The warning from the International Monetary Fund's World Economic Outlook released yesterday was loud and clear: "Growth would stall in 2013 with the full materialization of the (fiscal) cliff…" Many large regions, including the entire world, saw growth forecasts cut by the IMF. But the world economists warned America's economic problems are home grown.

They predict the U.S. will continue its tepid growth rate of near 2% if the fiscal cliff is averted. On the flip side, if we go over the cliff, the IMF predicts the automatic spending cuts and tax hikes due to set in at year-end would take more than 4% out of the GDP rate for 2013, tipping us back into recession.

Washington may not be reacting, but Peter Schiff, President & CEO of Euro Pacific Capital and author of "The Real Crash" is. He's been beating the drum on America's fiscal crisis, but it's not necessarily the year-end cliff that could lead us into the next disaster.

"It's not because we go over this phony fiscal cliff, it's probably because we don't go over that one because the government cancels the spending cuts, cancels the tax hikes, and instead we end up going over the real fiscal cliff further down the road," he says.

By kicking the can down the road, Schiff believes interest rates will spike and we won't be able to afford to pay the interest on the enormous amount of debt that we have. "In fact, the real fiscal cliff comes when our creditors want their money back, and we don't have it," he states.

Schiff says QE3 can only take us so far and the Federal Reserve's money printing will do so much destruction to the dollar through inflation, that we'll see a currency collapse like never before, which will force a dramatic and painful new way forward.

"Our economy is so screwed up from years and years and years of bad monetary and fiscal policy that it's going to be painful to correct that problem. But we have to do it," he says. "We can't keep avoiding the pain and in the process making the problem worse, because then we're just going to have even more pain in the future to fix an even bigger problem."

For what it's worth, the IMF does back the Fed's latest round of quantitative easing:

The Fed must stop printing money and politicians must create a real fiscal plan with budget cuts, tax reform and ultimately deficit reduction to avoid Schiff's predicted doomsday scenario. And it's not going to feel good. He likens the pain of money withdrawal to that of an addict in detox.

"If we address these imbalances and let the economy restructure, people are going to lose their jobs in some sectors, some investors are going to lose money, it's going to feel bad for a lot of people for a short period of time, but it will be very constructive pain," he says. "The only way around this is to stop the presses, let interest rates go up, and they're going to have to go way up, and let the chips fall where they may."

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