Unlike the "legitimate bull markets" of many foreign markets, Peter Schiff believes the U.S. is merely experiencing a "rally in a bear market," and is lagging the rest of the world "for a reason."

The worst is not over, according to Euro Pacific Capital's Schiff, who predicts the Dow will fall another 90% from current levels when measured against gold.

A longtime dollar bear and gold bull, he foresees gold hitting $5000 per ounce "in the next couple of years," and predicts the Dow and gold will trade on a one-to-one ratio vs. the current level of around 9.7-to-1.

Schiff believes gold is currently "climbing a wall of worry" but will eventually become as hot as tech stocks in 1999 and start moving up $100 per day.

Schiff's forecast is based on his view the U.S. dollar is going to collapse under the weight of our massive deficit and reckless policies of the Obama administration, which he compares to the massive spending programs of the 1960s, which paved the way for gold's ascent in the 1970s. "Obama is making the same mistakes as Bush, but he's doing them on a grander scale," says Schiff, who is running for U.S. Senate in Connecticut as a Republican.

In addition to gold, Schiff remains bullish on Asia, most notably China. His firm recently launched the Euro Pacific Halter China fund, and Schiff believes "there's a lot of value" in China and thinks the renminbi could "double or triple" when it's depegged from the dollar.

That will make Chinese assets more valuable when measured in dollars, he says.

Schiff presciently called the bursting of the debt bubble and subsequent rout in financial assets, and his current forecasts may very well come to fruition. But Schiff's confidence that the rest of the world (notably Asia) will prosper as the dollar loses its reserve status and America's economy collapses seems dubious, at best.

Then again, Schiff is nothing if not (supremely) confident.