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Top 5 Places NOT To Be When The Dollar Collapses
Chris Duane
The dollar collapse will be the single largest event in human history
This will be the first event that will touch every single living person in the world. All human activity is controlled by money. Our wealth, our work, our food, our government, even our relationships are affected by money. No money in human history has had as much reach in both breadth and depth as the dollar. It is the de facto world currency. All other currency collapses will pale in comparison to this big one. All other currency crises have been regional and there were other currencies for people to grasp on to. This collapse will be global and it will bring down not only the dollar but all other fiat currencies, as they are fundamentally no different. The collapse of currencies will lead to the collapse of ALL paper assets. The repercussions to this will have incredible results worldwide. (Read the Silver Bullet and the Silver Shield to protect yourself from this collapse.)
Thanks to the globalization and the giant vampire squids of the Anglo-American Empire, the dollar is the world's reserve currency
It supports the global economy in settling foreign trade, most importantly the Petro Dollar trade. This money is recycled through the City of London (not to be confused with London) and New York. This fuels our corporate vampires that acquires and harvests the wealth of the world. The corporate powers suppress REAL assets like natural resources and labor to provide themselves massive profits. This Fascist, Statist, Collectivist model provides the money into the economy to fund an ever increasing federal government. That government then grows larger and larger enriching its minions with jobs to control their fellow citizens. Finally, to come full circle, the government then controls other nations through the Military Industrial Complex.
This cycle will be cut when the mathematically and inevitable collapse of the dollar occurs
In order for our debt based money to function we MUST increase the debt every year in excess of the debt AND interest accrued the year before or we will enter a deflationary death spiral. When debt is created, money is created. When debt is paid off, money is destroyed. There is never enough to pay off the debt, because there would be not one dollar in existence.
We are at a point where we either default on the debt, willingly or unwillingly, or create more money/debt to keep the cycle moving
The problem is if you understand anything about compounding interest, we are reaching the hockey stick moment where the more debt that is incurred, the less effective it is and this leads us to hyper inflation. There are only two actors needed for this hyper inflation, the Lender of Last Resort, the Fed, and the Spender of Last Resort, the government. These two can, and will, blow up the system. I believe they will wait until the next crisis and the whiff of deflationary depression before they fire up the printing presses. That crisis is coming very soon at the end of this summer or fall. The money and emergency measures are worn out. The fact that NONE of the underlying problems that caused the 2008 crisis have been resolved. The only thing that has happened is that instead of corporate problems, we now have nation problems. In this movie Greece will play the role of Lehman Brothers and the United States will play the role of AIG. The problem is there is nowhere to kick the can down the road and there is no world government to absorb the debt, yet...(Problem, Reaction, Solution.)
So this leads me to the Top 5 Places Not To Be When the Dollar Collapses
1. Israel
This Anglo-American beach head into the Middle East was first conceived by the most powerful family in the world, the Rothschilds, in 1917. The Balfour Declaration said that there will be a Zionist Israel years before World War two and the eventual establishment of Israel. Israel has not been a good neighbor to its Muslim nations and has always had the two biggest bullies on the block at it's back. When the dollar collapses, the United States will have much to much on its plate both domestically and internationally to worry about such a non-strategic piece of land. This will leave Israel very weak at a time when tensions will be high. This very thin strip of desert land will not be able to with stand the economic reality of importing its food and fuel or the political reality of being surrounded by Muslims.
2. Southern California
The land of Fruits and Nuts turns into Battlefield Los Angeles. 20 million people packed into an area that has no water and thus food is not good to say the least. Throw on top of the huge wealth disparities and the proximity to a narco state and this does not bode well. We have seen riots for Rodney King, what will happen when the dollar is destroyed and food an fuel stops coming into this area. People will get desperate and do crazy things, especially when a huge proportion of its citizens are on anti depressants. If food and fuel cannot get in, what about Zolfot? At a time when people's world are falling apart they lack the ability to deal with this new paradigm. If people come off of these drugs too fast they suffer psychotic breaks and you will have thousands of shootings or suicides.
3. England
The Land of the Big Brother and former Empire of world wide slave and drug trade will suffer heavily. The stiff upper lip that their the British Elite ingrained into their sheeple will not work anymore as the British population explodes. The human character will sacrifice and unite for a foreign enemy, but not if the enemy has always been the Elite. The Anglo-American Empire may pull off another false flag to distract it's population on another Emmanuel Goldstein like in 1984, but I feel this collapse will happen before they pull it off. This will make all eyes point at the British Elite as solely responsible for this catastrophe. We have seen massive riots for soccer matches with hooligans. What will happen when this island with very little food and fuel gets cut off?
4. New York City
Another large urban area living too high on the dollar hog. NYC is the area I moved out of in 2008. There is little doubt that all of the wealth in New York, New Jersey and Connecticut is derivative off of Wall Street wealth. The savings and investments of the whole nation and much of the world flows through this financial capital. As the world wakes up to the massive financial fraud, this will lead to the destruction of capital like we have never seen before. This will have tremendous effects on the regional economy as people driving in Mercedes suddenly wonder where their next meal is coming from.
5. Washington D.C.
The political collapse of the Federal Government will wreck havoc on the hugely inflated local economy. As more and more states find it necessary to assert their natural control, the Federal Government will suddenly loose power and importance as the whole world suffers from a Global Hurricane Katrina. The money that they create and spend, will become worthless and the government minions pensions will evaporate. Millions that once relied on the ability to force others to send their money to them, will learn that the real power has always been at the most local level. Massive decentralization will be the answer to globalization gone mad. Local families and communities will forgo sending money and power out of their community, as they will care about their next meal and keeping warm.
"You can ignore reality, but you can't ignore the consequences of ignoring reality." -Ayn Rand
To sum up, those areas that have lived highest on the hog in the dollar paradigm will most likely be the worst places to live when the dollar collapses
Many of you will find this article with passing interest, but rest assured this dollar collapse is coming. It is a mathematical inevitability. We will not be as fortunate to muddle through this collapse like we did in 2008 when it was a corporate problem. This time around, it is a national and global problem. The global Ponzi scheme has run out of gas as the demographics decline, as cheap abundant oil declines, as hegemonic power declines. This comes at a time when we reach the exponential or collapse phase of our money. The Irresistible Force Paradox says,""What happens when an unstoppable force meets an immovable object?" We are about to find out, when infinite money hits a very finite world.
The system is designed to fail, and they started gambling with our money when they got rid of the Glass-Steagall Act!!
25 June 2011
The Credit Default Swaps That Underlie the Greek Crisis
This interview will help you to understand the problems surrounding the Greek crisis, the intended looting of their public resources, and the model that is being repeated by the banks around world.
Rickards on Regulatory Capture, Corrupt Banks, and the Credit Default Swaps on Sovereign Defaults
Around 2000 I came to roughly the same conclusions that he does. I had the opportunity to study the European money system while it was forming in graduate business school, and it just did not make sense.
The euro was probably going to fail unless the union became a unified federal government with one set of laws and taxation policy, with the kind of revenue distribution that exists amongst states in the US, for example.
A single currency cannot span independent fiscal authorities because it removes the ability of the currency to flucuate in value based on their independent economic health, acts of God, and social policy choices of the different social organizations. This is basic monetary theory. I was surprised that it lasted as long as it did, but it was to the advantage of the financial world to tolerate the attendant deceptions because they were growing fat on it.
And a similar thing can be said for the global currency trading regime based on the dollar and arbitrary valuations subject to national manipulation. It has allowed multinational corporations and banks to achieve tremendous power and advantage over local governments.
In other words, the currency regime and financial deregulation are the setup, and the credit default swaps are the trigger. Why the politicians permit the naked selling and buying of such instruments by banks handling public money is beyond my understanding, save pure, blind greed.
I always thought that a crisis would be put forward as an opportunity for the 'one-worlders' to once again promote their idea of a one world government, and a universal order of central financial authority that eventually and inevitably evolves into a single political system. And that is still very much in the cards.
For this to happen, national governments must be undermined and absorbed, their people brought down to their knees financially. And then their saviors can begin the work of ordering their lives.
96: That is really interesting and I have seen the video once before. It is interesting how science is finally catching up with the scripture. I knew there was a real change within me the night long ago when Christ came within. My so-called "God Gene" must have lit up that night because I was never the same, as it is today. As you say my "views" were changed forever. I thank you for reminding me as to what happened long ago. p.c.
Hey P.C., this is what our government thinks of your religious views:
http://www.godlikeproductions.com/forum1/message1527066/pg1
Preservation
Johnny Silver Bear
(Editor's Note: I recently received an email from a reader who voiced the same concerns that I expect most of our readership shares, about their retirement savings and how to best secure their assets and deal with the demise of empire. You folks are fortunate in that you have awakened and realized that there was something very, very rotten going on. There is still time to do something. In an attempt to answer her questions, I found my self slipping in to one of my rants. I decided to post it for you all to enjoy. - JSB)
Dear Johnny,
As a dear friend of mine referred me a few months back to your web site, I am still pretty green as to understanding what all is going on. I would not refer myself as a sheeple but at times it is difficult for me to follow some of the articles. I am learning though.
The reason I am writing to you is more on a personal note than anything regarding silver and hoping that you can help me. This past December I moved my retirement funds out of the G Fund, TSP. Smart move but now in various diversified accounts for example I Shares Silver, Gold Silver Mines and even McCormick Spices to name a few. In December my gut reaction was to pull it all and to invest in silver currency. My investor guy talked me out of it due to the 10% penalty along with 20% taxes. I haven’t "lost" any money to date other than the devaluation of the dollar. (still a loss in that sense but not like losing it all)
I have been sick over the state of the economy and my gut reaction is that I made a big mistake. After reading the latest article regarding the amount of silver basically left, I have not been able to sleep well. I do not know if I am on target in thinking that I still should pull my all my retirement funds but my gut is telling me it is now. Normalcy mode tells me that I am jumping the gun but every time I step out of the box it has been a good move. I know I will hear some junk from the investor guy that I should not put all my eggs in one basket but again my gut is telling me that it will not get better.
So my biggest concern after much thought is making sure my mortgage payment is made if the SHTF. Being that my husband and I are retired there is no guarantee even that check will be there…for him being a state employee and me a federal employee. I have prepared myself with food, etc and now at a crossroads regarding the silver.
I do realize that you do not have a crystal ball to look into to say what exactly going to happen but guess I am looking for reassurance that I see things as they truly are. Any help would be greatly appreciated for I do have a call into the investor.
Thanks for all you do for it is greatly appreciated!
June
Dear June,
As you might imagine, I receive many emails daily and I am, due to time constraints, unable to answer most of them, but your email struck a chord with me because we recently dealt with my wife's IRA.
But before I get to the retirement account option, I will address your other questions. First, you are absolutely right about the dollar devaluation. The U.S. Dollar has lost more than 60% of it purchasing power since 2002. The value of silver has not increased. The value of the dollar has tanked. Most people do not understand the insidious nature of inflation. It is not a natural occurrence. It is a contrived means of theft. It was originally implemented by goldsmiths who invented the fractional reserve system. Please follow this link to a video that might help you understand the methods of their madness: http://www.silverbearcafe.com/private/02.09/moneyasdebt.html
To further illustrate my contention that we are being screwed by the Government and the Federal reserve, please consider, on July 23rd, 1965 L.B.J. unconstitutionally signed the Coinage Act of 1965 and prevaricated that it would legally supersede the original Coinage Act of 1792. He did not have the constitutional authority to mess with the value of U.S. coinage. He was just one more criminal politician, in a long line of criminal politicians, trying to rewrite the U.S. Constitution for his own personal gain. His contention, that he had the power to do so, was ludicrous. In fact, the penalty, prescribed in the original coinage act for doing so, was/is death. But the dumbed down sheeple didn't seem to mind, so he got away with it. Johnson was a slimeball criminal. Ah, but I digress.
A dime, minted in 1964 was comprised of 90% silver. Today, a pre 1965 dime will purchase a gallon of gasoline. Today, gasoline is cheaper than it was in 1964. The reason we can't buy gasoline for 10¢ with Federal Reserve notes is because we have been robbed by the Federal Reserve (owned by American and European Banking families) and a complicit government. Pretty much everything is cheaper now than it was in 1964. Advances in technology, manufacturing and distribution would have/should have provided a greatly enhanced standard of living for all Americans. That is if we hadn't been ripped off by the powers that be. This is the main reason that the middle class is shrinking. Until we abolish the Federal Reserve and prosecute the criminals, the future of the United States will remain in great peril.
The dollar still has a ways to go before the people realize it is worthless. Silver represents a store of value that can not be altered by the criminal banksters or politicians. So, to sum up the first point. I believe that, even if you take a 10% penalty and pay 20% taxes (that's probably about as much as you would have paid in taxes on the income originally) you will be ahead of the game if the dollar loses another 10%. I think silver will surpass $100 an ounce within the near future.
Silver, however, is more volatile (price wise) than gold. I believe there is quite a bit more potential for the price of silver to rise than there is for gold. Naturally then, the factor of risk is greater holding silver than it is for holding gold. Silver, however, is rarer than gold. Not very many people are aware of this fact. Most of the world's above ground stockpile of silver has been used up by industrial applications and weaponry. the traditional silver to gold ratio (for last 5000 years, prior to the federal government illegally fixing the price) has been 16-to-1. At gold's current price of around $1542.00, the price of silver should be at least $96.00. If there was no manipulation by criminal banksters, the Silver Users Association, the Crimex (Comex) the FED, or the government, I would expect the price of gold to be closer to $10,000.00 per ounce which would mean silver could reach a value in excess of $625.00 an ounce. Investing in precious metals is the best security that I am aware of.
And now we arrive at yet another option, which is to leave your savings in an IRA. It is now possible to move funds that are currently in a self directed IRA into an account that mirrors gold and/or silver in their appreciation (or depreciation) against the dollar. Although this is one of the most prudent things you can do with a IRA, it is my least favorite option because I am afraid that the government might be intending to seize the retirement accounts of all Americans and force them into U.S. Treasuries (or something like that). The Federal Reserve is currently buying the bulk of each Treasury Issuance which is, beyond a doubt, hyperinflationary. So many criminals, so little time...
For years I have complained that my wife's 401K was subject to criminal constraints in that she could only go long on the issues she was involved with. Her company mandated (all companies mandate by law) that she could only invest, and go long, in XYZ mutual funds. At the time, I believed were they were bad investments. In a free market you have to have the option to bet against an issue as well as betting for it. Taking away the option to short an issue provides for nothing more than a rigged game. But all the sheeple seem to go along with it. Everybody's 401K has the same restrictions. Nobody balks. It's much easier remain ignorant of the realities of investing than to gain the understanding that they are being fleeced.
I personally have lost all faith in the system, as well as the hope that the worthless sheeple might wake up, and, as a result, I spend most of my time trying to provide evidence of the crimes of the Darkside, and to present the remedies and solutions that I have come across, in my research, that might help my readers deal with the current, abysmal, state of affairs. When I started "the Bear" I was actually (naïvely) trying to pose solutions to the "big picture" problem. Solutions that might have "righted the ship". That was ten years ago. About three years ago I realized the system was irrevocably broken and beyond repair and that all I could do was help those that had finally awakened from their sheeple slumber to prepare for the collapse. It is like a slow motion train wreck.
The day is fast approaching when Joe Sixpack will not be able to afford a sixpack on Friday and, when that day comes, and I expect it to happen this year, the country will slip into a chaotic haze. Joe will not have a clue as to what happened, why it happened, who caused it or who is to blame. At that point we will have riots in the streets, clueless idiots with no plan. These folks will be mad at everyone who has something, anything...
So prepare yourself. Own physical bullion. Hold it yourself. If you're concerned, bury it in the backyard. Don't tell anyone that you have it. Don't pay more than a 3% premium to buy it or sell it. You can, eventually divest your self of everything you own and convert it to bullion. At that point you will be a pauper, and eligible for medicare and medicaid. Leave a map to where it is hidden for your kids or whomever. This will eliminate any probate.
By the way, I am not a licensed financial planner. The message I am trying to convey comes as the result of ten years of intense study and good old common sense. In spite of what I have stated in this piece, please take everything I say with a grain of salt.
June, we appreciate your readership and wish you the best.
Respectfully,
Kenny Parsons aka Johnny Silver Bear
Chief cook and bottle washer,
The Silver Bear Cafe.
That was me showing how I feel with all the pumping of metal miners and how the banksters are the only ones eating. I like that video. p.c.
What the hell was that????? LOL
The junior miners stocks make me feel like the dog in the video and his food.
It appears to me that if this American economy ever recovers that it will only recover for a few. The older generation is not sleeping well these days. Many spend their social security checks on property taxes and health insurance. Reverse mortgages are selling well because it is the only asset left for those over 62 to dip into. Their savings accounts make less than .5% per year while inflation eats their assets. I was talking to a friend this week and said that the average person on SS does not have enough cash left to buy a vacant building lot after working for 40 years and saving for retirement. How will the older generation ever recover???? p.c.
Have a blessed Memorial Day weekend!!
http://silverbearcafe.com/private/05.11/1-2boy.html
Most Americans know that the nation has debt problems but think of it as someones debt but not theirs. Many are sitting at home today looking at the pile of unpaid bills sitting on their desks. Power bills, house insurance and car insurance bills, the overdue property tax bills, five credit card bills that they cannot even make the minimum payments,health insurance bills, etc. For most of us, the gut ache is at home and not in the government. Washington,the banksters, and the greedy have ruined the nation and have robbed the hopes of the elderly. It is written that we should feed the hungry and clothe the naked but the greedy have done the opposite. Justice will come when He seperates the sheep from the goats in the end and for the goats (greedy), it will be a frightfull site for sure. J.M.O. - p.c.
Pile of debt would stretch beyond stratosphere
By Emily Stephenson
WASHINGTON (Reuters) - President Ronald Reagan once famously said that a stack of $1,000 bills equivalent to the U.S. government's debt would be about 67 miles high.
That was 1981. Since then, the national debt has climbed to $14.3 trillion. In $1,000 bills, it would now be more than 900 miles tall.
In $1 bills, the pile would reach to the moon and back twice.
The United States hit its legal borrowing limit on Monday, and the Treasury Department has said the U.S. Congress must raise the debt ceiling by August 2 to avoid a default.
The White House is trying to hammer out a deal with lawmakers to cut federal spending in exchange for a debt-limit increase.
Most people have trouble conceptualizing $14.3 trillion.
Stan Collender, a budget expert at Qorvis Communications, said the biggest sum most Americans have ever handled -- in real or play money -- is the $15,140 in the original, standard Monopoly board game.
The United States borrows about 185 times that amount each minute.
Here are some other metrics for understanding the size of the national debt and United States borrowing:
* U.S. Treasury Secretary Timothy Geithner has said the United States borrows about $125 billion per month.
With that amount, the United States could buy each of its more than 300 million residents an Apple Inc iPad.
* In a 31-day month, that means the United States borrows about $4 billion per day.
A stack of dimes equivalent to that amount would wrap all the way around the Earth with change to spare.
* In one hour, the United States borrows about $168 million, more than it paid to buy Alaska in 1867, converted to today's dollars.
In two hours, the United States borrows more than it paid France for present-day Arkansas, Missouri, Iowa and the rest of the land obtained by the 1803 Louisiana Purchase.
* The U.S. government borrows more than $40,000 per second. That's more than the cost of a year's tuition, room and board at many universities.
"That usually gets their attention," Doug Holtz-Eakin, who was chief White House economist under President George W. Bush, said in an email. "I have two kids, so every 10 seconds, the feds borrow more than I paid lifetime."
* The Congressional Budget Office projects the total budget deficit in fiscal 2011 at about $1.4 trillion.
"The net worth of Bill Gates, roughly around $56 billion, could only cover the deficit for 15 days," said Jason Peuquet, a policy analyst with the Committee for a Responsible Federal Budget. "The net worth of Warren Buffet, roughly around $50 billion, could only cover the deficit for 13 days."
(Editing by Mohammad Zargham)
Corrects last paragraph to say Jason Peuquet, not James Peuquet
I've been saying it for years. It's good to see others who see it the same way.
Thanks for stopping by Relentless Despot. I think this board will catch more attention once the dollar's demise really begins to accelerate!! Weather it's next week or next decade, most here think its inevitable...
Warnings Signs Caution the Next Crisis Is Coming
http://www.minyanville.com/businessmarkets/articles/precious-metals-stocks-secular-bear-market/5/16/2011/id/34559?camp=syndication&medium=portals&from=yahoo
Guest Post: The Good, The Bad And The Ugly - Part 3
http://www.zerohedge.com/article/guest-post-good-bad-and-ugly-part-3
Have you noticed the pressure on local business people to keep their doors open? Owners are doing everything they can think of to just survive and many are starting to compromise their values of their past. The demising of the dollar is one issue, however, the demising of our of our good name is another. This degeneration is always about money. A good name is worth more than gold. j.m.o. - p.c.
This board deserves more attention...
Zimbabwe Says Days Of The US Dollar Are Numbered, Pushes For Gold-Backed Local Currency
Topping off a weekend of surreal news is the announcement from the Central Bank of Zimbabwe that the country is now evaluating introducing a gold-backed Zimbabwean dollar, and, in keeping with the Salvador Dali feel to the past 48 hours, that the "days of the US dollar as the world's reserve currency are numbered." Yes. Zimbabwe, the same place that two years ago sported a brand new crisp Z$100 trillion bill. What is just as odd is that this news comes less than a week after Iran's President Mahmoud Ahmadinejad criticized US economic policies, saying that the paper currency created by the American government is taking a heavy toll on the global economy. While Zimbabwe, which now transacts almost exclusively in foreign currencies such as the USD and the South African Rand, is actively considering ways to return its own currency into circulation, the man who has up to now served as an inspiration and a role model to Ben Bernanke, Gideon Gono, said the country should consider adopting a gold-backed currency. “There is a need for us to begin thinking seriously and urgently about introducing a Gold-backed Zimbabwe currency which will not only stable but internationally acceptable,” he said in an interview with state media... That giant ripping noise you hear is the Chairsatan tearing down each and every 20x10 poster of Gideon Gono, lining the hallways of the Princeton Economics department.
From News Zimbabwe:
THE central bank says the country must consider adopting a gold-backed Zimbabwean dollar warning that the US greenback’s days as the world’s reserve currency are numbered.
Government ditched the Zimbabwe dollar in 2009 after it had been rendered worthless by record inflation levels and adopted multiple foreign currencies with the US dollar, the South African Rand and the Botswana being the most widely used.
“We need to re-think our gold-mining strategy, our gold-liberalisation and marketing strategies as a country. The world needs to and will most certainly move to a gold standard and Zimbabwe must lead the way.”
Gono said the inflationary effects of United States’ deficit financing of its budget was likely to impact other countries to leading to a resistance of the green back as a base currency.
We wonder what took Zimbabwe, a country rich in natural resources, so long to figure out that it was nothing but a puppet in the hands of western monetary interests:
“The events of the 2008 Global Financial Crisis demand a new approach to self reliance and a stable mineral-backed currency and to me, Gold has proven over the years that it is a stable and most desired precious metal,” Gono said.
“Zimbabwe is sitting on trillions worth of gold-reserves and it is time we start thinking outside the box, for our survival and prosperity.”
Curiously, the same can be said for Russia, and, soon enough, after it will have bought every last resource and global extraction company, China.
By now it is far too clear that it is an "Onion" world out there. Will it be all that surprising if Zimbabwe is the first country, following its brief and painful detour into hyperinflation, to introduce a gold-backed currency?
50 Things Every American Should Know About The Collapse Of The Economy
The Economic Collapse
Right now, we are witnessing a truly historic collapse of the economy, and yet most Americans do not understand what is going on. One of the biggest reasons why the American people do not understand what is happening to the economy is because our politicians and the mainstream media are not telling the truth. Barack Obama and Federal Reserve Chairman Ben Bernanke keep repeating the phrase "economic recovery" over and over, and this is really confusing for most Americans because things sure don't seem to be getting much better where they live.
There are millions upon millions of Americans that are sitting at home on their couches right now wondering why they lost their jobs and why nobody will hire them. Millions of others are wondering why the only jobs they can get are jobs that a high school student could do. Families all across America are wondering why it seems like their wages never go up but the price of food and the price of gas continue to skyrocket. We are facing some very serious long-term economic problems in this country, and we need to educate the American people about why the collapse of the economy is happening.
If the American people don't understand why they are losing their jobs, why they are losing their homes and why they are drowning in debt then they are going to keep on doing all of the same things that they have been doing. They will also keep sending the same idiot politicians back to Washington to represent us. There are some fundamental things about the economy that every American should know. The American people need to be shocked out of their entertainment-induced stupor long enough to understand what is really going on and what needs to be done to solve our nightmarish economic problems. If we do not wake up enough Americans in time, the economic collapse that is coming could tear this nation to shreds.
The U.S. economy was once the greatest economic machine in modern world history. It was truly a wonder to behold. It worked so well that entire generations of Americans came to believe that America would enjoy boundless prosperity indefinitely.
But sadly, prosperity is not guaranteed for any nation. Over the past several decades, some very alarming long-term economic trends have developed that are absolutely destroying the economy. If dramatic changes are not made soon, a complete and total economic collapse will be unavoidable.
Unfortunately, the American people will never agree to fundamental changes to our economic and financial systems unless they are fully educated about what is causing our problems. We have turned our backs on the principles of our forefathers and the principles of those that founded this nation. We have rejected the ancient wisdom that was handed down to us.
It has been said that those that sow the wind, shall reap the whirlwind.
We are about to experience the consequences of decades of really bad decisions.
Hopefully we can get the American people to wake up.
The following are 50 things that every American should know about the collapse of the economy....
#1 Do you remember how much was made of the "Misery Index" during the presidency of Jimmy Carter? At that time, the "Misery Index" was constantly making headlines in newspapers all across the country. Well, according to John Williams of Shadow Government Statistics, if we calculated unemployment and inflation the same way that we did back during the Carter administration, then the Misery Index today would actually be higher than at any point during the presidency of Jimmy Carter.
#2 According to the U.S. Bureau of Labor Statistics, an average of about 5 million Americans were being hired every single month during 2006. Today, an average of about 3.5 million Americans are being hired every single month.
#3 According to the Wall Street Journal, there are 5.5 million Americans that are currently unemployed and yet are not receiving unemployment benefits.
#4 All over America, state and local governments are selling off buildings just to pay the bills. Investors can now buy up government-owned power plants, prisons and municipal buildings from coast to coast. For example, the mayor of Newark, New Jersey recently sold off 16 government buildings (including the police and fire headquarters) just to pay some bills.
#5 When Americans think of "government debt", most of them only think of the federal government, but it is not just the federal government that has a massive debt problem. State and local government debt has reached an all-time high of 22 percent of U.S. GDP.
#6 If you can believe it, one out of every seven Americans has at least 10 credit cards.
#7 Credit card usage in the United States is on the increase once again. During the month of March, revolving consumer credit jumped 2.9%. Sadly, it looks like Americans have not learned their lessons about the dangers of credit card debt.
#8 Last year, Social Security ran a deficit for the first time since 1983, and the "Social Security deficits" in future years are projected to be absolutely horrific.
#9 The U.S. government now says that the Medicare trust fund will run out five years faster than they were projecting just last year.
#10 Right now we are watching what could potentially be the worst Mississippi River flood ever recorded play out right in front of our eyes. One agricultural economist at Mississippi State University believes that this disaster could do 2 billion dollars of damage just to farms alone.
#11 The "tornadoes of 2011" that we just saw in the southeast United States are being called the worst natural disaster that the U.S. has seen since Hurricane Katrina. It has been estimated that up to 25 percent of all of the poultry houses in Alabama were either significantly damaged or destroyed. It is also believed that millions of birds were killed.
#12 The economic effects of the BP oil spill just seem to go on and on and on. The number of very sick fish in the Gulf of Mexico is really starting to alarm scientists. The following is how one local newspaper recently described the situation....
Scientists are alarmed by the discovery of unusual numbers of fish in the Gulf of Mexico and inland waterways with skin lesions, fin rot, spots, liver blood clots and other health problems.
#13 The number of "low income jobs" in the U.S. has risen steadily over the past 30 years and they now account for 41 percent of all jobs in the United States.
#14 All over America, hospitals that care for the poor and needy are so overwhelmed and are so broke that they are being forced to shut down. Recently, a local newspaper in Florida ran an article about two prominent charity hospitals in Illinois that have served the poor for more than 100 years but are now asking for permission to shut down....
Two charity hospitals in Illinois are facing a life-or-death decision. There's not much left of either of them - one in Chicago's south suburbs, the other in impoverished East St. Louis - aside from emergency rooms crowded with patients seeking free care. Now they would like the state's permission to shut down.
#15 The U.S. dollar is in such bad shape that now even Steve Forbes is predicting that the U.S. is "likely" to go back to a gold standard within the next five years.
#16 Most Americans don't realize how much the U.S. dollar has been devalued over the years. An item that cost $20.00 in 1970 would cost you $115.93 today. An item that cost $20.00 in 1913 would cost you $454.36 today.
#17 Over the past 12 months the average price of gasoline in the United States has gone up by about 30%.
#18 U.S. oil companies will bring in about $200 billion in pre-tax profits this year. They will also receive about $4.4 billion in specialized tax breaks from the U.S. government.
#19 It is being projected that for the first time ever, the OPEC nations are going to bring in over a trillion dollars from exporting oil this year. Their biggest customer is the United States.
#20 According to the Pentagon, there are minerals worth over a trillion dollars under the ground in Afghanistan. Now, J.P. Morgan is starting to tap those riches with the help of the U.S. military.
#21 Speaking of J.P. Morgan, most Americans don't realize that they are actually the largest processor of food stamp benefits in the United States. In fact, the more Americans that go on food stamps the more money that J.P. Morgan makes.
#22 When 2007 began, there were about 26 million Americans on food stamps. Today, there are over 44 million on food stamps, and one out of every four American children is on food stamps.
#23 Back in 1965, only one out of every 50 Americans was on Medicaid. Today, one out of every 6 Americans is on Medicaid.
#24 Only 66.8% of American men had a job last year. That was the lowest level that has ever been recorded in all of U.S. history.
#25 The financial system is more vulnerable today than it was back in 2008 before the financial panic. Today, the world financial system has been turned into a giant financial casino where bets are made on just about anything you can possibly imagine, and the major Wall Street banks make a ton of money from this betting system. The system is largely unregulated (the new "Wall Street reform" law has only changed this slightly) and it is totally dominated by the big international banks. The danger from derivatives is so great that Warren Buffet once called them "financial weapons of mass destruction". It is estimated that the "derivatives bubble" is somewhere in the neighborhood of a quadrillion dollars, and once it pops there isn't going to be enough money in the entire world to bail everyone out.
#26 Between December 2000 and December 2010, the United States ran a total trade deficit of 6.1 trillion dollars with the rest of the world, and the U.S. has had a negative trade balance every single year since 1976.
#27 The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001, and the U.S. trade deficit with China is now 27 times larger than it was back in 1990.
#28 In 2010, the number one U.S. export to China was "scrap and trash".
#29 All over the United States, many of our once great manufacturing cities are being transformed into hellholes. In the city of Detroit today, there are over 33,000 abandoned houses, 70 schools are being permanently closed down, the mayor wants to bulldoze one-fourth of the city and you can literally buy a house for one dollar in the worst areas.
#30 During the first three months of this year, less new homes were sold in the U.S. than in any three month period ever recorded.
#31 New home sales in the United States are now down 80% from the peak in July 2005.
#32 America's real estate crisis just seems to get worse and worse. U.S. home prices have now fallen a whopping 33% from where they were at during the peak of the housing bubble.
#33 According to a new report from the AFL-CIO, the average CEO made 343 times more money than the average American did last year.
#34 The European debt crisis could cause a global financial collapse like the one that we saw in 2008 at any time. The world economy is incredibly interconnected today, and the United States would not be immune. A recent IMF report stated the following about the growing sovereign debt crisis in Europe....
Strong policy responses have successfully contained the sovereign debt and financial-sector troubles in the euro area periphery so far. But contagion to the core euro area and then onward to emerging Europe remains a tangible risk.
#35 According to one study, the 50 U.S. state governments are collectively 3.2 trillion dollars short of what they need to meet their pension obligations.
#36 A different study has shown that individual Americans are $6.6 trillion short of what they need to retire comfortably.
#37 The cost of college tuition in the United States has gone up by over 900 percent since 1978.
#38 According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980. Today they account for approximately 16.3%.
#39 One study found that approximately 41 percent of working age Americans either have medical bill problems or are currently paying off medical debt.
#40 The combined debt of the major GSEs (Fannie Mae, Freddie Mac and Sallie Mae) has increased from 3.2 trillion in 2008 to 6.4 trillion in 2011. Thanks to our politicians, U.S. taxpayers are standing behind that debt.
#41 The U.S. government is over 14 trillion dollars in debt and the budget deficit for this year is projected to be about 1.5 trillion dollars. However, if the U.S. government was forced to use GAAP accounting principles (like all publicly-traded corporations must), the U.S. government budget deficit would be somewhere in the neighborhood of $4 trillion to $5 trillion each and every year.
#42 Most Americans don't understand that the Federal Reserve and the debt-based monetary system that it runs are at the very heart of our economic problems. All of this debt is absolutely crushing us. The U.S. government spent over 413 billion dollars on interest on the national debt during fiscal 2010, and it is being projected that the U.S. government will be shelling out 900 billion dollars just in interest on the national debt by the year 2019.
#43 Standard & Poor’s has altered its outlook on U.S. government debt from "stable" to "negative" and is warning that the U.S. could soon lose its AAA rating.
#44 In 1980, government transfer payments accounted for just 11.7% of all income. Today, government transfer payments account for 18.4% of all income.
#45 U.S. households are now receiving more income from the U.S. government than they are paying to the government in taxes.
#46 59 percent of all Americans now receive money from the federal government in one form or another.
#47 According to Gallup, 41 percent of Americans believed that the economy was "getting better" at this time last year. Today, that number is at just 27 percent.
#48 The wealthiest 1% of all Americans now own more than a third of all the wealth in the United States.
#49 The poorest 50% of all Americans collectively own just 2.5% of all the wealth in the United States.
#50 The percentage of millionaires in Congress is more than 50 times higher than the percentage of millionaires in the general population.
theeconomiccollapseblog.com/
The wide road that is being placed before us is filled with angry people. When I was young, I lived in the middle of a poverty infested town. Several familys had 12 kids and some even more and lived in two bedroom shacks and some with outside bathrooms. However, many of us, including myself, had a hope to get out of that town, find a job, and leave poverty forever. I worked my way through jr. college and found a entry job in my field. My starting pay was $531 per month. You could buy a new car with $100 per month, rent wad $65, and everything else was inexpensive. Today,the people are going back to what I left long ago and an entry level job will not buy much more than rent. We had big hope but they have anger and that is the road ahead. It is written that "ye have the poor always with you" and that number is increasing much faster than most of us understand. There comes a tipping point in a nation where the people riot because of hunger and anger. We are beginning to move that direction even this day. j.m.o. - p.c.
You're right P.C. people are getting worried, desperate, and pissed off!! We are headed in the wrong direction and reading a rant such as that goes to show you that this is coming to a boiling point!!
Yes 268, you have stated it well. Things are quickly becoming very serious for the families here in America. The financial pressures are a great weight on the parents as well as the retired on fixed incomes. A young woman who works with us came into my office today crying and wanted to talk. They cannot make their house payment, buy food, gas or anything else. Her husband has a low paying job and her sales have dropped off to near zero. She cannot sleep at night and is fighting with her husband continually over money. She told him if they lose the home that the marriage is over. (We had a long discussion about that as you may quess). This great pressure we all feel is like a diver going deeper and deeper into the sea and the pressure is great. When this tribulation is finished it will not be the one with the most beans and gold who wins but he who has "loved his neighbor as himself through it". jmo - p.c.
Wow. That is a rant indeed. Aside from being hilarious, what strikes me about that kind of anger is that is makes the writer seem just as emotionally dependent on a "properly" operating government as the 'gullible' and 'dependent' folks that he's berating. For me, the collapse of governments and empires is not surprising or infuriating in the least. It's simply the cyclical pattern of human history... the nature of moral sin and the emptiness of human autonomy playing out yet again, for the whole world to see and marvel at, not with fury, but with a sense of awe and wonder that humanity is exactly what the Lord God says it is, fallen, broken, and blind.
This is a good rant that I found on another site:
Dollar is in it's death throes!!!!
We are now in a propaganda stage as far as our currency goes.
The six fastest growing economies have dumped the dollar as a trading vehicle. India just bought their oil in rubees, and everyone is dumping the dollar and our treasuries. Hong Kong is opening up their own metals exchange in order to get around the obvious manipulation of the metals and escape the silver paper traders on Wall Street here in the U.S.. Only under the careful watch of the comex police could a commodity that is fast evaporating and in ever increasing demand plummet almost 30% in only a few days time. Let's put it this way, name one thing that has improved over the last two years since the last break down in our economy. Just one.
Housing is collapsing still, and even further as we speak.
Commercial real estate is collapsing.
Student loans are now a larger debt than the housing bubble.
Trade deficits are widening.
State budgets are even further in the hole and bankrupt.
Muni bonds are tanking.
Social Security has officially gone into the red.
The National Debt has gotten larger.
More people are unemployed.
More of our industries have left the country.
The entire gulf fishing industry has been destroyed.
The Fed has become the largest buyer of stocks.
The Fed is still printing money.
The Fed has become the largest buyer of our treasuries.
This doesn't even touch on the derivatives market, which is a lie.
More countries are leaving our currency by the day, and from now on when the Fed buys stocks, juices treasuries, or spends any more tax payer money on bailing out private corporations turning private debt into IRS enforced tax debt, well guess what, all that money isn't going to be spread out on a global scale to all the countries around the world holding the dollar, oh no, all the money printing is going to come out of your saving account, your grocery bill, your gas bill, and then you can pay it back with more taxes to cover all that debt! This charade is over!
Anyone still pretending that the debt is repayable is delusional. Every working person living in the United States would owe over a million dollars per person! It's so unbelievably over, and to watch any politician get up in front of the people of this country and pretend or make believe that everything is fine, or if we raise some stupid tax we'll be fine. All of these candidates that get up there pretending we can somehow recover at this point! It's so pathetic.
If your receiving candy from this government you better get use to the idea of what is to come.
Old people, your not going to get a dime. You were lied to, the big government that you loved stole everything you put into this system your hard earned money was stolen and spent years ago, and I'm not paying for your gullibility.
Minorities who think they are owed something just for being born and all those of any race that are too lazy to even try, thanks, all your belly aching about your entitlements, and what the gumment owed you has all come to a head.
You have successfully turned the USA into a third world nation, complete without welfare, food stamps, medicare, medicade, or any other entitlement government tit sucking program.
Hope you enjoy what you all have helped create.
Government workers, I can't wait to see you blood suckers all sitting at home enjoying the unemployment, and the non productivity you have helped create.
You are no longer public servants but tyrants in every since of the word, thugs, mafia.
Your pensions will be worthless, and all your benis will be a thing of the past.
You destroyed our freedoms, and your greed was so excessive that you sucked all the life out of your host until it was too weak to continue living.
You agreed to hand over all our money to the banks and Wall Street and turned our country into a fascist nation.
What I will enjoy more than your collapse is that I wont have to pay you anymore for this bullshit you labeled as freedom!
Thank you!
Big Business and Wall Street, thank you sooo much for rigging our elections our tax codes, exporting our work force, exporting our industries, and doing whatever you could for the bottom dollar for the reporting quarter of business. Thank you for allowing me to pay for your stupidity with my tax dollars as the Government turned your debt into my personal debt. MR. TOO big to fail.
Guess what dip shits your now out of quarters in the literal since. Game over bitches!
wait until QE3 hits and the real fun begins
they will never choose deflation because the printing press always wins and who will buy the gov debt anyway ?
There is no use removing doubts one by one. If we clear one doubt another doubt will arise and there will be no end of doubts. But, if by seeking the doubter, the doubter is found to be really non-existent, then all doubts will cease. -- Ramana Maharshi
Bankers: (aka Federal Reserve, and their IMF loving global banker friends)
There is a special place in hell for you. Fractional reserve banking is nothing more than theft of a mans life. Your lending something you don't even have so that a man can work half his life to pay back to you what you never had to lend.
You have done the same thing to our country. Lending money you never had in order to turn us all into Social Security card carrying tax slaves. You created the 16th amendment, and up until that point there was no Federal Income tax. You created the IRS to collect the money you thought was owed to you, once again the money lent you never had. You have financed our wars from both sides, and sought to create a global currency that would place you above all standing armies, above all countries, and above all people of the world. You even rigged this collapse off of the endless greed of the people that were willing to go along with you. You destroyed our looted our nation and destroyed our currency. You have sold all of us into slavery, and if world war three breaks out, I hope that it is against the bankers.
Just look at the difference between Greece and Iceland. Greece told you they would pay you all back, and now they are slaves. Iceland told you to shove it up your ass, and now they are free!
I guess it can't go straight down!!! Just as the price of everything can't go straight up!! The overall trend is still intact because the cards have already been dealt, the world is just trying to figure out how to play them...
Dollar getting stronger now. When everyones is shorting the dollar you know then it will probably go up.
QE3 And the Silver Entry Point
John Rubino
With QE2 scheduled to wind down this summer and millions of American voters still unemployed, it was clear that the Fed was itching to keep the monetary spigot open. But how would that be possible with oil, food, and precious metals at or near historic highs and the dollar at multi-year lows? Clearly, something would have to happen to justify QE3.
Now we know what. On April 27 the Fed confirms that QE2 will end pretty soon, and one week later a slew of bad economic numbers just happen to hit the headlines. First-time jobless claims, productivity, consumer confidence all suddenly appear to contradict the idea that a sustainable recovery is underway. Stocks tank, oil falls, and gold and silver retrace their post-Bernanke press conference parabolic spikes. The economy is suddenly looking double-dipish.
This might be pure coincidence, of course, but the timing is definitely propitious for a government that 1) knows it has to inflate away the dollar if it's to have any hope of maintaining its global military empire and cradle-to-grave welfare system, and 2) has an election coming up in which a roaring 2012 economy is crucial.
Now get ready for the spread of the 1931 meme, in which the current false spring is compared to the one that preceded the descent into the Great Depression. Talking heads will demand action, government officials will claim to be watching the situation closely, and economists will start debating the form of the next stimulus plan. Then - with plenty of time for the folks in power to claim credit during the election campaign - Washington will announce something that puts QE2 to shame. Shock and awe on a Krugmanesque scale will hit the markets. And the plan to inflate away the dollar will really get going.
No real surprises here, but a dilemma for investors. How much trauma will the financial markets have to suffer before it's a "crisis" capable of justifying QE3? What level on the Dow are we talking about? And where will gold, silver and oil have to go to wash away those pesky inflationary expectations? Put another way, where is the entry point for the next - inevitable - parabolic move up? Is it $30 silver or does the plan require $20?
It's safe to say that the entire sound money world has spent the past six months wishing we'd mortgaged the house and bought Silver Eagles. Now, just maybe, we're getting one last chance...
SHAKEOUT IN GOLD & SILVER? Don't Panic! Mike Maloney & James Anderson
268: Thanks for a well written,full of Truth post. There are several forms of "spiritual tenson" that exist. Here on earth we see this joy and almost a party going forth to celebrate his( Bin Laden's) demise. In the book of Revelations 11 7-12 is a picture of those two witnesses of the Lord who will be killed and their bodies lay in the street for days. And v.9 & 10 says " AND THEY OF THE PEOPLE AND KINDREDS AND TONGUES AND NATIONS SHALL SEE THEIR DEAD BODIES THREE DAYS AND A HALF,AND SHALL NOT SUFFER THEIR DEAD BODIES TO BE PUT IN GRAVES. AND THEY THAT DWELL UPON THE EARTH SHALL REJOICE OVER THEM, AND MAKE MERRY, AND SHALL SEND GIFTS ONE TO ANOTHER;BECAUSE THESE TWO PROPHETS TORMENTED THEM THAT DWELL ON THE EARTH". However, the view and approach changes for the account of the rich man who died and Lazarus in Luke 16 as seen from Abraham's bosom. As I have stated before, for me it is wonderful when evil has departed from this world and BL now knows who the King of Kings is and it is to late for him. p.c.
Another Decline In Registered Silver Brings Total Comex Physical To Multi-Year Lows
http://www.zerohedge.com/article/another-decline-registered-silver-brings-total-comex-physical-multi-year-lows
I'll jump into this one headfirst, because hey, what do I have to lose! :) I think as Christians, there is what I call a 'spiritual tension' that exists in how we should feel about evil people being destroyed because of their wickedness. As PC says and I think most would agree, there is a law of 'sowing and reaping' that will always stand... because God will not be mocked... this is the way He has designed the universe to function. And so we celebrate the fact that God is just and sovereign and that he keeps his promises, "uprising against the house of the evildoers". And yet our theology makes it clear that in our fallen state, we are all just as far from a Holy God as was bin Laden or anyone else in this broken world, and so we are all just as deserving of eternal destruction as anyone else. In other words, the entire human race is on the same playing field morally with respect to the deserved judgment of God. This is of course where Christ comes in and saves us from the wrath that we justly deserve, if we put our faith in Him. So yes, celebrate the justice of God. But if it's not done with an awareness that we all live with the same potential for darkness as Osama bin Laden, then we are in danger of suffering the same fate eternally as I believe he is suffering now. We should celebrate, not death, but justice, and do so with quaking knees before the righteous Judge of the Universe. This is not j.m.o. nor my opinion at all. This is the simple, incontrovertible reality proclaimed by the Word of God.
I commend a fantastic article on this subject:
desiringgod.org/blog/posts/is-god-glad-osama-bin-ladens-dead
...and I am so grateful for the selfless and fearless warriors that God has given us in this country. What an awesome display of the ability and might of our military to have executed this mission so flawlessly. They deserve our praise and our constant prayers.
May God bestow his true blessings on America. -268
Whenever evil is taken out of the world, it is a good thing. The law of sewing and reaping has overtaken Ben Laden. He long ago set his path of death and destruction. My view is NOT of him but of the great joy of the people. For me it is like the time when O.J. Simpson walked out of the court room and black people were filled with joy as an apparent guilty man was set free. I thought " wow,this joy should not be seen", what has happened to their value system? I may be the only person who sees things in this view and it is jmo. P.C.
What is wrong with Bin Laden being killed in action??
In times like this week, I wonder how we the people have come to this level of humanity. First a Royal Wedding with William and Kate and they say over two billion people watched it. In my day when two people were living together before marriage, they slipped off in shame and found a justice of the peace. And secondly, tonight with the death of Ben Laden, the people are flocking to the National Capital to celebrate his death. This is being brodcasted all around the world. Both of these two events are troubling to our former core values. We have slowly lost more than the "demise of the dollar". The nation need to have an awakening and soon. J.M.O. - p.c.
Bin Laden is dead - confirm!
With the big drop in PM's tonight and if they hold, there will be many who will scoop up piles of coins by Tuesday. J.M.O. - p.c.
Guess Who Just Got Invited To The Printer Party...
http://www.zerohedge.com/article/guess-who-just-got-invited-printer-party
With gold and silver taking off after the Fed statement, today King World News interviewed James Turk out of Spain. When asked about the action Turk stated, “I've just finished reading the Federal Reserve's announcement of its meeting concluded earlier today. I've also scanned some of the excerpts from Bernanke's press conference and Eric, I am struck by the inconsistencies. The precious metals markets must be seeing it the same way I am given the strength in gold and silver after the announcement's release.”
Turk continues:
“On the one hand, the Fed acknowledges higher commodity prices and rising inflation. Yet they go on to say that inflation trends are "subdued" and inflation expectations are "stable" - and those are the exact words they use. I mean, what can they possibly be looking at to reach those conclusions?
Then they say that they will keep interest rates low, but the reality is they need to be raising interest rates to fight the growing inflationary pressures, just like Volcker did when he was Fed chairman thirty years ago.
But here's the biggest inconsistency, the Fed plans to end its $600 billion quantitative easing program on schedule at the end of June. But the federal government continues to run horrendous deficits, forcing it to borrow record amounts of money. Consider this, since the Fed began QE2 last August, the federal government's debt has increased about $900 billion. Over $500 billion of that debt has in effect been borrowed from the Fed, courtesy of the Fed's printing press. Now I ask you, with the federal deficits running at or near record levels, who is going to buy all of the debt the federal government will be issuing after June 30th to fund its never-ending deficits?
Clearly, something has to give. There are only two choices to stop the dollar from the waterfall decline you and I have been talking about and expecting. Either the Fed raises interest rates, or politicians stop spending and it doesn't look like either one of those is about to happen. In fact, looking at the Dollar Index and precious metals markets as we speak, the waterfall decline in the dollar has begun. The Dollar Index has broken below all of its previous lows except for the last one at roughly 71 on the index. When that gives way you could see incredible panic selling ensue.
The bottom line is the market is calling the Fed's bluff. Investors don't believe the Fed will stop its purchases of US government debt on June 30th and for what it is worth, I don't either.”
When asked about gold Turk replied, “Gold is at a new record high, what's there to say? I am a firm believer in the message of the market. In other words, I don't look at cycles, momentum indicators or anything else, instead I look at prices, their trends and underlying fundamentals. The only conclusion to make about gold is that it is heading to my $1800 target and looks like it will get there soon, maybe sooner than the June 30th date I had been anticipating.”
When asked about silver Turk remarked, “Silver got close to its all-time $50 record high when it reached $49.78 on Monday morning in Asia. It is currently still below that price. Therefore, silver has not yet confirmed the new high gold made today. That may mean silver has to build a base here in the high $40s before plowing higher, and let gold lead for awhile. That would not be surprising given that silver has been leading since last summer, as is clear from the drop in the gold/silver ratio. We'll see how long it will take silver to hurdle above $50, but regardless, let's step back from the trees and look at the forest.
The dollar is in trouble and the Federal Reserve has its head buried in the sand. Washington's politicians are spending money they don't have and the federal government's credit rating is being called into question, I could go on, but you get the point. We're at an historic moment. Years from now we will look back and point to 2011 as the moment in time when the flight out of the US dollar accelerated leading to its eventual collapse. A simple and safe way KWN readers can prepare for this catastrophe is to own physical gold and physical silver.”
It is important to understand that your physical gold and silver holdings are insurance against a collapse of the US dollar if you live in the United States. If you live outside of the US it is your insurance against a collapse of your country or regional currency. This is an extremely important time in history because people are slowly losing faith in all fiat money globally. For now simply continue on your monthly accumulation programs and do not try to time these markets.
That's what the average Joe doesn't understand!! The dollar is not money, gold and silver are money. True money cannot be in a bubble, but a fiat currency definitely can. That is how I convinced only a few people I know to buy silver and gold. I said it is only a simple currency conversion from a weak to a strong position... The dollar is what has been in a 30 year bubble and now that bubble is popping. Once the hundred or so people that I have tried to convince start buying metals, then I will roll them over into something else...and that is when we know the silver/gold "bubble" has been reached.
Yes your understanding is correct. He will just keep the cash in the belief that it is security. It is difficult for the older generation to see that they are converting one kind of money (fiat) into a different kind of money (silver), however, for those who can see this, they will buy PM's. Our parents were depression era adults and anyone who had saved a few bucks could buy anything with silver certificates ( do you remember those?). So we, their children, have been raised to hear their stories and have been bit by the save the money bug. As the money changed to fiat, we still see it as before and have a difficult time changing. For him,the PM's are not "to funny or to risky" but to fearful. P.C.
There's one guy at work and I keep telling him to buy silver. He says he missed the boat and I rather buy food (and store it) than buy something that you can't eat. I told him he should do both but it seems he just wants to have fun and play with his money. So I pretty much gave up on him but he does ask what the current price is and I think it is because he secretly wants me to lose my azz, lol. He also thinks we must be at a top and what goes up just comes back down.
PS: the public Joe just cannot fathom it.
He probably feels like he would be buying too late or at the top. I can understand that seeing the charts as of late but in my opinion we will look back at $45 silver and laugh at how cheap it was!! I would take advantage of any dips below $40 if I were him and I'm sure P.C. will advise him on a good entry point...
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All about the fall of the dollar and the economic repercussions. This board was started so that we can do much complaining about the fall of the dollar and why. I am really, really, angry about this mess our government and the Federal Reserve have created. It's wreaking havoc through out the world's economy.
These are links to a few websites that are relevant to the 'Demise of the Dollar'. :
http://www.dollarcollapse.com/default.asp
http://silverbearcafe.com/private/home.html
Here are some must watch videos to help explain the ponzi scheme that we call our monetary system. :
http://silverbearcafe.com/private/02.09/moneyasdebt.html
http://silverbearcafe.com/private/6.08/difference.html
http://video.google.com/videoplay?docid=5355374476580235299
http://silverbearcafe.com/private/mises.html
Fiat Money ~ Toilet Paper Money
The history of fiat money, to put it kindly, has been one of failure. In fact, EVERY fiat currency since the Romans first began the practice in the first century has ended in devaluation and eventual collapse, of not only the currency, but of the economy that housed the fiat currency as well.
Why would it be different here in the U.S.? Well, in actuality, it hasn’t been. In fact, in our short history, we’ve already had several failed attempts at using paper currency, and it is my opinion that today’s dollars are no different than the continentals issued during the Revolutionary War. But I will get into that in a moment. In the meantime, I will show you that fiat currencies have not been successful, and the only aspect of fiat currencies that have stood the test of time is the inability of political systems to prevent the devaluation and debasement of this toilet paper money by letting the printing presses run wild.
Fiat Money -Rome — The Denarius
Although Rome didn’t actually have paper money, it provided one of the first examples of true debasement of a currency. The denarius, Rome’s coinage of the time, was, essentially, pure silver at the beginning of the first century A.D. By A.D. 54, Emperor Nero had entered the scene, and the denarius was approximately 94% silver. By around A.D.100, the denarius’ silver content was down to 85%.
Emperors that succeeded Nero liked the idea of devaluing their currency in order to pay the bills and increase their own wealth. By 218, the denarius was down to 43% silver, and in 244, Emperor Philip the Arab had the silver content dropped to 0.05%. Around the time of Rome’s collapse, the denarius contained only 0.02% silver and virtually nobody accepted it as a medium of exchange or a store of value.
Fiat Money -China — Flying Money
When the Chinese first started using paper money, they called it “flying money,” because it could just fly from your hands. The reason for the issuance of paper money is simple. There was a copper shortage, so banks had switched to the use of iron coinage. These iron coins became overissued and fell in value.
In the 11th century, a bank in the Szechuan province of China issued paper money in exchange for the iron coins. Initially, this was fine, because the paper money was exchangeable for gold, silver, or silk. Eventually, inflation began to take hold, as China was funding an ongoing war with the Mongols, which it eventually lost.
Genghis Khan won this war, but the Mongols didn’t assume immediate control over China as they pushed westward to conquer more lands. Genghis Khan’s grandson Kublai Khan united China and assumed the emperorship. After running into some setbacks with paper currency, Kublai eventually had some success with fiat money. In fact, Marco Polo said of Kublai Khan and the use of paper currency:
“You might say that [Kublai] has the secret of alchemy in perfection…the Khan causes every year to be made such a vast quantity of this money, which costs him nothing, that it must equal in amount all the treasure of the world.”
Even Helicopter Ben would be impressed. Marco Polo went on to say:
“This was the most brilliant period in the history of China. Kublai Khan, after subduing and uniting the whole country and adding Burma, Cochin China, and Tonkin to the empire, entered upon a series of internal improvements and civil reforms, which raised the country he had conquered to the highest rank of civilization, power, and progress.”
Wait a second, I thought we were bashing fiat currencies here…Can anyone say crackup boom? Since Marco Polo experienced this firsthand, and has been very helpful to us thus far, I think I will allow him to finish his analysis of China’s paper money experiment.
“Population and trade had greatly increased, but the emissions of paper notes were suffered to largely outrun both…All the beneficial effects of a currency that is allowed to expand with a growth of population and trade were now turned into those evil effects that flow from a currency emitted in excess of such growth. These effects were not slow to develop themselves…The best families in the empire were ruined, a new set of men came into the control of public affairs, and the country became the scene of internecine warfare and confusion.”
I wonder if Keynes read Marco Polo’s experiences with Chinese fiat currencies when he said that the U.S. government should just bury bottles full of money in old mine shafts to spur economic growth.
Fiat Money -France — Livres, Assignats, and Francs
The French have been particularly unsuccessful in their attempts with fiat money.
John Law was the first man to introduce paper money to France. The notion of paper money was greatly helped along by the passing of Louis XIV and the 3 billion livres of debt that he left.
When Louis XV was old enough to make his own mistakes, he required that all taxes be paid in paper money. The currency was backed by coinage…until people actually wanted coins.
The theme of the day…the new paper currency rapidly became oversupplied until nobody wished to own the worthless junk anymore and demanded coinage for their currency.
Oops. It looks like Law didn’t think that anyone would actually want coins ever again. After making it illegal to export any gold or silver, and the failed attempts by the locals to exchange their paper currency for something of actual value, the currency collapsed.
John Law became the most hated man in France and was forced to flee to Italy.
In the latter part of the 18th century, the French government again tried to give paper money another go. This time, the pieces of garbage they issued were called assignats. By 1795, inflation of assignats was running at approximately 13,000%. Oops.
Then Napoleon stepped on the scene and brought with him the gold franc. One of the good things that Napoleon realized is that gold is the way of a stable currency, and that’s what pretty much ensued during his reign.
After Waterloo had come and gone, the French gave it another go in the 1930s, this time with the paper franc. It took only 12 years for them to inflate their currency until it lost 99% of its value. History has proven a couple things about the French: 1) They are quick to surrender and 2) They are very talented at making worthless currency.
Weimar Germany — Mark
Post-World War I Weimar Germany was one of the greatest periods of hyperinflation that ever existed. The Treaty of Versailles was essentially a financial punishment placed on Germany to make reparations.
The sums of money to be paid by Germany were enormous, and the only way it could make repayment was by running the printing press. (Huge unpayable debt — that sounds familiar. I wonder what the solution in the U.S. will be.)
Inflation got so bad in this period that German citizens were literally using stacks of marks to heat their furnaces. Here is a brief timeline of the marks per one U.S. dollar exchange rate:
April 1919: 12 marks
November 1921: 263 marks
January 1923: 17,000 marks
August 1923: 4.621 million marks
October 1923: 25.26 billion marks
December 1923: 4.2 trillion marks.
Fiat Money -More Recent Times
In recent times, fiat failures have become more common occurrences. For the sake of time, I won’t go into extensive details of all these examples of paper money failures, because there are SO many. But here you have it:
In 1932, Argentina had the eighth largest economy in the world before its currency collapsed. In 1992, Finland, Italy, and Norway had currency shocks that spread through Europe.
In 1994, Mexico went through the infamous “Tequila Hangover,” which sent the peso tumbling and spread economic hardships throughout Latin America.
In 1997, the Thai baht fell through the floor and the effects spread to Malaysia, the Philippines, Indonesia, Hong Kong, and South Korea.
The Russian ruble was not the currency you wanted your investments denominated in in 1998, after its devaluation brought on economic recession. In the early 21st century, we have seen the Turkish lira experience strokes of hyperinflation similar to that of the mark of Weimar Germany.
In present times, we have Zimbabwe, which was once considered the breadbasket of Africa and was one of the wealthiest countries on the continent. Now Mugabe’s attempts at price controls, combined with hyperinflation, have the nation unable to supply the most basic essentials such as bread and clean water.
Fiat Money -Lessons to Be Learned
Here in the U.S., I should say the lessons were not learned. There are many consistencies from the above-mentioned stories that led up to the eventual collapse of the currencies.
The scary thing is that the U.S. has some of these above-mentioned characteristics, the ones that lead to toilet paper money becoming just that. More on that in just a second. I would first like to give a brief look at the U.S. attempts with paper money in our short history.
The first attempt with paper money came in 1690 with the issuance of Colonial notes. The first Colonial notes were issued in Massachusetts and were redeemable for gold, silver, corn, cattle and other commodities.
The other Colonies quickly jumped on the toilet paper money bandwagon and began issuing their own paper currencies. Like a broken record, the money quickly became overissued. The lessons of John Law and others were definitely not learned. It is not good enough just to say that a currency is backed by commodities. It actually HAS to be backed by commodities. Essentially, it was still a fiat money, and in a short period of time, Colonials became as good as toilet paper.
The next experiment came during the Revolutionary War. Big surprise — the issuance of paper money was used to finance the war efforts. This time, the currency was called a continental.
The crash of the continental was spectacular, and the phrase “not worth a continental” was coined. This brought on a large distrust for paper currency, and until 1913, toilet paper money in the U.S. wasn’t used. Enter the infamous Federal Reserve and its monopoly on money and interest rates. Now we have the greenback.
Although the money was “officially” backed by a gold standard until 1971, it wasn’t a true gold standard. When the government found it inconvenient to have a gold standard, it just made it illegal for U.S. citizens to hold gold or exchange dollars for gold.
As reported on Strike-the-root.com:
“Under the infallible leadership of President Franklin Roosevelt, it was made illegal to own gold. On March 11, 1933, he issued an order forbidding banks to make gold payments. On April 5, Roosevelt ordered all citizens to surrender their gold — no person could hold more than $100 in gold coins, except for collector’s coins. He also made it unlawful to export gold for payment abroad, unless done through the Treasury. The penalty for defying Roosevelt was 10 years in prison and a $250,000 fine.”
But the official demise of the dollar was locked into place in 1971 when “Tricky Dick” Nixon completely severed all ties between the dollar and the gold standard. During the decade that followed, the U.S. experienced some of the worst inflation in its history, only matched by today’s U.S. monetary and fiscal irresponsibility.
The U.S. of A. has all the characteristics set in place that have led to the collapse of every other fiat currency money in history.
We are currently at war, and the financing of this war is extremely inflationary. In fact, if you look back at our history, since 1914, the U.S has engaged in 16 military conflicts. We have been involved in some form of violent international accord in 44 of the past 93 years. The overwhelming majority of military conflicts result in monetary inflation.
The U.S. has a debt similar to that of Weimar Germany. All though the reasons for the debt are completely different, it appears that this Mount Everest of IOUs is going to be impossible to pay back. I guess the U.S. could just print 10 trillion dollar bills and hand them out, but the implications of such actions are obvious.
We are currently increasing the supply of dollars at a rate of 13% per annum. This overissuance of a currency has been the leading indicator of a currency on the brink.
So what’s in the future for the dollar?
Some, myself included, might say that the dollar has already failed. It has lost over 92% of its value since its initial issuance in 1913. After the revaluation in 1934, the dollar dropped another 41%. In my opinion, it already is toilet paper money, but for the above-mentioned characteristics, which are alarmingly similar to the circumstances that led up to the eventual collapse of the dollar’s toilet paper predecessors, I believe that we have seen only the tip of the iceberg of the dollar’s inevitable path toward becoming toilet paper money.
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