Urban Survival - Collapse Indicators Late April 2011

I am getting a lot of readers e-mailing me about an imminent collapse. Maybe some of these that were the same people who called for an imminent collapse a dozen times or more in the last 10 years. I do know that most of us cannot keep at a peak preparedness 24/7. Obligations and just plain life get in the way. I think keeping on top looking for and analyzing the indicators of a SHTF scenario, or at least the scenarios that we can see coming is about the only thing we can do, besides trying to get better preparation wise each and every day.

As far as economic collapse indicators, I am trying to keep on top of the ones I am aware of,.....not just the financial factors, but make no mistake about it,...the financial factors ARE dire. Here are just some recent events and indicators:

University of Texas Investment Management Co. converting Gold shares into physical Gold on taking delivery of 6,643 gold bars, worth $991.7 million yesterday, that are stored in a bank warehouse in New York. Why would U or Texas do this when just the storage fee is around $900K a year?

Open interest in gold futures and options traded on the Comex (paper shares of Gold) typically exceeds supplies held in its warehouses. If the holders of just 5 percent of those contracts opted to take delivery of the metal, there wouldn’t be enough to cover the demand. Imagine if many people or companies held their base capital or even just their reserves in Gold then found out they could not re-deem it, nor sell it because there was nothing of value? Paper Gold and Silver shares are just like fiat currency!

Rep. Ron Paul’s warning that “Holding your money in dollars when the Fed can double and triple the supply rather quickly and quietly, is a losing proposition”. Ron Paul, a Texas Republican, advocates a return to a currency backed by precious metals.

West Coast advisor's report more and more of their investors converting their portfolio into physical Gold. The highest percentage of those who take possession of Gold shares in physical gold are millionaires.

The FED has printed more money than they ever have, so the value of the dollar has declined while the prices of goods and services have skyrocketed.

More people, including Congressman Paul, are warning of a probably Government attempt to curtail private entities and people holding gold,……remember U.S. ownership restrictions in the 1930s?

Speaking of Gold,…..and Silver. Prices were: Gold up $3.10 to $1,506.50 and Silver up $.54 to $46.60 and by the time I upload this article, the prices will be higher.

Concerns over Sovereign-debt (at an all time high) driving Standard & Poor’s to revise its U.S. credit outlook to negative. It the U.S> defaults on their debt or the U.S. dollar ceases the be the World’s reserve currency, then fuel prices will free fall upward.

Speaking of fuel,……it is averaging around $4 a gallon, with some locations charging $5 per gallon. Some analysts are predicting fuel to hit $7 a gallon by the fall – this is without the collapse of the dollar, however I suspect the dollar will collapse long before it. Fuel prices have tremendous repercussions as many electrical plants are ran by fossil fuels. Can you imagine everyone’s electric bill doubling? How about routine rolling blackouts? Can you imagine tens of thousands of people, who depend upon fuel oil to heat their homes, not being able to afford the necessity of heat during the winter in some of the coldest environs in the U.S. ?

Urban Survival Planning - Collapse Indicators: The Daily Crux

UrbanSurvivalSkills.com is now a fan of The Daily Crux by Porter Stansberry as he provides good insight into how the World economy and geo-political events will affect the United States through his site, The Daily Crux.

A couple of post headlines and orientation from each, from his website are posted below. You can go to his site to read the complete article. The take home lesson here is that Stansberry's Daily Crux is an essential information provider for us to format our own conclusions and indicators of the coming collapse. If I was you, I would bookmark it and refer back to it as often as you can, even several times a day.

Porter Stansberry: You must prepare for a crisis NOW
Wednesday, January 12, 2011
The collapse of the euro will cause all kinds of big problems this year and almost surely lead to a huge correction in commodities. Does that mean the U.S. dollar's problems are just a mirage? Nope. Sooner or later the U.S. will face a stark choice...
If we let the euro fail, it will result in terrible short-term consequences. So the Fed will crank up the presses yet again. Quantitative easing 3 will be another $1 trillion effort, this time focused on buying European sovereign debt. The Fed must become the lender of last resort not only for the U.S. , but for the world. That's the last step before its eventual collapse. After that point, people will no longer flee to Treasurys (Treasury Bonds) when a crisis erupts. They will flee to gold.

These "nightmare scenarios" could plunge the world into a new crisis
Thursday, January 20, 2011
What could cause an economic collapse in 2011? Well, unfortunately there are quite a few "nightmare scenarios" that could plunge the entire globe into another massive financial crisis.
The United States, Japan, and most of the nations in Europe are absolutely drowning in debt. The Federal Reserve continues to play reckless games with the U.S. dollar. The price of oil is skyrocketing and the global price of food just hit a new record high. Food riots are already breaking out all over the world. Meanwhile, the rampant fraud and corruption going on in world financial markets is starting to be exposed and the whole house of cards could come crashing down at any time.
... So we had all better be getting prepared for hard times. The following are 12 economic collapse scenarios that we could potentially see in 2011...

#1 U.S. debt could become a massive crisis at any moment.

#2 Speaking of threats to the global financial system, it turns out that "quantitative easing 2" has had the exact opposite effect that Ben Bernanke planned for it to have.

#3 The debt bubble that the entire global economy is based on could burst at any time and throw the whole planet into chaos.

#4 As the U.S. government and the Federal Reserve continue to pump massive amounts of new dollars into the system, the floor could fall out from underneath the U.S. dollar at any time.

#5 One of the primary drivers of global inflation during 2011 could be the price of oil. A large number of economists are now projecting that the price of oil could surge well past $100 dollars a barrel in 2011.

#6 Food inflation, massive food riots in various spots in the World; what is going to happen if global food prices go up another 10 or 20 percent and food riots spread literally all over the globe during 2011?

#7 There are rumors that simply will not go away of massive physical gold and silver shortages. Demand for precious metals has never been higher.

#8 The U.S. housing industry could plunge the U.S. economy into another recession at any time. Record low new houses and massive foreclosures scheduled.

#9 A combination of extreme weather and disease could make this an absolutely brutal year for U.S. farmers. A winter of new cold weather and snowfall records set across the United States .

#10 The municipal bond crisis could go "supernova" at any time. Already, investors are bailing out of bonds at a frightening pace. State and local government debt is now sitting at an all-time high.

#11 The quadrillion dollar derivatives bubble could burst at any time.

#12 The biggest wildcard of all is war. The Korean peninsula came closer to war in 2010 than it had in decades. The Middle East could literally explode at any time.

Mayors of major U.S. cities say defaults are certain
Thursday, January 20, 2011
The mayors of Los Angeles and Chicago said the financial strains still weighing on local governments in the wake of the recession may cause cities to default on their bonds.
Los Angeles Mayor Antonio Villaraigosa, a Democrat, said municipalities are being squeezed as states move to balance their own budgets, a step that can involve taking more funds that would otherwise be sent to towns and cities.
"There's no question you'll see some cities in default," Villaraigosa told reporters today at a press conference in Washington , where the U.S. Conference of Mayors is meeting. "The difference between us and the federal government is they can print money.

America 's "day of reckoning" has arrived
Wednesday, January 19, 2011
Call it a Day of Reckoning or a Point of No Return. Either way, it has arrived. Cities and states are in forced cutback mode except for Illinois , which managed to kick the can down the road with massive increases in taxes.

A huge threat to your freedom is gathering strength (WARNING: extremely controversial post)
Friday, January 14, 2011
"What is government if words have no meaning?"
Jared Loughner reportedly posed that question to Rep. Gabrielle Giffords at a forum two years ago. Perhaps unwittingly, Loughner answered that question himself by murdering six people and attempting to murder fourteen others, including Giffords. In doing so, the young nihilist effectively privatized government's central function.
Shorn of the sophistries that provide it with a moral disguise, pared down to its essentials, political government is the systematic use of exactly the same kind of criminal violence employed by Loughner, only on a much grander scale. This was illustrated the day before Loughner's murderous rampage, when agents of the government ruling us used a remote-controlled drone operated from the safety of an office building in Nevada to murder six people in Pakistan 's North Waziristan region.

Americans were not admonished to observe a moment of chastened silence in memory of the victims of that exercise in criminal violence. This is, in part, because observances of that kind would quickly become tedious: Since 2008, Pakistan – a country with which the government ruling us is not formally at war – has endured at least 250 drone attacks, in which roughly 1,400 people have been killed.

According to the most conservative estimate of "collateral damage," only a tithe of those slaughtered through drone strikes are "militants."

Hundreds of civilians have likewise been massacred in the ongoing "surge" in Afghanistan , many of them in nighttime raids by "Special Operations Forces" – that is, death squads – whose behavior is not easily distinguishable from that of Jared Loughner. At least a hundred thousand civilians have been annihilated in the continuing war in Iraq , which was inaugurated for reasons just as delusional as anything that percolated in Loughner's distressed mind.

For those who worship at the altar of the omnipotent State, mass murder of this kind is an exercise in sanctified violence. In a 2009 interview with Foreign Policy magazine, Bill Clinton – who has repeatedly denounced "anti-government" speech as a form of criminal sedition – defined terrorism as "killing and robbery and coercion by people who do not have state authority." (Emphasis added.) What this means, of course, is that "killing and robbery and coercion" by duly authorized agents of the State isn't terrorism,…it’s policy.

Urban Survival Planning - Financial Indicators: The Debt Crisis

UrbanSurvivalSkills.com, since our inception, has been counseling on Survival Planners having a list of indicators that would precede and foretell the coming collapse. The idea is this list is self developed; based on factors and indicators you think are important to identify the near term coming collapse; and, should consider all factors – social, economic - financial and political.

UrbanMan uses a lot of financial sources, probably none more credible that Leeds who we have hyperlinked to this site just below the title.

Sandy Leeds, CFA is a Senior Lecturer at The University of Texas at Austin . He teaches graduate level classes in the MBA program and also serves as President of The MBA Investment Fund, L.L.C. Prior to teaching, he had careers as a lawyer and a money manager. He did his undergraduate work at The University of Alabama and also has a law degree from The University of Virginia and an MBA from the University of Texas . At UT, he has received many teaching awards, including Outstanding Professor in the MBA Program. He is married and has three children.

Leeds’ latest article, go to here: http://leedsonfinance.com/2010/09/21/ideas-about-a-debt-crisis/

Talks about the debt crisis and why you should be worried,…and if you are worried you should be preparing maybe just alittle more.

This is Leeds’ article in his words:

Here are a few quick points why you should be worried about the US :

1. By 2040, the US ’ debt-to-GDP ratio will be 425% (according to the BIS). This estimate is worse than the estimates for Portugal , Italy , Ireland and Greece.

2. We can only print money to solve the problem if we don’t mind inflation.

3. Even if you adjust for the effects of the economic cycle and you exclude interest payments, the US has a -7.3% structural budget deficit.

4. If the US wanted to reduce our debt-to-GDP to 60% by 2030, we would need to have a fiscal adjustment (lower spending or higher taxes) of 8.8% of GDP. While that might sound like a small number, realize that our tax revenue is approximately 18% of GDP.

Factors That Cause a Debt Crisis

1. Excessively large debt (pretty obvious).

2. Excessive dependence on foreign capital (which may flee).

3. Economic weakness (the debt-to GDP ratio grows if GDP is stagnant).

4. Political weakness (excessive spending and insufficient taxation).

5. Irrational exuberance (b/c investors don’t learn about the risks of debt from the past).

In the US , we could argue that we’re five-for-five (on these factors).

Six Ways Out of a Debt Crisis

1. Higher GDP growth.

2. Lower interest rates (to reduce impact of excess debt).

3. Bailout – capital from abroad.

4. Raising taxes / cutting spending.

5. Inflation (printing money).

6. Default.

Here’s a quick summary of these six exit strategies. The US is too mature for high growth. Eventually, risk premiums make low rates impossible. We’re too large to be bailed out. We don’t have the political will to cut spending or raise taxes. We’re unlikely to default (b/c we can print money). So, high inflation seems likely.

Key Lessons From History

1. Governments do not cut spending or entitlements. Similarly, they do not reduce taxes to stimulate growth. They do not tax consumption to stimulate savings. They do not grow their way out of the problem (without defaulting or depreciating).

2. Governments encourage central banks and commercial banks to load up on government debt. They often discourage foreign investment so that investors are left with little choice but buying domestic debt. They tend to default on commitments to weaker creditor groups. They condemn bond investors to negative real returns (through inflation).

3. Not all debt crises are the same. We have issued much short-term debt – so rates may rise ahead of inflation. We could have high rates in a deflationary period! This may mean that inflating our way out of the problem won’t work and we would have to default.

See…short and sweet. I didn’t clutter this report with any reason to be optimistic.

end of Leed's article.

In our view, this makes more certain and hastens the growing gap between the haves and the have nots, which is another way of declaring the extinction of the American middle Class. What happens when there are 30 million, 60 million or 50 million have nots who cannot afford to live?