TEOTWAWKI - The End of The World As We Know It

Received from Herbert who is prepping in Missouri. ”Have you thought about how much the interest rates will rise when the economy starts to go downhill? I think we’ll see rates going up and up and when around the 12% mark for homes and vehicles, which would make credit cards around 24%, there will be a food shortage, or maybe a money shortage, or maybe both and food riots will commence in the inner cities. The government will be forced to act with military forces occupying the cities and our enemies will act. The Russian’s can’t re-take Crimea but if they haven’t taken Ukraine by then, they will. Then Poland and Hungary. China will move to control the China Sea, Japan and the Philippines. It’s going to be a mess. Have you thought about the strategic move to by survival equipment on credit such as a new truck, plenty of spare tires and an additional fuel tank, a couple of expensive rifles and ammunition and long term food? A prepper could end up new long lasting gear and be better prepared and after the economy collapse, will there be any institutions to collect? Land could be bought also. A Bug Out site with a water source in an area with decent weather, decent neighbors and no big cities. What say you?”

Herbert – I just cannot advocate going into a contract planning to default – however I think you’re point is valid is that if you need something expensive that you have to buy on credit, and is vital to your survival plans, then get it now before you can’t afford it. And if the interest rates rise and/or the institutions collapse, money is going to be your last concern. Unless you are counting your gold and silver as money.

However, on your point that the coming collapse will be based or begun due to economic issues, such as the collapse of the dollar and influenced by world events,....well, that is pretty valid. A recent article from Peak Prosperity gives us a little more insight:

Economist Warns of Collapse Risk: “Will Not Allow Life to Continue As We Know It”

Earlier this week we noted that an invasion of the Ukraine by Vladimir Putin would likely lead to a complete destruction of U.S. stock markets. It’s not so much the invasion force itself, but rather, the economic maneuvers that would come with it should Russia take this course of action.

Well known economist and founder of the Shadow Stats web site John Williams seems to agree. If Russia were to begin unloading US Dollars it would almost instantly lead to a collapse of not only our financial markets, but our entire way of life. And while Russia alone may not have the economic power to single-handedly crush the U.S. economy, if their trading partners and allies like China got into the mix, coupled with front-running investors who may suspect the move is about to happen, it could well be a blood bath on a global scale.

This wouldn’t even be an issue if the U.S. economy were operating at healthy levels, but as Williams notes in the following interview with Greg Hunter’s USA Watchdog, it’s anything but:

What you have to keep in mind is that back in 2008 we had one of the greatest financial crises the United States ever faced. The system was on the brink of collapse at that point in time.

What the Fed and the federal government did was spend every penny they could, anything they could create or anything they could guarantee. They did everything they could possibly do to keep the system from crashing. They guaranteed all bank accounts. So, they saved the system, but now what they did has not borne fruit. We have not seen an economic recovery. We have not seen a return of health to the banking system.

So, the system is very vulnerable; and if the Russians carry through with their threat, you have, indeed, the risk of it collapsing the system.

It does have the effect of creating a hyperinflation, which I think it would. It’s the type of circumstance that will not allow life to continue as we know it because the U.S. is not able to handle hyperinflation.

We’re not structured for it. Zimbabwe had one of the worst hyperinflations that anyone has ever seen. They were still able to function for a while because they get paid in a rapidly depreciating currency. It was so rapid it became like toilet paper overnight… they would go to a black market and exchange it for dollars. We (the U.S.) don’t have a black market to escape from our dollars. Gold is probably the closest thing to that. Gold will tend to rally here as the dollar sells off, barring very heavy intervention by the central banks which you may see.

The fundamentals will eventually dominate, and you will see a very weak dollar and very strong gold coming out of this. As it stands now, even without Russia and China, our economic system is, once again, on the cusp of a serious deleveraging. John Williams highlights that January retail sales, a leading indicator of economic health, gave the strongest signal since September 2007 that a recession is looming, if not already here.

One huge indicator of this is that Staples, a leading supplier of office supplies nationwide, is shutting the doors on 225 stores. And, they aren’t the only ones getting hammered by a pullback in consumer spending. The world’s largest retailer, Walmart, saw sales drop over 20% year-over-year in the fourth quarter of 2013. And as trend forecaster Gerald Celente once noted, “as goes Walmart, so goes America.”

So, in reality, Russia can probably sit back and watch the U.S. economy slip into a coma over the next couple of years. Of course, if their intention is to return their nation to super power status, an attack on the US economy by dumping the dollar would speed up the process and amplify the fall-out, causing a multi-generational depression.

Last year Barack Obama faced off with Russia over Syria, a situation that could easily have led to a much wider conflict. Now, the same players have taken the game to Ukraine. In both instances we’ve heard warnings of a potential collapse of our economic system in the event of an escalation. The point is that it really doesn’t matter if it’s Syria, Ukraine, Iran or some other periphery conflict. It should be clear that eventually this is exactly how it’s going to play out with respect to the US dollar. China and Russia will make their move when they are good and ready. When that day comes the implosion will be so fast that most Americans won’t even realize what has happened or know how to cope.

UrbanMan's comments:

1. It is a fact that we are not prepared for Hyper-inflation. We do not even grow enough food to support our own country. We (as a country) and we (as prepared individuals) must be able to grow and harvest food to support our survival. If you are not planning or prepared to grow your own food, then you are a fool.

2. Zimbabwe indeed had hyper-inflation,....what they also had was rampant violence from the starving and pissed off poor on those who owned farms and manufacturing. That will happen in this country. The government is certainly creating a base for it with all the class warfare and themes that the rich are creating the havoc in this country.

3. "The U.S. does not have a Black Market to escape to....." Yes we do. It's called Gold, Silver, Fuel, Food, other commodities,.......it's called ammunition, tools and services. But it is only valid for those who prepare.

How the Collapse of the Dollar Could Occur

US Dollar Collapse? Here Are 9 Ways It Could Happen, by Chris Ferreira on Economic Reason.com, which defines nine ways the dollar collapse could occur. He is spot on concerning the slow, gradual decline until a major event triggers the collapse. Until then most people will be fooling themselves, thinking market correction, chances to buy cheap and sell high, until it becomes apparent that there are other things more important than their financial holdings,....and those things of course are the ability to feed yourself and your family,.....and the ability to protect the same.

We all know that the US dollar is losing value through inflation every year; in fact, the dollar has lost over 97% of its purchasing power over the last century. When “real money” (i.e. backed up with intrinsic value) was used, a cup of coffee in the 1920s costed about a few cents. In a fiat world, where money’s value is ambiguous, a cup of coffee can cost upward to a 100 trillion dollars, as was the case in Zimbabwe in recent times. Just how much more can the remaining 3% be debased from the US dollar, and how fast can it happen?

A slow, gradual decline can occur without any one person ever even noticing the effects– until, that is, a “black swan”event comes along and triggers the psychology of investors to quickly reverse their thinking, and here a collapse can literally happen overnight. A “black swan,” a term coined by Nassim Nicholas Taleb in his bestselling book The Black Swan, is “an event, positive or negative, that is deemed improbable yet causes massive consequences.” In his book he describes the psychology biases that makes people individually and collectively blind to a rare event. He also notes that the more complex a system is, the more prone it is to failure as there is more room for glitches and errors. This analogy can be used to describe the complexity of the US global empire, complete with its massive debt and 900 military bases around the world. This article is taking a “black swan” approach to the US dollar.

Here are nine events that could trigger a black swan event that would result in a US dollar collapse. The reasons below are not in order of importance, and all them can prove to be negative for the US dollar.

1. The Fed Chooses to engage in currency wars by being the spender of last resort and printing money to oblivion. When people think of a collapse, they often think of a deflationary setting. But a collapse can also occur when the face value of the currency goes up–or skyrockets upwards, as did the currency in Zimbabwe, when everyone was suddenly eligible to be a “trillionaire.” (Webster needs to update their dictionary with this word). When the face value of a currency skyrockets, the purchasing power decreases, and these are usually the ingredients for hyperinflation and collapse.

It took the US 200 years to issue $3 trillion dollar in M3 money supply. Greenspan increased this to $10 trillion dollars in his eighteenth year as Fed chairman. How much has it increased under Ben Bernanke, in his seven years as chairman of the Fed? Your guess is as good as mine, actually, because the exact number is unknown: the Fed no longer reports this statistic as of 2006, exactly when Bernanke entered office. What a coincidence!

With QE 3 and QE 4, the Fed now prints a total of $85 billion a month, most of which is reportedly being held in reserves. Even with these rock bottom low interest rates, credit demand is weak. There is plainly too much uncertainty.

If the stock market were to crash again as it did in 2008, and the Fed were to consequently launch QE5, then QE6 and so on… This would hardly be, in reality, a “black swan” event since it is probable, but nevertheless, it could eventually lead to hyper-inflation and a total collapse of the dollar, where people would lose purchasing power of the dollar as in the case of Zimbabwe. This is more likely to occur if the US dollar also loses its reserve currency status.

2. The Fed’s printing press “jams” and ceases to stops printing money. As I’ve stated before, the Fed will most likely not stop printing money. During the December 2012. FOMC meeting, this belief was supported. The most important reason why the Fed needs to continue printing money is so that it can hold interest rates artificially low to stimulate the economy. Normally, higher interest rates would increase the value of the dollar, as this would cause people to deleverage from investments and increase the demand for dollars. However, the structural imbalances the economy has undertaken from a decade of artificial low interest rates would implode the economy from high interest rates now. Undoubtedly, if the Fed stops printing money, this will mostly cause higher interest rates. This will lead to increased bankruptcies, higher unemployment, more foreclosures, lower tax revenue for the US government, and increased interest on the national debt. In this situation it could lead to the bankruptcy of the US as they could default on their own debt.

Interest rates in the 80′s were increased signficantly to kill inflation, however the US debt was nowhere near what it is today (even in terms of % of GDP). At the present moment, the US is paying over $1 billion a day just in interest payments to service its debt. A slight increase in interest rates would significantly increase these payments and leave the US with even more debt than it already has, increasing their trillion dollar per year deficits. This is a scenario whereby the US could default just as Argentina did in the early 2000′s.

If they were to stop printing money, the Fed could trigger a dollar collapse, especially if foreigners decide to no longer lend the US any more money, and start dumping US debt from their foreign reserves.

3. Rise of “Gotham City” and the Vigilantes. We know that the US is currently the largest debtor nation in the history of the world, operating on yearly trillion dollar deficits. What if the US citizens were to “wake up” and collectively stop paying their taxes? What if they were to collectively choose to no longer support political decisions that serve to perpetually increase the debt? An increase in debt ruins the prospects for future generations, after all. Taxes are essentially the life-line of any government. A cut on this life-line is like cutting the main artery to the heart. Without a tax base, government can no longer pay its bills.

A significant internal revolution by citizens would entail a collective refusal against the paying of taxes and the continual raising of the debt ceiling. Perhaps these citizens might even become bond vigilantes and sell US bonds, especially if other countries became US bond vigilantes and sell their US bonds, as well. This would likely collapse the dollar, and send the US dollar into hyper-inflation.

4. China, the largest financier of the US debt, drops the debt bomb. The Chinese can drop the debt bomb on the US just by selling a fraction of their US treasury holdings. As of June 2012, the Chinese owned $1.16 trillion in US debt (US government treasury bonds). Japan owns $1.11 trillion and the OPEC nations, $261 billion. In the last few years, China has been lowering their purchases of US debt and replacing it with other assets. To circumvent this problem, the Fed of late has been stepping in to purchase treasury bonds to make up for the lost demand of the foreigners.

China’s power is the direct result of the symbiotic trade relationship with the US. The US buys goods from China in US dollars, and China ships them the products and uses the US dollar surpluses to buy US debt, among other assets.

It may not be in the interest of China to drop the debt bomb, but it definitely has the power to do it. If this is the case, there would be so much US debt on the market that other US debt holding countries could also throw their debt on the market as well as a result of panic and fear. Triggering an international run on US debt. The US Dollar will surely collapse in this scenario.

5. China, Japan, Russia, Iran, Germany, Brazil, Australia, Chile, UAE, India, and South Africa are bypassing the dollar and creating bi-lateral trade warfare.

What if now the Chinese, instead of dropping the debt bomb, create enough bi-lateral trade agreements to avoid the US dollar altogether with foreigners? In fact China, among other countries, has already done this by trading with the Chinese Yuan instead of the US dollar. If China, Japan, Russian, Iran, Germany, Brazil, Australia, Chile, USE, India, and South Africa would continue to do so, other larger countries may follow suit and before you know it, the majority of trade would be transacted in non-US dollars. At this point, the US dollar would no longer be needed, and its world reserve currency status would collapse along with its purchasing power.

What could also trigger a large decline in the US dollar would be if a relatively large oil-producing country (like Saudi Arabia) refuses to use the US dollar to sell its oil, choosing instead something more tangible (like gold). William R. Clark’s excellent book, Petrodollar Warfare, treats this issue precisely, going in depth into the Petrodollar collapse and how the US maintains its dollar supremacy with its current imperialistic foreign policy. If a major OPEC nation refuses to sell its oil in US dollars, this could result in a total loss of confidence in the US dollar, precipitating its collapse.

6. “Good-bye Dollar, Hello SDR!” The U.N. and IMF implement a New World Reserve Currency George Soros states in a recent video interview (see here) that the US needs a “New Financial World Order,” on the pretext that the current system is “broke” and creating huge trade imbalances. The Guardian stated the following:

“The International Monetary Fund warned that the colossal United States trade deficit was a noose around the neck of the economy, emphasizing that the once mighty dollar could collapse at any moment.”

Soros, a member of the Bretton Woods Committee–the same institution that created the IMF–is now promoting the Special Drawings Right (SDR) as a potential new world currency.

The progress for the SDR has been very slow and has not received much acceptance among other nations. However, note that the US currently controls the IMF by its voting powers (17% nominal interest, and a required of 85% majority for decisions). As more and more people lose confidence in the US dollar in general due to reckless monetary and fiscal policies, the IMF can instead back the SDR with gold to promote stability and confidence. That is certainly one realistic possibility considering that they reportedly own over 2,800 tons of gold. A shift in reserve currency from the US dollar to the SDR or other another currency would undoubtedly collapse the US dollar. It’s trade imbalance is sustained by it’s reserve status.

7. A “too-big-to-fail” corporation fails: A derivative shock-wave. The Financial Stability Board (FSB) released a list of 29 “too big to fail” corporations operating around the world. According to the FSB, these banks are considered to be “systemically important financial institutions” and a failure of any one of these corporations could result in “financial systemic failure.” Of the 29 corporations on the list, 17 are based in Europe, eight in the U.S., and four in Asia.

Bank of America

Bank of China

Bank of New York Mellon

Banque Populaire CdE

Barclays

BNP Paribas

Citigroup

Commerzbank

Credit Suisse

Deutsche Bank

Goldman Sachs

Group Crédit Agricole

HSBC

ING Bank

JPMorgan Chase

Lloyds Banking Group

Mitsubishi UFJ FG

Mizuho FG

Morgan Stanley

Nordea

Royal Bank of Scotland

Santander

Société Générale

State Street

Sumitomo Mitsui FG

UBS

Unicredit Group

Wells Fargo

A failure of any one of these banks, but especially one in the US, could create a bank run, further destroying the ability to provide credit and increasing the likelihood of a dollar collapse.

What is most likely to create a bank failure is a derivative failure. Actually, a current derivatives scandal is threatening to take down the world’s oldest bank:

“Banca Monte dei Paschi di Siena, the world’s oldest bank, was making loans when Michelangelo and Leonardo da Vinci were young men and before Columbus sailed to the New World. The bank survived the Italian War, which saw Siena’s surrender to Spain in 1555, the Napoleonic campaign, the Second World War and assorted bouts of plague and poverty.

But MPS may not survive the twin threats of a gruesomely expensive takeover gone bad and a derivatives scandal that may result in legal action against the bank’s former executives. After five centuries of independence, MPS may have to be nationalized as its losses soar and its value sinks.”

The precise, total amount of global derivatives in the market is not exactly known, but estimates range from 650 trillion to 1.5 quadrillion dollars. This amount dwarfs the world’s GDP at approximately $70 trillion. (Refer to this article to see what $16 trillion looks like.) It is no wonder why Warren Buffet calls derivatives the “financial weapons of mass destruction.”

According to the Controller of Currency and National Banks, here are the stats for the following banks as of September 2012:

JPMorgan Chase
Total Assets: $1.85 trillion dollars
Total Exposure To Derivatives: $71.07 trillion dollars

Citibank
Total Assets: $1.365 trillion dollars
Total Exposure To Derivatives: $55.51 trillion dollars

Bank Of America
Total Assets: $1.448 trillion dollars
Total Exposure To Derivatives: $43.79 trillion dollars

Goldman Sachs
Total Assets: $120.43 billion (not trillion)
Total Exposure To Derivatives: $41,23 trillion
Note that JP Morgan alone has more derivative exposure than the world’s GDP. A derivative collapse is definitely an event that could take down the whole financial system and collapse the US dollar. 8. A run on the gold and silver bullion exchanges. Andrew McGuire, a former Goldman Sachs trader, disclosed that the London bullion Market Association (LBMA) trades on a net basis each year of $5.4 trillion dollars, a little less than half the size of the US economy. The LBMA is the biggest gold commodity market in the world.

But how can the LBMA do this be when the gold market is such a tiny market? The world production of gold is about 2,500 metric tons of gold (88,184,905 oz) which at today’s price of $1,667 is approximately $147 billion in yearly production value.

The LBMA is the equivalent of a fractional reserve system in that it is leveraged 100 to 1. For every ounce of real gold that is sold, 100 ounces of paper gold is sold, meaning there are 100 claims on each and every ounce of gold. These numbers were verified by Jeffrey Christian, a gold expert and founder of CMP Group (a commodities research, consulting, investment banking, and asset management company). The leverage is absurd.

The LBMA can be compared with other exchanges. The world’s gold market is backed up by approximately 2.3% of real gold. If a mere 2.5% of people would start demanding their gold, the physical gold market would explode, subsequently crushing the dollar, as the value of the dollar is inversely proportional to the price of gold.

Hedge fund manager Kyle Bass pointed out that the New York Comex has only approximately 3% of the bullion on hand to cover future contracts positions. and this game will continue if people do not demand delivery of their gold. The emperor has no clothes!

9. A central bank gold rush and foreign gold repatriation from the Fed – Gold Audit Venezuela has actually just recently received their last shipment of gold bars from the US.

“This was the largest type of operation to transport this type of metal in the last fifteen years,” said Merentes. “The repatriation of our gold was an act of financial prudence and sovereignty.” (Bloomberg)

The Germans and the Dutch have also recently requested their gold to be repatriated from the US. However, unlike Venezuela, Germany was told to wait seven years to get their gold back. That sounds odd, right?

Now the Swiss, under their recently launched Swiss Initiative to Secure the Swiss National Bank’s Gold Reserves, are hinting that they might want to get their gold back on Swiss soil. The Swiss government has a long standing tradition of backing their currency with gold.

This gold repatriation is turning out to be much bigger than a political statement. It is a total non-compliant/non-confidence vote for the US and the US dollar.

Which country is next? Mexico? They have 96% of their gold stored in the US and London.

A central bank gold rush to repatriate a country’s gold from the US can cause a huge upward demand for gold, pushing the price of gold upward and crushing the US dollar. (Especially if the Fed doesn’t have their gold and has been leased out into the market).

We have just gone through nine black swan events–events, remember, that are highly improbable but yet, when they do happen, have massive consequences.

Chris Ferrerra promises a Part 2 of this article, which he will go through five other “black swan” events that could cause the US dollar to collapse.

Everyone's Predicting the Coming Collapse

The Coming Economic Collapse,.....there are many recent sources hitting the internet waves predicting an economic collapse precipitated by or accelerated by a stock market collapse. To be sure, many are selling something,....paper or physical gold and silver,.......some sort of economic survival or investments information packet or book,.....and sometimes just some sort of commentary based capture system to sell you something later on.

Sorting through the facts and determining the causes and effects have validity, after all if you are reading this site (and other survival sites) you have some sense of impending doom, be it a total economic collapse,.....a great depression,.......or just a non-specific scenario where life will be not only much different than we know it but very dangerous......that's why we are all prepping.

And to be sure, the people who think they can manage their financial assets by moving money around, changing investments, etc., and survive are missing the foundation of survival preparation. However, if you have noticed the same things I have, you see many more these "experts" not only talking financial protections, but preparations that include food storage and physical gold/silver holdings.

You still don't see too much on the mainstream economic collapse predictors about safe location selection and preparations nor the basic need for security and the foundation of security that firearms provide.

Still, there are many noted and respected economic voices out there predicting some sort of economic hard times coming. Gerald Celente, Robert Kiyosaki, Congressman Ron Paul, Peter Schiff, and Jim Rogers just to name a few of the main stream analysts.

Newsmax After Shock Survival Summit, detailing how investors are planning to or or at least ready to dump stocks before or at the beginning of what many people think will be a 2013 market crash. The below video is a representation of a prediction of where the U.S. economy is headed. This is more of a middle of the road analysis and prediction, by economist Bob Wiedemer, who predicted the housing market crash, the grid-locking of the U.S. markets, the surge in national debt, the world wide financial crisis, and the downgrade of U.S. debt. He predicts the subsequent effects of the coming economic hard times will have on everyone. My posting of this video is not an endorsement, just a video that is a representative video of many analysts predicting the coming collapse.  He is also selling you information on how to protect yourselves. He (Wiedemer) says, about the upcoming tough times, "It's going to get worse, before it gets better". From my perspective, it's going to get worse all right,..it remains to be seen if it can get better after that.....after all, that's what we are preparing for.

Worldwide Indicators of SHTF, September 2012

Global Economy. Moody's downgrades the Global Economy,..."Moody's analysts states that: risks to the global forecast remain to the downside and have risen relative to the risks perceived earlier in the year. The main risks to the global macro outlook stem from (i) a deeper than currently expected recession in the euro area, for example caused by deeper credit contraction; (ii) the risk of a hard landing in major emerging market economies, including China, India and Brazil; (iii) an oil-price supply-side shock resulting from resurfacing geopolitical risks; and (iv) the risk of sudden and sharp fiscal tightening in the US in 2013, given recent political gridlock."

Spain. Jobless roster grew to 4.63 million people in August 2012. The Spanish are suffering a nearly 25 per cent unemployment rate.

France. Unemployment now at 10%; businesses and capital are leaving France at an alarming rate due to high taxation on businesses and the wealthy by the new Socialist Government. 

Greece is expected to hit 27 to 29% in early 2013. 1 in 3 Greece businesses are closing.

Iran is now reported to be much further along than previously thought in development of a nuclear weapon, both in the enriching of uranium and the computer modeling for weapons design.

United States:
Many Urban food pantries supporting the poor are depleted. Donation both monetary and food supply wise are way down now while the demand is increasing.

Latest data has 46.7 million people on food stamps. Food stamps has doubled in the last four years and there is no reversal in site.

Food Prices already up by an average of 30% in the last 18 month is expected to go up another 8% in the next three months.

U.S. Cities going bankrupt San Bernadino, Mammoth Lakes, Stockton are bankrupt. Fresno, Compton and San Jose are not far behind,...and these are just in California. Rhode Island has Central Falls. Other cities on the bubble (and going to fall) include: Miami; Detroit; Rockland County, NY; and Gary, IN.

National drought. The U.S. Drought Monitor estimates that up to 80% of the contiguous 48 states faced moderate to exceptional drought conditions over the summer. A lack of rain coupled with high temperatures severely damaged corn and soybean crops. The U.S. Department of Agriculture expects the corn harvest to fall 13% from last year’s crop, and expects the soybean crop to fall 12%.

Collapse of the Dollar. The dollar is dropping, and to be fair it comes up and goes down, then comes up again and goes down, but overall the buying power of the U.S. dollar and the respect if has as the World's Reserve Currency is greatly diminished. The Fed is initiating another type of Quantitative Easing which will certainly devalue the dollar more. Fuel prices will go up, as will virtually everything else on the planet.

Oil prices are no longer expected to ever drop below $80 a barrel. In fact, some experts are bracing us to see $200 a barrel in mid 2013.

Hey, things are good. Take that extra $30 and go see a movie. You don't need to buy more foods, supplies or ammunition!!

Economic Collapse: Watch Out For QE3

QE3 is of course Quantitative Easing Round Three, where more fiat currency is printed further devaluing the current paper money in circulation and necessarily causing prices to inflate because the dollar is worth less. Once QE3 is announced or actually executed,.....expect the latter since the Government and the Fed have taken secrecy from the people to new heights,....precious metals will go up, particularly Gold.

In fact, when the major central banks launched a joint action to provide emergency U.S. dollar loans to banks in Europe, which put more money (not backed by anything but some politician's word) there became a rush to buy equities and commodities that would survive inflation and Gold rose $30 an ounce.

As 2011 ends, the four FED governors will be replaced and most analysts figure that the next four will be much more liberal in their monetary policies. QE3 will probably be snuck in, money created from air, without much publicity; and the present incredible low interest rates will climb as the dollar devalues. This will incite the $16.4 trillion Federal Debt to explode and the U.S. will be all probability start the slide to become like Greece. So the smart people are buying precious metals ahead of the very probable QE3.

It shouldn't end there for Survivalist. Everything will go up in price,... excepting your pay checks. The smart idea is to procure now what you can, because as the interest rates rise, the beginning of the dollar collapse begins. Scary times my friends. They will likely become much more scary in early 2012.

I am not advocating going into debt to purchase vehicles or property at the current low interest rates, although I know a couple people who are rationalizing that they would rather have new, reliable vehicles for a Bug Out
than to try and procure one when the interest rates are higher and the dollar buys less.  I'm not going to do that.  I'll continue on the same rate, maybe just step it up a notch, on procuring long stay food items and perhaps more Silver. 

2012 is going to be ugly.  Be prepared.

Urban Survival Planning - Perfect Storm Ahead?

If you are not preparing now, you are in fact just plain crazy! Just too many instances of facts, warnings and predictions for all but the thickest rose colored glasses to ignore.

NYU Professor Nouriel Roubini has seized the headlines again, warning that a "perfect storm" of economic disasters may smash the global economy in 2013. Roubini's perfect storm consists of four factors:
-The U.S. 's basket-case of an economy and budget deficit,
-A potential slowdown in China,
-European debt restructuring and
-Stagnation in Japan.

One problem that seems undeniable is the European debt crisis, which has defied all attempts to paper it over and kick the can down the road. Greece is broke, and no serious analyst thinks it will ever be able to pay back its debts. Roubini says "Everybody's kicking the can down the road of too much public and private debt. The can is becoming heavier and heavier, and bigger on debt, and all these problems may come to a head by 2013 at the latest."

50% more people are borrowing from their 401K plans. Some doing it as a source of immediate cash and others to fund survival preparation.

Two months ago the United States total crude oil imports averaged slightly over 9,000 thousand barrels per day with the top five exporting countries being Canada (near 30%), Mexico (near 15%), Saudi Arabia (near 12%), Venezuela (near 10%) and Nigeria (near 10%),......only two of the five states can be described as remotely stable. Upon a dollar collapse, fuel imports will drastically rise in price. We are surely in for a beating.

And now we have mainstream people talking about chaos and violence in the U.S. upon an economic collapse.

Urban Survival Planning - The Case for the Coming Hyper Inflation

I am including this article on UrbanSurvivalSkills.com because I believe much of what Dr. Roberts puts forth as an explanation of why a collapse of the dollar and subsequent Hyper-Inflation is not only coming it is unavoidable given just how far we have tumbled. And with Hyper Inflation will come a collapse that will create chaos.

This article is written by Paul Craig Roberts and can be read in it’s entirety at http://www.infowars.com/the-ecstasy-of-empire
Dr. Paul Craig Roberts is the father of Reaganomics and the former head of policy at the Department of Treasury. He is a columnist and was previously an editor for the Wall Street Journal. His latest book, “How the Economy Was Lost: The War of the Worlds,” details why America is disintegrating.

The United States is running out of time to get its budget and trade deficits under control. Despite the urgency of the situation, 2010 has been wasted in hype about a non-existent recovery. As recently as August 2 Treasury Secretary Timothy F. Geithner penned a New York Times column, “Welcome to the Recovery.”

As John Williams has made clear on many occasions, an appearance of recovery was created by over-counting employment and undercounting inflation. Washington cannot spend the economy out of recession. The deficits are already too large for the dollar to survive as reserve currency, and deficit spending cannot put Americans back to work in jobs that have been moved offshore.

Let’s get real. Here is what the government is likely to do. Once Washington realizes that the dollar is at risk and that they can no longer finance their wars by borrowing abroad, the government will either levy a tax on private pensions on the grounds that the pensions have accumulated tax-deferred, or the government will require pension fund managers to purchase Treasury debt with our pensions. This will buy the government a bit more time while pension accounts are loaded up with worthless paper.

The only remaining financier will be the Federal Reserve. When Treasury bonds brought to auction do not sell, the Federal Reserve must purchase them. UrbanMan comment: This is already happening.

The Federal Reserve purchases the bonds by creating new demand deposits, or checking accounts, for the Treasury. As the Treasury spends the proceeds of the new debt sales, the US money supply expands by the amount of the Federal Reserve’s purchase of Treasury debt.

Do goods and services expand by the same amount? Imports will increase as US jobs have been migrated off shore and given to foreigners, thus worsening the trade deficit. When the Federal Reserve purchases the Treasury’s new debt issues, the money supply will increase by more than the supply of domestically produced goods and services. Prices are likely to rise.

How high will they rise? The longer money is created in order that government can pay its bills, the more likely hyperinflation will be the result.

The economy has not recovered. By the end of this year it will be obvious that the collapsing economy means a larger than $1.4 trillion budget deficit to finance. Will it be $2 trillion? Higher?

Whatever the size, the rest of the world will see that the dollar is being printed in such quantities that it cannot serve as reserve currency. At that point wholesale dumping of dollars will result as foreign central banks try to unload a worthless currency.

The collapse of the dollar will drive up the prices of imports and off shored produced goods on which Americans are dependent. Wal-Mart shoppers will think they have mistakenly gone into Neiman Marcus.

Domestic prices will also explode as a growing money supply chases the supply of goods and services still made in America by Americans.

The dollar as reserve currency cannot survive the conflagration. When the dollar goes the US cannot finance its trade deficit. Therefore, imports will fall sharply, thus adding to domestic inflation and, as the US is energy import-dependent, there will be transportation disruptions that will disrupt work and grocery store deliveries.

Panic will be the order of the day. Will farms will be raided? Will those trapped in cities resort to riots and looting?

UrbanMan’s rhetorical Questions: Just how many banks will fall? How long will the “have nots” go without? Will the U.S. impose martial law? How will you survive?