Monetary Collapse on July 1st?

Most of you have seen the ads and the alerts that on July 1st, the Dollar will collapse. I received the same spam that Bob talks about in the article. I was in the process on trying to figure this out because I have received several questions from readers about it, then all of sudden I come across Bob Rinear's article which is much more articulate than I could ever be. Did I previously mention in a post that Bob Rinear is becoming one of my favorite sources of common sense information?

Does The World Stop July 1st?

By Bob Rinear

Over the past few months, my inbox has been littered with spam Emails suggesting that on July 1st, the US dollar will collapse, the lights will go out, and martial law will be put in place. All I have to do is cough up a few hundred bucks to get the authors letters, and I’ll know everything I need to get around this disaster.

But, it has been so effective at stirring people up, that I’ve probably fielded a couple dozen questions from our subscriber base, asking indeed if July 1 is going to usher in some form of collapse. So, I figure I best do a quick outline of what this is all about, and see if we’re all going to be reduced to babbling rubble in a month.

The basis for this doom and gloom scenario is that House bill HR 2847 which is titled “Hiring Incentives to Restore Employment Act” goes into full effect on July 1. Well that sounds tame enough, what’s the issue? Well, inside this monstrosity is a section labeled the “Foreign Account Tax Compliance Act” which most will know as FATCA, and that is the basis for the apocalypse warnings.

If you’ve ever truly read any Government “bill” you know it is loaded to the gills with “blah blah blah” of Article 2 of section blah blah blah, which is subnoted in index 9, subset 4, of blah blah blah….. but I can wrap it up for you relatively compactly. Basically the gist is this.. Uncle Sam is broke. When nations go broke they start looking for income in every nook and cranny. So, they pass more and more laws to make sure they know what everyone has, where it is and how they can tax it. FATCA does that for all the US citizens with foreign connections, such as offshore accounts, foreign stock holdings, etc.

They want to make sure no one’s making a dime they can’t get their ransom on. FATCA requires foreign financial institutions (FFI) of broad scope — banks, stock brokers, hedge funds, pension funds, insurance companies, trusts — to report directly to the IRS aall clients' accounts owned by U.S. Citizens and U.S. persons (Green Card holders).

Starting July 1, FATCA will require FFIs to provide annual reports to the Internal Revenue Service (IRS) on the name and address of each U.S. client, as well as the largest account balance in the year and total debits and credits of any account owned by a U.S. person. If an institution does not comply, the U.S. will impose a 30% withholding tax on all its transactions concerning U.S. securities, including the proceeds of sale of securities.

In addition, FATCA requires any foreign company not listed on a stock exchange or any foreign partnership which has 10% U.S. ownership to report to the IRS the names and tax I.D. number (TIN) of any U.S. owner.

FATCA also requires U.S. citizens and green card holders who have foreign financial assets in excess of $50,000 (higher for those who are bona-fide residents abroad) to complete a new Form 8938 to be filed with the 1040 tax return, but this has been in effect since 2011.

Okay, so why the utter doom and gloom sales pitch about this act collapsing the dollar, and forcing us all to eat bugs in the front yard? Well, the underlying theme is actually correct. It WILL accelerate the move OUT of US dollars that I’ve been showing you all for two years now. I’ve been telling you of the “global reset” for more than two years as a new global reserve is going to replace the dollar. Many think FATCA will be the straw that snaps the camels back.

All the articles I’ve penned about the Chinese wanting out of the US dollar, how they are forming alliances with dozens of countries to use Native currencies and bypass the dollar, etc, are all real, and YES…FATCA will push even more countries that have been sitting on the fence to say “the hell with this US regulation stuff, we’re not dealing with all this”

Multiple reports have suggested that small and medium-sized firms, unable to bear the compliance costs or the crippling withholding taxes, would be especially likely to ditch American markets. "On the institutional side, the cost of becoming FATCA compliant may be prohibitive for some foreign institutions, and therefore they will divest from their American holdings," explained Douglas Goldstein, author of The Expatriate's Guide to Handling Money and Taxes and director of Profile Investment Services Ltd. Indeed, compliance costs borne by the private sector are expected to dwarf the amount of additional U.S. tax revenue — perhaps by hundreds of times.

Okay, so now you know what the hype is all about. The question is, do we all come to a grinding halt on July 1? No, we don’t. This bill was crafted in 2010 folks, and it has been postpone/delayed a couple times. Nations, and institutions have had years to work the system, and decide if they’re going to play ball or go home. So, most of them are “ready” for this nightmare. But there’s no doubt that some of the fence sitters, when finally faced with “doing” the work, instead of just planning for it, are going to toss in the towel.

I think that the biggest “problem” isn’t going to be chasing down Ex-pats for their income taxes, those numbers won’t be significant enough to make a major difference. Where things could go bump in the night, is that it very well might push more foreign investors to completely shun our markets. In other words, why buy US stocks, if Uncle Sam is going to butt in on every transaction? They can instead buy emerging markets, BRICS markets, and not have to have us breathing down their neck.

It is moves like this bill, that proves to you all that the US is in the final stages of a long drawn out collapse. When nations do stupid things as ours has since the early 70’s, they run up debts they can’t pay. Before they toss in the towel and give up and let everything crash, they first go on a witch hunt for every penny they can scrape up to keep the illusion alive. We’re in that stage now.

Just like I mentioned in Sunday’s letter, the elites don’t pick up the phone and tell you what they’re doing. You have to be a forensic economist and put the pieces of the puzzle together to see the big picture. This act is simply another, albeit a very large…piece of the puzzle.

On Sunday I showed you the Deutsche report on bringing the Chinese yuan to the “world stage”. I also showed you the groundbreaking EurAsian pact that Russia is forming, as dozens of nations shun the West, for the economic stability of the East. Add up the times that the foreign nations have said that they’re tired of the US dollar hegemony, and toss in the gold that China, India, Russia and others are amassing and you can easily see the big picture emerge. The US is a desperate old gal, who wants to keep her façade of strength and superiority, but it’s all just make up. Everyone knows it except her own citizens, who are kept in the dark by the main stream media.

I think it also bears mention that our Government continues to militarize itself inside our borders. Years ago we made serious mention of the billions of rounds of ammunition that the Dept of Homeland defense was amassing. Then I showed you all the armored vehicles that have been populating cities and towns across the Country. Just a couple weeks ago the Dept of Agriculture started submitting for bid applications to acquire Submachine guns, Body armor, ballistic vests, etc. I don’t think you have to be a paranoid conspiracy freak to want to know just what on earth the Dept of Agriculture needs with a bid for .40 caliber “full auto” tactical weapons capable of holding 30 or more rounds???

The explanation for billions of rounds of hollow point orders and all this military style armament is that it is for training purposes, etc, but let’s be realistic. I pump more rounds out of my guns than just about anyone you’ll ever meet….yet I don’t use hollow points for my target shooting. I’m supposed to believe that this is all for training purposes? I’m supposed to believe that towns having tanks and half tracks, is all about better policing? I don’t think so. It’s just another part of the big picture. As the dollar continues to be shunned and collapse, as the Emerging markets join at the hip and create trade zones that exclude the US… we’re going to break down both economically and socially. They see it coming and they’re arming for the day.

UrbanMan's Comment: Hollow points for training ammunition? Yes. Most agencies practice and qualify with the same duty ammunition. I believe the LARGE governmental ammunition purchases were because of new EPA lead restrictions would necessarily drive up ammunition prices and drastically effect ammunition availability for the civilian population. That's your clue to stock more ammunition while you can find it, AND afford it.

Just Tuesday we learned that the Russians and the Chinese have created a joint “Ratings agency” for investments. They’re tired of the old boy network of Moody’s and S&P. They’re tired of having them place ratings on things based on political pressure versus fundamental economics. So, they will discard the ratings agencies, just like they’re discarding our dollars. But sometimes you have to pay attention to see just how pervasive this move “East” is becoming. Sometimes it isn’t broadcast in big headlines for all to see. For instance in April the Saudi’s held a very public parade, and what was rolling down the street? Chinese made missiles. Not US made. Many wouldn’t notice and others wouldn’t care. But that was a very public “thumbing of the nose” to the US by the Saud’s.

No, the world doesn’t stop on July 1. No, the dollar doesn’t collapse in a heap. No, we don’t have martial law in every town. No, the lights don’t go out. None of the doom and gloom you’ve been warned of is going to happen on July 1. It is however ALL going to happen. It just won’t happen then. It comes in fits and starts, a little at a time. The dollar has been in a slow motion collapse for years. The economy has been sinking for years. This will continue until the day they “pull the plug” on it. When is that? No one knows.

But the one thing I do know is that a date won’t be broadcast. It won’t come because of a bill that’s going to go into effect. No, when the collapse hits, or the reset or what ever you wish to call it, it will come out of the blue, probably on a Sunday night/Early Monday morning, with NO warning. So, don’t sweat July 1 folks. That’s just noise. You can however sweat all the things that point to the fact that all the evils are indeed going to hit at some point. Okay? Good.

UrbanMan's Comment: Perhaps Rinear's most significant point is that "the date of the monetary or dollar collapse WON'T be broadcast. It'll come without warning." Get prepared for it as it coming. It would sit you well to have some silver and maybe some gold bullion on hand as well. Think about it.

Protect Yourself Against Financial Collapse

In the last article I posted - the excellent article by Bob Rinear, titled "Disaster - Dealing With It, published on the International Forecaster, I hope the readers keyed on Bob's rhetorical question: "Lets suppose we do get some form of economic implosion that takes down the economic infrastructure. A few weeks of no banks, no credit cards working, no ATM’s, no way to buy anything…. And it’s nation wide. It isn’t localized. How well would you fare?

Well? How well would you fare? While food stocks, water sources, the ability to protect yourself - meaning firearms, a defensive plan and above all a PLAN are all important, I certainly think that holding cash on hand, plus silver and gold bullion is a vital component of any plan.

I have compiled two very good articles below. The first is a series of questions for, and answers from the Deviant Investor, concerning gold and silver. I have only posted the Q&A dealing outside of market forces and that Wall Street mumbo jumbo. The Deviant Investor article was posted on 8 April 2014 and available in it's full length here.

Q: “I see nothing but trouble in the financial and political world. I see potential war in the Middle-East, in the Ukraine, in the South China Sea, and maybe elsewhere. I see morons in high places doing silly things. I see bankers printing their currencies to excess, as in uncharted territory excess, and I can’t see how this will end well for anyone, even the upper 1% of the political and financial elite. I want to buy gold and hunker down, but I also know that gold prices are manipulated, controlled, and capped, so why should I buy gold?”

A: I think it is important to remember that the powers-that-be (PTB) have been mismanaging the world for a long time, we are still here, the sun still shines, and gold has retained its value for several millennia. If the manipulation were overwhelmingly powerful, why is gold selling for about $1,300 instead of $300 like it was 12 years ago? The answer is, in my opinion, that the PTB know the dollar is going down and gold is going up, probably a long way up, but the PTB want to manage the dollar’s devaluation, not let the devaluation get out of hand, and they need to keep the game of financial musical chairs playing while they “get theirs.” Buy gold and ignore the daily, weekly, and monthly shenanigans in the markets.

Q: “I think silver is a better value than gold. I think gold is going up and silver is going up even more. I’m selling my gold and buying silver. What do you think of that plan?”

A: I think, as of today, silver will appreciate much more than gold and so you are probably correct. But things change, and I like the safety and security of gold also. Balance is good.

Q: “I’m putting my trust in God and my money in 3 month Treasuries. I think you should also. Go ahead, admit it, you are a bit jealous.”

A: I’ll pass on the Treasuries. I’m not jealous. I put my faith and trust in God and Gold. It works for many people.

And another good (but long) article from Gold Silver Worlds titled: "Monetary Insurance: Protect With Physical Silver Against The Financial Winter."

UrbanMan's note: I would have replaced the words Financial Winter with Financial Collapse.

As part of our research to unveil the best tactics and strategies to protect against the upcoming tsunami in monetary and financial markets, we have reached out to Charles Savoie, author and researcher, with a tremendous knowledge of precious metals history. Our question was how individuals and small investors can best protect during the hard times that are coming, which will most likely be characterized as turmoil and collapses (of all sorts of assets, including currencies, around the world).

Charles Savoie wrote a very useful document for our readers. It is entitled “The Best Monetary Insurance”, counts 38 pages, and is a mix of practical tips embedded in an historical context. The key message of Mr. Savoie is to hold enough silver in physical form, ideally a mix of formats, but for sure silver dimes.

In this article, we highlight the most actionable tips and tactics. The full document is embedded at the bottom, it can also be downloaded.

Visit Mr. Savoie his two websites: www.nosilvernationalization.org and www.silverstealers.net. He offers all this information as a free service to the public.

Silver has historically played an important role. It has been money, but, more than anything else, a metal of the elites. Consider this:

U.S. Congress knew silver to be more valuable in regard to gold than the present bullion banking fiends. And Congress knew it nine generations ago! For details, see Senate document number 67 of the first session of the 73rd Congress, “Elementary Facts Bearing On The Silver Question” by Joel F. Vaile” (50 page document, 1896). Today the reality ratio of silver to gold may have fallen to 9, due to depletion of minable silver (The U.S. Geological Survey concurs) and even more so, the evanescence of above surface inventories. Ratios of silver to gold such as the approximate 64 to 1 of late March 2014 are illusory. But the real impact is that silver is a better buy than gold.

The best monetary insurance you can have is 90% silver dimes 1964 and earlier. Many gold bugs readily admit silver to be more depressed than gold. Ted Butler stated long ago that not even gold has a users association. The fact of the existence of this group is another of many proofs that synthetic money creators hate and fear silver even more than their loathing for gold. The Silver Users Association started out as the Silver Users Emergency Committee in World War II and in 1947 was renamed the Silver Users Association. Directors of SUA companies, especially the biggest silver users, are also since that time, directors of megabanks. 90% U.S. coins, historic money, facilitated many billions of transactions during their long history spanning many generations. Inasmuch as silver is so depressed relative to gold, personally, I advocate owning little or no gold; unless the investor cannot acquire silver. This is not disdain for gold, but more so, advocacy for acquiring the interest with higher potential. Silver can be swapped for gold at a later time if the ratio tilts to overvalue silver versus gold. Why buy 1 ounce of gold today versus 60+ silver ounces, when you may be able later on to swap those 60 + silver ounces for over 5 gold ounces?

UrbanMan's Comment: 90% silver coins are good to have but only part of the equation. I would also recommend silver bullion - i.e...one once silver rounds as well as some smaller denomination gold coins such as 1/10th and 1/4th ounce gold bullion coins.

A silver dime at the mints started out with a content of .0723 oz silver (4 digits is enough!) Due to average circulated wear, the business typically uses the figure of .0715 ounce contained silver. You will be able to tell the difference from a dime with no wear and a dime with light wear and more so, a heavily worn dime. I feel that very worn dimes are better melted, except for collectors seeking an inexpensive “cull” or “filler” coin for a key date and mint mark. When you buy dimes, you’re unlikely to get any with 89.24% silver, which were minted from 1796 to 1837. The clear advantage of Mercury dimes over Roosevelt is guaranteed identification of purity with no check of the date nor glance at the rim to look for telltale copper insides. Silver coins have a surprisingly large variation in surface tone, and you can’t always rely on telling the surface tone of a cupronickel (sandwich dime, 1965 and later) from a silver dime. Of course, proof silver dimes (1992-2009) can be found in dates beyond the fabled 1964 date. These are good buys generally only if you chance to come by some in a batch of mixed date dimes, in which case, they won’t be proof anymore, but will very likely stand way out due to newness and absence of wear.

I am not saying buy silver dimes, and no other silver. I have all types except the 1,000 ounce ingots, which you can anticipate having to have assayed if you have these and decide to sell. Unless you’re a larger investor and have intentions of using metal to buy land, stick with smaller units. Having smaller units wouldn’t preclude their use in buying land; smaller units are more “maneuverable” as to utility in purchases.

If dimes aren’t available, try for quarters. It mostly comes down to two considerations. One, the 90% coins haven’t been minted now for an entire half century—they get scarcer by the day, as some of these are always being smelted into bullion with silver scrap at refineries, and being melted in jewelers crucibles with some three-niner, in a proportion to yield .925 Sterling jewelry and Two, the silver dime is the most divisible, or the most fractionated, form of silver. You can go buy a 100 ounce silver bar. However, you can instead go for the same amount of silver, approximately, in 90% dimes. This equates to almost exactly 1,400 dimes (28 rolls of 50 coins) at the .0715 figure. In most cases, dealers have allowed me to cherry pick the dimes I wanted and the methodology I used was as follows.

Tip: Avoid damaged coins

Never buy coins with damage such as hole drilled, bent, clipped, etched (vandalized) or shaved rims. There’s the inevitable coin with red nail polish, best avoided. While date and mint mark checking is usually only practical in over the counter situations, and is unlikely to turn up anything of outstanding scarcity, it could help you in terms of being able to assemble some starter sets for sale to numismatic collectors. So while you aren’t paying numismatic prices, you will be getting some numismatic values, as long as people want to collect coin series as a hobby or business. It pays to print out a list of these mint issues and be familiar with them.

Tip: Avoid high premiums

You can buy .999 silver as half, quarter, and tenth of an ounce rounds. There is nothing wrong with these items. However, know two things—the collectible value will remain less, and when you buy 90% coin, you aren’t paying for any manufacturing or minting premium. You will pay such premiums with the smaller three-niners. Seven dimes in nearly all cases can be considered a touch more than a half ounce of silver; and 14 dimes a full ounce. In terms of how much silver is out there as separate items each weighing less than one ounce, definitely at this time, there is more 90% coin than these newer bullion items.

If your silver consists entirely of three and four-niner bullion—stop! Buy some dimes, or trade bullion for some dimes. These 90% coins—in all denominations—are increasingly hard to source. More investors have caught on that whereas these coins are a half century and older, and the supply is constantly shrinking; bullion silver will be produced as long as mining and scrap can supply silver. The 90% silver, though not industrially pure as is, is nonetheless the scarcer form of silver. If buying on E-Bay, do avoid dealers with less than very high positive feedback. Be fairly quiet about your holdings—no boasting to anyone. Keep these precious items in several scattered, and unpredictable—locations. If a thief finds one cache, hopefully the others will be missed.

Tip: Where and how to store your bullion

If you don’t have a vault or safe, and plan to obtain one, you may consider paying cash, for clear reasons you can imagine yourself. If it needs to be delivered and installed, arrange to have someone photograph the delivery personnel and the vehicle, from several views. When my vaults were delivered to an off-site location I have, I remarked as they were finishing, “Now if I only had something worthwhile to store in them;” I then indicated I expected to inherit an antique gun collection in several years. It never hurts to be careful. Read “The Art Of War” by Sun-Tzu. Many major military blunders, costing so many lives. As always, check ratings first, and buy from the source with the best ratings.

There’s always the steel vault and loaded gun approach—which are quite reasonable. I advise going on EBay and buying some cheap synthetic rubies. Then, you make up a phony gemological appraisal showing a stone is worth lots of money. Next, you place these in a jewelry box (unlocked) on top of a dresser. A thief would think he’s got a real haul, and maybe decide to stop searching. I suggest printing out articles making fun of silver as investment, and leaving these where you think it might mislead someone. If you use a keypad operated vault, consider acquiring a solar battery recharger and in case the power grid fails and the stores close. If you find your battery operated keypad fails due to battery exhaustion, this device will solve the problem of accessing your money metal. Be sure you’re using compatible batteries in the first place; they must be a size that matches the recharger, and must be rechargeable batteries. Keep backup batteries in a climate controlled environment where they’ll last longer. Cover any vault/safe with a tarp or other use of drapery, such as a decorative item—even a Mexican style multicolored serape or even plain canvas. Whenever possible, place any type of objects of low value on top, around and in front of the safe.

Tip: Check what you are buying

Never buy a bag, half bag, quarter bag or tenth of a bag in a shop without first having it opened up and spread out, unless you have a long trust relationship with the dealer. Paper rolls, more than plastic tube rolls, should be checked. You aren’t accusing the dealer of dishonesty, you are verifying contents, because errors can happen on anyone’s part. Eventually, due to real variations in silver weight in bags, these will have to be sold by actual weight rather than by face value times a factor! Check ratings of Internet sellers before buying. Many unfortunates out there are stressed out due to the Tulving fiasco. I consider the 40% Kennedy halves (1965-1970) a poor choice as long as 90% is available. The war nickel series, 1942-1945, contains even less silver, at 35% but is a better buy, weight for weight, if similar rates for contained silver are offered. Those nickels are more historic.

In closing, Charles Savoie says: “The suppression of the silver price is the most nagging and pestilential problem in world monetary history.”

What the U.S. Economic Collapse May Look Like

An interview between Chris Martenson (of Peak Prosperity) and Fernando Aguirre, a source of expertise on the hyperinflationary destruction of Argentina’s economy in 2001, occurred which may give us an insight on the U.S. economy will collapse. The interview and comments are below, however this interview was preceded by an article, titled "Watch Out, It's Coming" by Bob Rinear on International Forecaster concerning the impending U.S. Economic Crash. First selected comments from Bob Rinear's article, then the interview between Martenson and Aguirre.

Bob Rinear: This are Bob's comment's about the recent Fed taper where the Fed injected (printed) less money than in previous months which affected the Stock Market.

"I’ve said many many times to you all that a global “reset” is coming. The IMF World bank knows that there’s too much debt in too many countries for it to ever be repaid. Global currency fluctuations are so extreme and so rapid, it is sometimes impossible to carry on continuous trade. Just recently when Turkey’s currency was imploding, one carpet manufacturer had to call for currency pricing every 20 minutes so he could quote customers. This goes on world wide, every minute of every day Because of huge disparities over the amount of debts outstanding, versus the “value” of each countries GDP, it is evident that to have a continuous world where things stop blowing up every six months, it has to be changed."

"Countries all over the world are tired of the US in particular, as they’ve destroyed the value of the dollar for years, making it virtually worthless. No matter where we look, the evidence suggests “they have to do something”. Well, they’re doing something as we speak. In the background, in the shadows, outside the spotlight they’re working on a “replacement” for the US dollar as the global reserve. But more than that, they’re working out a complete rebalancing of all Countries debts, versus their “worth” in natural resources, Gold and Silver reserves, output per capita, productivity, demographics, etc."

UrbanMan Comments: The U.S. may be in a slide that is completely irreversible as the national debt continues to soar abve $17 Trillion and the debt limit for annual budgetary spending is suspended until 2015. China actively working to dethrone the U.S. dollar, which will in and of itself devalue the dollar tremendously, as well as all economic indicators - housing prices, unemployment, entitlement spending and stock market instability that will add weight to hyper-inflationary period that seems to be unavoidable. That is the "Watch Out, It's Coming" that Rinear talks about. Now let's look at the history lessons, albeit only a few short 13 years ago, in Argentina:

Background: Argentina is a country re-entering crisis territory it knows too well. The country has defaulted on its sovereign debt three times in the past 32 years and looks poised to do so again soon. Its currency, the peso, devalued by more than 20% in January alone. Inflation is currently running at 25%. Argentina's budget deficit is exploding, and, based on credit default swap rates, the market is placing an 85% chance of a sovereign default within the next five years.

Want to know what it's like living through a currency collapse? Fernando Aguiree speaks to Chris Martenson and gives us good look:



Chris Martenson: Okay. Bring us up to date. What is happening in Argentina right now with respect to its currency, the peso?

Fernando Aguirre: Well, actually pretty recently, January 22, the peso lost 15% of its value. It has devalued quite a bit. It ended up losing 20% of its value that week, and it has been pretty crazy since then. Inflation has been rampant in some sectors, going up to 100% in food, grocery stores 20%, 30% in some cases. So it has been pretty complicated. Lots of stores don't want to be selling stuff until they get updated prices. Suppliers holding on, waiting to see how things go, which is something that we are familiar with because that happened back in 2001 when everything went down as we know it did.

UrbanMan Comments: The U.S. annual average inflation rate since 2009 lays between 1.4 to 3.0% depending upon which government source you use. However, the government also says the unemployment rate is around 7%. How many of us can deny that their grocery money goes far, far less now days than years ago?

Chris Martenson: So 100%, 20% inflation; are those yearly numbers?

Fernando Aguirre: Those are our numbers in a matter of days. In just one day, for example, cement in Balcarce, one of the towns in Southern Argentina, went up 100% overnight, doubling in price. Grocery stores in Córdoba, even in Buenos Aires, people are talking about increase of prices of 20, 30% just these days. I actually have family in Argentina that are telling me that they go to a hardware store and they aren't even able to buy stuff from there because stores want to hold on and see how prices unfold in the following days.

UrbanMan Comments: What would you do if grocery store and other comodity prices doubled within, say even a month, let alone one day? The majority of us living within a budget would have to priotize what we wanted as opposed to what we needed. However, the average American household has something like 3 to 4 days of food in their pantry. Many people would be calling in sick to work in order to be at the grocery store before they opened. Think of the riots when stores would refuse to open or sell until prices were set that day. Who would be setting those prices?

Chris Martenson: Right. So this is one of those great mysteries of inflation. It is obviously 'flying money', so everyone is trying to get rid of their money. You would think that would actually increase commerce. But if you are on the other end of that transaction, if you happen to be the business owner, you have every incentive to withhold items for as long as possible. So one of the great ironies, I guess, is that even though money is flying around like crazy, goods start to disappear from the shelves. Is that what you are seeing?

Fernando Aguirre: Absolutely. Shelves halfway empty. The government is always trying to muscle its way through these kind of problems, just trying to force companies to stock back products and such, but they just keep holding on. For example, gas has gone up 12% these last few days. And there is really nothing they can do about it. If they don't increase prices, companies just are not willing to sell. It is a pretty tricky situation to be in.

Chris Martenson: Are there any sort of price controls going on right now? Has anything been mandated?

Fernando Aguirre: As you know, price controls don't really work. I mean, they tried this before in Argentina. Actually, last year one of the big news stories was that the government was freezing prices on food and certain appliances. It didn't work. Just a few days later those supposedly "frozen" prices were going up. As soon as they officially released them, they would just double in price.

UrbanMan Comments: When there are price controls, you will see several things,... 1 - a burgeoning black market; bartering and alternative currency transactions,..... meaning gold and silver. Again, food riots would ensure.

Chris Martenson: Let me ask you this, then: How many people in Argentina actually still have money in Argentine banks in dollars? One of the features in 2001 was that people had money in dollars, in the banks. There was a banking holiday; a couple of weeks later, banks open up; Surprise, you have the same number in your account, only it's pesos, not dollars. It was an effective theft, if I could use that term. Is anybody keeping money in the banks at this point, or how is that working?

Fernando Aguirre: Well, first of all, I would like to clarify for people listening: Those banks that did that are the same banks that are found all over the world. They are not like strange South American, Argentinean banks – they are the same banks. If they are willing to steal from people in one place, don't be surprised if they are willing to do it in other places as well.

UrbanMan Comments: Hyper inflation and impending economic collapse would force the government to implement banking and other financial controls. This could be banking holidays; could be limits on transaction amounts; could/would be a government order to turn in gold and silver bullion; may be government take over of all retirement accounts. So ask yourself how prepared are you for hyper inflation and a economic collapse?

Urban Survival Preparation - The Death of the Dollar and Slide to Collapse

With the latest news about the Government monetizing the Debt, meaning printing more money to buy our own debt, because overseas creditors (primarily the Chinese) won't buy anymore - they think the U.S. is sliding into a collapse, the "why" to prepare is even more valid right now, than every before. This is a Hyper-Inflation scenario.

This is a long post, but necessary to read to understand the threat. Taken from the American Thinker and Fox News, this should explain the danger we are facing.

Nothing can save our financial system in the long run. It is doomed to collapse. This is inevitable, because our government controls and manages its very foundation -- the dollar.

The federal government began its takeover of the dollar in 1913 when it established the Federal Reserve Banking System. Prior to that, the dollar was a real store of value. In the period from 1783 to 1913, there was a long period of currency stability with virtually no inflation. If you saved one dollar in 1800, your great-grandchild could buy roughly the same amount of goods with the same dollar one century later.

In 1913, five dollars could get you the following:

15 pounds of potatoes, 10 pounds of flour, 5 pounds of sugar, 5 pounds of chuck roast, 3 pounds of round steak, 3 pounds of rice, 2 pounds each of cheese and bacon, and a pound each of butter and coffee ... two loaves of bread, 4 quarts of milk and a dozen eggs.

In 2010, five dollars barely gets you two pounds of cut chicken meat.

Since the establishment of the Federal Reserve in 1913, the dollar has shed more than 90 percent of its value. The loss of value has been especially pronounced since 1971, when Richard Nixon took the dollar off the last vestiges of the gold standard. In that year, the dollar became a pure fiat currency, grounded in nothing but the whims of politicians and technocrats. The consequences have been disastrous. One thousand 1971 dollars would buy only $185 worth of goods today. This represents a loss of some 80 percent in purchasing power.

The dollar has already entered its terminal phase. The word "doom" is written across it for anyone with the eyes to see. Sad to say, there is no way to reverse its downward slide. With more than $13 trillion in public debt and some $100 trillion in unfunded mandates, our federal government has assumed far more obligations than it can ever make good on. Worse still, these figures are growing larger every year.

To put it bluntly, our federal government is flat-out bankrupt. Currency disintegration is always the unavoidable result of government bankruptcy. The dollar -- which has been weakening for many decades -- will at some point go into a sudden death spin.

The only question is when. It may happen six months from now or six years from now. The time frame is impossible to predict, but we can now be certain that happen it will. No one -- not even the federal government -- can escape the numbers. And the numbers are hideous. One hundred trillion-plus is a killer.

Under normal circumstances, the dollar would have collapsed already, given how impossibly indebted our government is. Some people are puzzled by its continued survival. They say this is just another sign that we live in a crazy world. But there is nothing crazy about it. The dollar is still alive because there is no ready alternative.

Doomed though it may be in the long term, big-time holders of U.S. dollars keep desperately hanging on because they have nowhere else to go. Where else could China invest its nearly one-trillion-dollar reserves? There is no easy option. So China keeps propping America's federal debt by purchasing Treasury notes and thus keeping the dollar afloat. It is a bad deal for China and a fortuitous one for the U.S., at least for the time being. But things cannot go on like this forever. Eventually, something will give in, and the whole gargantuan house of debt will come crashing down. When that happens, things will get ugly.

Some people may say this situation has been brought about by reckless fiscal and budgetary policies rather than by the government's management of the currency. But the ability of government to run deficits is directly tied to its power to manage money.

It is very difficult for politicians to run large deficits if the currency is anchored in something intrinsically real and valuable -- let's say gold. This is because when they post large budget shortfalls under a gold standard, people naturally ask them, "Where in the world are you going to get all the gold to pay for all this spending?" And since politicians do not know how to make gold, they are forced to admit: "We are going to get it from you, the people, of course. Where else could it come from?"

As you can imagine, such answers do not usually go well with the voting public. The restrictive quality that real money exerts on the profligacy of politicians is often referred to as "the golden handcuffs."

As it is now, most people do not think that they will have to pay for the spending incurred by their representatives in Congress. They think that deficits are something that does not concern them directly. They somehow assume that if the government needs more money, it can simply issue more bonds. But this way of living is unsustainable, and sooner or later, the inflow from abroad will stop. Then we will all pay for our government's extravagance by the disintegration of the currency.

This ain't just coming from the American Thinker. Fox News presented this news cast on a collapse.


Charles Biderman, Founder and CEO of TrimTabs Invesment Research, appears on Fox Business to give his view on the mounting economic problems that could trigger a collapse of the markets with Fox's Liz Claman