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.
Showing posts with label Financial collapse. Show all posts
Showing posts with label Financial collapse. Show all posts
Wednesday, June 11, 2014
Sunday, February 23, 2014
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?
Sunday, October 27, 2013
Bankrupt Governments Likely To Confiscate Wealth And Independence
Excellent article from Gold Silver Worlds on what appears to be a probability
as the US Government not only increase the national debt limit but did not put a
cap on the limit on how much the government can borrow. I am not posting this
article by Claudio Grass to suggest you run out and buy Gold. Although I
believe in having Gold and Silver on hand, it is only one aspect of total
preparedness. I am posting this for overall situational awareness.
I am also posting this article as it supports the the 100% probability of an economic collapse unless things change drastically and soon. Whether you call it a financial or monetary collapse or a super depression really doesn't matter. What matters is the likelihood of the government confiscating not only precious metals but other forms of wealth in order to perpetuate their control. They (the Government) will have no choice if they want to retain control and power.
The first Liberty Forum will take place between December 4th and 8th. The conference has a focus on asset protection, wealth preservation and the preservation of liberty. Some off-the-chart successful investors, metals and resource experts, offshore service providers, and international legal and accounting professionals will be on hand to help with personal preservation strategies.
Keynote speakers are Peter Schiff, Doug Casey and Mark Skousen. One of the many lectures will be held by Claudio Grass, a passionate advocate of free-market thinking and libertarian philosophy. Mr. Grass is convinced that sound money, i.e. gold and silver, and human freedom are inextricably linked to each other. In his function as Managing Director at Global Gold in Switzerland he offers investors a safe, convenient and competitive Swiss solution for buying, selling, storing and delivering a variety of physically allocated bullion coins and bars, completely outside of the banking system and protected under Swiss law.
Claudio Grass has written several white papers, research notes and articles. In them, he has clearly explained that the most likely outcome of the current global debt situation is that governments will try to inflate their debts away. That is what has always happened throughout history. The current evolution of events has not changed his view. The latest actions by Bernanke, in particular his decision not to stop QE, underlines the validity of Claudio Grass’ view. “Taking Yellen’s history into account, I am certain she will follow in the footsteps of her predecessor. Therefore, nothing has changed from my point of view.”
The Liberty Forum conference brings up some fundamental statistics about the debt situation
• The U.S. currently owes 885% of its GDP, more than any other industrialized country.
• America hasn’t passed a budget since April of 2009.
• As a country, the U.S. has had a budget deficit in 42 out of the last 47 years.
• U.S. expenses are 56% higher than its revenues.
• America expects to double its debt within the next 10 years (the interest on that debt alone will equal $1 trillion a year).
• Its annual income is $2 trillion, while its total debt obligations are $121 trillion (that’s a debt ratio of 60/1 – typically anything over 1/1 is a HUGE red flag to any investor, indicating that a country is not likely to be able to pay its debts in 12 months’ time).
The true US financial situation remains remarkably underexposed as the mainstream media is mainly concentrating on Europe and increasingly the emerging markets. We asked Claudio Grass about his opinion on that.
German economist Wilhelm Röpke once said: “The theories men construct, and the words in which they are framed, often influence their mind more strongly than the facts presented by reality”.
This sentence nicely describes today’s mindset amongst most people in the western word. It is no wonder because we were raised in a government controlled education system, in which we are indoctrinated from childhood that the path of success is based on memorizing and repeating! We are not taught to question [authority], the reason for this is that it is much harder to manipulate logical or independent thinkers.
This is why I am such a fan of history; our world is the result of thoughts and actions from the past. You see the cause and effect? The problem is that the actual system we live in focuses only on the effects but never discloses the underlying causes, let alone trying to connect the dots. This research needs to be done by the individual. However, research requires a healthy portion of curiosity and bravery as well as independence and self-confidence to stand up for one’s own opinion, which will be in contrast to the story we are told by governments and the mainstream media. The emperor has no clothes; however, it always takes time until the child that reveals it will be heard.
The world reserve currency is still the U.S. Dollar (USD) and more than 60% of all the reserves with central banks are still based on the USD, and only approximately 25% are in Euros. Therefore, many more governments and pressure groups are dependent on the USD and have an interest in not disclosing the truth about the actual state of the dollar. Also, in terms of global trade the USD is still the prevailing currency, especially as long as the USD keeps its hegemony over the Middle East and its oil reserves. In addition, specifically related to the USD, there is a single institution that has decisive power. It is therefore much more reactive than the Euro system with different central banks and different nations, each with their own national political agendas. Therefore, the power of the Euro is much more limited, which makes it also more fragile and vulnerable.
Bankrupt governments likely to confiscate wealth and independence
Claudio Grass goes on to point to a concerning trend: as governments run out of money, people’s sovereign rights to wealth and independence get increasingly trampled. What the world is experiencing for the last 100 years is an ongoing centralization especially in terms of credit – the so called monetary system – and political power in the hands of a few. This is only financeable if existing wealth is redistributed from the bottom to the top, through inflation and taxation. Since 2007 the average U.S. family wealth plunged 40%. Back in 1913 the average government quota was less than 10%. Today, depending on the country, (or the state) government quotas are between 50-70%. The trend is obvious! This system can go on until the remaining 50-30% is nationalized. The result is simple: Slavery!
That’s why it is my conviction that we are going to see “tools of financial repression” kicking in much harder within the next 5 years, which will impoverish most of middle class, but also affluent people. I see some parallels with the Weimar Republic before World War II. Back then, the US government in cooperation with Wall Street, flooded especially Germany with cheap credit by implementing the Dawes and Young Plan during 1924 and 1932. Afterwards it happened what always comes after an artificial boom: destruction and bust. This created a toxic environment for persons such as Hitler, Stalin, Franco and Roosevelt, to name just a few who came to power at about the same time, and more important, promoted more centralized political power and war. People were exhausted and the future was not really bright – and we are facing the same symptoms again today. We have 50 Million Americans living off food vouchers and this figure is still climbing. I believe history does not repeat itself but it rhymes, and therefore people need to understand that within the actual system property-rights do not really exist. People need to realize they are dependent on the whims of government and banks.
The first signs of these trends are already visible. Politicians and mainstream media say that things are improving which does not reflect the above mentioned trends. Most economic reports even expect economic growth. How can expectations be so different while everyone is looking at the same data? Claudio Grass answers that question with a quote of Edward Bernays, Father of Propaganda.
“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in a democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. [...] We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. [...] In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons … who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.”
Include a monetary crash in your risk assessment
Claudio Grass looks at the mess the world is in today and suggests to include a possible crash of the actual system as part of one’s risk assessments. Therefore, an investment into a tangible asset, without having any counterparty- risk, makes absolutely sense.
It is impossible to foresee when the system will crash. Inevitable does not necessarily mean imminent. However, “I am convinced that this world will look very different in the coming years and what can be said, too, is that it is not developing in the right direction.”
Anthony C. Sutton (British and American economist, historian and notable author, answered this question once by stating: “It will not stop until we act upon one simple axiom: that the power system continues only as long as individuals want it to continue, and it will continue only so long as individuals try to get something for nothing. The day when a majority of individuals declares or acts as if it wants nothing from government, declares it will look after its won welfare and interest, then on that day power elites are doomed.”
I started buying physical Gold and Silver in 2004 and so far it has been a very good investment. At the same time I explored the fascinating history of money; it reads like a criminal novel or even like a horror story in some cases. I personally support a system that is based on free market money where people can freely decide what they want to use as currency – sound money for a sound society. Money stands in the center of how human beings live together. It must be consequently a property title and not a debt promise. Gold and Silver are money in its pure form! They allow people to exchange goods, based on mutual respect and honesty….. With sound money we used to have production and trade and therefore prosperity. With fake money these periods have been dominated logically by corruption and wars; or in the words of Lord Acton, “Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.”
UrbanMan's comment: I agree with everything in this article except the very last sentence" "Great men are almost always bad men.” This is simply not true. Great men are most often common men to rise to meet a challenge.
I am also posting this article as it supports the the 100% probability of an economic collapse unless things change drastically and soon. Whether you call it a financial or monetary collapse or a super depression really doesn't matter. What matters is the likelihood of the government confiscating not only precious metals but other forms of wealth in order to perpetuate their control. They (the Government) will have no choice if they want to retain control and power.
The first Liberty Forum will take place between December 4th and 8th. The conference has a focus on asset protection, wealth preservation and the preservation of liberty. Some off-the-chart successful investors, metals and resource experts, offshore service providers, and international legal and accounting professionals will be on hand to help with personal preservation strategies.
Keynote speakers are Peter Schiff, Doug Casey and Mark Skousen. One of the many lectures will be held by Claudio Grass, a passionate advocate of free-market thinking and libertarian philosophy. Mr. Grass is convinced that sound money, i.e. gold and silver, and human freedom are inextricably linked to each other. In his function as Managing Director at Global Gold in Switzerland he offers investors a safe, convenient and competitive Swiss solution for buying, selling, storing and delivering a variety of physically allocated bullion coins and bars, completely outside of the banking system and protected under Swiss law.
Claudio Grass has written several white papers, research notes and articles. In them, he has clearly explained that the most likely outcome of the current global debt situation is that governments will try to inflate their debts away. That is what has always happened throughout history. The current evolution of events has not changed his view. The latest actions by Bernanke, in particular his decision not to stop QE, underlines the validity of Claudio Grass’ view. “Taking Yellen’s history into account, I am certain she will follow in the footsteps of her predecessor. Therefore, nothing has changed from my point of view.”
The Liberty Forum conference brings up some fundamental statistics about the debt situation
• The U.S. currently owes 885% of its GDP, more than any other industrialized country.
• America hasn’t passed a budget since April of 2009.
• As a country, the U.S. has had a budget deficit in 42 out of the last 47 years.
• U.S. expenses are 56% higher than its revenues.
• America expects to double its debt within the next 10 years (the interest on that debt alone will equal $1 trillion a year).
• Its annual income is $2 trillion, while its total debt obligations are $121 trillion (that’s a debt ratio of 60/1 – typically anything over 1/1 is a HUGE red flag to any investor, indicating that a country is not likely to be able to pay its debts in 12 months’ time).
The true US financial situation remains remarkably underexposed as the mainstream media is mainly concentrating on Europe and increasingly the emerging markets. We asked Claudio Grass about his opinion on that.
German economist Wilhelm Röpke once said: “The theories men construct, and the words in which they are framed, often influence their mind more strongly than the facts presented by reality”.
This sentence nicely describes today’s mindset amongst most people in the western word. It is no wonder because we were raised in a government controlled education system, in which we are indoctrinated from childhood that the path of success is based on memorizing and repeating! We are not taught to question [authority], the reason for this is that it is much harder to manipulate logical or independent thinkers.
This is why I am such a fan of history; our world is the result of thoughts and actions from the past. You see the cause and effect? The problem is that the actual system we live in focuses only on the effects but never discloses the underlying causes, let alone trying to connect the dots. This research needs to be done by the individual. However, research requires a healthy portion of curiosity and bravery as well as independence and self-confidence to stand up for one’s own opinion, which will be in contrast to the story we are told by governments and the mainstream media. The emperor has no clothes; however, it always takes time until the child that reveals it will be heard.
The world reserve currency is still the U.S. Dollar (USD) and more than 60% of all the reserves with central banks are still based on the USD, and only approximately 25% are in Euros. Therefore, many more governments and pressure groups are dependent on the USD and have an interest in not disclosing the truth about the actual state of the dollar. Also, in terms of global trade the USD is still the prevailing currency, especially as long as the USD keeps its hegemony over the Middle East and its oil reserves. In addition, specifically related to the USD, there is a single institution that has decisive power. It is therefore much more reactive than the Euro system with different central banks and different nations, each with their own national political agendas. Therefore, the power of the Euro is much more limited, which makes it also more fragile and vulnerable.
Bankrupt governments likely to confiscate wealth and independence
Claudio Grass goes on to point to a concerning trend: as governments run out of money, people’s sovereign rights to wealth and independence get increasingly trampled. What the world is experiencing for the last 100 years is an ongoing centralization especially in terms of credit – the so called monetary system – and political power in the hands of a few. This is only financeable if existing wealth is redistributed from the bottom to the top, through inflation and taxation. Since 2007 the average U.S. family wealth plunged 40%. Back in 1913 the average government quota was less than 10%. Today, depending on the country, (or the state) government quotas are between 50-70%. The trend is obvious! This system can go on until the remaining 50-30% is nationalized. The result is simple: Slavery!
That’s why it is my conviction that we are going to see “tools of financial repression” kicking in much harder within the next 5 years, which will impoverish most of middle class, but also affluent people. I see some parallels with the Weimar Republic before World War II. Back then, the US government in cooperation with Wall Street, flooded especially Germany with cheap credit by implementing the Dawes and Young Plan during 1924 and 1932. Afterwards it happened what always comes after an artificial boom: destruction and bust. This created a toxic environment for persons such as Hitler, Stalin, Franco and Roosevelt, to name just a few who came to power at about the same time, and more important, promoted more centralized political power and war. People were exhausted and the future was not really bright – and we are facing the same symptoms again today. We have 50 Million Americans living off food vouchers and this figure is still climbing. I believe history does not repeat itself but it rhymes, and therefore people need to understand that within the actual system property-rights do not really exist. People need to realize they are dependent on the whims of government and banks.
The first signs of these trends are already visible. Politicians and mainstream media say that things are improving which does not reflect the above mentioned trends. Most economic reports even expect economic growth. How can expectations be so different while everyone is looking at the same data? Claudio Grass answers that question with a quote of Edward Bernays, Father of Propaganda.
“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in a democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. [...] We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. [...] In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons … who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.”
Include a monetary crash in your risk assessment
Claudio Grass looks at the mess the world is in today and suggests to include a possible crash of the actual system as part of one’s risk assessments. Therefore, an investment into a tangible asset, without having any counterparty- risk, makes absolutely sense.
It is impossible to foresee when the system will crash. Inevitable does not necessarily mean imminent. However, “I am convinced that this world will look very different in the coming years and what can be said, too, is that it is not developing in the right direction.”
Anthony C. Sutton (British and American economist, historian and notable author, answered this question once by stating: “It will not stop until we act upon one simple axiom: that the power system continues only as long as individuals want it to continue, and it will continue only so long as individuals try to get something for nothing. The day when a majority of individuals declares or acts as if it wants nothing from government, declares it will look after its won welfare and interest, then on that day power elites are doomed.”
I started buying physical Gold and Silver in 2004 and so far it has been a very good investment. At the same time I explored the fascinating history of money; it reads like a criminal novel or even like a horror story in some cases. I personally support a system that is based on free market money where people can freely decide what they want to use as currency – sound money for a sound society. Money stands in the center of how human beings live together. It must be consequently a property title and not a debt promise. Gold and Silver are money in its pure form! They allow people to exchange goods, based on mutual respect and honesty….. With sound money we used to have production and trade and therefore prosperity. With fake money these periods have been dominated logically by corruption and wars; or in the words of Lord Acton, “Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.”
UrbanMan's comment: I agree with everything in this article except the very last sentence" "Great men are almost always bad men.” This is simply not true. Great men are most often common men to rise to meet a challenge.
Saturday, September 28, 2013
The Coming Economic Collapse - What Others Are Thinking
The Smell of Collapse is in the Air posted by Deviant Investor on September 19th, 2013 - See more here. See what other financial minds are saying about the hocus pocus on paper wealth and fiat currency - the printing of money out of thin air,....the possibility or probability of a economic collapse.
The U.S. stock market is near all-time highs, while politicians and economists are blathering about recovery, low inflation, and good times, but instability and danger are clearly visible in our debt based monetary system. To the extent we rely upon the fantasies of ever-increasing debt, money printing, and credit bubbles, we are vulnerable to financial collapses. Perhaps a collapse is not imminent, but it would be foolish to ignore the possibility. Consider what these insightful writers have to say:
Egon von Greyerz:
“Debt worldwide is now expanding exponentially. With absolutely no possibility of stopping this debt explosion, we will soon enter a period of unlimited money printing leading to a total destruction of paper currencies. The consequence will be a hyperinflationary depression in most major economies.”
Bullion Bulls Canada:
“So the ending is already clear. The U.S.S. Titanic is about to be intentionally sunk (again), and B.S. Bernanke’s ‘fingerprints’ will be planted all over the crime scene.”
John Rubino:
“…nothing was fixed after 2008, just as nothing was fixed after the housing, tech stock, and junk bond bubbles burst. The response has been the same each time, only progressively more aggressive and experimental. That the financial, economic and political mainstream think that the system has been reset to ‘normal’ because asset prices are back where they were just before the 2008 crash is, well, crazy. With financial imbalances bigger than ever before – and continuing to expand – the only possible outcome is an even bigger crash.”
Bill Holter:
“THIS is where THE REAL BUBBLE is! The biggest bubble in all of history, (larger than the Tulip mania, South Sea, the Mississippi Bubble, 1929, current global real estate and global stock bubble combined then cubed) is the current and total global financial system. EVERYTHING EVERYWHERE is based on credit. In fact, over 60% of this credit is dollar based and ‘guaranteed’ by the U.S. government. The minor little problem now is that we have reached ‘debt saturation’ levels everywhere. There are no more asset classes left able to take on more credit (air) to inflate the balloon. The other minor detail is that the ‘asset’ that underlies the value of everything (the dollar and thus Treasury securities) is issued by a bankrupt entity. What could possibly go wrong?”
Growing and healthy economies mean more people are productively employed. It appears that much of the “growth” in the U.S. economy over the last five years has been in disability income, food stamps (SNAP), unemployment, student loans, welfare, debt, and government jobs – none of which are productive. Examine the following graph of Labor Force Participation Rate – the actual percentage of the populace that is employed. Does this look like a healthy economy experiencing a recovery or a collapse in productive employment?
The damaging effects of 100 years of Fed meddling in the U.S. economy, many expensive wars, 42 years of unbacked debt based currency, and unsustainable growth in credit and debt have left the Western monetary system in a precarious position. The damaging effects of 100 years of Fed meddling in the U.S. economy, many expensive wars, 42 years of unbacked debt based currency, and unsustainable growth in credit and debt have left the Western monetary system in a precarious position.
Using common sense, ask yourself:
Can total debt grow much more rapidly than the underlying economy which must support and service that debt? FOREVER?
Can government expenditures grow much more rapidly than government revenues? FOREVER?
Will interest rates remain at multi-generational lows? FOREVER?
Will a fiscally irresponsible congress rein-in an out of control spending system that our fiscally irresponsible congress created?
Is another and larger (than 2008) financial collapse likely and inevitable?
Do you still believe in the fantasies of ever-increasing debt, printing “money” and credit bubbles?
Are you personally and financially prepared for a potential financial collapse?
Have you converted some of your digital currencies into real money – physical gold and silver? Is it safely stored outside the banking system and perhaps in a country different from where you live?
Do you have a place to stay safe if the economic crisis turns violent?
Do you have a means to protect yourself and your loved ones? Are you competent with those firearms and do you have some ammunition put away but it surely won't be available, or affordable once the collapse hits.
Do you have some food stocked up? If not, why? Do you think you are going to be the golden one's that avoid all the coming bad times? Maybe if you're living in Costa Rica.
The U.S. stock market is near all-time highs, while politicians and economists are blathering about recovery, low inflation, and good times, but instability and danger are clearly visible in our debt based monetary system. To the extent we rely upon the fantasies of ever-increasing debt, money printing, and credit bubbles, we are vulnerable to financial collapses. Perhaps a collapse is not imminent, but it would be foolish to ignore the possibility. Consider what these insightful writers have to say:
Egon von Greyerz:
“Debt worldwide is now expanding exponentially. With absolutely no possibility of stopping this debt explosion, we will soon enter a period of unlimited money printing leading to a total destruction of paper currencies. The consequence will be a hyperinflationary depression in most major economies.”
Bullion Bulls Canada:
“So the ending is already clear. The U.S.S. Titanic is about to be intentionally sunk (again), and B.S. Bernanke’s ‘fingerprints’ will be planted all over the crime scene.”
John Rubino:
“…nothing was fixed after 2008, just as nothing was fixed after the housing, tech stock, and junk bond bubbles burst. The response has been the same each time, only progressively more aggressive and experimental. That the financial, economic and political mainstream think that the system has been reset to ‘normal’ because asset prices are back where they were just before the 2008 crash is, well, crazy. With financial imbalances bigger than ever before – and continuing to expand – the only possible outcome is an even bigger crash.”
Bill Holter:
“THIS is where THE REAL BUBBLE is! The biggest bubble in all of history, (larger than the Tulip mania, South Sea, the Mississippi Bubble, 1929, current global real estate and global stock bubble combined then cubed) is the current and total global financial system. EVERYTHING EVERYWHERE is based on credit. In fact, over 60% of this credit is dollar based and ‘guaranteed’ by the U.S. government. The minor little problem now is that we have reached ‘debt saturation’ levels everywhere. There are no more asset classes left able to take on more credit (air) to inflate the balloon. The other minor detail is that the ‘asset’ that underlies the value of everything (the dollar and thus Treasury securities) is issued by a bankrupt entity. What could possibly go wrong?”
Growing and healthy economies mean more people are productively employed. It appears that much of the “growth” in the U.S. economy over the last five years has been in disability income, food stamps (SNAP), unemployment, student loans, welfare, debt, and government jobs – none of which are productive. Examine the following graph of Labor Force Participation Rate – the actual percentage of the populace that is employed. Does this look like a healthy economy experiencing a recovery or a collapse in productive employment?
The damaging effects of 100 years of Fed meddling in the U.S. economy, many expensive wars, 42 years of unbacked debt based currency, and unsustainable growth in credit and debt have left the Western monetary system in a precarious position. The damaging effects of 100 years of Fed meddling in the U.S. economy, many expensive wars, 42 years of unbacked debt based currency, and unsustainable growth in credit and debt have left the Western monetary system in a precarious position.
Using common sense, ask yourself:
Can total debt grow much more rapidly than the underlying economy which must support and service that debt? FOREVER?
Can government expenditures grow much more rapidly than government revenues? FOREVER?
Will interest rates remain at multi-generational lows? FOREVER?
Will a fiscally irresponsible congress rein-in an out of control spending system that our fiscally irresponsible congress created?
Is another and larger (than 2008) financial collapse likely and inevitable?
Do you still believe in the fantasies of ever-increasing debt, printing “money” and credit bubbles?
Are you personally and financially prepared for a potential financial collapse?
Have you converted some of your digital currencies into real money – physical gold and silver? Is it safely stored outside the banking system and perhaps in a country different from where you live?
Do you have a place to stay safe if the economic crisis turns violent?
Do you have a means to protect yourself and your loved ones? Are you competent with those firearms and do you have some ammunition put away but it surely won't be available, or affordable once the collapse hits.
Do you have some food stocked up? If not, why? Do you think you are going to be the golden one's that avoid all the coming bad times? Maybe if you're living in Costa Rica.
Sunday, July 14, 2013
Not Prepared: 17 Signs That Most Americans Will Be Wiped Out By The Coming
From an article sent to me, written by Michael Synder, called - Not Prepared: 17 Signs That Most Americans Will Be Wiped Out By The Coming Economic Collapse
The vast majority of Americans are going to be absolutely blindsided by what is coming. They don’t understand how our financial system works, they don’t understand how vulnerable it is, and most of them blindly trust that our leaders know exactly what they are doing and that they will be able to fix our problems. As a result, most Americans are simply not prepared for the massive storm that is heading our way.
Most American families are living paycheck to paycheck, most of them are not storing up emergency food and supplies, and only a very small percentage of them are buying gold and silver for investment purposes. They seem to have forgotten what happened back in 2008. When the financial markets crashed, millions of Americans lost their jobs. Because most of them were living on the financial edge, millions of them also lost their homes. Unfortunately, most Americans seem convinced that it will not happen again. Right now we seem to be living in a “hope bubble” and people have become very complacent.
For a while there, being a “prepper” was very trendy, but now concern about a coming economic crisis seems to have subsided. What a tragic mistake. As I pointed out yesterday, our entire financial system is a giant Ponzi scheme, and there are already signs that our financial markets are about to implode once again. Those that have not made any preparations for what is coming are going to regret it bitterly. The following are 17 signs that most Americans will be wiped out by the coming collapse…
#1 According to a survey that was just released, 76 percent of all Americans are living paycheck to paycheck. But most Americans are acting as if their jobs will always be there. But the truth is that mass layoffs can occur at any time. In fact, it just happened at one of the largest law firms in New York City.
#2 27 percent of all Americans do not have even a single penny saved up.
#3 46 percent of all Americans have $800 or less saved up.
#4 Less than one out of every four Americans has enough money stored away to cover six months of expenses.
#5 Wages continue to fall even as the cost of living continues to go up. Today, the average income for the bottom 90 percent of all income earners in America is just $31,244. An increasing percentage of American families are just trying to find a way to survive from month to month.
#6 62 percent of all middle class Americans say that they have had to reduce household spending over the past year.
#7 Small business is becoming an endangered species in America. In fact, only about 7 percent of all non-farm workers in the United States are self-employed at this point. That means that the vast majority of Americans are depending on someone else to provide them with an income. But what is going to happen as those jobs disappear?
#8 In 1989, the debt to income ratio of the average American family was about 58 percent. Today it is up to 154 percent.
#9 Today, a higher percentage of Americans are dependent on the government than ever before. In fact, according to the U.S. Census Bureau 49 percent of all Americans live in a home that gets direct monetary benefits from the federal government. So what is going to happen when the government handout gravy train comes to an end?
#10 Back in the 1970s, about one out of every 50 Americans was on food stamps. Today, about one out of every 6.5 Americans is on food stamps. UrbanMan's note: I believe this figure is actually 1 in 5 Americans.
#11 It is estimated that less than 10 percent of the U.S. population owns any gold or silver for investment purposes.
#12 It has been estimated that there are approximately 3 million “preppers” in the United States. But that means that almost everyone else is not prepping.
#13 44 percent of all Americans do not have first-aid kits in their houses.
#14 48 percent of all Americans do not have any emergency supplies stored up.
#15 53 percent of all Americans do not have a 3 day supply of nonperishable food and water in their homes.
#16 One survey asked Americans how long they thought they would survive if the electrical grid went down for an extended period of time. Incredibly, 21 percent said that they would survive for less than a week, an additional 28 percent said that they would survive for less than two weeks, and nearly 75 percent said that they would be dead before the two month mark.
#17 According to a survey conducted by the Adelphi University Center for Health Innovation, 55 percent of Americans believe that the government will come to their rescue when disaster strikes.
Just because you are living a comfortable middle class lifestyle today does not mean that it will always be that way. If you doubt this, take a look at what is going on in Greece. Many formerly middle class parents in Greece have become so impoverished that they are actually dumping their children at orphanages so that they won’t starve…
Scores of children have been put in orphanages and care homes for economic reasons; one charity said 80 of the 100 children in its residential centres were there because their families can no longer provide for them.
Ten percent of Greek children are said to be at risk of hunger. Teachers talk of cancelling PE lessons because children are underfed and of seeing pupils pick through bins for food.
If the U.S. economy crashes and you lose your job, how will you and your family survive?UrbanMan's note: Many Military Civilian worker are asking themselves this same question as sequestration has reduced their hours and pay 20%, Next Government fiscal year is supposed to be worse.
Will you and your family end up homeless and totally dependent on the government for your survival?
Get prepared while there is still time. If you do not know how to get prepared, my article entitled “25 Things That You Should Do To Get Prepared For The Coming Economic Collapse” has some basic tips, and there are dozens of excellent websites out there that teach people advanced prepping techniques for free. So there is no excuse. You can trust that Ben Bernanke and Barack Obama have everything under control, but as for me and my family we are going to prepare for the giant economic storm that is coming.
I hope that you will be getting prepared too.
UrbanMan's note: If you are reading my site and others, then you are probably not in this group of Americans ill prepared for any emergency. But nonetheless, this article coulds serve to motivate you just a little further.
The vast majority of Americans are going to be absolutely blindsided by what is coming. They don’t understand how our financial system works, they don’t understand how vulnerable it is, and most of them blindly trust that our leaders know exactly what they are doing and that they will be able to fix our problems. As a result, most Americans are simply not prepared for the massive storm that is heading our way.
Most American families are living paycheck to paycheck, most of them are not storing up emergency food and supplies, and only a very small percentage of them are buying gold and silver for investment purposes. They seem to have forgotten what happened back in 2008. When the financial markets crashed, millions of Americans lost their jobs. Because most of them were living on the financial edge, millions of them also lost their homes. Unfortunately, most Americans seem convinced that it will not happen again. Right now we seem to be living in a “hope bubble” and people have become very complacent.
For a while there, being a “prepper” was very trendy, but now concern about a coming economic crisis seems to have subsided. What a tragic mistake. As I pointed out yesterday, our entire financial system is a giant Ponzi scheme, and there are already signs that our financial markets are about to implode once again. Those that have not made any preparations for what is coming are going to regret it bitterly. The following are 17 signs that most Americans will be wiped out by the coming collapse…
#1 According to a survey that was just released, 76 percent of all Americans are living paycheck to paycheck. But most Americans are acting as if their jobs will always be there. But the truth is that mass layoffs can occur at any time. In fact, it just happened at one of the largest law firms in New York City.
#2 27 percent of all Americans do not have even a single penny saved up.
#3 46 percent of all Americans have $800 or less saved up.
#4 Less than one out of every four Americans has enough money stored away to cover six months of expenses.
#5 Wages continue to fall even as the cost of living continues to go up. Today, the average income for the bottom 90 percent of all income earners in America is just $31,244. An increasing percentage of American families are just trying to find a way to survive from month to month.
#6 62 percent of all middle class Americans say that they have had to reduce household spending over the past year.
#7 Small business is becoming an endangered species in America. In fact, only about 7 percent of all non-farm workers in the United States are self-employed at this point. That means that the vast majority of Americans are depending on someone else to provide them with an income. But what is going to happen as those jobs disappear?
#8 In 1989, the debt to income ratio of the average American family was about 58 percent. Today it is up to 154 percent.
#9 Today, a higher percentage of Americans are dependent on the government than ever before. In fact, according to the U.S. Census Bureau 49 percent of all Americans live in a home that gets direct monetary benefits from the federal government. So what is going to happen when the government handout gravy train comes to an end?
#10 Back in the 1970s, about one out of every 50 Americans was on food stamps. Today, about one out of every 6.5 Americans is on food stamps. UrbanMan's note: I believe this figure is actually 1 in 5 Americans.
#11 It is estimated that less than 10 percent of the U.S. population owns any gold or silver for investment purposes.
#12 It has been estimated that there are approximately 3 million “preppers” in the United States. But that means that almost everyone else is not prepping.
#13 44 percent of all Americans do not have first-aid kits in their houses.
#14 48 percent of all Americans do not have any emergency supplies stored up.
#15 53 percent of all Americans do not have a 3 day supply of nonperishable food and water in their homes.
#16 One survey asked Americans how long they thought they would survive if the electrical grid went down for an extended period of time. Incredibly, 21 percent said that they would survive for less than a week, an additional 28 percent said that they would survive for less than two weeks, and nearly 75 percent said that they would be dead before the two month mark.
#17 According to a survey conducted by the Adelphi University Center for Health Innovation, 55 percent of Americans believe that the government will come to their rescue when disaster strikes.
Just because you are living a comfortable middle class lifestyle today does not mean that it will always be that way. If you doubt this, take a look at what is going on in Greece. Many formerly middle class parents in Greece have become so impoverished that they are actually dumping their children at orphanages so that they won’t starve…
Scores of children have been put in orphanages and care homes for economic reasons; one charity said 80 of the 100 children in its residential centres were there because their families can no longer provide for them.
Ten percent of Greek children are said to be at risk of hunger. Teachers talk of cancelling PE lessons because children are underfed and of seeing pupils pick through bins for food.
If the U.S. economy crashes and you lose your job, how will you and your family survive?UrbanMan's note: Many Military Civilian worker are asking themselves this same question as sequestration has reduced their hours and pay 20%, Next Government fiscal year is supposed to be worse.
Will you and your family end up homeless and totally dependent on the government for your survival?
Get prepared while there is still time. If you do not know how to get prepared, my article entitled “25 Things That You Should Do To Get Prepared For The Coming Economic Collapse” has some basic tips, and there are dozens of excellent websites out there that teach people advanced prepping techniques for free. So there is no excuse. You can trust that Ben Bernanke and Barack Obama have everything under control, but as for me and my family we are going to prepare for the giant economic storm that is coming.
I hope that you will be getting prepared too.
UrbanMan's note: If you are reading my site and others, then you are probably not in this group of Americans ill prepared for any emergency. But nonetheless, this article coulds serve to motivate you just a little further.
Sunday, February 17, 2013
Why Survivalist's Should Buy Silver
This is a good common sense and straight forward article on why you should have silver in your Survival "portfolio", along with foods, gear, firearms and ammunition, and of course, a PLAN. This is from GE Christenson, aka the Deviant Investor. Preppers should consider bookmarking his site and refer back to it from time to time or subsribe to e-mail updates as I will.
Why Buy Silver?
• Silver has no counter-party risk. It is not someone else’s liability. Silver Eagles or Canadian Silver Maple Leaf coins are recognized around the world and have intrinsic value everywhere. The same is NOT true for hundreds of paper currencies that have become worthless, usually because the government or central bank printed them to excess to pay the debts of governments that did not control spending.
• The price of silver in US dollars since the year 2001 has been strongly correlated with the ever-increasing official national debt of the United States. Read $100 Silver! Yes, But When? I doubt that anyone believes the national debt will decrease or even remain constant over the next four years. We have every reason to believe that it will increase by well over $1,000,000,000,000 per year for many years. If the national debt is rapidly increasing and it correlates, on average, with the price of silver, then we can be reasonably certain that the HIGHLY VOLATILE price of silver will increase substantially over the next few years.
• Silver has been used as money (medium of exchange and a store of value) for over 3,000 years. In most cultures, silver has been used for daily transactions far more often than gold. I have read that the word for “money” is the same as the word for “silver” in many languages.
• In the United States silver was used as money – coins – until the 1960s when inflation in the paper money supply caused the price of silver to rise sufficiently that silver coins were removed from circulation. Do you remember silver dollars? They contained approximately 0.77 ounces of silver. Currently the US Mint produces silver eagles which contain 1.0 ounce of silver – and cost approximately $35.
• Argentina has devalued their currency several times and has dropped eight zeros off their unbacked paper money in the past 30 years. The United States has not dropped any zeros from dollars, but it took approximately one-half of one dollar to buy an ounce of silver 100 years ago, while it takes over 30 in today’s reduced value dollars. It took about 20 dollars to buy an ounce of gold 100 years ago and it takes over 1,600 dollars to buy that same ounce of gold today. There are many more dollars (paper and electronic) in circulation today compared to 100 years ago. Hence the prices, measured in declining value dollars, for silver, gold, wheat, crude oil, bread, coffee, and ammunition is MUCH larger.
• Throughout history the prices of gold and silver have increased and decreased together, usually with gold costing 10 to 20 times as much as silver. A historical ratio of 15 or 16 is often quoted and that places the current ratio, which is in excess of 50, as relatively high. Since Nixon “closed the gold window” on August 15, 1971 and allowed the dollar to become an unbacked paper currency that could be created in nearly unlimited quantities, the gold to silver ratio has ranged from a high of approximately 100 to a low of approximately 17. There is room for silver prices to explode higher, narrowing the ratio to perhaps 20 to 1. When gold reaches $3,500 (Jim Sinclair) and subsequently much higher in the next few years, and assuming the ratio drops to approximately 20 to 1, the price of silver could approach $200 per ounce, on its way to a much higher number, depending on the extent of the QE-Infinity “money printing,” panic, hyperinflation, and investor demand.
• If you think a silver price of $200 per ounce is outrageous, I suspect you would find near universal agreement among most Americans. But is a national debt in excess of $16,000,000,000,000 less outrageous? If unfunded liabilities are included the “fiscal gap” is, depending on who is calculating it, approximately $100,000,000,000,000 to $220,000,000,000,000. For perspective, that places the unfunded liabilities of the US government at approximately $700,000 per person in the United States. Is $700,000 unfunded liability (debt) per man, woman, and child more believable than a price for silver of $200?
It seems likely that the populace will eventually realize that:
• Government spending is out of control and will not be voluntarily reduced.
• “Printing money” or debt monetization (QE) is necessary and inevitable in order to continue funding the excess spending of the US government. More money in circulation means a declining purchasing power for the dollar. The decline is likely to accelerate at some time in the future.
• The real value of our savings and retirement diminishes as the dollar declines in value.
• People will panic and shift into real assets to preserve their purchasing power. (There is no fever like gold fever!)
• That panic will cause gold, silver, and many other real assets to drastically increase in price, as measured in devalued dollars.
• It is better to be early than late if a panic-moment is about to arrive.
• Silver is less expensive per ounce than gold and more available for purchase than gold, particularly for middle-class westerners. An investment into silver is likely to appreciate more than a similar investment in gold.
What Do You Believe?
• Do you believe that excessive spending and debt will be reduced?
• Do you believe that the decline in purchasing power of the dollar over the last 100 years will suddenly reverse?
• Do you believe that congressional promises for Social Security, Medicare, Medicaid, and government pensions will be broken?
• Do you believe the Federal Reserve will continue to print the money to pay for those promises?
• Do you believe your savings and retirement are totally safe in paper investments denominated in dollars?
• Do you believe, as history indicates, that paper money eventually devalues to zero while gold and silver retain their value?
• Do you believe that the world will suddenly stop using silver, instead of finding new uses for it every year?
Would you rather trust silver coins in a safe place or paper money and political promises? Most people will do nothing to protect their financial future.
Why Buy Silver?
• Silver has no counter-party risk. It is not someone else’s liability. Silver Eagles or Canadian Silver Maple Leaf coins are recognized around the world and have intrinsic value everywhere. The same is NOT true for hundreds of paper currencies that have become worthless, usually because the government or central bank printed them to excess to pay the debts of governments that did not control spending.
• The price of silver in US dollars since the year 2001 has been strongly correlated with the ever-increasing official national debt of the United States. Read $100 Silver! Yes, But When? I doubt that anyone believes the national debt will decrease or even remain constant over the next four years. We have every reason to believe that it will increase by well over $1,000,000,000,000 per year for many years. If the national debt is rapidly increasing and it correlates, on average, with the price of silver, then we can be reasonably certain that the HIGHLY VOLATILE price of silver will increase substantially over the next few years.
• Silver has been used as money (medium of exchange and a store of value) for over 3,000 years. In most cultures, silver has been used for daily transactions far more often than gold. I have read that the word for “money” is the same as the word for “silver” in many languages.
• In the United States silver was used as money – coins – until the 1960s when inflation in the paper money supply caused the price of silver to rise sufficiently that silver coins were removed from circulation. Do you remember silver dollars? They contained approximately 0.77 ounces of silver. Currently the US Mint produces silver eagles which contain 1.0 ounce of silver – and cost approximately $35.
• Argentina has devalued their currency several times and has dropped eight zeros off their unbacked paper money in the past 30 years. The United States has not dropped any zeros from dollars, but it took approximately one-half of one dollar to buy an ounce of silver 100 years ago, while it takes over 30 in today’s reduced value dollars. It took about 20 dollars to buy an ounce of gold 100 years ago and it takes over 1,600 dollars to buy that same ounce of gold today. There are many more dollars (paper and electronic) in circulation today compared to 100 years ago. Hence the prices, measured in declining value dollars, for silver, gold, wheat, crude oil, bread, coffee, and ammunition is MUCH larger.
• Throughout history the prices of gold and silver have increased and decreased together, usually with gold costing 10 to 20 times as much as silver. A historical ratio of 15 or 16 is often quoted and that places the current ratio, which is in excess of 50, as relatively high. Since Nixon “closed the gold window” on August 15, 1971 and allowed the dollar to become an unbacked paper currency that could be created in nearly unlimited quantities, the gold to silver ratio has ranged from a high of approximately 100 to a low of approximately 17. There is room for silver prices to explode higher, narrowing the ratio to perhaps 20 to 1. When gold reaches $3,500 (Jim Sinclair) and subsequently much higher in the next few years, and assuming the ratio drops to approximately 20 to 1, the price of silver could approach $200 per ounce, on its way to a much higher number, depending on the extent of the QE-Infinity “money printing,” panic, hyperinflation, and investor demand.
• If you think a silver price of $200 per ounce is outrageous, I suspect you would find near universal agreement among most Americans. But is a national debt in excess of $16,000,000,000,000 less outrageous? If unfunded liabilities are included the “fiscal gap” is, depending on who is calculating it, approximately $100,000,000,000,000 to $220,000,000,000,000. For perspective, that places the unfunded liabilities of the US government at approximately $700,000 per person in the United States. Is $700,000 unfunded liability (debt) per man, woman, and child more believable than a price for silver of $200?
It seems likely that the populace will eventually realize that:
• Government spending is out of control and will not be voluntarily reduced.
• “Printing money” or debt monetization (QE) is necessary and inevitable in order to continue funding the excess spending of the US government. More money in circulation means a declining purchasing power for the dollar. The decline is likely to accelerate at some time in the future.
• The real value of our savings and retirement diminishes as the dollar declines in value.
• People will panic and shift into real assets to preserve their purchasing power. (There is no fever like gold fever!)
• That panic will cause gold, silver, and many other real assets to drastically increase in price, as measured in devalued dollars.
• It is better to be early than late if a panic-moment is about to arrive.
• Silver is less expensive per ounce than gold and more available for purchase than gold, particularly for middle-class westerners. An investment into silver is likely to appreciate more than a similar investment in gold.
What Do You Believe?
• Do you believe that excessive spending and debt will be reduced?
• Do you believe that the decline in purchasing power of the dollar over the last 100 years will suddenly reverse?
• Do you believe that congressional promises for Social Security, Medicare, Medicaid, and government pensions will be broken?
• Do you believe the Federal Reserve will continue to print the money to pay for those promises?
• Do you believe your savings and retirement are totally safe in paper investments denominated in dollars?
• Do you believe, as history indicates, that paper money eventually devalues to zero while gold and silver retain their value?
• Do you believe that the world will suddenly stop using silver, instead of finding new uses for it every year?
Would you rather trust silver coins in a safe place or paper money and political promises? Most people will do nothing to protect their financial future.
Thursday, September 29, 2011
Recession and Revolution
A reader of UrbanSurvivalSkills.com sent us this article written by well known author Seth Godin, whose book Tribes is a good read for the average urban or suburban survival prepper to provide some concepts and ideas about leading, connecting and creating movements, such as building a survival network or team in case of SHTF.
Anyway, Seth Godin's article below, is entitled "The Forever Recession (and the Coming Revolution)" is a good read for all Survivalists.
By Seth Godin
There are actually two recessions:
The first is the cyclical one, the one that inevitably comes and then inevitably goes. There's plenty of evidence that intervention can shorten it, and also indications that overdoing a response to it is a waste or even harmful.
The other recession, though, the one with the loss of "good factory jobs" and systemic unemployment--I fear that this recession is here forever.
Why do we believe that jobs where we are paid really good money to do work that can be systemized, written in a manual and/or exported are going to come back ever? The internet has squeezed inefficiencies out of many systems, and the ability to move work around, coordinate activity and digitize data all combine to eliminate a wide swath of the jobs the industrial age created.
There's a race to the bottom, one where communities fight to suspend labor and environmental rules in order to become the world's cheapest supplier. The problem with the race to the bottom is that you might win...
Factories were at the center of the industrial age. Buildings where workers came together to efficiently craft cars, pottery, insurance policies and organ transplants--these are job-centric activities, places where local inefficiencies are trumped by the gains from mass production and interchangeable parts. If local labor costs the industrialist more, he has to pay it, because what choice does he have?
No longer. If it can be systemized, it will be. If the pressured middleman can find a cheaper source, she will. If the unaffiliated consumer can save a nickel by clicking over here or over there, then that's what's going to happen.
It was the inefficiency caused by geography that permitted local workers to earn a better wage, and it was the inefficiency of imperfect communication that allowed companies to charge higher prices.
The industrial age, the one that started with the industrial revolution, is fading away. It is no longer the growth engine of the economy and it seems absurd to imagine that great pay for replaceable work is on the horizon.
This represents a significant discontinuity, a life-changing disappointment for hard-working people who are hoping for stability but are unlikely to get it. It's a recession, the recession of a hundred years of the growth of the industrial complex.
I'm not a pessimist, though, because the new revolution, the revolution of connection, creates all sorts of new productivity and new opportunities. Not for repetitive factory work, though, not for the sort of thing ADP measures. Most of the wealth created by this revolution doesn't look like a job, not a full time one anyway.
When everyone has a laptop and connection to the world, then everyone owns a factory. Instead of coming together physically, we have the ability to come together virtually, to earn attention, to connect labor and resources, to deliver value.
Stressful? Of course it is. No one is trained in how to do this, in how to initiate, to visualize, to solve interesting problems and then deliver. Some see the new work as a hodgepodge of little projects, a pale imitation of a 'real' job. Others realize that this is a platform for a kind of art, a far more level playing field in which owning a factory isn't a birthright for a tiny minority but something that hundreds of millions of people have the chance to do.
Gears are going to be shifted regardless. In one direction is lowered expectations and plenty of burger flipping. In the other is a race to the top, in which individuals who are awaiting instructions begin to give them instead.
The future feels a lot more like marketing--it's impromptu, it's based on innovation and inspiration, and it involves connections between and among people--and a lot less like factory work, in which you do what you did yesterday, but faster and cheaper.
This means we may need to change our expectations, change our training and change how we engage with the future. Still, it's better than fighting for a status quo that is no longer. The good news is clear: every forever recession is followed by a lifetime of growth from the next thing...
Job creation is a false idol. The future is about gigs and assets and art and an ever-shifting series of partnerships and projects. It will change the fabric of our society along the way. No one is demanding that we like the change, but the sooner we see it and set out to become an irreplaceable linchpin, the faster the pain will fade, as we get down to the work that needs to be (and now can be) done.
This revolution is at least as big as the last one, and the last one changed everything.
Thursday, July 28, 2011
STHF Prep: The Race for Physical Gold and Silver
From the article: The Global Physical Gold & Silver Reserves Race is the New Nuclear Arms Race. If the ownership of physical Gold and Silver is not important, then why are people, institutions and countries racing toward stockpiling it? Again, the complete Survival Plan must have some Gold and/or Silver. This is the same as having as Bug Out Bag,...having extra magazines for your rifle,....essentially the same as any contingency. Most preppers did not stock 6 months of food overnight, not did they accumulate a SHTF - Prepare for the Collapse Survival firearms battery overnight. This is a continuous process. I would rather have 6 ounces of silver than none; I would rather than 100 ounces when the collapse commenced than just 50 ounces. The purchase of Gold and/or Silver scares people sometimes because it's value can go down,...what about the value of food that you have bought and has spoiled? Or the AR-10 rifle you bought and will (hopefully) never have to use for the purpose you bought it for?
Add JS Kim and the above website to your financial indicators research and tracking list to be prepared for when SHTF otherwise known as the Collapse or Financial Armageddon.
The old Cold War USA-USSR nuclear arms race has been replaced by the East-West Central Bank battle to accumulate physical gold and physical silver reserves. While Western Central Banks and their puppet bullion banks have distracted and goaded private citizens with the invention of fraudulent bogus paper gold and paper silver derivative products, including ETFs more recently, and paper futures contracts for a much longer period of time, they themselves have been making sure to avoid the very fraudulent paper products they have invented and have been diving headfirst into real physical precious metals.
As Central Banks continue to significantly devalue all major global currencies through excessive creation of new supply out of thin air in a digital world where “new money” is never even printed into paper/cotton form but only is created as digital bytes that are sent across international borders, the private families that are the majority shareholders in the world’s most powerful Central Banks have engaged in heavy buying of physical gold in particular, and to a lesser degree, physical silver. In 2010, Central Banks as a group, became net buyers of physical gold after two decades as net sellers. EU Central Bankers became net buyers of physical gold for the first time during the 1st Quarter 2011 since their introduction of the heavily flawed Euro into circulation in January of 2002.
As of April 2011, China was, according to “officially reported” statistics, the sixth-largest official holder of gold, with 1,054.1 tonness, according to World Gold Council estimates. The U.S. was still reported to possess the largest gold reserves at 8,133.5 tonnes. However, all of you know by now that I believe all “officially reported” statistics, whether the statistic is GDP, unemployment, inflation, or gold reserves, to be a charade and mockery of the truth. To this day I am highly skeptical of the US reported reserves of 8,133.5 tonnes, especially since these reserves have neither been independently audited nor independently tested to ensure that they meet good-for-delivery bar status since Dwight D. Eisenhower was the US President in the 1950s. As for China ’s “officially reported” holdings of only 1,054.1 tons, anyone that takes these reported stats at face value as the truth is a fool for any number of logical reasons. One , China reported that its “official” gold holdings were a constant 600 tons from 2003 to 2009 and then reported that it had increased its holdings to more than 1,000 tons overnight in 2009. Since China lied about its gold reserve holdings for more than 6 years, one cannot and should not assume that their “officially” announced 1,054.1 ton level was truthful. Since China made that announcement in 2009, their “official” gold reserve level has not increased at all.
Anyone that believes that China has not accumulated more gold, and lots of it, since that time, does not understand the Chinese government and Chinese bankers. Chinese bankers have been studying the best ways to invest in gold and silver for many years now in preparation for this global monetary war and they realize that one of the best ways to invest in PMs is to own the real thing. Furthermore, there are multiple mechanisms by which China could be secretly increasing their gold reserves out of the scrutiny of the public eye. In 2008, China replaced South Africa as the largest gold producer in the world, but nobody really knows exactly how much gold China produces or how many proven/ probable reserves or how much measured/indicated resources they own. Thus, China could be increasing gold reserves significantly on in-house production alone. Certainly we know that China is increasing its silver reserves through a policy of decreasing its domestic silver exports and increasing its foreign silver imports.
For example, last month, China ’s General Administration of Customs reported that its net imports of silver nearly quadrupled year-over-year in 2010 to more than 3,500 metric tons. Also of important note is the fact that in 2010, China exported 1,575 metric tons of silver, 58% less than in 2009, and imported 5,159 metric tons of the metal, 15% more than in 2009. This is a huge change if one realizes that from 2005 to 2010 China transitioned from a net exporter of 2,900 metric tonnes of silver to a net importer of 3,500 metric tonnes.
From 2005 to 2010, China increased its gold holdings in its State Administration of Foreign Exchange (SAFE) more than tenfold from a very small starting point of USD $4.2 billion to USD $48.1 billion. However, China could be increasing gold (and silver) reserves significantly through purchases in its Sovereign Wealth Fund – purchases that are not made available for public inspection or consumption. For China to publicly announce their buildup of gold and silver reserves that would drive up the price of the very commodity they wished to accumulate more of would be akin to then-Chancellor of the Exchequer Gordon Brown’s foolish decision to pre-announce in 1999 that the UK would be selling half of its gold reserves.
Also of important note are the following facts. China only recently deregulated gold in 2003 to allow gold prices in China to mirror international prices. The Shanghai Gold Exchange only opened in October of 2002. In late 2009, the Chinese started making gold and silver bullion easily accessible to its citizens through introducing physical sales of multiple size bars at its banks and China finally legalized ownership of 99.999% pure silver bullion. The Chinese typically have a tendency to buy PHYSICAL gold and PHYSICAL silver, not the fraudulent paper gold and paper silver derivatives invented by bankers to suppress the price of gold and silver. For the first time ever, Chinese citizens will be able to buy silver futures in Hong Kong this week and later in Shanghai ; however, since the Chinese are fond of owning Physical metals, perhaps even the majority of Chinese may settle these futures contracts with physical delivery. Furthermore, even when the option to buy gold and silver ETFs in China becomes a reality, the average Chinese citizen may shy away from these products due to his or her propensity for owning real gold and real silver.
For Asians in general, gold and silver have always been money. In Thailand , the word for money “ngen” is also the word for silver. In China , the word for bank combines the characters for “silver” and “movement”. In China not only is private demand strong AND relatively young, but even in India , private ownership of gold bullion bars was not legalized until 1990. Thus, the war between East and West over gold and silver will intensify in coming months and coming years. The objective of the East will be to release the gold and silver price from the clutches of Western price suppression schemes while the objective of the West will be to hoard gold in an attempt to prevent citizens of Western nations from owning the asset that will protect them the most from their currency devaluation schemes.
The current talk in the mainstream financial media about gold being a bubble at $1,600 an ounce and of silver having already reached its top of its long-term peak at $50 an ounce is simply rubbish. A bubble is never defined by high prices, the perception of high prices or even a decade long rise in prices. What defines a bubble is a meteoric rise in price that is not supported by fundamental reasons. For example, the US NASDAQ dot.com stock market was a bubble because dot.com stocks that had zero earnings were trading at impossible valuations and sometimes double and triple digit dollar values per share. However, the fundamental reasons that have driven gold from $250 to $1,600 and silver from $4 to its current $39 – $40 range are even stronger today than they were at the beginning of this precious metals bull. Therefore, it is impossible for a bubble in gold and silver to exist at their current prices and at this current time.
And for this reason, this is precisely why the global nuclear arms race has been replaced by a global physical gold race. Welcome to the new global war in precious metals.
J.S. Kim
SmartKnowledgeU
JS Kim is the Managing Director and Founder of SmartKnowledgeU, a fiercely independent investment consulting and research firm that devises investment strategies to protect Main Street from the fraud of Wall Street.
Tuesday, May 17, 2011
Urban Survival Preparation - The State of the Economy, Spring 2011
It is interesting to unemotionally consider the causes, indicators and the effects of the collapse. Will there is a significant event to act as a catalyst? Will there just be an ever so gradual slide into a Greater Depression? At what point will the diminishing food supply and the increasing hungry masses be a factor? Will this result in sporadic or wide spread food riots? Will the Government use the Insurrection Act to deploy active duty military? Will AD military use lethal force on U.S. citizens?
We are about to reap what we have sown for so long. After all we have created an entitlement society where maybe 15% of the population expect someone, usually the Government, to provide for them. There are even polls out where a significant percentage of the people think the Government should provide housing, food and medical care.
The nation's debt is simply too big. It is unrecoverable. The U.S. Government has been spending like a drunken lottery winner for two decades. Going to the Chinese, the Japanese and other countries to borrow money to spend where the National Debt is over $14 trillion,....This year, the government is projected to spend $3.8 trillion with revenues at $2.2 trillion,......due the math - about 40% of this spending is from borrowed money and another $1.4 trillion added to the debt,...hence the requirement to increase the Nation's debt limit. And make NO mistake about it , this Government will due just that.
Social Security and Medicare, equal about 40% all Government spending.
The Military accounts for almost 20 percent.
Medicaid, which is actually some sort of necessity as it keeps poor people from becoming even poorer equals about 8 percent.
Interest (minimum) on the National debt, meaning payment sto China and others, is almost 6%. And it is not so simple as the U.S. defaulting on loan payments, like your neighbor did on his new vehicle. If the U.S. defaults an incredibly round of global economic repercussions will be felt.
So far, we have 74% of the Federal Budget. ....
Add in normal Government functions,.....well, okay, it is hard to call them normal when we have seen massive growth of the Federal Government,...people, powers and appetite wise. Anyway, this accounts for the rest of the budget,..around 26%.
Some of that can surely be cut without ruining this Country and cuasing wide spread rioting and even Anarchy. BUT 40%!!!
The Government has not choice but to raise taxes. This will of course de-stimulate the economy. Prices for fuel and food will continue to rise,....more people will be poor and hungry,.....all this will be the catalyst for the collapse, the only question is will be through significant steps or just a gradual decline in the abyss.
Does this change your survival preparations? Are you heading for your Bug Out location now? I think the answer is no to both. In fact, it should stimulate your preps. Factor in that most of us are dependent upon our jobs; our daily normal lives also impact quite a bit on our preps. I think the idea is to keep moving forward; better your Survival Preps each week, if not each day. Plan and prepare well and be safe,
Urban Man
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