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Thursday, December 30, 2010

Economic Indicators Point Towards a Collapse

Recent economic reports are out spelling bad things to come in the future. Combined with the predictions of other prominent financial forecasters the future appears grim.

The gap between the rich and the middle class is larger than it has ever been due to the bursting of the housing bubble. The richest 1% of U.S. households had a net worth 225 times greater than that of the average American household in 2009, according to analysis conducted by the Economic Policy Institute, a liberal think tank. That's up from the previous record of 190 times greater, which was set in 2004. We feel the Middle Class will soon be divided with the vast majority of these people/households becoming part of the “have nots” group.

The widening gap came even as wealthy households' average net worth tumbled 27% -- to about $14 million -- between 2007 to 2009. That's the first time that they suffered a decline since the three-year period of 1992 to 1995. Meanwhile, the average family's net worth plunged 41% -- to just $62,200 -- from 2007 to 2009, according to EPI's calculations.

"The typical person lost more because a bigger percentage of their wealth in 2007 had been the value of their home," said Heidi Shierholz, an economist with EPI. The poorest U.S. households have had a negative net worth in every reading dating back to 1962, meaning that their debts and other liabilities outweigh their assets. They fell deeper into a hole the last two years, with their net worth falling to negative $27,000 on average, or nearly twice as much as they owed two years earlier.

Net worth is a measure of a family's total assets, including real estate, bank balances, stock holdings and retirement funds, minus all of their liabilities, such as mortgages and other consumer debt. The EPI estimate uses figures from the Federal Reserve's survey of consumer finances for 2007 estimates, and the Fed's flow of funds report on household wealth for the more recent reading.

In another report, more U.S. banks are in danger of failing, even after receiving aid from the federal government, The Wall Street Journal reported Sunday. The economy has done little to improve the financial conditions of many struggling institutions, leaving 98 bailed-out banks without the capital to lift themselves out of the at-risk category, according to the Journal. That's a 15% increase from the second quarter, when 86 of the banks that had received funds from the Troubled Asset Relief Program, or TARP, were considered at risk.

Taxpayers have spent more than $2.7 billion in TARP funds on seven banks that nonetheless already have failed, while the 98 at-risk banks have together received more than $4.2 billion, the Journal reported. A Government Accountability Office report in October said that many of the failed banks should have been red flagged for their already precarious financial position during the application process.

About 10% of the country's 7,760 banks are undercapitalized, up from about 9% during the second quarter, a Federal Deposit Insurance Corp. spokesman told the Journal. Last month, a report released by the Congressional Budget Office forecast that TARP will end up costing taxpayers about $25 billion, down from the $50 billion estimated in October.

Gold and Silver are up and continue to climb; the strngnth of the dollar is down. Commodities continue their escalation in price. All facts and figures point to very bad times ahead. Be prepared. And it starts with a plan.

Tuesday, December 28, 2010

More Than One Type Of "Unintended Consequence"

Reading about the financial analysts talking about the "Unintended Consequences" of the Government not only spending more money, but printing it too (deflating the value of the dollar), made me think of another "Unintended Consequences" - this one a book written by John Ross (obviously a pseudonym).

"Unintended Consequences" - starts off with a history lesson on gun rights and laws but rapidly sets the story of unimpeded Government intrusion and regulation, and the resulting trampling on constitutional civil rights. The book ends with the major subjects taking matters into their own hands and dealing with government agencies who has, not at the agency level but at lower individual levels, violated individual rights. The actions of some stimulate and inspire others to do the same, so the U.S. Government has a case of sporadic and small violent revolt and direct action against an intrusive government's draconian regulation and civil rights violations. All of the violence in the book is directed against "rogue" employees of these government agencies, and a legislator or two, who more than just energetically enforcing "the letter of the law".

This book is out of print and commands substantial prices if you can find one. I am not a conspiracy buff and I do have routine conversations (read arguments) with people who think the U.S. government is a lot smarter than it really is, and often gets away with a lot of "covert" actions and conspiracies. I just don't believe in the vast majority of suspected government conspiracies. However, I personally think it is in the U.S. Government's best interests to have the book "Unintended Consequences" unavailable and I have wondered why it is no longer in print. Other than sending government employees out to buy up all the copies, I just don't see how it could be done.

This book serves to highlight what is possible, even probable, when the government in a wholesale manner tramples on individuals rights. I liked it simply because the underdog wins and in doing so exhibits some pretty crafty tradecraft. The technical writing about history and firearms is a bonus.

Kind of reminds me of a recent e-mail where the sender writes that over 600,000 hunters took to the woods in Michigan this year,...over 700,000 in Pennslyvania,....600,000 in Florida - and these are just a couple of states. The sender wrote that the U.S. has the largest un-organized milita and that is why not only foreign countries could never take over the U.S., a la a "Red Dawn" scenario, but also why U.S. Government martial law would never be accepted.

We have a history in this country of a separation of Law Enforcement and Military. The military, through U.S. Code 18, Section 1385, also known as "Posse Comitatus", has no authority or law enforcment powers in this country. With one exception,..the Insurrection Act,.....

The Insurrection Act of 1807 governs the U.S. President's ability to use Federal troops to put down lawlessness, insurrection and rebellion within the United States. The laws are contained in U.S. Code 10, Sections 331 to 335. I'll bet most of you did not know the changes in 2006 and 2007 by Congress to this law.

The amended Insurrection Acts now reads:

(1) The President may employ the armed forces, including the National Guard in Federal service, to--

(A) restore public order and enforce the laws of the United States when, as a result of a natural disaster, epidemic, or other serious public health emergency, terrorist attack or incident, or other condition in any State or possession of the United States, the President determines that--

(i) domestic violence has occurred to such an extent that the constituted authorities of the State or possession are incapable of maintaining public order; and
(ii) such violence results in a condition described in paragraph (2); or

(B) suppress, in a State, any insurrection, domestic violence, unlawful combination, or conspiracy if such insurrection, violation, combination, or conspiracy results in a condition described in paragraph (2).

(2) A condition described in this paragraph is a condition that--

(A) so hinders the execution of the laws of a State or possession, as applicable, and of the United States within that State or possession, that any part or class of its people is deprived of a right, privilege, immunity, or protection named in the Constitution and secured by law, and the constituted authorities of that State or possession are unable, fail, or refuse to protect that right, privilege, or immunity, or to give that protection; or

(B) opposes or obstructs the execution of the laws of the United States or impedes the course of justice under those laws.

A little known fact, is that when the State of Louisiana was hem hawing about asking for Federal help in the wake of Katrina,...many members of the U.S. Government were trying to get then President Bush to declare an insurrection in New Orleans in order to send in the U.S Army with law enforcement powers.......Bush did eventually send the military, but they did not have law enforcement powers - - - thank God, as that would have set an ugly precedent.

I don't know,.....I'm still not a conspiracy buff,.......I still think the only way to change unfair regulation and inefficient representation is through the ballot box,.....but I would still encourage people to read "Unintended Consequences", by John Ross.

Sunday, December 26, 2010

Reader Response on Riots received the following (very interesting) reader response on riots,.....Anonymous has left a new comment on your post "Urban Survival Planning - More Riots and Scenarios..."I'm a creature of the 60s. As to these riots: Been there, done that. Let me explain: Suspect the obvious. As in the 60s when "the whole world [was] watching" at the Chicago 8 trials and the Kent state killings, and Watts and Hough suburbs were burning, each one of those were concerted efforts designed and carried out by Saul Alinsky followers like Students for Democratic Action and The Weathermen Underground and the Black Panthers.WITHOUT EXCEPTION !!

None of this is by inspiration of a angst-be-sodden crowd of like-minded sophisticates. It is a cold - hearted plan carried out by nation-busting global governance freaks who use their expendable useless idiots/minions to do their dirty deeds. Meanwhile, where is the FIRE in the USA? There ain't none...yet....just gentlemanly middle class activists drinking a toast to their latter-day icon, Glen Beck...but YOU WAIT....and see...

UrbanMan replies:I get it. I also believe there is a group in this Country actively wanting, planning and acting to make this Country a third world socialist shithole. We're heading this way now without large scale, across the board corrective action. Many of us are doing the survival planning and preparation because if we don't know what the results can be, at least we instinctively know that this Country is in trouble.

I was writing about the threat of riots to be fueled by discontent, anger and hate and take on a live of their own. I think the coming riots, based on the extinction of the middle class and development of a large percentage of Americans that can't afford to live, will vastly over shadowed the anti-war, anti-government riots of the 60's. It's one thing not getting your way and having a tantrum,'s a total different thing when you can't feed your family.

Add in a an initial lack of protection and control by our Government then installment of heavy handed government control, maybe even martial law, and their will be chaos.

And this is a gradual economic collapse scenario. Factor in a rapid economic collapse and maybe even a terrorist strike to precede this and the stakes go up.

The survivor needs to consider riots and their impact on the survivor's immediate safety and escape routes. Grocery stores, food distribution warehouse, hospitals, probably urban shopping malls will be ground zero for massive protests then riots and looting.

You can simply wargame these possibilities by looking at likely sites that would attract large groups of angry, disenfranchised people who by then may not have anything to lose. Add the phenomenon of the mob mentality and you have a dangerous situation. Wargame (or "what if") the danger to you and your family from the flow of these riots. A friend of mine lives in a old house on a street next to a hospital and a multi-story building of Doctor's offices. The house is pushed back against a steep mountain. This basically boxes him and his family in, once the hospital are overwhelmed with people seeking help, then later by mobs and looters. This basically eliminates one entire direction and network of roads for his escape.

Another friend of mine lives in a home abutting a military installation. This does not forebode well as I think it is likely you'll see the government, through the military, initially try to feed people and triage needs, but the military installation is also a likely place for detention camps for both large groups of criminals or later on maybe just the general hungry population. I don't want to be caught up in any of that, as I am prepared to protect and feed my own

Anyway, the point to all of this is that is a more likely danger of out of control riots then there is of organized para-military type bands of looters. Just prepare yourselves for this.

Friday, December 24, 2010

Urban Survival Planning - Hyper-Inflation will precede the Collapse

A buddy of mine sent me this video from the National Inflation Association with the theory that our Government isn't stupid. He justified this by stating all the things are government has done to stave off economic disasters, for clunkers, bailout of Fannie Mae and Fredie Max,...Stimlus I and II,....the bailout of AIG,.....nationalizing half of the automotive industry,.....passing Obamacare,...trying to pass Cap and Trade,....extending unemployment benefits (twice actually),....and the list goes on,...are not things a rational government does,..UNLESS they are very scared of the future economic viability of this Country, and indeed the viability of this Country as a country.

He sees it as a time buying plan and/or a plan to orient the historical record to efforts made and not results. He sees the end as a economic collapse of this Country preceded by hyper-inflation. He forecasts two scenarios a rapid collapse the speed of which as never been seen before, or less probable, a gradual collapse that will plunge this country into anarchy which will results in the Government suspended the Constitution in an effort, doomed to failure, to control the chaos.

God, I hope not, but I don't see any way out of it. His prediction mirrors that of Gonzalo Lira, although he said he has heard of Lira but not read any of his writings. But I see the writing and it is on the proverbial wall....Get prepared, have a plan and do it now.