More Proof of the Coming Economic Collapse

ETF Daily, basically an investors information-financial intelligence site often produces excellent articles dealing with the U.S. and World financial situation. Not necessarily from a "gloom and doom, the collapse is coming" perspective, ETF Daily does provide some insight into the possiblities of a national and world wide economic spin downward and that of course is the economic collapse, one of many possible SHTF scenarios, that we have been prepping for.

I have copied some of a recent article by ETF concerning government created bubbles and major events that will cause them to burst and herefore bring the economic collapse closer to the surface if not
bubbling over and effecting life as we know it. Read the entire article here.

The Tech and Housing Bubbles That Created These Giant Failures Were SMALL in Comparison to the Greatest Bubble of All, Being Created RIGHT NOW! I’m talking about the massive growth of the federal government that we’ve seen over the past few years.

Not only is the government bubble the biggest of all time, but it is rapidly expanding in four separate ways:

First, we have an unprecedented Government Debt Bubble: Washington has spent a record $16.3 trillion since 2007 … has added $6.5 trillion to the national debt … and is CONTINUING to run up trillion-dollar-plus deficits every year.

Second, we are witnessing the Greatest Monetary Bubble in U.S. history: Just since 2008, the Federal Reserve has dumped more than $1.8 trillion newly-created U.S. dollars directly into the economy. Plus, the Fed is creating even MORE money by holding interest rates low in order to
increase loan demand. Never forget: When banks lend money, they effectively create new U.S. dollars out of thin air.

Third, we have a Government Employment Bubble. The Heritage Foundation reports that since December 2007, even while the private sector workforce has shrunk by 6.6%, shedding more than 7.5 million jobs … the federal government workforce has grown by 11.7%, adding 230,000 jobs.

Fourth, and most dangerous, there’s the Entitlement Bubble: Just consider the facts:

One in every five Americans now relies on federal assistance.

Nearly 46 million Americans need food stamps to keep body and soul together — 34% more than just two years ago.

The average recipient of federal aid collects $32,748 in benefits — about $300 more than the average tax-paying family gets in disposable income.

The biggest of all: The government’s obligations for Social Security, Medicare and Medicaid are now $65 trillion, nearly five times the value of all the goods and services produced by the entire country.


But Soon, Three Major Events Will Burst This Massive Bubble …

First, the U.S. government is going to lose its primary creditors — overseas investors. In fact, there’s abundant evidence that this deadly process has already begun. That’s why Lawrence Goodman a former Treasury official and president of the Center for Financial Stability, pointed out last week that major U.S. creditors like Japan and China, that once scooped up U.S. debt, are shunning it. Such foreign purchases of U.S. debt amounted to 6 percent of GDP and has since fallen by over eighty percent to a paltry 0.9 percent.

Second, that’s why the Federal Reserve has had no choice but to temporarily fill the gap. Last year the Fed used printed money to purchase a stunning 61% of the total net Treasury issuance, up from negligible amounts prior to the 2008 financial crisis. This raises the question: What happens when the Fed’s actions drive fuel, food and other prices through the roof? Treasury interest rates surge — the first sign that the government bubble is bursting.

Third, ultimately entitlements must be cut — just like they’re being cut in Europe. In Spain, Greece, Portugal and Italy, those cuts are taking massive amounts of money out of the economy and plunging them into deep recessions.

Imagine what will happen when the world’s largest government with the world’s largest entitlement obligations begins making similar kinds of cuts!

Make no mistake: This great government bubble — probably the greatest mankind has ever seen — is destined to burst. And when it does, blood will run hip deep down Wall Street and effect every aspect of our lives.

Second Recession - Are We Going to See Riots then Economic Collapse?

Paraphrasing the article, "Second Recession in he U.S. Could Be Worse", from the New York Times,.....their view is that the second recession (are we out of the first yet?) could be extremely painful and may not be recoverable.

Glenn Beck is predicting riots in the streets. And he is pretty damn accurate. We are seeing riots in England right now, and not just from the Police killing a man in an attempted arrest,...what fueled the riots is the general feelings by the "have nots" that they are getting the "short end of the stick".  They like alot of us in the U.S. are tired of their government  running this country into the ground.

Nowhere will this be larger issue if the high density population groups in the U.S. can't get food anymore either due to escalating prices or lack of availability....or fuel,......or really any commodity necessary for life or just plain survival.


We have seen two consecutive days of giant losses on the Stock Market.  Over 500 point on Friday 5 August, then over 600 points on Monday 8 August. What is going to happen if the Stock Market goes into free fall?

If the economy falls back into recession, as many economists are now warning, the bloodletting could be a lot more painful than the last time around.  “It would be disastrous if we entered into a recession at this stage, given that we haven’t yet made up for the last recession,” said Conrad DeQuadros, senior economist at RDQ Economics. And this is the good news. This is an understatement.

Anxiety and uncertainty have increased in the last few days after the decision by Standard and Poor’s to downgrade the country’s credit rating and as Europe continues its desperate attempt to stem its debt crisis. This is going to force the U.S. to execute entitlement reform, leaving millions without, or worse yet, have their credit dry up,..in effect becoming bankrupt.

We have had a population in the work force grow by 3% in the last four years, but jobs have declined, putting an extremely large number of people out of work and on some sort of welfare.  What happens when the Government either begfins entitlement reform or just goes plain bankrupt and people have no choice really but to take what they need. 
We are very lucky that  fuel prices and interest rates have remained comparitively low, but that just cannot last for very much longer and the decline will become much more rapid.

Think about what you are going to do once food cannot be obtained, due to either high prices or unavailability.   Where are the most likely places for riots to begin?  Where will they migrate to?  Speaking of migration, are you are a natural refugee route?   How is your OPSEC?  How many people know you stock food and supplies?  Are you tracking the indicators of this potenial collapse?

As I post this the morning of Tuesday August 9th, I have no idea what will happen today, but you can be damn sure I'll have both the Television and radio on at work, as well as surf through revelent sites when I have the time,...and I will make the time.  This week may very well be critical.     

New York Times article: http://finance.yahoo.com/news/Second-Recession-in-US-Could-nytimes-2428475539.html?x=0