Tag: "economic collapse"
Dependence Day
Quite a gem from Mark Steyn. A bit long, but thought provoking.
Dependence Day (click for full article)
If I am pessimistic about the future of liberty, it is because I am pessimistic about the strength of the English-speaking nations, which have, in profound ways, surrendered to forces at odds with their inheritance. “Declinism” is in the air, but some of us apocalyptic types are way beyond that. The United States is facing nothing so amiable and genteel as Continental-style “decline,” but something more like sliding off a cliff.
View PostOff the Grid News
I’ve discovered a new web site, run by a group of Christian men who are dedicated to keeping you up to date on what is happening around the world and in our nation. Off the Grid News gives practical advice on how to prepare for life post economic crash. Please visit them today.
I will be posting less frequently for a period as my daughter and I finish our book “A Line In The Sand.” As we begin writing, I am very excited about what God is doing through this work. I believe God is revealing a very important story, while at the same time drawing my daughter and me closer together in a way that blesses me beyond what I can describe. Please pray for this effort. Right now, we anticipate the book’s completion to be by the end of the year at the latest. By God’s grace, it may be as early as late fall.
God bless you all. I will check in from time to time, particularly on issues related to getting Christians involved in taking this nation back.
Europe is bailed out. Who is next?
The markets have gone mad. I can’t for the life of me understand what there was to celebrate in today’s announcement that the world would print whatever money is necessary to bail out an entire continent. What in that announcement said anything but “we are all in deep trouble here.” What in that announcement said anything but “the bailout of the banksters is now the world’s problem.” And in the United States, what in that announcement said anything but “the U.S. taxpayer is now the guarantor of the world’s sovereign debt.”
Through taxes or inflation, the U.S. government or the Federal Reserve will put the cost of the bailout of the world’s nations onto the backs of the American taxpayer. Oh yes, each nation will certainly share in the pain of their respective country’s bailout as “austerity’ measures are put in place. But the U.S. will be asked to shoulder some of the burden “for the greater good” just as all of Europe has had to share in the reckless policies of Greece, Portugal, Italy and Spain.
And in the end, it will not work.
What we witnessed over the weekend was the assured destruction of our current financial system. Jim Sinclair in this case hit it dead on. If Greece’s problems spawned a $1 trillion bailout response, what will happen when California’s debt meets the same fate? “QE to infinity” as sovereign debt explodes into trillions of dollars of losses – all monetized until the major fiat currencies of the world explode in hyperinflation as people lose confidence.
Contrary to popular opinion, hyperinflation is NOT strictly a monetary event. It is a loss of confidence event. And the “confidence” shown by the knee jerk reaction of the world’s markets to more and larger bailouts will soon fade. When it does, look for the next big nasty down leg in the markets to return with a vengeance – that is except in precious metals and a few (very few) other sectors.
I have written in the past that if anything near a worst case scenario begins to play out in the debt markets, there would come a day when one will want all of their assets in tangible goods of one form or another. That includes gold, silver, oil, grains, farmland, etc – and NOT their paper representatives such as ETF’s or possibly even equities of companies who own them. You may need the real thing. That day may not be far off, and the likelihood of it actually coming is growing by the week.
Stay tuned and buckle up. What we saw over the weekend is one of the primary reasons you are saving in silver. Stay the course.
Why the crash? Good answer here.
The reality of the “shadow banking system” that would have gotten people labeled as conspiracy nut a couple of years ago is now making its way into the main stream. Watch this and learn. It is as close to the truth as you will see on the MSM.
Visit msnbc.com for breaking news, world news, and news about the economy
What (nearly) killed the markets today?
A nearly 1000 point drop in the DOW. Gold up nearly $30. What does is all mean? Well, that depends on who you ask at this hour. MSM news outlets are claiming a computer glitch or a mistake made when entering a trade. Others claim the markets are simply catching wind of just how serious of a problem exists in the currency markets with the sovereign debt problems in Greece and the Euro zone. Still others blame HFT - High Frequency Trading – that simply got caught without a negative feedback loop, ala the 1987 crash.
Whatever the reason, one thing is certain. Market sentiment is sure to have changed. All the spin that has been engineered by the MSM and PTB over the last year was undone in one, 60 minute roller coaster ride on Wall St. If nothing else was evident today, it is clear that someone – be it millions of individual someones – or a few computer programmers in the glass houses of the big investment banks – has a hair trigger when it comes to exiting the markets. That was on display for all investors to see today, and now people know that they can lose thousands of dollars in the blink of an eye. Investors now will have their finger hovering over the mouse clicker or on the speed dial number of their broker. “Sell NOW!” is on their minds.
18 months is not long enough for investors to have forgotten the pain that the market dive in late 08 and early 09 brought them. They saw their financial life pass before their eyes. Many were late to “get back in” and have recovered only a fraction of their losses. They will not stand by this time and watch the rest of it slip away. The question is, where will they go? If today’s market action did nothing else, it served to reveal in a 3 hour period where money will flow when the next down leg gains momentum (tomorrow and Monday will tell us if that is now). Places to be: US Treasuries, the US dollar, gold and silver and their equities. Nearly everything else got thrashed today.
Let’s look at these one by one. US Treasuries will be a safe haven only for a short period of time. That period could be days or months, depending on how quickly things unravel. Eventually, they too will join the list of asset classes doomed to fall. Ditto for the US dollar. In the game of cascading currency defaults, even the last man standing (which will NOT be the US dollar) will fall.
Now to gold and silver. Today they showed their metal (no pun intended). Gold was firm all day long, steadily catching a bid in the face of major market turmoil. Silver was noteworthy due to its lack of volatility. This is the opposite of what happened in late 08/09′ when they both got crushed with the markets. Why? I have given this some thought, and in 08/09, the markets were under pressure because the financial system was failing. Now, however the actual “money” itself is failing. Big, big, big (did I say big?) difference. This is a trend that will continue throughout the remainder of this crisis, until our current fiat empire is replaced by something else.
And what about energy and other “hard” assets? Well, you saw that they will likely receive the same treatment – at least in the short term – as most other asset classes. The fear of “demand destruction” will outweigh the flight to tangible assets in the early stages. That simply means that energy and other hard assets will be great investment opportunities after the first wave of selling subsides. It will take some wisdom to know when to enter those markets.
If the markets somehow gather themselves tomorrow and are able to put this horror show behind them. It will only be temporary. Gold may pull back slightly, however people now know what to expect. More and more people will begin to accumulate precious metals and their shares. Even Larry Kudlow remarked today “Gold is now the world’s reserve currency. Amazing.” Not for those who have been watching this unfold for the past 3 to 5 years. Not for the Austrian economists. Not for those who read and study history. And last but not least, not for those who read and study their Bible.
Buckle up everyone. The next few days will be very telling. Let’s see how the overseas markets view today’s action.
Fear not Obamacare explained…
A reader asked me to explain my post “Fear not Obamacare” because they couldn’t listen to the BTR show. Here is the short answer:
Before it is fully implemented (slated for 2014) this legislation has huge obstacles to overcome. Some are beyond the control of the legislators…
1) It is being challenged in the courts on Constitutional grounds. Ultimately this will make it to the SCOTUS. In my opinion, the SCOTUS will side with the Federal Government because it is a branch of the Federal government and if they open the door to limits on Fed power, especially by the states, they know the states will end up limiting their power (SCOTUS) eventually, and they don’t want that.
2) Attempts at nullification by the states will be undertaken. Again, see #1 above for a possible similar process.
3) Absent relief from the courts, some states (at a minimum their citizens) will practice civil disobedience, ignoring the Fed’s demands on Obamacare. The masses will be very vocal in their demands for relief. 912 was just the beginning. This is when things get – shall we say – interesting.
Then there are those things that are beyond the control of the courts and legislators.
4) By 2014, several states will have gone bankrupt, likely taking the Fed government and the US dollar down with them. There will be NO MONEY to pay for Obamacare, let alone Social Security, Medicare, and Medicaid. The US economy will very likely be starting over. Massive Federal government defaults (probably by hyperinflation) will either have had happened or be in the process of happening. This is in my opinion what is most likely to stop Obamacare.
5) There is a possibility of massive social unrest before 2014. It could be in the wake of a collapse of the US dollar or because of backlash to ever increasing Federal tyranny. What this ends up looking like is difficult to say at this point. However, if it turns really sour, then the Federal government will likely be in a major overhaul. This ties to #3 above.
So there you have it. What I believe is the unfortunate probable outcome. No Obamacare, but possibly for reasons that are not pleasant.
Freedom comes at a price. If we are to continue to be free in this country, we must once again step up and pay.
Agenda – Grinding America Down (5 star!)
Commentary
Folks, we have developing one of the most perverse dichotomies in the history of economic data. With the DOW over 12,000, and unemployment “down” to 9.0 percent, pundits are falling all over themselves to claim victory in the battle of the Great Recession of 2008/2009. Here are a few facts:
1) Trillions of dollars in stimulus and money printing to keep interest rates low are the only reason that there is any meaningful economic activity at all. Govt programs (food stamps/unemployment benefits) have kept many families out of the streets. Without it, we’d be 1930′s all over again. However these programs and this money printing cannot last forever without disastrous repercussions. The spin is that the bond market is selling off in the face of QE2 because economic activity is rebounding. I submit rather that it is selling off because the bond vigilantes are once again coming back, seeing that QE2 is failing and that QE3 to QEX will be implemented, further debasing our money.
2) Housing is entering into its “double dip” as the sales figures are deteriorating once again across the nation. Without a recovery in housing (one of the targets of QE2) there will be no lasting economic recovery. With mortgage rates rising, there will be no housing recovery. Can anyone say “death spiral?”
This is the labor force participate rate. It is showing en exodus of people who are even trying to look for a job. This is sad. I mean it is really heart breaking. Families across the nation have Mom or Dad, maybe both, who have given up looking for work. If all those who have given up started looking again, official unemployment would jump by multiple percentage points. This IS reality. For more information about this story, see this link.
4) A market that will not sell off even slightly, when the Middle East has turned into a tinder box has something wrong with it. We do not understand the implications of a 30 year staunch ally of both the U.S. and Israel potentially falling into Muslim hands. This could be the black swan event that tips things over, yet the markets march higher. As an aside, I really wonder if our government will heed its own words when it says the Egyptian military should not fire on its own people. At the rate things are going, within five years, we will see massive protests in the streets of Washington.
People may read this and think I cannot do anything but preach doom and gloom. I would say, I only present you with some facts. You decide what they mean. I simply do not like being lied to. The chart above isn’t lying.
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