This Isn’t Your Grandfather’s Great Depression

Reading time: 5,655 words, 16 pages, 13 to 23 minutes plus videos.

This will be far worse than anything seen in history. Empires have fallen before but we will see the entire globe collapse back into the Dark Ages.

It really IS different this time. I’ll briefly outline the failed grand experiments that are turning this “Great Recession” into the World’s Greatest Depression. For more detail, I urge you to read the first couple of pages of the December 2008 Crash Update – Dec. 20, 2008 for a greater understanding of the failures below.

1 – Central Banks – were created by the banksters to protect the banks. The myth, for a century now, is that the stated mission of central banks (FYI – the U.S. Federal Reserve is a central bank) was to reduce economic volatility and control inflation. The first chart on the article linked above shows their dismal failure of smoothing volatility. Instead, economic volatility increased.

As for controlling inflation, our currencies have lost between 95% and 98% of their purchasing power in the last century. Case in point: Canada replaced $1 and $2 bills with coins and recently discontinued the penny so transactions are now rounded to the nearest 5¢. In other words, money becomes more worthless every day.

Self-deluded Amerikans continue using $1 bills and pennies. Ask yourself: what can you buy with a penny? For that matter, how much does a dollar buy anymore? When central banks started, a dollar could buy meals for several people. Today, a dollar is just change!

Central banks no longer allow banks to fail so that newer, stronger banks could take the place of weaker ones. The chart below shows bank asset compared to their countries GDP. Most are at risk because they’re highly leveraged. And, anyone who still thinks Canadian banks are safe, better look at this chart.

bank assets country GDP
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2 – Global Fiat Currency – unbacked paper money has ALWAYS failed but the failure of one nation’s funny munny never threatened to take down the whole world. Today, EVERY country in the world is on a fiat currency system. When one currency collapses, they’ll all collapse because global finance is so interconnected. Case in point: the recent Cyprus ‘bail-in’ is driving money out of southern Europe into the U.S. dollar, driving up the price of U.S. dollars and creating a bubble which, when it bursts, will have disastrous consequences to the downside.

Governments and central banks are desperately trying to prevent a sovereign currency collapse from spreading. Ultimately it will be futile but, in the meantime, we watch as global finance, currencies and economies slowly disintegrate. See Peter Schiff’s video below.

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3 – Consumption Based Economies – again, I refer you to the December 2008 article above for more detail. Consumer spending accounts for more than 70% of western economies but, economies that based on consumption without production and savings are doomed to collapse as we now see.

4 – Globalization – that grand experiment has also utterly failed. The thinking was that countries could specialize away from mixed economies. China would be the world’s factory for cheap goods. Amerika would be the financial service center. Canada, Australia, Africa and Russia would supply the world’s resources. The muddle east would provide oil. There’s more detail in the December 2008 article but the ‘interconnectedness’ that was supposed to reduce risk has become its greatest failure. Like a chain, if one link breaks the whole chain collapses just like Derivatives (next).

5 – Derivatives – the greatest failure of all the recent experiments is responsible for the insolvency of the entire global banking system. Derivatives are explained in more detail in Crash of 2007 – Economics 101. I strongly urge you to read it to get an understanding of the runaway train that is about to run you over.

Just as central banks were created to protect the banksters (and not you) the Bank for International Settlements (BIS) is the central bank for central banks. At one time the BIS reported that the total value of global derivatives was $1.4 Quadrillion and rising (the resulting shockwave made them fudge the number by half). A quadrillion is the astronomical number of 1e+15 or the number 1 followed by 15 zeros or a thousand Trillion or one thousand million million. To put a thousand trillion into perspective, consider that the entire global GDP is between $55 and $70 trillion (depending whose numbers you use). In other words, derivatives dwarf global GDP by 20 to one.

As with globalization, the ‘interconnectedness’ of derivatives was supposed to reduce individual risk by spreading it around. This was another monumental failure. This too, is like a chain; if one link breaks the whole chain collapses. Today major banks are sitting on a mountain of worthless derivative assets. Some are leveraged 20, 30 up to 70 to one. And, that’s just what we know about. There’s no telling how much worthless crap is held off-balance sheets and in shadow banking activities but you can bet it’s a gargantuan amount.

Central banks’ purchases of Mortgage Backed Securities (MBS) sounds like central banks are backing mortgages to rescue homeowners. Nothing could be farther from the truth. MBS’s are derivatives, not mortgages. The untold trillions of dollars that are created out of thin air are simply a way for the banksters to transfer some of their toxic assets to the central banks. There has NEVER been a case of endless money printing that did not result in hyper-inflation. However, it would take centuries for all the toxic derivatives to be eliminated. This house of cards has begun collapsing taking banks and economies with it.

Gotta love James Howard Kustler’s word-smithing: “What remains are games of musical chairs, Ponzi schemes, frauds, swindles, stonewalls, ruses, ploys, scams, dodges, bluffs, subterfuges, QE martingales, interventions, rehypothecations, pretenses and other modes of evading or disguising reality. The reality is that there is not enough real wealth to go around, certainly not enough to cover the giant web of obligations that masquerades as ‘money’.”

6 – Debt – never in world history have ALL governments of the world been insolvent, broke, bankrupt, etc. etc.. Rogoff and Reinhart’s study of 800 years of financial folly determined that NO government ever avoided collapse with a debt to GDP ratio greater than 90%. The U.S. is over 100%. Japan is over 250%. And, the few that are slightly less than 90% have unfunded liabilities well in excess of 100%.

7 – Zero Interest Rate Policy (ZIRP) – yet another historical first – never before in history have interest rates been so low for so long. If ever there was proof that economies are NOT recovering, ZIRP is the smoking gun combined with Quantitative Easing (QE to infinity) – creating money out of thin air to stimulate the dead corpse of our economies and revive zombie banks. Other than a vast array of unintended consequences (discussed below), it is NOT working.

Worse yet, they cannot stop QE because as soon as they do, economies will collapse even faster than they are now. Case in point: Japan, the world’s third largest economy, just announced a massive QE (their 9th I think) that’s even proportionally larger than anything the Amerikans have done to date. More insanity!
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Reader’s Comment # 1

One astute reader asked “where do you see society as a whole going if we continue down the same path the world is heading down right now?” That’s a good question.

Above, I outlined some of the reasons why the continuing economic and sovereign currency collapse will be different than anything we’ve ever seen before. We have no playbook for what is happening. We have never been here before. They’re making it up as they go. That’s one reason the central banks are floundering and trying this, that and everything but the kitchen sink. Nothing they do works to solve the problems.

This is not surprising because they are NOT addressing the root cause of our problems. They keep trying to “fix” the symptoms (results) rather than the cause. You cannot fix results. You can only fix the cause of a problem. Determining root cause is never easy but willfully refusing to do so guarantees failure. Trying to fix results simply creates more problems and unintended consequences. Here is why the failures listed above are insurmountable.

1 – Central Banks – Are central banks going to solve the problems created by the very existence of central banks by eliminating themselves? Dream on! They are part of the problem. The problem cannot fix itself.

2 – Global Fiat Currency – Fiat currency is backed by nothing except the full faith and credit of politicians. I try not to laugh when I hear that. If a currency is backed by politicians, it is backed by NOTHING. There is no incentive for politicians to act responsibly and keep our money supply within limits. There is every incentive to print endless amounts of money and bribing us with OUR own money. Again, they refuse to address the problem. They create more of the problem by printing endless amounts of worthless currency.

In regards to money creation, Kenneth J. Gerbino says, “The printing of paper money has given free enterprise and capitalism a bad name to the lower and middle class wage earners as well as most white collar workers since they are all having a tough time getting by. Socialists use this as an argument against capitalism and free markets, when the real target of their discontent should be the printing of fiat paper money – which ironically is the socialist solution!”

Jim Sinclair thinks currencies will start collapsing 2015 to 2017 and a new currency introduced about 2020. That means three to five years of utter turmoil where what’s left of economies will continue to tear themselves apart. It also means that whatever new currency is introduced will be “the new boss, just like the old boss” except the decimal place will be moved to the left, also known as currency devaluation. Your $1,000 will be replaced with a $10 bill or $100 if we’re lucky.

3 – Consumption Based Economies – Same thing! They’re ignoring the problem and trying to solve the retraction of a consumer based economy by enticing insolvent consumers to consume more. Insanity is doing the same thing over and over and hoping for a different result. The authorities are not only incompetent, they are clearly insane. Healthy economies need production and savings. We moved production overseas and left everyone too broke to save.

4 – Globalization – Yet more insanity! President Obama is trying to expand globalization with Atlantic free trade treaties. Canada is trying to form one with the European Union. The more interconnected we are the more fragile the system becomes. If every country were a ‘stand-alone’ nation and one got into trouble, there would be no risk of contagion but, with every country closely connected to all the others; one country’s problems infect the whole globe. That’s where we are today.

As an aside, the world ended for Amerika a month earlier than the Mayans (supposedly) predicted; November 20, 2012 to be exact except somebody forgot to tell them. As Spengler of Asia Times in Post-US world born in Phnom Penh comments, “It is symptomatic of the national condition of the United States that the worst humiliation ever suffered by it as a nation, and by a US president personally, passed almost without comment… I refer to the November 20 announcement at a summit meeting in Phnom Penh that 15 Asian nations, comprising half the world’s population, would form a Regional Comprehensive Economic Partnership excluding the United States.” [Emphasis mine]

President Obama travelled to the summit to organize a US-based Trans-Pacific Partnership (TPP) that excluded China. Instead, it was the U.S. that was excluded when the Association of Southeast Asian Nations (ASEAN) plus China and others formed their own partnership. Notable among this club are so-called Amerikan allies India, Japan, South Korea, Australia and New Zealand.

Also, notable is the deafening silence of Amerika’s ass media in reporting another major defeat of the fading Amerikan Empire. I read about it in Asia Times Online, which, incidentally, is an excellent source of almost unbiased news.

5 – Derivatives – The solution is simple but impossible. Everyone in the world has to work for the next twenty years and donate 100% of their PRE-tax earnings to the banksters, pension funds, hedge funds and other investors to write-off their toxic derivatives. Oh yeah, and continue spending like crazy to maintain our current consumer economies. It’s NOT going to happen is it? The alternative, which IS going to happen; the whole house of cards Ponzi scheme is slowly collapsing which is why we see more and more bank failures. This will spread.

In the meantime, derivatives will poison depositor confiscation ‘bail-ins’ as derivatives are declared senior to “unsecured creditors” (depositors). In other words, highly leveraged derivatives are ahead of depositors’ actual, unleveraged money. There’s no end to this insanity!

Do you still have money in the bank or credit union? Kiss it good-by!

6 – Debt – more insanity. They are trying to solve indebtedness by going deeper into debt. I try not to laugh but, am I the only one that sees the insanity of getting out of debt by going deeper in debt?

So, are our problems going to be solved? NO, of course not! The whole house of cards Ponzi scheme is slowly toppling. I wonder if Jim Sinclair is right; that they can hold it together for another two to four years before it tears itself apart in three to five years of utter turmoil unlike anything this world has ever seen.

My prediction? I don’t think there’s much likelihood of holding out that long before the collapse, let alone through that much turmoil. I could be wrong. I hope I’m wrong. I’m usually not. Are you prepared yet?

Having read much commentary and analysis since both the European Central Bank and the U.S. Federal Reserve announced their latest counterfeiting schemes (QE to infinity) and the continuing Zero Interest Rate Policies (ZIRP); I’ve connected some very disturbing dots.

There are several ways to address the incredible amount of government debt.

1. Taxation
2. Default
3. Devaluation (inflation)

Taxation would kill the already week economies. Default would end the U.S. dollar as a reserve currency and the U.S.S.A is resisting that mightily. Devaluation (hyperinflation) is the likely and unintended consequence of all the money printing. Right now we have stagflation. That will soon turn to hyper-inflation.

7 – ZIRP – Zero Interest is going to kill retirees on fixed incomes, those who rely on interest from savings and Boomers about to retire in the near future.

ZIRP, increased taxes and inflation are also killing the Middle Class. By driving them into poverty and debt serfdom, it will make the U.S. competitive with low wage countries. The operation may be successful but the patient will have died.

Analysts say that ZIRP results in malinvestments but they rarely define the term or give examples.

According to Wikipedia Malinvestment “is a concept developed by the Austrian School of economic thought, that refers to investments of firms being badly allocated due to what they assert to be an artificially low cost of credit and an unsustainable increase in money supply, often blamed on a central bank. This concept is central to the Austrian business cycle theory. Austrian economists such as Nobel laureate F. A. Hayek advocate the idea that malinvestment occurs due to the combination of fractional reserve banking and artificially low interest rates misleading relative price signals which eventually necessitate a corrective contraction—a boom followed by a bust.”

An example of malinvestment is the continued overbuilding of ships of ever larger sizes, driven by low interest rates. This caused shipping rates to plunge during the Financial Crisis and never recover thus driving ship lines out of business and others like Maersk to scale back.

Another example provided by Testosterone Pit in HOUSING BUBBLE II: BUT THIS TIME IT’S DIFFERENT “… foreclosure sales – there were 5 million since the peak of the housing bubble – have become the hunting grounds for investors with two goals: hanging on to these homes until the Fed’s flood of money drives up their value; and defraying the expenses of ownership by renting them out.

“Trying to rent these places is another story. Housing is zero-sum: when you move into a new place, you move out of the old place at the same time. So it becomes available.

“There’s a whole bunch of rental supply that’s coming on that used to be sitting empty in bank portfolios.”

“Timing couldn’t be worse. Occupancy rates of single-family rental homes are already low— 53% for Colony Capital. But investors are buying ever more properties and flood the rental market with them. Just when the stream of people who’ve gotten kicked out of their foreclosed homes is tapering off. With rising costs and declining revenues, the rental part of the business model collapses.

“But with the economics to support these prices—namely rental revenues—giving way, the remaining reason to buy would be a singular hope: economically unsustainable price appreciation. The definition of a bubble. At some point, not being able to make money on rentals, investors will try to bail out. Then, the process of a Fed-inspired housing bubble blowing up starts all over again.”

Unlike the past two Great Depressions that lasted an average of 19.6 years before economies recovered, this one will be permanent. The failures I’ve outlined above have never been seen before or to such a degree and they’re all happening at the same time.

Only the super-rich will thrive because QE drives up the price of stocks and commodities. The rich are getting richer and everyone else will be permanently poorer. If you’re not among the rich, you need to prepare in order to survive albeit at a greatly reduced standard of living.

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Reader’s Comment # 2

That reader also stated, “this will not be a world we would like to see our children grow up in if I had to reflect 20 or 30 years down the road….”

Never having raised children, I’m not in a position to give child rearing advice although I have no doubt that raising children in the future will be a great challenge.

Yes, it will turn into a world unlike anything we’ve seen and your attitude will be of the utmost importance, especially to those who depend on you. Based on the survival courses I’ve taken, the three most important elements to survival are attitude, attitude and attitude.

All the skill in the world and all the gear in the world are useless if you don’t have the right attitude. I don’t mean just pasting a foolish smile on your face (although a genuine smile can reassure others) and I don’t mean a self-deluded, Pollyanna “positive attitude”. This video illustrates what I mean.


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The right attitude is NEVER GIVE UP. I highly recommend you read James A. Michener’s “The Covenant” for an understanding of the real history of South Africa rather than today’s bullshit propaganda.

Michener describes a vicious battle between the Afrikaners (Dutch settlers) and the English army for a strategic hill that killed almost everyone on both sides. A handful of surviving Afrikaners were retreating. Yet, one lone Afrikaner climbed the hill strewn with the dead and found himself all alone at the top. Waving his hat, he called on his remaining comrades to return and occupy the hill. Had they not, all those deaths would have been in vain. He had the right attitude: NEVER GIVE UP.

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Reader’s Comment # 3

That reader also said, “Everything I see and hear seems to be a reflection in human history. It is a reminder which takes me back to the great depression which then led to the second world war. The difference this time is mankind has the technology to wipe out humanity. Are the people in power so foolish that they have forgotten everything taking place today is a path that can lead us all to a war none of us may survive?”

The people in power are incompetent and sociopathic liars but, fortunately they’re not stupid. I don’t expect a global nuclear war because even those in power will be adversely affected regardless how long they hunker in their bunkers. However, I don’t rule out the limited use of tactical nukes. They are, after all, insane but, I don’t foresee global nuclear war.

We are already at war. President Obama, has presided over more wars than any U.S. President in history. The “forever” wars will continue. Long time readers will remember my analogy to a wounded animal. The most dangerous animal is a wounded one. America is badly wounded and it will continue to blindly thrash about in its death throes. Eventually, it will eat its own. The DHS purchasing billions of rounds of hollow point ammo and thousands of Armored Personnel Carriers are NOT for overseas use. Are you prepared yet?

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Retirement

Forget retirement. Stealing our bank accounts won’t be enough so they’ll come after our private pension plans. That still won’t be enough so they’ll come after our company pension plans. And that still won’t be enough so they’ll slash what’s left of social security.

How do I know this? It’s very simple. All the non-counter party derivatives in the world plus all the federal government debt in the world plus all the unfunded liabilities of the world plus all state, provincial and private debt in the world will take longer than the age of the universe to pay off. In other words, all that debt will NEVER be paid let alone serviced at today’s low interest rates and especially when rates rise.

However, rather than let the whole thing collapse in a god-awful heap so we can start to re-build, they’ll drag it out as long as possible by robbing us blind. Why? Because they can and they’ve already shown they will. The Cyprus bail-in was not an isolated incident. Canada, New Zealand, the U.S.S.A and the UK already have bail-in plans pending. They were developed long before Cyprus; probably for the last G-20 meeting.

For the past hundred years, inflation has also robbed us as discussed above. Today the actual inflation rate is far above the ‘official’ headline rate and the middle class is slowly dwindling along with living standards.

As already outlined, Zero Interest Rate Policy (ZIRP) robs savers and pensioners who might as well keep their money under the mattress. Those who are already retired will be left penniless, starving and dumpster-diving. Those who plan to retire face the same fate. Don’t plan to retire. Stay healthy and maintain good relation with relatives. You may end up moving in with them.

We need to put retirement into perspective. It is a relatively recent phenomenon and still restricted to a very small part of the world. In 1889, German Chancellor Otto von Bismarck introduced one of the first retirement schemes for those aged 70 at a time when few people actually lived that long. It’s only in the last few decades where a significant number of people actually retired for any length of time.

And much of the world still has extended families with aunts, uncles and grandparents living under the same roof. Our ‘nuclear’ families are also a recent phenomenon and also restricted to a comparatively small part of the world. You’d be well advised to maintain good relations with your relatives. As I already mentioned, you may be living with them.
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Global GDP is Collapsing

Even the Economist, one of the Elites’ mainstream cheerleaders admits, “the world’s growth continued to slow in the third quarter of last year, according to The Economist’s measure of global GDP, based on 52 countries. Global growth fell by 0.4 percentage points from the previous quarter to 2.4%, its lowest level since the end of 2009.”

world GDP

You can see the dip below zero in 2008’s Great Recession and now GDP’s are trending down again. Bear in mind, GDP is adjusted for the “official” inflation rate. Adjusted for the REAL inflation rate, global GDP is actually shrinking. If the above chart accounted for the real inflation rate, it would be well below zero.

People, listen up. We are in a Stealth Depression that’s hidden by bullshit inflation statistics.

I’ve beaten the Baltic Dry Index to death but it’s such a reliable leading indicator of global economic health that it deserves another look. Below you can see it’s still bottom bouncing; indicating falling demand for dry goods and confirming there is NO recovery, local or global, despite the ass media’s propaganda.

bdi 4-05-13
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Zero Hedge’s “Oil Tanker Market In “State Of Panic” As Charter Rates Plunge, Cargoes Rejected” headline also confirms that global GDP is collapsing. It’s not just dry goods but petroleum shipments that are down. He says, “adding insult to injury, this year shippers have to deal with not only dropping revenues, but soaring input costs as well, ironically: fuel costs.”

The ass media tells us the drop in rates is a result of a glut of ships but that’s only half the story as Zero Hedge says, “major collapse in global trade in the past 6 months, coupled with a drop off in end demand for energy around the world. Because while one can go with the myth of a US energy self-sufficiency, the same can certainly not be said for Japan, which is naturally the other half of the benchmark Gulf to Japan VLCC rate.”

bdi oil Zero Hedge
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New World Order

Hats off to the tin-foil hat conspiracy theorists for warning us about the New World Order or One-World Government. You can stop waiting; it’s here now. If it’s not enough that we have the UN, the IMF, the BIS, the World Bank; the Trilateral commission and the Bilderbergs, etc. then the recent Cyprus ‘bail-in’ proved it.

Sovereign nations are no longer sovereign (def: self-governing; independent of outside authority). Only the banksters are. Like I said, they own us and will continue to do so until we roll out Madame Guillotine again.
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Volatility is Opportunity

The future holds volatile markets of all kinds. If you invest looking in the rear view mirror with your father’s investment strategy, you will lose. However, there ARE opportunities to grow your wealth but it will need both patience and swift action. Patience is required when a stock that you know has value plunges unexpectedly if you aren’t using ‘stop losses’. And, you’ll need courage to hang on for the ride until it recovers. Swift action is needed when you determine an overall trend has ended and it’s time to get out and find something new. Never fall in love with an asset. And, keep telling yourself that what worked in the past may not work again.

I cannot tell you what to buy or sell as I’m not an accredited financial advisor. I can tell you what I’m doing, though. Silver is undervalued so I’m loading up on one ounce silver coins. My stock portfolio, previously in cash is now in solid precious metal miners whose stocks have recently gone on sale when gold and silver got hammered. I own Goldcorp, Detour Gold, Silver Wheaton and Silvercorp as well as some speculative juniors. I’m considering buying Premier Gold and North American Palladium. This is my portfolio, not advice.

Ignore the doomsters calling for a crash (it will happen sometime but not yet). For now, stock markets are manipulated by the banksters to enrich their buddies and create the illusion of economic recovery. I’m using this opportunity.

Other than that I cannot give specifics as everyone is different, has different emotional characteristics and different economic situations. Be prepared to adjust your investments according to changing conditions. Over the last four decades I went from stocks to commodities to commercial real estate and now I’m back in stocks again. I avoid the bond bubble.

To become a successful investor, you must educate yourself. My two favorite technical tools are Japanese candlestick charts set at 3 month daily and Bollinger Bands at 20 – 2. The candlesticks are fairly reliable predictors of trend reversals and the Bands are like electric fences keeping the candlesticks within their upper and lower ranges. I buy when they break below the lower band and sell when they skirt the upper but again it depends on the overall trend. I try to avoid short term trades but a little profit is better than none.

If you’re a homeowner, you won’t like to hear this. Real estate is one of the greatest hoaxes ever perpetrated on the public. Real estate is NOT an investment like it was for your grandparents; it is no more than a lifestyle choice and a roof over your head. A house is a bottomless money pit for maintenance, increasing power, electricity and sewer/water rates; a depreciating asset and a tax cow for increasingly desperate governments.

By the time you’re mortgage free, you will have paid double, triple or quadruple your home’s value depending on interest rates and amortization periods. The ONLY good thing one can say for real estate is it’s a form of forced savings for people lacking the discipline to save or invest otherwise. But it’s a very expensive way to save. Think of a bank account where they nail you 50% or more when you withdraw.

I cringe every time someone tells me I’m “throwing away” my rent money or they tell me my rent could “almost” cover a mortgage. When I ask them the total they’ll pay before they own their home, they don’t know! And, when I ask how much they pay monthly for taxes, maintenance, utilities, etc. they squirm and change the subject. We simply love our myths. Keep in mind that today’s low interest rates won’t last forever. The incompetent central bankers will lose control of interest rates someday so mortgage renewals at higher rates will be very painful.
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Gold Confiscation

Many commentators say we shouldn’t worry about gold confiscation. Circumstances are different than during Roosevelt’s term in office when currency was based on gold and the confiscation and subsequent revaluation of gold prices helped the government.

However, those who refuse to learn from history are doomed to repeat it. Western governments are OUT OF GOLD. If they have anything in their vaults it’s probably not theirs. Why do you think Germany is asking for its gold back and it’s taking seven years for them to get it?

Those of you who own “paper” gold are at risk. ETF’s can be confiscated as easily as bank accounts. Try converting paper to physical and you get cash. Storing physical gold at dealers is also risky. If it’s not in your hand, you don’t have it; someone else does.

Gold has been leased to stooge banksters like JP Morgan and sold on the open market to suppress the price of gold. When the SHTF and currency collapses and gold is once again included in the future reserve currency; those nations that have gold will be wealthy and in control of their futures. Those who do NOT have their own gold will be at a disadvantage and desperate so they’ll try to steal your gold (and silver). Keep it in your hands. Do NOT store gold in safety deposit boxes because there’ll be a government thug there for inspection when you open it just like in the 1930’s.

Be careful where you store it. Expect government thugs to ransack your home looking for precious metals and other stockpiles. Expect laws to be passed outlawing precious metal ownership. They’ll declare stockpiling food and essentials as “hoarding”. One strategy is to leave some where it is easily spotted and the rest in several different hidden locations.

Another strategy is to shoot the bastards when they show up but that requires guns, ammo, strategy, neighborly cooperation, alarms, armor and much manpower in shifts because they’ll probably come at night. So forget I said that. By the way, they’ve developed a new way of dealing with armed stand-offs: they burn you out. So it’s better to lose a little than lose your life.
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What else can we expect?

In addition to confiscation, higher taxes and more inflation we can also expect ‘capital controls’ to restrict cash withdrawals and prevent the transfer of funds out of the country.

Governments will increase regulations to criminalize and control every aspect of life. Their thugs will set up checkpoints and invade homes. Liberty and freedom will only be found in history books. Canadians who think they’re immune to police state tactics are in for a rude awakening.

Desperate governments will enact wage and price controls. This will drive trade underground into black markets so you’ll need stuff to barter. Whiskey is always a good idea; it stores well and can be used for bribes, too. We’ll see more “unbanking”, whether through barter clubs, precious metals or Bitcoins (I’m still not convinced yet). Are you prepared?

No one expects ‘bank holidays’ except wealthy insiders with connections who will withdraw their funds before it happens. Google ”bank holidays” and you’ll get endless pages of public holiday dates. Good luck finding anything on bank closures. Amerikans believe it can’t happen in the good ole U.S.S.A. It already has happened during Roosevelt’s first 100 days in office with a 4 day bank holiday. And, modern day electronic banking will only make it that much easier.

China’s credit bubble will burst sending more shockwaves throughout the financial world.

You’ll pay more for gold and silver than the ‘official’ price because premiums will continue to increase and availability issues will make waiting times longer. So what are you waiting for? Gold and silver are on sale right now. You’ll never see prices this cheap again.

Propaganda will increase. Publicly questioning governments, regulators, their enforcers and their policies will be risky. Those who don’t toe the line will be branded traitors or terrorists.

As poverty increases, the definition of “wealthy” will become proportionately lower so anyone with a home or car will be at risk of robbery, confiscation or kidnapping.

Volatility will increase. Stock, bond, in fact ALL markets will see wilder swings.

There will be bank runs. Keep cash on hand or join the mob at ATM’s.

Capitalism which disappeared long ago will be blamed for everything. When there’s more people taking than working and they vote, socialist government intervention will make everything worse and hasten the descent into poverty where we’ll ALL be equally poor.

Are you prepared yet?
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Remember the mantra:

We cannot borrow our way out of debt.

We cannot spend our way to prosperity.

We cannot pretend our way out of trouble.

Gerold
April 7, 2013

Update – April 8, 2013
It’s started in Australia and even sooner than I thought. I said they’d come after pensions. Simon Black reports, The next domino: Australia doubles tax on retirement savings

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Your comments are WELCOME!
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About gerold

I have a bit of financial experience having invested in stocks in the 1960s & 70s, commodities in the 80s & commercial real estate in the 90s (I sold in 2005.) I am appalled at our rapidly deteriorating global condition so I've written articles for family, friends & colleagues since 2007; warning them and doing my best to explain what's happening, what we can expect in the future and what you can do to prepare and mitigate the worst of the economic, social, political and nuclear fallout. As a public service in 2010 I decided to create a blog accessible to a larger number of people because I believe that knowledge not shared is wasted.
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One Response to This Isn’t Your Grandfather’s Great Depression

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