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Posts Tagged ‘dollar collapse

Economic collapse is a mathematical certainty: The top 5 places where not to be

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by NewAmericaNow
Posted June 26, 2011

The top five places NOT to be when the dollar collapses

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by Silver Shield
Posted June 23rd,2011

http://dont-tread-on.me/top-5-places-not-to-be-when-the-dollar-collapses/

THE DOLLAR COLLAPSE WILL BE THE SINGLE LARGEST EVENT IN HUMAN HISTORY. This will be the first event that will touch every single living person in the world. All human activity is controlled by money. Our wealth, our work, our food, our government, even our relationships are affected by money. No money in human history has had as much reach in both breadth and depth as the dollar. It is the de facto world currency. All other currency collapses will pale in comparison to this big one. All other currency crises have been regional and there were other currencies for people to grasp on to. This collapse will be global and it will bring down not only the dollar but all other fiat currencies,as they are fundamentally no different. The collapse of currencies will lead to the collapse of ALL paper assets. The repercussions to this will have incredible results worldwide. (Read the Silver Bullet and the Silver Shield to protect yourself from this collapse.)

Thanks to the globalization and the giant vampire squids of the Anglo-American Empire, the dollar is the world’s reserve currency. It supports the global economy in settling foreign trade, most importantly the Petro Dollar trade. This money is recycled through the City of London (not to be confused with London) and New York. This fuels our corporate vampires that acquires and harvests the wealth of the world. The corporate powers suppress REAL assets like natural resources and labor to provide themselves massive profits. This Fascist, Statist, Collectivist model provides the money into the economy to fund an ever increasing federal government. That government then grows larger and larger enriching its minions with jobs to control their fellow citizens. Finally, to come full circle, the government then controls other nations through the Military Industrial Complex.

This cycle will be cut when the mathematically and inevitable collapse of the dollar occurs. In order for our debt based money to function we MUST increase the debt every year in excess of the debt AND interest accrued the year before or we will enter a deflationary death spiral. When debt is created, money is created. When debt is paid off, money is destroyed. There is never enough to pay off the debt, because there would be not one dollar in existence.

We are at a point where we either default on the debt, willingly or unwillingly, or create more money/debt to keep the cycle moving. The problem is if you understand anything about compounding interest, we are reaching the hockey stick moment where the more debt that is incurred, the less effective it is and this leads us to hyperinflation. There are only two actors needed for this hyper inflation, the Lender of Last Resort, the Fed,and the Spender of Last Resort, the government. These two can, and will, blow up the system. I believe they will wait until the next crisis and the whiff of deflationary depression before they fire up the printing presses. That crisis is coming very soon at the end of this summer or fall. The money and emergency measures are worn out. The fact is that NONE of the underlying problems that caused the 2008 crisis have been resolved. The only thing that has happened is that instead of corporate problems, we now have nation problems. In this movie Greece will play the role of Lehman Brothers and the United States will play the role of AIG. The problem is there is nowhere to kick the can down the road and there is no world government to absorb the debt, yet…(Problem,Reaction,Solution.)

So this leads me to the top five places not to be when the dollar collapses:

1. Israel- This Anglo-American beach head into the Middle East was first conceived by the most powerful family in the world,the Rothschilds, in 1917. The Balfour Declaration said that there will be a Zionist Israel years before World War Two and the eventual establishment of Israel. Israel has not been a good neighbor to its Muslim nations and has always had the two biggest bullies on the block at its back. When the dollar collapses, the United States will have much too much on its plate both domestically and internationally to worry about such a non-strategic piece of land. This will leave Israel very weak at a time when tensions will be high. This very thin strip of desert land will not be able to withstand the economic reality of importing its food and fuel or the political reality of being surrounded by Muslims.

2. Southern California- The land of Fruits and Nuts turns into Battlefield Los Angeles. Twenty million people packed into an area that has no water and thus food is not good to say the least. Throw on top of the huge wealth disparities and the proximity to a narco state and this does not bode well. We have seen riots for Rodney King, what will happen when the dollar is destroyed and food and fuel stop coming into this area? People will get desperate and do crazy things, especially when a huge proportion of its citizens are on anti-depressants. If food and fuel cannot get in, what about Zolfot? At a time when the world is falling apart, they lack the ability to deal with this new paradigm. If people come off of these drugs too fast they suffer psychotic breaks and you will have thousands of shootings or suicides.

3. England- The Land of the Big Brother and former Empire of world wide slave and drug trade will suffer heavily. The stiff upper lip that their the British Elite ingrained into their sheeple will not work any more as the British population explodes. The human character will sacrifice and unite for a foreign enemy, but not if the enemy has always been the Elite. The Anglo-American Empire may pull off another false flag to distract its population on another Emmanuel Goldstein like in 1984, but I feel this collapse will happen before they pull it off. This will make all eyes point at the British Elite as solely responsible for this catastrophe. We have seen massive riots for soccer matches with hooligans. What will happen when this island with very little food and fuel gets cut off?

4. New York City- Another large urban area living too high on the dollar hog. NYC is the area I moved out of in 2008. There is little doubt that all of the wealth in New York, New Jersey and Connecticut is derived from Wall Street wealth. The savings and investments of the whole nation and much of the world flows through this financial capital. As the world wakes up to the massive financial fraud, this will lead to the destruction of capital like we have never seen before. This will have tremendous effects on the regional economy as people (perhaps owning very expensive cars) suddenly wonder where their next meal is coming from.

5. Washington D.C.- The political collapse of the Federal Government will wreak havoc on the hugely inflated local economy. As more and more states find it necessary to assert their natural control, the Federal Government will suddenly lose power and importance as the whole world suffers from a Global Hurricane Katrina. The money that they create and spend will become worthless and the government minions’ pensions will evaporate. Millions that once relied on the ability to force others to send their money to them will learn that the real power has always been at the most local level. Massive decentralization will be the answer to globalization gone mad. Local families and communities will forgo sending money and power out of their community as they will care about their next meal and keeping warm.

“You can ignore reality,but you can’t ignore the consequences of ignoring reality.” -Ayn Rand

To sum up,those areas that have lived highest on the hog in the dollar paradigm will most likely be the worst places to live when the dollar collapses. Many of you will find this article of passing interest, but rest assured this dollar collapse is coming. It is a mathematical inevitability. We will not be as fortunate to muddle through this collapse like we did in 2008 when it was a corporate problem. This time around, it is a national and global problem. The global Ponzi scheme has run out of gas as the demographics decline, as cheap abundant oil declines, as hegemonic power declines. This comes at a time when we reach the exponential or collapse phase of our money. The Irresistible Force Paradox says, ”What happens when an unstoppable force meets an immovable object?” We are about to find out,when infinite money hits a very finite world.

If you want to become aware and prepared for this collapse, please join the free Sons of Liberty Academy.

Richard Maybury on the collapse of the Anglo-American Empire and what it means for you

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from The Daily Bell
with  Anthony Wile
Originally posted February 06, 2011

The Daily Bell is pleased to present another exclusive interview with Richard Maybury.

Introduction: The former Global Affairs editor of MONEYWORLD, Richard Maybury (left) is one of the most respected business and economics analysts in America. His articles have appeared in major publications. Books include “Whatever Happened to Penny Candy?” “Whatever Happened to Justice?” and “Evaluating Books: What Would Thomas Jefferson Think of This?” His current interest is “The Fall of the U.S. Empire”. His writings have been endorsed by top business leaders, and is a consultant to numerous investment firms in the U.S. and Europe. He is editor of the newsletter, Richard Maybury’s U.S. & World Early Warning Report For Investors.

Daily Bell: We last interviewed you in 2009. Has the world’s economic picture gotten worse?

Richard Maybury: As far as production is concerned, I think that things have improved but the essential problem is the malinvestment that was created by the Federal Reserve counterfeiting dollars since 1913, and almost all that malinvestment is still out there and needs to be shaken out. The pain we have been going through since August of 2007 has essentially been for nothing because the federal government stopped the malinvestment, or most of it, from being shaken out, and that traumatic experience is yet to come. So, anybody who thinks we are getting to the end of this thing is dreaming.

Daily Bell: What’s the worst problem America is suffering from?

Richard Maybury: I think ethics. Nearly the entire population has been raised in schools that are under the control of government agencies and they have been taught that the government doesn’t need to obey ethical principals such as, “Thou shall not steal”. So, this has become part of the American culture. I don’t see any long-term solution for America or any of the rest of the world until they start accepting the fact that government has to be ethical, just like individuals.

Daily Bell: Is America essentially bankrupt?

Richard Maybury: America isn’t but the federal government sure is. I don’t think I need to get into statistics, but the federal government is about as hopeless as we have ever seen in history. I can’t think of any other government that ever got into this much trouble, but the country and the government are not the same things. Some individuals are bankrupt, some are prosperous, it varies from one person to the next, but most assuredly the federal government is a real financial basket case.

Daily Bell: How can America recover?

Richard Maybury: Well again we go back to ethics. We have to go back to obeying the rule of “Thou shall not steal”. The American founders went through all this two centuries ago. I am doing an article on this in the Early Warning Report. Thomas Jefferson for instance, in his first inaugural address laid out 16 principles for how the government should be run ethically. I think the time has come where we have to start re-learning what those principals are and the country is supposed to be about. I have become very optimistic when I look at the protests that are going on in the United States now, and there is a lot of focus on the constitution and the writings on the American founders. I think the American people are beginning to realize that there’s a lot they were not taught in school and they need to now learn what the country is supposed to be like. That’s a wonderful development and I hope it continues. We have to rediscover our origins, and a lot of people are beginning to do that.

Daily Bell: What will happen to the dollar?

Richard Maybury: I think the dollar, as we know it is dead or pretty close to it. Obviously it’s not dead yet but it’s another great big version of Tulipmania. This demand for not only the dollar but for all paper currency, fiat currency, it’s just Tulipmania. It’s been going on since 1971 when all currencies were converted to fiat currencies. So now we are seeing the process of the world bringing this calamity to an end. So the dollar and all other fiat currencies will no longer be fiat. They will be tied to something real, perhaps gold, perhaps a basket of commodities that includes gold, I don’t know, but the whole world is clearly a lot more interested now in holding real assets than fiat currencies. I think we are in the beginning of a great revolution of currencies where we are going to go back to the type of money that can’t be created without limits out of thin air.

Daily Bell: Will the EU be able to salvage the PIGS?

Richard Maybury: I would politely disagree with the phrasing of the question. It should be, Will Germany be able to salvage the PIGS? The answer is probably not in the long run because you can bleed the Germans for a while, but they will probably end up going broke if they try to keep bailing out the PIGS. And there are going to be more PIGS. There are many countries out there operating as welfare states and they are inherently unsound. So if the question were, will the German’s bail them out, I would say for a while, but then the Germans will be dragged down too.

Daily Bell: Let’s continue with some geopolitical questions. Is the euro going under?

Richard Maybury: Yes, I think the euro is going under but I don’t know when. It’s a fiat currency like the rest of them. It’s going to be wiped out too, or replaced by some form of currency that cannot be created in unlimited quantities.

Daily Bell: Ireland just started printing its own euro notes. Is this a significant crack in the dike?

Richard Maybury: Yes, sure. Any time you give any human being the privilege of counterfeiting money, he’s probably going to do it, and do a lot. The Irish are just as human as the rest of us and they will succumb to the temptation to inflate the euro.

Daily Bell: Will the EU itself survive?

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On the Death of Globalization, the Death of Currency and the Death Spiral

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by Mike Krieger
of KAM LP
Originally posted Feb 3, 2011

THEY HAD THEN LEARNED HOW EASY IT IS TO ISSUE IT; HOW DIFFICULT IT IS TO CHECK ITS OVER-ISSUE; how seductively it leads to the absorption of the means of the workingmen and men of small fortunes; how heavily it falls on all those living on fixed incomes, salaries or wages; how securely it creates on the ruins of the prosperity of all men of meager means a class of debauched speculators, the most injurious class that a nation can harbor, more injurious, indeed, than professional criminals whom the law recognizes and can throttle; how it stimulates overproduction at first and leaves every industry flaccid afterward; how it breaks down thrift and develops political and social immorality. All this France had been thoroughly taught by experience.

Everything was enormously inflated in price except the wages of labor. As manufacturers had closed, wages had fallen, until all that kept them up seemed to be the fact that so many laborers were drafted off into the army. From this state of things came grievous wrong and gross fraud.
–Andrew Dickson White, “Fiat Money Inflation in France, How it Came, What it Brought and How it Ended”

Globalization is Dead

I debated whether or not to write today. To be completely honest I feel as if I have said as much as I can and don’t want to start sounding like a broken record. That said, we have clearly entered the next stage in this tragic circus called the global monetary and financial system death spiral. The final stage comes when the system consumes itself as a result of its refusal to reform and we are there now. The fact that most people are completely unaware of it or have such strong “normalcy bias” they can’t see what is directly in front of their faces is immaterial. It is here, it is irreversible, and it will unleash a cyclone of chaos and confusion that will leave many literally suspended in disbelief as the entire false paradigm most of humanity has lived under for their entire existence is washed away forever.

Last week, I wrote about what is happening in Egypt and what it means. The key point I want to emphasize is that there is no going back from where we are. The notion of stocking up on the limited food and resources available today is no longer theoretical for governments, it is a matter of survival. While many wake up in cold sweats with the memories of 2008’s commodity crash and the concurrent U.S. dollar rally fresh in their minds, these nightmares are misplaced. The U.S. dollar has been hyper-inflated since 2008 and the only thing that has kept commodities under wraps has been the absence of a sudden and violent mobilization of those dollars into real goods.

Since so many of these dollars are sitting at the central banks of governments around the world, they key was always what would spark governments to mobilize those reverses. The spark has been food supply shocks and revolution at the periphery of the American empire. The gun is cocked, the bullets are cold and the heretofore benign tumor that we call the dollar will puke its malignancy all over the world at once in desperate attempts to own something that will have value in the next monetary system. The days of governments playing nice with one another is long over. This is the survival stage and every decision that is made from officials from here on out will be entirely self-serving. You want to go long protectionism. Globalization is dead.

So now I want to discuss the Korean Won. For a very long time I have maintained that we would know we are at the big turning point when the Asia currencies start to properly break out versus the U.S. dollar. Asian central banks and many others have been resisting a major appreciation of their currencies for two major reasons. First, their entire economies have been based on the export to the West model. Although this makes no sense any longer as they are the creditors and those in the West are the debtors, old habits are hard to break. Secondly, China has refused to budge in any meaningful way and so the other nations don’t want to give China a free ride. If China was forced to appreciate in a big way all the other Asian nations would immediately follow suit.

I always like to look at this Won-Dollar cross since South Korea is one of those exporting nations that imports virtually all of its resources. So as resource prices surge and export prices do not keep up the terms of trade start going against them hard. One option to fight this that has been resisted is a strengthening currency. I have always said at some point they will be forced to bite the bullet. As you can see from the chart below the Won has recently strengthened considerably and is close to some serious resistance (the chart is inverted).

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The Repercussions of nearly One Trillion in QE

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by Dan Norcini
Post Edited: November 3, 2010

Dear Friends,
THE PRICE ACTION IN THE DOLLAR AFTER TODAY’S RELEASE OF THE FOMC STATEMENT from their early November meeting generated a great deal of price volatility in the currency markets this afternoon. When the initial knee jerk reactions were finished and the more sober-minded had some time to digest the repercussions of nearly ONE TRILLION DOLLARS of QE, the Dollar came under pressure which took it down below the 77 level which had temporarily been serving as downside support in front of today’s meeting.

The technical damage is becoming quite severe as it is now perched precariously above an important support level near 75. Judging from the fresh sell signals being generated by more than a few technical indicators, it is difficult for me to see how it can maintain its footing above this level barring a sudden and unexpected improvement in the various US economic statistical releases of the next couple of weeks. In short, it would not take much to see the Dollar drop through 75 and then plummet down towards 72, a level, which if broken, would prove to be a watershed moment for our nation.

I would suspect that we would see some sort of attempt to prop the Dollar on its first approach towards 72 but that would only stem the decline for a brief period unless the QE were withdrawn or the monetary authorities were to walk back on the size and scope of today’s announcement. That would of course necessitate a dramatic improvement in the economy which is why I cannot see that occurring.

It is my opinion that the US has long wanted to engineer a manageable decline in the currency on account of the now mathematically-impossible-to-ever-pay-back debt load that our nation has been saddled with. They will get their wish but at a terrible cost to the rest of us and to the nation at large as it watches its economic supremacy gradually fade. That will be the legacy of the Federal Reserve system and the contemptible monetary authorities who sold out our nation’s birthright for a bowl of stew.

Want a Real View of the Economy? Talk to a CEO

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by Andy Summers
Phoenix Capital Research
Posted October 15, 2010

WELL, WE’VE REACHED THE POINT AT WHICH THE MAINSTREAM MEDIA IS FINALLY BEGINNING to understand that the US recovery of 2009 was actually an accounting fiction and that the “green shoots” were just a stupid metaphor. Indeed, just this morning, Fed Chairman Ben Bernanke all but guaranteed he will introduce a large QE 2 program sometime in the near future… which essentially proves not only that QE 1 failed, but that the US economy is on the ropes (why else would we need more emergency policies?).

Let’s put this in perspective…

The US Fed is already buying between $8-12 billion in US debt per week as courtesy of its QE lite program. Moreover, the Fed has been juicing the market on 12 of the last 13 options expiration weeks. So QE 1, for all intensive purposes, NEVER ended. And now, our illustrious Fed Chairman is talking about introducing even MORE QE? Just how awful have things gotten that we’ve got ONE QE program occurring and they’re already talking about introducing a second LARGER one at the same time? Well, according to US CEOs things are flat out awful… as in May 2009 BAD. According to Bloomberg:

Confidence among chief executive officers in the U.S. sank in October to the lowest level since May 2009, when the world’s largest economy was still in a recession, according to a survey from the Business Council… The group’s gauge of expectations for the economy six months from now fell to 51.7, the lowest since February 2009.

If you’ll recall, February 2009 was when everyone thought the whole world was ending. The US economy was literally falling off a cliff with initial jobless claims clearing 600,000 (a 26 year high) while the S&P 500 was collapsing on its way to the March lows of 666.

And US CEOs’ expectations for the next six months are as BLEAK as they were back then… BEFORE the Fed even introduced QE 1?

Lest you think this is merely idle talk, consider that insiders have been unloading their shares by the truckload in the last few weeks. For the week of October 4th 2010, the insider selling to buying ratio was 2,341 to 1 with insiders DROPPING $400+ million in stock and only buying a measly $170,000. This comes on the heels of September 27’s equally insanely bearish ratio of 1,411 to 1 (which by the way was preceded by weeks with ratios of 250 to 1 and 650 to 1).

In plain terms, corporate insiders, the folks who know their business and its prospects better than anyone are dumping shares as fast as humanly possible. They are literally putting their money where their mouths are when they say the US economy is AWFUL and business prospects are on par with those of February 2009 (before Bernanke even thought up that stupid “green shoots” nonsense).

All of this is going to end horribly when the rest of the world realizes what corporate CEOs have already figured out: that the US economy is a full-scale disaster and nothing the Fed has done has improved the situation. This is very much akin to what happened in 2008 when everyone thought that the “worst was over” and kept banking that the Fed would stave off any collapse (just as it did for the Bear Stearns Crisis)… right up until the entire system imploded in late September.

Sometime, and I cannot tell you when, the financial markets will have a similar “wake up call” as they did in 2008. We’ve already got the same set up in place: US banks are being hit from losses related to garbage mortgage securities, commodities are soaring, and the US Dollar is collapsing with everyone shouting that it’s doomed.

This is almost identical to where we were in the summer of 2008. And we all know how that turned out. In plain terms, you should take this rally for what it is: a gift from the market Gods to cash out some profits and prepare for what’s to come.