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Sunday, February 23, 2014

What the U.S. Economic Collapse May Look Like

An interview between Chris Martenson (of Peak Prosperity) and Fernando Aguirre, a source of expertise on the hyperinflationary destruction of Argentina’s economy in 2001, occurred which may give us an insight on the U.S. economy will collapse. The interview and comments are below, however this interview was preceded by an article, titled "Watch Out, It's Coming" by Bob Rinear on International Forecaster concerning the impending U.S. Economic Crash. First selected comments from Bob Rinear's article, then the interview between Martenson and Aguirre.

Bob Rinear: This are Bob's comment's about the recent Fed taper where the Fed injected (printed) less money than in previous months which affected the Stock Market.

"I’ve said many many times to you all that a global “reset” is coming. The IMF World bank knows that there’s too much debt in too many countries for it to ever be repaid. Global currency fluctuations are so extreme and so rapid, it is sometimes impossible to carry on continuous trade. Just recently when Turkey’s currency was imploding, one carpet manufacturer had to call for currency pricing every 20 minutes so he could quote customers. This goes on world wide, every minute of every day Because of huge disparities over the amount of debts outstanding, versus the “value” of each countries GDP, it is evident that to have a continuous world where things stop blowing up every six months, it has to be changed."

"Countries all over the world are tired of the US in particular, as they’ve destroyed the value of the dollar for years, making it virtually worthless. No matter where we look, the evidence suggests “they have to do something”. Well, they’re doing something as we speak. In the background, in the shadows, outside the spotlight they’re working on a “replacement” for the US dollar as the global reserve. But more than that, they’re working out a complete rebalancing of all Countries debts, versus their “worth” in natural resources, Gold and Silver reserves, output per capita, productivity, demographics, etc."

UrbanMan Comments: The U.S. may be in a slide that is completely irreversible as the national debt continues to soar abve $17 Trillion and the debt limit for annual budgetary spending is suspended until 2015. China actively working to dethrone the U.S. dollar, which will in and of itself devalue the dollar tremendously, as well as all economic indicators - housing prices, unemployment, entitlement spending and stock market instability that will add weight to hyper-inflationary period that seems to be unavoidable. That is the "Watch Out, It's Coming" that Rinear talks about. Now let's look at the history lessons, albeit only a few short 13 years ago, in Argentina:

Background: Argentina is a country re-entering crisis territory it knows too well. The country has defaulted on its sovereign debt three times in the past 32 years and looks poised to do so again soon. Its currency, the peso, devalued by more than 20% in January alone. Inflation is currently running at 25%. Argentina's budget deficit is exploding, and, based on credit default swap rates, the market is placing an 85% chance of a sovereign default within the next five years.

Want to know what it's like living through a currency collapse? Fernando Aguiree speaks to Chris Martenson and gives us good look:

Chris Martenson: Okay. Bring us up to date. What is happening in Argentina right now with respect to its currency, the peso?

Fernando Aguirre: Well, actually pretty recently, January 22, the peso lost 15% of its value. It has devalued quite a bit. It ended up losing 20% of its value that week, and it has been pretty crazy since then. Inflation has been rampant in some sectors, going up to 100% in food, grocery stores 20%, 30% in some cases. So it has been pretty complicated. Lots of stores don't want to be selling stuff until they get updated prices. Suppliers holding on, waiting to see how things go, which is something that we are familiar with because that happened back in 2001 when everything went down as we know it did.

UrbanMan Comments: The U.S. annual average inflation rate since 2009 lays between 1.4 to 3.0% depending upon which government source you use. However, the government also says the unemployment rate is around 7%. How many of us can deny that their grocery money goes far, far less now days than years ago?

Chris Martenson: So 100%, 20% inflation; are those yearly numbers?

Fernando Aguirre: Those are our numbers in a matter of days. In just one day, for example, cement in Balcarce, one of the towns in Southern Argentina, went up 100% overnight, doubling in price. Grocery stores in Córdoba, even in Buenos Aires, people are talking about increase of prices of 20, 30% just these days. I actually have family in Argentina that are telling me that they go to a hardware store and they aren't even able to buy stuff from there because stores want to hold on and see how prices unfold in the following days.

UrbanMan Comments: What would you do if grocery store and other comodity prices doubled within, say even a month, let alone one day? The majority of us living within a budget would have to priotize what we wanted as opposed to what we needed. However, the average American household has something like 3 to 4 days of food in their pantry. Many people would be calling in sick to work in order to be at the grocery store before they opened. Think of the riots when stores would refuse to open or sell until prices were set that day. Who would be setting those prices?

Chris Martenson: Right. So this is one of those great mysteries of inflation. It is obviously 'flying money', so everyone is trying to get rid of their money. You would think that would actually increase commerce. But if you are on the other end of that transaction, if you happen to be the business owner, you have every incentive to withhold items for as long as possible. So one of the great ironies, I guess, is that even though money is flying around like crazy, goods start to disappear from the shelves. Is that what you are seeing?

Fernando Aguirre: Absolutely. Shelves halfway empty. The government is always trying to muscle its way through these kind of problems, just trying to force companies to stock back products and such, but they just keep holding on. For example, gas has gone up 12% these last few days. And there is really nothing they can do about it. If they don't increase prices, companies just are not willing to sell. It is a pretty tricky situation to be in.

Chris Martenson: Are there any sort of price controls going on right now? Has anything been mandated?

Fernando Aguirre: As you know, price controls don't really work. I mean, they tried this before in Argentina. Actually, last year one of the big news stories was that the government was freezing prices on food and certain appliances. It didn't work. Just a few days later those supposedly "frozen" prices were going up. As soon as they officially released them, they would just double in price.

UrbanMan Comments: When there are price controls, you will see several things,... 1 - a burgeoning black market; bartering and alternative currency transactions,..... meaning gold and silver. Again, food riots would ensure.

Chris Martenson: Let me ask you this, then: How many people in Argentina actually still have money in Argentine banks in dollars? One of the features in 2001 was that people had money in dollars, in the banks. There was a banking holiday; a couple of weeks later, banks open up; Surprise, you have the same number in your account, only it's pesos, not dollars. It was an effective theft, if I could use that term. Is anybody keeping money in the banks at this point, or how is that working?

Fernando Aguirre: Well, first of all, I would like to clarify for people listening: Those banks that did that are the same banks that are found all over the world. They are not like strange South American, Argentinean banks – they are the same banks. If they are willing to steal from people in one place, don't be surprised if they are willing to do it in other places as well.

UrbanMan Comments: Hyper inflation and impending economic collapse would force the government to implement banking and other financial controls. This could be banking holidays; could be limits on transaction amounts; could/would be a government order to turn in gold and silver bullion; may be government take over of all retirement accounts. So ask yourself how prepared are you for hyper inflation and a economic collapse?

Monday, February 17, 2014

Does Gun Control Predict the Collapse? Precursor to Martial Law?

I have had a back and forth between two friends of mine, the topic being Federal and State gun control efforts which my two friends stridently believe are an intentional precursor to Governmental preparations for the impending collapse which the Federal Government knows they cannot stop.

While I understand that gun registration is the obvious and mandatory first step to any gun confiscation, and that any Martial Law imposition would be much less effective with an armed civilian population, I don't see the failed gun registration in Connecticut as a joint liberal state-federal government test case for national registration and eventual confiscation. Nor being done because the federal government knows it cannot stop the economic collapse from happening and is preparing for martial law.

Who in their right mind would just let an economic collapse happen? And I say this believing an economic collapse is much more likely now, then it was last year, or the year before, but not due to a conspiracy but to a choke hold on ideology and incompetence of our governmental institutions.

To be sure, any gun control efforts are unconstitutional and if given a foot hold will diminish not only our unalienable rights, but our ability to protect ourselves from the tenuous environment of today's world through the vastly increased dangers of an economic or societal collapse.

I think gun control efforts are a product of the age old liberal way of thinking that they know better than the rest of us what is best for us. And I am grateful that the citizens of the very liberal state of Connecticut are pushing back against unlawful registration.

The Blaze reports that Officials in Connecticut are stunned by what could be a Massive, State-Wide Act of ‘Civil Disobedience’ by Gun Owners:

On Jan. 1, 2014, tens of thousands of defiant gun owners seemingly made the choice not to register their semi-automatic rifles with the state of Connecticut as required by a hastily-passed gun control law. By possessing unregistered so-called “assault rifles,” they all technically became guilty of committing Class D felonies overnight.

Police had received 47,916 applications for “assault weapons certificates” and 21,000 incomplete applications as of Dec. 31, Lt. Paul Vance told The Courant.

At roughly 50,000 applications, officials estimate that as little as 15 percent of the covered semi-automatic rifles have actually been registered with the state. “No one has anything close to definitive figures, but the most conservative estimates place the number of unregistered assault weapons well above 50,000, and perhaps as high as 350,000,” the report states.

Needless to say, officials and some lawmakers are stunned.

Due to the new gun control bill passed in April, likely at least 20,000 individual people — possibly as many as 100,000 — are now in direct violation of the law for refusing to register their guns. As we noted above, that act is now a Class D Felony.

Then Mike Vanderboegh of Sipsey Street Irregulars writes a well written letter concerning the effects of unconstitutional governmental efforts to restrict gun ownership:

15 February 2014

To the men and women of the Connecticut State Police and the Department of Emergency Services and Public Protection:

My name is Mike Vanderboegh. Few of you will know who I am, or even will have heard of the Three Percent movement that I founded, though we have been denounced on the national stage by that paragon of moral virtue, Bill Clinton. Three Percenters are uncompromising firearm owners who have stated very plainly for years that we will obey no further encroachments on our Second Amendment rights.

Some of you, if you read this carelessly, may feel that it is a threat. It is not. Three Percenters also believe that to take the first shot in a conflict over principle is to surrender the moral high ground to the enemy. We condemn so-called collateral damage and terrorism such as that represented by the Oklahoma City Bombing and the Waco massacre. We are very aware that if you seek to defeat evil it is vital not to become the evil you claim to oppose. Thus, though this letter is certainly intended to deal with an uncomfortable subject, it is not a threat to anyone. However, it is important for everyone to understand that while we promise not to take the first shot over principle, we make no such promise if attacked, whether by common criminals or by the designated representatives of a criminal government grown arrogant and tyrannical and acting out an unconstitutional agenda under color of law.

If we have any model, it is that of the Founding generation. The threat to public order and safety, unfortunately, comes from the current leaders of your state government who unthinkingly determined to victimize hitherto law-abiding citizens with a tyrannical law. They are the ones who first promised violence on the part of the state if your citizens did not comply with their unconstitutional diktat. Now, having made the threat (and placed the bet that you folks of the Connecticut State Police will meekly and obediently carry it out) they can hardly complain that others take them seriously and try by every means, including this letter, to avoid conflict.

Some of you are already working a major case on me, trying to figure out how I may be arrested for violating Conn. P.A. 13-3, which bears the wildly dishonest title of "An Act Concerning Gun Violence Prevention and Children's Safety." (What part of "protecting children" is accomplished by sparking a civil war?) Not only have I personally violated this unconstitutional and tyrannical act by smuggling and by the encouragement of smuggling, defiance and non-compliance on the part of your state's citizens, but I have further irritated your wannabe tyrant bosses by sending them standard capacity magazines in my "Toys for Totalitarians" program. I further have annoyed them by pointing out -- and seeking more evidence of -- the existence of Mike Lawlor's KGB file (as well as his FBI and CIA counter-intelligence files).

In short, I have made myself a nuisance to your bosses in just about every way I could think of. However, their discomfiture reminds me of the wisdom of that great American philosopher of the late 20th Century, Frank Zappa, who said, "Do you love it? Do you hate it? There it is, the way you made it." Whether you will be able to make a case on me that sticks is, of course, problematic for a number of reasons which I will detail to you in the letter below. I have already done so to your bosses and include the links in this email so that you may easily access them.

But even if you are not working on my case you will want to pay attention to this letter, because tyrannical politicians in your state have been writing checks with their mouths that they expect you to cash with your blood. We have moved, thanks to them, into a very dangerous undiscovered country. Connecticut is now in a state of cold civil war, one that can flash to bloody conflict in an instant if someone, anyone, does something stupid. So please pay attention, for Malloy and Co. have put all your asses on the line and are counting on your supine obedience to the enforcement of their unconstitutional diktat.

I apparently first came to your attention with this speech on the steps of your state capitol on 20 April 2013. It was very well received by the audience but virtually ignored by the lapdog press of your state. If I may, I'd like to quote some of the more salient points of it that involve you.

"An unconstitutional law is void." It has no effect. So says American Jurisprudence, the standard legal text. And that's been upheld by centuries of American law. An unconstitutional law is VOID. Now that is certainly true. But the tricky part is how do we make that point when the local, state and federal executive and legislative branches as well as the courts are in the hands of the domestic enemies of the Constitution. Everyone who is currently trying to take away your right to arms starts out by saying "I support the 2nd Amendment." Let me tell you a home truth that we know down in Alabama -- Barack Obama supports the 2nd Amendment just about as much as Adolf Hitler appreciated Jewish culture, or Joseph Stalin believed in individual liberty. Believe what politicians do, not what they say. Because the lie is the attendant of every evil.

Before this year no one thought that other firearms and related items would ever be banned -- but they were, they have been. No one thought that the authorities of your state would pass laws making criminals out of the previously law-abiding -- but they did. If they catch you violating their unconstitutional laws, they will -- when they please -- send armed men to work their will upon you. And people -- innocent of any crime save the one these tyrants created -- will die resisting them.

You begin to see, perhaps, how you fit into this. YOU are the "armed men" that Malloy and Company will send "to work their will" upon the previously law-abiding. In other words, this law takes men and women who are your natural allies in support of legitimate law enforcement and makes enemies of the state of them, and bully boy political police of you. So you all have a very real stake in what happens next. But let me continue:

The Founders knew how to answer such tyranny. When Captain John Parker -- one of the three percent of American colonists who actively took the field against the King during the Revolution -- mustered his Minutemen on Lexington Green, it was in a demonstration of ARMED civil disobedience. . . The colonists knew what to do and they did it, regardless of the risk -- regardless of all the King's ministers and the King's soldiery. They defied the King. They resisted his edicts. They evaded his laws and they smuggled. Lord above, did they smuggle.

Now we find ourselves in a similar situation. The new King Barack and his minions have determined to disarm us. We must determine to resist them. No one wants a new civil war (except, apparently, the anti-constitutional tyrants who passed these laws and the media toadies who cheer them on) but one is staring us in the face. Let me repeat that, a civil war is staring us in the face. To think otherwise is to whistle past the graveyard of our own history. We must, if we wish to avoid armed conflict, get this message across to the collectivists who have declared their appetites for our liberty, our property and our lives -- WHEN DEMOCRACY TURNS TO TYRANNY, THE ARMED CITIZEN STILL GETS TO VOTE.

Just like King George, such people will not care, nor modify their behavior, by what you say, no matter how loudly or in what numbers you say it. They will only pay attention to what you DO. So defy them. Resist their laws. Evade them. Smuggle in what they command you not to have. Only by our ACTS will they be impressed. Then, if they mean to have a civil war, they will at least have been informed of the unintended consequences of their tyrannical actions. Again I say -- Defy. Resist. Evade. Smuggle. If you wish to stay free and to pass down that freedom to your children's children you can do no less than to become the lawbreakers that they have unconstitutionally made of you. Accept that fact. Embrace it. And resolve to be the very best, most successful lawbreakers you can be.

Well, I guess at least some of my audience that day took my message to heart. As Connecticut newspapers have finally begun reporting -- "Untold Thousands Flout Gun Registration Law" -- and national commentators are at last noticing, my advice to defy, resist and evade this intolerable act is well on the way. The smuggling, as modest as it is, I can assure is also happening. This law is not only dangerous it is unenforceable by just about any standard you care to judge it by. Let's just look at the numbers mentioned in the Courant story.

By the end of 2013, state police had received 47,916 applications for assault weapons certificates, Lt. Paul Vance said. An additional 2,100 that were incomplete could still come in.

That 50,000 figure could be as little as 15 percent of the rifles classified as assault weapons owned by Connecticut residents, according to estimates by people in the industry, including the Newtown-based National Shooting Sports Foundation. No one has anything close to definitive figures, but the most conservative estimates place the number of unregistered assault weapons well above 50,000, and perhaps as high as 350,000.

And that means as of Jan. 1, Connecticut has very likely created tens of thousands of newly minted criminals — perhaps 100,000 people, almost certainly at least 20,000 — who have broken no other laws. By owning unregistered guns defined as assault weapons, all of them are committing Class D felonies.

"I honestly thought from my own standpoint that the vast majority would register," said Sen. Tony Guglielmo, R-Stafford, the ranking GOP senator on the legislature's public safety committee. "If you pass laws that people have no respect for and they don't follow them, then you have a real problem."

This blithering idiot of a state senator is, as I warned Mike Lawlor the other day, extrapolating. It is a very dangerous thing, extrapolation, especially when you are trying to predict the actions of an enemy you made yourself whom you barely recognize let alone understand. I told Lawlor:

You, you silly sod, are extrapolating from your own cowardice. Just because you wouldn't risk death for your principles, doesn't mean there aren't folks who most certainly will. And, not to put too fine a point on it, but folks who are willing to die for their principles are most often willing to kill in righteous self-defense of them as well. You may be ignorant of such people and their ways. You may think that they are insane. But surely even you cannot be so clueless that, insane or not from your point-of-view, such people DO exist and in numbers unknown. This is the undiscovered country that you and your tyrannical ilk have blundered into, like clueless kindergarteners gaily (no pun intended) tap-dancing in a well-marked mine field.

The Founders marked the mine field. Is it our fault or yours that you have blithely ignored the warnings? If I were a Connecticut state policeman I would be wondering if the orders of a possible KGB mole throwback were worth the terminal inability to collect my pension. Of course, you may be thinking that you can hide behind that "thin blue line." Bill Clinton's rules of engagement say otherwise.

The odds are, and it gives me no particular satisfaction to say it, is that someone is going to get killed over your unconstitutional misadventures in Connecticut. And if not Connecticut, then New York, or Maryland, or California or Colorado. And once the civil war you all apparently seek is kicked off, it would not be -- it could not be -- confined to one state.

This is not a threat, of course. Not the personal, actionable threat that you may claim. It ranks right along with -- no, that's wrong, IT IS EXACTLY LIKE -- an ex-con meeting me in the street and pointing to my neighbor's house saying, "Tonight I am going to break in there, kill that man, rape his wife and daughters and steal everything that he is, has, or may become." I warn him, "If you try to do that, he will kill you first. He may not look like much, but I know him to be vigilant and perfectly capable of blowing your head off." That is not a threat from me. It is simply good manners. Consider this letter in the same vein. I am trying to save you from yourself.

For, like that common criminal, you have announced by your unconstitutional law and your public statements in favor of its rigorous enforcement that you have a tyrannical appetite for your neighbors' liberty, property and lives. It doesn't take a crystal ball to see that this policy, if carried to your announced conclusion, will not end well for anybody, but especially for you.

Now let's examine those numbers in the Courant story. You know the size of the Connecticut Department of Emergency Services and Public Protection. Wikipedia tells us that "CSP currently has approximately 1,248 troopers, and is headquartered in Middletown, Connecticut. It is responsible for protecting the Governor of Connecticut, Lieutenant Governor of Connecticut, and their families." There are but 1,212 email addresses listed on the state website to which this email is going, which presumably includes everyone including secretaries, receptionists, file clerks, technicians, etc. Now, how many shooters for raid parties you may find among that one thousand, two hundred and forty eight that Wikipedia cites, or whatever number will be on the payroll when something stupid happens, only you know for sure. I'll let you do the counting.

They are daunting odds in any case, and as you will see, they get more daunting as we go down this road that Malloy and Company have arranged for you. (By the way, don't forget to subtract those on the Green Zone protective details, for your political masters will certainly see their survival as your mission number one.) So, how many folks would your superiors be interested in seeing you work their will upon? And of these, how many will fight regardless of cost?

Let's assume that there are 100,000 non-compliant owners of military pattern semi-automatic rifles in your state. I think it is a larger number but 100,000 has a nice round ring to it. Let us then apply the rule of three percent to that number -- not to the entire population of your state, not even to the number of firearm owners, but just to that much smaller demonstrated number of resistors. That leaves you with at least 3,000 men and women who will shoot you if you try to enforce this intolerable act upon them. Of course you will have to come prepared to shoot them. That's a given. They know this. So please understand: THEY. WILL. SHOOT. YOU. (In what they believe is righteous self defense.)

Now, if any of them follow Bill Clinton's rules of engagement and utilize the principles of 4th Generation Warfare, after the first shots are fired by your raid parties, they will not be home when you come to call. These people will be targeting, according to the 4GW that many of them learned while serving in Iraq and Afghanistan, the war makers who sent you. This gets back to that "when democracy turns to tyranny, the armed citizenry still gets to vote." One ballot, or bullet, at a time.

This is all hypothetical, of course, based upon the tyrants' appetites for these hitherto law-abiding citizens' liberty, property and lives as well as upon your own willingness to enforce their unconstitutional diktat. And here's where you can do something about it. The first thing you have to realize is that the people you will be targeting do not view you as the enemy. Indeed, you are NOT their enemy, unless you choose to be one.

Again, an unconstitutional law is null and void. Of course you may if you like cling to the slim fact that a single black-robed bandit has ruled the Intolerable Act as constitutional in Shew vs. Malloy, but that will not matter to those three percent of the resistors -- your fellow citizens -- whom you target. They no longer expect a fair trial in your state in any case, which leaves them, if they wish to defend their liberty, property and lives, only the recourse of an unfair firefight. So to cite Shew vs. Malloy at the point of a state-issued firearm to such people is, well, betting your life on a very slender reed.

Thus, my kindly advice to you, just as it was to Lawlor, is to not go down that road. You are not the enemy of the people of Connecticut, not yet. The politicians who jammed this law down the peoples' throats are plainly flummoxed by the resistance it has engendered. In the absence of a definitive U.S. Supreme Court decision do you really want to risk not being able to draw your pension over some politician's insatiable appetite for power?

There are many ways you can refuse to get caught up in this. Passive resistance, looking the other way, up to and including outright refusal to execute what is a tyrannical law that a higher court may yet find unconstitutional and therefore null and void. Do you really want to have to kill someone enforcing THAT? Just because you were ordered to do so? After Nuremberg, that defense no longer obtains. (You may say, "Well, I'm just a secretary, a clerk, you can't blame me for anything." Kindly recall from Nuremberg one other lesson: raid parties cannot break down doors unless someone like you prepares the list in advance. In fact, you have at your keyboard and in your databases more raw, naked power than any kick-in-the-door trooper. And with that power comes moral responsibility. Adolf Eichmann didn't personally kill anyone. But he darn sure made up the lists and saw to it that trains ran on time. When the first Connecticut citizen (or, God forbid, his family) is killed as a result of your list-making, do you think that because you didn't pull the trigger that gives you a moral pass?)

So I call on you all, in your own best interest and that of your state, to refuse to enforce this unconstitutional law. There are a number of Three Percenters within the Connecticut state government, especially its law enforcement arms. I know that there have been many discussions around water-coolers and off state premises about the dangers that this puts CT law enforcement officers in and what officers should do if ordered to execute raids on the previously law-abiding.

You have it within your power to refuse to initiate hostilities in an American civil war that would, by its very nature, be ghastly beyond belief and would unleash hatreds and passions that would take generations to get over, if then.

Please, I beg you to understand, you are not the enemy, you are not an occupying force -- unless you choose to violate the oath that each of you swore to preserve, protect and defend the Constitution of the United States against ALL enemies, foreign and domestic. For their part, the men and women who will be targeted by your raids took an identical oath. Can you think of anything more tragic than brother killing brother over some politician's tyrannical appetite?

I can't. The future -- yours, mine, our children's, that of the citizens of Connecticut and indeed of the entire country -- is in YOUR hands.

At the very least, by your refusal you can give the courts time to work before proceeding into an unnecessary civil war against your own friends and neighbors on the orders of a self-anointed elite who frankly don't give a shit about you, your life, your future or that of your family. They wouldn't pass these laws if they thought that they would have to risk the potential bullet that their actions have put you in the path of. They count on you to take that bullet, in service of their power and their lies. Fool them. Just say no to tyranny. You are not the enemy. Don't act like one.


Mike Vanderboegh

The alleged leader of a merry band of Three Percenters
PO Box 926
Pinson AL 35126

Saturday, February 8, 2014

18 Months From the Collapse?

I received a call from a old buddy of mine (Jeff) ...not a text message or an e-mail, but an actual phone call such as he was worked up. Apparently he has been reading articles and listening to news program and at some point he started believing the end is near,...18 months to be specific to a collapse. He was planning on quitting his job, moving out of the East coast and basically sinking 100% in prepping.

My response was "Okay, but what is going to be the catalyst? What do you think is going to happen and how?" I have been seeing articles in the last month of so pretty much outlining the good possibility of an economic collapse within the next two years, but I wanted Jeff to articulate the facts or assumptions that are leading him to his own view. So I told Jeff, "you may be right. I certainly think things will be tougher in the next 18 months,.....commodities shortages,.....inflation if not severe inflation,......I think we'll see food riots in urban areas. And the government will not be able to do too much as their assets pool is significantly shallower than ever." But I stopped short of telling Jeff that I think the collapse will occur in 18 months. I don't want to be responsible for someone basing their survival plan on my opinion, plus I'm still really in the plan for the worst - survival prep, and hope for the best camp. Anyway, I scanned all my on-line sources and resources to see what a cross section of people are saying.

Chris Martenson wrote on his website, Peak Prosperity, an article with the title - Why Your Own Plan Better Be Different - Because the cavalry isn't coming. Pretty much summing up that the US Government is broke and will not be able to get out of insolvency. Martenson remarks that action at the individual level is your best bet right now. I think action at the individual level has always been the best bet.

When the Treasury Department estimates that the U.S. has a ~$65 trillion NPV (Net Present Value) shortfall in its main accounts, it's saying that using its assumptions, the U.S. government would need to have $65 trillion – today – in an account, earning a stated rate of interest, in order to be solvent.

Since the U.S. government don't have that have that kind of scratch, it's insolvent. But the real picture is likely worse. The Fed calculates the NPV shortfall to be closer to $100 trillion. And if you believe Lawrence Kotlikoff's math, the figure is closer to $200 trillion. Either way – $65 trillion, $100 trillion, or $200 trillion – the sum cannot be paid.

Paul Joseph Watson, from Investor's Forecaster, reports: "On Saturday (Feb 1, 2014) it emerged that HSBC was restricting large cash withdrawals for UK customers from £5000 upwards, forcing them to provide documentation of what they plan to spend the money on, a form of capital control that more and more banks are beginning to adopt. (Then) Fears of bank runs have escalated with the news that Russian lender ‘My Bank’ has banned all cash withdrawals until next week. Bloomberg reports that ‘My Bank’ – one of Russia’s top 200 lenders by assets – has introduced a complete ban on cash withdrawals until next week. While the Ruble has been losing ground rapidly recently, we suspect few have been expecting bank runs in Russia.

These banking shenanigans (or are they tests?) follow a November 2013 incident where Chase Bank also recently imposed restrictions which prevent its customers from conducting over $50,000 in cash activity per month, as well as banning business customers from sending international wire transfers. Financial expert Gerald Celente said the news was a sign that Americans should prepare for a bank holiday.

And from Italy comes the headlines that "Italy’s president fears violent insurrection in 2014 but offers no remedy as events in Italy are turning serious. President Giorgio Napolitano has warned of “widespread social tension and unrest” in 2014 as the Long Slump drags on. Thousands of Italian companies are on the “brink of collapse”. Great masses of the working people are on the dole or at risk of losing their jobs. Very high rates of youth unemployment are leading to dangerous alienation.

Bob Rinnear writes - Housing ground to a virtual stop. The non-farm payroll report was horrid. The amount of folks not even in the workforce is almost 1/3 of the entire population. Food stamps, welfare, unemployment, and other fall back systems are overwhelmed. Just Monday 3 Feb 2014), the ISM report for the US hit. It could have been worse, but it would take work to do it. We saw the overall survey fall from 55.8 to 51. Inside the report, we saw the new orders index fall from 64 to 51, a 20% drop, the biggest drop since 1980. Yes you read that right. The biggest drop in 34 years........A likely scenario is that we bottom out, put in a massive bounce that comes up well shy of the highs, and then we roll over and plunge even lower.

Doug Casey, on Market said "We are heading toward The Greater Depression’ said The problem that we face in the world today is that almost all – in fact I’ll go so far as to say all of the world’s governments – are actually bankrupt, and the fact is, the world’s banking system is bankrupt as well…Both governments and the big banks are like a couple of drunks standing up holding each other up. The both should fall down. The entire world has become too financialized at this point. People are concentrating not on producing real goods and services, but on trading things and paper securities and so forth. This is a giant bubble that’s going to burst.” “I’ve been saying for years that we are heading for something that I call The Greater Depression…I call it The Greater Depression because I expect it to be much worse and much greater than what we went through in the 1930′s.”

James H. Kunstler wrote a column for Peak Prosperity titled "Get Ready For Strange Days - We're in the Twilight of American Federalism" . He makes an good argument about what the immediate aftermath of a collapse could look like with the states going it alone or perhaps banding together with other another state(s) to share and trade resources - from energy to commodities to defense capabilities.

The last time the USA faced a comparable political convulsion was the decade leading into the Civil War, but this time it will be more complex and confusing and it will have a different ending.

In the 1850s, the dominant Whig party choked to death on its own internal contradictions — mainly its failure to take a coherent position on slavery — and morphed into the Republican Party. The original Democratic Party broke apart into southern and northern factions. All of the doctrinal and legal debates of the day — states’ rights, property rights, et cet. — could not overcome the growing moral revulsion against human bondage. When Lincoln was elected in 1860, seven southern slave states seceded from the Union before his inauguration. The ferocity of the ensuing Civil War — the world’s first industrial-strength slaughter fest — came as a great shock to many who had expected little more than a few symbolic romantic skirmishes on horseback preceding a negotiated settlement.

I believe we are headed now into a breakup of the nation into smaller units, but this time there will be no reconstituting the original USA as in 1865. I realize this is a severe view, but the circumstances we face are more severe than the public seems to imagine. To some degree the coming political rearrangement would appear to be the unfinished business of the 1860s. The old animosities remain, mainly in cultural rather than economic terms. But the real driving force of schism will be catabolic economic collapse expressing itself in scale reduction of all our support systems: food production, energy production, transportation, finance, commerce, and governance.

Everything is going to have to get smaller, get more local, and be run differently. Just as political rhetoric failed to contain the revulsion against slavery, all the debates of the Left and Right in our time will not overcome the geophysical limits of energy resource scarcity and its affect on the other major systems of everyday life. Environmental degradation (including climate change) will amplify the journey downward in the viable scale of human operations.

Saturday, February 1, 2014

Dollar Collapse, Banks Close,...What Will You Do?

One of our neighbors, a woman who always struck me as a busy body type, organized a neighborhood cleanup and a cook out afterwards. I consented to both the cleanup and the cook out as I had the agenda to get to assess my neighbors better - so I could categorize their personalities, strengths and weaknesses. Only six couples out the group came to the cookout after the cleanup with the women in the kitchen and the men congregating around the outdoor grill - it was fairly cold and the gas grill provided a little heat.

One the men (I'll call him Hal) and another man (I'll call him Frank) were discussing the upcoming Super Bowl, when Hal's wife walked up and asked Frank how the burgers were coming, then she looked at Hal and said "don't let me keep you from talking about the Zombie Apocalypse".....using her fingers to denote quotation marks for Zombie Apocalypse. Then she walked off and nobody said anything for maybe 10 seconds before Hal said "She's still mad at me from finding out I bought a couple of buckets of survival food. She asked me what it was for and I said something Like "I don't know,..possibly the Zombie Apocalypse", and she has been made for the past week.

I said to Hal, "well what did you buy it for?" Hal replied "It seemed like a good idea just to have some extra food, plus Melissa found a machete, camp axe and camp saw which she is also pissed about. While mentally pegging Hal's wife, Melissa, in that those who have a difficult personality category, I then said "Well, makes sense to me. Lot's of potential bad things that could happen where it would come in handy".

A couple of side conversations took place about how bad things seemed. One guy said his health care premium went from $300 something to over $800 a month.

Trying to get the conversation back to prepping, I said "well Hal what would you do if the Government called a bank holiday for, say four days, and that included the ATM machines and debit card transaction?"

Frank spoke first and said words to the effect that it would certainly screw up a lot of people and possibly cause panic.

Chris, another guy, said "that would never happen." I said, "well, just suppose it did happen, what would you do? Most people only have three of four days of food in their pantry. And even if food wasn't the immediate concern, people would be panicked without access to their accounts. I'll be there would be more than a few cars running out of gas and I'll be you robberies, especially around grocery stores, would increase."

Hal mumbled, "yeah, maybe I need to get a gun." I said, "you don't have a gun?". And to make a long story short, I fielded about a hundred questions about guns, buying guns, guns laws, training and the like. Frank has a 12 gauge hunting shotgun which he has never shot, and one of the other guys said he had a rifle given to him by his Dad, but he didn't know anything about it, the make/model or caliber.

Bottom line is that this cleanup and picnic, while a pain in the ass, paid off for me as I now have five new friends who see me as the "gun expert" and are going to call me to talk about buying a gun for personal protection and getting some firearms and shooting lessons.

By the way, the bank scenario didn't just come of the blue. Read below what is happening in England, from Yahoo news a couple weeks ago. Are you prepared for any of it? Stocked food and water/ firearms for protection? Cash on hand? Someplace to go and a plan in case it all comes crashing down?

If you bank at HSBC in England, don’t plan on making any large cash withdrawals. At least not without a good explanation. Or, maybe even a permission slip.

That’s because a previously unannounced change in banking policy is blocking some customers from making large withdrawals without “evidence” explaining why they need the money from their accounts.

The policy affects customers attempting withdrawals for amounts as little as £5,000 ($8,253).

HSBC says it’s all done in the name of customer protection.

"The reason being we have an obligation to protect our customers, and to minimize the opportunity for financial crime,” HSBC said in a statement. “However, following feedback, we are immediately updating guidance to our customer facing staff to reiterate that it is not mandatory for customers to provide documentary evidence for large cash withdrawals, and on its own, failure to show evidence is not a reason to refuse a withdrawal. We are writing to apologize to any customer who has been given incorrect information and inconvenienced."

The change in approach comes after the BBC aired reports from multiple HSBC customers who said they were denied in their recent attempts to make cash withdrawals.

Banking customer Stephen Cotton says he attempted to withdraw approximately $11,000 to repay a loan from his mother but was blocked from doing so.

"When we presented them with the withdrawal slip, they declined to give us the money because we could not provide them with a satisfactory explanation for what the money was for,” he told the BBC. “They wanted a letter from the person involved."

Cotton says the bank wouldn’t even tell him how much he was allowed to withdraw under the new policy, which was not announced to customers when taking affect last November.

"So I wrote out a few slips. I said, 'Can I have £5,000?' They said no. I said, 'Can I have £4,000?' They said no. And then I wrote one out for £3,000 and they said, 'OK, we'll give you that.' "

In the U.S. there have been rumors of similar restrictions that major banks such as Citibank have denied. After the massive security breach at Target retail stores in December, JP Morgan did place a temporary limit on how much cash customers could withdraw from Chase ATM’s at Target stores and how much they could spend on their debit cards at one time. But that limit has since been removed.

A Conservative member of the British Parliament said the change in policy “infantilizes the customer.” However, the head of retail at the British Bankers Association defended the policy.

"I can understand it's frustrating for customers,” Eric Leenders told the BBC. “But if you are making the occasional large cash withdrawal, the bank wants to make sure it's the right way to make the payment."