No pain with plunge protection

Have you ever heard of the “Plunge Protection Team” or PPT? If you're like me then the answer is no. Today I was watching an interview on MSNBC's “Closing Bell” interview with Charles Beterman. In this interview he talked about how individuals are doing major sell offs in equities, but the government was purchasing the stocks that people were selling because of QE2. When I decided to look into this I came across PPT, but it's official name is the Working Group.



PPT's official goal is to

“...keep the markets operating in the event of a sudden, stomach-churning plunge in stock prices -- and to prevent a panicky run on banks, brokerage firms and mutual funds. Officials worry that if investors all tried to head for the exit at the same time, there wouldn't be enough room -- or in financial terms, liquidity -- for them all to get through. In that event, the smoothly running global financial machine would begin to lock up.....In the 1987 crash, government officials worked feverishly -- and, ultimately, successfully -- to avoid precisely that bleak scenario.”

In simple terms, if we have a market crash like the housing and credit bubble that started to burst in 2007 the Federal Reserve, along with other agencies, would step in and prop up the market.

After reading this article, I took a trip back in the way back machine to 1907. In 1907 we had a similar crash. The market went so low that margins were being called and many people were on the verge of bankruptcy and ruin. If it wasn't for J.P. Morgan coming out and promising loans we might have had our Great Depression in 1907 instead. After J.P. Morgan went public with loan promises, the market rallied. Many believe that this is what led to the Roaring 20's or at least allowed it to happen. However, 22 years later, we had another crash, but people decided to get out of the market unlike the 1907 crash where people jumped right back in and the market rallied.


If you've ever watched the movie “The Recruit”, there's a scene where the main character was asked if he preferred a walk in the rain or to feel no pain. His first answer was to walk in the rain, but as he was walking out he told the truth, he wanted to feel no pain. I think with the creation of the Federal Reserve Bank in 1913 was what has led us down the road to feel no pain. After so many people had gone through the Great Depression, they wanted to make sure that future generations wouldn't feel any pain either, hence our entitlement programs starting with Social Security and the New Deal. The thing is every politician since has campaigned on the promise to let the general public feel no pain, which brings me to my favorite quote from the Tao Te Chang.

“If you want to be a great leader, you must learn to follow the Tao. Stop trying to control. Let go of fixed plans and concepts and the world will govern itself.


The more prohibitions you have, the less virtuous people will be. The more weapons you have, the less secure people will be. The more subsidies you have, the less self reliant people will be.


Therefore the master says; I let go of the law, and people become honest. I let go of economics, and people become prosperous. I let go of religion, and people become serene. I let go of all desire for the common good, and the good becomes common as grass.”

It seems to me that in our quest to feel no pain, we've caused even more pain than if we would have left things alone. There was 22 years between the crash of 1907 and the crash of 1929, it's been 20 years between Black Monday 1987 and the financial collapse of 2007. Economists have said that our current financial crisis is mirroring the Great Depression that started in 1929, but their propaganda lately is how we're coming out of this recession although anyone who's paying attention will see that everything is about to collapse.


The thing that is most important to take from this is that although things look like they may be getting better, they're not, the Federal Reserve is propping up the market to give an illusion of stability. During the Great Depression the market had upswings and crashed again and again. The main problem for the common man during that time period was jobs, over 30% of the population was unemployed. Some of the big differences between that time and now is that we were an emerging economy just like China whereas we're number 2 in the world now. Also, most of the people during that time had family farms or property, so they could grow their food. Right now, we don't own property and if we do, there's not enough land to grow a big enough space for a crop to survive for a year. Another thing that was important back then, they had little to no regulation so it was easier to start up a business compared to today. Most of all, during that time a war could bring an economy out of ruins unlike today where it's actually a drag because we don't make anything here.


I think we need to start feeling the pain. If we feel no pain, there's no real gain. By having hardships and working your way through rough times, it builds character and confidence. Right now with the Federal Reserve propping up the stock market, it's only making it worse. A couple years ago I got a spider bite. At first it was a bite, but then the redness started spreading. I took the attitude that it'll either pass or if I just ignore it, it will go away. After about two weeks my leg was so red and my foot so swollen that I went to the ER. The doctor had to cut open my leg which was so painful that when I squeezed my wife's hand, I almost broke it. A few days later the part of the infection in my foot finally exploded as well. The moral of the story was that if when I had the problem I took care of it, I would not have had to go through that ordeal which cost me money and pain. We, as a country, need to stop trying to ignore the problem like it's going to go away and let the impending crash happen because if we don't, we'll pay a higher price. The sooner we start to take care of our problem, the less pain and quicker we can get back on our feet. I believe it was Iceland who did just that, now they're coming out of their recession and starting to become productive.
 
Sources:
 
http://www.youtube.com/watch?v=AwlQ5PjITJ8
http://www.conspiracyplanet.com/channel.cfm?channelid=114&contentid=7474&page=2
http://oddcitizen.com/?p=116
http://www.huffingtonpost.com/social/MrBadExample/senate-votes-for-wall-str_n_567063_46581780.html
http://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets
http://www.washingtonpost.com/wp-srv/business/longterm/blackm/plunge.htm
http://www.washingtonpost.com/wp-srv/business/longterm/blackm/blackm.htm

Undergoing MyBlogLog Verification

Federal and State governments insolvent

**For those readers that are my regular readers, I apologize for not posting regularly. I've been working long and hard on this current article. Please spread the word**



If you watched 60 minutes this weekend, you've been informed of what's going on. There's a bigger story here which leads to politicians, corruption, and banks. All of these different entities have played a big part in our impending collapse. If the States are bailed out next year when they collapse, then I would expect by the end of 2012 we'll have a complete financial collapse of the whole US which includes debt, currency, and the economy.


Politicians


Our political leaders only job is to get re elected. After August 1971 President Nixon put a stop to the mass liquidation of our gold by telling the nations of the world that they could accept the dollar in exchange for paying our debt. This took the US fully off of the gold standard, which was what FDR wanted during the Great Depression, and also put us as the global exchange currency. I think Nixon did this with good intentions, but the very entities that were supposed to keep watch over our currency were corrupted along with the politicians.


Have you ever noticed that politicians, when trying to be elected, make all these campaign promises. These promises are made so that they can get votes. They end up making deals with Unions and promise gold standard pensions. Unions weren't the only ones, the corporations bought the politicians as well so they could have influence the create legislation to stamp out their competition. After the Campaign finance reform, this allowed special interest groups, which tend to be to one extreme or another, to buy politicians as well.


Glenn Beck asked a great question before the November elections. He asked how long does a politician campaign. He was told that they start campaigning 2 years in advance. The next question he asked was how much money do these politicians have to raise and how many people do they owe favors to by the time they get elected. Those were two great questions, this gives us the complete insight into why we have so much corruption inside Washington D.C.


Currency


All this talk about currency collapsing, what exactly are they talking about? Think of things based upon supply and demand. If the supply is up, the demand is down which gives it less value, if supply is down then it's more expensive. The US used to be on the gold standard, this means that every ounce of gold represented 1 dollar, you could take your dollar to the Treasury Department and exchange it for 1 ounce of gold. Based upon the diversity of metals that the Treasury department has allowed that specific amount of paper money to be printed. This put limits on the amount of money that can be printed. This is also what made our currency so strong and so stable.


After Nixon took us completely off of the gold standard, this took the ceiling off of the amount of currency being able to be printed. This is actually where inflation comes from. The more money that is printed, the less your dollar can buy, this is where prices actually rise and they call it inflation. During President Reagan's campaigning he made a big deal about having a 1 trillion dollar deficit, but by the end of his presidency he had allowed it to increase 3.4 trillion dollars. Before G. W. Bush left office his biggest deficit was 587 billion dollars, now we're running a starting year deficit of 1 trillion dollars. Remember, every time we run a deficit the Federal Reserve prints money in exchange for Treasury bonds of different denominations.


Banks


In my opinion, this is where history will lay the blame. Banking was invented early in history, but really took off when capitalism was implemented here in the US. There was nothing wrong with the banks until the implementation of the Federal Reserve in 1913. The Federal Reserve loaned our currency to us at an interest rate and also created the fractional reserve system. During the Great Depression some people thought that the Federal Reserve didn't print enough money to help bail everyone out, this is why FDR wanted to get away from the gold standard. After getting away from the gold standard in 1971, this opened the flood gates to put us on the path we're on now.


As much as I want to blame the banks, this also has a lot to do with how corrupt our system has become. Remember, politicians owe favors, some favors are deals with the devil. With Wall Street being based off of profitability and growth, banks wanted to make even more money. With credit being given away so readily, this padded the banks books. Eventually so much credit would be given away that there came a point when no one could get any more credit and the banks became insolvent which was part of the credit bubble that crashed starting in 2007.

Don't forget the creation of Fannie and Freddie really took off in the 1980's. Fannie was originally a New Deal program created by the government to promise loans to people with little to no credit or just bad credit. The federal government let Fannie go private in 1968 and then created Freddie to counter balance Fannie. This allowed a private company to put loans together for those who couldn't get a loan, but the government backed these mortgages. This is what lead to the housing bubble that crashed starting in 2007.

Once these banks became insolvent because of government regulation, the government bailed them out. Remember what I said earlier about currency, the more you have, the less it's worth. The Bush and Obama administration both authorized and signed the bailout bills. The bailouts were a 3 phase operation. Phase 1, give banks money to cover their bad debt, phase 2 and 3, the Federal Reserve drove down interest rates to keep people in their homes along with buying government bonds to artificially create a demand and drive bond rates extremely low.


Economy


For years since the Great Depression our countries economy has been built on spending and manufacturing. After 1971 with the US being the global exchange currency, the US exports and manufacturing declined with the last trade surplus being in 1976. From that period on, we've been building upon debt with more debt because we don't make anything. Once the housing and credit bubbles burst in 2007, our economy made a change, but the politicians didn't figure it out. Have you ever noticed how our politicians are telling you to go out and spend so you can start the economy with their different forms of stimulus? How can you spend when you're so broke paying minimum payments and you can't get credit.


I believe the economy is going to shrink, this might lead to mass starvation and even mass exodus to other countries. If you're economy is strictly based upon offering services, there's only so many people you can employ. We have two choices at this point, either reduce wages to bring manufacturing jobs back or devalue our currency so that its is not only no longer the reserve currency, but so that it's cheaper to do business here than anywhere else. What made America the industrial might it used to be was because of the cost of doing business, resources, and manufacturing. Now that we don't do this, we either need to get back to that, or realize that there's only so much room we can maneuver inside a non export economy because our only export, the US dollar, is about to cease to exist.


The Ultimate Collapse


We have so many factors playing into our current economic situation. There are also so many organizations pulling at every free spot of fabric of our nation, there's no way that we can keep the gravy train going. There are many extreme organizations inside of the US that want to pull us in their direction, there are different countries that we've made enemies out of, and there are those who are so bent on power that they'll sell a whole country down the river just to have it.


The biggest threat to our way of life would be a tie between debt and politicians, but they go hand in hand. Our politicians for so long have been telling us that they will give us this and that and expand services for the majority of voters in their area, but my question is, did anyone stop to think about how we're going to pay for that? The thing I was told growing up, especially during the 90's, is that America is rich, so we can afford it. If you have a million dollars, would you ever stop to think about paying a thousand dollars for something you want, the answer would probably be no for a poor person and yes for a rich person. I think that the farther we got away from the Great Depression, the easier it was to forget what hard times were and how to be responsible.


According to 60 minutes between 50-100 states and cities will be bankrupt and are currently unable to pay their basic bills because previous politicians made sweetheart deals with special interest groups and unions that they knew they wouldn't be responsible for. One of two things will happen, either the Fed will bail out the States and stave off destruction for one more year(After a year of bailouts by the IMF the Euro is expected to be dead by the end of 2011) or they will let the States declare bankruptcy and this will cause a domino effect and the US will collapse by the end of 2011.

The Future


Although I can't predict the future, I can look at recent events and get an idea. In Europe a country that represented 2% of the Euro economy, Greece, was bailed out because they thought that it would cause a domino effect and collapse the whole European Union. Once Greece fell other countries such as Ireland fell and Spain and Portugal are expected to be next. In exchange for these countries being bailed out, pretty much the banks not the government, the IMF came in and offered to bail these countries out, but they had to do Austerity programs. This caused the civil unrest we've seen on the news coming from Greece.


If you compare the EU to the US, you'll the same similarities between states and a centralized power. So, if the States go bankrupt as expected next year, the Fed will take the place of the IMF and bail them out. In exchange for bailing them out though, I'm willing to bet that they'll merge the states into one super state or something similar. The thing is though, unlike the EU where everyone's currency fails, the US Dollar will collapse and the IMF will come in with the same Austerity programs for the whole country, if we haven't had a civil war.


This is probably the scariest part, I believe the IMF is acting as the instigator for the new world order. With everyone being bailed out by the IMF, you get a new currency, a world currency. In order to have a world currency, you'll need a world government. Think UN with actual power to govern. I think this is most suitable under Obama because if there is enough civil unrest, he can suspend elections or even appoint who he wants as Reps. and Senators. Considering he's a one worlder, he's going to want to merge the US into this global government. This will ultimately be the end of the US as we know it and if anyone resists, they'll be squashed because at this point the US will be outnumbered. This will be like the movie Serenity where the country no longer exists, so the resisters will be labeled as rebels and allow the State to eradicate them.
 
Sources:
 
http://www.youtube.com/watch?v=KsdUpzSjaEA
http://www.reuters.com/article/idUSTRE66I05U20100719
http://news.bbc.co.uk/2/hi/2817995.stm
http://www.youtube.com/watch?v=nBNm3AWF_qE
http://www.chinatranslated.com/?p=993
http://www.cardeapartners.com/aoi/fincad-derivatives-market-could-be-worth-700-trillion-by-year-end/
http://hubpages.com/hub/Survive-Total-Economic-Collapse
http://www.ehow.com/how_4546748_survive-sudden-economic-collapse.html
http://www.marketoracle.co.uk/Article7171.html
http://www.youtube.com/watch?v=KAT__cgdoPs
http://www.benzinga.com/10/08/443492/faber-and-schiff-the-american-bond-bubble
http://www.youtube.com/watch?v=ktEiN2zXZbo
http://beforeitsnews.com/story/314/416/Buying_Gold:_Why_Are_The_Chinese_Gobbling_Up_Gold_Like_There_Is_No_Tomorrow.html
http://bobchapman.blogspot.com/
http://beforeitsnews.com/story/314/416/Buying_Gold:_Why_Are_The_Chinese_Gobbling_Up_Gold_Like_There_Is_No_Tomorrow.html
http://www.trutv.com/video/conspiracy-theory/full-episodes/wall-street.html
http://www.stansberryresearch.com/pro/1011PSIENDVD/MPSILC22/PR?o=230927&s=233550&u=51973801&l=197794&g=156&r=Milo
http://business.financialpost.com/2010/07/26/michigan-residents-turn-to-alternative-currency/
http://libertymaven.com/2010/07/19/competing-currency-being-accepted-across-mid-michigan/10234/
http://www.sandiego6.com/news/local/story/Tijuana-Airport-to-Stop-Accepting-U-S-Dollars/3KGwK6NUaEyuA52yquO91g.cspx
http://www.washingtonpost.com/wp-dyn/content/article/2010/12/19/AR2010121903022.html?wpisrc=nl_pmopinions
http://bobchapman.blogspot.com/2010/12/bank-bailout-boondoggle-of-billions.html
http://online.wsj.com/article/SB10001424052748703886904576031401310024990.html?mod=WSJ_Bonds_LEFTTopNews
http://peterschiffblog.blogspot.com/2010/12/three-investment-themes-for-2011.html
http://jimrogers-investments.blogspot.com/2010/12/things-are-happening-with-dollar-that.html
http://bobchapman.blogspot.com/2010/12/bob-chapman-hyperinflation-end-of.html
http://en.wikipedia.org/wiki/History_of_banking
http://en.wikipedia.org/wiki/Fannie_Mae
http://projects.washingtonpost.com/top-secret-america/articles/monitoring-america/1/

Saving our future

This last weekend my grandfather and I sat down and discussed what would happen and how to survive if the economy collapsed. He made sure to remind me at the start that I don't know what hard times are, and he's right. There's always been a program around to help people out weather it be welfare, unemployment, or even food stamps. No one in this country really knows what hard times are like compared to what the people during the Great Depression went through. They had one thing going for them, they had land and knowledge to grow food along with most of the public not really being city dwellers. Today it's quite the opposite. The majority of people are city dwellers, what's worse is we have gotten away from our agrarian roots.



There are two models to look at to decide what the possible outcomes are for us in the event that there is a major crash of our currency and economy. When Russia collapsed their two main exporting partners were North Korea and Cuba. When trade was cut off with North Korea the government just let their people starve. Now most of the people in North Korea are either government employees or cannibals. Cuba on the other hand did things different. Cuba sent out a mandate and loosened up their rules to require that every person start growing their own food. Any available land was to be used for gardening, people in a way had property rights, but this was the key to their survival. The main difference between North Korea and Cuba is that North Korean's are starving while Cubans started prospering more than they had in the past. Looking at this example, we need to start thinking about following the Cuban example.


There is a big possibility that we may not even have a collapse, although my opinion is that it's already happening. If there is no collapse, we could get accidentally rich, if there is a collapse we're prepared and will have a greater chance of survival. We as a society need to start pulling together now instead of waiting for the collapse to happen, then react. I think by pulling together we could actually save our country and bring it back into prosperity and in line with the Constitution again.


If you own vacant land you can do many things and this actually puts you in a better position than most. You have the opportunity to turn that land into a Liberty Garden (Term used during the Great Depression for gardens within the cities). 1 acre of land could feed up to 5 people including yourself if you manage it just right, think of share cropping. Another idea is allowing those who are dislodged from their homes the ability to camp on the property. I think 1 acre could fit up to 5 families, but it would allow them to have a place to stay and have security in numbers. They could even grow mini gardens. I'm not saying let people live there for free or that their entitled to have a piece of your land, but what I am saying is there are many barter deals that can be worked out such as giving a small portion from each garden to you for usage of the land. If there is surplus, you can either donate or sell the remainder, but several people would be grateful and this would be a step on a positive direction for our country, but I'll let you work out the details.

If you don't own land, but you own a house with a small yard, there's many possibilities there too. There are plenty of people in apartments that would be willing to do a little work to have a garden, me being one of them. For example, I would be willing to rototiller and buy the seeds myself if I just had a place to grow a garden if I were to be able to grow in someone's back yard. It would only be fair that we both work the garden, but I'm willing to do the hard work in order to get a reward that I would otherwise not have. If things got really bad, being able to camp in a back yard next to the garden would be most beneficial because I know that I would safe and I could do work around the house to pay for being able to have a place to live. In a collapse money will be worthless, so barter is the only way to go. The good thing about barter is it will weed out the crooks really quick so that you'll end up dealing with mostly honest people within a year or so.


Right now the U6 unemployment rate is around 20% which is just over 60 million people out of work. There is about another 20% or 60 million people who are underemployed. There are a total of around 120 million people hurting in our society and trying to make things work, so even if there's not a collapse, there's a lot of people who could benefit from a hand up under the current conditions. The most important things that people need in the hardest of times are food, water, and shelter. The great thing about being a Christian nation is knowing that we're all in this together regardless of religion, race, or creed. There's a reason why Glenn Beck is going to Wilmington Ohio, which has partially inspired this article.


There are those who do not have property or a house, but you have knowledge. It's a good idea to make sure that you take the time to teach us city dwellers how to garden. There's a lot to gardening such as soil, planting, and drying out seeds. Instructing people is just as valuable as having property or a house, so don't be shy.

There's no point in doing any of this though if you don't get the word out. There are plenty of community engagements where you can make announcements and let people know to get prepared or at least get them to pull together to help the people in the community. This brings to mind what my grandma told me about Apple Valley California where she just moved from. She has told me that there are so many people there that are out of work and most of them are over 40. She's told me stories of going to the grocery store and buying them a couple bags of groceries, but she's also fortunate to be well off as well.


I think we as a society have forgotten what made us great. I think the older generations in our society have a great role to play because they've got the life experiences the younger generations don't have. This is a chance for us to come together and change the tide of things to come. What made the Depression generation so strong is that they banded together and realized that there are more important things in life than life's distractions. What will save use from our utter destruction is our pulling together. I've been taught through mentors over the years about people having roles in society and its time to step up and accept our roles because we've gotten away from that and that's what's been hurting our society for the last 20+ years.

Bond bubble about to burst

Today the Fed bought up 9.7 billion in US Treasury bonds. From what I understand of the bond market is that the Treasury issues bonds at a specific starting interest rate and gives them to the Fed and the Federal Reserve sends over cash in exchange. If there are high demands on bonds then the rate will go lower, if there are low demands on the bonds the rate goes up. Last week after the Obama tax cut deal with the Republicans, the bond market had a huge sell off which rose interest rates almost .5%. This is a big deal because people's mortgage payments go up based upon these interest rates. Today the Fed bought up bonds which dropped interest rates a little lower.



The speculation is that without keeping interest rates lower it will allow people to borrow more and keep those people who can afford their homes in there without putting extra pressure with rising interest rates which raise their mortgage payments. The thing the people are denying is that by creating this cheap money it's driving bond investors away for a couple of reasons. One reason is that we're devaluing our currency by monetizing our debt which is growing bigger by the day. Another would be that bond investors see how much debt we currently have and realize that our spending habits aren't changing which will ultimately cause us to either default or even worse monetize our debt even more.


This is all part of a chain reaction. In 2006-07 the housing bubble burst which caused the credit bubble to burst which will lead to the bond market bubble bursting. Bubbles are defined as exceptionally high demand artificially driving up prices or in a bond market, driving down prices. When the housing bubble burst, people had to choose between paying a credit card or mortgage payments. Most people chose to pay their mortgage. With some people defaulting on their mortgage and even more on their credit cards the banks started requesting bailouts. With the Fed printing money to pay for these bailouts it caused accelerated devaluing of our currency which in turn started a bond sell off because of loss of market confidence. With this happening the fed started the QE program. This is what will ultimately be linked to the bond bubble bursting and collapse of the US economy.


The Federal Reserve has put itself between a rock and a hard place with these QE's. Either Bernanke wants to collapse the US economy and currency or he just doesn't have basic common sense that an IT guy with a computer and the internet can figure out. Because of the credit bubble bursting the economy will not be back to the way it was during the 80's and 90's because we no longer make things. Our wealth has been borrowed away for the last 25 our of 30 year. The only reason that America's economy was so robust is because we could use our credit to borrow to pay for that new car, house, or trinket that we want. The thing is until we start making things here and manufacturing, we're going to be at this rate of prosperity for a very long period of time because we need to pay off our debt so that we can go back to borrowing. Bernanke is trying to artificially keep interest rates lower so the whole country including the government can borrow money at low rates, but if everyone is in so much debt, you can't load them up with more otherwise it's robbery.


People are complaining because the banks are holding onto an estimated $2+ trillion dollars including businesses. The question I ask you, why wouldn't banks hold onto their money? I think they're seeing the bond market crashing while the Fed is artificially propping it up through QE's that they're preparing for bank runs and possibly worse case scenarios than that. This is their only hope of staying alive once everything goes belly up. The only thing they have on their side, from what I hear, is that they're not being required to give high risk loans anymore. With the economy almost in shambles and just barely plugging along, no one has good enough credit to get any loans. I know people who have over 750 beacon scores who can't even get a good car loan and they've even had their job for years. Before my mother's boyfriend passed away from cancer his credit score was so high he could get a million dollar loan on just a signature, he only made about $35k a year.

There's two things you should take away from this article. First, the economy is going to remain in its current state as long as we're not manufacturing goods, a service based economy is no longer sustainable. Secondly, the bond market is about to crash, but when? As long as people keep getting out of the US bond market we're going to have to keep doing QE's. Every time we do a QE, we're going to have to make it bigger and bigger. Sooner or later, within next couple of years, we're going to be the Wiemar Republic. People will start burning money because it will be cheaper than firewood.
 
Sources:
 
http://online.wsj.com/article/BT-CO-20101213-712553.html?mod=rss_Bonds
http://online.wsj.com/public/page/news-fixed-income-bonds.html?mod=WSJ_topnav_markets
http://www.treasurydirect.gov/govt/govt.htm

Social Security no longer taboo

I use a message board called Congress and today one of the posts was about the census report. I've never been so mad in my life, made me want to start rioting in the street almost. The report states that the wealth gap is increasing between wealthy and poor, this means the middle class is shrinking yet again. Another part of the report stated that household income decreased all while experiencing inflation (flooding the market with more money than gold and silver can back). What infuriated me most were the two claims that the baby boomers are the wealthiest part of our society and that politicians will be less likely to cut social security than any other entitlement program. What infuriated me most about this is not the fact that the baby boomers are the wealthiest in our society because that's to be expected of every generation, but the fact that politicians are more inclined to cut education and other entitlement programs than social security and medicare/medicaid which is what's killing our budget in the first place. In my opinion, this is the greatest generational theft in history. Those born after 1970 will not be able to collect Social Security.

When asked to provide my facts I decided to look up the baby boom generation and the biggest entitlement programs we have. The baby boom started in 1946 and ended in 1960, my mom and dad are the last of the boomers. The first boomer came of age to vote in 1964, so any policies put forth from 1963 to 1978-79 would be baby boomer responsibility, but considering they've been the largest voting block since 1964 until 2000, we'll give them 50% of the blame from 1979 on. Here's a list of some of the major budget items of the day and when they started.

• Social Security was started in 1935, but a majority of the population of that generation wouldn't live long enough to collect Social Security. My grandfather on my mother's side is the last of them to die off and he's 89, he's also the last of the WWII generation.
• Food Stamps was started in 1940, but a skeleton form of what we know today. In 1965 with LBJ's “great society” he expanded an emergency program and it was made permanent 1969 under Nixon. Welfare was later reformed under President Clinton and a Republican Congress in 1994.
• Medicare/Medicaid as we know it today was created in 1965, this was another part of “great society” by LBJ.
• 1940 welfare is created as an “emergency” service and in 1965 welfare is made permenent and expanded as another part of “great society” by LBJ.
• 1974 HUD was created.

Baby boomers started retiring as early as 3 years ago, so we're only going to see our financial crisis get worse. A lot of baby boomers have pensions, saved money, or invested it. Considering the current housing crisis, the stock market and cash will be the only assets that these baby boomers will be able to liquidate in order to enjoy their 20+ years of retirement. This will in turn cause the stock market to either crash or just remain stagnate.

The baby boomers had it good until around 1978 when the cost of living rose to where you needed at least 2 incomes to make ends meet for the middle and lower classes. This was caused by two key factors according to Chris Martenson. First, in 1971 Nixon completely took us away from the “Gold Standard”, and secondly, because of taking us off of the “Gold Standard” which took away any bank responsibility and allowed for an endless ceiling of money to be created out of thin air.

I've always held some animocity towards the baby boom generation, but not for the reason's you would think. Looking at my parents who were baby boomers, I see the baby boomers as those who wanted instant gratification and didn't think of the consequences, or as George Carlin said, “They went from Cocaine to Rogain”. As I learned when my mother's boyfriend passed away, his doughter was stuck with his outstanding debt, and so will I. I think the hippie movement was a real identity crisis for our country, but we spent like crazy depressed shoppers and left the bill to later generations. The worst part of all this is mine and my wife's generation are robbing our child by extending unemployment to 3 years and trying to create a free education system, but that's what the Tea Party movement is supposed to be all about stopping.

What this is all leading to is that we need to think about what we're doing. You can't ask me to give up everything for you and you give up nothing. Social Security shouldn't be taboo anymore because if you're going to cut education, welfare, and other programs, then you should be willing to take the hit yourself as well by doing things such as means testing or an immediate jump in retirment age. Come the 2012 election the baby boomers will be losing significant voting power as quickly as they came into power, that's why President Obama is starting to pander to the younger voters. You can't ask someone to let you move in with them, then tell them they have to wait hand and foot on you. The baby boom generation is mostly repsonsible for a lot of our deficit, so think twice before urging your congressman not to cut social security because, in essence, you'll be doing a disservice to the whole country. I've been wondering what will cause the riots in the US like they're having in Europe, I think I just found my answer.

Part 2 of 2: Surviving Martial Law

If you think I'm the only nay sayer writing about the impending collapse of the US and martial law then you haven't listened to Bob Chapman (retired investment broker), Peter Schiff (manager of Eurocapital), Bill Cooper (retired military intelligence and some think he was assassinated 10/2001), Glenn Beck, Jessie Ventura (former Navy Seal, former governor, and former wrestler), Alex Jones (conspiracy theorist), Chris Maretenson, Michael Rupert (interviewed for the documentary “collapse”, former LA police officer, and investigative journalist for 30 years), and Ron Paul (Representative from Texas). Here are some headlines from the last few years just to bring you up to speed.

• Since 2009 President Obama has been preparing for civil unrest and ordered that 1 million troops be stationed inside the US by Jan 2010.
• Currently the US military is undergoing “Unified Quest 2011” for 1 year to decide how to handle possible US or global economic collapse and civil unrest due to large budget cuts
• Republicans win a landslide victory in November 2010 behind the Tea Party.
• US has ended combat operations in Iraq.
• Greece and Ireland have been bailed out with Spain and Portugal expected to fall next.
• Euro expected to collapse.
• Chinese have bought 500% more gold in 2010 than they did in 2009. Peter Schiff reported that the Chinese are buying shorter term US Bonds and are diversifying out of the dollar.
• 2005 Civil Engineers grade US infrastructure a D and needing 1.6 Trillion to fix or repair.
• 2006-2007 Housing bubble bursts
• 2008 Banks on verge of collapse and are bailed out with TARP money.
• 2009 GM bailed out, but recently went public in November of this year.
• 2010 looks like the Bush tax cuts will be extended along with adding another 13 months of unemployment on top of the current 99 weeks which will cause an estimated budget deficit of 900 billion.
• Although President Obama states that we've been out of the recession in September of 2009. Unemployment hasn't dropped below 9.6% and just recently adjusted after census workers finally not being included to 9.8%. Unemployment has been as high as 10.1%, but some estimate that real unemployment is between 17-21%.
• US is currently at 94% debt to GDP. The debt commission recently voted 11-7 on measures to fix our current debt situation, but needed 14 votes in order to pass it. Although this didn't pass, there are Republican Representatives that want to implement 85% of the plan according to reports from the debt commission's chairman. I doubt that they'll implement the tax increases, but they will implement the budget cuts.
• Jan 2010 President Obama signs an Executive Order establishing the counsel of governors.

Currently the youngest baby boomer will be turning 51 this year and there are some interesting factors to consider because the baby boomers retiring over the last 10 years and the next 10 years will put significant strain on our economy because they will be going from tax payers to social security collectors. My grandparents each had 5 kids which meant that the contributions from their kids would support them when they reached the age to collect social security, but my parents generation had on average of 2 kids and my generation will have on average 1 kid.

The reason why we had to bail the banks out with TARP is because of a credit crunch. Although we thought that bailing them out would save us from impending economic collapse, it just prolonged the pain. Our economy is based upon continuing growth where each generation has at least 3 kids which will in turn spike the demand on the supply, but the 1st world is doing the opposite. We have incurred so much debt in our personal lives and government that our children's children won't be able to pay for it.

Another thing to realize is that any recovery will be stifled by energy costs. Depending on who you ask they'll say we reached peak oil production between 6-10 years ago which means that supply will dwindle while demand increases. It's expected that oil should reach around $93 a barrel by the end of the year and be about $200 a barrel within the next two years which means $6-10 a gallon gas prices. Oil doesn't just run our cars with gasoline, about 80% of everything in your home has some form of an oil bi-product in it. The cost of everything from driving our cars to buying a new shirt will go up while your wages stay the same. President Bush thought it would be a good idea to put 10% ethanol in our gas to make it stretch father, but do you realize how many thing we eat or make that have some bi-product of corn in them? The end goal is to have 15% ethanol in our gas which would use all the current corn producing crops inside the US just to produce that much ethanol for the US.

In part 1 I outlined what would be expected to happen under martial law. I wanted to take part 2 and give all the facts about what's leading up to this. US collapse is on its way no matter what because we've been hit by so many catastrophes in such a short period of time, but it's important to connect the dots and see where the civil unrest is coming from because we already know how to deal with the punch, but we need to know when to duck. Currently our deficits are reaching a trillion dollars a year, we're in a security state because of the 9/11 attack, participating in 2 wars, dealing with a housing and credit bubble bursting, and burning our food supply to extend the life of our luxuries. During the Revolutionary war it was George Washington who kept the troops together, not Congress because they weren't even paying the troops a lot of the time. We need to start preparing to go back to being a part of nature and forgetting our city dwelling habits because they won't be lasting much longer. The sooner you prepare, the greater chance you have at survival.

In my last thoughts, Michael Ruppert said in his interview for “Collapse” that the earth's population stayed around a billion people until 1900 when oil was introduced into society, then our population skyrocketed to almost 8 billion people. Once oil is gone, the earth will balance out because oil will be taken out of the equation. Those who have the survival skills will outlast everyone, those who don't may turn into cannibals. It's estimated at current levels that we'll run out of oil between 2035-2055. I think the most important thing to do from here on out is to pass along the basic survival skills to our children so that even if martial law or the collapse the United States doesn't happen, they can be prepared just in case.

Sources:
http://www.whitehouse.gov/the-press-office/president-obama-signs-executive-order-establishing-council-governors
http://www.guardian.co.uk/media/2010/dec/08/anonymous-4chan-wikileaks-mastercard-paypal
http://www.chrismartenson.com/crashcourse/chapter-6-what-money
http://www.chrismartenson.com/crashcourse/chapter-7-money-creation
http://www.youtube.com/watch?v=p3_Q1SiRN-A
http://www.youtube.com/watch?v=kM7rITeNW6U
http://www.msnbc.msn.com/id/7137552/ns/us_news/
http://en.wikipedia.org/wiki/United_States_housing_bubble

Future of America

I have been hearing from many different news sources and reporters about the imminent collapse of the US dollar, some have even talked about this being the gateway to global governance. Through listening to people like Peter Schiff and Bob Chapman, I think I've figured out how this will all take place. Please take into account the current news of the day. To start off, let's get an idea of who is involved.


Peter Schiff has been on record on MSNBC, FNC, and many other accredited news organizations stating that he believes the dollars collapse is inevitable because of our high debt and weak economy. Peter Schiff has been credited with predicting the housing crash and also the Wall-Street crash. He's even written books on how to survive the collapse of the dollar. He's also been on record stating that hyperinflation is on its way and we need to start getting prepared.

Bob Chapman has been on record saying that he has friends who attend the Federal Reserve Board meetings. It is said that the Federal Reserve has come to the point where they are going to devalue the dollar into oblivion and bring about a new dollar backed by gold. He has also said that the US could very well still remain the global exchange currency as long as we still have the gold reserves we say we do. The only bad part is that anyone holding onto the current US dollar will be left with worthless pieces of paper.

The UN was originally set up as a debating society, but has known aspirations to become a one world government. Although the UN is just a debating society according to its charters and not allowed to have a military arm, but if you look at the NATO charter it states that NATO can only perform military operations under the direction of the UN. The IMF, which is also another arm of the UN, has called for a new global currency, not to mention the top 3 exchange currencies in order are the US dollar, Euro, and the Chinese Yuan.

For years Congress has regulated business and created laws for citizens to abide by. What first started out as good intentions ended up eventually being hijacked by some of the most crooked and powerful people. Through regulation corporate lobbyists are able to slip things into legislation in order to stamp out their competition. Some companies have even gone as far, like with the TSA scanners, to take advantage of situations in order to enrich themselves through association with members of Congress. This has eventually led the US down the road to becoming a police state, although the original intention was good in nature.

This last weekend the Irish accepted a bailout from other participating Euro countries. Right now the Euro is in trouble with Greece, Irish, Spain, and Portugal being bailed out or on the verge of being bailed out, the Euro risks collapse which would move the Chinese Yuan to the number 2 spot in the IMF. Along with the imminent financial collapse of the Euro, the UK, Greece, and France are experiencing riots and civil unrest.

So, what happens and how does this all fit together and what does this mean? Once the Euro and US dollar collapses, there is a small window of opportunity. During this time I would expect there to be a lot of civil unrest. A lot of this will be because of the tightening of the deficit belt around the world, but there will be a lot of this type of activity on the news.


I would believe that the civil unrest would have an effect on commerce because, if big enough, it could halt businesses from functioning. This in turn will cause a deeper recession or spark a new recession on the country if it is in recovery mode. The countries with civil unrest will then collapse which will open the door to a global currency.

Once a global currency is introduced by the IMF or UN, or even the US depending on who's in power, there will be a call for a global government in order to ensure stability. I would hope that many here in the US would oppose it. If the US would oppose it, certain global corperations would encourage Congress under the table to accept a global currency even if it brings a global government because it would be in the corperations best interest. I think the most important thing to highlight here is that every country has its own regulations and currencies. With all these differences it would be either in their best interest to have 1 set of rules or at least it would be an appealing idea. Good intentions will be met with dire consequences.



Depending on how bad the civil unrest the global currency might be a little farther out if there are wars caused over the rioting. This would actually be in the best interest of at least the US if not the world because as long as the world is in war, we could possibly rebuild ourselves during this which would prevent a global currency. The thing that could happen though is during the civil unrest in the US it could lead to a civil war which would take us away from any participation in any global war. Think along the lines of Russia during WWI.

If there is no global war before a global currency is instituted, there would also be an opportunity to still have a global war, but it would be more like a civil war. The chances of those fighting against a global government and winning would be slim to none. I would think the worst part is that NATO will be the one used to enforce the new global government which is comprised mainly of US troops.

The worst part of this whole scenario is that it is so far along that there is really no stopping it. I hope this isn't what happens, but from a logical point of view, it's the only thing that makes sense. There have been many people being out in the open about their intentions and we've either ignored them or thought they were just kidding. Considering even the experts who aren't afraid of telling people what they see are the only ones being ignored while we wander aimlessly through our lives. As President Obama says, “We as American's need to get used to living with less”.

Sources:

http://www.guardian.co.uk/world/2010/nov/20/eric-cantona-bank-protest-campaign
http://www.dailymail.co.uk/news/article-1331518/William-Hague-doubts-euro-survive-Irish-debt-crisis.html
http://dailybail.com/home/real-ira-threatens-to-blow-up-bankers-explosive.html?ref=nf
http://www.youtube.com/watch?v=IHadp7GXSdk&feature=related
http://www.youtube.com/watch?v=IHadp7GXSdk
http://theinternationalforecaster.com/bob_chapman
http://theinternationalforecaster.com/International_Forecaster_Weekly/Keynsianism_Fallen_Upon_Hard_Times
http://www.govtrack.us/congress/bill.xpd?bill=h111-3808
http://www.bloomberg.com/news/2010-11-18/dollar-to-become-world-s-weakest-currency-drop-to-75-yen-jpmorgan-says.html
http://www.bloomberg.com/video/64550434/

Hidden Agenda of the SEC

I recently watched an interview where the guest said, “Don’t pay attention to what the Chinese are saying and pay attention to what they are doing”. The Chinese credit rating agency, Dagong, is an action not actually posturing. The Chinese have been trying to leverage themselves into a dominant global currency for some time now, unlike western countries; the Chinese are very patient (http://dennishodgson.blogspot.com/search/label/china).


The Dagong rating agency is being purposely kept under wraps. The SEC is a government agency that regulates publically traded companies for the US and the world. Since the US is where everyone wants to do business, we have a lot of foreign investors in the US, so in essence we regulate the world. In 2006 congress passed a reform bill because of the scandals on Wall Street with the collapse of the US housing market. If anyone has ever had to comply with any government regulation in the last few years, you would realize the amount of red tape and paper work required to comply.

I recently worked for a publicly traded company in the IT department. I spent 1 week of every month just putting together all the necessary paperwork required to be compliant with the Sarbanes Oxley act. This act strips all companies of their independence and also puts the government in a position to where if they were to do a hostile takeover, with the compliance regulations of SOX, they could run your company without anyone even noticing. Also, the SEC has the ability to seize assets of companies just for suspicion of wrong doing, put the assets in a Swiss bank account, and when your name is cleared give everything back to you after 5 years of investigation while keeping the interest gained over the 5 years. So, you can see my hostility towards the SEC, but I can also be unbiased to an extent.

If you were to ask the SEC about why they turned down the Dagong credit rating agency, they will tell you that “…because the agency said it couldn’t reliably ensure that the Beijing company would comply with U.S. reporting rules.” What measure did they use to determine this? I think this could be major politicizing because of the threat that Dagong poses to the big 3 ratings agencies and the US. The Dagong Company threatens to change the way things are done in the US and in the Bond Market.

If you ask the Dagong company why they were denied they would tell you that China’s regulatory agencies are willing to resolve any cross border dispute the US has because China’s regulatory agencies do not see this as a violation of national sovereignty, The US has never tried to resolve any cross border regulatory dispute, and that they were willing to follow SEC regulations. Dagong has also cited that the US has asked to enter the Chinese market, which they were allowed to, and have occupied 2/3 of the Chinese market.

I see both sides politicizing this issue to its fullest extent. The US would have to admit fault in their rating system if they let the Dagong Company in and China is whining, with some good reason, about not being able to receive equal treatment in their eyes.

So, what’s really going on here? China is making an action to reform the way the globe does its ratings of countries. What does this mean for the US? We would lose our AAA credit rating, this would force us to be responsible, and this could give emerging countries a hand up on the US. Currently the big 3 S&P, Flitch, and Moody’s are the dominant ratings agencies in the world. The way they rate countries is on borrowing ability. With the US having the largest economy in the world we would have to have a major recession worse than the great depression in order to be downgraded. On the other hand the Dagong Company wants to change the game by rating countries based upon income to debt along with other factors, but income to debt is the main change here. With the US reaching now 94% debt to GDP this would slow down our borrowing ability and possibly shut down the government. In other words we would have a hard time paying our bills without the Fed doing QE1 and QE2 type of lending. This would force us to monetize our debt and possibly collapse our system. This isn’t all doom and gloom though. With an A+ rating we’re still in decent shape, but we’d be paying a higher interest rate on loans which would cause us not to borrow as much which would cause us to start becoming more fiscally responsible. On the other hand if we don’t heed these warning by our credit rating dropping then we’ll continue on our destructive path and eventually the gravy train will be over.

The likelihood of the Dagong company becoming globally recognized is close to nil. As far as our credit rating, we have nothing to worry about. What about the long term effects though? If the big 3 refuse to hold the US accountable or change the way they rate countries we’re definitely heading down the road to self-destruction. A friend I’ve been talking to said that China has a completely untapped market inside their country. If the Chinese decide to pull out of the global market as much as possible and just develop within their country, this could be bad for business here in the US. China could very well become the biggest economy in the world due to the sheer population, but this would take at least one generation to do. There’s really no telling what could happen except that US consumers would be competing with Chinese consumers to be able to sustain the lifestyle we currently have.

In conclusion, I would say the SEC made a big mistake in refusing the Chinese Dagong credit rating agency. Either the SEC is a bunch of elitist government officials or they did the right thing, but we may never know for sure. I will say that although China is a Communist country, they have a good idea and would possibly reduce the risk of global catastrophe. Right now the US is heading down a bad path and could very well end up on its head because those agencies entrusted to keep us safe and secure are actually causing the problem. This is just another thing to think about and say, maybe we should really look at this. It is always in China’s best interest for the US to remain the global exchange currency and to have a strong dollar because they reap the benefits of jobs and an export surplus, so don’t always think that they are our enemy, they are acting in their best interest which at this point happens to be our best interest as well.

Sources:

http://blogs.wsj.com/marketbeat/2010/11/11/chinese-rater-us-downgrade-us-as-creditworthy-as-costco/

http://www.youtube.com/watch?v=UDRZRSZ7GX4

http://dailyreckoning.com/chinas-dagong-credit-rating-agency-steamed-over-nrsro-delay/

http://finance.fortune.cnn.com/2010/07/28/chinas-dagong-says-u-s-rejects-it/

http://www.dagongcredit.com/dagongweb/english/pr/show.php?id=78&table=web_e_zxzx  http://en.wikipedia.org/wiki/Nationally_Recognized_Statistical_Rating_Organization#Credit_Rating_Agency_Reform_Act_of_2006

http://www.sec.gov/rules/final/2007/34-55857.pdf

http://www.zerohedge.com/article/sec-denies-chinas-dagong-market-entry-after-us-debt-downgrade

http://www.sec.gov/litigation/opinions/2010/34-62968.pdf

Game Over America

**Blogger’s Note: Exploring this topic has been difficult for me. My family has always been the defenders and the backbone of this country. I come from 10 generations of military as well as middle class business-people. While one side of my family was helping to create a strong economy, another part was fighting for the freedoms and rights that our country needed and deserved. Doing this research has made me feel that we’ve been fighting and growing for nothing. All of the effort put into this country seems to have been disregarded and unappreciated. All it took was a handful of people to get into power and decide they wanted to destroy our country as we know and love it. I’d like to ask you to do your own research on this subject. If your research contradicts mine, I would love to see it. I think everyone needs to research these topics for themselves and find the information. If you love your country as much as I do, it may be a pretty painful experience, but I guarantee you, it is necessary. My sources at the bottom will be a great starting point for your own personal research.**

Recently Glenn Beck did a segment on the 15 day path to the New World Order. Either he didn’t paint a big enough picture, or he’s just plain wrong. I decided to look for the answers myself and what I found was kind of scary. I’m waiting for the Wallstreet Journal to finally publish this so that we can start rebuilding because right now, we’ve reached the end of our rope about $600 billion ago (http://www.usdebtclock.org/). First let’s answer the question that Glenn Beck stated may be the downfall of the Republic, which is will China stop buying US Bonds.

The simple answer is that China won’t stop buying US Bonds unless a couple of things happen. First of which would be that the US Dollar is no longer the global exchange currency. Secondly, China would have to be the global exchange currency which would mean that the Euro and US Dollar have collapsed. Lastly, America would have to collapse internally from such an overwhelming debt that the inflation over values the Chinese RMB. These are possibilities, but I doubt that this will happen in these ways from the research I’ve done.

Recently America has been accused of implementing the same currency warfare towards the rest of the world like when the stock market crashed in 1929. The world relies on the dollar being the global currency and is a very delicate system of checks and balances. With the US being the current exchange currency this gives us a lot of clout, but the policies of the Pelosi Congress and Obama Presidency have put the whole country at risk, even Hillary Clinton has admitted this.

The way this works is that the US dollar is the bench mark currency. The countries who have lower value currencies tend to have a trade surplus like China, Japan, and Germany. Those countries with higher currency values tend to have a trade deficit like the US and Greece. Currently the US makes up 40% of the world’s total trade deficit with China leading the way with the largest trade surplus at 23% and Japan runs somewhere around 21% and Germany around 19%. These nations in order to keep their trade surplus. which means jobs and development, keep their currency lower than the dollar because it makes their products cheaper to buy. As the US waters down its dollar by borrowing and doing things like QE2 this lowers the value of the dollar making purchases from China, Japan, and Germany more expensive. This in turn sends them into a recession because they rely on the US to be large importers of goods. If the US were to devalue its currency so low that it would match the Chinese RMB this would come close to collapsing the global economy.

There’s a few scenarios that are more realistic that could happen before Glenn Beck’s China refusing to purchase US Bonds scenario works.

Scenario 1:

With the US debt to GDP level reaching 100% by the end of 2010 we could see a new policy. The fed has already started to implement this by doing QE2. Congress could or could not raise the debt ceiling, but this really doesn’t matter at this point. Fed Chairman Bernanke has publicly stated that he’s not subject to the Congressional debt ceiling nor does he have to worry about having to be an elected official. This makes the Federal Reserve a rogue and destructive element in every scenario. The Federal Reserve can print money devaluing our currency as it pleasse because it has no real oversight. This would cause massive inflation and devaluing of our currency. No one in their right mind would want to invest in the US Dollar because it’s worthless. Our economy collapses, the rest of the world’s economy collapses, and a new global currency emerges.

Scenario 2:

China is currently trying to head off the currency wars by maneuvering to become the new world currency or global exchange currency. I have read an article that stated that China is giving discounts to nations that are willing to use the RMB instead of the US Dollar. They would still have to get the US to accept this, but since they own so much of our foreign debt and we’ve made promises, China could very easily twist our arm very hard in a post Obama Presidency or just politely ask the current Obama Presidency to get this done. The downfall of this would be that with China having such a large trade surplus and the US having such a large trade deficit that this would collapse the world economy. The upside to this is we might get bailed out like Greece, but be prepared for riots in the streets by union members because they lost their pensions.

Scenario 3:

With the value of the dollar dropping so rapidly and the inflation causing the cost of comodoties to go up this could give us a double dip recession that we may not be able to dig ourselves out of. If the US dollar collapses and the Euro being so weak and the US being 40% of the worlds trade deficits this could still lead us into a global catastrophy. This would open the door to a global currency and even possibly a global government because the general public of the world would sacrifice liberty in exchange for security like the US has currently shown it is willing to do just like after 9/11.

Scenario 4:

People like Glenn Beck and ultra conservatives could force the Federal Reserve to show them their books. By showing their books there is a possibility that the Federal Reserve could show at minimum double the amount that they have printed. This would cause such a major amount of hyperinflation that the American economy could collapse, the Euro could collapse, and then the Chinese could have a total collapse of their economy and create such a global catastrophy that would put us in the “Dark Ages”.

The bottom line with all these scenarios is that the US is devaluing its dollar so much that it is risking the collapse of the US economy which in turn will create a domino effect for the rest of the world because we are so intertwined. We will recover in due time, but we might see the dawning of another “Dark Age” for the world. Will this be equivalent to the world rebuilding itself from the ashes?

I watched a documentary on the History Channel about the “Dark Ages”. I was so upset by it I had a hard time finishing it. Once barbarians conquered the capital city of Rome’s Western half the world was sent into the “Dark Ages”. Barbarians in all corners of the old western empire were jockeying for domination. The world only knew one world power, Rome, and so they figured they would conquer as much as they could to create their vision of world domination. Unfortunately the “common man” was stuck in the middle of this. Technology, arts, and many other vital civilization evolutions were put on hold just to be able to whether the turbulent times. Once there was order, a new barbarian leader rose to conquer the stabilized society. This could very well be what happens here in the US and worldwide if we keep going in the direction that we’re going in.

In conclusion, the US Dollar is so devalued that over the next several months inflation will set in. Companies like General Meals and McDonalds are already stating that the commodities that they use to make their products are more expensive than what they are charging in the market causing them to raise prices. Once inflation sets in we should expect to see the double dip recession that some people have talked about. Once in the double dip recession we’ll continue to borrow because the Federal Government will want to give some sort of stability. One of two things could happen. We could have another civil war because of the imminent collapse of the dollar or we finally wake up and dig ourselves out of this problem. I think civil war will end up being the way we go because American’s have shown they just don’t care anymore. As my wife says “American’s just don’t stick to things and see them through anymore”, so the easy way out would be civil war. We have the potential to really send civilization back as much as a 100 years if any one of the 4 scenarios play out. The question is starting to become not “if” but “when” our economy collapses because Pelosi and Obama have singlehandeldly spent up to $6 trillion over 4 years which is almost a 50% drop in the value of our currency in just a short period of time.



Sources:

http://www.businessinsider.com/henry-blodget-china-terrified-us-will-default-on-debt-2009-3
http://www.nakedcapitalism.com/2009/01/ny-times-china-cooling-on-us-debt.html
http://www.guardian.co.uk/business/2010/may/27/stock-markets-buoyed-china-eurozone-debt

http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=7081
http://www.bcheights.com/marketplace/china-refuses-to-revalue-currency-despite-intense-u-s-pressure-1.1124754
http://wpblog.ohpinion.com/2010/09/25/u-s-going-beyond-polite-requests-to-get-action-on-yuan-revaluation/
http://www.brookings.edu/opinions/2010/0222_china_debt_burtless.aspx
http://www.cbsnews.com/8301-503983_162-4864398-503983.html
http://hubpages.com/hub/Why-is-China-so-Important-to-the-US-Economy
http://www.marketoracle.co.uk/Article21510.html

http://mpettis.com/2010/05/don%E2%80%99t-misread-the-trade-implications-of-the-euro-crisis-for-china/
http://mpettis.com/2010/05/don%E2%80%99t-misread-the-trade-implications-of-the-euro-crisis-for-china/
http://www.marketoracle.co.uk/Article21058.html
http://www.wsws.org/articles/2010/nov2010/pers-n05.shtml
http://weakonomics.com/2010/02/01/what-happens-if-congress-doesn%E2%80%99t-raise-the-debt-ceiling/
http://patriotsforamerica.ning.com/forum/topics/what-happens-if-the-gop
http://www.tradingonlinemarkets.com/Articles/Economics/debt_to_gdp_ratio.htm
http://www.nuwireinvestor.com/articles/what-happens-if-the-yuan-replaces-the-dollar-as-the-53636.aspx
http://economics.about.com/od/foreigntrade/a/trade_deficit_h.htm
http://epi.3cdn.net/28e51781e452fee9d9_3um6ii54c.pdf
http://mediamatters.org/print/research/201010190002
http://www.wnd.com/?pageId=114759
http://www.naturalnews.com/030309_food_inflation.html
http://www.naturalnews.com/food.html
http://inflation.us/foodpriceprojections.pdf
http://www.independentlivingnews.com/pdf/Final_days_of_dollar.pdf?utm_source=Publicaster&utm_medium=email&utm_campaign=1008%20-%20Initial%20Welcome%20Email%20-%20FDoF%20Survey&utm_term=The+Final+Days+of+the+Dollar%3a+10+Last-Minute+Preparations+You+Need+to+Make+Now&AID=2334
http://www.youtube.com/watch?v=4ljqUXVbZR0
http://www.doughroller.net/news-analysis/food-prices-are-soaring-everywhere/
http://online.wsj.com/article/SB20001424052748704506404575592313664715360.html