Friday, November 02, 2012

Financial Crunch! Economic Collapse! (Part 15)

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Chris Hedges "Brace Yourself! The American Empire Is Over & The Descent Is Going To Be Horrifying!"
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What Does It Mean to “Prepare for the Economic Collapse”?
Daisy Luther
The Organic Prepper
December 22nd, 2012
Last week I wrote an article in response to the media’s vilification of preppers in the aftermath of the horrible tragedy in Newtown, Connecticut. The article was quoted in an article on Yahoo.com, to my great astonishment, and that is when I saw how little most people understand about prepping. You can see in most of the 4492 comments the article received that many folks just don’t “get it”.
My inbox was filled with a barrage of hate mail and a number of people felt compelled to leave angry (and rather ignorant) comments on my website. I got messages from people that called me “batsh*t crazy”, messages from gun control advocates, messages from people who directly blamed me and all other preppers for the massacre, and even one particularly hate-filled email from a person who said “I hope that your kids are killed at the next school shooting.
All of this leads me to reconfirm my belief that people sincerely do not understand why we do what we do, and that ignorance leads to fear.
People fear what they don’t understand and hate what they can’t conquer. ~ Andrew Smith
If you go back through history, the “visionaries” or “wise ones” were always mocked at best and feared at worst. They were cast out of society to live alone at the edge of the village; children would sneak onto their property to show their bravery; they were burned at the stake as witches and heretics. Anything the larger percentage of people does not understand is treated as something evil and frightening.

Am I saying that preppers are all visionaries and sages? Not in a mystical “Joan of Arc” sense – but I am saying that preppers are willing to see the writing on the wall and search for a deeper understanding.

Many preppers are preparing for an economic collapse and the subsequent social collapse that will be close behind.
If you don’t think this is realistic, then you aren’t paying attention to the world around you.
People have this image of hunger – they see it as the skeletal dark-skinned children in some third world country, bellies protruding as malnutrition sets in.
But the face of hunger and poverty today is as close as your next door neighbor. Millions of North Americans can barely afford to put their next meal on the table. They are living in their cars, if they’re lucky, and without shelter if they are not so lucky.
For many people the economic collapse has arrived. Their “end of the world” event has already occurred in the form of a job loss, the foreclosure of the family home, or an illness that has caused such massive personal debt that there is truly no way out of it.
Less than 60% of Americans who are of age to be in the work force have a full time job. When you tally that, it means that more than 100 million people are out of work. More than 100 million people in the United States have no jobs. For more than 100 million people, the economic collapse has arrived in full force.
Meanwhile, as people all over the globe (think Greece, Italy, Spain, Argentina, the UK) struggle with high rates of unemployment, the prices of everything have gone up. People are struggling to keep such simple necessities as running water and electricity. Grocery costs have skyrocketed – the World Bank released a statement that global food prices increased by 10% in ONE MONTH – July 2012.

And it’s only going to get worse – the Farm Bill was blocked by the US House of Representatives, and this means that the prices will skyrocket, as farms are no longer subsidized. This will cause the industry to revert to the Agricultural Act written in 1949, meaning that the government is obligated to purchase dairy products from farmers at a cost that is twice what they are receiving now – this means that the price of a gallon of milk may skyrocket in January to as much as $8 per gallon. This is not an endorsement of government subsidies – this is a simple cause and effect observation to explain the reason people will be shocked when they go to the dairy case come January.

The price of food is increasing rapidly and dramatically. Mac Slavo, of SHTFplan, wrote,
“We’ve seen what happens in countries where the populace is forced to spend 50% or more of their earned income on food. Despite how the media portrays it, the riots we’ve seen in the middle east, Greece and Spain have been largely fueled by cost increases in food and the inability of individuals to provide the basic essentials for their families.
Americans have been, for the most part, immune from these pressures thus far. But the social safety nets are very quickly becoming overburdened and prices at grocery stores are rising consistently and without pause.
With the consumer economy coming to a standstill, continued central bank monetary easing, job losses and wage reductions, and the urbanization of millions of people, it is only a matter of time before Americans are forced to spend 50% or more of their paychecks just to stay alive.”
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The Global Food Crisis & Bernanke's Recipe for Disaster
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When you read the above information, the case becomes clear for stocking a long-term food storage pantry. It makes personal economic sense to purchase commodities like grains for your family at today’s prices to be consumed when the price skyrockets even further.
It seems, from some of the comments I’ve seen and received from non-preppers, that stockpiling food is acceptable, if somewhat eccentric. But being able to defend that food is strictly out of the question.
For example:
 “I have no problem with anyone stockpiling water and food for their ability to prolong their agonizing but inevitable death should this generation experience the “end of the world”. Unless you have a new planet in your back pocket that is complete with a an oxygen supply, food and water, your efforts to live past the rest of us will be the least enjoyable time spent here on earth. I believe it is the preppers’ need for stockpiling ammunition that is the bizarre twist on these so-called survival skills that is the “killer”. Pardon my pun. You see, if your survival depends on killing others than the world in which you will exist will not be worthy of keeping.”
They are delusional anti-social people. If you try to reason with them, you are attacked in the forums. You try to point out to them the truth, they slander you. These “preppers” should ALL be arrested , their food stockpiles distributed to the homeless, their guns conficated [sic]. Start with the people on the survivalist blogs.”With all due respct [sic], many people are missing the point. Our Constitution garentees [sic] us the right to bear arms, but not to stockpile an arsenal. You folks who stockpile food and supplies are wise. It is the guns and huge quantities of bullets that are the problem.Guns dont [sic] kill people. People who have no friends and have basements jammed full of ammo and canned goods kill people.You know…this is just a bunch of gun nuts going out and buying all the guns they can get before the laws become stricter. Just a bunch of weak people living in fear of nothing. I choose not to live in fear and if the apocalypse comes…oh well. Sure, I’ll stock up on food when a blizzard is in the forecast…but do I have an arsenol [sic] in my basement…no. Honestly, people like peppers need to stop thinking all hell is going to break loose, and just live in REALITY. So, this leads us to the next misconception about preppers – why do many prepared individuals feel that there might be social collapse to go along with the economic collapse? Why do they feel that in the wake of a disaster that they and their families could be threatened?There are very good, well-documented reasons for this. Recent history tells us that frightened, hungry people become desperate and often violent.In the aftermath of Hurricane Katrina, CNN reported that the city was under siege.
“Federal Emergency Management Agency Director Michael Brown said his agency was attempting to work “under conditions of urban warfare.” Police snipers were stationed on the roof of their precinct, trying to protect it from armed miscreants roaming seemingly at will. Officers warned a CNN crew to stay off the streets because of escalating danger, and cautioned others about attempted shootings and rapes by groups of young men.” A similar experience occurred after Hurricane Sandy struck the East Coast in October. The unmitigated violence and looting had residents terrified, especially after dark. Via Twitter, people actively planned “looting parties” as the storm bore down on the area, according to a report by Infowars.One resident described the scene to the Huffington Post. “People are turning on each other — they’re attacking each other. Even when there’s no disaster, this building is disastrous. But after the hurricane, it just got crazy.”Unfortunately, it isn’t just in the wake of a disaster that the need for personal security is rising. As the economy plummets, violent crime is in the upswing. In 2011, the overall rate of violent crime increased by 18%. (The numbers aren’t in yet for 2012. As funding to police departments is reduced, the criminals have a larger window of opportunity. The police are throwing up their hands in defeat – they feel that they cannot protect people. In Detroit, the police department warned people to enter the city at their own risk as budget cuts result in fewer police and shorter hours of operation.
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As the economic collapse increases and more and more people are going hungry, the need for proper security and self defense will also increase in a direct ratio, particularly for those who live in highly populated areas. Desperation breeds crime.
People must educate themselves on the relationship between economic need and violent crime. Only then can they make a reasonable (and morally acceptable) plan to protect themselves and their families.
The economic collapse is not some far-fetched, end-of-the-world fantasy. It is the reality that is occurring all around us, incrementally. The collapse that has been occurring since 2008 has been one of 1000 small cuts as income goes down and expenses go up.
Ask the people in Greece whether they regret not having stocked up on food supplies when those supplies were abundantly available. Ask the people in Argentina whether they feel the need to be armed against roving gangs and home invaders - violent crime increased by 35% in one year. One study went so far as to call property crime a tool of redistribution: ”Overall, these results suggest that property crime has been used as a redistributive tool for the poorest to compensate for their impoverishment during the last decade and in particular during the ultimate crisis in Argentina.”
This stuff is not fantasy – I have provided links to support every fact I have mentioned in this article. Hunger, cold, crime and fear are the daily realities in many countries that once enjoyed a similar standard of living to that of the average North American. That debt-based standard of living is unsustainable, though, and you must be able to connect these trends with what is happening in your own country in order to see the need for preparation.
For those who say it is selfish for me to plan to take care of my responsibilities, I respond that it is selfish of you to expect me to take care of your responsibilities. You have the same opportunities that I do to prepare. I am far from wealthy (our income is actually below the “poverty line”) but I make room in my budget by eschewing foolish expenditures like twice-yearly vacations, new cars and the latest I-gadgets.
I don’t live in fear – I live in security, knowing that through my personal responsibility, my trust in my own instincts and my faith, I have done everything possible to protect my family from poverty, hunger and crime. If you aren’t currently prepared, I hope that the facts and statistics I’ve provided cause you to consider doing the same thing.
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Pantry
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Delivered by The Daily Sheeple
Contributed by Daisy Luther of The Organic Prepper.
Daisy Luther is a freelance writer and editor. Her website, The Organic Prepper, offers information on healthy prepping, including premium nutritional choices, general wellness and non-tech solutions. You can follow Daisy on Facebook and Twitter, and you can email her at daisy@theorganicprepper.ca
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A Victory for Failure
By Attorney Jonathan Emord
Author of "The Rise of Tyranny" and "Global Censorship of Health Information" and "Restore The Republic"
November 12, 2012
NewsWithViews.com
A majority of Americans chose to put in place the same dysfunctional government that has been incapable of addressing with a plan, let alone actually reducing, the largest national debt ever held by a government in the world, $16 trillion. They re-elected a President who, by their own account, has failed to tackle the two most important issues facing the nation: the economy and the debt. They re-elected a President who has offered nothing to reduce annual deficits exceeding $1 trillion into the foreseeable future, promising to saddle the United States with a $20 trillion plus national debt by the time he leaves office in 2016. They re-elected a President committed to implement a series of new tax increases that will reduce the capital held by the most productive elements of society and will increase unemployment and dependency on the dole. In short, on November 6, 2012, a majority of Americans produced a victory for failure.
If you have any money in savings or investments, if you are an employer, if you do not presently have health insurance, or if you want to start a business of your own, get ready. You are about to experience an array of tax increases that will take from you everything you hoped you could save, invest, or use to expand and hire new employees.
By the end of December, if the dysfunctional United States government does not produce an agreement it has been unable to produce over the last four years (a decent bet), the Bush era tax cuts embodied in the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003 will expire in whole or part. If allowed to expire in totality, the loss of that tax relief will produce the single largest tax increase in American history. That would increase federal income taxes that are now 10 to 15%; that are now 25 to 28%, that are now 28 to 31%, that are now 33 to 36%, and that are now 35 to 39.6%. If Congress agrees to the President’s proposal of continuing the tax relief only for those earning less than $250,000 per year, each person earning that amount and above would suffer a very sizeable tax increase, depriving those most able of hiring new people of that opportunity and forcing many in this category to lay off more workers or put them on a part-time schedule. Those earning $250,000 to $1 million per year include owners of an enormous segment of small and medium sized businesses, the entities upon which the economy depends for the great bulk of existing jobs and for most new job creation.
As the Tax Foundation make clear, expiration of the Bush era cuts would also mean an end to indexing of the alternative minimum tax, higher taxes on capital gains and dividends, higher taxes for married couples, lower child tax credits, restoration of the estate tax, a loss in certain personal exemptions and itemized deductions for wealthy taxpayers. According to the Tax Foundation’s 2011 Tax Calculator, a family of four earning a combined income of $75,000 would experience a $2,143 tax increase. A family of four earning $150,000 would experience a $4,510 tax increase. A family of four earning $300,000 would experience a $11,000 tax increase.
Lest you think those taxes are the only ones about to rise, think again and remember one word: Obamacare. The Patient Protection and Affordable Care Act is chock full of new taxes that will land atop those which occur when either part or all of the Bush era tax cuts are allowed to expire. Consider the following summary of Obamacare tax increases that I have condensed from a detailed report on those increases published by the Tax Foundation.
In 2010, certain Obamacare taxes went into effect and will continue indefinitely. Those include an excise tax on charitable hospitals which kicks in if those hospitals fail to meet certain health assessment, financial assistance, and billing and collection requirements imposed by the Department of Health and Human Services. They include a new discretionary, case by case tax increase option for the IRS if the agency deems certain lawful tax deductions and tax minimizing plans to be lacking in a substantive justification. They include a new tax on bio-fuel. They include a new tax on innovator drug companies. They include an elimination of a special tax deduction for Blue Cross/Blue Shield if less than 85 percent of premium revenues are spent on clinical services. They include a new tax on indoor tanning salons. They include reduction in tax benefits derived from health savings account, flexibile spending account, and health reimbursement accounts.
In 2013, Obamacare will raise capital gains taxes from 15% to 23.8% for households making at least $250,000. Obamacare will raise the dividend tax rate from 15% to 43.4% for those same households. Obamacare will raise the Medicare payroll tax for employees from 1.45% to 2.35% and for the self-employed from 2.9% to 3.8%. Obamacare will impose a new 2.3% excise tax on medical device manufacturers. Obamacare will increase the threshold minimum expense before medical expenses are deductible from 7.5 percent of adjusted gross income to 10 percent of adjusted gross income. Obamacare will cap flexible spending accounts at $2,500, will eliminate the tax deduction for employer-provided retirement prescription drug coverage, and will impose a $500,000 annual executive compensation limit on health insurance executives.
Obamacare promises even more tax increases in 2014 (including the individual mandate tax, imposed for failure to buy health insurance; the employer mandated tax, imposed for failure of an employer to offer health coverage; and a new tax on health insurers). Finally in 2018, the federal government will impose an excise tax on comprehensive health insurance plans.
In sum, by re-electing Barack Obama, the American people have placed the nation on an irretrievable course of decline, the dramatic effects of which are just around the corner. All sources of capital accumulation needed to restore economic growth and decrease unemployment will be taxed, retarding economic growth and increasing unemployment. The lower growth and higher unemployment will place new strains on public sector welfare programs as will Obamacare, particularly as the exchanges take on the essentially uninsurable and provide government financing for extraordinary and uncontrollable medical costs. The national debt will continue to grow by over $1 trillion a year, resulting in a national debt of in excess of $20 trillion by the time Obama leaves office. That debt will force a sizeable increase in interest payments by the federal government. At the same time grossly unaffordable entitlements will continue to be doled out without substantive reform. Pressure will mount for another reduction in the U.S. credit rating. Pressure will mount for countries like China and Japan now loaning the United States enormous sums of money to raise their rates of interest on those loans. The effect of all of this is an insurmountable fiscal and economic crisis, yielding a loss of confidence in the government’s financial commitments and in the value of the dollar.
Thus, while a majority of voters favored the existing, bloated, unaffordable, and liberty depriving federal government over a voluntarily downsized version, they will within a relatively short period of time witness an involuntary downsizing in that federal government which will impose considerable pain and hardship on millions of dependents.
As I have explained in Restore the Republic, because the current government is unsustainable by every economic measure, it will eventually collapse as those willing to provide the services offered by the government find the economic reality of the market such that they cannot affordably provide those services; as tax revenues continue to decline atop a market that cannot bear the added tax increases; and as the number of people unemployed and dependent on entitlements mushrooms beyond the ability of the government to satisfy them. The parasite of government will soon sap the last essential life’s blood from its market host, causing both to fall into ruin. Those who re-elected Barack Obama will now join the rest of us in watching the United States fall from grace. For those like me who love this country, the loss of a nation for the sake of one man, Barack Obama, is profoundly humbling, disappointing, and agonizing.
© 2012 Jonathan W. Emord - All Rights Reserved
Jonathan W. Emord is an attorney who practices constitutional and administrative law before the federal courts and agencies. Congressman Ron Paul calls Jonathan “a hero of the health freedom revolution” and says “all freedom-loving Americans are in [his] debt . . . for his courtroom [victories] on behalf of health freedom.” He has defeated the FDA in federal court a remarkable eight times, six on First Amendment grounds, and is the author of Amazon bestsellers The Rise of Tyranny, Global Censorship of Health Information, and Restore the Republic. He is also the American Justice columnist for U.S.A. Today Magazine. For more info visit Emord.com.
Website: Emord.com
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Billionaires Dumping Stocks, Economist Knows Why
Newsmax Wires
Aug. 29, 2012
http://www.fourwinds10.net/siterun_data/business/economy/news.php?q=1347980235
Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.
Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.
In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.
With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome.
Unfortunately Buffett isn’t alone.
Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee.
Finally, billionaire George Soros recently sold nearly all of his bank stocks, including shares of JPMorgan Chase, Citigroup, and Goldman Sachs. Between the three banks, Soros sold more than a million shares.
So why are these billionaires dumping their shares of U.S. companies?
After all, the stock market is still in the midst of its historic rally. Real estate prices have finally leveled off, and for the first time in five years are actually rising in many locations. And the unemployment rate seems to have stabilized.
It’s very likely that these professional investors are aware of specific research that points toward a massive market correction, as much as 90%.
One such person publishing this research is Robert Wiedemer, an esteemed economist and author of the New York Times best-selling book Aftershock.
Editor’s Note: Wiedemer Gives Proof for His Dire Predictions in This Shocking Interview: http://w3.newsmax.com/a/aftershockb/video47.cfm?promo_code=FE8A-1
Before you dismiss the possibility of a 90% drop in the stock market as unrealistic, consider Wiedemer’s credentials.
In 2006, Wiedemer and a team of economists accurately predicted the collapse of the U.S. housing market, equity markets, and consumer spending that almost sank the United States. They published their research in the book America’s Bubble Economy.
The book quickly grabbed headlines for its accuracy in predicting what many thought would never happen, and quickly established Wiedemer as a trusted voice.
A columnist at Dow Jones said the book was “one of those rare finds that not only predicted the subprime credit meltdown well in advance, it offered Main Street investors a winning strategy that helped avoid the forty percent losses that followed . . .”
The chief investment strategist at Standard & Poor’s said that Wiedemer’s track record “demands our attention.”
And finally, the former CFO of Goldman Sachs said Wiedemer’s “prescience in (his) first book lends credence to the new warnings. This book deserves our attention.”
In the interview for his latest blockbuster Aftershock, Wiedemer says the 90% drop in the stock market is “a worst-case scenario,” and the host quickly challenged this claim.
Wiedemer calmly laid out a clear explanation of why a large drop of some sort is a virtual certainty.
It starts with the reckless strategy of the Federal Reserve to print a massive amount of money out of thin air in an attempt to stimulate the economy.
“These funds haven’t made it into the markets and the economy yet. But it is a mathematical certainty that once the dam breaks, and this money passes through the reserves and hits the markets, inflation will surge,” said Wiedemer.
“Once you hit 10% inflation, 10-year Treasury bonds lose about half their value. And by 20%, any value is all but gone. Interest rates will increase dramatically at this point, and that will cause real estate values to collapse. And the stock market will collapse as a consequence of these other problems.”
And this is where Wiedemer explains why Buffett, Paulson, and Soros could be dumping U.S. stocks:
“Companies will be spending more money on borrowing costs than business expansion costs. That means lower profit margins, lower dividends, and less hiring. Plus, more layoffs.”
No investors, let alone billionaires, will want to own stocks with falling profit margins and shrinking dividends. So if that’s why Buffett, Paulson, and Soros are dumping stocks, they have decided to cash out early and leave Main Street investors holding the bag.
But Main Street investors don’t have to see their investment and retirement accounts decimated for the second time in five years.
Wiedemer’s video interview also contains a comprehensive blueprint for economic survival that’s really commanding global attention.
Now viewed over 40 million times, it was initially screened for a relatively small, private audience. But the overwhelming amount of feedback from viewers who felt the interview should be widely publicized came with consequences, as various online networks repeatedly shut it down and affiliates refused to house the content.
“People were sitting up and taking notice, and they begged us to make the interview public so they could easily share it,” said Newsmax Financial Publisher Aaron DeHoog.
“Our real concern,” DeHoog added, “is the effect even if only half of Wiedemer’s predictions come true.
“That’s a scary thought for sure. But we want the average American to be prepared, and that is why we will continue to push this video to as many outlets as we can. We want the word to spread.”
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Also See:
Financial Crunch! Economic Collapse!
(Part 1)
31 July 2008
http://arcticcompass.blogspot.ca/2008/07/financial-crunch-economic-collapse.html
and
(Part 2)
20 November 2008
http://arcticcompass.blogspot.ca/2008/11/financial-crunch-economic-collapse-part.html
and
(Part 3)
25 January 2009
http://arcticcompass.blogspot.ca/2009/01/financial-crunch-economic-collapse-part.html
and
(Part 4)
17 April 2009
http://arcticcompass.blogspot.ca/2009/04/financial-crunch-economic-collapse-part.html
and
(Part 5)
23 June 2009
http://arcticcompass.blogspot.ca/2009/06/financial-crunch-economic-collapse-part.html
and
(Part 6)
23 August 2009
http://arcticcompass.blogspot.ca/2009/08/financial-crunch-economic-collapse-part.html
and
(Part 7)
30 November 2009
http://arcticcompass.blogspot.ca/2009/11/xxxx.html
and
(Part 8)
23 February 2010
http://arcticcompass.blogspot.ca/2010/02/debt-dynamite-dominoes-coming-financial.html
and
(Part 9)
28 August 2010
http://arcticcompass.blogspot.ca/2010/08/financial-crunch-economic-collapse-part.html
and
(Part 10)
13 January 2011
http://arcticcompass.blogspot.ca/2011/01/financial-crunch-economic-collapse-part.html
and
(Part 11)
29 April 2011
http://arcticcompass.blogspot.ca/2011/04/financial-crunch-economic-collapse-part.html
and
(Part 12)
28 July 2011
http://arcticcompass.blogspot.ca/2011/07/financial-crunch-economic-collapse-part.html
and
(Part 13)
04 April 2012