The real Big A - the writing on the wall

by Nickolas 16 Replies latest social current

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  Nickolas

  What's happening geologically recently seems to be bringing out the sandwich boards and doomsday proclaimers. Signs of the end of the world? Not likely, at least not in the scriptural sense. Don't expect the four horsemen to show up in your town anytime soon, but you might want to prepare for a different kind of apocalypse, especially if you live in the United States of America.

  A few months ago, I participated in a thread started by leavingwt. This one. http://www.jehovahs-witness.net/members/politics/202957/1/The-Tax-Cut-Endgame

  In it I expressed a concern that the US was heading for a currency crisis. I remain concerned and welcome feedback and pushback. Take the gloves off, I'm a big boy and I really want to be proven wrong. Here are the facts as I see them.

  Almost every state in the US is on the verge of bankruptcy. Add to that group dozens of major cities.

  US national debt is $14 trillion and rising over $4 billion per day. The US has borrowed an impossible amount of money that seems can never be repaid (even if the incomes of Americans were taxed at 100%, the US could not pay off its debt).

  Household debt is lower this year than last, but still stands at close to $13.5 trillion. This is the result of reduced spending when most economists are saying that spending is the key to economic recovery in the US. But to increase spending means to increase debt, which puts further pressure on the value of the USD.

  When Japan reduces its business tax by 15% this year, the US will have the highest corporate tax rates in the world, which will continue to drive business elsewhere and increase unemployment.

  The US is monetizing its debt by printing money, which is contributing to the ongoing devaluation of the USD.

  All of the world's major financial players are preparing for an alternative to the US dollar as the world's reserve currency. Once this happens, economic theory holds the US might reasonably expect to experience high levels of inflation because everything they buy, from Arab oil to South American produce, will be denominated in something other than USD as they are now.

  The US government's ability to respond to crises like Hurricane Katrina does not bode well for responding to a general economic crisis.

  Does anyone else see the writing on the wall? To me it reads "The US dollar is in big, big trouble" and the US is poised for a currency crisis that will change everything, and not in a good way.

  Push back.
• 

  LostGeneration

  Personally, I'm a lot more worried about what you describe than any sort of intervention by some skydaddy.

  I've prepared myself a bit by diversifying retirement accounts into foreign companies and a little gold and silver. I really don't know what else I can do to prepare for something like you describe.
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  InterestedOne

  Is there anything similar in the past to compare this to?
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  villabolo

  "I've prepared myself a bit by . . . a little gold and silver."

  I hope you have physical possession of the gold and silver, otherwise it can be easily confiscated.

  "I really don't know what else I can do to prepare for something like you describe."

  I strongly recomend a two month supply of regular canned foods and at least a six month supply of long term storage foods. Grains packaged in Nitrogen will last 20-30 years at room temperatures. Stock up on basic daily use items-at least a years worth. That should be a hege against hyperinflation or other severe social problems.

  Villabolo
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  villabolo

  InterestedOne: "Is there anything similar in the past to compare this to?"

  Expect a variety of problems other than the monetary ones. That means that, no, there is nothing in the past that will remotely resemble the multiple problems that we will go through in the next 10-20 years.

  Villabolo
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  slimboyfat

  Nickolas I also think there is trouble ahead. The debt problem of western nations has not been solved, it has merely been shifted from the banks to nation states. When the largest nation states in the world get into trouble there will be no one to bail them out. We made a terrible mistake handing over all our future earning potential to fraudster bankers rather than allowing the banks to go bust. And through it all the bankers and the billionaires have claimed even more wealth for themselves. This will surely result in trouble.
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  Nickolas

  I've prepared myself a bit by diversifying retirement accounts into foreign companies and a little gold and silver. I really don't know what else I can do to prepare for something like you describe.

  Sound strategy. If you look to history, governments will try to control the financial flexibility of its citizens in order to control the financial flexibility of the nation. The US gov't made it illegal to own gold bullion not that long ago - 80 or 90 years ago - and it may be expected to do something similar if times get tough. So, as villabolo suggests, getting physical ownership of your assets seems a logical move. You also need to protect your liquid assets, as you have apparently done already. It may sound unpatriotic, but moving some of your money to a more stable foreign economy, like to Canada and the Canadian currency for example, might make sense (don't be surprised if you see moves to restrict this type of transaction in the near future.) But the Canadian dollar is a bit player in the world and will not be the new world's reserve currency. It may be the Euro, which is also just a little sick these days from EU bailouts, or it may be the Yen, but Japan has its own problems, or it may be the Yuan - this is my personal bet. China's economy is just waking up.

  I've benefited by sustained market bulls only to be hammered a number of times by meltdowns, worst was 2008 when some of my investments declined 70%. I''ve got all of that back but I can't figure out the substance behind the current uptick, what's sustaining it, and I wonder if it's an illusion.
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  crazyblondeb

  the big A is on the way....yawn!!

  where have we heard this?
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  Satanus

  I could hold some of yours' loot(s) for yas. I got a lot of socks that i could fill up. Plus, since it's so cold up here, in the great white north, your moneys would stay crisp and cool.

  S
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  Nickolas

  You are in the UK I believe, slimboyfat, so you have already experienced what I am talking about. The pound sterling used to be the world's reserve currency. When was it your government devalued the pound? Couple of times, I think. Big one was just after WW2, then again in the mid 70's, when Britain experienced something like 25-30% annual inflation. Is it not surprising that people in other countries think they're immune?

  Can you imagine 25% inflation in the US?