Monday, July 18, 2011

What To Look For In Advance Of The Big Collapse

I'm a bit short on time today and a commenter asked my views in the comment section about what "signs" in the market to look for in order to try and anticipate a systemic/dollar collapse in this country.  He was referencing a view by "Another," an anonymous individual who started writing views on the global financial system back in the late 1990's.  This person and a "friend of Another" were mapping out the demise of fiat currencies and the eventual collapse of the global financial system long before most of us even knew how to spell "gold" and "banking cartel."  Anyway, you can read the inquiry comment in the comment section of yesterday's post and I kind of like what I wrote in the comment section in response, so I polished up that response and decided to post it:

I'm not sure if there will be definitive signs that will tell those watching for them that "it's over." Right now everything is in a slow-motion state of collapse dating back to probably the 1970's "oil crisis," but really to the closing of the gold window. Since then, starting with the junk bonds/S&L crisis, we've have successive bubbles and blow-ups, each one getting bigger and more vicious - each one a catalyst to transfer massive wealth from the middle class to the political and business elite.

I truly believe Clinton could have turned things around after the Long Term Capital collapse, but Rubin and the other puppet-master bankers/oil barons/defense industry magnates already had their hooks too deep into the Oval Office. Ironically, and I'm not the only one out "there" to remark on this, it was during the populist Clinton's Presidency that the extreme and blatant corruption we see on Wall Street and DC seems to have accelerated. Hell, Clinton himself barely had a pot to piss in when he entered the White House and now he's worth $100's of millions. I don't recall that ever happening to Harry Truman...You think that Clinton "self-made" that wealth? LOL

In terms of predicting "THE Event," I dunno. How many really wealthy people in Germany with billions in marks in the bank on November 13, 1923 thought they would wake up on November 14 to see their paper wealth literally incinerated? Surely "insiders" were looking for signs that the mark would collapse. The revaluation was 1 billion to 1. On November 13, 1923 if you had a billion marks in the bank when you went to bed, the next day when you woke up you had 1. Although the process of collapse is accelerating, the actual "Event" historically seems to happen all at once. And you have to be prepared a long time in advance in order to set up your plan of protection and you have to be prepared for the insanity to drag on a lot longer than you truly believe that it can.

I think this situation has more time to play out and I've stopped putting out timeframe predictions. For sure our country won't last as it is until 2020, probably not even 2015. But then again, I thought in 2002 that where we are now is where would be by 2006/7. They have run out of assets to bubble up, so now I think you'll eventually see wealth confiscation via retirement fund confiscations in the form of exchanges for "Government guaranteed" Treasury annuities.  In fact, I said back in 2002 that our system would not collapse until the ruling elite (bankers/politicos) had swept every last crumb of middle class wealth off of the table. That "last crumb" of wealth most people have left is their retirement assets.  We will also see the Government implement stronger totalitarian control over the citizens (that's happening already).

Think I'm nuts? The concept of the Government taking over the retirement fund system has already been discussed in Congress, including an academic presentation to Congress back 2008. They'll need those assets to pay for the Government spending and they'll issue Treasury bonds in exchange.  Most States have already done that with State employee pension plans and the Federal Government has already done that with the funds in the Social Security Trust and they started doing that a few weeks ago with the Federal pension assets (to the tune of a couple hundred billion).  Expect that gameplan to eventually expand into all retirement asset plans public and private.  As they lose control of the ability of the global financial system to finance the Government and lose control of the value of the dollar and the value of precious metals, the Government will impose its political will more forcefully on the citizens. The ability to make all of this happen has already been legislated via the Patriot Acts (1 and 2), the Homeland Security Act and the Detainee Bill.

The only way to avoid this is to leave the country, which people are doing in record numbers every year. Owning gold and silver will help a lot if you stay here, because you want to move as much as you can out of paper assets and out of "the system" and into gold and silver and out of the Government's ever-expanding "reach."  We could well see the black market scenario to which Another refers because once the dollar/system actually collapses, there won't be much gold/silver for sale, as those who don't have it but have goods to offer will only accept gold/silver in exchange and those who do own it will hold onto it to trade for things they need.  In the best-case scenario after the collapse, a new system of gold/silver-backed currency will quickly fill in the "vacuum" left by the collapse and that will help restore a more "normalized" system of commerce.  The worst case scenario?  Read "The Road" by Cormac McCarthy.

Before that, I bet we see at least $10k gold and $500 silver...


  1. Can you show me a credible source for your estimate of President Clinton's net worth? Or does your figure come from what you imagine is sitting in accounts outside the jurisdiction of The United States?

  2. (Dave)

    re Clinton net worth:"try google. I've seen several articles in the past that reference his net worth. He made a pact with the devil AND he's big buddies with Ron Burkle, who is grocery store magnate and notorious flamer. I know Burkle from my junk bond days when he was building his grocery store empire. But Clinton has his fingers all kinds of "wealth pies" that he set up when he was the Prez.

  3. "A bubble That Broke the World"
    by Garet Garrett.

    No, this isn't a book that was written to discuss the economic mess we are in now, it was written way back in 1932 but the similarities are striking.

    A copy is available for free from Mises, but it is a looong pdf file so be prepared for a wait.

    If you choose to read this book, you will be thinking to yourself "Good Grief! The same exact things that happened back then are happening right now! Its like a remake of a 1930's horror movie only with more violence and gore"

    Loans were made to insolvent countries so these countries could keep buying products, because if these insolvent countries crashed trade would dry up, jobs would be lost, money would be lost, etc.

    It was, for wont of a better term, a murder-suicide pact, if one nation went down all went down (sound eerily familiar?)

    Back then, The US and Europe had their own pre-QE bailouts, all relying on more and more debt to keep things together.

    Something from the book to ponder-

    "...the German government itself, to prove Germany's incapacity to pay, publicly declared that reparations had been paid only by borrowing and that if Germany could not continue to borrow she could not continue to pay." Page 28

    A Future statement from Greece, Spain, Italy, The US?

    As to the Question, when did the wheels start to fall off the Wiemar Wagon, 1923 was already too late to move into gold for financial protection.

    About halfway down from the above link you can see for yourself how many marks were needed to buy gold

    Jan 1921 - 1,349.00 Marks bought one ounce of gold
    Sept 1921 - 2,175.00 Marks bought one ounce of gold
    Jan 1922 - 3,976.00 Marks bought one ounce of gold- Gold almost tripled from a year earlier

    By Oct 2 1923 a German citizen needed
    6,631,749,000.00 Marks to buy an ounce of gold, if anyone was even willing to exchange gold for paper.

  4. Clinton and his genius wife had a net worth
    Less than 700k when he took office. Last time
    I checked they were worth between 100 and 200
    Million. Not bad for a guy with a narcissistic
    Personality disorder who doesn't inhale.

  5. "I bet we see at least $10k gold and $500 silver..."

    Would that mean my favorite loaf of wholesome, organic, non GMO/Radiation, gluten free, unsalted Bread will be somewhere between $50 to $60?

  6. (Dave)

    LOL - a wheelbarrow would be a good buy right now...

  7. If the government mandated that all IRAs had to be in Treasury bonds wouldn't that mean a massive amount of stocks would have to sold?

  8. "The Road" ! Krikey Dave. In June, I watched the movie with Vigo Mortenson alongside my 14 year old son. It's haunting me still. Sometimes its hard to focus on the penny ante petty crap we do to earn a living if you even imagine "The Road" in your future.

  9. (Dave)

    Anonymous: I don't know what the Govt would do in terms of managing the equity side of the situation. What I believe is envisioned is that the Govt would swap you out of your retirment plan in exchange for a guaranteed to annuity stream at retirement and that Treasuries would be issued to fund the annuity payments. Technically, it wouldn't be "printing" money because the Government would be exchanging one asset for another. The massive pool of funds would then be sub-contracted to Wall Street for them to have fun with an earn fees by "managing" it on behalf of the Government...

  10. Iran Opens Oil Bourse - Harbinger of Trouble for New York and London?

    Enter the Kish Exchange.

    China's Ambassador to Tehran Yu Hung Yang, addressing the Iran-China trade conference in Tehran on Monday, said that the value of the two countries' trade exchanges surged 55 percent during the first four months of 2011 over the same period a year ago to $13.28 billion and further predicted that the figure would surpass $40 billion by the end of the year.

    So much for sanctions, eh?

    So, while Washington prepares to commit political hara-kiri, Iran is preparing to take away a little of the capitalist glow from New York and London. If the Chinese decide to start paying for their Iranian purchases strictly in yuan, expect the trickle away from the dollar in energy pricing to become a stampede. That ought to give Washington politicos an issue to think about besides gay marriage.

  11. Gold v. Money

    So who are we fooling? Just those who prefer to be fooled! This is why gold is now rising. So stop the stupid gold standard stuff that is about as realistic as a balanced budget amendment. Just buy gold and enjoy the hedge. We can’t fix the system for there is too much disagreement. It has to collapse!

  12. And the world says " we had enough "

    Foreigners net sellers of U.S. assets in May


  13. The Dollar, Gold And The Quality Of Money

    A poll conducted by Rasmussen last week indicates that the American people are losing trust in the Federal Reserve and in the future value of the dollar. Fifty percent of those polled reported they are “very concerned” about inflation, and 79% said they were at least “somewhat concerned.”

    Is gold money? Technically, no, in that gold does not circulate as a medium of exchange. But, as trust in the paper dollar continues to erode, and the incompetence of the governing class to manage the economy becomes more evident by the day, there is growing interest in and support of making the dollar as good as gold.

    The question: “Is gold money?” terrifies central bankers because it highlights their inability to provide a currency that is better than one whose quality is guaranteed by a fixed rate of exchange into gold. Between Aug. 15, 1971 — the day President Richard Nixon suspended the promise that a dollar was worth 1/35th of an ounce of gold — and Feb. 1, 2006 — the day Bernanke was appointed Fed Chairman — the dollar had fallen to 1/569th of an ounce of gold. Today, it is worth a teeny tiny 1/1600th of an ounce of gold.

  14. There was a "quickening" of this collapse begining about 2007 and another sudden surge in 2009. Just look at the changes in budget deficits since then. There is a ten-fold increase in deficit between 2006 and 2010 or 2011. This has never happened before. Our economy is looking at the end-times.

    Here is what it will look like: Friday evening there will be a bank holiday and ATM's, credit/debit cards will be locked out and other sources of money will be closed. The president will come on every TV channel and begin a short speech "my fellow Americans..." where he blames Bush, tells us our system is broken/collapsed and he and his advisors have worked as hard as they ever have in his life to fix it. In a few days/weeks the banks will reopen and you will be allowed to exchange your "old" dollars for NEW dollars. You will be limited to exchange no more the $300 and any more then that will require a tax and or confiscation of your money. The NEW dollars will be worth 10 of the old dollars. And by the way you will be restricted to withdrawing no more then $200 of the NEW dollars per month from your bank accounts.
    The grocery stores will be sold out by end of day Saturday and riots will begin Saturday night. After that everything will get worse...

  15. (Dave)

    Probably not a bad snapshot of what the collapse will look like - I'm just not sure Obama will be the Prez when that happens.

  16. As far as the debt ceiling is concerned, in the end the bankers and the pols will get the gold and the taxpayers will get the shaft.

  17. Ron Paul: “We Will Default Because The Debt Is Unsustainable”

    “When a country is indebted to the degree that we’re indebted, the country always defaults. We will default because the debt is unsustainable,” Rep. Ron Paul (R-TX) said on the House floor today.

    “If we don’t understand this, this default will not be because we don’t send out the checks. We will send out the checks. It will be defaulted on because people will get their money back, or they will get their Social Security checks and it won’t buy anything.”

  18. If it is in the Federal Register and it is, Feb 2008, goober seizing private retirement accounts and throwing you a guaranteed payout goober bag of shells each month when you are half in the grave is what you should expect, maybe pretty soon. goober always takes good care of its sheeple.

  19. What suggestions do you have for "leaving the country"? Canada? Australia? Everyone has their problems, and if this happens, I’m not sure what other options there will be.

  20. (Dave)

    I believe it will be bad everywhere. You want to find a country where you think the Govt is going to be least totalitarian. I have been reading that Uruguay is considered to be the "little Switzerland" of South America. That refers to the way Switzerland used to be before the banks took control and Switzlerand de-linked the Swissy to gold. The climate is good there, it has beaches and skiing and a lot of Americans and Europeans are moving there. I may check it out this winter.

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