Do they know something that the rest of us do not? There are tens of millions of ordinary Americans that are feeling really good about the future now that Donald Trump has won the election, but meanwhile the elite are feverishly constructing luxury bunkers at a pace unlike anything we have ever seen before. So why are so many among the elite preparing for an imminent “apocalypse” when tens of millions of other Americans are anticipating a new era of peace and prosperity? Are they smarter than most of the rest of us, or are they simply being paranoid?
Without a doubt, something is going on among the elite. Earlier today, WND published an article that discussed the fact that wealthy people “are quietly moving away from major cities” all over the globe because of concerns about security…
Widespread media reports as well as independent investigations from groups such as New World Wealth suggest wealthy people around the globe are quietly moving away from major cities because of fears of social instability. Increasing crime, terrorism and rising racial tensions have all been identified as factors driving the exodus. Even the Daily Beast reported the introduction of large numbers of Muslim refugees into Europe has made once prosperous areas fraught with danger, in the opinion of some security experts.
And just a few weeks ago a Hollywood Reporter article entitled “Panic, Anxiety Spark Rush to Build Luxury Bunkers for L.A.’s Superrich” talked about how “Oscar winners, sports stars and Bill Gates are building lavish bunkers” because of their anxiety about what is coming next. The following is a short excerpt from that article…
Given the increased frequency of terrorist bombings and mass shootings and an under-lying sense of havoc fed by divisive election politics, it’s no surprise that home security is going over the top and hitting luxurious new heights. Or, rather, new lows, as the average depth of a new breed of safe haven that occupies thousands of square feet is 10 feet under or more. Those who can afford to pull out all the stops for so-called self-preservation are doing so — in a fashion that goes way beyond the submerged corrugated metal units adopted by reality show “preppers” — to prepare for anything from nuclear bombings to drastic climate-change events. Gary Lynch, GM at Rising S Bunkers, a Texas-based company that specializes in underground bunkers and services scores of Los Angeles residences, says that sales at the most upscale end of the market — mainly to actors, pro athletes and politicians (who require signed NDAs) — have increased 700 percent this year compared with 2015, and overall sales have risen 150 percent. “Any time there is a turbulent political landscape, we see a spike in our sales. Given this election is as turbulent as it is, we are gearing up for an even bigger spike,” says marketing director Brad Roberson of sales of bunkers that start at $39,000 and can run $8.35 million or more (FYI, a 12-stall horse shelter is $98,500).
This is all very odd, because among the general population interest in “prepping” has hit a multi-year low. In fact, sales of emergency food and supplies are way down at the moment across the entire industry.
So once again the question must be asked – do the elite know something that the rest of us do not?
If they don’t, why are they spending so much time, effort and money on such extraordinary preparations?
For instance, down in Texas one group of investors is constructing “a $300 million luxury community replete with underground homes”…
An investor group is planning for a doomsday scenario by building a $300 million luxury community replete with underground homes. There will also be air-lock blast doors designed for people worried about a dirty bomb or other disaster and off-grid energy and water production.
The development, called Trident Lakes, is northeast of Dallas.
Residents will enjoy an equestrian center, 18-hole golf course, polo fields, zip lines and gun ranges. Retail shops, restaurants and a row of helipads are also in the works. For those looking to “get away,” they’ll also be able to enjoy three white sand beaches and a neighborhood spa.
Most of us could hardly even imagine such luxury, and this is yet another example of the growing gap between the ultra-wealthy and the rest of us in this country.
If you do happen to be one of the ultra-wealthy, perhaps you may be interested in purchasing one of the extremely expensive U-shaped “Earthships” that one company has been constructing for the elite…
Billionaires are buying up “indestructible” alien boltholes to seek sanctuary in during alien Armageddon or more-likely nuclear war and disaster.
The US company creating the $1.5million “Earthship” eco-structures says humans “must evolve” and insists they “will soon be a necessity” for our species “to survive on this planet.”
The bizarre U-shaped hideaways, which can reportedly survive in any climate, can be deployed to any part of the world and are self-sufficient enough to survive in isolation – during a killer virus outbreak or a radiation catastrophe.
I have to admit that I felt a twinge of jealousy when I first learned about these “Earthships”. They are completely self-sufficient, they are environmentally-friendly, and they sound like they are quite comfortable. The following is what one reporter discovered when she visited a community of these “Earthships”…
In addition to the cord-cutting power and self-sustaining water supply, each abode contains its own greenhouse. I could forage for figs, bananas, pineapple, broccoli, rosemary and chives in my fluffy socks. Or if the zombies weren’t looking, I could dash over to my neighbor’s place for supper. The Phoenix, a three-bedroom that sleeps six, dedicates one-third of its space to food production. Its tropical jungle supports parakeets and cockatiels (not for consumption) and a garden bursting with fruits and vegetables, including grapes, artichokes, lemons, melons, kale, squash, hot peppers and mushrooms that cling to a log. Chickens cluck around the back yard, which features a sunken den with a grill for coop-to-kebob meals. An indoor fishpond once contained a robust stock of tilapia before a group of guests threw a fish fry. Now, the littlest survivors swim laps with koi. For the dairy course, the staff is considering resident goats.
It sounds wonderful.
But once again, why go to all of this effort if a new era of peace and prosperity for humanity is right around the corner?
I really like what Carl Gallups had to say about this. Carl is the author of Be Thou Prepared, and this is what he told WND about the preparations that the elite are making…
“I think that the rich and elite are becoming increasingly aware of the dangerous and potentially unstable world in which we now reside,” he warned. “Massive instances of civil unrest, even in America, are becoming a very real possibility. Internal terror attacks, swelling illegal alien populations, an influx of Islamic refugees, increasing racial discord, ambushing police officers, the rule of law continually being trampled by the political elite and an almost complete collapse of trust in the mainstream media – all of this has led to widespread cynicism and distrust among the population as a whole.”
Gallups noted “the rich usually have deeper connections to reliable information and prediction sources, and most of them have the means to take immediate action.”
I believe that Carl Gallups is right on the money.
Normally I am extremely hard on the elite, but in this case I believe that they are showing much more wisdom than the general population.
So many people are crying “peace and safety” right now, and yet we are right in the middle of what I have labeled “the danger zone“.
Our world is becoming more unstable with each passing day, but there is so much apathy among the American people at the moment.
I just don’t understand it.
The self-destructive behavior that we are engaging in as a nation is a recipe for national suicide, and the warning signs are all around us, but because disaster has not struck yet most people seem to believe that the warnings that they have been hearing are not true.
Meanwhile, the elite are preparing extremely hard for an imminent “apocalypse”, and I have a feeling that they are going to end up looking like the smart ones once it is all said and done.
Did you know that almost 70 percent of the U.S. population is essentially living paycheck to paycheck? As you will see below, a brand new survey has found that 69 percent of all Americans have less than $1,000 in savings. Of course one of the primary reasons for this is that most of us are absolutely drowning in debt. In fact, the total amount of household debt in the United States now exceeds 12 trillion dollars. So many Americans are so busy just trying to pay off their existing debts that they can’t even think about saving anything for the future. If economic conditions remain relatively stable, the fact that so many of us are living on the edge probably won’t kill us. But the moment the economy plunges into another 2008-style crisis (or worse), we could be facing a situation where two-thirds of the country is in imminent danger of running out of cash.
If you are living paycheck to paycheck, you live under the constant threat of your life being totally turned upside down if that paycheck ever goes away. During the last crisis, millions of Americans lost their jobs very rapidly, and because so many of them were living paycheck to paycheck all of a sudden large numbers of people couldn’t pay their mortgages. As a result, multitudes of American families went through the extremely painful process of foreclosure.
Unfortunately, it appears that we have not learned anything from the last go around. According to the brand new survey that I mentioned above, 69 percent of all Americans have less than $1,000 in savings…
Last year, GoBankingRates surveyed more than 5,000 Americans only to uncover that 62% of them had less than $1,000 in savings. Last month GoBankingRates again posed the question to Americans of how much they had in their savings account, only this time it asked 7,052 people. The result? Nearly seven in 10 Americans (69%) had less than $1,000 in their savings account.
Breaking the survey data down a bit further, we find that 34% of Americans don’t have a dime in their savings account, while another 35% have less than $1,000. Of the remaining survey-takers, 11% have between $1,000 and $4,999, 4% have between $5,000 and $9,999, and 15% have more than $10,000.
Perhaps the most alarming fact from this survey is that 62 percent of all Americans had less than $1,000 in savings last year. So that means that this number has gotten 7 percent worse over the last 12 months.
How did that happen? I thought the mainstream media was telling us that the economy was getting better…
Look, if you don’t have an emergency fund you are in danger of losing everything. This is a point that I have been making over and over again for years, and in an article about this new survey USA Today made this point very strongly as well…
This data is particularly worrisome since the recommendation is for Americans to have six months in expenses saved in case of an emergency, such as a large medical expense, car repair bill, or losing your job. Without this emergency fund to fall back on, millions of Americans could be risking financial disaster.
As the publisher of The Economic Collapse Blog, people are constantly asking me what they should do to get prepared for what is coming.
The number one thing that I always suggest is to build up an emergency fund.
In a chaotic situation it is always hard to anticipate accurately what is going to happen, but without a doubt we are all going to need to continue to pay our bills and to buy things for our families during the next crisis.
Yes, someday the U.S. dollar will become rather worthless, but until that happens you are going to need to continue to put a roof over the heads of your family and to put food on the table.
And you are going to need money to do those things.
Some time ago, the Federal Reserve also found that a large percentage of Americans are living on the edge of financial disaster. They discovered that 47 percent of all Americans could not even come up with $400 to pay for an unexpected emergency room visit without borrowing the money or selling something that they own.
If you can’t even come up with $400 you are really hurting, but that is the status of about half the country these days.
We are continually being told that the economy is strong, but that is simply not the truth.
In fact, it turns out that the period from 2005 to 2015 was the worst period for per capita real GDP growth in modern American history. The following comes from Zero Hedge…
- Growth was unusually strong in the 1960s and early 1970s. In every year from 1966 through 1973, per-capita income was up between 30 percent and 40 percent from a decade earlier. Thus, it’s not surprising that many Americans recall this as a great period for the nation’s economy.
- In every year from 1984 to 2007 — a period that economists call the Great Moderation, because of the way both growth and interest rates stabilized — per-person income was up between 20 percent and 30 percent from a decade earlier. That’s ample reason for Americans to view this as a good period for the economy.
- Cumulative per-person growth from 2005 to 2015 was lower than in any prior decade in the sample. That certainly helps explain why many Americans are unhappy with the nation’s recent economic performance.
And as I repeat over and over, Barack Obama is on track to be the one and only president in all of American history to never have a single year when the economy grew by at least 3 percent, and he has had eight years to try to accomplish that feat.
Why doesn’t Donald Trump ever bring up that amazing fact? I would think that he could get a lot of mileage out of that number.
At this point, nobody can deny that the middle class is shrinking. 61 percent of all Americans lived in middle class households in 1971, but now the middle class makes up a minority of the population for the very first time in our history.
Back in 1970, the middle class brought home approximately 62 percent of all income, but today that figure has plummeted to just 43 percent.
Those that are still doing well often dismiss those that are struggling by barking out such phrases as “get a job”, but the truth is that getting a good job is not so easy these days.
The most recent statistics show that there are 7.9 million Americans that are considered to be officially unemployed. When you add that number to the 94.1 million working age Americans that are considered to be “not in the labor force”, you get a grand total of 102 million working age Americans that do not have a job right now.
And just because you do have a job does not mean that everything is okay. As I have discussed previously, 51 percent of all U.S. workers make less than $30,000 a year according to the Social Security Administration.
Everywhere you look things seem to be getting worse and not better. Not too long ago I documented the explosion of tent cities all over the country as poverty continues to rise, and I discussed how one study found that some young women in our impoverished inner cities are so desperate that they are actually trading sex for food.
Sadly, it isn’t just a few hard cases that we are talking about. Even in areas of the country that are supposed to be “doing well” we are seeing record-setting poverty numbers. For example, it was recently reported that the number of New Yorkers sleeping in homeless shelters just set a brand new all-time high, and the number of New York families permanently living in homeless shelters is up 60 percent over the past five years.
If things are this bad during an “economic recovery”, what are they going to look like once the economy really starts imploding?
And considering the fact that almost 70 percent of the population has virtually no savings, could our nation handle an extended economic downturn that may be even worse than what we experienced in 2008 and 2009?
As a nation we truly are living on the edge, and it isn’t going to take very much at all to push us into oblivion.
Have you ever come away discouraged after trying to talk about prepping with friends or family members that just don’t seem to be interested? Over the years, I have heard countless excuses from people for why they aren’t getting prepared for what is about to happen to America. Some of the excuses, like a lack of money, are definitely legitimate. But in many other instances, the objections don’t seem to make a lot of sense. In America today, most people let others do most of their thinking for them. And in general, our political, religious and cultural leaders are telling Americans that there really is no reason to be overly concerned about the future. They assure us that they have everything under control, and that life is only going to get better in the years ahead. Bad beliefs lead to bad decisions which in turn lead to bad actions, and most Americans have chosen to believe what the elite are telling them at this point. As a result, only a small fraction of society is getting physically, mentally, emotionally and spiritually prepared for the exceedingly hard times that are rapidly approaching. The following are 53 common excuses that people like to use for not prepping…
1. “Obama fixed everything that was wrong with America”
2. “When Hillary Clinton is elected she will put this nation back on the right track”
3. “Donald Trump will make America great again”
4. “I don’t have to prepare because the rapture is going to happen before anything really bad happens to this country”
5. “Everybody told me that the world was going to end in September and that didn’t happen”
6. “I don’t have enough money to buy emergency food and supplies”
7. “I’m too exhausted after working hard all day to do anything else”
8. “There is never enough time, and I would rather spend my precious free time doing something else”
9. “The U.S. economy is the greatest economy in the history of the world – there is no way that it could ever possibly collapse”
10. “Whenever we have had a major economic downturn in the past we have always recovered”
11. “Things are never going to get THAT bad”
12. “When things fall apart the federal government will take care of us”
13. “I am going to spend my extra money on fun rather than on fear”
14. “While you guys are sitting on stockpiles of expired food, I will be counting all of the money that I made in the stock market”
15. “When disaster strikes I will simply steal food from everyone else that has been prepping”
16. “The people at the Federal Reserve are very highly educated and they know precisely what they are doing”
17. “Wal-Mart will always be there when I need it”
18. “I’m too lazy to get prepared”
19. “Preppers don’t have a positive mental attitude”
20. “It is anti-faith to get prepared for an economic collapse”
21. “If the economy does collapse, I will just go on welfare”
22. “Nobody can get prepared for every possible scenario, so why bother?”
23. “I would rather save money for retirement”
24. “Obama told me that anyone that says the economy is heading for hard times is just peddling fiction”
25. “The stock market always rebounds to new highs after every crash, so why worry?”
26. “I don’t have room to store anything at my place”
27. “Prepping is something that crazy people do”
28. “I’m not a conspiracy theorist”
29. “I am afraid that all of the food that I store is going to go bad”
30. “All of the people that got freaked out about Y2K look really foolish right about now, don’t they?”
31. “Instead of being ultra-paranoid, I would rather just enjoy my life”
32. “If things get really bad, the people in my community will just band together to take care of everyone”
33. “If society did completely collapse, I would not want to go on living anyway”
34. “I’m too lazy to learn how to grow a garden”
35. “If you assume that the worst is eventually going to happen, then you don’t really believe in America”
36. “If something happens I will just run out to the store and grab what I need”
37. “If all of my debts are wiped out during an economic collapse I might as well live it up now”
38. “When things hit the fan I will just go live with my relatives that have been prepping”
39. “My spouse does not believe that prepping is a good idea”
40. “Prepping seems so complicated and I don’t know where to start”
41. “I don’t have to worry about preparing for a major disaster because that is what FEMA is for”
42. “There is no way that the supermarkets could ever possibly run out of food”
43. “Once I get my student loans and credit card debt paid off then maybe I will start thinking about prepping”
44. “My relatives are already convinced that I am a nutjob – I don’t need to make it worse by stockpiling buckets of food in my garage”
45. “What would the people at work think?”
46. “If there really was a reason to get prepared they would have told us about it on the news”
47. “People have been predicting doom and gloom for years, and yet nothing has happened”
48. “If I do prepare, angry mobs will just come and steal it all at some point anyway”
49. “Look at how fast technology is advancing – there is no way that things could completely fall apart now that humanity has so much advanced knowledge”
50. “We live in the greatest country on the entire planet during the greatest time for humanity in the history of the world”
51. “I have no intention of becoming a card carrying member of the Tin Foil Hat Brigade”
52. “If we are all going to die anyway, what is the point of prepping?”
53. “There is always more time – if I don’t get prepared today I can always get prepared tomorrow”
If you would like to learn more about how you can get prepared for what is immediately ahead of us, you may want to check out an article that I recently did entitled “70 Tips That Will Help You Survive What Is Going To Happen To America“. It contains quite a few little “nuggets” that many people don’t commonly think about when it comes to prepping.
Personally, I think that it would be very nice if normal life were to just continue indefinitely in America. That way I could just sit up on my mountain and enjoy a nice quiet life with my family.
But the truth is that we are moving into the greatest time of chaos that any of us have ever experienced, and those of us that have been preparing are going to need to step forward as leaders. It is during times of great darkness that light is needed the most, and during the hard years ahead there is going to be a crying need for people that have great strength, great courage and great love.
So do you have any excuses that you have heard that you think would make good additions to this list? Please feel free to share them with the rest of us by leaving a comment below…
When it comes to “prepping”, many among the elite take things to an entirely different level. As you will see below, the elite are willing to pay big money for cutting edge home security measures, luxury bomb shelters and superyacht getaway submarines. Some of the things that the elite are demanding for their own protection go beyond even what we would see in a James Bond film, and serving the prepping needs of the elite has become a multi-billion dollar business. Meanwhile, the media outlets that the elite own continue to mock the rest of us for getting prepared. All the time we see headlines like this one that appeared in a major American news source: “Preppers: Meet the paranoid Americans awaiting the apocalypse“. Well, if we are paranoid for setting aside some extra food and supplies for the future, what does that make the people that you will read about in this article?
The elite live in a world that is completely different from the world that you and I live in. In wealthy enclaves of major global cities such as London, elitists are willing to shell out massive amounts of money to ensure that everyone else is kept out. The following comes from an article that was just published a few hours ago by the London Evening Standard entitled “The paranoid world of London’s super-rich: DNA-laced security mist and superyacht getaway submarines“…
Business is booming because billionaires are a paranoid bunch. Take one who recently moved to Mayfair. ‘He wanted everything, from protection from cyber hacking through to physical intrusion and kidnapping,’ says Bond Gunning. ‘We ended up installing fingerprint-activated locks for family members and programmable keys for staff that limit the time they are allowed into the property and the rooms they are able to enter and exit.
‘Inside and outside we installed 24-hour monitored CCTV cameras that are so hi-tech they can tell the difference between a dog, cat and a person. In the garden there are thermal-imaging cameras that can detect heat sources in the undergrowth. One thing intruders can’t hide is the heat of their bodies.
‘Should an intruder evade the cameras or ignore the warnings they automatically broadcast, the property itself is protected by bulletproof glass and alarm sensors in all rooms. There is a bullet, gas and bombproof panic or safe room, with its own food and water, medical supplies and communications, and an impregnable supply of fresh air. Just in case the family cannot make it there in time, key rooms are sealed by reinforced shutters.’
But for many elitists, those kinds of extreme security measures are simply not enough. That is why sales of “luxury doomsday shelters” are absolutely soaring. If “the end of the world” arrives unexpectedly, high net worth individuals want to know that there will be somewhere for them and their families to go. The following is an excerpt from an article about one such facility located in Indiana…
As we roll down US Highway 41 in Terre Haute, Indiana , my guide insists I give him my iPhone. Then he tosses me a satin blindfold. The terms of our trip were clear—I wasn’t to know where we were going or how we got there.That’s because we’re on our way to the undisclosed location of an underground bunker designed to survive the end of the world, whatever form that apocalypse takes.
When I remove my blindfold, I am standing in a grassy clearing looking at a boxy concrete structure that serves as the entrance to a Cold War–era government communications facility gutted and reborn as Vivos Indiana. This is the Ritz Carlton of doomsday shelters, a hideout where residents can wait out a nuclear winter or a zombie apocalypse in luxury and style while the rest of humanity melts and disintegrates. The living area has 12-and-a-half-foot ceilings, sumptuous black leather couches, wall art featuring cheerful Parisian street scenes, towering faux ferns, and plush carpets. Faith Hill croons from a large-screen TV set in front of three rows of comfy beige reclining chairs. The cupboards are stocked with 60 varieties of freeze-dried and canned foodstuffs; an evening meal might include spaghetti aglio e olio topped with skillet fried steak chunks, a fresh tomato-and-zucchini salad fresh from the hydroponic garden, and decadent turtle brownies. An eight-by-nine bedroom is designed for four people (there are larger units for six) and comes with double-queen bunks clothed in 600-thread-count ivory sheets and duvet covers worthy of a four-star hotel, a comparison highlighted on the Vivos website.
That sounds lovely.
But normal people like us cannot afford something like that. It will only be the elite that will be able to afford to hole up in underground bunkers while the world above descends into madness.
Other elitists will be taking off in their superyachts and heading out into the open ocean when things really start falling to pieces. And if their superyachts are threatened, some of them even have “getaway subs”. Here is more from the Evening Standard…
The ultimate vehicle of choice is no longer an armoured limousine or a private jet. They’re so Noughties. If you want bragging rights these days, you need your own submarine, which floats out of a sub-sea compartment in your superyacht. ‘It’s a toy, but if the worst happened, it could also be an escape route,’ says one prominent London tycoon with a weakness for Monaco-berthed superyachts — provided they have military-grade radar jammers and missile and torpedo defences.
So exactly why are so many among the elite so concerned about their own security these days?
Why are so many of them going to such extraordinary lengths to prepare for worst case scenarios?
Do they know something that the rest of us do not?
In a previous article, I included a quote from an article in the Mirror that was published earlier this year entitled “Panicked super rich buying boltholes with private airstrips to escape if poor rise up“…
Robert Johnson, president of the Institute of New Economic Thinking, told people at the World Economic Forum in Davos that many hedge fund managers were already planning their escapes.
He said: “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway.”
The next time that someone criticizes you for prepping, just point out what the elite are doing.
Clearly, many of them are deeply concerned that something may be coming.
So are you preparing?
If so, what are you preparing for?
Please feel free to join the discussion by posting a comment below…
Gerald Celente of the Trends Research Institute has just gone on the record with a prediction that there will be a stock market crash by the end of this calendar year. If you are not familiar with Gerald Celente, he is one of the most highly respected trends forecasters in the entire world. He has been featured on CNN, The Oprah Winfrey Show, The Today Show, Good Morning America, CBS Morning News, NBC Nightly News and Coast to Coast AM. Personally, I have a lot of respect for him. While it is true that not every single one of his forecasts about the future came to pass over the years, he does have a very solid track record that goes back for decades. He correctly predicted the 1987 stock market crash, the bursting of the dotcom bubble and the financial panic of 2008. Just a couple of days ago, he told Eric King the following: “I’m now predicting that we are going to see a global stock market crash before the end of the year.” Celente says that it won’t just be U.S. stocks either. He believes that crashes are also coming to “the DAX, the FTSE, the CAC, Shanghai, and the Nikkei”. It other words, it is going to be a truly global financial crisis and he says that there is “going to be panic on the streets from Wall Street to Shanghai and from the UK down to Brazil”.
When you go out on a limb like this, you are putting your credibility on the line. This is something that Celente has only done a few times in the past, and normally he has been spot on…
Rarely do I ever put a date on market crashes. I did it in 1987 when I forecast the 1987 stock market crash — that was in the Wall Street Journal. I also forecast the ‘Panic of 2008,’ and the ‘dot-com bust’ in October of 1999, when I said it (the dot-com mania) would fail in the second quarter of 2000…
Of course Celente is far from alone. Many others have also been warning that a new financial crisis is imminent.
For instance, just check out what David Stockman recently told CNBC…
David Stockman has long warned that the stock market is on the verge of a massive collapse, and the recent price action has him even more convinced than ever that the bottom is about to fall out.
“I think it’s pretty obvious that the top is in,” the Reagan administration’s OMB director said Thursday on CNBC’s “Futures Now.” The S&P 500 has traded in a historically narrow range for the better part of 2015, having moved just 1 percent higher year to date. “It’s just waiting for the knee-jerk bulls, robo traders and dip buyers to finally capitulate.”
Stockman, whose past claims have yet to come to fruition, still believes that the excessive monetary policy from central banks around the world has created a “debt supernova,” and all the signs point to “the end of the central bank enabled bubble,” which could cause a worldwide recession.
Just a few days ago, I authored an article entitled “8 Financial Experts That Are Warning That A Great Financial Crisis Is Imminent” which showed that a whole bunch of other financial experts are sounding the alarm about an implosion of the financial markets.
And before any of these warnings came out, I issued my “red alert” for the last six months of 2015 back on June 25th.
There is a growing consensus that something really, really bad is about to happen in the very near future.
You know that we are really late in the game when the mainstream media starts sounding exactly like The Economic Collapse Blog.
On July 22nd, I authored a piece entitled “Commodities Collapsed Just Before The Last Stock Market Crash – So Guess What Is Happening Right Now?”
Now compare that headline to this recent one from Bloomberg: “Commodities Are Crashing Like It’s 2008 All Over Again“.
The mainstream media is starting to get it. The exact same patterns that we witnessed just prior to the last financial crisis are playing out once again right before our very eyes. Here is an excerpt from that Bloomberg article…
Attention commodities investors: Welcome back to 2008!
The meltdown has pushed as many commodities into bear markets as there were in the month after the collapse of Lehman Brothers Holdings Inc., which spurred the worst financial crisis seven years ago since the Great Depression.
Eighteen of the 22 components in the Bloomberg Commodity Index have dropped at least 20 percent from recent closing highs, meeting the common definition of a bear market. That’s the same number as at the end of October 2008, when deepening financial turmoil sent global markets into a swoon.
This is the kind of stuff that I have been hammering on for weeks.
Another sign that we saw back in 2008 that is repeating once again is a substantial slowdown in global trade. Over the weekend, we got some more bad news on this front from China. The following comes from Zero Hedge…
Overnight we got another acute reminder of just who is lying hunched over, comatose in the driver’s seat of global commerce: the country whose July exports just crashed by 8.3% Y/Y (and down 3.6% from the month before) far greater than the consensus estimate of only a 1.5% drop, and the biggest drop in four months following the modest June rebound by 2.8%: China.
It wasn’t just exports, imports tumbled as well by 8.1%, fractionally worse than the -8.0% consensus, and down from the -6.1% in June as China’s commodity tolling operations are suddenly mothballed.
The crisis that so many have been waiting for is here.
As the coming weeks and months play out, there will be good days and there will be bad days. Remember, some of the biggest one day gains in U.S. stock market history happened right in the middle of the financial crisis of 2008. So don’t get fooled by what happens on any one particular day.
Also, please do not think that this crisis will be “over” by the end of 2015. What we are moving into is just the start of the crisis. Things will continue to unravel as we move into 2016 and beyond. The recession that we experienced back in 2008 and 2009 will seem like a Sunday picnic compared to what is coming by the time that everything is all said and done.
So that is why I work so hard to encourage people to get prepared.
What we are facing is not going to last for weeks or for months.
The coming crisis is going to last for years, and it is going to be painful beyond what most people would dare to imagine.
After all these years, the most famous investor in the world still believes that derivatives are financial weapons of mass destruction. And you know what? He is exactly right. The next great global financial collapse that so many are warning about is nearly upon us, and when it arrives derivatives are going to play a starring role. When many people hear the word “derivatives”, they tend to tune out because it is a word that sounds very complicated. And without a doubt, derivatives can be enormously complex. But what I try to do is to take complex subjects and break them down into simple terms. At their core, derivatives represent nothing more than a legalized form of gambling. A derivative is essentially a bet that something either will or will not happen in the future. Ultimately, someone will win money and someone will lose money. There are hundreds of trillions of dollars worth of these bets floating around out there, and one of these days this gigantic time bomb is going to go off and absolutely cripple the entire global financial system.
Back in 2002, legendary investor Warren Buffett shared the following thoughts about derivatives with shareholders of Berkshire Hathaway…
The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so
far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.
Those words turned out to be quite prophetic. Derivatives have definitely multiplied in variety and number since that time, and it has become abundantly clear how toxic they are. Derivatives played a substantial role in the financial meltdown of 2008, but we still haven’t learned our lessons. Today, the derivatives bubble is even larger than it was just before the last financial crisis, and it could absolutely devastate the global financial system at any time.
During one recent interview, Buffett was asked if he is still convinced that derivatives are “weapons of mass destruction”. He told the interviewer that he believes that they are, and that “at some point they are likely to cause big trouble”…
Thirteen years after describing derivatives as “weapons of mass destruction” Warren Buffett has reaffirmed his view that they pose a threat to the global economy and financial markets.
In an interview with Chanticleer this week, Buffett said that “at some point they are likely to cause big trouble“.
“Derivatives, lend themselves to huge amounts of speculation,” he said.
Most of the time, the big banks that do most of the trading in these derivatives do very well. They use extremely sophisticated computer algorithms that help them come out on the winning end of these bets most of the time.
But when there is some sort of unforeseen event that suddenly causes a massive shift in the marketplace, that can cause tremendous problems. This is something that Buffett discussed during his recent interview…
“The problem arises when there is a discontinuity in the market for some reason or another.
“When the markets closed like it was for a few days after 9/11 or in World War I the market was closed for four or five months – anything that disrupts the continuity of the market when you have trillions of dollars of nominal amounts outstanding and no ability to settle up and who knows what happens when the market reopens,” he said.
So if the markets behave fairly calmly and predictably, the derivatives bubble probably will not burst.
But no balancing act of this nature ever lasts forever. Just remember what happened in 2008. Lehman Brothers collapsed and then the financial system virtually froze up. According to Forbes, at that time almost everyone was afraid to deal with the big banks because nobody was quite sure how much exposure they had to these risky derivatives…
Fast forward to the financial meltdown of 2008 and what do we see? America again was celebrating. The economy was booming. Everyone seemed to be getting wealthier, even though the warning signs were everywhere: too much borrowing, foolish investments, greedy banks, regulators asleep at the wheel, politicians eager to promote home-ownership for those who couldn’t afford it, and distinguished analysts openly predicting this could only end badly. And then, when Lehman Bros fell, the financial system froze and world economy almost collapsed. Why?
The root cause wasn’t just the reckless lending and the excessive risk taking. The problem at the core was a lack of transparency. After Lehman’s collapse, no one could understand any particular bank’s risks from derivative trading and so no bank wanted to lend to or trade with any other bank. Because all the big banks’ had been involved to an unknown degree in risky derivative trading, no one could tell whether any particular financial institution might suddenly implode.
After the crisis, we were promised that something would be done about the “too big to fail” problem.
But instead, the problem of “too big to fail” is now larger than ever.
Since the last financial crisis, the four largest banks in the country have gotten approximately 40 percent larger. Today, the five largest banks account for approximately 42 percent of all loans in the United States, and the six largest banks account for approximately 67 percent of all assets in our financial system. Without those banks, we would not have much of an economy left at all.
Meanwhile, smaller banks have been going out of business or have been swallowed up by the big banks at a staggering rate. Incredibly, there are 1,400 fewer small banks in operation today than there were when the last financial crisis erupted.
So we cannot afford for these “too big to fail” banks to actually fail. Even the failure of a single one would cause a national financial nightmare. The “too big to fail” banks that I am talking about are JPMorgan Chase, Citibank, Goldman Sachs, Bank of America, Morgan Stanley and Wells Fargo. When you total up the exposure to derivatives that all of them currently have, it comes to a grand total of more than 278 trillion dollars. But when you total up all of the assets of all six banks combined, it only comes to a grand total of about 9.8 trillion dollars. In other words, the “too big to fail” banks have exposure to derivatives that is more than 28 times the size of their total assets.
I have shared the following numbers with my readers before, but it is absolutely crucial that we all understand how exceedingly vulnerable our financial system really is. These numbers come directly from the OCC’s most recent quarterly report (see Table 2), and they reveal a recklessness that is almost beyond words…
Total Assets: $2,573,126,000,000 (about 2.6 trillion dollars)
Total Exposure To Derivatives: $63,600,246,000,000 (more than 63 trillion dollars)
Total Assets: $1,842,530,000,000 (more than 1.8 trillion dollars)
Total Exposure To Derivatives: $59,951,603,000,000 (more than 59 trillion dollars)
Total Assets: $856,301,000,000 (less than a trillion dollars)
Total Exposure To Derivatives: $57,312,558,000,000 (more than 57 trillion dollars)
Bank Of America
Total Assets: $2,106,796,000,000 (a little bit more than 2.1 trillion dollars)
Total Exposure To Derivatives: $54,224,084,000,000 (more than 54 trillion dollars)
Total Assets: $801,382,000,000 (less than a trillion dollars)
Total Exposure To Derivatives: $38,546,879,000,000 (more than 38 trillion dollars)
Total Assets: $1,687,155,000,000 (about 1.7 trillion dollars)
Total Exposure To Derivatives: $5,302,422,000,000 (more than 5 trillion dollars)
Since the United States was first established, the U.S. government has run up a total debt of a bit more than 18 trillion dollars. It is the biggest mountain of debt in the history of the planet, and it has grown so large that it is literally impossible for us to pay it off at this point.
But the top five banks in the list above each have exposure to derivatives that is more than twice the size of the national debt, and several of them have exposure to derivatives that is more than three times the size of the national debt.
That is why I keep saying that there will not be enough money in the entire world to bail everyone out when this derivatives bubble finally implodes.
Warren Buffett is entirely correct about derivatives – they truly are weapons of mass destruction that could destroy the entire global financial system at any time.
So as we move into the second half of this year and beyond, you will want to watch for terms like “derivatives crisis” or “derivatives crash” in news reports. When derivatives start making front page news, that will be a really, really bad sign.
Our financial system has been transformed into the largest casino in the history of the planet. For the moment, the roulette wheels are still spinning and everyone is happy. But sooner or later, a “black swan event” will happen that nobody expected, and then all hell will break loose.
If enough people truly believe that things will get better, will that actually cause them to get better? There is certainly something to be said for being positive and thinking that anything is possible. And as Americans, optimism seems to come naturally for us. However, no amount of positive thinking is ever going to turn the sun into a block of wood or turn the moon into a block of cheese. Any good counselor will tell you that one of the first steps toward recovery is to stop being delusional and to come to grips with how bad things really are. When we deny reality and engage in irrational wishful thinking, we are engaging in something called “hopium”. This is a difficult term to define, but the favorite definition of hopium that I have come across so far goes like this: “The irrational belief that, despite all evidence to the contrary, things will turn out for the best.” In hundreds of articles, I have documented how the U.S. economy is mired in a long-term decline which is about to get a lot worse. But most Americans see things very differently. In fact, according to a brand new CNN/ORC poll, 52 percent of Americans describe the U.S. economy as “very” or “somewhat good”, and more than two-thirds of all Americans believe that the U.S. economy will be in “good shape” a year from right now. But if you asked most of those people why they are so optimistic, they would probably mumble something about “Obama” or about how “we’re Americans and we always bounce back” or some other such gibberish. Well, it’s wonderful that so many people are feeling good and looking forward to the future, but are those beliefs rational?
We witnessed a perfect example of this “hopium” on Wednesday. Sales at McDonald’s restaurants have been in decline for quite a while, and the numbers for the first quarter of 2015 were just abysmal…
The ubiquitous burger-and-fries chain said US sales, the largest share of global income, fell 2.6 percent from a year ago for comparable outlets.
Sales in the Asia-Pacific and Middle East region dropped 8.3 percent, helping bring overall global sales down 2.3 percent, “reflecting negative guest traffic in all segments,” the company said.
Total revenue sank 11 percent to $5.96 billion in the quarter to March 31, and net income plunged 32.6 percent to $812 million, or 84 cents a share (-31 percent).
So you would think that the stock price would have tanked on Wednesday, right?
Thanks to news that a “turnaround plan” would be announced on May 4th, McDonald’s stock actually skyrocketed…
McDonald’s closed up 3.13 percent after spiking more than 4.5 percent in early trade as investors cheered a turnaround plan expected on May 4. However, the fast food chain’s earnings missed on both the top and bottom lines.
This is pure hopium. Why don’t McDonald’s executives just tell us what the plan is now? But instead, the mystery of a “secret turnaround plan” gives people just enough hope to keep the stock from tumbling – at least for the moment.
And of course there are all sorts of other stocks that are being massively inflated by hopium right now.
Many years ago, when I was an undergraduate, I was taught that a price to earnings ratio of more than 20 was really, really high.
But these days that is the norm on Wall Street, and at the moment there are quite a few stocks that actually have price to earnings ratios that are greater than 100…
There are 10 stocks in the Standard & Poor’s 500, including industrial giant General Electric, video-streamer Netflix and oil and gas explorer Cabot Oil & Gas that are trading for 100 times their diluted earnings the past 12 months excluding extraordinary items, according to a USA TODAY analysis of data from S&P Capital IQ.
And if you can believe it, General Electric has a PE on its training earnings of more than 200…
Take General Electric, the industrial giant that’s swiftly selling off banking assets so it can return to its manufacturing roots. GE sports a PE on its trailing earnings of 227, says S&P Capital IQ.
This is completely and totally irrational. General Electric is a giant mess and is being very badly mismanaged. But investors continue to pay a massive premium for GE stock because they hope that things will turn around eventually.
Look, hope will get you a lot of things in life, but it won’t put money in your pockets or dinner on the table.
Our politicians and the mainstream media continue to sell us hard on the idea that things are getting better in America, but meanwhile our economic infrastructure continues to decay. Just check out what is happening in the steel industry…
United States Steel Corporation issued layoff notices to 1,404 workers in the latest sign of struggle for the American steel industry. The missives went out in recent days to workers producing pipe and tube products that are used in the oil and gas sector. Job cuts could come as early as June for 17 to 579 employees at a plant in Lone Star, Texas, 166 at a factory in Houston, 255 at a mill in Pine Bluff, Arkansas, and 404 managers across the company’s tubular operations nationwide.
Since last June, the company has informed 7,800 employees of potential job cuts, a tally from Pittsburgh Business Times indicated. U.S. Steel spokeswoman Sarah Cassella said the ongoing layoffs are the result of “challenging market conditions and global influences in the market including a high level of imports, reduced prices for oil and natural gas and reduced steel prices.”
A little over a month ago, I published an article entitled “10 Charts Which Show We Are Much Worse Off Than Just Before The Last Economic Crisis” in which I demonstrated that we are in far worse economic shape than we were just prior to the last recession, and now another great economic crisis is at our door.
Unfortunately, most Americans have no idea what is going on out there. Most of them get their news from the giant propaganda matrix that very tightly controls the flow of ideas and information in this country. This is something that I explain on my new DVD. Six colossal corporations control over 90 percent of the news, information and entertainment that Americans consume, and that gives them an awesome amount of power.
And right now that propaganda matrix is assuring the American people that everything is going to be just fine.
Well, they better be right. Because if not, they are going to have millions of people extremely angry with them when things really start falling to pieces.
Our entire way of life can be ended in a single day. And it wouldn’t even take a nuclear war to do it. All it would take for a rogue nation or terror organization to bring us to our knees is the explosion of a couple well-placed nuclear devices high up in our atmosphere. The resulting electromagnetic pulses would fry electronics from coast to coast. Of course this could also be accomplished without any attack. Scientists tell us that massive solar storms have hit our planet before, and that it is inevitable that there will be more in the future. As you will read about below, the most recent example of this was “the Carrington Event” in 1859. If a similar burst from the sun hit us today, experts tell us that life in America could suddenly resemble life in the 1800s, and the economic damage caused could potentially be in the trillions of dollars. This is one of the greatest potential threats that we are facing as a nation, and yet Barack Obama has essentially done nothing to get us prepared.
The technology necessary to conduct such an electromagnetic pulse attack against the United States has become much more accessible in recent years. According to an article in the Wall Street Journal, even rogue nations such as North Korea and Iran either already have or will soon have the capability to hurt us in this way…
Rogue nations such as North Korea (and possibly Iran) will soon match Russia and China and have the primary ingredients for an EMP attack: simple ballistic missiles such as Scuds that could be launched from a freighter near our shores; space-launch vehicles able to loft low-earth-orbit satellites; and simple low-yield nuclear weapons that can generate gamma rays and fireballs.
If a successful, large scale EMP attack ever did take place, it would be a catastrophe beyond anything that the United States has ever seen before. The EMP Commission, which was established by Congress, says that it is likely that most of us would end up dead…
What would a successful EMP attack look like? The EMP Commission, in 2008, estimated that within 12 months of a nationwide blackout, up to 90% of the U.S. population could possibly perish from starvation, disease and societal breakdown.
In 2009 the congressional Commission on the Strategic Posture of the United States, whose co-chairmen were former Secretaries of Defense William Perry and James Schlesinger, concurred with the findings of the EMP Commission and urged immediate action to protect the electric grid. Studies by the National Academy of Sciences, the Department of Energy, the Federal Energy Regulatory Commission and the National Intelligence Council reached similar conclusions.
If you are a terrorist, a dictator or a fanatic that is looking for a “killshot” for the United States, those kinds of numbers would certainly get your attention.
And it was recently reported by WND that the Iranian military has already been playing around with such a scenario…
Peter Vincent Pry, who is executive director of a congressional advisory group called the Task Force on National and Homeland Security, raised the alarm as the agreement is about to be finalized.
He said U.S. military officials have confirmed such an Iranian plan.
“Iranian military documents describe such a scenario – including a recently translated Iranian military textbook that endorses nuclear EMP attack against the United States,” Pry wrote in a recent column in Israel’s main online media network, Aruz Sheva.
“Iran with a small number of nuclear missiles can by EMP attack threaten the existence of modernity and be the death knell of Western principles of international law, humanism and freedom,” he said.
Very chilling stuff.
And of course there are many, many others out there that would love to see the U.S. taken down other than just the Iranians.
Meanwhile, our power grid is far more vulnerable than most Americans would dare to imagine.
In previous articles, I discussed a recent Federal Energy Regulatory Commission report which stated the following…
“Destroy nine interconnection substations and a transformer manufacturer and the entire United States grid would be down for at least 18 months, probably longer.”
Are you starting to get the picture?
Our entire way of life depends upon electricity. If you take away that electricity, our society is transformed literally overnight.
A successful EMP would be an utter nightmare for this nation. Just consider what U.S. Representative Scott Perry had to say about a potential attack last year…
“The consequences of such an attack could be catastrophic; all electronics, power systems, and information systems could be shut down,” Rep. Scott Perry said in prepared remarks during an EMP hearing in May held by the U.S. House Committee on Homeland Security. “This could then cascade into interdependent infrastructures such as water, gas, and telecommunications. While we understand this is an extreme case, we must always be prepared in case a rogue state decides to utilize this technology.”
In essence, suddenly nothing would work and just about everything that we take for granted would suddenly be gone.
In a previous article, I spelled out some of the implications of such an event…
-There would be no heat for your home.
-Water would no longer be pumped into most homes.
-Your computer would not work.
-There would be no Internet.
-Your phones would not work.
-There would be no television.
-There would be no radio.
-ATM machines would be shut down.
-There would be no banking.
-Your debit cards and credit cards would not work.
-Without electricity, most gas stations would not be functioning.
-Most people would be unable to do their jobs without electricity and employment would collapse.
-Commerce would be brought to a standstill.
-Hospitals would not be able to function normally.
-You would quickly start running out of medicine.
-All refrigeration would shut down and frozen foods in our homes and supermarkets would start to go bad.
And as I mentioned above, all of this can happen even without an attack.
A direct hit from a major solar storm can cause the exact same thing.
In fact, NASA says that there is a 12 percent chance that such a storm will hit us during the next ten years…
NASA is warning that there’s a 12 percent chance an extreme solar storm will hit Earth in the next decade, sending out massive shock waves that would knock out grids across the world.
The economic impact of this doomsday scenario could exceed $2 trillion — or 20 times the cost of Hurricane Katrina, according to the National Academy of Sciences.
In recent years, we have been really lucky.
There was a close call in 2012 and another one in 2013.
The following is an excerpt from an upcoming book that I have co-authored with Barbara Fix that will soon be published entitled “Get Prepared Now”…
Most people have absolutely no idea that the Earth barely missed being fried by a massive EMP burst from the sun in 2012 and in 2013. And earlier in 2014 there was another huge solar storm which would have caused tremendous damage if it had been directed at our planet. If any of those storms would have directly hit us, the result would have been catastrophic. Electrical transformers would have burst into flames, power grids would have gone down and much of our technology would have been fried. In essence, life as we know it would have ceased to exist – at least for a time. These kinds of solar storms have hit the Earth many times before, and experts tell us that it is inevitable that it will happen again. The most famous one happened in 1859, and was known as the Carrington Event. But other than the telegraph, humanity had very little dependence on technology at the time. If another Carrington Event happened today, it would be a complete and utter nightmare. A study by Lloyd’s of London has concluded that it would have taken a $2,600,000,000,000 chunk out of the global economy, and it would take up to a decade to repair the damage. Unfortunately, scientists insist that it is going to happen at some point. The only question is when.
So keep an eye on the sun.
The giant ball of fire that we revolve around has started to behave very erratically, and it has the power to end our way of life at any time.
In fact, scientists tell us that we are about to get hit with a “glancing blow” on April 7th…
A filament of magnetism stretching halfway across the sun erupted during the late hours of April 4th (22:00-23:00 UT). The eruption split the sun’s atmosphere, hurling a CME into space and creating a “canyon of fire,” shown in a movie recorded by the Solar Dynamics Observatory: The glowing walls of the canyon trace the original channel where the filament was suspended by magnetic forces above the sun’s surface. From end to end, the structure stretches more than 300,000 km–a real Grand Canyon.
Fragments of the exploding filament formed the core of a CME that raced away from the sun at approximately 900 km/s (2 million mph): image. Most of the CME will miss Earth, but not all. The cloud is expected to deliver a a glancing blow to our planet’s magnetic field could on April 7th. High-latitude sky watchers should be alert for auroras.
The event of April 7th is not going to cause us major problems. But someday there will be a solar storm that will.
Personally, I cannot even imagine what life would be like without electricity.
Because we have become so deeply dependent on technology, most of us would have absolutely no idea how to live without it.
An electromagnetic pulse attack would be one of the fastest ways to cripple America and end the dominance of the United States in world affairs. And in this day and age, there are hundreds of millions of people around the planet that would love to see that happen.
So to not take steps to protect our power grid from such an attack is very foolish. But that is precisely what Barack Obama (and presidents before him) have chosen to do. We have technology which would mitigate the damage from an electromagnetic pulse, but rather than spend the money Obama has decided to just hope that it will never happen.
Up to this point, we have been fortunate.
But someday, our luck may run out.