Has Gold Become A New Reserve Currency?

For decades, the U.S. dollar has been the reserve currency of the world.  This has given the United States an extraordinary amount of economic power, but as the U.S. economy has started to come apart over the past decade, other nations have increasingly sought to move away from the U.S. dollar and find other alternatives.  For a long time it was thought that the Euro would become the next great reserve currency of the world.  However, the recent Greek debt crisis, along with massive financial instability in nations such as Portugal, Spain and Italy, has caused investors to rapidly lose confidence in the Euro.  In fact there are even some whispers that the Euro may not even survive the sovereign debt crisis as it sweeps across Europe.  With both the U.S. dollar and the Euro looking shaky, investors have been searching somewhere safe to put their money.  Increasingly, they have been turning to gold.  So has gold now become a new reserve currency?  Will all of this new demand drive the price of gold into unprecedented territory?

Well, the truth is that as long as paper currencies around the world continue to show instability, gold will continue to be a preferred choice.  Nations all over the world are looking for ways to diversify their very large foreign exchange reserves.  For example, China now has approximately $2 trillion in foreign exchange reserves, and has been wanting to reduce its position in U.S. dollars for quite some time now.

But where should they put their money?

The Euro is coming apart like a 20 dollar suit.  There is a very real fear that Greece is only the first domino to fall and that soon nations like Italy, Spain and Portugal will be begging the IMF for assistance as the sovereign debt crisis sweeps across Europe.

Well, what about the British pound?  The truth is that the pound is not very appealing right now because the U.K. is facing a massive government debt crisis as well.  In fact, Bank of England governor Mervyn King recently warned that public anger over the “austerity measures” that soon must be implemented in the U.K. will be so intense that whatever party wins this election will be out of power for a generation.

Well, how about the Japanese yen?  Ironically, there has been a move towards the Japanese yen in recent days, but the truth is that the Japanese debt situation is one of the worst in the world.  Japan’s gross public debt has reached 201 percent of GDP and  Japan’s battle with deflation dragged into its 13th straight month in March.  No, the yen is not safe at all.

So does that bring us back to the U.S. dollar?  No.  There is a reason why nations all over the world have been wanting to get out of the U.S. dollar.  The United States has piled up the biggest mountain of debt in the history of the world, and even official U.S. government reports admit that the U.S. government is on a financial path that is not even close to sustainable.  The U.S. economy is caught in a death spiral, and that makes the U.S. dollar very unsafe.

So, what is safe at this point?

Well, gold is.

The price of gold rose to $1,210 an ounce on Friday.  The terms “flight to quality” and “safe haven” are increasingly being used for the precious metal as investors flee all of the major global paper currencies.

Just consider some of the recent comments about gold by financial experts that have shown up in the news….

Stephen Platt, a commodity analyst at Archer Financial Services Inc. in Chicago:

“The sovereign-debt panic is spreading and forcing a flight to quality into gold.”

Citigroup analyst David Thurtell:

“Gold is now enjoying safe haven status, partly because bonds, particularly peripheral euro zone government and bank paper, is no longer a safe haven.”

Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter:

“There is a clear flight into quality to the gold market as frightened capital seeks a haven of any sort while confusion reigns.”

So will this move towards gold continue?

Sure.

Although anyone who follows the gold market knows that big financial institutions regularly work to suppress the price of gold.  In fact, one industry insider recently decided to be a whistleblower and came forward with “smoking gun” evidence of price manipulation in the precious metals markets, but the CFTC didn’t do a thing about it.

Fortunately, the overwhelming demand for gold is now pushing the price up despite efforts to suppress it.

In addition, once it becomes apparent that most of the “gold” that is traded in the world is not backed by the actual metal itself, the price of gold will go even higher.

For years, almost everyone has assumed that the London Bullion Market Association (LBMA), the world’s largest gold market, had actual gold to back up the massive “gold deposits” at the major LBMA banks.

But that is just not the case.

People are now starting to realize that there is very little actual gold in the LBMA system.

When most people think they are buying “gold”, what they are actually buying are just pieces of paper that say they own gold.

Egon von Greyerz of Matterhorn Asset Management in Switzerland recently elaborated on this point.  He says that “a lot of people who have studied it closely are convinced that there is a major shortage in physical gold at LBMA. LBMA trades around 700 tons net of gold daily. That is 25% of world annual production and around $6 trillion annually. To back that amount of trading on a 100% reserve ratio basis, it would need several year’s production of physical gold, which they definitively haven’t got.”

So what is going to happen when investors start demanding physical delivery of the gold that they purchase?

It is going to create a huge mess.

Needless to say, if you are investing in gold make sure that you take physical delivery of the gold.

As the paper currenices all over the globe continue to unravel (as all debt-based paper currencies always do), all precious metals, including gold, will be increasingly in demand.

In fact, the idea of gold being a “reserve currency” is not anything new.

Gold has been a “reserve currency” for thousands of years, and those who understand history know that it will always remain one.

Will The Gulf Of Mexico Oil Spill Be An Economic Disaster That The Gulf Coast Will Never Recover From?

As a silent blanket of black goo that is now about the size of the state of Florida slowly but relentlessly drifts towards the Gulf Coast, communities in the region are bracing for an economic catastrophe that is being described as a “slow motion Katrina”.  Still reeling from the effects of Hurricane Katrina after all these years, many who depend on the Gulf of Mexico for their livelihood fear that the massive oil spill heading their way could prove to be an economic disaster from which they will never recover.  Thousands of businesses in the region could go under before all of this is over, and millions could lose their jobs.  As the gigantic mass of black oil kills and maims all the wildlife it encounters, and as it pushes dangerously close to the coastal wetlands, many residents are predicting that two of the most important industries in the region – seafood and tourism – will be completely and totally destroyed.

Already, the edges of the massive oil spill in the Gulf of Mexico have grazed the barrier islands off Louisiana’s Chandeleur and Breton sounds.  BP spokeswoman Ayana McIntosh-Lee announced on Monday that the damaged well is releasing 210,000 gallons of oil a day into the Gulf of Mexico.  At this point there is no end in sight.

In fact, the oil spill in the Gulf Of Mexico is now larger than the entire state of Florida, and each day it grows larger and more insidious.

Scientists in the region tell us that the Gulf oil spill could actually get into what’s called the “Loop Current” within a day, eventually carrying oil south along the Florida coast and into the Florida Keys.  In fact, one prominent oceanographer says that he cannot think of any scenario where the oil spill doesn’t eventually reach the Florida Keys.

And there are indications that things could get a whole lot worse before they get better.

It is being reported that a confidential government report on the oil spill in the Gulf makes it clear that the Coast Guard now fears that the damaged well could become an unchecked gusher shooting millions of gallons of oil per day into the Gulf.  One Alabama newspaper has posted excerpts from this alarming report….

“The following is not public,” reads the National Oceanic and Atmospheric Administration’s Emergency Response document dated April 28th that was posted on . “Two additional release points were found today in the tangled riser. If the riser pipe deteriorates further, the flow could become unchecked resulting in a release volume an order of magnitude higher than previously thought.”

How bad could it get?

Well, if the riser pipe blows out, experts tell us that we could see 5 to 10 times as much oil flowing into the Gulf as we are now.

That would be a nightmare of Biblical proportions.

Not that we aren’t facing a complete and total nightmare already.

Both Obama administration and BP are  indicating that it might take up to three months to completely seal off the leaking oil well.

3 more months of oil flowing into the Gulf?

How in the world could the Gulf Coast ever recover from that?

And once the oil spill gets into the wetlands along the coast it will never, ever be able to be totally cleaned up.

Already, environmentalists are warning that the oil spill in the Gulf of Mexico could absolutely devastate the bird population of the region.

You see, nearly 75 percent of all U.S. waterfowl use Louisiana’s three million acres of wetlands to rest or nest.  Once the oil spill gets into those wetlands it is over for those waterfowl.

Not only that, but Louisiana produces more fish and seafood than anywhere in the United States except for Alaska.  The cost of this disaster to the fishing industry in Louisiana alone could top 3 billion dollars, and it is being projected that the tourism industry in Florida could lose even more than that.

In fact, some local shrimpers in the region are gloomily forecasting that it will be seven years before they can set to sea again.

Are you starting to get the picture?

Entire industries are going to be wiped out by this thing.

In economic terms, this is far bigger than Katrina.

What we are witnessing is the potential economic death of an entire region.

To get an idea of just what kind of a nightmare the residents of the Gulf Coast are facing, just read some of the quotes that have been popping up in mainstream media sources over the last couple of days….

The Telegraph:

“Worst case scenarios almost never happen,” Professor Robert Thomas, of New Orleans’ Loyola University, was quoted as saying yesterday. “In this case, almost everyone I have known with technical knowledge of oil spills – people who have worked in the industry 30, 40 years – say it is upon us.”

Louis Miller of the Mississippi Sierra Club:

This is going to destroy the Mississippi and the Gulf Coast as we know it.

The Los Angeles Times:

“A major oil spill would devastate the ecosystem and the economy based on that ecosystem,” said Larry Crowder, professor of marine biology at Duke University’s Nicholas School of the Environment. “It’s a particularly bad time of year because just about everything is nesting or replicating.

“In the Gulf of Mexico giant blue fin tuna are spawning, and their eggs and larvae float on the surface,” he said. “Seabirds and gulls are nesting. For nesting sea turtles, obviously, oiling the beaches could have a devastating impact.”

An anonymous Louisiana resident:

“A hurricane is like closing your bank account for a few days, but this here has the capacity to destroy our bank accounts.”

Even if you have a heart that is cold as a stone, now is the time to pray for those who live along the Gulf Coast.  The oil spill relentlessly pushing towards the shore threatens to destroy countless numbers of lives.

Hopefully BP (or someone else) will find a way to keep this disaster from escalating out of control.

If not, there are going to be a whole lot of people who are going to need our help.

Emergency Seed Bank

Emergency Seed Bank

How Is The U.S. Economy Supposed To Succeed When Our Politicians And The Big Banks Are Making Billions Of Dollars Betting Against It?

Most people around the globe think of America as a great “capitalist” economic machine, but the truth is that the U.S. financial system is essentially one massive betting parlor at this point.  In fact, there has been a whole lot of easy money made in this betting parlor over the past several years by our politicians and by the big financial players down on Wall Street.  So how did they make all of this money?  They did it by betting against America.  By betting that the U.S. economy would do badly, a lot of very powerful people have gotten insanely wealthy.  Literally billions of dollars have been made over the past five years simply by betting that the U.S. housing market would go into the toilet.  But is all of this “short selling” and are all of these “side bets” actually good for the American economy?  How is the U.S. economy supposed to succeed when the big banks and so many of our politicians are actively making bets against it?

Just take a moment and check out some of the folks that have been betting against America….

*A Wall Street Journal analysis of congressional disclosures shows that 13 members of the U.S. Congress or their wives were engaged in substantial short selling during the financial crisis of 2008.

*An individual by the name of Jeff Greene made hundreds of millions of dollars during the real estate collapse by making huge bets against the residential housing market.  Now he wants to use some of that money to run for the U.S. Senate in Florida.

*Goldman Sachs openly and brazenly bet against its own clients as the housing market began to implode back in 2007 and 2008, and they made a TON of money by doing so.

*John Paulson (with the assistance of Goldman Sachs) has quickly become one of the richest men in the United States by betting against America.  Shorting the subprime mortgage market enabled his firm, Paulson & Co., to make 15 billion dollars in 2007.  John Paulson alone made approximately 4 billion dollars that year.

*Legendary investor Warren Buffett said on Saturday that he’s bearish about the ability of all currencies to hold their value over time because of massive deficits being run up by governments in the wake of the global financial crisis.

*The Federal Reserve holds credit-default swaps on the debt of Florida schools, and on debt owed by the states of Nevada and California.  So the Federal Reserve would profit if one of those states defaulted on its debt.

*JPMorgan Chase, Bank of America, and Citigroup are offering “municipal credit default swaps” that enable investors to make big money if U.S. states and cities end up defaulting on their debts.

It is one thing to make a legitimate profit on an investment.  It is another thing entirely for the biggest financial institutions in the United States and our politicians to be making massive amounts of money off of the economic collapse of America.

You see, those making huge bets against the U.S. economy also have an incentive to do what they can to make those bets profitable.  So for those who have the power to do so, does there come a point where they give the U.S. economy a little “push” in the wrong direction so that their bets will pay off?

The reality is that we have created a financial environment where fear rules.  For example, very few people want to back U.S. home loans anymore.  So now the U.S. government has to do it.  According to Inside Mortgage Finance, U.S. government-related entities backed 96.5% of all U.S. home loans during the first quarter of 2010.  This was up from 90% in 2009.

We should really rethink a financial system where a few people make a ton of money off of the fact that everyone else is doing badly.  Sure a few people are laughing all the way to the bank, but America as a whole is hurting.

Just consider the following charts.  U.S. national income has never experienced such a radically negative change in modern times….

All of these economic problems have caused the revenue of the U.S. government to dramatically decline at the same time expenditures are rocketing into the stratosphere….

As the U.S. economy continues to tank, the U.S. national debt is going to keep spinning wildly out of control.  Back in 1980, the U.S. national debt was approximately 1 trillion dollars.  Today it is accelerating rapidly as it pushes past 12 trillion dollars and towards 13 trillion dollars….

The truth is that the massive deficits being run up not only by the U.S. government, but by governments all over the world, are something that is clearly not sustainable.  In fact, Warren Buffett recently made an interesting remark about how painful it is going to be when the debt party ends….

“How the world weans itself off huge deficit financing is going to be difficult to watch.”

In fact, there are some nations that are in bigger trouble with debt than even the United States is.  Japan’s gross public debt has reached 201% of GDP, and the only way that the government of Japan can avoid bankruptcy at this point is by borrowing ever-increasing amounts of money.

But the truth is that this game cannot be played forever.

There has never been a time when so many nations around the world have piled up so much debt so quickly.

When the sovereign debt bubble pops, things are going to get really messy and the dominoes will start falling really quickly.

But when that happens one thing is for certain – there will be a lot of people ready to make a lot of money by betting on the financial failures of others.

Loyal9.org

Why Do So Many Bad Things Keep Happening To The United States?

At a time when the American economy is already reeling like a drunken sailor, the United States is being hit by what seems like an endless parade of horrible disasters that threaten to push the fragile financial system over the edge.  The massive oil spill in the Gulf of Mexico that is now destroying not only the the entire economy of the Gulf Coast but also the entire way of life for hundreds of thousands of people is getting all the headlines right now, but it is far from the only major crisis that has hit the United States recently.  The old saying, “when it rains it pours”, is certainly applicable to the United States right now.  Already faced with some of the biggest economic problems in a generation, America is also being forced to deal with horrifying natural disasters, rapidly growing environmental nightmares and agricultural problems that could end up being absolutely unprecedented.  So why do so many bad things keep happening to the United States?  Does there come a point when the economic damage from all of these disasters just becomes too much?  After all, how many body blows can the “biggest economy in the world” take and still remain standing?  

Consider just a few of the major disasters that the U.S. is having to deal with….

*The Gulf Of Mexico Oil Spill

Industry experts are now saying that the oil spill in the Gulf of Mexico could be increasing at a rate of 25,000 barrels a day – five times the U.S. government’s current estimate.  In fact, Barack Obama is calling the massive oil spill in the Gulf of Mexico a potentially unprecedented environmental disaster.

So how much is this disaster going to cost?

Well, estimates vary at this point, but it is being reported that some analysts are already projecting that the costs related to the oil spill drifting toward Louisiana from a well operated by BP in the Gulf of Mexico could exceed 14 billion dollars.

The cost to the fishing industry in Louisiana alone could top 3 billion dollars, and it is being projected that the tourism industry in Florida could lose even more than that. 

This is rapidly shaping up as one of the biggest environmental nightmares (perhaps the biggest) that the United States has ever had to face.  In fact, there are some who are saying that this incident has already eclipsed the 1989 Exxon Valdez incident as the worst U.S. oil disaster in history.

Louisiana Governor Bobby Jindal is warning that the oil spill in the Gulf threatens the very way of life of people in his state.  As bad as Hurricane Katrina was, there are those who are already claiming that this disaster will be worse than Hurricane Katrina for the region, because it will literally take years for this mess to be cleaned up.  In fact, there is a very real possibility that the fishing industry may be crippled for generations by this disaster.

*The Disappearance Of The Honeybees

For the fourth year in a row in the United States, more than a third of all bee colonies have failed to survive the winter.

To be more precise, according to the annual survey by the Apiary Inspectors of America and the U.S. government’s Agricultural Research Service, the number of managed honeybee colonies in the United States fell by 33.8% last winter.

Needless to say, this is not a good trend.

In fact, it could quickly turn into an unmitigated disaster as it is estimated that a third of all that we eat depends upon honeybee pollination.

Are you starting to get the picture?

Most flowering plants require insects for pollination.  The most effective insect for pollination is the honeybee.

Without honeybees, we are going to be in a world of hurt.

According to WorldNetDaily, the following is a list of just some of the crops that depend on honeybees: almonds, apples, apricots, avocados, blueberries, boysenberries, cherries, citrus fruits, cranberries, grapes, kiwi, loganberries, macadamia nuts, nectarines, olives, peaches, pears, plums, raspberries, strawberries, asparagus, broccoli, carrots, cauliflower, celery, cucumbers, cantaloupe, honeydew, onions, pumpkins, squash, watermelon, alfalfa hay and seed, cotton lint, cotton seed, legume seed, peanuts, rapeseed, soybeans, sugar beets and sunflowers.

In fact, Ohio State University’s honeybee specialist, James Tew, recently told the following to the Dayton Daily News….

“The average person should care. Bees of all species are fundamental to the operation of our ecosystem.”

So what happens if they all die off?

You don’t even want to think about that.

But certainly our scientists can find a solution, right?

Well, the World Organization for Animal Health announced on Wednesday that the huge die off of bees worldwide is not due to any one single factor.

Some of the factors for the honeybee deaths the World Organization for Animal Health included in its report include parasites, viral and bacterial infections, pesticides, and poor nutrition.

Other researchers claim that genetically modified crops and cell phone transmissions are also playing a role in the disappearance of the honeybees.

But the truth is that a “solution” seems to be very far away right now and we are running out of time.

*The Deadly Tornadoes Which Have Ravaged The Southeast

Last Sunday saw an unprecedented outbreak of tornadoes across the southeast United States.  Officials said 61 tornadoes erupted as a massive storm marched across states such as Mississippi, Florida and South Carolina. 

Winds inside some of the tornadoes were clocked as high as 160 mph, and one of the tornadoes had a base one and a half miles wide.

The tornadoes killed at least 12 people, and it is estimated that the damage that they caused could reach into the billions of dollars.

*The Drying Up Of The Ogallala Aquifer

Most Americans have never heard of the Ogallala Aquifer, but it is absolutely critical to food production in many areas of the United States.

The water from this massive underground lake is used to irrigate much of America’s Great Plains.  But it is being drained at a rate of approximately 800 gallons per minute and it is starting to dry up.  

So why is that a bad thing?

Well, the Ogallala Aquifer is a gigantic underground lake that stretches from southern South Dakota all the way through northern Texas, covering approximately 174,000 square miles.

If it gets depleted, the era of “pivot irrigation” in the region will be over.  That would mean that the Great Plains could quickly turn into the Great American Desert. 

America could very well see a return to the Dust Bowl days of the 1930s.

Are you prepared for that?

Even if agricultural production continues to grow normally, scientists are telling us that the world is heading for a massive global food shortage.  So what happens if our food production does not increase or is even reduced?

Sadly, the United States has only enough grain stored up to give about a half a loaf of bread to every man, woman and child in the United States.

How long do you think that is going to last in the event of a major emergency?

The truth is that “the good times” we have all grown up with are not going to last forever.  The United States is in big trouble economically, and all of these natural disasters and environmental problems are not helping things one bit. 

We are not entitled to endless wealth and prosperity just because we are Americans.  In fact, we have recklessly squandered the wealth that prior generations have left for us. 

But even as the economy crumbles around them, millions of Americans will remain in denial until the day they have to cook a dinner of “mouse soup” for their starving family.

“Things Are Never Going To Get THAT Bad”

Our recent article, “20 Things You Will Need To Survive When The Economy Collapses And The Next Great Depression Begins“, has drawn some intense criticism from those who believe that the U.S. economy is so strong that it could never completely and totally collapse.  In fact, this blog is being accused of officially going off the deep end.  Why?  It’s not because we are pointing out that the economy is bad.  After all, according to a recent Pew Research national poll, 88 percent of Americans rate national economic conditions as only fair or poor.  No, rather it is because we are projecting the eventual complete and total collapse of the U.S. economy.  There still seems to be a belief among a large number of Americans “that things are never going to get THAT bad”.  But they are going to get that bad.  It’s just that most people do not realize it yet.

But while times are still good (and what we are experiencing now is rip-roaring prosperity compared to what is coming), large numbers of people are going to continue to live in denial.  In fact, those who try to warn people about what is coming are going to be accused of “fear-mongering”.  One recent commenter even accused us of totally going off the deep end like many of the Y2K alarmists did….

—-

“Ok – you’ve officially fallen off the deep end. This blog went from legitimate economic concerns to grand fear mongering. This is the same as Y2K all over again. I have friends who still have bunkers and thousands of dollars of expired canned food and you’re suggesting they go do it again…”

—-

First of all, it was completely and totally obvious that Y2K was going to be a non-event to anyone with a bit of common sense.  There was simply no way that a “computer glitch” that was foreseeable years ahead of time was going to cause the collapse of society.

What is happening with the U.S. economy now is completely different.  We have built an entire economic system on ever-increasing amounts of debt and paper money, and anyone with half a brain should be able to see that such a system is not sustainable in the long-term.  The collapse of the economy is inevitable due to the way that it was constructed.

As for having “thousands of dollars of expired canned food”, that would not be a problem if you rotated the food that you have stored.  You eat the old stuff first and you replace it with new food that you have purchased.

But the commenter above was not the only one to accuse us of trying to scare people….

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“How does the economic collapse lead to a complete halt to all economic activity? More people may be poorer, but they will still have some money to motivate others to produce for a market. The natural disaster scenario seems more plausible for this type of warning. More and more foreclosures don’t. This posting is a bit much for me, seems just some much scaremongering.”

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The commenter is right about one thing – a few bad economic statistics are not enough to run out and start preparing for the collapse of society.  After all, the American economy has always recovered no matter what happened before.  If we made it through the Great Depression, we can make it through this, right?

Well, the truth is that there are some fundamental differences between what is happening now and what happened during the Great Depression.

During the Great Depression, most Americans were not up to their eyeballs in credit card debt, car payments, student loans and mortgage debt.

During the Great Depression, most Americans either owned their land or had a great deal of equity in their land.  As we wrote about recently, today that is not the case.  Equity as a percentage of home value in the United States has been hitting all-time record lows.

During the Great Depression, most Americans were not dependent on giant corporations to feed and supply us.  Back then, the majority of Americans knew how to live off the land and grew at least some of their own food.  Today that is most definitely not the case.

During the Great Depression, America still had the greatest manufacturing base in the entire world.  Today we have “offshored” our once great manufacturing base, and we have become a fat, spoiled society that consumes everything in sight but manufactures very little.

During the Great Depression, America did not have a colossal trade deficit.  Today we have got the biggest trade deficit in the history of the world.

During the Great Depression, the wealth of Americans was not being sucked dry by dozens of different kinds of taxes.  Today we are being taxed in so many various ways that many Americans actually end up spending over half their incomes just in taxes.

During the Great Depression, the U.S. government had debt, but it was not threatening to collapse the entire global economy.  Today the U.S. government has piled up the biggest mountain of debt in the history of the world.

During the Great Depression, derivatives were not even an issue.  Today, we have created a derivatives bubble that is now well beyond a quadrillion dollars.

Just think about that.

Over 1,000,000,000,000,000 dollars.

Counting at one dollar per second, it would take 32 million years to count to one quadrillion.

In fact, renowned investor Warren Buffett has warned that derivatives are “financial weapons of mass destruction” that could bring down the entire world economic system.

And he is right.

When derivatives collapse, there is not enough money in the world to fix the mess that will be created.  All of the governments in the world working together would not be able to print money fast enough to even make a dent in the colossal wave of red ink that would be created.

The truth is that the U.S. economy (and the world economy for that matter) is teetering on top of a giant pyramid of debt and paper that is on the verge of coming down like a house of cards.

But if you do not want to believe this blog, perhaps you will listen to some of the top financial experts in the world who are also warning that a complete and total economic collapse is coming.

For example, Gerald Celente, the CEO of Trends Research Institute, is forecasting that we are going to see a devastating economic collapse by the year 2012.  It would be easy to dismiss him, except for the fact that he has a sterling track record of forecasts going back 3 decades, and he has appeared on almost all of the major news networks who have no problem relying on him as a source.  What Celente says is on the way for America is absolutely bone chilling….

But if you don’t want to listen to Celente, perhaps you will listen to Peter Schiff, the president of Euro Pacific Capital.  He accurately predicted the recent financial crisis, and he is also forecasting that a depression is on the way.  Schiff is convinced that we need to allow the current “Ponzi economy” to collapse so that something more substantial can arise from the ashes….

Jim Rogers is another financial expert that is forecasting a major economic collapse.  Jim Rogers was a co-founder of the Quantum Fund, and is a college professor, author, economic commentator, and creator of the Rogers International Commodities Index.  He says that civil unrest is on the way and that now is a good time to take up farming if you want to make it through what is coming….

The truth is that the vast majority of Americans have no idea just how vulnerable the U.S. economic system is.  A new Gallup poll has found that 44 percent of Americans believe that they could barely go a month before experiencing severe economic hardship if they lost their jobs.

How long could you go if you suddenly lost your job?

Right now the U.S. economy is being kept afloat by unprecedented U.S. government intervention and spending, but we all know that the U.S. government cannot keep spending money like it is water forever without very serious economic consequences.  To give you an idea of how desperate things have become, just check out the following graphic about the U.S. national debt that was featured in the Chicago Tribune….

Anyone who believes that such a tidal wave of red ink is sustainable please raise your hand.

The truth is that the U.S. economy is caught in a death spiral.

Already there are some areas of the United States that are literally dying.

For those who do not believe this fact, the following is a challenge for you….

Head down to Detroit and buy one of those houses that are on sale for less than a thousand dollars (in fact there have even been reports of some houses selling for a single dollar in Detroit), and try to live there for a month.

You will quickly learn what it is like to live in an area that is literally dying economically.

When people are hungry and they can’t get jobs they get desperate.

So far this year in Detroit, car thefts are up 83%, robberies are up 50%, burglaries are up 20% and property destruction is up 42%.

What is happening in Detroit is a preview of what is soon going to happen all over America.

So doubt it all you want, but all the doubting in the world is not going to stop what is coming.  The U.S. economy is dying so you better start getting ready.

The Prep Room

20 Things You Will Need To Survive When The Economy Collapses And The Next Great Depression Begins

Today, millions of Americans say that they believe that the United States is on the verge of a major economic collapse and will soon be entering another Great Depression.  But only a small percentage of those same people are prepared for that to happen.  The sad truth is that the vast majority of Americans would last little more than a month on what they have stored up in their homes.  Most of us are so used to running out to the supermarket or to Wal-Mart for whatever we need that we never even stop to consider what would happen if suddenly we were not able to do that.  Already the U.S. economy is starting to stumble about like a drunken frat boy.  All it would take for the entire U.S. to resemble New Orleans after Hurricane Katrina would be for a major war, a terror attack, a deadly pandemic or a massive natural disaster to strike at just the right time and push the teetering U.S. economy over the edge.  So just how would you survive if you suddenly could not rely on the huge international corporate giants to feed, clothe and supply you and your family?  Do you have a plan?

Unless you already live in a cave or you are a complete and total mindless follower of the establishment media, you should be able to see very clearly that our society is more vulnerable now than it ever has been.  This year there have been an unprecedented number of large earthquakes around the world and volcanoes all over the globe are awakening.  You can just take a look at what has happened in Haiti and in Iceland to see how devastating a natural disaster can be.  Not only that, but we have a world that is full of lunatics in positions of power, and if one of them decides to set off a nuclear, chemical or biological weapon in a major city it could paralyze an entire region.  War could erupt in the Middle East at literally any moment, and if it does the price of oil will double or triple (at least) and there is the possibility that much of the entire world could be drawn into the conflict.  Scientists tell us that a massive high-altitude EMP (electromagnetic pulse) blast could send large portions of the United States back to the stone age in an instant.  In addition, there is the constant threat that the outbreak of a major viral pandemic (such as what happened with the 1918 Spanish Flu) could kill tens of millions of people around the globe and paralyze the economies of the world. 

But even without all of that, the truth is that the U.S. economy is going to collapse.  So just think of what will happen if one (or more) of those things does happen on top of all the economic problems that we are having.

Are you prepared?  

The following is a list of 20 things you and your family will need to survive when the economy totally collapses and the next Great Depression begins….

#1) Storable Food

Food is going to instantly become one of the most valuable commodities in existence in the event of an economic collapse.  If you do not have food you are not going to survive.  Most American families could not last much longer than a month on what they have in their house right now.  So what about you?  If disaster struck right now, how long could you survive on what you have?  The truth is that we all need to start storing up food.  If you and your family run out of food, you will suddenly find yourselves competing with the hordes of hungry people who are looting the stores and roaming the streets looking for something to eat.

Of course you can grow your own food, but that is going to take time.  So you need to have enough food stored up until the food that you plant has time to grow.  But if you have not stored up any seeds you might as well forget it.  When the economy totally collapses, the remaining seeds will disappear very quickly.  So if you think that you are going to need seeds, now is the time to get them.

#2) Clean Water

Most people can survive for a number of weeks without food, but without water you will die in just a few days.  So where would you get water if the water suddenly stopped flowing out of your taps?  Do you have a plan?  Is there an abundant supply of clean water near your home? Would you be able to boil water if you need to?

Besides storing water and figuring out how you are going to gather water if society breaks down, another thing to consider is water purification tablets.  The water you are able to gather during a time of crisis may not be suitable for drinking.  So you may find that water purification tablets come in very, very handy.

#3) Shelter

You can’t sleep on the streets, can you?  Well, some people will be able to get by living on the streets, but the vast majority of us will need some form of shelter to survive for long.  So what would you do if you and your family lost your home or suddenly were forced from your home?  Where would you go? 

The best thing to do is to come up with several plans.  Do you have relatives that you can bunk with in case of emergency?  Do you own a tent and sleeping bags if you had to rough it?  If one day everything hits the fan and you and your family have to “bug out” somewhere, where would that be?  You need to have a plan.

#4) Warm Clothing

If you plan to survive for long in a nightmare economic situation, you are probably going to need some warm, functional clothing.  If you live in a cold climate, this is going to mean storing up plenty of blankets and cold weather clothes.  If you live in an area where it rains a lot, you will need to be sure to store up some rain gear.  If you think you may have to survive outdoors in an emergency situation, make sure that you and your family have something warm to put on your heads.  Someday after the economy has collapsed and people are scrambling to survive, a lot of folks are going to end up freezing to death.  In fact, in the coldest areas it is actually possible to freeze to death in your own home.  Don’t let that happen to you.

#5) An Axe

Staying along the theme of staying warm, you may want to consider investing in a good axe.  In the event of a major emergency, gathering firewood will be a priority.  Without a good tool to cut the wood with that will be much more difficult.

#6) Lighters Or Matches

You will also want something to start a fire with.  If you can start a fire, you can cook food, you can boil water and you can stay warm.  So in a true emergency situation, how do you plan to start a fire?  By rubbing sticks together?  Now is the time to put away a supply of lighters or matches so that you will be prepared when you really need them.

In addition, you may want to consider storing up a good supply of candles.  Candles come in quite handy whenever the electricity goes out, and in the event of a long-term economic nightmare we will all see why our forefathers relied on candles so much.

#7) Hiking Boots Or Comfortable Shoes

When you ask most people to list things necessary for survival, this is not the first or the second thing that comes to mind.  But having hiking boots or very comfortable and functional shoes will be absolutely critical.  You may very well find yourself in a situation where you and your family must walk everywhere you want to go.  So how far do you think you will get in high heels?  You will want footwear that you would feel comfortable walking in for hours if necessary.  You will also want footwear that will last a long time, because when the economy truly collapses you may not be able to run out to the shoe store and get what you need at that point. 

#8) A Flashlight And/Or Lantern

When the power goes off in your home, what is the first thing that you grab?  Just think about it.  A flashlight or a lantern of course.  In a major emergency, a flashlight or a lantern is going to be a necessity – especially if you need to go anywhere at night. 

Solar powered or “crank style” flashlights or lanterns will probably be best during a long-term emergency.  If you have battery-powered units you will want to begin storing up lots and lots of batteries.   

#9) A Radio

If a major crisis does hit the United States, what will you and your family want?  Among other things, you will all want to know what in the world is going on.  A radio can be an invaluable tool for keeping up with the news. 

Once again, solar powered or “crank style” radios will probably work best for the long term.  A battery-powered until would work as well – but only for as long as your batteries are able to last.

#10) Communication Equipment

When things really hit the fan you are going to want to communicate with your family and friends.  You will also want to be able to contact an ambulance or law enforcement if necessary.  Having an emergency cell phone is great, but it may or may not work during a time of crisis.  The Internet also may or may not be available.  Be sure to have a plan (whether it be high-tech or low-tech) for staying in communication with others during a major emergency.

#11) A Swiss Army Knife

If you have ever owned a Swiss Army knife you probably already know how incredibly handy they can be.  It can be a very valuable and versatile tool.  In a true survival situation, a Swiss Army knife can literally do dozens of different things for you.  Make sure that you have at least one stored up for emergencies.

#12) Personal Hygiene Items 

While these may not be absolute “essentials”, the truth is that life will get very unpleasant very quickly without them.  For example, what would you do without toilet paper?  Just think about it.  Imagine that you just finished your last roll of toilet paper and now you can’t get any more.  What would you do? 

The truth is that soap, toothbrushes, toothpaste, shampoo, toilet paper and other hygiene products are things that we completely take for granted in society today.  So what would happen if we could not go out and buy them any longer?

#13) A First Aid Kit And Other Medical Supplies

One  a more serious note, you may not be able to access a hospital or a doctor during a major crisis.  In your survival supplies, be absolutely certain that you have a good first aid kit and any other medical supplies that you think you may need.

#14) Extra Gasoline

There may come a day when gasoline is rationed or is simply not available at all.  If that happens, how will you get around?  Be certain to have some extra gasoline stored away just in case you find yourself really needing to get somewhere someday.

#15) A Sewing Kit

If you were not able to run out and buy new clothes for you and your family, what would you do?  Well, you would want to repair the clothes that you have and make them last as long as possible.  Without a good sewing kit that will be very difficult to do.

#16) Self-Defense Equipment

Whether it is pepper spray to fend off wild animals or something more “robust” to fend off wild humans, millions of Americans will one day be thankful that they have something to defend themselves with.

#17) A Compass

In the event of a major emergency, you and your family may find yourselves having to be on the move.  If you are in a wilderness area, it will be very hard to tell what direction you are heading without a compass.  It is always a good idea to have at least one compass stored up. 

#18) A Hiking Backpack

If you and your family suddenly have to “bug out”, what will you carry all of your survival supplies in?  Having a good hiking backpack or “survival bag” for everyone in your family is extremely important.  If something happened in the city where you live and you suddenly had to “go”, what would you put your most important stuff in?  How would you carry it all if you had to travel by foot?  These are very important things to think about. 

#19) A Community

During a long-term crisis, it is those who are willing to work together that will have the best chance of making it.  Whether it is your family, your friends, a church or a local group of people that you know, make sure that you have some people that you can rely on and work together with in the event that everything hits the fan.  Loners are going to have a really hard time of surviving for long.

#20) A Backup Plan

Lastly, it is always, always, always important to have a backup plan for everything.

If someone comes in and steals all the food that you have stored up, what are you going to do?

If travel is restricted and your can’t get to your “bug out” location immediately do you have a Plan B?

If you have built your house into an impregnable survival fortress but circumstances force you to leave do you have an alternate plan?

The truth is that crisis situations rarely unfold just as we envision.  It is important to be flexible and to be ready with backup plans when disaster strikes. 

You don’t want to end up like the folks in New Orleans after Hurricane Katrina.  You don’t want to have to rely on the government to take care of you if something really bad happens. 

Right now the U.S. strategic grain reserve contains only enough wheat to make half a loaf of bread for each of the approximately 300 million people in the United States.

How long do you think that is going to last?

Now is the time to get ready.

Now is the time to prepare.

The United States economy is going to collapse and incredibly hard times are coming.

Will you be able to survive when it happens?

Megabanks: The Banking Oligarchy That Controls Assets Equivalent To 60 Percent Of America’s GNP

Today financial power is being concentrated in the hands of fewer and fewer individuals.  In fact, the six biggest banks in the United States now possess assets equivalent to 60 percent of America’s gross national product.  Back in the 1990s that figure was less than 20 percent.  These six banks – Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo – literally dictate what goes on in the U.S. banking industry.  These entities are the poster children for “too big to fail”, and they donate massive amounts of cash to the campaigns of both Republicans and Democrats to ensure that they will continue to receive favorable treatment.  The vast majority of Americans have had a banking account, a credit card and/or a mortgage with one of these institutions at some point.  If they acted in concert, these six banks could literally bring down the U.S. economy overnight if they wanted to.  Together with the Federal Reserve, these six banks represent the real financial power in America.  They are the 800 pound gorilla in the room that influences nearly every major financial deal that gets done and virtually every major political decision that gets made.  As the last couple of years have demonstrated, top politicians from both parties (John McCain and Barack Obama for example) will instantly jump into action and start advocating that the U.S. government spend billions upon billions of dollars when the interests of these behemoths are threatened.  The frightening thing is that the power of these megabanks is growing at a frightening pace.  As dozens upon dozens of smaller U.S. banks are “allowed to fail”, they either go out of existence or the Feds actually encourage these smaller banks to sell themselves to one of the big sharks.  In either event, the banking power in the United States becomes further consolidated in the hands of the megabanks.

Bill Moyers recently interviewed Simon Johnson and James Kwak, the authors of a new book entitled 13 Bankers: The Wall St. Takeover and the Next Financial Meltdown.  During that interview Kwak described to Moyers just how explosive the growth of the power of these megabanks has been….

Bill Moyers: And you write that they control 60 percent of our gross national product?

James Kwak: They have assets equivalent to 60 percent of our gross national product. And to put this in perspective, in the mid-1990s, these six banks or their predecessors, since there have been a lot of mergers, had less than 20 percent. Their assets were less than 20 percent of the gross national product.

Does it alarm you that the banking elite have accumulated such a large amount of financial power?

It should.  These institutions have the power to wreck entire economies.  Just consider what happened in Greece lately.  Now, it is being alleged that the megabanks are ripping off American cities with the same kinds of predatory deals that brought down the financial system in Greece. 

And that is what these megabanks are.

They are predators.

In fact, a very revealing article in Rolling Stone described Goldman Sachs this way….

The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

Unfortunately, they may have actually been understating things a bit.

These megabanks have rigged the game so that the wealth of the nation is slowly transferred from us to themselves and to the international financial interests that control them.

They can make money if the markets are going up, and they can make money if the markets are going down.

For example, in a newly released email from the height of the housing crash, the CEO of Goldman Sachs bragged that his firm “made more than we lost” by betting against the housing market.

Thankfully the SEC is starting to look into the fraud that Goldman Sachs committed during this time period, but the truth is that Goldman is not likely to receive any more than a slap on the wrist for what it has done.

They are way too big, way too powerful and have too many friends in high places for them to get into any real trouble.

For example, it has come out that Barack Obama does not intend to return any of the campaign contributions that he received from Goldman Sachs.  And surely they will be glad to continue to pour big money into his political coffers.

So where does that leave the rest of us?

Well, the rest of us can expect higher taxes and a lower standard of living according to the IMF.  The IMF (which has deep connections to these megabanks) says that the party is “over” for nations that have been enjoying the good life.  In a recent article, the Washington Post summarized the message that the IMF is trying to communicate through their recent policy papers….

To keep the global economy on track, people in the United States and the rest of the developed world need to work longer before retiring, pay higher taxes and expect less from government. And the cheap imports lining the shelves of mega-chains such as Wal-Mart and Target? They need to be more expensive.

So are you ready to work longer, pay higher taxes, expect less from government and have a lower standard of living?

That is what the IMF says we are all going to be facing in the years ahead.

We are all going to financially suffer as the megabanks continue to thrive and consolidate power.

Isn’t that wonderful?

You say you don’t like that so much?

Well, good luck taking on the 800 pound gorilla.

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