Is The U.S. Government Stockpiling Food In Anticipation Of A Major Economic Crisis?

Is the U.S. government stockpiling huge amounts of food and supplies in anticipation that something bad is about to happen?  Is something about to cause a major economic crisis that will require large quantities of emergency food?  For a while, I have been hearing things about the government storing food through the grapevine and I have not been sure what to think about those rumors.  Well, today I received a phone call that blew me away.  I debated for quite a while before I decided whether or not to share this information with you all.  Normally I do not like to talk about anything unless I am able to prove it by pointing to an article in the mainstream media.  But the source of the information that I am about to share with you is rock solid.  I cannot reveal his name, so you will just have to trust me on that.  Hopefully the following information will be one more "dot" as we all try to connect the dots about what is really going on out there.

This morning I received a call from a very prominent person in the storable food industry.  He has asked me not to reveal his name.  I have been dealing with him for an extended period of time and I consider him to be a rock-solid source.  When I talked to him today, he had just received a huge order for storable food from a U.S. government source.  He told me that the dollar amount of the order was in the "five figures".

When he asked about why so much food was being ordered, the government source told him essentially that "you know what is coming".  When pushed further, the government official did not elaborate.
It was unclear whether this was part of a larger food stockpiling program by the government.  Perhaps this order was just part of the normal preparations that government agencies make for potential emergencies.
Nobody could blame the government for storing up some emergency food.  That is something that we all should be doing.
The truth is that the government is taking emergency preparedness very seriously these days.  For example, you can see video of a high-level NASA official urging NASA employees to develop preparedness plans for their own families right here.
But what if this is a sign of something bigger?
Remember, this is not some rumor I just pulled off the Internet.  This is not something that someone got from "an aunt" somewhere.
I got this information over the telephone from the person who took the order.
I promised that I would not reveal any more specific details, so I won't.
But this does seem to fit with a pattern that we are beginning to see emerge.
Earlier this year, FEMA issued an RFI (Request For Information) that inquired about the availability of 140 million meals of emergency food.  Apparently the food was meant to be stored up in case there was a "catastrophic disaster event" along the New Madrid Fault.
You can view this FEMA RFI right here.  The following is an excerpt....

The Federal Emergency Management Agency (FEMA) procures and stores pre-packaged commercial meals to support readiness capability for immediate distribution to disaster survivors routinely.  The purpose of this Request for Information is to identify sources of supply for meals in support of disaster relief efforts based on a catastrophic disaster event within the New Madrid Fault System for a survivor population of 7M to be utilized for the sustainment of life during a 10-day period of operations.   FEMA is considering the following specifications (14M meals per day):
- Serving Size - 12 ounce (entree not to exceed 480 calorie count);
- Maximum calories - 1200 and/or 1165 per meal;
- Protein parameters - 29g-37g kit;
- Trans Fat - 0;
- Saturated Fat - 13 grams (9 calories per gram);
- Total Fat - 47 grams (less than 10% calories);
- Maximum sodium - 800-930 mg;
Requested Menus to include snacks (i.e. fruit mix, candy, chocolate/peanut butter squeezers, drink mix, condiments, and utensils).  All meals/kits must have 36 months of remaining shelf life upon delivery.   Packaging should be environmentally friendly.

Mysteriously, seven days later this RFI was cancelled.
At that same time, FEMA also issued an RFI that sought to identify a supplier for 140 million blankets.  You can view that RFI right here.  The following is an excerpt....

The Federal Emergency Management Agency (FEMA) procures and stores blankets to support readiness capability for immediate distribution to disaster survivors routinely.  The purpose of this Request for Information is to identify sources of supply for blankets in support of disaster relief efforts based on a catastrophic disaster event within the New Madrid Fault System for a survivor population of 7M to be utilized for the sustainment of life during a 10-day period of operations.   FEMA is considering the following specifications (14M blankets per day):
- 100% cotton;
- White;
- 66" x 90"

Also, there have been some much publicized shortages of storable feed recently.  There has been much speculation about whether or not the government is part of the reason for these shortages.
There are some products that simply were not available for an extended period of time.  For example, the following was posted on the Mountain House home page....

As you know we have removed #10 cans from our website temporarily. The reason for this is sales of #10 cans have continued to increase. OFD is allocating as much production capacity as possible to this market segment, but we must maintain capacity for our other market segments as well.

The shortages around the country got so bad at one point earlier this year that a special alert was posted on Raiders News....

Look around you. Read the headlines. See the largest factories of food, potassium iodide, and other emergency product manufacturers literally closing their online stores and putting up signs like those on Mountain House's Official Website and Thyrosafe's Factory Webpage that explain, due to overwhelming demand, they are shutting down sales for the time being and hope to reopen someday.

Unfortunately, shortages have not been limited to storable food.  Most Americans don't realize this, but there is a significant shortage of certain pharmaceutical drugs in many areas of the country right now.  Just check out the video news report posted below....

In addition, it is not just in the United States where food is being aggressively stored up.  For example, a recent article in The Telegraph noted that governments all over the globe are now stockpiling food....

Authoritarian governments across the world are aggressively stockpiling food as a buffer against soaring food costs which they fear may stoke popular discontent.

Also, some governments are now gobbling up as much farmland as they can.
According to the New York Times, China has been buying up "vast tracts of Latin America’s agricultural heartland" and is seeking to acquire quality farmland all over the globe.
So what does all of this mean?
It could mean something.
It could mean nothing.
But as I have written about so much recently, we really do seem to be on the verge of a major economic crisis.
The signs that the financial world is melting down are all around us.  I won't take the time to repeat what I have covered in the last few days here.  If you missed any of it, just go back and read these articles over....
*Is Financial Instability The New Normal?
*Depressed As A Nation? 80 Percent Of Americans Believe That We Are In A Recession Right Now
*Nervous Breakdown? 21 Signs That Something Big Is About To Happen In The Financial World
One thing that I haven't covered yet is a very curious move by Lloyd's of London.  It turns out the Lloyd's of London has started pulling money out of banks in Europe’s peripheral economies according to Bloomberg....

Lloyd’s of London, concerned European governments may be unable to support lenders in a worsening debt crisis, has pulled deposits in some peripheral economies as the European Central Bank provided dollars to one euro-area institution.

At this point, world financial markets have officially entered "bear" territory.  In fact, global stocks are down approximately 20 percent since May.
Many believe that what we have seen is just the beginning of another major financial crisis.
For example, in a recent editorial for The Ticker, Karl Denninger (who saw the 2008 crash coming) warned that the house of cards is starting to fall once again....

Well, America (and the world), you’ve been scammed by the financial institutions and governments for the last 30 years.  2008 was the first spasm of recognition but was short-circuited by…. you guessed it…. even more scams.  Rather than demand truth and an end to the games the American consumer lapped up the frauds and schemes of the politicians on both sides of the aisle who conspired with the financiers to rip you off once again.

Later on in the editorial, Denninger stated that he hopes that all of us have "taken the last couple of years to become prepared"....

Now recognition of that fact is dawning on people in a convulsive fashion, and markets of all sorts are reacting as one would expect when their entire worldview is exposed as having been a gigantic and intentional pyramid scheme constructed of debt layered upon debt thatcannot be paid down.  The wrong thing was done in 2008 and there is zero evidence that our government has changed one iota in their singular focus on misdirection and lies in this regard.
Welcome to awareness; I hope you’ve taken the last couple of years to become prepared.

Well, if the anecdotal evidence presented above is an indication of a larger trend, it appears that the government is getting prepared.
And if the government is stockpiling food, who can blame them?
It should be obvious to anyone that the world has become an incredibly unstable place.
Hopefully we are not about to enter another major economic crisis, but it never hurts to be prepared.
If anyone out there has any additional information that is relevant to this report, please let me know.
If the government really has started to aggressively stockpile food, that would be an important thing to know.
If it is happening, the mainstream media surely will not tell us about it.  So we will have to rely on one another for information.

17 Facts That Prove That The Average American Family Is Getting Absolutely Pulverized By This Economy

How in the world does the average American family survive in this economy?  The median household income is a little bit less than $50,000 a year right now.  So let’s call that about $4000 a month.  But before any of that money gets spent, you have to take out at least $1000 in taxes.  That leaves about $3000 a month to pay all the bills with.  With that $3000 you have to pay the mortgage (or rent), make the car payments, make the student loan payments, pay for power and water, pay for health insurance, pay for home insurance, pay for car insurance, pay the phone bill, pay the Internet bill and pay the cable bill.  On top of all that, every member of the family needs three meals a day and the cars need to be filled up with gasoline or they won’t go anywhere.  Of course I haven’t even mentioned expenses that don’t happen every month such as car repairs or new shoes.  No wonder so many families are feeling so financially stressed!
The truth is that American families are getting squeezed harder than they have been in ages.  The number of good jobs is declining, incomes are going down, and the cost of living just keeps going up.
The following are 17 facts that prove that the average American family is getting absolutely pulverized by this economy….
#1 The cost of a health insurance policy for the average American family rose by a whopping 9 percent last year.  According to a report put out by the Kaiser Family Foundation and the Health Research and Educational Trust, the average family health insurance policy now costs over $15,000 a year.
How in the world can most families afford that?  Yes, in many cases employers are paying for at least a portion of that, but still that seems absolutely outrageous.
#2 Due to rising costs, a lot of employers are completely getting rid of health plans for their employees.  In fact, the percentage of Americans covered by employer-based health plans has fallen for 11 years in a row.
#3 The number of uninsured Americans continues to rise.  Things have gotten so bad that an all-time record 49.9 million Americans do not have any health insurance at all.
#4 At this point, most American families are tapped out financially.  According to the U.S. Labor Department, incomes and spending were both down for the second straight year in 2010.
#5 At the same time, the employment picture continues to look worse with each passing month.  According to the U.S. Bureau of Labor Statistics, the number of layoffs in the United States was up 14 percent in August.
#6 Even if you do have a job that doesn’t mean that you are doing much more than surviving.  According to Paul Osterman, a professor of economics at MIT, approximately 20 percent of all employed Americans are making $10.65 an hour or less.
#7 The amount of debt that the average American family has piled up is absolutely staggering.  The median yearly wage in the United States is just$26,261, but the average American household is carrying $75,600 in debt.
#8 Consumer confidence is extremely low right now.  If the U.S. economy was in good shape, the Consumer Confidence Index would be up around 90.  Instead, it is sitting at 45.4.
#9 Nearly every recent survey shows that the American people are feeling really depressed about the economy right now.  In fact, one poll found that 80 percent of them believe that we are actually in a recession right now.
#10 Many consumers are seriously starting to cut back on spending again, and that is not a good sign for the U.S. economy.  According to one recent study, 40 percent of all Americans have cut back on their spending within the last 60 days.
#11 It certainly does not help that millions of good jobs have been shipped out of the country.  Sadly, the trend of offshoring our jobs is going to continue to accelerate if something is not done.  According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades.
#12 There is a lot of fear in the workforce right now.  According to Gallup, 30 percent of all employed Americans are worried that they will be laid off soon.
#13 Today, there are 5.9 million Americans between the ages of 25 and 34 that are living with their parents.  That is putting an even greater strain on the budgets of many families.
#14 American families have gotten very accustomed to using plastic to pay for things.  Today, the average U.S. household has 13 different credit cards.
#15 Many American families are not making it at all in this economy.  Last year, 2.6 million more Americans dropped into poverty.  That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.
#16 For many American families, living on food stamps has become a way of life.  Today, there are more than 45 million Americans on food stamps and we keep setting a brand new record almost every single month.
#17 Things have gotten so bad that many American families are selling off whatever they can in order to survive.  For example, down in Florida hundreds of people have been selling off their burial plots in an attempt to raise cash.  The following is an excerpt from a local news report about this new trend….

Sellers are posting online, using burial plot brokers, and also funeral homes to market the real estate. Some of those advertisements show single plots starting at about $1,000, while family plots can go for up to $50,000.

Most American families are living in a state of almost constant financial stress.  Way too many parents are spending way too many sleepless nights wondering how in the world they will be able to keep their heads above water for another month.
Very few families seem to have “extra money” for stuff these days.  Yeah, there are the “privileged few”, but most people are really struggling to get by.
In America today, if you are able to keep your home from being foreclosed and you are able to put food on the table and clothes on the backs of your family then you are doing pretty good.
Sadly, as our current economic crisis deepens, the average American family is going to have an even more difficult time trying to survive financially.

The Growing Intolerance Toward Free Speech

In America, anyone has the right to speak their mind – but those opinions can sometimes carry a high price. At least that’s been the experience of some high profile figures who’ve lost their jobs, or their reputations, after voicing their views. Especially when it comes to some hot-button issues, as RT’s Gayane Chichakyan reports from Washington.

THE EURO: A Machine Of Perpetual Destruction

The latest piece by Ambrose Evans-Pritchard of the Telegraph highlights a disturbing error this deep into the crisis.  Angela Merkel is still referring to this crisis as a debt crisis:

Angela Merkel told German industry today that we are not facing ”a euro crisis, but a debt crisis.”

He goes on to describe why this is wrong:

“She is wrong. Total levels of private and sovereign debt in the eurozone are lower than in the U.K., the U.S., and far lower than in Japan.

…Not because of debt, except in the most superficial sense.

The reason this crisis keeps grinding ever deeper is because the euro itself is a machine for perpetual destruction. The currency is fundamentally warped and misaligned.

It spans a 30pc gap in competitiveness between North and South. Intra-EMU current account deficits have become vast, chronic, and corrosive. Monetary Union is inherently poisonous.”

Now we’re making progress!  Mr. Evans-Pritchard has an enormous audience in Europe so hopefully his message will get through to some extent.  You can’t resolve a disease if you don’t even understand what’s causing it.  Merkel’s comments are eerily similar to what we heard from Ben Bernanke and Hank Paulson in 2008 when they misdiagnosed a household debt crisis as a bankingcrisis.  Europe must understand that this is a currency crisis and that there is only one true fix — the creation of an autonomous Europe.  Mr. Evans-Pritchard thinks that can best be done via a split in the Euro (which would still require a central Treasury) or dissolution.  I have said there is a third option — a United States of Europe.  But we can’t expect them to move in the right direction if they still think this is a banking and debt crisis.  That will simply lead to bank bailouts and the American disease of bailing out banks without fixing the actual cause of the economic problem.

Nicely Said.....................

Undoubtedly, though, inflation aggravated every evil, ruined every chance of national revival or individual success… Partly because of its unfairly discriminatory nature, it brought out the worst in everybody – industrialist and worker, farmer and peasant, banker and shopkeeper, politician and civil servant… It caused fear and insecurity among those who had already known too much of both… It corrupted even where corruption had been unknown, and too often where it should have been impossible.”

– Adam Fergusson, When Money Dies

Doug Casey Answers The Hard Questions About Hard Times

Best Doug Casey interview ever? You decide.

 

 

The following must-watch interview of Doug Casey was conducted on September 9, 2011 by Tommy Humphreys as part of his new Speculator Series.
Humphreys does a great job of pushing Doug to defend his brand of no-holds-barred capitalism and the impact it would have on real people with real problems in today’s tough economy.  Doug’s answers might surprise you; they will certainly educate you.
On viewing the video, Doug commented that he thought it was the best interview he’s done in a couple of decades, and we agree. 

End To An Empire

Dear Reader, do you recall our Sound Of Cannons interpretation of the Iraq War? Well, we didn’t either.

But then we remembered. How could the Bush Administration do something so stupid? It played right into the terrorists’ hands. It put the empire on course for bankruptcy. While stirring up enemies everywhere.

Our interpretation of this was that George W. Bush and the neocons were not really trying to protect the US; they were trying to destroy it. Otherwise their actions made no sense. After all, they aren’t stupid.

In other words, they were just the witless tools of history. America had gotten too big for her britches. She had no foreign enemies that were up to the challenge of bringing her down. She needed to do the work herself.

So far, so good. The empire is going broke...and nobody seems able to do anything about it.

What’s more, the work of destruction goes on!

The United States’ audacious bid to dominate the greater Middle East by military force is going at close to full throttle. This is despite the talk in Washington about over-extension, budgetary constraints, and war fatigue. Three stories this week reveal this dismaying truth while conveying the flavor of the prevailing mindset in the White House and the security agencies.

First is the revelation that the imperial-scale American embassy complex in Baghdad already needs expansion to accommodate the 6,000 mercenaries there to ride shotgun for the 9,000 civilian employees whenever they clamber out of their bomb-proof offices. That number includes roughly 1,200 US officials and 7,800 hired help from places like Bangladesh and Sri Lanka to do the laundry, clean the rooms and serve the food. The mercenaries also will guard the citadel and its satellite fortresses in Basra, Mosul and Erbil. These Blackwater types have the additional duty of escorting salesmen and agents for American businesses selling and servicing weapons for the Iraqi military. The forces commander-in-chief will be Hillary Clinton. They are in addition to the 10,000 troops that Washington is trying to impose on the reluctant Iraqi government and thousands more on call next door in Kuwait,...

The second story recounts the Obama administration’s plans to escalate further the drone campaigns in Yemen and Somalia. There is a mild debate between those who want to restrict assassinations to (supposedly) identified leaders of al-Qaida in the Arabian Peninsula and al-Qaida in East Africa. Others are keen to expand the target list to include (suspected) foot soldiers; other radical Islamist groups who use violence against people on our side, i.e. remnants of the Saleh regime in Yemen or those who currently reside in the presidential palace in Mogadishu (with an American-sponsored African Union force having taken the baton from the Christian Ethiopians whom we earlier inflicted on the Muslim Somalis in a foregone bloody failure to hold at bay the Islamists); and even radical fundamentalist organizations only potentially hostile to the United States. In this latter perspective, a manifest threat to the United States is unnecessary for targeted killings and Special Forces operations. Again, there is no public statement of exactly why it is imperative to do these things that not only violate international law and national sovereignty but are counter-productive by their provoking bitter anti-American feelings among the natives — leading some to contemplate doing us harm directly.

Finally, there is the mounting military campaign to eliminate all anti-American groups in Northwest Pakistan — be they local al-Qaida residue, some variety of Taliban, the Haqqani network, their Kashmiri and Punjabi based allies and whomever else gets in the way...

Denninger: “I Hope You’ve Taken the Last Couple of Years to Become Prepared”

Karl Denninger, who forecasted the breakdown in stock markets a couple of weeks before the crash of 2008, says that all hell is now breaking loose:

You’ve once again had your 401k and IRA whacked by the incessant lies and scams promulgated by your government and the “financial wizards” who seduced you back into the markets with half-truths and siren songs.
The market opened this morning down 300+ DOW points and the VIX slammed through the 40 level.  There will clearly be bounces along the line but as things stand right now the underlying financial conditions have not changed one iota from where they were in 2007.  Instead of allowing those who were overlevered to go bust and have capitalism do what it does best – creative destruction of the foolish – we instead took private effectively-defaulted risk and transferred it to the public balance sheet.
But that’s a scam – it simply moves the deck chairs on the economic Titanic, because governments can only raise funds through two means: They can borrow money (increasing leverage) or they can tax it (decreasing consumption or investment by private parties.)  The obvious “borrow it” choice was made here in the US and elsewhere, but just as with private borrowing government borrowing has limits and we’re now running into them, and deficit spending creates false demand signals in the economy that must eventually end.
Recognition that you’ve been scammed can be a truly ugly thing.  It is usually violent at an emotional and financial level, and more often than one would like it has a habit of being violent in the physical sense as well.
Well, America (and the world), you’ve been scammed by the financial institutions and governments for the last 30 years.  2008 was the first spasm of recognition but was short-circuited by…. you guessed it…. even more scams.  Rather than demand truth and an end to the games the American consumer lapped up the frauds and schemes of the politicians on both sides of the aisle who conspired with the financiers to rip you off once again.
The opportunity to address these issues as I have been tirelessly attempting to do, was ignored by those in policy roles in Washington DC.  Those who have been reading The Ticker are well-aware of my efforts going back into 2007 and through the 2008 Presidential campaign on both sides of the aisle, along with my efforts since.
They’ve been ignored with the political establishment choosing to knob-job the banks and lie to you, the public, rather than address the fact that the entire last 30 years have been one gigantic economic scam and that what they were attempting to do could not, as a matter of mathematics, succeed.
Now recognition of that fact is dawning on people in a convulsive fashion, and markets of all sorts are reacting as one would expect when their entire worldview is exposed as having been a gigantic and intentional pyramid scheme constructed of debt layered upon debt thatcannot be paid down.  The wrong thing was done in 2008 and there is zero evidence that our government has changed one iota in their singular focus on misdirection and lies in this regard.
Welcome to awareness; I hope you’ve taken the last couple of years to become prepared.
Source: Market Ticker

Denninger has for years put forth mathematically undeniable empirical evidence that shows not only how unsustainable our system is, but the lunacy in the government’s purported solutions and response.
Our debt load is too high. Our production capacity has been decimated. Our GDP growth is negative and has been for a decade (if you look at the real data).
It may very well all be coming to a head. While we opined earlier that the triggers for the meltdown of the last 24 hours may not have been a loss of confidence in the US dollar, that doesn’t mean it won’t happen as a result of what will play out in coming weeks and months.
It’s clear that stock markets world wide are in panic mode, and this will not bode well for investors, as Denninger suggested in a commentary yesterday:

I’ll go ahead and make the prediction now: This time will be worse than 2008 and we’ll measure from SPX 1370, which makes the minimum downside target under 600.  And no, this time it won’t recover with more “hopium” and fraud – that card has already been played which means the pension funds and annuities across this nation are going to get smoked, exactly as I warned about four years ago.

Consider the implications of what led to the collapse of  2008, our failure to resolve the problem, the obscene debt we created in the last three years, and the economic disaster that is the American job market.
Many have been holding out hope that “they” will do something to keep everything from normal.
They won’t.
So if you haven’t spent the last two or three years preparing, then we’d recommend you get into high gear right now. Not tomorrow. Not next week. Now.
The world as we have come to know it, in one way or another, is going to crumble over coming years. It may happen overnight in a rapid waterfall collapse, or it may deteriorate over several years. Regardless of how it happens or exactly how long it takes, we’re running out of time and the outcome will be the same. Here’s historical proof exists that this can happen in America. In The Redline: A Tale of Collapse, Brandon Smith depicts a scenario that may not be too far off from what reality will look like in America in the not too distant future.
Suffice it to say that if you want to avoid, or at least insulate yourself from, living in a world of poverty, violence, and despair, consider how you can become more self reliant today.

• What will you do if commerce stops due to a currency collapse and the banks are closed- how will you buy food, medicine and bare essentials?
• Can you grow your own food or raise micro livestock?
• Do you have the ability to protect yourself at home or in public?
• What skills do you bring to the table that will be of use when the service industry in America collapses – what are you capable of producing?
• How prepared are you to sustain your family in the event of a hyperinflationary or hyperdeflationary collapse – what will you use to pay your monthly mortgage and bills if traditional currencies collapse or you lose your primary income stream?

All of these questions and many more should be at the top of your list of things to do right now.
Obviously, mainstream media, government and central bankers have been lying to us about the state of our economy and financial markets. Perhaps preparedness minded web sites like SHTFplan are wrong.
But what will you do if we’re right?

Nicely Said............................

"We're not huntin' trouble, we're peace lovin' people.
But if trouble should find us, we'll stand up and fight." - Red Steagall, "Stand Up and Fight"

The Solyndra Scandal Reeks, but the Entire Green-Energy Program Is a Scam

I’ve commented on the corruption of the Solyndra scandal, but it’s important to understand this is not just a story of sleaze.

From an economic perspective, the real problem is that green-energy programs cause a misallocation of capital. Simply stated, government intervention diverts resources from more productive uses.
Here are a couple of examples, explained in videos put together by Senator Jim DeMint’s office.
The first video shows how a subsidiary of Coca-Cola used White House favoritism to subsidize its energy costs.
And the second video explains how a Spanish company, thanks to the Obama White House, benefited from industrial policy.
And what’s the economic impact of these forms of crony capitalism? I did a back-of-the-envelope calculation, estimating that there’s about $160,000 of investment for every real job in the private sector.

Will the Real Culprits of Euro Doom Stand Up?

The Telegraph has carried an article entitled "The Great Euro Swindle" by Peter Oborne and Frances Weaver who have written a book on the subject (Guilty Men) from which the article is excerpted. They ask a good question, which is why those who have backed the unraveling euro – especially Europe's and Britain's leaders – are not exposed to more criticism and professional and personal ramifications from what has occurred.

One might think, given the extent of the disaster and the chaos it is causing, that there would more of an outcry to examine who was really behind the thing. In fact, as the euro and perhaps the EU continue to crumble, there will be attempts made to hold people accountable. But I will state for the record that these attempts will not be complete. Somebody, or perhaps several, will "take the fall" for everyone else. Oborne and Weaver, despite their evident sincerity, are seemingly feeding into this meme.

Unfortunately, from what I can tell, as furious as they apparently are, they are not willing to extend the blame to those who truly need to be held accountable. Instead, they are focused on what might be termed the "enablers" – those who carried out EU and euro policies and backed them but were not responsible for the concept itself, or its realization.

This is an old game. The Anglosphere power elite – a group of impossibly wealthy families that controls the world's central banks – is evidently and obviously responsible for much of what has gone wrong. But as the Euro project continues its decline, we will no doubt find blame is being laid elsewhere ... on highly placed functionaries. Of course, it's important, nonetheless, and a contribution to how things work. So let's review them before returning to our main thesis.

The first example is the Financial Times. Oborne and Weaver state that something went wrong with this prestigious mainstream newspaper about 25 years ago when it was captured by a "clique of left-wing journalists." As a result, the FT "has been wrong on every single major economic judgment over the past quarter century."

The biggest error was the support of the EU project itself, support that Oborne and Weaver call "religious." They cite the paper's Lex column, circa January 2001, as an example of how wrongheaded the paper could be. "With Greece now trading in euros, few will mourn the death of the drachma. Membership of the eurozone offers the prospect of long-term economic stability."

The paper also attacked euro-skeptics directly, claiming that those who differed with the paper were "immature." When the euro and the EU began to become undone in 2008, and countries like Ireland were suddenly exposed as failing, the FT continued its defense of the union. "European monetary union is a bumble bee that has taken flight," asserted the newspaper's leader column. "However improbable the celestial design, it has succeeded in real life."

What's the verdict, according to Oborne and Weaver? "For a paper with pretensions to authority in financial matters, its coverage of the single currency can be regarded as nothing short of a disaster."

Then there's the high-profile lobbying group, the Confederation of British Industry (CBI), the mission of which is to help create and sustain the conditions in which businesses in the United Kingdom can compete and prosper for the benefit of all.

The CBI claims to represent a broad cross-section of businesses. But according to the article, "by the mid-1990s a small clique of large corporations were firmly in control, and they had the director general they wanted in Adair (now Lord) Turner, later to become chairman of the disastrous Financial Services Authority (FSA). [This clique] claimed an overwhelming majority of British businessmen backed the single currency – a vital propaganda tool for pro-euro campaigners."

The CBI lobbied hard for Britain to join the single currency, even though it soon became obvious that most of its smaller, entrepreneurial business members were opposed to the CBI's position on the euro. Apparently, not representing the majority of its members on the EU issue did not deter the CBI leadership.

The BBC, England's "progressive" monopoly media, is perhaps the largest culprit in Oborne and Weaver's view. "The BBC betrayed its charter commitment and became a partisan player in a great national debate – all the more insidious because of its pretence at neutrality. For example, in the nine weeks leading to July 21, 2000, when the argument over the euro was at its height, the Today programme featured 121 speakers on the topic. Some 87 were pro-euro compared with 34 who were anti. BBC broadcasters tended to present the pro-euro position itself as centre ground, thus defining even moderately Eurosceptic voices as extreme." Here's some more:

As Rod Liddle, then editor of the Radio 4's Today programme, said: "The whole ethos of the BBC and all the staff was that Eurosceptics were xenophobes." He recalls one meeting with a senior BBC figure over Eurosceptic complaints of bias. "Rod, the thing you have to understand is these people are mad. They are mad."

In truth the Eurosceptics were only too sane. Margaret Thatcher, John Redwood, David Owen, William Hague and Bill Cash were mocked. But they grasped the problems the euro would bring. Speaking in the House of Commons in 1936, Winston Churchill said: "The use of recriminating about the past is to enforce effective action at the present."

So what should we learn from the argument over the euro? First, we should cherish that British trait, eccentricity. Study of the public discourse at the height of the euro debate shows how often pro-euro propagandists isolated their critics by labelling them cranks. Take Observer columnist Andrew Rawnsley's column on January 31, 1999: "On the pro-euro side, a grand coalition of business, the unions and the substantial, sane, front rank political figures. On the other side, a menagerie of has-beens, never-havebeens and loony tunes."

Of course, given what's going on with the euro and the EU these days, the loony-tunes all seem to be located in Brussels, fighting a never-ending battle to save the euro from a default that is seemingly inevitable. In fact, the air of unreality is such that top euro-leaders are apparently moving ahead with a facility to allow Brussels to issue EU-wide euro bonds even though a German constitutional court in a recent ruling has made such issuance doubtful indeed.

All this is interesting but, nonetheless, the people at the very top of this flawed project are again escaping identification. The politicians, media and business leaders that want the EU to succeed are an important part of the mess, but they were not the founders.

Who were? Some have suggested the EU is an outgrowth of some sort of German/Nazi plan, but that doesn't seem very feasible. The Anglosphere elite was very evidently in charge of a post-war world, and the EU would not have come to fruition if the Anglo-American powers-that-be didn't want it to occur.

No, the EU is evidently and obviously a project of the Anglosphere power elite that seeks regional building blocks on the way to a one world government. The central banking economy initiated and implemented by this power elite is responsible for the current economic crisis; but the elite banking families have many enablers including the politicians clustered about Brussels.

If there is to be a movement aimed at holding people responsible for the euro disaster, I would hope for once that it would at least explain more fully how the pyramid of leadership actually works. The people at the very top are responsible for the ongoing economic crisis, just as in the 1930s the central banks they set up crashed the world's economy. At the time, the blame was shifted away from central banks and their controllers and toward the securities industry (Wall Street, etc.).

Now, the same meme shall be played out when it comes to the euro and the EU. Somebody will be made to pay, but it won't be the real elites, the impossibly wealthy central banking families. They never seem to get blamed.

Obama's misguided economic agenda

Some wiseguys at the Economic Freedom Network just released a survey alleging that the United States has fallen from the sixth-freest economy in the world to the 10th-freest. The survey is based on four foundations of a healthy capitalist society: "personal choice, voluntary exchange coordinated by markets, freedom to enter and compete in markets, and protection of persons and their property from aggression by others."
Or what progressives might call greed, racism, unfairness, and immorality.
Certainly, this decline is no surprise. After imagined outbreaks of "unfettered" capitalism, these tenets have been on the outs around these parts. Technocrats want to coordinate markets and choices. And "having" is now the same as "taking." Hey, and the government has been monumentally irresponsible with that "budgeting" deal for a few decades, so it's time to hold someone responsible. Why not the rich?
When President Barack Obama unveiled his new un-passable "deficit reduction plan," many accused him of playing class envy. The plan ostensibly calls for $1 in budget cuts (cuts that would never happen) for every $1 in tax increases ($1.5 trillion). And if we're not willing to ask more from the rich, says the president, "then the logic—the math—says everybody else has to do a whole lot more; we've got to put the entire burden on the middle class and the poor."
This argument is offered by Obama in endless iterations, but it won't add up until we invent an Arabic numeral that signifies a lie. In no way, by no percentage, no matter how you quantify or qualify or twist it, does the middle class (or certainly the poor) pay more in taxes than the rich. As an Associated Press fact check put it, "on average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data."
That doesn't mean a person can't argue the rich should pay more than the 80 or 90 percent of federal taxes they already do. Go for it. In that debate, Republicans can make many strong arguments about how tax-the-rich schemes (seemingly Obama's sole idea) are counterproductive. But there are three points that they can't make but should.
First, let's thank the rich for being so generous.
Because there is no shared sacrifice. If the wealthy were really paying their fair share of this out-of-control budget, the rest of us would be destitute tout de suite.
Taxes have not increased for the middle class in a very long time. The poor (by which we also mean people starting out and ending their careers) haven't been asked to "sacrifice" for that $3.7 trillion gift to humanity called a budget. If this immense government is so moral, patriotic, and embedded in our national fiber, why not ask everyone to participate, Mr. President?
Life's not fair.
You'll notice that for many progressives, taking from the rich is not simply a necessity of budgeting but a moral imperative and a tool to institute fairness that capitalism supposedly hasn't. After Rep. Paul Ryan deconstructed the president's phony political deficit plan, Daily Beast columnist Michael Tomasky asked whether the congressman is "stupid, a liar, or something even more malevolent, a morally diseased ogre who secretly believes ... that the rich deserve every handout government can offer them."
You'll notice that Tomasky is lashing out and moralizing as if someone had challenged his religious beliefs. ... Oh. Is earned money really a government handout? I guess that if you believe—as Tomasky and others clearly do—that the bigger the government the more moral the society, perhaps all of this makes sense somehow.
We don't need their money.
Even if Obama's increases on the rich would slightly help the bottom line on the deficit—and that is a best-case scenario without any entitlement reform—many barbarians like me would not care. It is no lasting solution. It's not a solution at all. We need a smaller, leaner Washington. It won't happen if we raise taxes without any coinciding reform and serious slashing of spending.

12 Reasons Not To Fear September’s Gold And Silver Price Smackdown

I absolutely love the precious metals price correction for it allows me to buy more! Nothing would make me happier than to see $800 gold and $10 silver again. The dollar price means absolutely nothing to me. The NWO’s continuing war with precious metals investors is as transparent as it is futile.Their predictable behavior this month is just more of the same and fits hand in glove with the last three years.The last thing men like the George Soros or David de Rothschild want is for regular people to invest in an asset class that has marked the course of human economic progress for thousands of years.These cowards will stop at nothing to postpone their day of reckoning.But fail they shall. Global investors around the world are finally embracing investment alternatives outside the purview of the fractional reserve banking system and the elites know it.

Take some time to consider these 12 disturbing facts and developments before liquidating your metals position, but, most importantly, LEARN TO THINK FOR YOURSELF.The following represent nothing less than a prelude to revolution.

1) All of the world’s major banks are insolvent. How much longer can Central Banks around the world run their fraudulent currency swap schemes or steal the wealth from future generations without consequence? How much debt can they create? Their toxic assets still exist, their derivatives are worthless, and their balance sheets are broken beyond repair.

2) When measured in actual inflation numbers,U.S. Treasury Bonds have a negative yield. Why would any sane investor put their money in a paper asset class with a diminishing return? This is a safe haven asset all of a sudden? What a joke.
3) The U.S. zero interest rate policy has destroyed billions in capital and continues to crush savers. In order to have a capitalist society, you need capital. In order to have capital, you need savings. In order to have savings, you need a realistic interest rate/yield on your savings. Do you notice a recurrent theme here?
4) To date, no bankster has been arrested for any crime, and the Dodd-Frank Wall Street Reform and Consumer Protection Act is an insult to those of us hoping for enforceable regulation. All this really means is that the banking fraud will continue-much to the delight of precious metal investors.
5)The global derivatives market is $1.5 quadrillion dollars. This is FRAUD. How can so much speculation in the system create prosperity in a world choking on debt? The Fed et al continually apply the Heimlich maneuver to no avail.
6) Hedge funds and market traders sold their one profitable asset class-METALS- to cover margin calls on their stocks. This is one of the reasons why gold and silver prices are dropping. The long-term fundamental price support for precious metals bull market remains intact. The assumption by many folks that the U.S. government will realistically address its deficits or fulfill its obligations to creditor nations borders on insanity. We cannot and we will not. The current use of political brinkmanship and fear mongering in Washington and on Wall Street to induce a specific political or economic effect combined with the declining participation of working class people in what was once the free market has rendered the current economic model obsolete. Nothing has or will change. The Fed will continue to bail out the banks, our economy will continue to tank, and the feverish masses will continue to pay for it!The only vaccine available for monetary rot IS gold and silver.
7) The COMEX just raised margin requirements on gold, silver and copper again (effective tomorrow, 9/27)This, too, is contributing to the current sell-off. Do not cower in the presence of evil. We hold the money; they hold worthless pieces of paper. The margin hikes are an excellent opportunity to acquire more metal. Accept the gift of volatility with open arms!
FYI: GOLD’S margin was raised 21%, SILVER-16%, COPPER-18%.
The insolvent banks are holding onto foreclosed properties-called REO’s (Real Estate Owned)- hoping that once the market recovers they will be able to realize substantial profits. Good luck with that. As Jim Willie recently said, the U.S. Real Estate Market is sinking in quicksand.
9) The stock market has lost 2,000 pts since its May high, and as a result, 401k retirement plans are under assault again. Gold and silver may be extremely volatile right now, but so is everything else.
10) Unemployment has not improved. The gainfully employed aren’t faring much better,either. More than 50% of Americans now make less than $30,000/yr. For an economy built on consumption, this does not bode well for future sustainable growth.
11) The poorest 50% of Americans now own just 2.5% of all the wealth in the United States.The disparity between rich and poor in this country has never been greater.
12) The “strong dollar paradox” is problematic for debt-laden America. A strong dollar for a sustained period is the last thing “the Bernank” wants. A strong dollar kills our exports and makes financing our hundreds of trillions in debt more expensive. Ben’s ultimate goal is to pay back our creditors with worthless pieces of paper. Deflation’s effect is cheaper prices, sure, but it also negatively impacts stock prices, real estate values,pensions, corporate profits and wages. The result is the same amount of debt with far less income and wealth to service it. Eventually, more money printing will be needed to revive the comatose American consumer and to placate Wall Street investors.Gold and silver prices will explode once the Fed fires up the printing press yet again.
Basically, the USDollar is the “Hail Mary” pass,the flavor of the month,the leper with the most fingers. The rush into the dollar is a transient event,the foolish endeavor of unrepentant,misguided investor hacks. Fear in Europe is creating tailwinds into our currency, for now. The free market has been destroyed, its form and function barely recognizable. Various global economic machinations resembling money printing, interest rate manipulation, currency swaps, paper money debasement, and a parade of crisis after crisis now rule the day. In time,like all fiat money, the dollar will also be exposed for what it is: an I.O.U with no intrinsic value. The American people will just be the last to feel the effects of all of these economic misdeeds since our Federal Reserve Bank can print all the dollars it wants whenever it wants.
“We learn from history that we do not learn from history.”-Georg Wilhelm Friedrich Hegel
The greed of evil men has disrupted the centuries old social order of mankind.What we are all experiencing together is the greatest economic paradigm shift in the history of the world,an event so complete in its destruction of freedom and liberty that most people simply refuse to acknowledge it. The strangulation of the middle class is almost complete.And the oxygen is becoming scarce.All the kings’ horses and all the kings’ men can’t put humpty dumpty back together again.The accelerating unraveling of free market capitalism is indeed troubling,but the willful disregard people have for one another bothers me more.Things are so bad now that I don’t know which situation is worse: the unparalleled crimes against humanity by the global banking crime syndicate, or the inability of reasonable human beings to see that their once prosperous lives will soon be buried under a mountain of debt they apparently have no problem subsidizing.Either way,precious metals are my preferred investment at this time.

Nicely Said.......................

"The fearful danger of the present time is that above the cry for authority, we forget that man stands alone before the ultimate authority, and that anyone who lays violent hands on man here, is infringing eternal laws, and taking upon himself superhuman authority, which will eventually crush him." - Dietrich Bonhoeffer

An eye-opening interview with renowned speculator Doug Casey, conducted by Karen Roche and JT Long of The Gold Report. Doug explains why fiat currencies around the world are destined for collapse… and what investors can, and should, do to protect themselves.


If dollar-dumping turns from a trickle into a flood, look out. Exploding prices (aka exorbitant inflation) resulting from the devaluation of the dollar will compound the problems we saw in 2007–2009. Catastrophe will come when everybody realizes that the dollar is an "IOU nothing." That's the downside in the decade(s) ahead, according to Casey Research Chairman Doug Casey. But an optimist at heart, in this exclusive interview with The Gold Report, Doug also identifies some reasons to be hopeful.

The Gold Report: You've been talking about two ticking time bombs. One is the trillions of dollars owned outside the U.S. that investors could dump if they lose confidence. And the other is the trillions of dollars within the U.S. that were created to paper over the crisis that started in 2007. Are these really explosive circumstances that will bring catastrophic results? Or will it just result in a huge, but manageable, hangover?

Doug Casey: Both, but in sequence. One thing that's for sure is that although the epicenter of this crisis will be the U.S., it's going to have truly worldwide effects. The U.S. dollar is the de jure national currency of at least three other countries, and the de facto national currency of about 50 others. The main U.S. export for many years has been paper dollars; in exchange, the nice foreigners send us Mercedes cars, Sony electronics, cocaine, coffee—and about everything you see on Walmart shelves. It has been a one-way street for several decades, a free ride—but the party's over.

Nobody knows the numbers for sure, but foreign central banks, and individuals outside the U.S., own U.S. dollars to the tune of something like $6 or $7 trillion. Especially during the recent crisis, the Fed created trillions more dollars to bail out the big financial institutions. At some point, foreign dollar holders will start dumping them; they are starting to realize this is like a game of Old Maid, with the dollar being the Old Maid card. I don't know what will set it off, but the markets are already very nervous about it. This nervousness is demonstrated in gold having hit $1,900 an ounce, copper at all-time highs, oil at $100 a barrel—the boom in commodity prices.

Some countries are already trying to get out of dollars, but it could become a panic if the selling goes from a trickle to a flood. So, yes, it's a time bomb waiting to go off, or maybe a landmine waiting to be stepped on. If a theatre catches fire and one person runs out, soon everybody rushes toward the door and they all get trampled. It's a very serious situation.

TGR: If panic erupts on the U.S. dollar, would products manufactured in the U.S. become super-cheap or super-expensive?

DC: They would become super-cheap. Everybody says that devaluing the dollar will stimulate U.S. industry because the products will become cheaper and foreigners will buy them. This is a huge canard everybody repeats and nobody thinks about. Yes, it is true for a while, but if devaluation were the key to prosperity, Zimbabwe should be the most prosperous country in the world as it has already collapsed its currency.

A strong currency is essential for a strong economy. Sure, a strong currency can hurt exporters for a while. But, a strong currency encourages manufacturers to invest in technology, and become more efficient. It rewards savings and results in the growth of capital that's critical for prosperity. A strong currency allows businessmen to buy foreign companies and technologies at bargain prices. It results in a high standard of living for the country, and yields social stability as a bonus. The idea that decreasing the value of currency to stimulate exports is a short-lived, stupid and counterproductive solution to the problem. People seem to forget that while the German currency was rising about sixfold from its level of 1971, and the Japanese yen about fourfold, those countries became the world's greatest export economies. It didn't happen despite a strong currency, but in large measure because of it.

TGR: Given that the U.S. is the world's biggest consuming nation, wouldn't fleeing the dollar create a big consumer vacuum in the international community? Doesn't the rest of the world want to keep up the high level of exports to these U.S. consumers?

DC: That's exactly why the U.S. is in such trouble; it's idiotically focused on consumption, while only production can create prosperity. The world doesn't need to stimulate consumption. This is another canard, because everybody has an infinite desire for goods and services. I know for myself, I'd like not just a car, but 10 Ferraris, a couple of Gulfstreams and 10 houses around the world. So, by myself, I have an infinite desire for goods and services. Multiply that by 7 billion other people. The only way to gratify those desires is by producing enough to trade with other people to give you what you want. When so-called "economists" think the problem is that we don't have enough consumption, that shows that the profession itself is bankrupt. It's actually quite embarrassing.

TGR: But other countries currently produce enough of what the U.S. wants. With U.S. dollars, that trade won't look good on their side eventually.

DC: The problem is the U.S. doesn't produce enough in return. The U.S. has been lucky to have a currency that has, so far, been accepted by everybody. But when everybody realizes that the dollar is an "IOU nothing" on the part of a bankrupt government and a society that doesn't really produce anything anymore, it's going to create a worldwide catastrophe. Those $7 trillion held by foreigners are going to become instant hot potatoes.

TGR: Considering what you said a moment ago, that the world doesn't need to stimulate consumption, you must find some irony in the Obama administration's plan to stimulate consumption again in the U.S. as a way to spur some economic growth.

DC: I'm afraid that after being counseled by the fools that surround him, Obama talking about economics is like the blind leading the doubly dismembered. They want to spend $450 billion trying to create new jobs—but these are government jobs, where you have people digging holes during the day and filling them up at night to create the appearance of employment. No government has any idea what the market really wants and needs. There should be zero government involvement in this. The government cannot and should not even try to create jobs. If Obama wants to stimulate the economy, he can decrease the size of the government. I would say a 90% reduction would be a good starting figure.

TGR: But that will create even more unemployment. That's one of the big concerns. States laying off employees could increase unemployment even more.

DC: It is wonderful that states are starting to lay off employees. Once they lose their state jobs, which suck wealth from taxpayers, maybe those people can find real, productive jobs providing goods and services that people actually want and will pay for voluntarily. So I'd argue that getting rid of state employees is essential to a sound recovery plan.

TGR: You warned early on in the 2008–2009 economic crisis that it would really be more of a hurricane. In the last year or so, we've been in the eye of the hurricane and there's more turmoil to come. Will the other side of the storm be worse than the first? And given the recent economic news, do you think we have moved out of that eye?

DC: Yes, I think we are moving out of the eye and going into the other side of the storm. This storm will be much more severe because we haven't solved any of the problems that caused the hurricane in the first place. The fact that governments all over the world have created trillions of currency units has only aggravated those problems. Now, I expect exploding prices to compound the problems that we saw back in 2007, 2008 and 2009. That will devastate the prudent people in society who saved money. They saved it in the form of currency, and wiping out their savings will be catastrophic.

TGR: Will this affect only North America and Europe?

DC: Mostly North America and Europe, but it's going to be very serious in Japan, too. It could be even more disastrous in China. The Chinese real estate market bubble is very inflated, driven by the lending of Chinese banks that won't be able to recover their loans. They will all go bankrupt, taking out the Chinese populace's savings with them. At the same time, those who own real estate will find it worth vastly less than what they paid for it. Those problems will create social disruptions in China, leading to riots, perhaps even revolution, and who-knows-what. The fallout is going to be terrible.

TGR: Many pundits and economists still project growth in China, albeit at a lower rate, and anticipate further expansion of the middle class.

DC: The 21st century will be the Chinese century, but the distortions and misallocations of capital that have occurred over the last 30 years—notwithstanding the truly phenomenal progress the country has made—are serious and have to be washed out. I am a huge bull on China for lots of reasons, but I am bullish for the long run. I think it is going to go through the meat grinder over the next 10 years. I don't know how it will come out; maybe China will break up into five or six different countries. Actually, that would be a good thing. Most of the world's nation-states are artificially constructed and too big to be manageable as political entities.

TGR: Your outlook on China fits right in with something you've been saying for years—about this being the "Greater Depression," which is also the topic of your upcoming presentation at the sold-out Casey Research/Sprott Inc. "When Money Dies" summit next month in Phoenix. Your opening general session talk is entitled, "The Greater Depression Is Now." We are now four years into it, based on your 2007 start date.

DC: Actually, depending on how long a historical scale you look at, you could say that, for the working class in the U.S. anyway, the depression started in the early 1970s. After inflation, after taxes, their take-home pay hasn't risen in real terms for 40 years. But the definition of a depression that I use is "a period of time during which most people's standard of living drops significantly."

Net savings shows that you're living within your means and putting aside capital for the future. In the U.S., people have been living above their means for many years—that is what debt is all about. Debt means that you are borrowing against future production, which is exactly what the U.S. has been doing.

TGR: So, how long will this Greater Depression last?

DC: It doesn't have to last long at all. It could be quite brief if the U.S. government, which is basically the root cause, retrenches vastly in size and defaults on the national debt, which is essentially an enormous mortgage, an albatross around the neck of the next several generations of Americans. The debt will be defaulted on one way or another, almost certainly through inflation. I simply advocate an honest, overt default; that would serve to punish those who, by lending to the government, have financed its depredations. Distortions and misallocations of capital that have been cranked into the economy for many years need to be liquidated. It could be unpleasant but brief. The government is likely to do just the opposite, however. It will try to prop it up further and make it worse—compounding the problem by expanding the wars. So, it could last a very long time. In that sense, I'm not optimistic at all. I think there is little cause for optimism.
On the other hand, I'm generally optimistic for the future. There are only two causes for optimism. First, smart individuals all over the world continue, as individuals, to produce more than they consume and try to save the difference. That will build capital, which is of critical importance. They should just save by holding paper currency. Second, expanding and compounding technology will increase the standard of living. Remember that there are more scientists and engineers alive today than have lived in all previous history combined. Those two factors countervail the government stupidity around us. Whether they will be overwhelmed and washed away by a tsunami of statism and collectivism, I don't know.

TGR: You say that the U.S. government is the root cause of this problem. Isn't that putting too much blame for a worldwide problem on one nation?

DC: The institution of government itself is the problem, and the problem is metastasizing like a cancer all over the world. But, sad to say, the U.S. is the most serious offender because it is currently both the most powerful and the most aggressive nation-state. It has been greatly abetted by the fact that the U.S. currency has been accepted globally. The U.S. dollar is, in effect, the reserve that backs all the other currencies in the world. That is why the U.S. government has been the most destructive from an economic point of view. Furthermore, military spending—which in the U.S. equals that of all the other militaries in the world combined—is purely destructive. It serves no useful economic purpose at all. The military is no longer "defending" anything—least of all liberty. It's actively creating enemies and provoking conflict. So, yes, I think the U.S. government is actually the most dangerous force roaming the world today.

TGR: Do you see that changing after the next election?

DC: No. I think the chances of Obama being reelected are high, simply because more than half of Americans are big net recipients of state largesse. The U.S. has turned into a larger version of Argentina politically, where the electorate is effectively bribed to vote for the biggest thief. It is likely to turn out much worse than Argentina, however. Unlike the Argentines, the U.S. government is fairly efficient. And, unlike Argentina, the U.S. is rapidly turning into a police state.

Electing a Republican might be even worse, though. With the exception of Ron Paul and Gary Johnson, the potential Republican candidates absolutely make my skin crawl. So, no, there is no help on the horizon. The U.S. government is spending about $1.5 trillion more this year than it takes in, and it is not going to cut that. In fact, foolish spending to bail things out will increase. And, worse than that, the Fed has artificially suppressed interest rates for three years. Interest accounts for roughly 2% of $15 trillion official national debt, or $300 billion per year. As interest rates inevitably rise, that interest amount will grow. At 12%—and I'm afraid they'll have to go even higher than that—it would add another $1.5 trillion just in interest payments.

I absolutely see no way out without a collapse of the U.S. currency and a total reordering of the U.S. economy.

TGR: When Money Dies, the title of your summit, implies some return to a gold standard. How do you see that playing out?

DC: Nothing is certain, but when the dollar disappears—and it's going to reach its intrinsic value soon—what are people going to use as money? Will we gin up another fiat currency like the euro? The euro is likely to fail before the dollar. My suspicion is that people will want to go back to gold. It's not because gold is anything magical, but simply the one of the 92 naturally occurring elements that—for the same reasons that make aluminum good for planes and iron good for steel girders—is most useful as money. In fact, the reason that gold has risen as high as it has is that the central banks of third-world countries—places that don't have large gold reserves, such as China, India, Korea, Russia, even Mexico—have been buying the stuff in size.

TGR: The concept of going to a gold standard seems impossible in the sense that there is only so much gold above ground—6 billion ounces? Maybe $11 trillion worth? But it's only a fraction of the U.S. GDP. Even with gold at $2,000 an ounce, that leaves an immense gap. In that scenario, how do you convert to a gold standard?

DC: In terms of today's dollars, gold should probably be a lot higher than it is. I don't know what the number will be, because a lot of those dollars will disappear in bankruptcies; they will dry up and blow away. It's like a real estate development that was worth $1 billion on somebody's books; when it fails, that's $1 billion destroyed. It's a question of the battle of inflation (with the government creating dollars to prop things up) against deflation (where businesses fail and wipe out dollars). But put it this way: the U.S. Government reports it owns about 265 million ounces. Its liabilities to foreigners alone are at least $6 trillion. If they were to be redeemed for a fixed amount, that would require roughly $22,000/oz. gold. And that doesn't count dollars in the U.S. itself.

I'm a bargain hunter and a bottom fisher, and bought most of my gold at vastly lower prices. But I think gold is going much higher because most people still barely even know that the stuff exists. As inflation picks up, they are going to want to get rid of these dollars—but what other monetary commodity can they turn to? So, gold is going higher. I'm still accumulating gold.

TGR: You said that the storm as we emerge from the eye of the hurricane will be worse than it was on the other side. If they don't own gold, how do investors protect themselves?

DC: It's very hard to be an investor in today's world because an investor is someone who allocates capital in a way to create new wealth. That is not easy in today's highly taxed and regulated economy. It's late in the day, but not too late, to buy gold, silver and other commodities. Productive assets are good to own. Of course, the easiest way to buy most productive assets is through the shares of publicly traded companies, but the stock market is quite overvalued in my opinion, so that's not the best option right now.
In addition to trying to build personal holdings of gold and, to a lesser degree, silver, I think people should learn to be speculators. This is not to be confused with gamblers, who rely on random chances. Speculators position themselves to take advantage of politically caused distortions in the marketplace. In a true free market society, you would see very few speculators because there would be few such distortions. But regulations, taxes and currency inflations are likely to keep markets very volatile. Good speculators will position themselves to take advantage of bubbles, and identify bubbles that have been blown to their maximum and are about to deflate.
Government actions are going to force people to become speculators, whether they like it or not. Most won't like it, and very few will be good at it.

TGR: What bubbles might speculators look to exploit?

DC: I'd say the world's biggest bubble is real estate in China, but real estate bubbles are just starting to deflate elsewhere, too—in Australia and Canada, for example. It's relatively hard to short real estate, of course. Shorting bank stocks is an indirect way to play it. I'd say bonds are the short sale of the century. They're going to be destroyed. Bonds pose a triple threat to capital because:
Interest rates are artificially low, and as interest rates rise—which they must—bonds will fall.
Bonds are denominated in currencies, and most currencies, let's say dollars, are going to lose a lot of value.
The credit risk of most bonds, certainly those issued by governments, is high.
On the long side, mining stocks are very cheap relative to the price of gold right now. I'd say there's an excellent chance of a bubble being ignited in gold mining stocks, especially the small ones; in fact, I'd put my finger on that as likely being the easiest way to make a killing.

TGR: Technology was one of the two areas of optimism you mentioned earlier. Do you see a bubble forming there?

DC: You have a point, but I'm not sure you can talk about technology stocks as a whole; technology is too variegated, too vast a field. Although, I've long been a huge believer in nanotech, which is likely to change the world as we know it. With gold stocks, however, you can jump into a discrete universe, that's likely to become a mania.

TGR: Thank you for the tips, Doug, and as always, for your thoughtful insights.

FT Report That Greek Bailout Package On The Verge Of Collapse After Surge In Greek Funding Needs Sends Stocks, Euro Plunging From Highs

Wondering what just caused the market to slump? Take a wild guess. That's right - Greece. Minutes after Greece passed a vote in which it promised to promise to promise to consider collecting 1998-1999 taxes (even as all of its tax collectors are about to go on permanent strike), the FT was breaking news that while the Troika was "bailing out" Greece in the past years, the country was spending itself into an  even greater oblivion. As a result, the terms of the July 21 Second Greek Bailout will most certainly need to be renegotiated, with banks having to take even greater write downs on the bond exchange, and with far more capital having to be injected into the country. The result is the France and the ECB are panicking because as we all know, any additional write downs will expose just how undercapitalized French banks already are (no need to even mention the world's most toxic hedge fund: Trichet et Cie). Should this story pick up traction, look for Europe to open limit down again tomorrow.
From the FT:

A split has opened in the eurozone over the terms of Greece’s second €109bn bail-out with as many as seven of the bloc’s 17 members arguing for private creditors to swallow a bigger writedown on their Greek bond holdings, according to senior European officials.

The divisions have emerged amid mounting concerns that Athens’ funding needs are much bigger than estimated just two months ago. They threaten to unpick a painfully negotiated deal reached with private sector bond holders in July.

While hardliners in Germany and the Netherlands are leading the calls for more losses to be imposed on the private sector, France and the European Central Bank are fiercely resisting any such move. They fear re-opening the bond deal could spark renewed selling of shares in European banks, which have significant holdings of Greek and other peripheral eurozone debt.

Because of the recent economic downturn and Greece’s slow implementation of austerity measures, officials estimate Athens’ funding needs over the next three years have grown beyond the €172bn forecast this summer. The scale of the shortfall will be determined by international lenders over the next few weeks.

So let's get this straight: the funding hole was €109 billion two months ago, and it is €172 billion, an incremental diferential of €63 billion in two months, or €360 billion annualized.
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