When listening to the EU political "leaders" and other "experts" talking on the mainstream media I despair. These people are either incredibly corrupt or unbelievably stupid (or both).
I thought I would write a new post. However, the post I wrote in October (see below) is still perfectly valid and the advice given still stands.
If anything the situation deteriorated more rapidly than I expected then. EU bureaucrats are now actively destroying the EU nations, taking away their sovereignty. The only solution they are coming up with is more "bailouts" i.e. more debt. This will only make the final (and unavoidable) EU collapse more painful.
Meanwhile, the estimated amount of so called "financial derivatives" in the global financial system is $ 700.000.000.000.000 (700 trillion). Derivatives are artifical financial products or contracts traded by the markets(banks,traders,investors, hedgefunds) instead of real stuff (like oil or food) . Effectively these are contracts/debt obligations that someone has to pay for at some point !! FYI the gross domestic product of the whole world (Global GDP) in 2010 was "just" $ 63 trillion. So even if the whole world wanted to pay the derivatives off it would take > 10 years (without being able to pay anything else) !!!!!!! This is just to illustrate the scale of the problem created by the money changers. http://www.zerohedge.com/news/707568901000000-how-and-why-banks-increased-total-outstanding-derivatives-record-107-trillion-6
Meanwhile, the estimated amount of so called "financial derivatives" in the global financial system is $ 700.000.000.000.000 (700 trillion). Derivatives are artifical financial products or contracts traded by the markets(banks,traders,investors, hedgefunds) instead of real stuff (like oil or food) . Effectively these are contracts/debt obligations that someone has to pay for at some point !! FYI the gross domestic product of the whole world (Global GDP) in 2010 was "just" $ 63 trillion. So even if the whole world wanted to pay the derivatives off it would take > 10 years (without being able to pay anything else) !!!!!!! This is just to illustrate the scale of the problem created by the money changers. http://www.zerohedge.com/news/707568901000000-how-and-why-banks-increased-total-outstanding-derivatives-record-107-trillion-6
This fraudulent "synthetic" financial Ponzi scheme is going to collapse. In fact the house of cards is already falling down. When the dust settles we will wake up in a new world. The world dominated by those who own resources and those who produce, i.e. India, China, Brasil, Russia, Vietnam, etc.
If we are lucky this wealth transition from the West to the East will happen without any major international conflict or war.
It is crucial that you understand the severity of the situation and that you prepare for what is coming as much as you can.
If we are lucky this wealth transition from the West to the East will happen without any major international conflict or war.
It is crucial that you understand the severity of the situation and that you prepare for what is coming as much as you can.
DO NOT EXPECT ANY HELP FROM THE GOVERNMENT !!
DO NOT EXPECT TO BE INFORMED BY THE MEDIA IN TIME !!
READ THE ADVICE, DO YOUR RESEARCH, THINK ABOUT IT, PREPARE YOURSELF !!
DO NOT EXPECT TO BE INFORMED BY THE MEDIA IN TIME !!
READ THE ADVICE, DO YOUR RESEARCH, THINK ABOUT IT, PREPARE YOURSELF !!
Published in October 2011
WHAT IS WRONG WITH THE ECONOMY ?
By now even the most open minded optimist must admit that something weird is happening in the world economy.
"Crisis" = any event that is an unstable and dangerous situation affecting an individual, group, community or whole society. The word "crisis" implies that something can/must be done relatively quickly to resolve it and to restore the "normal" conditions again.
What we are experiencing now is not an event though. It is a process that has started many years ago and it is now culminating and manifesting itself ( please check my "Watch and Read" links to see some clever people explaining it in plain English ) .
The concept of a society based on ever increasing consumption, decreasing production, unlimited supply of cheap energy and cheap credit is now officially on its way out.
We will have to first recognise it, then accept it and finally we will have to adjust to the new reality......all that will take some time and some pain, unhappiness, unrest, violence, etc....
The US/EU/UK financial trouble is escalating. The amount of debt in the West is staggering and frankly unpayable. Check the US debt clock to see the speed with which the US debt is increasing http://www.usdebtclock.org/
Maybe, like many others, you hope that someone capable is managing the events ...... perhaps Cameron, Sarkozy, Obama, Merkel, Lagard, Berlusconi, International Monetary Fund, World Bank, UN ?
Or you may think that someone will come and pay all those bills. Maybe China or Russia ? Or maybe the mighty banks like J.P.Morgan or Goldman Sachs will figure something out and save the game ...so that the party can start again ?http://maxkeiser.com/2011/06/29/total-net-derivative-exposure-jpm/
And you may hope that if something bad was to happen, the media will inform you in time to prepare for it .
Wake up, please !
This is not a controlled process.
It is a free fall with some last minute collateral damage limitation.
And you are the last one to be informed about the true state of affairs by the media that are either corrupt or lagging behind the events by days to months. http://www.fair.org/index.php?page=1406
The domino effect has already started
http://graphics.thomsonreuters.com/11/07/EZ_BNKEXP0711_SB.html
French,German and UK banks are exposed to bad debt from Greece, Spain,Portugal,Italy and Ireland. US banks are exposed to French, German and UK banks.
http://graphics.thomsonreuters.com/11/07/EZ_BNKEXP0711_SB.html
And WE ARE EXPOSED TO ALL THE BANKS because WE WILL PROVIDE MONEY to bail the banks, investors, corporations and governments out.
By money I do not mean the increasingly useless $/£/€. We are going to pay for all that financial fraud by lowering our living standards, working harder, longer, for less and for decades to come.
But that's the future. What are we going to experience this year and next year ? Who knows ? Without some crucial information (that will never be shared with the general population anyway) we can only speculate.
So please take my "predictions" and "advice" with a pinch of salt. Do your own thinking and research. But do it ! Because something is going to pop soon and you should be ready.
Here is what I expect to happen in the near future:
1. US/UK/EU will continue QE (= quantitative easing a.k.a. printing money out of thin air) to recapitalise banks to prevent bank collapses, runs on the banks and other financial havoc.
2. Prices of food, energies and other goods will keep rising steadily (if we are lucky) or exponentially (if we are less fortunate).This is inflation caused by all that extra cash pushed into the economy. We all feel it already. But governments will maintain that they have inflation "under control" and that inflation will start falling next year.
3. The purchasing power of fiat currencies such as £, $ or € will continue to decline. This is the effect of "printing too much money out of thin air" or QE (fiat currency is a currency issued by government decree; fiat currency has no value as such; it is a currency because government said so; as such it can be easily abused by financial institutions and governments; currently all the world currencies are fiat currencies).
4. In the meantime gold and silver prices will keep rising as the desperate investors will seek safe havens to preserve their wealth or savings.
5. International Monetary Fund (IMF), World Bank (WB) and European Central Bank (ECB) will demand a decisive action from the politicians. The following suggestions are going to be on the menu, guaranteed: Increase taxes. Introduce new taxes. Cut the pensions. Cut health care and social expenditures. Cut the salaries of state employees. Fire state employees. Sell state owned assets. And always, always, always support your banking system to avoid world wide collapse !!!! The creation of the "United States of Europe" will be proposed, taking away the nations sovereignty.
6. Greece will default officially. It has already defaulted de facto.
7. Following Greece the other EU nations will get closer to default: Italy, Spain, Ireland, Portugal.
8. First few EU banks will collapse. They will be quickly bailed out or "acquired" by bigger EU banks.
9. Eventually the EU bailout program will fail no matter what Sarkozy, Merkel & All will come up with. Remember the US have already "stimulated" the US economy with over $ 11 trillion over the last few years and the US economy is still declining.
10. Germany, the last remaining truly productive economy in the EU (and the last EU mega credit card for bailouts) may eventually decide to jump EU and reintroduce the Deutsche Mark. Would that mean the end of € ?
11. Meanwhile the US/UK/EU citizen will get squeezed. Unemployment in double digits, prices rising, people spending more and more on food and energies, discretionary spending (holidays, entertainment, clothing, TVs, phones) virtually disappearing....etc. You get the picture.
12. Some very unpleasant social consequences will occur: manifestations, strikes, urban violence and crime, nationalism, racism, etc.
13. Eventually the interest rates will start rising.
14. Finally we will end up either in severe DEFLATION (= situation when people have no money to buy staff) or in HYPERINFLATION (in which people have lots of worthless money). http://www.youtube.com/watch?v=AMY3aJwhfqg
Is it just a financial problem or is there something else going on ??
There are 5 major issues at the background that in my view will have negative long term impact on the US/UK/EU population:
- Uncontrollable global financial and corporate oligarchy (corporatocracy). Huge amount of capital is concentrated in the hands of a few super powerful and super rich groups (large private banks, corporations, sovereign wealth funds, etc). These groups control trillions of $/£/€. These groups are beyond any governmental control. They shift their vast capital from place to place in order to extract maximum profit. By doing so they literally decide about the fate of people, regions, countries. This is called globalisation which I consider to be an extremely detrimental process . http://knowledge.wharton.upenn.edu/article.cfm?articleid=1868
- US/UK/EU are in trouble not just because their financial system is failing. It is because their economies are not based on productive capacity anymore. These are now service economies only. For the last 15-20 years we kept borrowing money to consume things and services produced elsewhere (mainly in China). Our luxurious lifestyle, expensive social programs and irresponsible wars abroad resulted in a gigantic and unpayable state debt. To recover from this situation we would have to start produce better and cheaper products than China. Can we do it quickly ? Fat chance...
- Further global economic growth is unsustainable and mathematically impossible. China's economy alone grows by 7-9% per year. If this rate of growth persists China will, in the next 10 years, produce and consume the same amount of "staff" as it did in its entire history up to now. There is probably not enough raw materials in the world to make that possible.
- Increasing spending power of the 3 billion of people living in the BRIC (Brazil, India, Russia, China) and other previously underdeveloped countries. As the new middle class is created "there" there will be a proportional decline of the middle class "here". Too many of relatively wealthy "them" will compete for resources (food, water, oil) with now relatively poor "us".
- Peak Oil Factor. According to this theory we have reached the peak of oil production. If the theory is right we will be facing declining supply of oil in the world that has increasing demand for it. Since our modern civilisation is totally dependent on oil the consequences of Peak Oil would be extreme. We are being reassured by "experts" that some other form of energy will replace oil but so far no such alternative source that could power our energy hungry communities has been found
http://www.youtube.com/watch?v=yQd-VGYX3-E&feature=relmfu
AM I TOO PESSIMISTIC, TOO DOOMY&GLOOMY HERE ??
Well, only time will tell.
Watching the actions of our "Masters" a.k.a the IICCs (incompetent and inept or competent and corrupt = politicians, banksters, corporate CEOs, hedge funds managers and other unelected powerful groups like IMF, WB, ECB) does not exactly fill me with confidence.
So, back to good old basic rule "prepare for the worst and hope for the best". My advice is as follows:
- Consolidate any debt you may have now ! Negotiate fixed interest rates with your lender even if these are higher than those you pay now.
- Only keep enough cash in your bank for your routine, necessary and expected expenditures.
- Do not keep your savings as cash. Do not invest into any paper based assets denominated in USD, GBP or Euro
- Buy gold and silver coins. Even if the metals seem overpriced they still are a very good hedge against the coming inflation.Gold and silver coins are very liquid and tradeable even in SHTF ( "s..t hitting the fan") situation.
- You can buy real estate or shares of good companies but you must understand the market and you must not use any loan with variable interest rate to finance these investments. Also remember that during a major crisis you may not be able to trade these assets.
- Do your self-sufficiency check. Are there any aspects of your life where you are totally dependent on government, governmental agencies or "automated" supply systems (food stores, electricity, gas, water, etc). Now imagine that the agency or supply chain fails. How long are you and your loved ones going to survive without them and what would you need to do. This analysis can easily identify your vulnerable areas.
- Buy food with long shelf life and other items of daily use in bulk (in sales) and hoard these at home. This will save you money by buying at lower prices. If hyperinflation occurs, people may need to spend everything they have just for food. Remember, any major economic hit could mean panic buying in which case shops will be empty within days. If you have supplies at home to keep you going for at least 6 months you are likely to withstand the first impact and then adjust to the new conditions better.
- Further advice on more comprehensive and rather more "crazy" survival strategies can be found here:
http://www.youtube.com/watch?v=lnENYaKJUV4&feature=BFa&list=SP7ABCD5802D03363E&index=4
PLEASE BEWARE THAT THE INFORMATION ABOVE IS COMPILED FROM MANY SOURCES. IT IS NEITHER PRECISE NOT EXHAUSTIVE. THE PURPOSE IS TO STIMULATE YOUR INTEREST AND SELF-EDUCATION. I AM NOT AN EXPERT. YOU ARE ADVISED NOT TO TAKE ANY ACTION BASED ON THE ABOVE INFORMATION WITHOUT EXERTING YOUR OWN DUE DILIGENCE, YOUR OWN RESEARCH AND USING YOUR OWN BRAIN. I CAN NOT BE HELD RESPONSIBLE FOR ANY INCONVENIENCE OR LOSSES YOU MAY SUFFER BY FOLLOWING THE ABOVE ADVICE.
