“The End of America”: Porter Stansberry Sees the Future … And It’s Grim

If you thought the economy was starting to improve, think again. Things are actually going to take a turn for the worse — much worse, says Porter Stansberry, founder of Stansberry & Associates.

In a shocking video entitled “The End of America”, Stansberry paints a very grim picture of the future of the United States. According to Stansberry & Associates, the Web video has been seen by more than 7 million people since its launch late last year.

Stansberry is not predicting the end of days or the collapse of our political union. But he is forecasting the end of America’s global economic dominance, ultimately resulting in rioting and protests across the country.

With trillions of dollars of debt and a Federal Reserve that has engaged in two rounds of quantitative easing (and QE3 potentially on the way), his point is that the financial stability of this country is on shaky ground. “Sooner or later our creditors are going to say ‘enough is enough’,” he tells Aaron in the accompany clip. “We need a reliable currency that can’t be printed.”

The logical solution for Stansberry is to revert to the gold standard since it worked for 4,000 year prior to 1971, when America abandoned the peg. Should gold once again become the world’s reserve standard, its price will likely hit $7500 he says.

So how long do Americans have before the world dumps the dollar?

Well, according to Stansberry, we’re already in the thick of it. “If you go anywhere around the world, most wealthy people have already abandoned the dollar,” he says. “If you look at the commodity complex you can see very clearly that many people around the world have [already] abandoned the dollar as the reserve currency.”

If something is not done to remedy this country’s tremendous debt load and stop the flood of dollars into the market, the rest of the world will eventually drop the dollar completely for hard assets – such food, he says.

Stansberry points out that millions of Americans are already living off of food stamps. Should the price of food rise so dramatically, millions more will go hungry.

Without affordable food, jobs or retirement funds, he predicts Americans will take to the streets in protest, similar to what’s occurred in Egypt, Greece and other nations.

Stansberry really does not want to be the bearer of such bad news, but says Americans need to wake up now, before it’s too late!

Editor’s Note: For Stansberry’s tips on how to protect yourself investments against this potential looming crisis, see part two of our interview later today.

Are The Wild Teacher Protests In Wisconsin A Prelude To The Economic Riots That Are Coming To America?

The Economic Collapse
Feb 18, 2011

Have you seen video of the teacher protests that are going on in Wisconsin?  We haven’t seen anything like this in America in quite some time.  If you haven’t seen video of the protests yet, some very good raw footage is posted below.  On the one hand it is good to see Americans coming together and standing up for what they believe in, but on the other hand what these teachers are freaking out about shows just how much America has changed.  These teachers are not protesting for liberty, freedom or to change the government.  Rather, they are protesting because they want things to remain the same.  They simply don’t want anyone to mess with their pay.  Well, the truth is that none of us ever wants to experience a pay cut.  It is not a lot of fun.  But sadly, states like Wisconsin are so broke that they have to find cuts somewhere.  Someone is going to have to make a sacrifice.  The teachers in Wisconsin just want to make sure that it is not them.

In the United States today, state and local governments are facing unprecedented budget crunches.  Tax revenues are way down and expenses are way up.  State and local government debt has reached at an all-time high of 22 percent of U.S. GDP, and many state and local governments are teetering on the brink of insolvency.

States like Wisconsin have to do something or else they will collapse financially.  Wisconsin is facing a $3.6 billion budget deficit (which for that state is huge), and Wisconsin Governor Scott Walker and the Republicans in the legislature are attempting to make some tough cuts.

In particular, they want public employees to pay a little more towards their health care premiums and pension programs.  In fact, what the Republicans are proposing would still leave Wisconsin public employees contributing far less to health care and pensions than their private sector counterparts.

U.S. Representative Paul Ryan recently appeared on MSNBC’s “Morning Joe” program and described what Governor Scott Walker is asking the teachers to do….

Scott and I are very close friends. We e-mail each other quite a bit… He’s basically saying that state workers which have extremely generous benefits packages relative to their private sector counterparts, they contribute next to nothing to their pensions, very, very little in their health care packages.

He’s asking that they contribute about 12 percent for their health care premiums, which is about half of the private sector average, and about 5.6 percent to their pensions. It’s not asking a lot. It’s still about half of what private sector pensions do and health care packages do.

So he’s basically saying “I want you public workers half of what your private sector counterparts do” and he’s getting riots. It’s like Cairo has moved to Madison these days.

These proposed changes have caused a massive uproar in Wisconsin.  Just check out the following raw video footage from the last few days….

But this is what we have come to as a nation.  Almost everyone agrees that reducing government debt is a good thing “in theory”, but whenever anyone starts to put forward some specific proposals to cut government spending it makes those that will be affected by the cuts extremely upset.

Just look at what is happening with the federal government.  Republicans and Democrats are both frothing at the mouth over extremely small budget cuts that have been proposed.  Virtually none of our national politicians are even willing to discuss budget cuts that would actually make a serious dent in our budget deficits.

But we have got to do something.  Spending by the U.S. government is spinning wildly out of control.  Back in 1970, the U.S. government only spent about 200 billion dollars for the whole year.  Well, this year the federal government is going to spend somewhere around 3.6 trillion dollars, and Barack Obama’s newest budget proposal calls for U.S. government spending to increase to 5.6 trillion dollars by the year 2021.  If the government continues to spend money at such a rapid pace it is going to completely wipe out our entire economic system….

But it is not just the U.S. government that is spending like a drunken sailor.  Most of our state governments are complete financial disaster zones at this point as well.

As I have written about previously, the state of Illinois is such a financial disaster zone that it is hard to even describe.  According to 60 Minutes,  the state of Illinois is six months behind on their bill payments.  60 Minutes correspondent Steve Croft asked Illinois state Comptroller Dan Hynes how many people and organizations are waiting to be paid by the state, and this is how Hynes responded….

“It’s fair to say that there are tens of thousands if not hundreds of thousands of people waiting to be paid by the state.”

Something has got to be done about our national addiction to debt.

Government spending has to be dramatically cut.  All of us are going to have to make sacrifices.  We simply cannot continue to spend far, far, far more than we bring in.

But we are Americans – we do not like to make sacrifices.

Our founding fathers warned us about this.  They warned that when the American people figured out that they could vote themselves money out of the U.S. Treasury it would greatly endanger our republic.

Unfortunately that is exactly what is happening today.  The vast majority of government spending on both the national and state levels consists of direct payments to individuals of one sort or another.

The American people have become addicted to the bread crumbs that they receive from the hand of their master.

This is not what our republic was supposed to look like.

As the U.S. economy continues to decline, we are going to see a lot more riots like we have seen in Wisconsin.  Once the American people realize that the “good times” are over, all hell is going to break loose.

Already the anger and the frustration of the American people is starting to boil over.  Unfortunately, that anger and frustration is focused in 1000 different directions.  The ruling elite and the establishment media are constantly encouraging us to hate one another.  I recently wrote about this phenomenonin an article on another website….

The truth is that the “establishment” is constantly trying to divide us and get us fighting with one another. They pit the Republicans against the Democrats (even as though control both sides). They pit one race against another. They pit one gender against another. We are told that the rich are against the poor, the north is against the south, urban is against rural and that there are even “generational battles” going on. Frustration and hate are rapidly growing in the United States today, and a lot of that frustration and hate is unfortunately aimed at the targets that the mainstream media has programmed all of us to hate. Meanwhile, those at the top of the pyramid who are controlling the whole game love it when we are divided because we can never become united and challenge their control.

Unfortunately, America is more divided today than ever.  Our extreme affluence has kept the thin veneer of civilization that we all take for granted from disappearing so far, but once our affluence is gone all of the hate and frustration in society is going to come bubbling to the surface and it is going to be horrifying to behold.

Once the economic collapse happens, most Americans are not going to take it sitting down.  Most Americans are going to want someone to blame.  Most Americans are going to want to lash out somehow.

America today is like a big, fat spoiled baby that is about to have its favorite pacifier permanently taken away.  America is going to whine and cry and complain like there is no tomorrow.

For decades the financial “gloom and doomers” have been warning about what would happen to this country if we didn’t get our house in order, but nobody wanted to listen.  Everyone just kept piling up more debt as if it would never be a problem.

Well, now our entire country is covered in red ink.  Large numbers of state and local governments across the country are on the verge of defaulting on their debts, and they are hoping that the federal government will bail them out.  The federal government has already accumulated the biggest pile of debt the world has ever seen and continues to behave as if we can just keep borrowing and spending massive amounts of money forever.

There is no way out of this nightmare under the current system.  Taxing people more is not going to solve our problems.  Taxing people less is not going to solve our problems.

We have gotten to the point where it is inevitable that the debt bubble that we have created is going to burst.  Our politicians can try to delay it for a while, but in the end the whole house of cards is going to come crashing down.

When the U.S. economy does totally collapse, it is going to make the riots that we have seen in Egypt and throughout the Middle East this year seem tame by comparison.

What we are witnessing right now in Wisconsin are just the “birth pains”.  The American people don’t want to “tighten their belts”.  In fact, most Americans have absolutely no idea what “hard times” would even look like.  When things go from bad to worse we are going to see temper tantrums in this country like we have never seen before.

So get ready.  Unless there is some kind of dramatic transformation in this country, in the years ahead we are going to see some horrific economic riots.

It would be nice if we had a brighter future to look forward to, but we don’t do ourselves any favors by living in denial.

So what do you all think about what has been going on in Wisconsin?  Do you all believe that we could see huge economic riots inside America in the years ahead?  Feel free to leave a comment with your opinion below….

Food/Financial Crisis of 2011

Mark Sircus

World food inflation is smashing down on the world’s populations as prices rise precipitously in the face of increasing shortages and absurd monetary policies. Prices are rising everywhere. It is not millions but billions of people who must tighten their belts because they have no choice but to eat less. Billions of people on our planet have no discretionary funds so they just cannot afford the increased prices. They have to get by with less to eat. They have no choice.

Things can get so bad that people will not be able to buy foods at any price because they simply will not be available because they have been bought up by someone else. I am not talking about your neighbor here who just happened to beat you to the supermarket this morning. Imagine if China pulls out a $100 billion out of its almost bottomless pockets and purchases grain to feed its billions? Why wouldn’t they, after all, spend increasingly worthless paper on a mountain of food?

Below you will see that this is a real threat because of the drought that is going on there. Other governments are already stockpiling food staples in an attempt to contain panic buying, inflation and social unrest. There is nothing pretty about this quickly evolving food catastrophe and with each week the story only becomes gloomier.

The price of wheat is up 78.13 percent over  the past 12 months and still going higher.

Everywhere we turn we see dramatic climate events taking their toll on crops

The cold weather experienced across much of the U.S. in early February made its way deep into Mexico and early reports estimate 80-100 percent crop losses, which are having an immediate impact on prices in U.S. grocery stores with more volatility to come. As a result, prices on cucumbers, zucchini, peppers, tomatoes and asparagus are set to explode in the states if in fact there will be much of any of these vegetables available at all.

Storms in China’s far western Xinjiang flattened or damaged about 100,000 homes, and more than 15,000 head of livestock were killed by the cold front that set in on the 16th of January.

“Minimal rainfall or snow this winter has crippled China’s major agricultural regions, leaving many of them parched. Crop production has fallen sharply as the worst drought in six decades shows no sign of letting up.” A severe drought has persisted in China’s northern territories for several months. In Hebei province, the farmers haven’t seen any rain for five months. What is going on in China has global breadbasket implications. So dire is the situation becoming that, “If the weather turns warmer and there is still no rain, then we will not be talking about lower agricultural production, but rather zero production, because the seedlings will all be dead,” reported one Chinese official. Wheat prices in Chicago jumped nearly two percent on the 8th of February when the United Nations’ food agency issued a rare alert that China’s crop was in trouble.

Record-breaking snowfall pounded South Korea’s east coast last Saturday when waist-deep snow stranded hundreds of motorists on highways and destroyed dozens of houses. The roofs of dozens of houses, livestock sheds, vinyl greenhouses – even a bowling alley – collapsed under the weight of the snow. According to the Gangwon Regional Meteorological Administration, the two-day snowfall in the area reached 43 inches (110 cm) in Samcheok, 39 inches (100.1 cm) in Donghae, 22 inches (56.3 cm) in Daegwallyeong mountain pass, and 17 inches (42.8 cm) in Sokcho.

Before Korea was hit it was Vietnam. After enduring a freezing cold with temperatures in mountainous areas dropping to – 4° C, northern Vietnam is undergoing another fresh cold snap. The record low temperature this year had frozen over 7,000 buffaloes and cows to death in more than 12 northern mountainous provinces, said Deputy Head of the Livestock Breeding Department Nguyen Thanh Son.

The location has been changing week by week but its one place on the planet after another being hit with agriculturally destructive weather patterns. Global food production and supply are being beaten down just as financial and monetary inflation also takes hold.

Financial-Sourced Causes of Price Increases

“Nasty weather in key agricultural markets around the world has savaged the global grain crop, meaning worldwide supplies can’t help but be squeezed. Australia, for instance, is experiencing additional flooding in areas that were already battered by the torrential rains of November, December and January. And as if the supply-related increase in agricultural commodities wasn’t enough, there’s also the U.S. dollar – and the so-called “race to the bottom” – to contend with. Make no mistake: The endless devaluations in the greenback are having a worldwide impact on agricultural commodity prices. Since commodities are priced in dollars, these devaluations translate into higher prices for grains and other food-related commodities,” writes Jack Barnes.

The Federal Reserve is printing money almost limitlessly now to extend the life of the United States government that is addicted to increasing debt and deficits. They are injecting money (debt) at a furious pace producing stacks of fine quality paper with colored ink. This blatant act of self-preservation is striking hard at the lower and middle classes around the world who have to pay higher and higher prices for their food, which on international markets is denominated in dollars. The day of reckoning for the dollar inches closer every day, as the Fed issues more Treasuries and floods the market with more devalued paper. Inevitably, this will cause prices to rise faster and faster as the value of U.S. currency drops further, pushing food prices up and up the side of a steep slope. The world is paying for American debt in terms of high food and energy prices.

So, the present tragedy is going to be compounded by too much money chasing the availability of food

Even in America, if you are not financially independent, the odds are good that someday you could be waiting in line to feed yourself and your family. It’s a mistake, even at this early point, to take this delicious-looking bread for granted.

We are not allowing yet onto our collective radar screens exactly what we are facing in the months and years ahead. The world is still looking normal for the “haves” but those who have less feel the avalanche of climbing food prices. We are only at the very beginning of a crisis that has “going to get much worse” written all over it.

agriculture.imva.info

The Fed is Wrong…Inflation has Arrived

Sy Harding

Fed Chairman Bernanke says inflation is still benign and not a concern. He’s wrong! And he’s behind the curve, dangerously so!

Inflationary pressures have been rising and recognized in many major global economies for quite some time, which has had their central banks raising interest rates and tightening monetary policies in efforts to bring rising prices under control. So far without effect, thanks to the intensity of the inflationary pressures.

China began raising interest rates and tightening policies almost a year ago, and has become more aggressive recently as the efforts so far have had no effect whatever. Similar inflationary concerns and efforts to cool off rising prices in India have spread through the rest of Asia, into Russia, over to Brazil and the rest of South America, and into Africa.

This week in Europe, the United Kingdom reported that its annualized rate of inflation jumped to 4% in January, up from an already worrisome 3.7% in December. The 4% level is double the Bank of England’s stated ‘comfort zone’ of 2%, which by the way is the same as the Fed’s stated comfort zone.

The Fed looks out the rear view mirror and says that the ‘core rate’ of inflation, that is with the cost of food and energy removed, is up only 1.6% over the last 12 months, well within the Fed’s comfort zone.

The Fed needs to look out the windshield at what’s coming down the road, not through the rear window.

Yesterday in the U.S. it was reported that the Producer Price Index (PPI), measuring inflation at the producer level, jumped an unexpected 0.8% in January from December, and the ‘core rate’ jumped 0.5%, more than double the consensus forecast of economists, and the fastest monthly pace of increase in two years.

And it looks like it’s moving on from producers to consumers. This morning it was reported that the Consumer Price Index (CPI) was up 0.4% in January. The Fed will take comfort that the core rate was only up 0.2%, an annualized rate of 2.4%. It was however, also double the consensus forecast of a rise of only 0.1%.

Meanwhile, the World Bank president warned yesterday that global food prices have hit “dangerous levels” that could create political instability in many parts of the world. The bank reported that global food prices have jumped 29% over the last 12 months.

Commodity futures, particularly in the areas of corn, soybeans, cotton, are pointing to still higher prices ahead. And agriculture experts say there is not enough global growing capacity to bring prices down any time soon.

Yesterday, CitiGroup CEO Vikram Pandit warned that “Many emerging markets are operating at or near capacity and are therefore at risk of overheating – and must deal with the possible consequences of inflation.”

The release of the minutes of the Fed’s last FOMC meeting revealed that some Fed governors suggested last month that the Fed scale back the remainder of its QE2 program on concerns that the continuing easy money policy could create an inflation problem. Countries around the world have complained since the Fed’s QE2 announcement that it would worsen already worrisome global inflationary pressures.

But the Fed Chairman is fixated on trying to fix the high unemployment problem in the U.S. by pumping up an already recovering economy, and in the process has his head in the sand regarding inflation.

It looks like once again the Fed will be dangerously behind the curve on a bubble, as it was in the stock market and housing bubbles. This time it is the inflation bubble, particularly in commodities.

The historic hedge against inflation – gold!

How To Fake An Economic Recovery

Giordano Bruno

This may be a highly distasteful proposition, but just for a moment, I want you to sit back, and imagine that you are a member of the corporate banking elite. You are a walking talking disease ridden power mad pustule who naively believes himself intellectually superior to the vast majority of humanity and above the inherent laws of conscience, honor, and general good taste. You are a villain in the purest sense, in that you not only do great harm to the world, you actually SEEK to do great harm to the world, if only to benefit yourself and your exclusive circle of “friends”; a clan of degenerate blood thirsty sociopaths with delusions of omnipotence that stalk the night like Armani wearing Chupacabra exsanguinating the joy from poor unsuspecting cultures. You are capable of anything, and sadly, you take “pride” in this fact…

You aren’t “rich” in the traditional sense. You aren’t a “Bill Gates” or a “Donald Trump” (I’m beginning to wonder if Donald Trump is even solvent, or if his entire fortune is a special-effect courtesy of NBC). No, you don’t “make” money, you MAKE the money. You are a global financier. You are a central banker. You create the fiat that the rest of the country uses to sustain its fantasy economy. You dominate trade through monopoly and corporate fraud. You control the flow of currency through an economic system using fractional reserve banking, artificially pegged interest rates, and your ever trusty printing press. You put your substantial monetary clout behind BOTH major political parties, and groom presidential candidates to your globalist standards. Any politician who desires to climb the ladder of power turns to you for assistance, not the voting public. You have a tremendous financial stake in every corporate news provider in the country, if not own them outright. You invite their top reporters to posh banquets, give them unlimited access to prominent social figures and high rollers, and fly them to private alcohol addled orgies in the middle of the California Redwoods (I wish this was all made up). Forget responsible journalism, they love hanging out with you, and would probably write whatever you tell them to.

Now that you have placed yourself in the tight fitting shoes of the “enlightened few”, I want you to imagine that you have engineered an implosion in national credit sectors using ultra-low interest rates to fuel mortgage and derivatives bubbles that would contract at an unprecedented pace once it is revealed to the wider investment world that those equities which they prized only days before are now “toxic”, essentially worthless, due to mass debt defaults on loans which never should have been made in the first place. Yeah, you’re a real dirtbag.

Of course, you aren’t finished yet! Your ultimate goal is centralization, and the key to centralization is to remove all options available to the masses but one; the option which garners you the greatest amount of dominance. A global economic system based on a single world currency and a single unaccountable governing body would be ideal. What would you call this world currency? I don’t know, how about something innocuous sounding like….Special Drawing Rights (SDR’s), which you can then label as a mere “basket of currencies” when it is really a parasitic financial instrument meant to absorb currencies until it replaces them completely:

http://money.cnn.com/2011/02/10/markets/dollar/index.htm

http://www.rte.ie/news/2011/0214/g20-business.html

In order to begin instituting this world currency, you would first need to remove the standing world reserve currency from its exalted position, that currency being the U.S. dollar. This seems rather impossible to many mainstream analysts who cannot fathom the possibility of a breakdown in the mighty Greenback, but you have already set the stage. You have created a progressive debt singularity so immense that no amount of fiat, no amount of taxation, no amount of austerity could ever satiate its hunger. You now have the perfect excuse to print the dollar with wild abandon until its withered, corpsified remains are six feet underground, leaving the door wide open for the tap dancing fast-talking SDR to take its place.

The issue is, how do you convince the general public that all is well until you are ready to unleash hyperinflation and fiscal Armageddon? How do you make them believe with all their hearts that they are not in the midst of a debt meltdown and the end of their financial sovereignty, but basking in a full-on economic recovery?!

You can’t stop wealth destruction now that the avalanche has been set in motion. You can’t stop inflation and dollar devaluation (nor would you want to. Hey, you’re evil incarnate, remember?). The effects on mainstreet are beyond your ability to hide, but, what you CAN manipulate, are the statistics and indices that Americans rely on for psychological comfort. You give everyone a blindfold and a cigarette and you do what you do best; lie!

Here is a step by step guide to fabricating an economic recovery out of thin air….

Don’t Count The Unemployed, Discount Them:

Jobless people are a real downer and a pesky nuisance because they represent living breathing proof that a recovery is not taking place. By most standards, a recovery in jobs markets can be claimed if meaningful evidence shows a return to unemployment standards (normal unemployment) set before the recession / depression was triggered. If you are a global banker today, however, this will not do. Instead, you simply change the definition of “normal unemployment”. Thus, the debilitating jobless rate which was originally thought of as “bad”, is now thought of as “natural”. You must then publish long-winded white papers using more subjective statistics devoid of common sense while feigning a logical pretense:

http://www.frbsf.org/publications/economics/letter/2011/el2011-05.html

This only satisfies a small portion of the populace, though. Next, you must rig the manner in which unemployment is calculated to always overlook certain subsections of jobless. Never count those people who have been unemployed so long that they no longer receive benefits. Always count people who are underemployed as fully employed, even if they are only able to scrape together ten hours a week through part time McSlavery. After this, change the manner in which raw data on unemployment is actually collected.

First, the Labor Department derives most of its raw data on unemployment not through any traditional mathematical means, but through two separate surveys which are open to wide interpretation; an establishment survey, and a household survey. The establishment survey is what we hear about at the beginning of every month, while the household survey tends to float under the mainstream radar. In 2009 and 2010, the Labor Department deemed the household survey data (a phone driven survey of 60,000 households) “more reliable” for indicating job growth, because it was supposedly accurate in counting small business hiring and self-employment. So, you have two separate surveys (unscientific indicators of employment) combined together to produce a job growth rate number, and an unemployment percentage, both of which represent, at the most, a GUESS on the current state of jobs in this country.

While the establishment survey showed only 36,000 jobs created, the household survey somehow showed around 600,000 new jobs created!?:

http://www.bls.gov/news.release/pdf/empsit.pdf

Basically, the BLS is asking you to believe that over 600,000 people either started their own businesses, or were hired by home based businesses in the month of January alone. I’m curious as to where all the capital inflows are coming from to launch such a revolution in home entrepreneurship in the middle of the greatest credit crisis in history. Oh well, if the Labor Department says it’s true, it must be…

The juxtaposition of odd data collection methods is the reason why the government was able to claim a drop from 9.4% to 9% in the jobless rate while announcing only 36,000 jobs created! The household survey has become an incredibly useful tool for generating arbitrary employment data which can be molded to say whatever government officials and central bankers want it to say. Anyone who controls the source data for a calculation controls the outcome of that calculation. It’s that simple.

What I wouldn’t want, if I was the Labor Department, is for some outside independent citizens group to monitor my survey methods while in progress. That would make life for a statistical huckster very difficult indeed.

As Long As Stocks Are Green, The World Is Golden:

Near zero interest rates can be very useful if a central bank wishes to throw a tidal wave of fiat into a particular index in order to make it appear healthy. Certainly, the Fed has avoided admitting to any manipulation of the stock market. QE measures are all “above the board”, and all is well in Bernanke’s Mayberry. A question arises here though that desperately begs to be answered; if the stock market’s meteoric rise from near destruction to the 12,000 point mark is “real”, and completely in tune with a legitimate recovery, then why is the Fed still keeping interest rates at near zero after almost three years, and why are they continuing quantitative easing measures? Could it be that without constant liquidity injections from the Fed, the stock market would once again collapse like a wet paper sack? We know that in 2009, it was revealed that bailout funds which were supposed to go towards muting the effects of toxic bank assets were actually being pumped into the equities of healthy banks instead, meaning,the money has not been allocated to the areas promised:

http://www.associatedcontent.com/article/1436061/more_shocking_news_on_2009_bailout.html

We also know that top hedge fund managers have openly stated that stocks will remain bullish because QE funds are propping up the market:

http://www.marketwatch.com/story/tepper-tells-cnbc-fed-will-prop-up-market-2010-09-24

And, frankly, if you are a global banking cartel intent on keeping the American people in the dark, it makes perfect sense to prop up stocks. A Dow in the green is like a mass dose of fiscal lithium; it calms investors into a stupor. Even people who are otherwise unconcerned about economics will keep track of the Dow as if it is a solid indicator of their personal financial safety. A great test would be to observe market reactions to a Federal Reserve interest rate hike and a freezing of QE in order to counter inflation. Will the Dow stand on its own two feet then? I seriously doubt it, but then again, I don’t know that the Fed will ever raise interest rates again…

Inflation? What Inflation?:

Unmitigated inflation spells doom for any society. It’s like some monetary based animal instinct deep down in our collective unconscious. The moment we hear the word “inflation” or see prices rise dramatically, we revert to survival mode and begin honing our mammoth bone battle mallets. Governments and central banks throughout history have made it their top priority to hide the effects of inflation from the citizenry at all costs.

To mask inflation is nearly impossible, especially where commodities and base goods are concerned. That’s why our government and private central bank calculate the Consumer Price Index (CPI) without counting food or energy. Most grains and crude oil have doubled in price over the past year alone, and this does not reflect well on the safety of the dollar, or the effectiveness of liquidity measures by the Fed. China, whose inflation is but a prequel to our own, is also distancing food and energy price surges from its CPI numbers, giving the false impression of leveling markets:

http://www.zerohedge.com/article/china-lowers-weighting-surging-food-prices-cpi

Corporate retail chains have a tendency to absorb rising prices of base goods to avoid alienating their customer foundation, hoping that the increases are temporary. When retailers realize that prices are not going to drop back down, they eventually relent, and shelf costs skyrocket. The bottom line is clear; overall worldwide food averages were up over 28% in 2010:

http://www.fao.org/worldfoodsituation/FoodPricesIndex/en/

Crude oil prices continue to hover near the $90 mark even though inventories are at a 20 year high:

http://www.zerohedge.com/article/gasoline-inventories-jump-20-year-high-gas-price-surges

The World Bank is now warning of possible disasters (which they helped create) in the wake of “dangerous price levels”:

http://www.reuters.com/article/2011/02/15/us-worldbank-food-idUSTRE71E5H720110215

Our government’s response? Complete denial that there is any significant threat of inflation. Denial that overprinting of the dollar and its subsequent devaluation has anything to do with rising prices. Scapegoating everything from weather, to speculators, to the fake “recovery” itself for price spikes. The longer they keep the terminology of inflation out of the mainstream, the less Americans are likely to prepare for an onslaught of the dollar.

Create Debt To Pay Off Debt:

This is pretty self explanatory. If foreign investors want nothing to do with you, your explosive national debt, or your depreciating currency, where is your government going to get the money to continue spending like a drunken trophy wife at Macy’s? If you default, the jig is up, and no one will buy your recovery yarns. Instead, print even more fiat and use it to purchase your own Treasury bonds! This serves two purposes; first, it props up the federal bureaucracy which gives the impression of stability (at least for a time), and, it furthers your goal of squeezing the dollar like a grape.

Remove All Checks And Balances:

If you plan on decimating an economy, you can’t very well have people pointing fingers at you while you do it. That would be inconvenient. It’s funny, but for years, ratings agencies like Moodys helped global banks facilitate the mortgage and derivatives crisis by categorizing worthless assets as AAA securities. Without them, no one would have invested in such garbage in the first place, and the banking fraud would have been immediately exposed. Now that ratings agencies are finally doing their job and downgrading the creditworthiness of banks and countries that possess extreme liabilities, the SEC is moving to marginalize them:

http://www.reuters.com/article/2011/02/09/us-financial-regulation-creditraters-idUSTRE7180OD20110209

Interesting that as the U.S. nears a possible credit downgrade, we suddenly no longer care what ratings agencies have to say.

The SEC in itself is one enormous joke, and in no way a practical overseer of banking activity. The organization has shown itself to be either fantastically incompetent, or deliberately indifferent to ongoing financial fraud. I never thought I would find myself agreeing with a cretin like Bernie Madoff, but according to the middle-weight Ponzi artist, global banks he dealt with, like JP Morgan and HSBC, had to be perfectly aware of the scam he was undertaking, otherwise, it could not have been possible:

http://www.reuters.com/article/2011/02/16/us-madoff-interview-idUSTRE71F0QD20110216

Likewise, the SEC’s complete lack of proper investigation into such activities turned Wall Street into a globalist playground where much bigger conmen than Madoff have nested and bred like fleas. It’s not that the system needs more regulation, or more legal wrangling; this would accomplish nothing, because the system is regulated by the criminals! Therefore, new laws can be enacted in concert, and the government can deem the system reformed and recovered, all while the underlying corruption remains untouched. If the poison that instigated the fall of the markets is not uprooted, treachery will continue to reign supreme, and healthy markets a childish illusion.

The Creeping Terror

Two years ago I was in my local Borders bookstore and noticed that they had downsized their stock selection by what looked to be nearly a third. I made a point to ask if this was a chain wide phenomenon. Most employees I talked with said yes. I then asked if they had begun cutting employee hours by significant margins and specifically laying off longtime workers that had built up substantial pay increases. Again, the consensus was yes. Finally, and most importantly, did Borders discuss these changes with their staff in a manner that was informative and open, or, was there a lot of confusion amongst employees as to what exactly was going on? The response was that they were overwhelmingly bewildered by Borders’ lack of clear communication as to the direction of the corporation.

My suggestion to them was to start looking for another job, because their company was about to declare bankruptcy. They, of course, denied this was remotely likely:

http://online.wsj.com/article/SB10001424052748704329104576138353865644420.html

It may sound like a stretch, but the reason I bring up Borders’ impending chapter 11 is because, to me, it represents a microcosm of the creeping nature of economic collapse, especially when that collapse is being wielded and delegated.

Borders has been on the verge of default for quite a while. Did they refuse to relay this information openly to their employees because they selfishly wanted to maintain profit margins just a little longer until they were ready to pull the plug? Of course! Do global bankers with aspirations of a centralized currency keep the true destabilization of the market spectrum and the coming international dollar dump to themselves because in the end they will benefit from our shock and awe? Of course!

Whether a person loses everything all at once, or a piece at a time, the end result is the same, however, there is something especially cruel in the idea of fiscal theater; the act of inspiring false hope that a financial environment is sound when it has, in truth, already suffocated. Why would our modern day robber barons put so much energy into constructing a fake recovery? There are many reasons, but first and foremost, to create apathy. To lure us towards inaction. To swindle us into assuming the storm will blow over, and all will return as it was. Unfortunately, recovery without intense restructuring of our economic system is impossible. The fundamentals do not support the suggestion in the slightest. The question is, who will be at the helm when the dust settles and this restructuring does eventually occur? Will the American people take the lead, as they should, and commit to a concrete free market rejuvenation of our financial environment? Or, will we sit back yet again, and let the banksters set us up for the next grand disaster?

The Biggest Lies Ever Sold To The Investment Public

Graham Summers

The general public had stocks foisted on them in the 80s with the introduction of stock-based retirement plans (401ks and IRAs). They became further enamored by this asset class with the creation of online discount brokerages, which seduced the DIY spirit.

Stocks have become so popular that there are entire peripheral industries have been built surrounding them: investing books, investing seminars, investing TV shows, etc.

And yet no one has ever asked whether investing in stocks is actually a good thing.

In reality, owning stocks isn’t all that great. I don’t mean during bear markets – I mean in general. When you get done reading the lies detailed in these articles, you’ll likely come to the conclusion that stocks as an asset class are not only highly overrated, but that owning stocks can in fact be a colossal waste of time.

Lie #1: Stocks make money from price appreciation.

Just about everyone talks about investing in stocks from a price appreciation perspective. “Buy low, sell high” so the saying goes.

Well, historically dividends have accounted for 70% of all stock market gains.

According to a study performed by the London Business School, when you remove dividends, stocks have returned a mere 1.7% in average annual gains over the last 109 years. To put this into perspective, this is less than you’d make from owning long-term US Treasury bonds (2.1%) over the same time period.

Indeed, if you’d invested $1 in stocks in 1900 and reinvested your dividends, by 2009, you’d have made $582 (adjusted for inflation). Take out dividends and you’d have only seen $6 from price appreciation. Yes, $6 from 109 years’ worth of capital gains.

Put another way, by focusing solely on capital gains when it comes to stock investing you’re only doubling your money about every 18 years (remember, this analysis simply focuses on the returns generated by the market – which outperforms most professional and individual investors).

So unless you’re buying stocks with dividends, you’re likely not making diddly in the long-term.

Lie #2: A bull market in stocks increases your wealth.

Everyone and their mother likes to babble about whether we’re in a new bull market. The reality is it doesn’t matter. There have been ENORMOUS periods of time in which stocks didn’t make ANY money when you account for inflation – and that INCLUDES bull markets.

Case in point, research from the London Business School shows that stocks didn’t make a CENT in purchasing power in France from 1912 to.. 1977: a whopping 65 years.

Put another way, some three generations of investors in France didn’t actually increase their purchasing power by owning stocks.

Indeed, the US is currently experiencing a similar period in which stocks rise but FAIL to increase purchasing power for investors. Consider that since the Tech Bubble stocks priced in Gold have FALLEN nearly 90% indicating in plain terms that most of the gains we’ve seen in the market are a result of easy money and US Dollar devaluation.

Meanwhile, inflation is on the rise. Food prices are at record highs and only going higher. Executives at clothing retailers are warning that prices could rise by as much as 15-20% by the Autumn. Cotton is up 44% so far in 2011. And even the Fed’s phony measures show that vegetable prices are up 13%!

Make no mistake, higher interest rates are coming and coming fast. The Fed has spent Trillions trying to lower interest rates (more on this in a moment), and it’s now officially lost control of the long-end of the Treasury market and food prices.

This will have ENORMOUS implications for the US housing market and financial system. Housing prices will be collapsing in the coming months as interest rates soar. We could also very well see another 2008-type event (a collapse of the US Financial System) as well.

Why?

Derivatives.

In 2008, the entire financial system nearly went under due to the Credit Default Swap market which was $50-60 Trillion in size. In contrast, the interest-rate based derivatives market is $196 TRILLION in size: more than THREE times larger than the credit default swap market at hits peak.

At this size you only need a very small percentage of these derivatives to be “at risk” (meaning real money is bet on them), say 5% to get $10 trillion in potential losses. To put that number into perspective, the entire WORLD STOCK MARKET is only $36 trillion in size.

See the potential risk here?

To say that the US financial system is in danger would be a HUGE understatement. It is the derivatives market, NOT the housing market that has the Fed concerned.

Make no mistake, we are rapidly descending into an inflationary disaster. If you haven’t already prepared your portfolio for this, NOW is the time to do so.