March 20, 2014 at 12:43 pm #770
With the Fed’s Head, Janet Yellen announcing yesterday that the Federal Reserve is easing Quantitative Easing by another $10B a month starting in April (Going from $65B to $55B) and a promise to continue easing through early fall; we can expect to see some weakening of the economy further.
I was never a fan of QEing in the beginning as it just kicks the can down the road not unlike putting off that cancerous brain tumor operation another year or so. Or my favorite analogy of getting the economy hooked on heroin and now having to wean the economy back off of the heron. Regardless the end is not going to be pretty.
David Stockman in an interview with CNBC yesterday basically said what I have written above in that:
“We never should have painted ourselves so deep in this QE corner in the first place,” chides David Stockman, “because the whole predicate [of Fed policy] is false… “We are already at peak debt and forcing more into the economy didn’t work,” and won’t work as is merely funds Wall Street’s latest carry trade to nowhere and fiscal irresponsibility in Washington. Simply put, “the private credit channel of monetary transmission is busted,” so the Fed is exploiting the only channel it has left – “the bubble channel.”
Scroll down on that hyperlink above to watch the 3 minute interview – OUCH!
So where does this all lead you ask…Here are some of my thoughts:
> Lower stock market which lost 114 points yesterday based on Yellen’s announcement (back up today)
> A possible financial attack by Russia & China where they dump US Treasuries. If you think this is far
fetched – Russia put pressure on China to do just that in 2008 as was reported by The Blaze[/url] and the
BBC confirmed by Former Sec. of the Treasure Paulson.
> Inflation in the high single digit to low teens
> Interest rate hikes not seen since the Jimmy Carter years – Low to high teens
> A renewed higher unemployment rate (I look at the U6 rate)
Then throw in the following:
> Man made drought in CA. which is where we receive 20% of our food from
> Higher energy costs thanks to Russia’s expansion, the continuing strife in the Middle East and the failure
of Presidents Obama’s administration opening up more oil and gas exploration
> The November mid-term elections
> A inevitable correction in the stock market
> Stagnate USofA economy with a less than 1% GDP
> Higher U6 unemployment rates
> $17.7T national debt with a $210T unlimited liability due in part to retirement plans (Promises)
> What have I missed?
IMO, I would get those Beans, Band-Aids and Bullets bought and plans tweaked.
With this all said, what do you think is going to happen by year end?
Freedom Through Self-Reliance
www.Unchainedpreppers.com/forumMarch 20, 2014 at 9:53 pm #840EricParticipant
as far as what is going to happen, who knows man? I certainly have no idea, but I am fairly certain that the world is headed for some tough times in the not too distant future. As to what will kick that off? The possibilities are endless.
"I have sworn upon the altar of god eternal hostility against every form of tyranny over the mind of man"
Thomas JeffersonMarch 22, 2014 at 9:06 am #1030
True words Eric.
I think all of the folks (Except the NSA folks) on this forum think as you do. The big question is are they preparing?
The questions I am trying to answer is when will the SHTF and in what form will it take. Economic collapse, war, coup, or what?
I am also concerned that many folks are spending all of their discretionary income only on weapons and supporting gear. Their needs to be a plan of action to get ready for what ever is going to be thrown at us. Think Beans, Band-Aides and then Bullets.
Freedom Through Self-Reliance
www.Unchainedpreppers.com/forumMarch 23, 2014 at 5:48 pm #1142
JohnyMac, If we knew when it would happen it would be to easy.
I am a practicing CPA, NY metro area, escapee from Wall Street, deep in “enemy” territory. Here is what I know and believe. The board is set and the pieces are in motion. ALL participants (read governments) have loaded themselves up with debt and no hope of paying it off, or as I would say, the books don’t balance and the numbers don’t work. Therefor the clock is ticking. At some point there will be a “triggering event”. It will in all likelihood be a financial/economic event that will move out in a wave swamping everyone/everything in its path.
China has multiple asset bubbles. We have started to see loan defaults out of China, a first ever with more to come. Bubbles always burst, they do not deflate. Putin has a score to settle with the USA. We bankrupted Russia in 1980’s. He was/is KGB and always will be. This time we are on the financial ropes and have a commander in chief who isn’t. Russia has significant natural resources and controls flows of natural gas to Europe. France, Italy and Portugal (and other Euro countries) have huge debt levels that cannot be paid. These are just some of the bigger players.
Remember, just follow the money. In Europe and the US we have high unemployment. 12% in Europe, 25% in Spain, Portugal, Greece and & 7% in the US (a bogus number). Why aren’t there riots? Because the govt’s keep giving out money. When the flow of money is interrupted civil unrest will occur fairly quickly. Remember the WalMart that was looted when people in the area didn’t get their automatic debit card recharge due to some computer problem.
It’s all about the money and the flows. ALWAYS follow the money. My personal view is a financial problem in China that begins the reset. I believe sooner than later, less than 3 years, and am organizing my life accordingly. That said, “triggering events” many times occur in places and ways you would never have thought of. So, be ready, live your life and remain aware of what goes on around you.
My 2 cents.
You are never out of the fight.March 23, 2014 at 6:08 pm #1147
Great post Arthur L! Sorry to hear you are so deep behind the enemy’s lines.
Our BOL is just across the NY border in NE PA. Most of the mom & pop gun stores in PA. keep running out of ammo thanks to NYers coming across the boarder to buy cheap untraceable ammo
LOL, what ever as I buy 90% of my ammo from Freedom Ammunition which I have written about in an earlier post.
Once I pass the west bound toll booths in MA. on I90, I feel like I have passed into enemy territory. I mine my P’s and Q’s until I enter PA. two hours or so later.
Take care as the April 15th craziness comes closer
Freedom Through Self-Reliance
www.Unchainedpreppers.com/forumMarch 23, 2014 at 8:41 pm #1168
Thanks JohnyMac, it is just as I see it.
Btw, to your original post deflation is a bigger issue than inflation. Think about it, we have stimulus, QE1, QE2, QE3, etc. and all we are seeing by gov’t measurements is 1%+ inflation. Without all that money printing, most of which is sitting in the banks, we would be spiraling down in a 1930’s style depression, but worse because the numbers are bigger. It will be interesting to see how the Fed off loads all this debt they have bought up, and remember, even though they are tapering they are still adding to their position. This is all unchartered territory. The unintended consequences are lurking.
Definitely more to come on this.
You are never out of the fight.March 27, 2014 at 8:19 pm #1702George HaystackParticipant
I think Arthur L. is right on. I’ve been studying economics seriously for about 10 years (Austrian School) and can’t find a flaw in his analysis. I see a couple of options:
(1) A relatively precipitous collapse in 1-3 years. Dollar loses reserve status and then fiat currencies collapse around the globe. War and calamity on a global scale as the financial oligarchs and their political lickspittles try to cling to whatever power they can salvage.
(2) A long, slow grind for several more years, followed by (1). Social conditions will deteriorate (especially in populous urban areas), crime will increase, standards of living will fall, the deflationary threat will be countered with QE infinity so inflation will winnow away savings, retirement accounts and incomes. All this will coincide with ever escalating militarization and centralization of law enforcement. Eventually there will have to be a reckoning.
I have to say that the Oligarchs and political cronies have shown more resilience than I thought possible. In 2008 I thought the breaking point would be reached by 2011. I was wrong. QE, as evil as it is, has propped up the system for the past 3 years. Of course this just means that the endgame will be more painful. Who knows what else they will do to keep things afloat? Nationalize retirement accounts? Federal consumption or property taxes? Wide spread public works programs (like WPA in the 30’s)? Political power has a way of perpetuating itself.
Stock up, make like-minded friends, get healthy, and train.March 28, 2014 at 9:44 am #1776
It’s coming and as AL wrote, “If we knew when it would happen it would be to easy.” This is not unlike we don’t know when Jesus is going to return to our world.
With that said here are my thoughts:
> Get ready for the Russian Spring. It has been reported that 100,000 soldiers are amassed on the Ukrainian border.
> Russia holds a pretty good hand. The cards look like:
– Stop using the Petrodollar which would surly devalue the Dollar
– Cut off or severely curtail the energy flow to the EU
– Ask/tell Syria to stop dismantling their WMD program
– Escalate Russia’s help towards Iran
None of the items I listed is good for the USofA or western Europe.
MrsMac and I understand that something is coming and it is sooner than later. We have:
> Significantly reduced our exposure in the stock market
> Sold off some real estate and have our current home in RI on the market
> Food has been put away along with medications and defense is in place
Like not knowing when SHTF will happen, we will never be done prepping
Freedom Through Self-Reliance
www.Unchainedpreppers.com/forumMarch 29, 2014 at 1:42 am #1868MaxKeymaster
We don’t have a chance. The numbers don’t add up, the personal debt and government debt in unsustainable and we all keep spending it like we have it.
Beans, bullets, band-aids and the training to use them all.March 29, 2014 at 11:28 am #1889
Interesting discussion and all good points. I do see one way out. It has to do with our vast and increasing oil/gas reserves. Forgive me for venturing into fairy land but it would take something like this:
1. The evil oil/gas companies are unshackled to explore/develop/produce in a safe, sound manner, or as they are currently doing.
2. The government (fed & state) realize a bullet has been dodged and pull up their fiscally responsible pants and begin to make meaningful progress towards cutting fat, balancing budget, etc, etc.
3. Term limits top to bottom. We gotta get rid of these guys on a regular basis. Not trying to be a political statement. All these guys want a career out of being a politician so they can stay at the trough forever creating all their laws/regulations and other BS to make it look like something is getting done. The Founders purposely set this up so the politicians would do their public service and go back home to do something productive.
The potential is there.
Now what do I believe based upon the history of how this works? If (big if since environmentalists hold lots of sway) we unshackle oil production the politicians will find a way to tax it, regulate it more, redistribute the wealth more and spend 120% of their share and the day of reckoning will be pushed off while the hole gets dug deeper. At the end of the day the numbers still won’t work and the books WILL balanced with the pain that will go along with it.
So as stated above stay healthy, train, live your life and be vigilant.
You are never out of the fight.March 30, 2014 at 11:57 am #1951
AL, my sediments EXACTLY!
On another note: Maybe if we have a “reset or reboot” we could implement your three ideas…Maybe.
Freedom Through Self-Reliance
www.Unchainedpreppers.com/forumMarch 30, 2014 at 1:04 pm #1954
Well a reset/reboot is coming in one way, shape, form or another. Do we manage it or does it manage us? The later I suspect.
You are never out of the fight.
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