Pro Tip: A tax refund is not a present from your government. When you receive a tax refund… you are simply getting paid back for a mandated interest-free loan. Often times, this money is not even paid back to the same person who was forced to loan it away in the first place. This process is more commonly referred to as “stealing”.
Category: Serious
That Don’t Impress Me Much
Just a few weeks ago, President Obama used Yemen as the perfect example of success regarding his recent foreign policy decisions. Yemen now has no functioning government whatsoever and is currently being run by terrorists. I just can’t wait to see what kind of diplomatic successes that he has planned for us regarding Iran.
The Myopic Assessment Of Chris Kyle And The True Enemy Of The Iraqi People
Chris Kyle was the most lethal military sniper in the history of the United States. He became highly decorated after four tours of duty in Iraq while he recorded up to one hundred and sixty confirmed kills. A very popular movie was just released out of Hollywood depicting his life story. If you listen to some of the people on the far left, you quickly realize that they have a far different perception of Chris Kyle than the person portrayed in the movie. Film director Michael Moore implied that Chris Kyle is a coward and was the invader of another sovereign nation. Actor Seth Rogan compared the movie about Chris Kyle to a fictional piece of Nazi propaganda. Many on the left argue that the people of the United States military were unwelcome invaders during the start of the Iraq War in 2003. They laugh when looking back at Vice President Dick Cheney’s speculation that the people of the United States military “would be greeted as liberators”. They perceive Chris Kyle as an unwelcome invader in an unjustified war. This is an overly simplistic view of a very complex story.
In order to understand the complicated relationship between the United States and Iraq, one really has to go all the way back to 1982. Islamic extremists had already overthrown the Shah of Iran. Saddam Hussein feared that radical Islamic ideas would start spreading rapidly through his predominantly Shi’ite population. Hussein then invaded Iran and attempted to overthrow the new radical Islamic government. Two years into the Iraq-Iran War, Saddam Hussein was clearly losing. President Ronald Reagan was growing concerned about Iran’s repeated success on the battlefield. You have to remember that this was just two years after the Iranian hostage crisis. Iran was clearly our greater potential enemy during this period. America decided that Iraq would be removed from the list of state sponsors of terrorism. The United States began to supply the Iraqi military with communication and radar equipment. Saddam Hussein started receiving billions of dollars in aid from the United States. The U.S. military provided intelligence and advice to the Iraqi military including how to arm itself via third-party weapons dealers. The citizens of Iraq could see that the United States government was clearly in Saddam Hussein’s corner.
Did you ever see that old Frankenstein movie when the crazy doctor starts yelling, “It’s alive”? Well, that is pretty much what the United States government should have yelled after we propped up the President of Iraq. The United States created this monster and then completely lost control of it. Over the next eight years, Saddam Hussein would rule over his people with a ruthless iron fist. His citizens lived in constant fear of his wrath. He kept most of his nation’s wealth for himself as his people lived in abject poverty. During the end of the Iran-Iraq War, Saddam Hussein used chemical weapons against his own Kurdish civilians in Northern Iraq. It has been estimated that up to 182,000 people were killed in this genocide. The United States turned a blind eye to the plight of the Iraqi people during this time because it was not in our own country’s best interest. Now, let us all check in on our Frankenstein’s monster by fast-forwarding to 1990.
War has its costs, and for Saddam Hussein the cost of his prolonged war with Iran included a 30-billion-dollar debt to the tiny adjacent oil-rich country of Kuwait. Saddam asked Kuwait to forgive this debt, which Kuwait promptly refused. Saddam deeply resented this refusal considering his perception that Kuwait had historically always been a part of Iraq. Using the weaponry and power granted to him by the United States government, Saddam Hussein suddenly invaded and quickly took over Kuwait… much to the surprise of the international community. Within the course of just a few days, Saddam Hussein suddenly flipped in his role from a trusted ally to public enemy number one. The United States started encouraging the Iraqi people to rise up against their brutal dictator.
After a few months of failed negotiations, the first Gulf War had begun. The United States military along with its allies moved in and quickly pushed Saddam Hussein out of Kuwait. Within just a few days, allied tanks were blazing at full speed across southern Iraq while the so-called “elite Iraqi Republican Guard” were sent fleeing up north back to Baghdad. Many of the citizens across Iraq greeted the United States military as liberators. Citizens cheered in the streets as the allied tanks rolled past them. The Iraqi people started to do what the United States had encouraged them to do… they rose up against their brutal dictator. Trusting in the United States government would eventually prove to be a fatal error.
Iraqi military resistance was much lighter than almost anyone expected. Most of the Iraqi military would surrender almost immediately when encountered. It became obvious that Saddam Hussein would be quite easy to topple. At this point, President George Herbert Walker Bush had to make a quick choice. Would he want to push into Baghdad and remove the head from the snake? There was concern that a leadership vacuum in Iraq would quickly lead to the spread of Islamic fundamentalism in the region. The choice was suddenly made to withdraw our troops from Iraq and leave Saddam Hussein in power. The Iraqi citizens who rose up to join our fight against Saddam Hussein would later be slaughtered. The deaths of these brave Iraqi rebels would not soon be forgotten. Let us now jump ahead once again to 2003.
The World Trade Center has now fallen. Saddam Hussein has already initiated multiple failed assassination attempts on our current President’s father as an act of revenge for the previous Iraqi invasion. The United States military has already been at war for two years with terrorists in Afghanistan. Secretary of State Colin Powell sits before the United Nations Security Council giving the most famous speech of his life. He told the world that Saddam Hussein possessed extremely dangerous weapons of mass destruction that could be used for an imminent attack. In retrospect, it would seem that the evidence presented that day was likely falsified and presented to the CIA by an Iraqi citizen with a brilliantly devious plan to remove his brutal dictator from power.
Do I believe that President Bush and Secretary Powell believed everything that they were telling the world about weapons of mass destruction in Iraq? I have never been given any reason not to believe them. But I do believe that President Bush was just looking for a reason to finish the job that his father admittedly failed to do. I think that President Bush was in a very vulnerable position to “take the bait”. Just recently, some new evidence has come to light indicating that there may indeed have been some actual weapons of mass destruction in Iraq. However, given the leadership vacuum and growth of radical Islamism created in the invasion’s wake… I do suspect that most historians will eventually agree that the 2003 invasion of Iraq was a tactical mistake.
It is within the context of this history that you must view the current mindset of the average Iraqi citizen. The average Iraqi citizen does not fear the American military. The Iraqi people did not greet the American military as liberators the second time around because they justifiably did not trust the American government. Saddam Hussein had two male sons who had walked around the streets of Iraq absolutely terrorizing and repeatedly torturing them. When Saddam and his evil offspring were finally put to death, military commanders felt the need to broadcast these images throughout Iraq due to the understandable distrust of the American government. As the Iraq War dragged on, most of the opposition that our troops were facing was not from the Iraqi citizens… we were fighting Islamic extremists who were crossing the borders and engaging us from other countries like Iran and Syria.
There are three factors that should be considered when any country engages in a war: the military, the government, and the citizens. The United States military has always been our strongest and most admirable variable. It is not a soldier’s job to decide if we go to war or why we go to war. It is not the soldier’s responsibility to empathize with the people who are trying to kill him. Chris Kyle was not an enemy to the Iraqi people. He was a hero to the citizens in the United States and the citizens in Iraq. Most of the people of Iraq are just like many of us. They are afraid of Islamic extremism. They are highly educated and cultured. Many of them believe in Jesus Christ and pray to him regularly. Chris Kyle volunteered to go half way across the world to protect these people along with his fellow soldiers. Meanwhile, Michael Moore and many of the rest of us stayed over here to safely judge his actions from a distance.
The second factor that should be considered when a country engages in war is its government. Our government has repeatedly let down the people of Iraq. The only thing worse than not helping a group of people is when you only half-help them. You eventually set these people up for an even greater failure than if you never even got involved in the first place. Large numbers of peaceful citizens around the globe do not hate the United States because we are rich or because we are “freedom loving”… they hate us because our government constantly screws around with their country’s infrastructure and then abruptly abandons them. Our government often props up brutal dictators because it serves our own personal interest. Just recently, our government was led by President Obama in pulling completely out of Iraq and abandoning any of our previous commitments that we made to its people. Hard fought military gains were simply handed over to our enemy. This action was executed with very little protest from the American people. This leads me to the third and most important factor when dealing with a nation’s war: its citizens.
The citizens of the United States are our country’s “weakest link”. Our enemies fear our government and they most certainly fear our military… but our enemy understands that the true weakness of the United States lies within the civilian population. They know that we don’t have the stomach for a prolonged fight. They realize that we lack the same intestinal fortitude that they do over the long haul. They know that we are intellectually lazy and easily distracted. We allow our government to run amok and we tend to mindlessly defend our political leaders. Our enemies will prolong conflicts instead of simply trying to win them because they know that American citizens will eventually lose their resolve over time. Our government attempts to mitigate this risk by not showing us the body bags or the flag draped coffins on our televisions.
The citizens of the United States do not want to constantly hear about the war overseas because it makes them feel badly in general.
We have become distracted and uninformed as a nation.
We have become hesitant in supporting the act of doing the right thing in the world simply because it is right.
We are blurring the previously distinct lines between good and evil.
We are becoming more godless as a people.
I have met the true enemy of the Iraqi people and it is not Chris Kyle nor any members of the United States military.
I have met the true enemy of the Iraqi people… and the enemy is us.
The Era of Pseudo-capitalism and The Day That America Blinked
Pure capitalism is a beautiful thing when working as designed. Capitalism works as a catalyst for invention. The money one strives for through capitalism is the perpetually hanging carrot on a stick. It motivates people to give extra effort going forward with the expectation of additional rewards in the future. Capitalism allows the choice for people to live extraordinary lives rather that just ordinary ones should they desire.
Unfettered capitalism has allowed for much of the innovation that the rest of the world has enjoyed over this past century. Just image what the world would look like today without capitalism. Much of the technology we use today would look like witchcraft in that parallel universe. Capitalism makes all of our lives easier over the long run whether we realize it or not.
There is also a very important downside to capitalism that is often overlooked. True capitalism punishes bad decisions. It quickly separates the fools from their money. Private enterprise is supposed to act as the unforgiving graveyard where bad ideas go off to die. Well functioning capitalism works like a giant reset button that periodically levels the playing field for intelligent young go-getters on the bottom rung of the economy. When true capitalism is working as designed, it is supposed to eventually weed out the idiots and the bad apples.
A few years ago, the rules of capitalism in the United States were changed forever. The origin of this change is rooted in the 1999 repeal of the Glass-Steagall Act. This law had been in place ever since the Great Depression. This law allowed for banks to take deposits and make loans and it also allowed for investment brokers to underwrite and sell securities. However, this law restricted ONE single entity from performing BOTH tasks at the same time due to an inherent conflict of interest. After repeated lobbying from big banks, Democratic President Bill Clinton and Republican Phil Gramm worked together to successfully repeal Glass-Steagall in 1999… and capitalism as previously known in the United States would NEVER be the same. This was an exercise in bipartisan stupidity.
A few years after being unshackled by Glass-Steagall, investment banks on Wall Street started making a series of ridiculously bad bets on the subprime mortgage industry. They were granting large mortgage loans to the poorest among us and were even being encouraged to do so by our government. They leveraged themselves beyond idiocy. Investment bankers with small penises and large egos got into a pissing contest with other people’s money. They started making bets that low-income people with no savings would be able to continue making enormous mortgage payments in perpetuity. Were these poor fools with no money and large mortgages partially to blame for this problem? You bet they were! But these investment bankers did not even seem to care if the whole system was rigged… because they were getting rich. Bankers would bundle these bad loans into small packages and then sell them to third parties. They would basically create these steaming investment turds, light them on fire, and then leave them at someone else’s doorstep.
Eventually, this house of cards came crashing down. The collapse of Lehman Brothers was the canary in the coal mine. Other investment banks and insurance companies soon came crashing down as well. The whole economic system started to look like it was about to go under. Credit markets became frozen and global panic quickly set in.
Goldman Sachs was the Wall Street investment bank that almost had this whole thing figured out… almost. Goldman Sachs saw much of this subprime mortgage disaster coming and attempted to invest in such a way to profit handsomely from it. They purchased a high volume of “credit default swaps” from the insurance company AIG that insured against a subprime mortgage meltdown. This is like you buying insurance just in case your neighbor’s house burns down. This is not insurance designed to protect you from individual loss. Credit default swaps are basically a means of placing bets on an external market… and in this analogy it even ENCOURAGES you to go burn your neighbor’s house down in order to get paid. Goldman Sachs made very large bets via credit default swaps that the subprime mortgage market would collapse and when they made the correct bet… they wanted their bookie named AIG to pay up!
There was one glaring problem with Goldman Sachs and their brilliant strategy. AIG was about to go “belly up” and assume room temperature along with Lehman Brothers. It appeared that there would be no giant insurance company remaining in the near future to reward Goldman Sachs for their wise investment move. These capitalist masterminds had lined themselves up like a row of dominos and they were all about to knock each other down.
There would be one man to save them all. His name was Hank Paulson. He was the Secretary of the Treasury and the top economic advisor to President Bush. In an instant, he became the “Chicken Little” of the President’s cabinet. Hank Paulson approached the President and told him that our economic sky was falling. Hank Paulson joined forces with the Federal Reserve to establish a plan of action in order to prop up the banking system. Hank Paulson literally got down on his hands and knees and begged the Speaker of the House to pass a trillion-dollar stimulus package to save the banking industry. Oh by the way, you DO know what Hank Paulson did for a living before becoming the Secretary of the Treasury right? If not, you are going to absolutely LOVE this! Before becoming a top advisor to the President of the United States… Hank Paulson was the CEO of Goldman Sachs! Small world, right?
As Wall Street got down on its knees and begged Congress for its forgiveness… America was at a crossroads. Our society was staring down into the dark uncharted abyss that was the downside of capitalism. I was frantically writing letters to my representatives begging them not to pass this trillion-dollar stimulus package for the banking industry. I recommended that any and all stimulus money should go to help provide a backstop for FDIC insurance so that most individuals could at least recuperate some of their savings in a few months. Fate had its hand firmly planted over capitalism’s large reset button. The idiots and the bad apples were about to be weeded out. The intelligent young go-getters were about to get their chance in this land of opportunity to start the process of rebuilding our economy from the ground up.
But in an instant… America blinked. Capitalism looked too frightening from so high up with no safe place to land. Our leaders allowed for almost a trillion dollars of taxpayer stimulus money to be distributed among all of the losers on Wall Street. We were told that these institutions were “too big to fail”. AIG was given over 182 billion dollars, much of which was then repaid to Goldman Sachs. Within the span of just a few days, capitalism in the United States was officially dead. What is now left in its place is some bastardized form of “pseudo-capitalism” in which a few undeserving investment bankers on Wall Street gather up the last remaining “hanging carrots of motivation” while the intelligent young go-getters spend their time looking for jobs on the internet while living in their parent’s basement. These brilliant investment bankers now know that they are too big too fail which makes crushing their opposition even easier.
Nowadays when I complain about the current state of capitalism and Wall Street in the United States, some people look at me like I’m some kind of communist. There are other people like many in the “Occupy Wall Street” crowd who tend to vilify rich people simply because they are rich and uninformed onlookers tend to lump people like me in together with them. I would like to announce to everyone that I am not an “Occupy Wall Street” guy. I am not a fan of “pseudo-capitalism” but I have absolutely no problem with rich people. In fact, I have always aspired to join the ranks of the rich. I will still chase an occasional hanging carrot on a stick on the rare occasion that I can actually find one. I would also like to state for the record that I was raised to believe in the American dream and I still love the concept of capitalism… I just don’t see it anywhere. Real capitalism in the United States apparently died a few years ago when it was somehow caught in the careless crossfire between unfettered greed and unfathomable stupidity.
I Have A Dream 2.0
I am happy to join with you today in fond remembrance of Dr. Martin Luther King, Jr. I was born just one year after Dr. King was abruptly taken from this Earth. Three score years ago, this great American, in whose symbolic shadow we all stand today, marched bravely through the streets of rural Alabama in the famous Montgomery bus boycotts. He stood up for a woman who refused to stand so that we could all someday stand as one.
But sixty years later we would appear to be just as divided as ever. Sixty years later our prison system is blacker than ever. We see images on our televisions of white police officers choking an unarmed black man to death and we see young black men gunning down other police officers in retaliation.
We refuse to see that we are growing morally bankrupt as a society. Each side blindly points to the other as the sole reason for these problems. Politicians attempt to racially divide us in order to gain political advantage. Both blacks and whites appear to be unwilling to look into their own mirror for a solution.
I call on all of you in America today to recognize the fierce urgency of now. This is no time to engage in the luxury of procrastination. These problems will not fix themselves over the next few election cycles. We have far too many enemies around the world for us to continue being enemies to each other. Now is the time to make real the promises of past generations. Now is the time to rise from the dark and desolate valley of racial division to the sunlit valley of racial unity. Now is the time to teach the lesson of unconditional love and acceptance to all of God’s children.
It would be fatal for the nation to overlook the urgency of this moment. Two thousand and fifteen is not an end, but a beginning. And those who hope that the people who rioted in Ferguson just needed to blow off some steam and will now be content will have a rude awakening if the nation returns to business as usual. There will be neither rest nor tranquility in America until all its citizens are treated equally without prejudice in the eyes of the law. The whirlwinds of revolt will continue to shake the foundations of our nation until the bright day of true justice emerges.
But this is a message not only for those who fight against our cause. This is an urgent message for those currently engaged on our side of the struggle. In the process of gaining your rightful place, you must not be guilty of wrongful deeds. Do not satisfy your thirst for justice by drinking from the cup of bitterness and hatred. We must not allow our creative protest to degenerate into physical violence. We must always hold ourselves to the very highest standards of morality.
We will not win this struggle by continuing to refer to our friends by the same hurtful names that our enemies use to degrade us. We will find it difficult to keep our heads held high if we cannot even keep our pants held up. We will lose this fight if we don’t hold all of our women in the same high regard that we would hold our own mothers and sisters. We must reject the pop culture message of misogyny and bravado and we must once again embrace God’s message of love and decency. Today, we must become the fathers that our children so desperately need.
We have been engulfed by a growing militarized police state, but this must not lead us to distrust an entire race of people. Some of us may be unfairly profiled and treated with prejudice from time to time but we will not be divided. The fate of white and black America is inextricably bound. We will rise or fall as one.
Let us not wallow in the valley of despair, I say to you today, my friends.
And even though we face the difficulties of today and tomorrow, I still have a dream. It is a dream deeply rooted in the American dream.
I have a dream that one day this nation will rise up and live out the true meaning of its creed: “We hold these truths to be self-evident, that all men are created equal.”
I have a dream that we will someday elect and support politicians not because they look like us but because they think as we do.
I have a dream that our old and outdated words of hate will someday be a distant memory in the vocabulary of our nation’s history.
I still have a dream that our children will live in a nation where they will be judged not by the color of their skin but by the content of their character.
I have a dream today.
Rest in peace, Dr. King. Your dream still lives in me.
The Currency Wars And The International Race To The Bottom
Do you all realize what is actually going on right now? The global economy is in a conundrum. Seven years ago, the economies around the world fell off a cliff. It caught many people off guard, but I can honestly say that I was not one of them. I pulled my entire net worth out of the stock market in 2007 and was watching from the sidelines when this crash occurred.
We started to see a collapse of our entire economic system in 2008. Even some money market funds “broke the buck” and started to lose money. The global economy was in full meltdown mode. Most of the countries in the civilized world were already deeply in debt when this financial earthquake occurred. Asset prices started to sink into a deflationary spiral. This economic catastrophe looked like it was going to be bigger than the Great Depression. However, the immediate disaster was somehow averted.
The United States took the lead in this so-called “recovery”. After passing an almost trillion-dollar stimulus passage, the United States Federal Reserve began to engage in repeated rounds of quantitative easing. Many people refer to this activity as “money printing” which is actually a misnomer. Extra money is not actually being printed.
The Federal Reserve creates a set amount of theoretical currency that it refers to as the “money supply”. This is best classified by a term that the Federal Reserve calls “M2”. In June of 2008, the United States money supply was just around 862 billion dollars. By June of 2014, this amount had ballooned to just over 4 trillion! Remember, this money was not actually printed onto paper currency… our government gradually proclaimed it into existence through quantitative easing.
Most people think that we now pay our bills by borrowing money from China. For the most part, China stopped loaning the United States money a few years ago along with most other countries. Each time the United States government runs out of money they will proceed to take out loans in the form of treasury bonds. Guess who is now the primary purchaser of these bonds? You guessed it… The Federal Reserve!
Each time the Federal Reserve increases the money supply this gradually decreases the value of the U.S. Dollar. Now here comes the fun part. All the countries around the globe will pick one stable currency to be the global reserve currency. The reserve currency is held in large quantities by governments and large institutions as part of their foreign exchange reserves. This currency is frequently used in international transactions and is often considered to be the world’s safe haven currency. Guess whose currency is currently considered the entire planet’s global reserve currency? The answer is the United States! Isn’t this hilarious?
As the United States gradually decreased the value of the global reserve currency, the value of other currencies around the globe started to rise. This is a good thing for those countries, right? WRONG! Leaders of these other countries became concerned that if their currencies became too strong that this would drastically hurt their ability to export their own goods. Their products would be too expensive on the global stage. This could also negatively affect tourism.
One by one, these countries around the globe began to “peg” their currencies to other weak currencies like the U.S. Dollar and the Euro. Japan and Switzerland joined in on the fun. This started their own versions of quantitative easing in a competitive little game of currency limbo with each nation trying to see how low they could go. Over time, when you compared the U.S. Dollar to other currencies, it didn’t look so bad. The U.S. Dollar was doing an amazing job staying afloat in this global toilet bowl full of currency turds! However, if you compared the U.S. Dollar to hard assets like gold, silver, and oil, its weakness was quite obvious.
But then what the hell happened? The price of gold exploded to over 1700 dollars per ounce but then it started going back down. Some of this downturn in gold was obviously due to the end of a fear trade as global markets stabilized and people felt confident to invest again. A bigger reason for gold’s demise was due to the creation of a brand new asset bubble brought to you by the so-called brilliant economists at the Federal Reserve.
The Federal Reserve did not just start spending its pretend money on government debt. Over the past few years, they have poured over a trillion extra dollars into mortgage-backed securities and “other assets”. The Fed has basically been pouring new money into investment banking. What do investment banks do best? If your answer was “drive the economy into the crapper”… that was an excellent guess but I was looking for “invest”. Money started pouring into the stock market. Individual investors started seeing the stock market rise as gold started to turn downward. People wanted a piece of the action. The Federal Reserve also intentionally drove down interest rates which indirectly “forced” more people into the stock market.
Investors continue to feel safe to keep pouring their own money into the stock market for as long as the Federal Reserve continues to expand the money supply. In this upside-down economic environment, bad news usually makes the stock market go up and good economic news often makes the stock market go down. The United States and the Federal Reserve have created a situation where the value of the U.S. Stock Market is falsely elevated while the value of gold is falsely depressed.
The big fear right now is inflation. The Federal Reserve has fired all of their interventional bullets. If inflation starts to go out of control, then the Fed will have no choice but to increase interest rates and to slow the rate of their quantitative easing. If they stop creating money out of thin air then who will loan money to the United States? We don’t have many good options left. On top of all that, the only way our country can afford the debt we currently have is because interest rates have been held so low. If interest rates rise even slightly, then our treasury debt that we eventually have to refinance will quickly become an overwhelming percentage of our federal budget.
Today we get a shocking announcement from Switzerland. They have grown tired of this global economic shell game. The Swiss have announced today that they are going to take their ball and go home. After putting up with years of financial nonsense, Switzerland just told the world that they are done intentionally devaluing their currency along with everyone else just to fit in. In one single day, the Swiss Franc is absolutely skyrocketing. Switzerland has decided that they will no longer participate in our international “race to the bottom”. Nobody knows for sure what will happen next… but you better get ready for a bumpy ride.
Preparing for Deflation and Hyperinflation at the Same Time
What would you do if somebody held a gun to your head and forced you to put all of your life’s savings on a roulette wheel for one spin? What would be the smart move? I already know what I would do. I would put 45 percent of my money on black… 45 percent of my money on red… and then put the last 10 percent on green. I would not get rich but I would make damn sure that I did not lose everything. This is the type of unwinnable scenario that we may all soon face in our fragile economy.
Our global economy is facing pressure that is simply unsustainable. There are now too many large countries trying to manage too much debt. I strongly believe that we will face a global economic collapse at some point in our lives. The question that I still cannot completely answer is whether this will be a deflationary collapse or a hyperinflationary collapse. Most collapses in the past have been deflationary such as what happened in the Great Depression. The price of stocks, goods, and real estate suddenly drop and credit markets freeze up. The value of the dollar actually increases and it’s purchasing power goes up, but there are very few dollars moving around.
There is a much more rare event which is equally destructive called a hyperinflationary collapse. This occurs when governments and central bankers try to avoid deflationary pressures by expanding their balance sheets and printing more money to solve their financial woes. Recent examples of this have been in 1930s Germany and more recently in Zimbabwe. The price of everything including real estate, food, and commodities start to rise rapidly as the value of the currency starts to fall.
What we face now is the mother of all global economic collapses. The world is now interconnected like never before. The U.S. dollar is the world reserve currency and the Federal Reserve controls its quantity in the global market. The Fed works in coordination with the International Monetary Fund and the European Central Bank to help manage the money supply and to control the rate of inflation or deflation around the world. If central banks around the globe decide that they want to avoid deflationary pressures at any cost, they could actually push the planet into global hyperinflationary territory like we have never seen before.
These are the questions that we are left with. Will my property suddenly become much more valuable or suddenly lose most of its value? Will my cash suddenly become much more valuable or actually lose most of its purchasing power? Ultimately, it all depends on what a few central bankers decide and how quickly they act. One thing that I have decided to do is to hedge my bets. I put some of our assets in physical property, some into commodities, and much of it into physical cash in multiple different currencies. I keep some money invested in stocks and some invested in gold. I intend to be on both sides of the seesaw. I gain on one side as the other side goes down. I don’t profit wildly but I don’t lose everything either. It keeps me from obsessing over all of these wild market swings.
I have a couple of points when it comes to planning for deflationary collapse. When deflation occurs this can lead to wide spread banking collapse where credit becomes frozen. It becomes impossible to get a loan and very difficult to get access to cash. This makes most real estate temporarily unsellable. Throughout history when this occurs, real estate can suddenly lose most of its value because no one is able to sell anything. There is no market. Just think about it. If you owned a house that is normally worth 120,000 dollars but you could not sell it and your family was starving, suddenly a cheeseburger could become more valuable than your home. The markets become extremely distorted during this period. However, if you place yourself in the position due to poor planning where you eventually want to trade your house for a cheeseburger, then you are totally screwed.
If you pay close attention, you will see however that these extreme market processes are almost always very short lived. People who hold on to their real estate through a deflationary collapse will usually see a return to previous market value in 3 to 5 years. If you had enough physical cash at the bottom of this collapse, you could buy up property at this level and make a huge profit. The problem is trying to make sure you have cash available to do this if the entire banking system goes completely under.
Many people just assume that as long as they hold their money in a bank with FDIC insurance that they will be safe but this is just simply not the case. The last time I checked, the FDIC only had about 50 billion in reserve funds. This is not enough money to bail out Bank of America or Citibank by themselves. I believe that many depositors will lose their savings regardless of FDIC insurance should global collapse occur and multiple banks fail simultaneously. Without access to cash, many people with mortgages could lose their property to banks over the subsequent months by no fault of their own.
I have decided that the best thing that anyone can do is to pay down any secured debt. I would recommend keeping an emergency savings in a regular savings account of a stable bank. I would avoid money market accounts because they may not be very secure during a global financial panic. I want to own anything I need outright including my home and food storage. Beyond the basics, I intend to split my financial planning right down the middle… half prepared for deflationary collapse and half for a hyperinflationary melt up. I want to make sure that no matter what happens that I already have what I need and already own what I have. This advice may not be for everyone but it helps me sleep like a baby.
The Attack Of The Falling Gas Prices And The Secret War For Your Money
Pop quiz, hot shot… What country is currently the largest oil producer in the world? Saudi Arabia? Russia, perhaps? Oh, please… those guesses are so 2008.
The International Energy Agency announced in June of 2014 that the United States of America is currently the single biggest producer of both crude oil and natural gas in the world. Oil extraction in the United States is now soaring at shale formations in places like North Dakota and Texas, ever since the recent development of the process of hydraulic fracturing of rocks using high-pressured liquid. This process is more commonly referred to as “fracking”.
A few months ago, Saudi Arabia and their partners in OPEC decided to declare war on the United States. They did not do this by wagging their fingers at the United States or by pounding their chests. Saudi Arabia silently declared war on the United States through inaction.
Normally when oil prices start to fall, OPEC will cut back on oil production and prop these oil prices back up. Much to everyone’s surprise, Saudi Arabia did nothing to intervene last year when oil prices started to plummet. Saudi Arabia has intentionally flooded the global market with cheap oil over the past few months.
What the hell is Saudi Arabia thinking? Their plan is actually quite solid and would actually make big corporations like Wal-Mart very proud. The Saudi government is the big business bully in this global scenario. They believe that they are positioned to absorb these self-inflicted financial losses over the long-term. Saudi Arabia has even built up massive foreign-exchange reserves to finance their deficits. The Saudi Arabian government has declared a financial war with the private oil enterprise of the United States. As with the case in any war, the ultimate goal of Saudi Arabia is to completely destroy the other side.
These recent actions of Saudi Arabia have already caused the entire Russian economy to implode. It may only be a matter of time before private fracking companies in the United States go “belly up” due to these falling oil prices. The last time oil prices fell this far and this fast was in 2008 when the entire United States economy went “belly up” as well. Saudi Arabia plans to bring down everyone around them in an effort to eventually be the “last man standing”. If they ever gain majority control over the oil market once again, you can bet that oil prices will quickly go back above $115 dollars per barrel.
Just remember, the next time you smile at the sight of the unbelievably low prices at your nearest gas pump… what you are really cheering for is a secret war initiated by Saudi Arabia to once again make the United States their oil-dependent little bitch. I hope you enjoy your cheap gas for now… because it will come at an incredibly steep price.
Je Ne Suis Pas Baga (I Am Not Baga)
The second deadliest terrorist attack in the past thirteen years has already occurred in the year 2015. Was this the recent attack in Paris, France? That would be a great guess based on all of the recent news reports. However, that guess would be an incorrect one.
Over 2000 people were recently rounded up and slaughtered by Islamic militants in the town and surrounding area of Baga. Where else can over 2000 innocent people be slaughtered and it barely even make the news? Of course, we must be talking about the tribal areas of Africa.
This massacre was committed by the infamous Islamic terrorist group known as Boko Haram. These are the same charming individuals who kidnapped the school girls last year and redirected them into sex slavery.
Have we now become so desensitized to terrorism that the murder of 2000 people barely even makes our news? Perhaps these victims were not white enough to deserve our attention? Why do we often treat the deaths of our African neighbors with the same level of concern that we would grant towards the unexpected death of some random barnyard animals?
These victims did not get any catchy slogans of support like “Je Suis Charle”. They did not get any protest marches with millions of people coming out in a show of unity. They hardly even got a mention on our network news broadcasts.
Perhaps the producers of the movie “Hotel Rwanda” can make a sequel about this recent mass killing a few years from now, so that we can once again spend a few hours feeling guilty while reminiscing about our past indifference. I already have a recommended working title for this movie: Je Ne Suis Pas Baga.
We Are Not Afraid (Some Restrictions May Apply)
The world is looking for answers. People around the globe are now asking for an explanation.
A highly publicized political rally took place in France over the weekend in response to the recent terrorist attacks in Paris. Over one million people filled the streets of this large city to send a simple message to terrorist groups everywhere: “We are not afraid”.
This rally included leaders from all over the world. The President of France walked defiantly down the street. He was joined by the leaders of Germany, Italy, Great Britain, and Turkey. This march even included the leaders of Israel and the Palestinian territories.
One country’s leader was conspicuously absent. President Obama did not join this historic rally over the weekend. He did not even bother to send the Vice President. He only offered the U.S. Ambassador of France to participate in this public march.
The President’s press secretary was bombarded with questions earlier today as to why our President did not join our allies in this public display of solidarity. His explanation noted the very short notice to prepare for this rally. Our press secretary pointed out that this rally was being held outdoors around many large buildings. The President’s personal security at this rally could not be absolutely guaranteed.
In summary, the President of the United States could not join our allies in this public display to the world that we were not afraid because… we were afraid.