We'll Never Be the Same Again

Permitting oneself an occasional philosophical reflection and contextual refocus can prove to be important in our personal quest to come out ahead. All of us in the good old USA could use just such a pause right about now.

Let us consider, given the imploding global economy and all the implications thereof, our accustomed position of superiority in the world is now but a distant impudence. I do mean this in the most grateful and prideful way ... as a still-patriotic and red-blooded American who is ready and willing to pull up the bootstraps and get busy to help rebuild our country into the best possible nation on the planet.

Change--CAN We Do It?

The internet is chock full of partisans, pundits, and prophets. I try to avoid being any of these things online, and mostly that just leaves me to present a straightforward and repetitive case for the logic and common sense behind the need for personal preparedness. Preparedness has been a passion and an avocation for a long time and eventually one of my vocations as well.

Today, the short-term, mid-term, and long-term need for strong levels of readiness by everyone out there is obvious. The mystery is gone. The debates and the need to defend a position in favor of preparedness are over. Those late to the party are now scrambling to get caught up. It's not good, but better late than never, as never seems to be almost upon us.

Do I really need to provide you with some expert reference about the current state of our demise? OK--check this out:

The End of the U.S. as We Know It: Tracking the Dollar Downward
by Paco Ahlgren
Fenruary 1, 2009

Excerpt:

Look, there is absolutely no way the gargantuan political machine in Washington will ever consider backing the dollar with gold -- much less (God forbid) cutting spending and taxes at the same time. The dollar is doomed.

So what will happen next? I keep coming to only one bleak conclusion: the United States will have to default. And that will be the final call for the dollar. Food shortages, rationing, and martial law could become the status quo.

It will undoubtedly seem farfetched to some of you, but I don't think the United States can survive the failure of its currency -- especially considering that the catastrophe will be the direct result of decades of governmental lies and manipulation. The states sent legislators to Washington who have systematically and purposely destroyed our currency. They manufactured an irresponsible Ponzi scheme that created false prosperity, over and over again. I simply don't think the states in the Union -- many of whom asserted their independence at another point in history -- will sit still for more of the same.

[snip]

Click on the article title above and read Ahlgren's entire piece. His commentary aptly describes where we find ourselves today. Like it or not, change is happening and there is no turning back the clock.

As always, we cherish our freedom to disagree. Today, it's all about how bad things will get and what this year and next year and beyond will look like. Will the dominoes keep falling or can someone out there find a way to stop them before the whole world erupts in chaos? In spite of my tendency to grasp at half-full glasses, I have come to the conclusion recently that we are pretty much out of luck.

Regretfully, our leaders are openly and shamelessly playing us for chumps as they wring some final personal wealth and power out of the dish-rag our system has become.

Bottom line: We're on our own. The safety nets are in the process of dissolving and many of the ivory towers are crumbling from the top down.

There's not a whole lot to be gained in trying to pinpoint just how bad things are going to get, as long as we acknowledge we're in the early stages of a long and painful descent. In fact, it may be enough to just come squarely to the realization that America will not ever be the same again. For a long time, many of us are going to be experiencing hardships we would not have seen as possible here a short while ago.

Clearly, the American Dream as we experienced it over the last few decades was just that--a dream. It was a fabricated blip in the graph of history. Now we will have to go back to earning what we have, and it will probably come the hard way. The sooner we each act on that understanding, the better off we will be.
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On the Cusp of Catastrophic Emotions Like Envy and Ethnic Intolerance

Once again Jeff Nyquist cuts right to the bone in his latest commentary, which I encourage you to read in its entirety (click on the title below):

Compound Errors
by J.R. Nyquist
1-30-09

Excerpt:

... When the government’s policies lead us from disaster to disaster, and the people are suffering, the outcome will devolve into an ideological battle between differing brands of nonsense.

What nonsense is likely to triumph? We don’t know the answer, as yet, because everything depends on the leaders that emerge as the crisis develops. Negative emotions, like envy and ethnic intolerance, are likely candidates. We must hope and pray they will not be exploited by political opportunists or demagogues. The danger is greatest when the people lose their patience. But first, many will lose their jobs, their life savings, and their future prospects.

This country needs a patient and tolerant spirit. We need unity and caution, if only to preserve those institutions which stand between our existence and the abyss. We must not forget that America’s nuclear arsenal upholds global order. The nuclear missiles of Russia and China are aimed at us, even now, because these countries want to form a new world order – in which they dominate. If the United States loses its nuclear deterrent as the result of internal disorders, then Russia and China will be tempted to carry out their destructive plans. In that event, a compound negative interest will be applied to the population and wealth of the entire world – and a new Dark Age will be born.

[snip]
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A Short Video that Packs a Powerful Punch

Prepare to have your breath sucked out of you and your world to start spinning ...

Wiegand's Calls for 2009 - Ignore at Your Peril

This is quite a description of what this trader sees in store for the rest of the year. (Click on the link and scroll down to view the entire article.)

More Trader Tracks Predictions for 2009 - Series #3
Wednesday January 21, 2009
The following is by technical analyst, Roger Wiegand, editor of Trader Tracks.

Excerpt:

... in April we are expecting a quintuple smash of:

1.Wave one of commercial real estate foreclosures and loan failures. Some of the biggest of the big buildings will be foreclosed and those planned but not built will never see daylight. Meanwhile, vacancies skyrocket while budgets are busted with dropping rents. One analyst estimated the New York City Financial district buildings will see 66% occupancies with breakeven budgets being much higher. You will see some major shopping malls shut down.

2.The second wave of residential foreclosures and loan failures arrives dragging down all real estate values both commercial and residential. They will sink like a rock in over-built states and within those regions previously hit the worst. This is related to the next mortgage failure cycle. Some of those formerly upscale, McMansion subdivisions will turn into ghost towns.

3.Wave one of auto loan failures containing billions in bank, credit union and auto finance company loans will smash credit markets. The reaction will be stunning and probably stop most vehicle lending temporarily for weeks paralyzing automakers and those lenders still doing car and truck loans.

4.Wave one of several future waves of credit card failures estimated at $40 billion by bank credit analysts will be an April smash. Normally card failures are in the 1-2% range annually. This larger event opens doors for a historic new number of non-payers and delinquents. This cycle is mostly job loss related but most of it is due to overspending by cardholders.

5.Wave one of the CDS Credit Default Swaps will hit markets like a Tsunami. These failures will be so overpowering, those in charge will be stunned and flabbergasted by the numbers. The figures are so large we cannot even imagine the amounts. One analyst said it was estimated between $500 and $750 Trillion dollars! There is no margin or deposit money on these trades.

View the article.
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Job Trends in Graph Form

Just came across this page at www.layoffdaily.com and thought some might want to bookmark it:

http://www.layoffdaily.com/graphs.htm

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Global Economy Shutting Down Faster than Expected

Better consider carefully your next moves.

Downturn Accelerates As It Circles The Globe

Economies Worse Off Than Predicted Just Weeks Ago

by Anthony Faiola
Washington Post
Saturday, January 24

The world economy is deteriorating more quickly than leading economists predicted only weeks ago, with Britain yesterday becoming the latest nation to surprise analysts with the depth of its economic pain.

Britain posted its worst quarterly contraction since 1980 on the heels of sharper than expected slowdowns reported from Germany to China to South Korea. The grim data, analysts said, underscores how the burst of the biggest credit bubble in history is seeping into the real economies around the world, silencing construction cranes, bankrupting businesses and throwing millions of people out of work.

"In just the past few days, we've had a big downward revision, we're seeing that an even bigger deceleration is on the way than we thought," said Simon Johnson, former chief economist at the International Monetary Fund and a senior fellow at the Peterson Institute for International Economics.

[snip]

Read entire article.
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A depression in store? When will we know?

This is certainly worth reading. Open minds agree that the answer won't be known for some time, but for those who embrace the logic of preparedness, the fact that another Great Depression is a very real possibility is reason for decisive action.

Recession or depression? Too early to tell

Many differences between now and 1930s but some similarities, too

by John W Schoen
Senior producer, msnbc.com

By every measure — lost jobs, plunging stock prices, scarce credit and a profound loss of confidence in the banking system — the economy is in awful shape.

The nation's 11th recession of the postwar era began in December 2007 and easily could become the longest since the Great Depression, although most forecasters expect a weak recovery to begin in the second half of this year.

But what are the odds that we’re in the early stages of what will eventually become a depression rather than just a recession?

The answer starts with definitions. While the term "depression" is reserved for the most extreme economic collapses, there is no technical definition, say economists. [snip]

See the entire article.
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Preparedness Today, in the Extreme

It's been a good long while since I've had the time for a genuine blog post here, so I'm going to steal the time right now to make various comments on the state of the world as they pertain to crisis preparedness.

1. Note that Safecastle LLC is growing by leaps and bounds, especially in the last six months when the whole world has woken up to the fact that the economy is threatening to destroy pretty much all of what modern society has to offer. Those looking to sock supplies away at this late date are desperate. We and all other preparedness-related providers are scrambling to respond. Demand continues to trend upward. Unfortunately, supplies of available food and gear is finite and in many cases is being depleted faster than the capacity out there to replenish can deliver. And "deliver" is key. Transport and delivery is increasingly looking to be the weakest link in a deteriorating (or at least threatened) national supply chain.

2. There has always been a lively and imaginative subculture of doomsayers out and about. But these last several months seem to have given the type an injection of highly caffeinated HGH. The looming great depression is not enough to wail and moan about, so now we also have the threatening Yellowstone mega-eruption, a new ice age bearing down, the bird flu re-emerging, war in the Middle East (again), India and Pakistan in a staredown, a promised huge terror strike to test the new administration, Russia freezing out eastern Europe, and even a growing murmur in the American population that some might say sounds like the beginnings of widespread social strife. So yep--there's a lot to speculate about and potentially prepare for. The pundits who are so inclined are dealing with no dearth of material to work into their daily programming.

3. My personal bug-a-boo of the day is the socialism that once was creeping into our lives but is now front and center and in the spotlight. As an old Cold Warrior and a small business owner, I find it all very disturbing. The ways that the public are being frozen out of the governmental proceedings which are evidently aimed at bailing out a few powerful individuals is something that smacks royally of a last-ditch plunder-the-treasury effort just before the defenses break down and the marauders storm into the capital (metaphorically speaking?).

4. I have to admit that I too have been in prepping overdrive, looking to fill remaining gaps in our household's resource base. Friends and relatives who recently were merely curious about our line of work are now actively seeking our advice and assistance. I'm happy to do whatever I can for folks as that is why I went into the business, but I really don't know for how long our supply lines will be solid and dependable. The signs out there are real. The thing that even still most people can't seem to get past is that there could very well come a day when there aren't going to be needed resources available for purchase--convenient or not. Running down to the gas station, the hardware store, the grocery store, or the pharmacy for what you just remembered is not going to be an option if any of the current crises are brought to a boil.

For those of us who have been raised and lived all our lives in America, supply-chain failures, famines, or resource shortages are just completely off our radar. We have not truly experienced the depth and breadth of how those things ripple through a society and tear it apart if solutions are not visible on the horizon.

Most people recognize on some level now how close we are to the edge, though a majority still are in denial about it. God help us if and when conditions deteriorate much further and the masses break into a panic. If that happens, do not get swept up in it. Step away. Take refuge and bolster your defenses. In the meantime, get down to the grocery store, the pharmacy, and the hardware store. The doors are still open and the lines are manageable today.
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Palin's Take on the Media's Appetite for Her

Preparedness? ... well, this interview with Sarah Palin and the larger documentary it will be part of regarding the media's behavior is worthwhile. How and why the media does what it does will continue to be important to all of us as we try to discern what is really afoot.


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Eyeballing Yellowstone, Keillor Says, Head for the Hills .... or Paris

Does Garrison Keillor harbor a fondness for the thrill of impending doom?

He does make a good point (in his always humorous way) ... that if Yellowstone's swarm of earthquakes the last few days presages the long-awaited eruption of the lava dome there, well, all the rest of this stuff that we like to worry about is just soggy Post Toasties.

Enjoy:
"If Old Faithful is about to blow big time, head for the hills. Or Paris."
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Merry Christmas, 40 Years Later

33 Minutes: Protecting America in the New Missile Age

Watch here or go to: http://www.33-minutes.com/report/

Mountain House Sale, Dec. 6-19

You just cannot have enough good storage food available as we enter a period of unprecedented uncertainty in the world. So––consider this a gift for the holidays.

We are really pleased to be able to offer you this chance once again to get some of the very best storage food in the world–

Mountain House Freeze Dried

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Good for 25-30 years or even longer. So delicious, even kids love most of the entrees. Nutritious. Lightweight. Easy to store. Easy to prepare.

This sale offers the maximum discount allowed by the manufacturer. The food ships FREE to the continental USA. And, our buyers club members earn rebate vouchers that make us your smart source for the best prep food out there.

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The food ships to you fresh from the factory. Expect to take delivery within two to three weeks of your order.

• 25% off list prices, the maximum discount allowed by Oregon Freeze Dry.
• FREE shipping to the lower 48, regardless of quantity purchased.
• Our differentiator, elevating Safecastle over other dealers out there––our volume voucher program. Any eight cases of Mountain House cans gets buyers club members a voucher code back worth $120 on a subsequent purchase in our store. Any 35 cases gets a $500 voucher! (These vouchers can be used toward the purchase of anything in our store except for Mountain House can cases.)

The sale prices will be valid from Saturday, December 6, through Friday, December 19.

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Stay safe.

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BTW, we expect to run our next MH cans sale in March 2009.

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Get Ready ... Seriously - http://www.safecastleroyal.com

Take a Timely Survival Quiz

"Could You Survive Another Great Depression?"

My score:

You Are 57% Likely to Survive Another Great Depression
Even though you may not be expecting the worst, you're the type of person who prepares for the worst. You live a relatively modest life. You don't overspend, and you aren't very materialistic. You are also quite self sufficient and independent. You have many useful skills. You can take care of yourself and those you love... which is crucial to surviving another Great Depression.
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"Executive Summary" of the Global Disaster in Progress

Still more high-level info for you, in case your coma kept you in bed the last several months.

World stability hangs by a thread as economies continue to unravel

The political bubble is bursting. Spreads on geo-strategic risk are now widening as dramatically as the spreads on financial risk at the onset of the credit crunch.

By Ambrose Evans-Pritchard
Last Updated: 7:15PM GMT 01 Dec 2008

Whether it is the Indian rupee, the Shanghai bourse, or Kremlin debt, the stars of the credit boom have fallen to earth. Investors are retreating into 3-month US Treasury bills – the ultimate safe-haven. The yield has fallen to 0.02pc, less than zero after costs. You pay Washington to guard your money.

The working assumption of the "Great Boom" is – or was – that we live in a benign era where most societies are converging towards some form of market liberalism; where trade and capital flows are unrestricted; where governments have enough legitimacy to keep order by light touch; where a major war is unthinkable.

This illusion is now being tested.

We should not to read too much into the Bombay carnage. It may or may not be significant that the Deccan Mujahideen – whoever they are – picked India's financial hub to launch their spectacular.

Even so, the love affair with Bombay's bourse was cooling anyway. The Sensex index is down almost 60pc from its peak.

The exodus of foreign capital may now quicken, laying bare the horrors of Indian public finance. The combined federal and state deficit is 8pc of GDP. Plainly, spending will have to be slashed.
If the atrocity now propels the Hindu nationalist leader Narendra Modi into office at the head of a revived Bharatiya Janata Party (BJP), south Asia will once again face a nuclear showdown between India and Pakistan.

Events are moving briskly in China too. Wudu was torched by rioters this month in a pitched battle with police. Violence has spread to the export hub of Guangdong as workers protest at the mass closure of toy, textile, and furniture factories.

"The global financial crisis has not bottomed yet. The impact is spreading globally and deepening," said Zhang Pin, head of the national development commission. "Excessive bankruptcies and business closures will cause massive unemployment and stir social unrest".
We are about to find out whether China has made the wrong bet with a development strategy of vast investment in manufacturing plant for mass export at thin margins to the US and Europe.

The shocking detail in the World Bank's latest report on China is that wages have fallen from 52pc to 40pc of GDP since 1999. This is evidence of an economic model that is disastrously out of kilter, and unlikely to retain popular support.

The Communist Party lost its ideological mission long ago. The regime depends on perpetual boom to stay in power. As the economy sours, there must be a high risk that it will resort to the nationalist card instead.

Tokyo certainly thinks so. When I visited Japan's Defence Ministry last year the deputy minister showed me charts detailing the intrusion of China's fast-growing fleet of attack submarines into Japanese waters. "We see its warships in the Sea of Japan all the time," he said.

Shoichi Nakagawa, the head of the ruling LDP party, was even more explicit. "What happens when China attacks Japan? Will the US retaliate on our behalf?" he said.

As for Europe, it is already fragile. Iceland, Hungary, Ukraine, Belarus, Latvia, and Serbia have turned to the IMF. Russia is a hostage to oil prices. If Urals oil stays below $50 a barrel for long, we are going to see an earthquake of one kind or another.

It is too early in this crisis to conclude whether Europe's monetary union is a source stability, or is itself a doomsday machine. The rift between North and South is growing. The spreads on Greek, Irish, Italian, Austrian, and Belgian debt remain stubbornly high. The lack of a unified EU treasury has become glaringly clear. Germany has refused to underpin the system with a fiscal blitz.

In the 1930s, it was not obvious to people living through debt deflation that their world was coming apart. The crisis came in pulses, each followed by months of apparent normality – like today.

The global system did not snap until September 1931. The trigger was a mutiny by Royal Navy ratings at Invergordon over pay cuts. Sailors on four battleships refused to put out to sea. They sang the Red Flag.

News that the British Empire could not uphold military discipline set off capital flight. Britain was forced off the gold standard within five days. A chunk of the world followed suit.

Nor was it obvious that Germany would go mad. Bruning persisted with deflation, blind to the danger. The result was the election of July 1932 when two parties committed to the destruction of Weimar – the KPD Communists and the Nazis – won over the half the seats in Reichstag.

We can hope that governments have acted fast enough this time – with rate cuts and a fiscal firewall – to head off such disasters. But then again, the debt excesses are much greater today. If in doubt, cleave to those countries with a deeply-rooted democracy, a strong sense of national solidarity, a tested rule of law – and aircraft carriers. The US and Britain do not look so bad after all.
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Citigroup Internal Client Memo: Gold to Blast Off as Economy Tanks

Looking back at the last several posts here, it looks like we're proclaiming the end of the world via a dissolving economy. We normally try to keep an even keel and simply raise awareness of a wide range of potential threats. Our overall goal is to encourage preparedness.

A full spectrum of critical threats remain visible all around the globe. However, the economy is obviously so integral to everyone's well-being, the dismal state of the world's finances is now raising most every other threat level out there as well.

Today's post, linking to an article at www.telegraph.co.uk, indicates that there is a belief within Citigroup that either the world is on the brink of an inflation shock or we are nearing widespread economic and political meltdowns leading to unrest and probably wars. Either way, the financial giant expects gold to skyrocket in value over the short to medium term.

Another must-read:
Citigroup says gold could rise above $2000 next year as world unravels
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Martin Weiss: Collapse of the Banking System Possible

On November 25, Dr. Martin Weiss posted a well-detailed warning to his legions of readers, which thankfully is available to the public. Read this all the way through if you have any aspirations for keeping your head above water in the coming deluge:

"Citigroup Collapses! Banking Shutdown Possible!"

Weiss mentions in his article the free service on Jim Cramer's TheStreet.com ratings of financial institutions. Check your own bank's ratings here: http://www.thestreet.com/screener/index.html?src=ratingsindex&tab=3
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Economy to Take Years to Recover

We have to say it again--optimism is increasingly rare. The authorities are hoping things can take a turn for the better in a few years. Do what you must now for your family's future well-being.

Worst of financial crisis yet to come: IMF chief economist
Nov 22 07:04 PM US/Eastern

The IMF's chief economist has warned that the global financial crisis is set to worsen and that the situation will not improve until 2010, a report said Saturday.

Olivier Blanchard also warned that the institution does not have the funds to solve every economic problem.

"The worst is yet to come," Blanchard said in an interview with the Finanz und Wirtschaft newspaper, adding that "a lot of time is needed before the situation becomes normal."

He said economic growth would not kick in until 2010 and it will take another year before the global financial situation became normal again.

[snip]
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A Whole Lot of Shakin' Goin' On

Riding out the seismic collapse of the global economy probably won't provide much in the way of learnin' applicable to the genuine "big one" if and when it rumbles through our living rooms.

It's not the easiest thing to prep for a mega earthquake. Most critical is to ensure your own home (and hopefully your workplace) is built to rigorous standards. Beyond that, standard water, food, and reserve power resources are in order.

Government Warns of "Catastrophic" U.S. Quake

Thu Nov 20, 2008 6:42pm EST

By Carey Gillam

KANSAS CITY, Missouri (Reuters) - People in a vast seismic zone in the southern and midwestern United States would face catastrophic damage if a major earthquake struck there and should ensure that builders keep that risk in mind, a government report said on Thursday.

The Federal Emergency Management Agency said if earthquakes strike in what geologists define as the New Madrid Seismic Zone, they would cause "the highest economic losses due to a natural disaster in the United States."

FEMA predicted a large earthquake would cause "widespread and catastrophic physical damage" across Alabama, Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee -- home to some 44 million people.

Tennessee is likely to be hardest hit, according to the study that sought to gauge the impact of a 7.7 magnitude earthquake in order to guide the government's response.

In Tennessee alone, it forecast hundreds of collapsed bridges, tens of thousands of severely damaged buildings and a half a million households without water.

Transportation systems and hospitals would be wrecked, and police and fire departments impaired, the study said.

The zone, named for the town of New Madrid in Missouri's southeast corner, is subject to frequent mild earthquakes.

Experts have long tried to predict the likelihood of a major quake like those that struck in 1811 and 1812. These shifted the course of the Mississippi River and rang church bells on the East Coast but caused few deaths amid a sparse population.

"People who live in these areas and the people who build in these areas certainly need to take into better account that at some time there is ... expected to be a catastrophic earthquake in that area, and they'd better be prepared for it," said FEMA spokesperson Mary Margaret Walker.

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Merrill Lynch CEO Warns that Epic Global Slowdown to be Like 1929

Arnaud De Borchgrave's columns are always worth reading and often incude unique scoops. This week's column about the velocity of the economic spiral is no exception.

Click on the title below to read the entire column. The excerpt included here is confirmation that Wall Street barons see the blight at the end of the tunnel.

TARP Trap
Arnaud de Borchgrave
Monday, November 17, 2008

... John Thain, chairman and chief executive officer of Merrill Lynch, warned that the global economy is entering a slowdown of epic proportions. Addressing the company's annual banking and financial services conference, Mr. Thain said: "Right now, the U.S. economy is contracting rapidly. We are looking at a period of global slowdown. This is not like 1987 or 1998 or 2001. The contraction now going on is bigger than that. We will in fact look back to the 1929 period to see the kind of slowdown we are seeing now."
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