As with every New Year there’s no shortage of forecasts for what’s to come. This year we, too, will attempt to interpret the crystal ball and share some items for consideration and a road map of events to keep an eye out for. We don’t like to make time-sensitive forecasts, because if there’s one thing we should have learned from the last three years, it’s that the expedient and self serving actions of governments, corporate conglomerates, and politicians are anything but predictable and often supersede any timetable we can come up with. In an environment based on incomplete information it is difficult to conclude, with any degree of certainty, which events will play out, when, how and what their consequences will be.
Who could have accurately predicted that governments would undertake the largest tax-payer funded bailout in history after the collapse of the financial system in 2008, further expanding the multi-trillion dollar global debt bubble, instead of letting it correct itself naturally? How many actually believed, amid protests from millions of Americans, that Congress would follow through with the passage of socialized health care in what it supposed to be the world’s bastion of free market capitalism? Who truly believed that American citizens would be, in one sweeping broad stroke, marked as persons-of-interest and domestic extremists for seemingly innocent behavior that can now land them in a detention facility for life without charge or trial? Did anyone foresee a complete collapse of the middle class, the wipe-out of trillions of dollars in retirement and pension savings through stock losses and inflation, the decimation of the domestic job market and wages, or the record levels of poverty stricken Americans requesting food assistance and unemployment insurance?
Actually, there were plenty of awake and aware Americans out there that saw it coming – many wrote about it on their blogs, spoke to us in videos, shared on their social media pages, or started discussions in community forums across the internet. Some of the forecasts may not have happened within a specified time frame or exactly how we may have expected, but many happened as predicted, and in some cases were much more extreme than we could have ever imagined.
As you read the following items for consideration going into 2012, keep in mind that nothing is set in stone, and events may play out very rapidly once they have been catalyzed, as we saw with the Occupy protests and European riots in 2011, or at a slow but progressively worsening pace, as we’re seeing with the globalization of war in the middle east and elsewhere.
The following forecasts are based on trends that are and have been developing for months and years. Some are more likely than others. Some may never come to pass. Others are events that have a high probability of coming to pass, perhaps in 2012 or in the next few years. Whatever the case, they are scenarios that are, in many cases, interrelated . So, if you see one come to fruition, the chance that another will take place grows exponentially.
1. Europe Is Going Down
We don’t need to explain the seriousness of the situation in Europe other than to point out that Greece’s economic problems are nothing compared to Spain, Portugal, Italy and the combined eastern European nations. The entire European Union is under threat and we’ve heard talk of a potential break up of the currency, and even the possibility of countries exiting the EU altogether. Even Germany has discussed this possibility. The situation is dire and the only thing holding it up at this point is the same thing holding up the U.S. economy: monetary machinations. But, as Horace said (65 – 8 BC), “you can drive nature out with a pitchfork, she will nevertheless come back.” The collapse of Europe is inevitable. It will not be stopped by more centralization. The Euro will be destroyed, and it may very well happen in 2012. In anticipation of the coming currency meltdown, the world’s largest lenders and investment firms are already pulling their money out of the European financial system and transferring those assets to perceived safety in US Treasuries and other instruments. We’re so close to a serious collapse in Europe that Britain has taken the unprecedented step of preparing evacuation plans for their citizens living in EU countries in case they are rendered penniless and without means to return to the UK when the Euro crashes. Other European governments are making contingency plans to deal with riots, violence and uprisings when the system goes critical.
2. Stocks Crash and Dollar Strengthens
You’ll know the European Union is in the midst of a waterfall collapse by watching stock markets, which will react violently and likely with unprecedented speed in their meltdown. While the big lenders and insiders may be exiting European investments, the general population, like Americans here at home, have no idea how bad the situation really is. It’ll happen when smaller investment houses and large individual investors start pulling out. This will cause a sell off of European debt, and subsequently European markets. As the money flows back into US dollars and the safety of treasuries, it will strengthen, possibly to multi-year highs. For a time we may see a repeat of 2008, where stocks and commodities collapse. The panic will build on itself, and investors who lost 40% or more of their money in 2008 will rush to exit in an attempt to avoid similar losses this time around. The negative feedback loop could send stock markets back to 2008 lows or lower. If it happens, it will be a panic unlike anything we’ve seen since 1929. Remember when stocks crashed 1000 points in a single day back in the 2010? Imagine that, but for real and for several days without reprieve.
3. Precious Metals Sell Off
They may be the safe haven asset of last resort, but if Europe crashes then precious metals priced in dollars may see a significant fall. This effect will be more of an issue with a strengthening dollar and companies selling anything they can to raise capital, than a bursting of the gold and silver bubble, though many mainstream financial pundits may make these claims as they did in 2008. The bubble will not be bursting anytime soon and such an event is probably many years of at this point. What we have seen over the last few years is that central banks, whether they’re in Asia, the middle east, or South America, are increasing their precious metals holdings significantly. While we will not rule out a price collapse of 30% here, we maintain that a price drop in metals will hit resistance around $1200 which is around the point central banks like China and India will move in with large quantity purchases. If and when this happens it will be the start of the great precious metals decoupling we’ve discussed previously, which is when gold/silver will no longer move in tandem with equities and other commodities. Keep an eye out for this opportunity. It may be the last time precious metals prices take a significant dive for a while, so stock up if you can.
4. The Economic Depression of the 21st Century Goes Mainstream
The economy has been battered for years. Only those who are ignorant or refuse to pay attention don’t see that we are already in the midst of collapse. It’s happening right here and now. Most would still write-off a European collapse as “just a problem over there,” but since U.S. stock markets will collapse along with it, and this is how most people gauge economic health, it won’t be until Americans see their personal retirement savings destroyed that they start realizing there is no easy way out of this mess. Until the stock markets crashed in 2008 no one was talking about the recession that had already taken hold for three quarters prior to the Presidential election. This time, unlike 2008 where Americans figured it was just a typical eighteen month recession, millions who have lost their homes and livelihoods, and even those who still have shelter and gainful employment, will finally realize this is the real deal. The people will lose confidence in our government’s ability to mitigate the crisis and the depression will be apparent to everyone – even corporate media.
5. Real Estate Continues Slide
No, it’s not over yet. There has been no pause in the downward momentum of home prices, despite the government’s many efforts to instill confidence through tax breaks and rhetoric. Before it’s all said and done we will see a collapse of at least 50% in home prices (we already have in some regions of the U.S.), and we may even go the way of Japan, which saw a total decline from bubble to bust of some 75% after their real estate bubble burst in the 1990’s. During the Great Depression of the 1930’s, land was selling at pennies on the dollar, reportedly at 80% off the highs, so don’t dismiss this as a possibility in this Depression. It won’t all happen in 2012, but if stock markets crash and people lose money, they will be less likely to want to invest in a home, putting further pressure on the housing market. The only thing that real estate has going for it right now is low interest rates on loans, and those rates may remain low, especially if more money flows to the U.S. as a result of a debt collapse in Europe. For those wanting to buy with a mortgage, the next year or two may provide the final opportunity for low interest rate loans this decade. If the US dollar goes into crisis (see below) it means that interest rates will be rising. In the 1980’s we saw mortgage rates reach 15%. We don’t need to tell you what something like that would do to potential buyers and home prices. So, if you’re planning on paying in cash, you may want to hold off and let the market slide more. If you are going to take out a loan on a house, this may be a good time to find a deal, especially if the home/land you are buying will allow you to get out of major cities, produce your own food, and become more self reliant.
6. US Consumers Will Be Hit Hard – Food Assistance Participation Exceeds 50 Million
There are no jobs. Wages are stagnant. Inflation is destroying our standard of living. And things will only continue to worsen. In Broke and Hungry we predicted that over 50 million Americans will be on nutritional food assistance from the government by the summer of 2012. We will likely breach this threshold on schedule. Couple that with an economy that is showing negative growth and consumers who have spent their savings and taken on debt just to maintain some semblance of their former lives, and you have a recipe for disaster. We won’t even mention what rising oil prices will do if the situation in Iran goes hot-war (see forecast below). People are broke, and they aren’t seeing any trend changes in the way things are going. This and a complete distrust in the merger of government and business is what led to the Occupy protests of 2011. And it will be what leads to the next wave of civil unrest that is sure to grip major metropolitan areas in 2012 and beyond. #Occupy was nothing compared to what will happen on the streets of America when people can’t feed themselves and their families.
7. The Much Anticipated Dollar Collapse Is Coming
It won’t be long now, but a few things need to happen first. As we’ve discussed for a couple of years, there will be one more boom for the dollar, and it ill result from a panic run to safety when Europe goes under. This is happening now, and in due time we should see the US dollar regain its power. But this strengthening will be short-lived. As our economy delves further into depression and our gross domestic product goes officially negative (unofficially our economy is already shrinking) our government will run into a serious funding problem. President Obama is already looking for a $2 Trillion-plus debt ceiling increase (after Congress raised it over a trillion dollars in the summer of 2011). What kind of confidence do you think this instills in our lenders? The result will be higher interest rates as lenders will look to minimize their risk. On top of that, remember that we will probably have had a major stock market crash as a result of Europe, which means people will panic. Remember what happened in 2008? We printed trillions – trillions – of dollars to bailout failing institutions and the American public under the pretext that the system would be saved. It wasn’t. It’s going to be bigger this time, much bigger. The Fed and the Treasury will, of course, print even more. And, at some point our lenders will simply stop investing in the debt, no matter the interest rate. The dollar collapse will build up for a while, with interest rates rising to satiate the appetites of lenders, but eventually no one will be willing to put up any more money to fund a government that has no intention of ever paying it back. When the meltdown finally occurs it will be very fast, probably occurring over a period of days and weeks. We can only speculate about the consequences, but it’s quite likely we’re looking at a total paradigm shift in life as we know it today that will include violence and political uprising, as well as disruptions to food supplies and the normal flow of commerce.
8. Riots in the Streets
They laughed when we and others forecast widespread protest movements across America. Police were able to control the masses in 2011. This may not be the case in 2012. Any number of events can set off demonstrations, and there is a strong likelihood we will see them again this year, and for years to come. They will get progressively more violent. At some point we predict that it won’t just be the police engaging in beatings. The people will turn. They’ll turn on local businesses. They’ll turn on each other. They’ll turn on the police. The Molotov cocktails will start flying, and when they do we can expect the same response from our government that we saw in Egypt and what we’re now seeing in Syria where thousands of protesters have reportedly been killed by the Syrian military.
*Warning Graphic Video*
9. Deployment of U.S. Military On The Streets of America
It won’t take much for the President to declare an emergency or designate a certain area a battle zone at which point the United States military can and will be immediately deployed to quell civil unrest. If the economy gets as bad as we think it will, we can fully expect a significant response from the populace. Whether by chance or design, protests will eventually erupt into violence, and when that happens the President will be “left with no other choice” because our militarized police forces simply won’t be able to contain the situation. It’s been reported that over 20,000 U.S. troops have been trained in riot control and detention procedures, and that the Pentagon is actively preparing for large scale economic collapse and the civil unrest that would follow. They are ready. They need only a catalyst. It may happen in 2012, but it would require widespread, extreme circumstances to be justified, but be assured that there are those in our government who are more than willing and ready to pull the trigger.
Game Changer: FEMA Detainment Centers Open For Business
They didn’t build the scores of Federal Emergency Management Agency camps around the country for nothing. Purported to be for the protection of refugees in the event of mass evacuations, the camps are believed by some to be used for various contingencies, one of which is the mass detainment of American citizens. While it may have sounded like a conspiracy just a year ago, with the passage of the National Defense Authorization Act, which allows for the detainment of US citizens without a trial, it is becoming increasingly clear that the tin foil hatters were on to something. According to a recent report, FEMA is activating the camps and the US military has posted job opportunities for Internment and Resettlement Specialists. Hard to imagine, yes. Impossible? We’ll let you decide. But consider this: If the US military is ever deployed on the streets of America they will be detaining thousands of individuals. Do you think the local or county jail will have room for them?
Game Changer: Mid East Goes Hot
Somebody wants a war in the middle east. For observers, it seems like both sides do. Iran’s President, although limited to rhetoric thus far, has indirectly called for the destruction of Israel, continues to inflame the situation surrounding its nuclear ambitions, and regularly threatens to attack or counter-attack US military assets. Whether Iran is producing weapon’s grade nuclear fuel or not is irrelevant to those in charge of the US and NATO military machine. Saddam Hussein didn’t have weapons of mass destruction, but we sent over a hundred thousand US troops into Iraq anyway. The troops have since pulled out of Iraq to Kuwait (though, independent contractors are still active in the country) after nearly ten years of war and are now awaiting a return home or redeployment. One thing’s for sure, though, if things continue the way they are going in the middle east, those troops will be fighting in a new theater of war soon. There’s too much to be gained to give up on the middle east now: resource control, regional influence, and mega dollars for the military industrial complex, all of which suggest we won’t be leaving for quite a while. Israel is itching to pull the trigger on suspected nuke sites and they may very well do so this year, as according to the Israelis, Iran is either capable of deploying nuclear weapons now or is months away. The US government, for its part, is doing what it can to turn sentiment against Iran, with one of the latest examples being a so-called assassination plot against a Saudi diplomat visiting the U.S. Whether the crisis is real or manufactured won’t matter when the bombs start flying, and if Israel gets involved you can bet the U.S. and its allies will be ready to deploy. According to a NATO envoy the plans are already in place. All it will take is another Archduke Franz Ferdinand and World War III can be underway in a matter of weeks or months.
Game Changer: December 21, 2012
Ancient historical and religious texts all talk about it – the end of the world. Could this year be it? We’re not 100% convinced, but of course, anything is possible. Petroglyphs dating back thousands of years show people running to the safety of mountains as floodwaters rolled in. Many even depict strange celestial objects in the sky. The Bible speaks of floods that wiped out almost all of humanity. Sumarian texts suggest that there is a 10th planet that passed by Earth every 3500 or so years, causing gravitational anomalies that may be responsible for shifts in our northern and southern poles. Some scientists claim that we may be passing through the galactic rift, a field of gravitational disturbance that lies in the central plane of our galaxy, and that this rift (referred to in Mayan texts as well) may likewise cause a pole shift or rapid earth crust displacement (as depicted in the movie 2012 – yes it’s a real theory). Former military remote viewers have suggested that they were able to remote view mass-refugee events occurring by mid-2013, though they can’t say exactly what they saw. Geological evidence suggests that all sorts of doomsday-like events have occurred throughout the history of man, and all of them are capable of wiping out all or most of the human race: pole shifts, mega-quakes, massive global flooding, the sinking of cities and continents, solar radiation, super volcanoes and cosmic collisions. There are many theories for what may (or may not) happen on December 21, 2012, but the only prediction we can make is that in 2012 they will be a regular topic at office water coolers around the country.
Will there be a cataclysmic event in 2012? And even if there were, how would one prepare for an event that threatens to wipe out billions of people? What we do know is that events such as this have happened in the past, at one point shrinking the human race down to somewhere between 2,000 and 10,000 people. So, it does happen. The Mayan calendar is certainly an end of one cycle and the beginning of another, just as our calendar starts anew each year. Did the Mayans know something we don’t? If they did, we’ll know about it in less than a year. In the meantime, if an Armageddon-like event is in our future, enjoy your life and the time you spend with your family, do all of those things you’ve always wanted to do, and leave the rest to God.