In The Greatest Outpouring Of Money And Credit In History Bob Chapman talks about the inherent problems in our economy, wealth preservation and expectations for 2010 and beyond.
“There are two basic schools of thought regarding the economy. One is buying bonds for safety and the other with virtually no interest money is gambling in the markets. As a result we have a bull market in bonds and a bear market rally in the stock market. These factors lead investors and the public to the perception that a recovery is underway when nothing could be further from the truth. If it was true someone has to explain to us why consumer spending is off 20% yoy, which makes up 69.3% Of GDP? It is no wonder households are not spending. They have just lost $13 trillion in home equity and the housing bubble still has 20% to go to the downside. Quantitative easing has been a failure. We are still in a prolonged period of credit contraction that has been subdued temporarily by massive does of liquidity. Those hardest hit are small businesses and homeowners. All that retirement money is gone, because the Fed created a housing bubble. In 2009, homes lost 40% of their value and they have 20% to go and who knows how long the housing market will bump along the bottom. Reducing debt and spending is the new mantra. This will certainly reduce demand and economic growth. Blatant market manipulation in the long run will not be successful. 2.8% GDP growth is non-existent. The stock market may be booming on zero interest Fed funds, but as we pointed out last February middle America is in depression. In order to keep this façade going and the bubble in tact, the Fed has no choice but to inflate. They want to withdraw funds, but they cannot. They are recalling TARP funds, which will be quickly gobbled up by a new stimulus program and a call from the Treasury to buy more Treasuries, Agencies and toxic waste. Bernanke has to be running around in circles as members of Congress grill him on poor performance and the House passes HR1207, the Bill to audit and investigate the Fed. In addition bank lending is off 16.2% yoy and there are no signs of any loosening. We are looking at object failure by the Fed, which we reflected almost three years ago. There is no normality and no recovery. You cannot spend your way into recovery. It just doesn’t work. Look at the 1930s. It didn’t work then and it won’t work now. Government guarantees challenge reality and reality always wins. As a result of fed policy we have corporatist fascism at its worst. Day by day we attract less foreign capital and that is because any semblance of free markets are gone. All the Fed has done is rescue its owners and other connected elitists and such a plan is doomed to failure.”
If you watch mainstream news and listen to the propaganda coming out of Washington, you’d think Bob Chapman has completely lost his mind. But, dear reader, if you are here at SHTF Plan, then this likely reinforces everything your gut is telling you. While impossible to time, there is a serious crash brewing. And we’re not talking about the stock market. The whole friggin’ system is going to get hit with a ton of bricks. If you’re not protecting yourself with precious metals, reserve food supplies and skills development, that ton of bricks is going to fall right on top of you.
We highly recommend to our readers that they visit Bob Chapman’s web site The International Forecaster, or regularly follow our Chapman Updates. This man has been around for a long time and knows what he’s talking about.
Some other notable quotes and excerpts from his recent article:
“Those in their 40s and younger are about to get an education in how real life works. Not the life created by Wall Street and the Fed, because that era is about to end and with it the fairy tale life they have been used too.”
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“There is no question that another bout of inflation is on the way and that the dollar will continue to fall in value. We do not believe gold and silver are today reflecting reflation. They are reflecting a flight to quality because professionals and a minority of other investors have lost faith and trust in the top 20 central banks. Thus, today we are witnessing a flight to quality and safety.”
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“We believe that the US dollar will be officially devalued in a year to 1-1/2 years from now to be replaced with an international trading unit. That will cause another flight to quality to gold and silver.”
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“We are well on our way to joining the third world and if you do not let Congress know you know what they are up too, then you will eventually live in a slum reminiscent of Calcutta, either that or in some US detention camp. The bottom line is a lower dollar is disastrous for the US economy. The US is being slowly strangled to death. Who wants to invest in a country that is on the edge of real trouble, plus all the environmental laws and onerous taxes? Readers, most people do not have a clue as to how bad it is.”
Read the full article: The Greatest Outpouring Of Money And Credit In History
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I, for one, have no clue wtf is really going on.
+1, Ovals.
With each passing day, I get more confused…
The latest subject of confusion for me is “debt” in general – both public (government) and private (consumer).
Does it really mean anything? Does it really matter that we are running insane deficits now…that is, MORE insane deficits? Does it really matter that the federal government has worked its tab up to $12 trillion? What about the $100 trillion (depending on which set of numbers you use) in unfunded liabilities?
My gut tells me (obviously) that it does in fact matter…but how can that really be with the way our “leaders” keep spending money?
As I’ve quoted many times here, the definition of insanity is doing the same thing over and over and expecting different results.
Is our government really THAT clueless? Or maybe Einstein just had it wrong…
Is it that I really don’t understand this stuff at all? Maybe I just don’t what I’m talking about. Maybe every bit of common sense, rationality, and logic that I’ve picked up since pre-school just hasn’t equipped me to grasp the pure genius working behind the curtain. Maybe I just don’t know enough about it yet…
Maybe I’ve gone completely nuts…
Last night I went to a typical neighberhood Christmas party.As the subject of politics and the economy came up in conversation,Iwas amazed at the lack of awareness and knowledge about the severity of our ecomic  condition.The baseless opinions among engineer types and ” professionals” was alarming.The average middle class person is clueless. As I was leaving the owner bragged about paying a bunch of “Mexicans” $300.00 to paint his first floor area.Maybe when his computer job goes to India he will begin to see the light.Â
Rick, I think Einstein had it right. Most of our elected government is clueless (just like us), but I suspect that the real players behind the curtain are not elected officials — and they most certainly know what they are doing. I may be wrong, but I think they have a pretty good idea about the rules of the game they are playing and what the end result will be. There are variables and unforeseen events that may occur, but nonetheless, for the most part, they know what’s up.
Why would they collapse the entire system as we know it? Who knows… perhaps to usher in a new system? The conspiracy theorists have been talking about it for decades… the new world order…
is it time?
I don’t know. Perhaps this is just a bust cycle and we are overreacting, perhaps it isn’t.
But because I have no idea what is really happening behind the curtain, I will take my chances as a loony prepper. If SHTF doesn’t play out, then great. If it does, then god help us all, because it won’t be pretty.
Paul, I hear you… I really don’t even talk about the economy with most people any more. If I do, I take it to that “dark” place, and no one wants to hear that. So, I throw out my views on health care, global warming, left, right, up, down, and for the most part discuss the crap they spew on the mainstream… I do throw in little tidbits of how all of this political craps is essentially a variety of different arguments pointing to the same end result, but that’s about as far as I take it. I keep it vague, and that helps me make and keep friends.. haha. America is a “Republican” and “Democrat” country, and apparently, there can exist no other ideological philosophies or ideas apart from what we see on TV.
Though I am a quite cheerful and positive person, people just don’t see this (possibility of doom/gloom) as a topic that is open for discussion, so i refrain from discussing it most of the time.. what’s the point, anyway….? Even those friends of mine who entertain the idea and respect my thoughts on the matter don’t really think it is going to go down, so they really are not taking steps in any which way to prepare for an economic collapse, let alone a down-turn.
What America is now can never change for the worse, right? That’s IMPOSSIBLE and IMPRACTICAL, so we shouldn’t even talk about it.
rick, we may be nutz, but are we as nutz as this guy:
I love that frickin’ guy. I would be proud to be as nutz as him!
We just had a nice evening with my parents, and the conversation was downright depressing. Realistic, but depressing.Â
We talked about having passports and lots of cash on hand for plane fares and bribes, food storage, how to endure a Phoenix summer with little or no electricity, and the possibility of all of us living in mobile homes on my parents’ property some day.Â
Not cheery, that’s for darn sure, but at least we’re all on the same page and are talking about hanging in there together if the SHTF. I can’t imagine being clueless at a time like that.
Like most of you, none of this makes sense, or should I say, “common sense”, to me.
I pretty much don’t talk about things in the manner of Mr. Chapman to my co-workers, because I might as well be speaking Aramaic.
At least we are “in the know” concerning the real state of the economy, and can make some type of preparations for the day it “hits the fan”.
Please realize that WE are the ones who know how things REALLY are, which is why we are a bit confused.
We have been thrown into someone elses manufactured economic fantasy world.
I have one thing to say: Most people really ARE clueless; by thinking that the elected officials don’t know what they are doing: In fact, most of them have been bought, paid for and are following the script given to them by those who have the power to print as much or as little  money as they decide upon. Guess what? If all of the officials in D.C. were replaced, unless the Federal Reserve Act is repealed and in it’s stead a monetary system is established comprised of silver & gold, within a short period of time, we will have the same problems that we now have!
Know the truth & the truth shall set you free. If anyone dare tell the truth, it probably won’t be available in ANY of the print media.
Allong with being clueless we also have the ones who sinply deny any thing is wrong out in the big scary world ! Thay refuse to acknowledge what thay see going on  around them . And if somthing does happen then glorious leader in washington will step in and save the day.
Frankly I’ve wondered how the system could be so dysfunctional & corrupt and yet continue on —– for my entire adult life (and I’m 54 now). Yet, like the energizer bunny, the system keeps on going. Of course, only a couple years ago analysts were marveling at how the consumer managed to keep spending. Certainly we’ve seen that end, and now I see some obvious wobbling in the larger economy itself.
As to if/when it collapses, and exactly what “collapses” means… I don’t know.  These days I concentrate on simplifying my affairs and restructuring them for a future of increased costs & limited resources. Having a “plan B” for the interim period after a systemic disruption is a priority too.
And yet, like many of you, I more or less keep this to myself. Over time I’ve learned that most folks aren’t receptive to the message. After all… nobody welcomes a Casandra.
What’s the likely outcome? Probably not a “Mad Max” type scenario, at least for a prolonged period. To me it seems more likely that an authoritarian regime will emerge as the Federal government gets more heavy handed in it’s desperation. 2nd place on the probability scale is a splintering of the U.S. with states/regional zones exerting themselves in a haphazard manner as the feckless Feds lose control. Note that I don’t forsee any of these scenarios as better than our current lot.
Certainly I see the USD continuing to lose value with all the attendant increase in oil & goods costs that entails. This simply translates to a lower standard of living because an increase in energy costs and foreign goods ripples through the economy …. sorta like the tide going out — stranding all boats. Position yourselves accordingly.
As an astrologer I can tell you that may 22 2010–there will be no stock-market or world economy for a long time. There will be a complete collapse of all systems now in place–soon nothing will grow or live on earth–radiation and a powdery substance much worse will make everything deadly to consume–drinkable water that won’t kill you, will become the most valuable thing left to the future remaining cannibals of earth. Your leaders made a choice a long time ago what they would like-they chose (from aliens) deadly technology-in exchange for lives and souls(war) they could have chosen something better-but it would be at the cost of putting an end to all money and inequity-we all know human nature could never accept that as a good. There is a war in heaven-but you choose-if you continue to become more and more evil one side will win you and that is what you have done-the other side certainly does not want you.
Hmmm….it seems like I work with the same people: mostly illiterate, ignorant and believing anything the government puppets of the mainstream media tells them.
So many watch and believe what they see on Fox, CNN, MSNMB or NBC etc, as the truth, yet they have no skills or the will to even challange their message. So many are unwilling to seek and even less to accept the truth. They live in a Disneyland fantasy of a two dimensional world:” please don’t disturb me with the truth, I don’t wanna know.” “It will all get better soon, just like it did before.” How so many American citizens have become so brainwashed and brainless is beyond my scope of understanding. Maybe it’s the flouride or maybe it’s because so many people have sat in front of the mindless wasteland of television for so long their minds have been turned to mush.
I sincerely hope that we do not suffer this possible catastrophy, but that hope has more or less been dashed to the rocks on a sea of failure.
Good luck America….you’re going to need it.
To those of you that are worried sick about the world going to crap I have one word of advice. Relax. Just take a deep breath and relax.
Remember,you can only control what’s in your bubble of influence which is you and your family. If you don’t have control over your family which could be a spouse or children or mom and dad. YOU must take control of the situation and do the things that must be done. If no one wants to help or contribute that’s fine. Just do what you can.
In the early days of the modern survival movement ( 70’s) while sitting in a 3 hour gas line and reading the book The late Great Planet Earth I made the decision to do something to take care of my family. I like everybody else was just working for a living. I had no extra income to purchase things that was to be use in an emergency. When I had 50 cents in my pocket I would buy a box of 22’s. I was contributing to the safety of my family. As world events went by I was still doing even the smallest of things and it all started to add up.I had a small closet full of stuff.
Then in the mid 70’s I was able to buy a B.O.T. (bug out truck ).
Eventually here we are 40 years later and we are still here.
The point is don’t get depressed about nothing you don’t have control over. The world is going on as planned.This is an absolutely controlled train wreck.
The first thing you need to consider is protection.I would rather die fighting with a 22 rifle than fighting with a stick or rock.Yes it’s a poor choice for a battle rifle so,don’t get in a battle. I’m telling you if you can’t afford a fighting rifle don’t let that stop you from getting nothing.
Things will come to you if you just start. It is up to you. Start today. Don’t think of all the stuff you don’t have think of what you can buy for $10. a box of 22 ammo, or a machete,or candles, or about 8 silver dimes. And yes I still buy a box of 22’s when I have $3 0r $4 bucks. Boy,that dollar sure lost it’s buying power.
And just relax.You never have enough anyway.
Survival is having the mental ability to adapt to the given circumstances .