ECON Economic Doom and Debt.

[20Gauge]

I thought I would start this thread based upon several threads of Economic Doom we have been seeing lately. Add in the variations the stock market is experiencing, we have the potential for some real threats to our economic survival.

Having said that, it is a certainty that at some point in the future, we will see a really bad economic downturn. I am not talking like that of 2008, but rather one of the more traditional down turns that in the past were call a full blown depression. (Yes, I know by definition, 2008 was a depression, but we no longer call them that). A depression that will require a reset of how we use and handle money in this nation. One that will have years of decline much like that of 1929. If fact, I believe we will end up having a new currency before it is over.

We all could see the writing on the wall with Obama and much of what Bush did also. Things were going south and moving quickly. for many it seemed that we were only months away from going under.

Now we have Trump, things are looking better that is for sure, but they are not as good as they have been in the past. The pain is less not gone. I believe Trump is simply a delay to what will happen and once he is gone, all bets are off. This gives us just 6 years at best and maybe less to get things in order.

It is my belief after he is gone, faith in the dollar will evaporate. Markets will crash and anyone with any debt at all will be screwed royally. I further believe the Government will be forced to either drop a zero from the dollar or even issue a new type of currency.

I also believe that those in power will not suffer as they will be allowed first bite at the new currencies and any debt they have will be minimal. So social unrest will be a levels that won't be far off of full blown civil war.

Thus, our plan is to have our home paid off in six years and have no debt what so ever. We will continue to have a full pantry and well maintained vehicles. There will be some precious metals on hand as well as a means to defend ourselves.

My issue with all this is hard to explain... but I will try...

I realize government will want their piece no matter what. That will include property taxes, etc. So we will have some metals to help with that situation.

But what other change is likely to happen that can be prepared for?

We can take care of ourselves with food, medicine etc but can not stand off an army or those who would confiscate our physical property.

But I feel that we are missing something that I fail to see that could or might happen that could easily be prepared for.

What do you think?

 

[NoMoreLibs]

I dunno. Lots of folks calling for doom for YEARS now and nothing. Yeah, up's and down's but since TPTB control the computers they're still in charge. The debt doesn't seem to matter as they're only raising the debt ceiling over and over and no one else seems to care.

Until the world says no more to US bonds, then and only then might we see something or some contagion from another larger economy.

 

[20Gauge]

I dunno. Lots of folks calling for doom for YEARS now and nothing. Yeah, up's and down's but since TPTB control the computers they're still in charge. The debt doesn't seem to matter as they're only raising the debt ceiling over and over and no one else seems to care.

Until the world says no more to US bonds, then and only then might we see something or some contagion from another larger economy.

I am guessing that the states will be the source of the crash. Once they stop paying pensions, etc it will fall. It will take 3-4 states at once.

 

[Michiana MaJo]

Watching a recent You Tube with an economist discussing this scenario....he showed some clips of Black Friday at Walmart, and how, at the opening, that morning, literally hordes of people pushed and shoved and almost trampled the clerks who stood by to greet them....and, I didn't see a white face in the crowd!

That said, if the store shelves were empty, like they are in Venezuela, we can't assume that crowds of hungry people wouldn't be scouring the neighborhoods for grub....and even assuming we all had a gun or two, I can't see where that would help much, if being overpowered like that, with "animals" who would want our stuff and us dead!

 

[Meemur]

Doom is always six months away.

I think it makes the most sense to prepare for:

1. Disasters that typically happen in your area (it's tornadoes and blizzards in mine).
2. Your personal economic crash (being fired from work . . .)
3. Major health problems (unexpected heart attack, going blind, etc)
4. Partner's crisis (if you have one) heart attack, unemployment . . .
5. Old age
6. Idiots suing you (carry insurance if you have a gun and keep your car and house insurance up to snuff)
7. House fires, large scale robbery, vandalism . . . prevention and being gray are helpful.

It is said in various corners of the net that the first thing preppers run out of is money. Don't be one of those people.

Also, if you live somewhere that's going down the toilet, take the financial hit and move. I did. The police aren't going to protect you. You are responsible for your own safety.

 

[hiwall]

20Gauge, I think your guess of the future is as likely as anyone else's.

 

[China Connection]

Um, one needs a garden set up that is big enough to keep those in the, let's say house fed.

One needs fertilizer on hand to keep the crops.

Enough food in store to hold one over until the garden is producing.

Medication well enough to hold one over till one is eating naturally. Natural food is the best medication.

 

[Shooter]

I have been watching the media scream about the stock market drops, and slides, what I watch to tell the pulse of the country is Silver, it has hardley moved, its $14.59 now. usually when market goes up silver goes down, and when market goes down, silver goes up. but last few years, it hardly moves,, mabye a 3 dollar total spread, if it ever spikes then ill worry,

and I been involved in the survival movement since 1975

 

[narnia4]

I also believe that those in power will not suffer as they will be allowed first bite at the new currencies and any debt they have will be minimal. So social unrest will be a levels that won't be far off of full blown civil war.

Thus, our plan is to have our home paid off in six years and have no debt what so ever. We will continue to have a full pantry and well maintained vehicles. There will be some precious metals on hand as well as a means to defend ourselves.

My issue with all this is hard to explain... but I will try...

I realize government will want their piece no matter what. That will include property taxes, etc. So we will have some metals to help with that situation.

But what other change is likely to happen that can be prepared for?

We can take care of ourselves with food, medicine etc but can not stand off an army or those who would confiscate our physical property.

But I feel that we are missing something that I fail to see that could or might happen that could easily be prepared for.

What do you think?

Your plan pretty much covers it I think, after that its filling in some of the inevitable gaps.

Like having some actual extra cash (not a lot, most advice I hear says it may be useful for awhile, probably not long term). Maybe have a second place to go (not necessarily a second owned home - like making arrangements with other family members in case one or the other of your areas gets bad). Bug Out plans, in general.

Its impossible to be prepared for everything that could happen. Like many here I think it could/probably will get very bad before long. But then I believed Hal Lindsey in the 1970's and thought for a few years it was all over, so I dont go in for extremes any longer. It could be an EMP wipe-out tonight, or an economy crash this month ...... or maybe it all will limp along for many years .....

In short its probably best to have a preparedness plan that can be sustained and do you no real harm if not needed.

 

[petedtom]

Meh, doom is only 3-6 months out.

The stock market is NOT an indicator of the overall economic condition of the country as a whole.

 

[hiwall]

Trump: "I Won't Be Here" When The Coming Debt Crisis Goes Nuclear

https://www.zerohedge.com/news/2018-12-06/trump-i-wont-be-here-when-debt-crisis-goes-nuclear

President Trump reportedly shrugged off concerns over the ballooning national debt, telling senior advisers in an early 2017 meeting "Yeah, but I won't be here" when presented with "charts and graphics layout out the numbers and showing a "hockey stick" spike in the national debt" set to occur "in the not too distant future."
The alleged incident from nearly two years ago comes from the Daily Beast - citing "a source who was in the room," which we note is anonymous - the standard operating procedure for most anti-Trump hit pieces. As such, one may want to take the report with copious grains of salt.

Citing another anonymous White House official, the Beast reports that President Trump hasn't addressed the national debt "in a truly meaningful way, despite his public lip service."

"I never once heard him talk about the debt," said the totally anonymous source.

Then again, former Trump official Marc Short - who went on record, refutes the anonymously sourced suggestion over Debt worries - telling the Beast that he believed Trump recognized "the threat that debt poses," as evidenced by the president's repeated concerns over "rising interest rates."

"But there’s no doubt this administration and this Congress need to address spending because we have out-of-control entitlement programs," Short said, adding, "it’s fair to say that... the president would be skeptical of anyone who claims that they would know exactly when a [debt] crisis really comes home to roost."

The Beast adds further to the notion that Trump is concerned about debt, however it's ultimately up to the legislative branch which has the "power of the purse."

 

[Dozdoats]

Debt? YES!

Debt is GOOD. Donald Trump is the King Of Debt. He will not allow anything bad to happen!


You believe that, right? Right?

 

[Adino]

Historic Debt Is At The Core Of Our Economic Decline
December 5, 2018 Birch Gold News

debt at core of economic decline

From Brandon Smith

As I predicted just after the 2016 presidential election, a sordid theater of blame has exploded over the state of the U.S. economy, with fingers pointing everywhere except (in most cases) at the true culprits behind the crash. Some people point to the current administration and its pursuit of a trade war. Others point to the Federal Reserve, with its adverse interest rate hikes into economic weakness and its balance sheet cuts.

Some blame the Democrats for doubling the national debt under the Obama Administration and creating massive trade and budget deficits. And others look towards Republicans for not yet stemming the continually increasing national debt and deficits.

In today’s economic landscape, the debt issue is absolutely critical. While it is often brought up in regards to our fiscal uncertainty, it is rarely explored deeply enough.

I believe that economic crisis events are engineered deliberately by the financial elite in order to create advantageous conditions for themselves. To understand why, it is important to know the root of their power.

Without extreme debt conditions, economic downturns cannot be created (or at least sustained for long periods of time). According to the amount of debt weighing down a system, banking institutions can predict the outcomes of certain actions and also influence certain end results. For example, if the Fed were to seek out conjuring a debt based bubble, a classic strategy would be to set interest rates artificially low for far too long. Conversely, raising interest rates into economic weakness is a strategy that can be employed in order to collapse a bubble. I believe that it is what launched the Great Depression, it is what ignited the crash of 2008, and it is what’s going on today.

The massive debt burden makes recovery difficult, if not impossible, and thus the system becomes increasingly dependent on the banking elites to resolve the problem.

Debt is the fuel that keeps the centralization machine running. I am not talking about standard lending, though this can be a factor. What I am talking about is debt created through policy; debt that’s created in an instant through the use of subversive and arbitrary measures, like central bank balance sheet initiatives or interest rates. And, debt that’s created through collusion between central banks, international banks, ratings agencies, and government using the removal of regulations, or the implementation of unfair regulatory standards.

Debt is a drug. The banks have known this for quite some time, and have exploited the opiate of easy money to leverage entire nations and cultures into servitude or self-destruction. To illustrate this point, let’s look at the debt numbers today.

The national debt is closing in on $22 trillion, with over $1 trillion a year currently being added for the American taxpayer.

Corporate debt is at historic highs not seen since 2008, with S&P Global reporting over $6.3 trillion in total debts and the largest companies holding only $2.1 trillion in cash as a hedge.

U.S. household debt currently stands at around $13.3 trillion, which is $618 billion higher than the last peak back in 2008, during the credit crisis.

U.S. credit card debt surpassed $1 trillion for the first time in 2018, the highest single year amount since 2007 (once again, we see that debt levels are spiking beyond the lines crossed just before the crash of 2008).

So how can this debt be exploited to engineer an economic crisis? Let’s start with household and consumer debt.

One would think that with so much lending and creation of consumer debt, we would see a massive expansion in home and auto markets. And for a time, we did. The problem was that most home purchases were being undertaken by major corporations like Blackrock, as they devoured distressed mortgages by the thousands and then turned those homes into rentals. In the auto market, there was a large spike in buying driven by lending, but this lending was accomplished through ARM-style car loans, the same kind of loans with lax standards that helped cause the mortgage crisis in 2008.

Today, both in the housing market and the auto market, a crash is indeed taking place as the Fed raises interest rates and makes holding these loans ever more expensive.

Pending home sales have tumbled to a four-year low, as one in four homes on the market is now forced to lower prices. Debt is becoming expensive, and therefore demand is slumping.

Overall U.S. auto sales began a precipitous decline this September, which has continued through November, mostly due to higher interest rates.

It is clear that an economic crash, which some are merely calling a bear market, is indicated in the swift decline in housing and autos, two of the most vital consumer sectors.

But what about corporate debt? Let’s use GE, GM and Ford as litmus tests.

GE is currently in the red for over $115 billion. And this doesn’t include its pension promises to employees, which amount to over $100 billion. Given that only $71 billion has been earmarked to cover the payments, any rate hikes from the Fed constitute a millstone on the necks of GE. The likely result will be continued layoffs. Last December, GE announced 12,000 jobs to be cut through 2018, and it is likely these cuts will continue into 2019.

GM, with long term debt of $102 billion (as of September) and cash holdings of around $35 billion, is now cutting over 14,000 jobs and shutting down multiple factories in the U.S. This is due, in part, to a combination of interest rate hikes and tariffs. However, the true point of fracture is because of the expansive debt that GM is responsible for. Without such debt, neither rate hikes nor Trump’s tariffs would have as intense an effect on these corporations.

Ford, not to be outdone by GM, is set to announce up to 25,000 job cuts, though the bulk of them may be implemented in Europe. Ford saw its debt rating downgraded by Moody’s earlier this year to one step above junk. With current liabilities of around $100 billion and only $25 billion in cash holdings, Ford is yet another company of the verge of crumbling due to huge liabilities it cannot afford to pay more interest on.

We can see the stress that the Fed is able to place on corporations by looking at their stock buyback expenditures over the past few years. Until recently, it was the Fed’s low interest rates, overnight loans, and balance sheet purchases that allowed companies to buy back their own stocks and thereby artificially prop up the markets. In fact, one could argue that without stock buybacks, the bull rally that started in 2009 would have died out a long time ago and we would have returned to crash conditions much sooner.

By lowering interest rates to near zero, what the Fed did was create a culture of irresponsible risk, and I believe they did this knowingly. Even Donald Trump has tied himself to the performance of the stock market and embraced the debt addiction, arguing for the Fed to stop or reduce interest rate hikes to keep the debt party going.

But the Fed is not going to stop. Why would they? They have created the perfect bubble. A bubble that encompasses not only corporate debt, consumer debt, and stock markets, but also bond markets and the U.S. dollar itself. If the goal is a move to centralize power, then the banking elites have the perfect crisis weapon in their hands.

As noted earlier, it is not only stock investors that are dependent on Fed interest rates, but also the U.S. government, as treasury debt becomes less desirable for foreign buyers.

Both China and Japan have been quietly reducing treasury holdings and purchases. Failing bond auctions have been cited as a trigger for spikes in Treasury yields since the beginning of 2018. Even U.S. debt and the dollar is embroiled in the “everything bubble”.

Debt is the key to it all. And to understand who benefits from economic crisis, one only needs to examine who controls the debt.

Brandon Smith has been an alternative economic and geopolitical analyst since 2006 and is the founder of Alt-Market.com.

The views and opinions expressed in this article are those of the author and do not necessarily reflect those of Birch Gold Group.

https://www.birchgold.com/news/historic-debt-is-at-core-of-our-economic-decline

 

[NoMoreLibs]

Debt? YES!

Debt is GOOD. Donald Trump is the King Of Debt. He will not allow anything bad to happen!


You believe that, right? Right?

Yeah but Donny can't chap 11 himself out of it this time.

 

[hiwall]

Debt is the key to it all.

A true fact.

 

[twobarkingdogs]

The stock market is NOT an indicator of the overall economic condition of the country as a whole.

Basically Agree. But a bunch of folks on this board seem to think it is. To me it is just one leg of the stool

tbd

 

[Dozdoats]

But a bunch of folks on this board seem to think it is

Funny, all the teevee talking heads seem to think it is too. It's their favorite tout.

 

[CaryC]

Um, one needs a garden set up that is big enough to keep those in the, let's say house fed.

One needs fertilizer on hand to keep the crops.

Enough food in store to hold one over until the garden is producing.

Medication well enough to hold one over till one is eating naturally. Natural food is the best medication.

Mostly agree.

Concerning fertilizer, if you mean commercial fertilizer that would be a no. As in not needed, as a necessity. Knowledge of natural fertilizer is a must. Composing and using natural material, now that is a yes.

Eating all natural isn't a cure all. People died from TB when all they had was all natural. Just saying. However, eating natural will go along way for sure. When the meds run out, they just will have to deal, and each will have to do the best they can.

 

[dogmanan]

I thought I would start this thread based upon several threads of Economic Doom we have been seeing lately. Add in the variations the stock market is experiencing, we have the potential for some real threats to our economic survival.

Having said that, it is a certainty that at some point in the future, we will see a really bad economic downturn. I am not talking like that of 2008, but rather one of the more traditional down turns that in the past were call a full blown depression. (Yes, I know by definition, 2008 was a depression, but we no longer call them that). A depression that will require a reset of how we use and handle money in this nation. One that will have years of decline much like that of 1929. If fact, I believe we will end up having a new currency before it is over.

We all could see the writing on the wall with Obama and much of what Bush did also. Things were going south and moving quickly. for many it seemed that we were only months away from going under.

Now we have Trump, things are looking better that is for sure, but they are not as good as they have been in the past. The pain is less not gone. I believe Trump is simply a delay to what will happen and once he is gone, all bets are off. This gives us just 6 years at best and maybe less to get things in order.

It is my belief after he is gone, faith in the dollar will evaporate. Markets will crash and anyone with any debt at all will be screwed royally. I further believe the Government will be forced to either drop a zero from the dollar or even issue a new type of currency.

I also believe that those in power will not suffer as they will be allowed first bite at the new currencies and any debt they have will be minimal. So social unrest will be a levels that won't be far off of full blown civil war.

Thus, our plan is to have our home paid off in six years and have no debt what so ever. We will continue to have a full pantry and well maintained vehicles. There will be some precious metals on hand as well as a means to defend ourselves.

My issue with all this is hard to explain... but I will try...

I realize government will want their piece no matter what. That will include property taxes, etc. So we will have some metals to help with that situation.

But what other change is likely to happen that can be prepared for?

We can take care of ourselves with food, medicine etc but can not stand off an army or those who would confiscate our physical property.

But I feel that we are missing something that I fail to see that could or might happen that could easily be prepared for.

What do you think?

More people who think like you do, to protect what you/they have, and people who come with their own guns/supplies.

You and the wife can only do so much by your self's.

 

[Seeker22]

Watching a recent You Tube with an economist discussing this scenario....he showed some clips of Black Friday at Walmart, and how, at the opening, that morning, literally hordes of people pushed and shoved and almost trampled the clerks who stood by to greet them....and, I didn't see a white face in the crowd!

That said, if the store shelves were empty, like they are in Venezuela, we can't assume that crowds of hungry people wouldn't be scouring the neighborhoods for grub....and even assuming we all had a gun or two, I can't see where that would help much, if being overpowered like that, with "animals" who would want our stuff and us dead!

I remember reading some years ago about Japan. They had a disaster where people could have started running and trampling each other. The media was shocked that they didn't do that- they were polite and quiet and orderly and not a life was lost. This wasn't a shopping trip but a real disaster.

The loss of civility in a large part of our citizens has to be factored into an economic event. A Black Friday mentality at the bank when people try to get their money out, or people are robbed for it after they leave the bank. All sorts of scenarios to game out and none of them appealing to me. Cities will fare worse than flyover country, as always.

 

[coalcracker]

Larry Burkett wrote "The Coming Economic Earthquake" in 1991. Around that same time, Harry Figgie wrote "Bankruptcy, 1995." I read both books back then, and I still respect both men. The fact, however, remains that they both (and many others) had it wrong, very wrong. So, for the past 20 years, I've been considering why. I'm no economist, but clearly those who are have no clue. The cycles, charts, moving averages, employment numbers, etc. are all akin to reading a horoscope. They provide guesses and assumptions, at best.

So, what is the deal? My best guess is the Fed has pushed QE to astronomical levels, probably guided by some AI in the dark recesses of their castle, and that they now know exactly when the system will collapse. They've run all the options. They know. They can push the debt to some mathematically certain point, an obscene level, and then it will all come down. The peons in the markets are irrelevant. The Fed has been propping the whole thing up by printing money (actually creating digital money). A true market would've collapsed years ago.

So, I look for the scapegoat "event" to occur right before the mathematical end is reached. That will be the cause, according to the MSM. They will also have their high-tech cashless system ready to go. As soon as the unwashed masses suffer enough and call out for salvation, the man on the white horse will arrive to save the day.

 

[Dozdoats]

So, I look for the scapegoat "event" to occur right before the mathematical end is reached.

IF all these complex plans, logistics etc work out as intended - and how likely are they to be able to pull it off?

 

[hiwall]

So, I look for the scapegoat "event" to occur right before the mathematical end is reached.

IF all these complex plans, logistics etc work out as intended - and how likely are they to be able to pull it off?

It will be interesting to see how it all works out, if we live through it that is.

 

[Dozdoats]

No one gets out of life alive - why worry?

Ever seen a Brinks truck in a funeral procession?

 

[SageRock]

New banking regulations have been put in place that allow "bail-ins," where the depositors' money is used to make the bank and its creditors whole again. There would be no recourse -- your money on deposit in the bank will be taken. In some cases, the depositors would be given worthless stock in the bank in place of their deposits.

There have also been proposals from the IMF to implement a one-off confiscation of 10% of all assets -- retirement accounts, savings/checking accounts, property value, stocks, bonds, and whatever else they can find and value. This money would be used to prop up the governments, which are in danger of being overwhelmed by their ongoing debt accumulation. There would be absolutely no advance warning of such a move, so as to prevent asset reallocation to attempt to avoid the confiscation. This move would not even be enough to bail out the governments completely, only enough to enable them to keep the Ponzi alive for a bit longer before hyperinflation or default set in.

Preparations for events such as these would be to have minimal cash in the banks -- perhaps 1 to 3 months' worth of expenses at most. Retirement accounts are also at risk.

Physical supplies are much more difficult to acquire -- it would be necessary to send government agents out to collect them -- at potential considerable risk and cost. Bank accounts can be confiscated with the click of a few keys, with no immediate risk to those implementing the decision.

Tools and supplies are probably a good investment in this scenario.

 

[Dozdoats]

#25 contains some critical things to contemplate IMO.

 

[imaginative]

Yeah but Donny can't chap 11 himself out of it this time.

Why not?