OT: Countdown: Three Weeks to Chaos

User Forum Topic
Submitted by partypup on September 17, 2008 - 10:37pm

I know that I have been characterized as "alarmist" and a "doomsayer" by many on this board in the past, but I would be remiss if I did not pass along some information to you all that I have learned from a very knowledgeable and well-placed source in the finance industry who has guided me for the past two years as I have attempted to navigate this crisis.

This source predicted, four (4) months ago, that the market would enter a heart-pounding phase in mid-late September. It would be as though, in his words, "the world would hold its breath" in anticipation of what would follow.

And then, on or about the first week of October, the dam would suddenly burst and the ride to hell would begin -- for months. He predicted that the system would experience a massive seizure, such that all electronic forms of trade (stocks, banks, ATMS) would simply fail. And the much-delayed death of the dollar would begin in earnest.

This coincides almost exactly with what the think tank at LEAP (http://leap2020.eu/GEAB-in-English_r25.html) has been predicting for the past 18 months. I have studied each of their reports, in which they have consistently labeled Fall 2008 as the point in which the world in general, and the U.S. in particular, would enter the heart of the system crisis. The only variation I note is that LEAP estimates that the dollar's role as the world's reserve currency will cease around the end of the 2nd quarter of 2009. My source believes that it will happen sooner. Or perhaps it is the case that the process begins in October and culminates in June. In any event,
the Fall and Winter are going to be extraordinarily brutal.

I am hoping that all who read this will understand the message that I am trying to relay to you: time is short. Many of us have been expecting what is coming from months or years. Some have only awaken to what is coming a few months ago. Others still don't understand what is coming. But as Wall St literally disintegrates before our eyes, I don't think there can be any question at this point that we are on the verge of something unprecedented and catastrophic.

If you have money in the markets, you need to get it out NOW.

If you have a 401K and are fearful of a withdrawal penalty and taxes, keep in mind that 60% of something is better than 100% of nothing.

If you have more funds in your bank than the absolute minimum necessary to pay your expenses, then you're playing Vegas odds. FDIC is technically insolvent as I write this, and one more major bank failure will trigger an unstoppable run on our retail banking system.

Buy a safe. Keep as much cash at home as you feel comfortable storing. BUY METALS. They will be volatile in the near term, but they are truly your best bet for asset protection in a world that is about to implode in a derivatives supernova.

The Chinese did something astounding today: they effectively broadcast to the world that a new world reserve currency is needed. The world heard them. And gold soared almost $100 today. I think that any thinking person can see that the unthinkable is now about to happen. The dollar is about to become irrelevant.

http://us.mobile.reuters.com/mobile/m/An...

And lastly, at the risk of sounding completely alarmist, I would advise you all to begin stocking up on goods that you will need to keep your household functioning in the near (and possibly long) term. When the system fails, there will be massive supply disruptions for a variety of reasons, not the least of which will be that panic will trigger a hoarding mentality, gas will be in short supply and inventories will be easily wiped off of store shelves. Can we buy enough food and supplies to last the rest of our lives? Of course not. The goal here is simply not to be a casualty in the first wave of the tsunami that will wipe out millions. Once the first wave has passed, we can pick ourselves up, look around for a place of safety and start moving.

I'm not advising anyone to buy a gun or any form of protection, although I think civil unrest is entirely possible, particularly in large metropolitan areas.

I am simply advising that, at a minimum, we all be prudent in preparing for what now seems inevitable. An ounce of prevention in these times is easily worth a ton of cure.

For those who may disagree with my post, I respect your opinion and would only ask that you not denigrate mine and simply move on to the next thread. I share this information with you all solely out of a concern for my fellow citizens.

I am hoping this thread will allow like-minded individuals to share practical information and advice as we all move into a grim and unchartered period in our nation's history.

Good luck to us all.

Submitted by Arraya on October 16, 2009 - 8:43pm.

Here is the MSM starting to run stories on it. ..

http://www.businessweek.com/magazine/con...
What Happens If the Dollar Crashes
Trade wars could break out. Overexposed banks might collapse. And that's just for starters

Submitted by Zeitgeist on October 16, 2009 - 9:23pm.

On the bright side, don't you see housing becoming more tied into wages, for the few who still have jobs. If they interest rate sky rockets, the price of housing will have to adjust to accommodate to the market. That's my read. I am not calling it a silver lining, but it is about time there was more realism in the housing market.

Submitted by SD Realtor on October 16, 2009 - 10:28pm.

Arraya I don't dispute any of that as you can see. It is the aftermath, you can speculate, I can speculate, we all can. Perhaps you think the aftermath will result in the world being a better place but I do not.

Once again, and I hate to overstate this but I think it bears importance, I feel like China is going to be a major player and so what role they will play should be discussed shouldn't it? I assume you saw the move by the current administration to let the Commerce dept authorize missile technology sales to China.

To me events like that illustrate the desperation that we are witnessing by our govt to pacify our creditors.

**********

So forget about that for the moment. What is done is done and I am more worried about what will be. I am not sure if you recall but before our unemployment really went wild there were lots of posters who were quite happy about it. Lots of those, "Bring it on" posts. Most of them admitted that they weren't wishing for hardship for friends and family as much as hoping for a chance to get a home for cheap. So here we are 3 years later. Doesn't look like anybody got that home in 4S for 400k or that ocean view home for cheap either. Yet plenty of people are out of work. I have lots of friends out of work, several clients. It really sucks. I remember posting many a post saying to watch out for what you wish for.

************

So now here we are again, potentially on the threshold for something much worse. Yet I hear more of the same, "bring it on" or "at least I can buy a home when this all happens" and when I hear this, I cannot really believe my ears. Not only does it epitomize the ultimate selfishness, but to honestly believe that we can undergo the sorts of dislocations that you are predicting but in the same breathe think okay I will get my home and everything will be alright, that just stuns me.

Honestly I just do not get it.

However I can say, as I have said, if things are going to get as fcked as you are saying, then those who think, "I will get my home and everything will be okay" are sadly mistaken.

I think even you may agree with that.

Submitted by scaredyclassic on October 16, 2009 - 11:17pm.

that's why i never look on the bright side. i think it is better to usually look at the bad repercussions to others. i am too empathetic.

Submitted by Arraya on October 17, 2009 - 2:35pm.

http://www.google.com/hostednews/afp/art...
COCHABAMBA, Bolivia — Leftist Latin American leaders have agreed on the creation of a regional currency to scale back on the use of the US dollar as well as economic sanctions against Honduran coup leaders.

Nine countries of ALBA, a leftist bloc conceived by Venezuelan President Hugo Chavez, met Friday in Bolivia where they vowed to press ahead with a new currency for intra-regional trade to replace the US dollar.

"The document is approved," said Bolivia's President Evo Morales, who is hosting the summit.

The new currency, named the Sucre after Jose Antonio de Sucre, who fought for independence from Spain alongside Venezuelan hero Simon Bolivar in the early 19th century, will be rolled out beginning in 2010 in a non-paper form.

That move echoes the European Union's introduction of the euro precursor, the ECU, an account unit designed to tie down stable exchange rates between member states before the national currencies were scraped.

Submitted by KSMountain on October 17, 2009 - 11:31pm.

I'll bet people thought we were down for good during the depression, and the dust bowl, and during the early 80's what with the Japanese were going to kick our ass, etc, etc, etc.

It was never permanent.

Economics is *cyclical* people. California had a budget surplus in the many billions as recently as 1999, do we really think that will *never* happen again?

Why is it "different this time"? Anytime I hear that implication, either on the way up or the way down, I immediately get *very* skeptical.

Even the soviet union, yes they had a multigenerational event, but it's not like society there collapsed and they're all cannibalizing each other. The average citizen has not had to stock up on gold and ammo there to get through their day as far as I can tell.

Now one thing I will say: I believe demographics is destiny. So countries like Japan, Russia, lots of W. European countries - they got major troubles coming their way.

India and China look very strong demographically, but actually, due to immigration (legal/illegal, a whole other topic) guess who else has a relatively large worker pool coming on line in the decades to come?: the U.S.

Think I'll pour a glass of Cab and sleep soundly tonight.

Submitted by KSMountain on October 18, 2009 - 9:12am.

Amazingly, this month's Foreign Affairs has an article on *exactly* the topic we've been discussing here recently. That is (as I see it):

Are the U.S.'s best days behind it?
Will there be another global leader, and if so, whom?, etc.

This article discusses *exactly* those topics.
Here's a snippet, but to get the whole thing you have to be a subscriber, buy it on the newsstand, or wait a month and then read it online.

http://www.foreignaffairs.com/articles/6...

Submitted by KSMountain on October 18, 2009 - 9:14am.

Hmm, actually you might be able to read it online for free if you register (I had the hardcopy).

Submitted by partypup on October 18, 2009 - 10:00am.

SD Realtor wrote:
Thanks for that. So now try to answer my question. Who do you think will "carry the load"?

There is nothing that I am denying except your claim that in 3 weeks chaos will reign. Like you claimed a year ago.

I am not denying things are screwed and will get much worse. I am denying that you believe some other country will "carry the load".

Americans don't have a choice in taking the pain or not taking the pain. They will take whatever card is dealt. There is nothing at all I am clinging to. The country will change whether we like it or not. So I am not sure what you think I am clinging to.

You seemed to like to make a great speech out of my question without answering it at all. Please point out something, ANYTHING that I wrote where I am clinging to any nostalgia.

Go ahead, point it out.

Oh yeah and then try to answer my question.

First: if you recall the last week of September and the first week of October of 2008, I think you must admit that chaos did reign as our elected leaders struggled to plug the gaping holes that suddenly appeared in the financial system: the Dow went from 11,421 to 8,579 in about a week. TARP was quickly pushed through because nearly one trillion dollars was flooding out of money market funds in one twenty-four (24) hour period.

And this is not chaos to you? Unless you're accustomed to living in a third world country, SD, this is most certainly chaos in what had once been orderly and predictable financial markets.

Second: I did answer your question, but you did not answer mine. My answer to your question, to be perfectly clear, is as follows: I do not see any individual country that can assume the *load* that the U.S. has carried. And I don't know if one will appear in the near future. And quite frankly, that doesn't bother me in the least. Why? Because, as I poised in my question to you, the U.S. offers absolutely NOTHING to the rest of the world at this point. We are the *load*. So please tell me what role you see the U.S. currently fulfilling, and why you think it is important for some other country to assume that role?

Submitted by partypup on October 18, 2009 - 10:03am.

SD Realtor wrote:

However I can say, as I have said, if things are going to get as fcked as you are saying, then those who think, "I will get my home and everything will be okay" are sadly mistaken.

I think even you may agree with that.

SD: I have been thinking this for the past 18 months as I have been reading the posts on this forum. People are so preoccupied with getting a house on the cheap that they haven't stopped to wonder what will happen when they get that house and cant possibly sell it in the next 20 years because our currency and economy will be so f****d up.

I just don't get it, either. You and I may disagree about what the U.S. brings to the table these days, but it does appear that we can agree on one thing: the future most certainly is not a rosy one for the people of this once great nation.

Submitted by partypup on October 18, 2009 - 10:17am.

KSMountain wrote:
I'll bet people thought we were down for good during the depression, and the dust bowl, and during the early 80's what with the Japanese were going to kick our ass, etc, etc, etc.

It was never permanent.

Think I'll pour a glass of Cab and sleep soundly tonight.

You need to start sleeping with one eye open, KS. It appears that a growing number of people are beginning to do just that, as they are now realizing that the unthinkable CAN happen. I am starting to see more and more articles like the one linked below in mainstream news media. This would have been anathema a year ago. After all, we are talking about the world's reserve currency!

I would like to reacquaint you with black swan theory: The Black Swan Theory (in Nassim Nicholas Taleb's version) concerns HIGH-IMPACT, hard-to-predict, and rare events beyond the realm of normal expectations.

Prepare for the mother of all black swans.

"What Happens If the Dollar Crashes"

"This state of calm would vanish overnight, though, if the financial markets got a sense that the dollar's decline was starting to snowball out of control. At that point, the invisible "force field" protecting the dollar would fade away, says Martin D. Weiss, chairman of Weiss Group, a financial data and analysis firm in Jupiter, Fla. Says Weiss: "We would become more like ordinary mortals and more vulnerable to attacks on our currency."

The bearish case for the dollar is that the decline takes on a life of its own. Selling begets more selling. The world's central bankers and finance ministers intervene to prop up the currency, but speculators, having tasted victory, aren't scared off. Princeton University economist Paul R. Krugman once called this the Wile E. Coyote scenario, after the character in the Road Runner cartoons who runs off a cliff but doesn't start to fall until he looks down and sees there's nothing beneath his feet.

Speculation that the dollar is headed for a tumble can become self-fulfilling if traders rush for the exit. Ashraf Laidi, chief foreign exchange strategist at CMC Markets, a London currency and commodity brokerage, says "right now there is around a 30% to 40% chance we are going to see the dollar falling toward a crisis point."

Do you like those numbers? Feeling confident that we won't get our ass kicked? Because once we cross 50% all bets are off.

http://www.businessweek.com/magazine/con...

Submitted by scaredyclassic on October 18, 2009 - 10:31am.

wishing for badness and wanting to do the right thing to protect yourself are different things. "getting a house on the cheap" sounds like profiteering from someone else's misery. what about just avoiding one's own damned misery? getting a good deal means being somewhat more financially stable. the economy after all is made up of an innumerable number of little tiny decisions. you don't make your money when you sell, as they say, you make it (if you do) when you buy. so i would say it's less about 'wishing" for bad things to happen, or "wishful thinking", but more about enhanced prudence and awareness in very financially risky times. in other words, i'd rather make a smart decision than a so-so decision, or a really bad decision.

Submitted by NotCranky on October 18, 2009 - 11:05am.

Chaos is here. Reach out and embrace as much as you can then come back to Piggington's and panic about the future for cathartic effect.Go back to chaos until you can't take it...rinse lather repeat. The future is not more chaotic than now...Even if the dollar crashes, the U.S. is supplanted as super power both militarily and economically. The localities in which levels and types of Chaos exhibit themselves just shift.Who has their eyes open and who doesn't?

I would ask what are the current symptoms of Chaos and how do I address that instead of sitting around fantasizing about shoes dropping, dikes failing ect. Those things always happen. Meanwhile we are a nation full of voluntary debt slaves, self drug and junk food poisoning,cluster bomb building, twinkie whores.Giving our children a future built on day care, obesity and diabetes. We call people marginal underachievers who don't get on board with unhealthy over consumption and screwing civility to make a buck. I call that chaos.

Submitted by Arraya on October 18, 2009 - 12:23pm.

Russ when the dollar crashed troops are coming home because we can't fund them anymore. The dollar reserve currency is a very clever global taxation method.

By this time next year, real unemployment will be pushing 26-30% and most state services will be getting slashed because of plummeting tax revenue right at the moment we they need it the most.

Right now the Fed is playing weekend at Bernies until the world pulls the plug.

This is the debt-ocalypse

Submitted by NotCranky on October 18, 2009 - 8:17pm.

Arraya wrote:
Russ when the dollar crashed troops are coming home because we can't fund them anymore. The dollar reserve currency is a very clever global taxation method.

By this time next year, real unemployment will be pushing 26-30% and most state services will be getting slashed because of plummeting tax revenue right at the moment we they need it the most.

Right now the Fed is playing weekend at Bernies until the world pulls the plug.

This is the debt-ocalypse

I will throw a party when the troops come home broke or not, "win or lose".

Sure you are right about the dollar taxation scheme.

I agree with the others who think life will go on O.K. It makes sense that, unless the U.S is being blown to pieces, some arrangement will be made to accommodate the existing domestic debt structures more or less. There is no way I believe that the dollar becoming less relevant on an international scale, or the U.S default on debt or any of these other things predicted is going to get Joe six pack out of hock.On the other hand "globalism" will not get him off the hook either. He just might change hands to a new set of masters. If J6P survives to pay his debt then those J6P's currently in the black will certainly survive, albeit within the "lower living standards" of the new economy.

I guess there are some other scenarios that would marginally approximate an "apocalypse". Perhaps some attempt at confiscation of all domestically held private assets ....and a different form of government. I guess to that you would say, "Bingo"!In that case there goes your gold and the box of tomatoes that I was going to pay my house off with.

Submitted by SD Realtor on October 19, 2009 - 12:37am.

Look it is a losing cause. If "chaos" reigns you are right. If chaos doesn't reign you are right because chaos will rein.

Tell you what, you go ahead and shut down your 401k, like you urged everyone to do back in your original post, and convert all your cash to precious metals. In the meantime find any and every link you can calling for imminent collapse, and hide in the bunker every night watching and waiting. I will go on taking my kids to the park, not convert every asset to gold, continue to take advantage of what I see are strong opportunities to make money, and pretty much enjoy my life as best I can. Yes I am wary and concerned but honestly I think one can balance that concern with levity.

Perhaps getting so obsessed with something may cause you to miss out on other things. You see what I am saying.

What you really need to think about is not what happens if you are wrong, but what happens if you are right. Once upon a time a president ordered that all private citizens holding gold needed to surrender it. Don't think that that cannot happen again.

Anyways yes either things will turn to shit and we will all be screwed royally or things will turn to shit and we will all be screwed marginally. However those that will really survive are those who are in the power seats right now.

*****************

As far as the USA goes with respect to things like humanitarian aid and things like that. If you think the world will be a better place without any country doing it then so be it. I do not. What we do agree on is if the US doesn't do it, nobody will. Yes hold off your post on how all of our aid is tied to our long range imperialistic plans to take over the world. Some of it is not. Generally we are pretty much on the scene when there are calamities, natural disasters, and things like that. No we are not the *load*. The food we bring, the medical aid we give is not a mirage. Groups like the peace corp, and other like minded groups do indeed provide real help and assistance.

I know Judeo/Christian religions believe helping out less fortunate fellow men is a very high priorities. I don't know about eastern religions or muslim but it would surprise me if they didn't. So yeah I guess we differ on the importance of helping others out.

Submitted by partypup on October 19, 2009 - 9:31am.

SD Realtor wrote:

Tell you what, you go ahead and shut down your 401k, like you urged everyone to do back in your original post, and convert all your cash to precious metals.

I did this 3 years ago and thank God every night. Instead of praying to get back to Dow 14,000 so I can recover 25% losses to my portfolio, I sleep like a baby, which is a lot more than I can say for anyone who is still in these markets.

SD Realtor wrote:
Find any and every link you can calling for imminent collapse, and hide in the bunker every night watching and waiting. I will go on taking my kids to the park, not convert every asset to gold, continue to take advantage of what I see are strong opportunities to make money, and pretty much enjoy my life as best I can.

It's curious that you would presume that I live in a bunker simply because I chose to exit the fiat game. That sounds like brainwashing by the Establishment at its best! No SD, I *emerge* from my lair every day around 9:30 AM and head to a multimedia company where I oversee a department of people who share your *clarity* of unfolding events. I sit in meetings, participate in conference calls, training sessions and all of the other *trappings* of a life I'm sure you would consider to be *normal*. But I don't buy into The Lie that freedom and prosperity are still available to even most in this country and that riding the stock market for the long term is the best way to ensure my financial independence.

SD Realtor wrote:
Perhaps getting so obsessed with something may cause you to miss out on other things. You see what I am saying.

SD, in the entire time that I have been posting here, I have followed one of my greatest passions: travelling. When the subprime market was cratering, I took a trip to Vienna. A few months later I spent a week in Hawaii. Shortly after the markets collapsed last Fall I went to Paris and enjoyed what was hands-down the best cuisine I have sampled in my entire life. This past summer my partner and I tool a 2-1/2 week road trip across the Western U.S. with our son. We have "Rock Band" parties on a semi-regular basis (if you've never rocked out to this game, then YOU'RE the one who's missing out on some fun, SD!), and we are planning a cruise to Alaska this Christmas. And more importantly, I am enjoying the hell out of my 6 month old, delighting in his every developmental milestone and teaching him to read. Have you ever read Dr. Seuss' "The Places You'll Go?" You can't know the meaning of life until you've cradled your child in your arms and read this most excellent summary of Life to the most important little person in your life.

So you'll forgive me when I say this: I don't think I'm missing out on a damn thing. If there's more to life than what I'm currently enjoying, then it will simply have to be enjoyed without me.

SD Realtor wrote:
What you really need to think about is not what happens if you are wrong, but what happens if you are right. Once upon a time a president ordered that all private citizens holding gold needed to surrender it. Don't think that that cannot happen again.

SD, I HAVE thought about this, which is why I have taken the actions that I have. Silver has never been confiscated, and I doubt a new precedent will be set here. My gold is safely out of the country. You are very much mistaken if you think I haven't extensively researched not only what I expect to happen, but also what to do when it happens.

SD Realtor wrote:
As far as the USA goes with respect to things like humanitarian aid and things like that. If you think the world will be a better place without any country doing it then so be it. I do not. What we do agree on is if the US doesn't do it, nobody will.

I know Judeo/Christian religions believe helping out less fortunate fellow men is a very high priorities. I don't know about eastern religions or muslim but it would surprise me if they didn't. So yeah I guess we differ on the importance of helping others out.

I don't think the rest of the world will shed a tear if the U.S. simply drifts away and neglects its "peace-keeping" activities in Iraq and Afghanistan. And I'm quite certain there is a village or two in Pakistan that will be relieved not to experience weekly drone attacks that kill or maim their friends and families. You and I may agree that no one will fill the U.S.' role anytime soon, but we clearly disagree about how productive and helpful to the rest of the world that role has been. Have you ever read "Confessions of an Economic Hit Man?'??

Any country that invades another based on a pretext that doesn't exist has simply lost is way and forfeited the right to any role of leadership it may have once deserved. Any country that floods the global financial system with toxic debt that it knows will cause lethal economic harm to others has lost its way and has forfeited its right to leadership. I'm not saying that the U.S. did not once fill a vital geopolitical role. What I am saying is that it no longer does. And I think it's naive and nostalgic in the extreme to believe that our Judeo/Christian principles still guide a country that is presently run by an egregious criminal banking syndicate that determines who we *help* and don't help.

We don't disagree on the importance of helping others out. What we really disagree on is what constitutes *help*. Because in my mind it does no good to drop food into the Sudan if we are simultaneously spreading a financial cancer throughout the world that will ultimately lead it into a global depression and causing much misery and suffering to those we have pledged to *help*.

Submitted by Arraya on October 19, 2009 - 12:44pm.

Well Said PP

In other news an interesting post from another blog.

Within the last several days there have been a sudden uptick in the number of bets for crude oil above $100 per barrel. This has had people scratching their heads for bit. There is zero economic reason for such a bet.

Now we have word that 5 of the top Iranian Revolutionary Guard senior commanders were executed by a lone suicide bomber. Iran alleges US involvement.

Meanwhile, last month we had the US Congress quietly increase its order of the new 15 ton bunker buster (non-nuclear) weapon from 4 to 10 weapons and to demand delivery in December, not next spring. This happened just days before the public announcement that Iran has a second reactor facility. Which US command wants these bombs? Yes, the same command that overseas the Middle East.

We live, ladies and gentlemen, in a fascist state, a manipulated economy. There is evidence, not conclusive but suggestive, that this economy is about to be manipulated again, this time via war, for the benefit of... Goldman Sachs.

If oil spikes because of this, Goldman will make a killing, the stock market will crater, and the flight to dollar safety will be on. Bernanke will have "saved the dollar", at the expense of the market, of course. But the market run up was always an illusion designed to part suckers from their cash

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