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Wednesday, August 1, 2012

“Denial” is not a river in Egypt…

"In other periods of depression, it has always been possible to see some things which were solid and upon which you could base hope, but as I look about, I now see nothing to give ground to hope—nothing of man."

- Former President Calvin Coolidge, 1932

I had an interesting conversation yesterday with someone who has just recently started to get their head around this idea of coming “The Event”.

She had an interesting viewpoint on why so many people are offering up resistance to this idea of what's coming. 

“People continue to keep their head in the sand because they don’t like their world to be rocked! They don’t like change, they see something that is obviously wrong and will find the most asinine reason to justify ignoring it.

They are like birds with their nests in a dead tree and ”they” like it that way.  Then the wind comes and knocks the tree down… then they flit around make a whole lot of noise and generally don’t know what to do!”

She is so right… right now people are feeling more comfortable than ever.  They have their house, their big screen TV, some type of fried food product a drink made of out High Fructose Corn Syrup or cheap beer.

Their country is doing well at the Olympics and that is just fine with them. 

Nothing else outside them matters.

"We the People" are far too comfortable in this country. We don't think that anything we ever do has any negative consequences.  We go through our lives creating a wake of destruction politically, environmentally and financially. 

Why is that?  

Because we live like this.

What is wrong with this picture? Besides leaving you feeling itchy and highly claustrophobic?

Whoever these folks are, they have left their backsides exposed to anything that could come along and bite / kick / hurt it.  This is no way to go through life.  But they think it is.

They live in their "world" that we are not a part of.

We in the USA have ignored our big problems for too long, and now we can’t go back.  We can't fix the mess we created. 

So when the "winds" come and knock people out of their comfortable nests, they like the birds, will flail about, blame someone else and never be able to recover, because they never "saw" this coming.

We have crossed the point of no return.
If you haven’t read the news today the Federal Reserve and ECB have been meeting to discuss how to fix our staggering world economy and yet again out of this meeting they provided no answers. 

You can read the full text of their release here.

But this press release couldn’t have been any more general in nature. It was full of fluff.  There wasn't anything it it of value.  Sure they used some big fancy phrases to describe how they are still committed to their current course of action.

As you read through it, one thing becomes very clear.  They have no idea how to fix this.  You see phrases like;

“Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook.”

This is just Fed speak for, 

“We really don’t see this economy thing turning around, in fact, we hope by some magical wish businesses will start hiring people who will then start spending money.  And we feel that since Europe is on the brink of financial collapse we really know this economy is deader than a doornail.

We are going to turn around, blame the US Government and tell them they need to fix it and we will stick to our guns about talking people into swapping their short term bonds for long term ones so we will never have to pay out on what we actually owe on them.  We will continue to sell debt that we will never be able to recover, that way when everything collapses we will be able to blame the American Government for everything that went wrong.”

Did I hit that close to the mark?  Some of you may think not, but from my insight into the industry that looks pretty spot on to me. Once again it is about control and how once this all collapses they will be able to control us through the debt we as a nation owe. 

So where does that leave the rest of us?  In a terrible, terrible lurch that's where. 

You see not only has the Fed allowed the US Government to borrow into a position that we will never be able to pay out of, but they have also made us fully reliant on their system.

Its as if we were given a credit card we thought didn't have a limit and now we find out that not only does it have a limit, but very soon it is going to have to be paid in full.

There are no options around this.  We have to let debt default and the economy collapse before we can rebuild something that is actually tangible, real and will benefit all who are involved.  Not just the rich and powerful.  As I have said before, "The Event" is part economic too.

There are no solutions.  Any way you look at it, we are headed for "The Event".

They cannot print any more money because it will cause inflation, severely devalue the dollar and cause the economy to collapse and cause mass civil unrest.  People would then begin to return to bartering again or even go back to Gold and Silver coin, leading to a possible Governmental collapse, and civil war.

They cannot force the Government to cut all social entitlement programs because then people would riot, starve and would lead to mass civil unrest and a collapse of the Government structure as well as possible civil war.

They cannot cut military funding and pull all the troops home because there are not any jobs for them to come home to, So former military families would starve, riot which would then lead to mass civil unrest. Not only that, it would open the door for our enemies to come in and take over the US with our defenses down. 

They cannot "infuse" more money through a "quantitative" style easing because that would devalue the debt we owe to other countries and show that we will just print more money and they will never be able to be paid back.  If other countries stop buying the debt, the money fountain turns off and once again we are faced with riots, civil unrest or civil war.

So as you can see no matter how they look at it.  The FED is really hosed in terms of fixing things...

They are going to stall it off as long as they can until all the excuses are used up.

You need to make sure your family is ready for that time.  You need to be thinking of what I am saying.  Like yesterday.  Find out what you can save!  Then put your money into things that last and will protect your family.

Until next time....


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