My readers, last week the US Treasury Department took over Fannie Mae
and Freddie Mac. They assumed liabilities of over $5 trillion US
dollars. This is over one half of the current US national debt. We now
see Lehman Brothers and Washington Mutual Bank teetering close to
failure. Another government bailout is looming. We also have the
spectre of trillions of dollars in credit fault swaps that could go bad.
Despite all of this bad news, the US dollar has shot up against other currencies. Gold and oil prices are dropping. It seems as if everyone around the world has buried their heads in the sand and thinking it is all business as usual.
It reminds me of Singapore in early 1941. As two Japanese armies moved down the Malay Peninsula to take the city,the elites of Singapore were seen having parties at such venues as the world-famous Raffles Hotel. No one believed that their island city paradise would fall into Japanese hands. No body took notice of the fact that all of the RAF personnel were being evacuated quietly to Australia. None gave much thought to the sinking of British capital ships by Japanese aircraft. When the Japanese armies stormed into the city, the party was over a huge hangover lasting over four years followed. Many of the people attending these parties did not live to see their liberation by the Allies.
What happens here when the party is over? We will have a Singapore-style hangover lasting 4-5 years. The first casualty will be the crash of the US dollar. The authorities will either let it fall or raise interest rates astronomically to try to attract investors. In either scenario, the American people will suffer a drop in living standards that they,most likely, will never recover from. Unemployment will rise to over 12%. Foreigners will come in and buy American firms and properties at bargain basement prices. The poor will suffer immensely.
How did such circumstances come to be. A weak and stupid man assumed the presidency in 2001. He got a majority in the senate and in congress. This gave him carte blanche to do what ever he wanted. With all of this power and authority, he could have created a United States that would continue to lead the world throughout the 21st century. Instead, he raised the national debt from $4 trillion to over $9 trillion dollars. He embarked on a senseless war inIraq that cost us over $1 trillion dollars and the loss of our prestige and respect all over the world. He let his friends in the congress and the senate give out all sorts of money to their rich friends. He did nothing to stop the loss of $1 trillion dollars per year due to the importation of foreign oil. He was "asleep at the wheel" when $10 trillion dollars in questionable real estate loans on homes and commercial property were made.
To add to the madness, the US voters are getting ready to elect John McCain so "the party" can go on for four more years.
How can you protect yourself against all of these problems. You need to own gold. You need to have your cash savings in a very stable currency like the Norweigan Kroner. Store six months of food in the house. If your house is paid off, leave it that way. If you owe a lot of money on your house, just sit and relax. Inflation will eat up a lot of the debt and the government will bail out your mortgage.
Despite all of this bad news, the US dollar has shot up against other currencies. Gold and oil prices are dropping. It seems as if everyone around the world has buried their heads in the sand and thinking it is all business as usual.
It reminds me of Singapore in early 1941. As two Japanese armies moved down the Malay Peninsula to take the city,the elites of Singapore were seen having parties at such venues as the world-famous Raffles Hotel. No one believed that their island city paradise would fall into Japanese hands. No body took notice of the fact that all of the RAF personnel were being evacuated quietly to Australia. None gave much thought to the sinking of British capital ships by Japanese aircraft. When the Japanese armies stormed into the city, the party was over a huge hangover lasting over four years followed. Many of the people attending these parties did not live to see their liberation by the Allies.
What happens here when the party is over? We will have a Singapore-style hangover lasting 4-5 years. The first casualty will be the crash of the US dollar. The authorities will either let it fall or raise interest rates astronomically to try to attract investors. In either scenario, the American people will suffer a drop in living standards that they,most likely, will never recover from. Unemployment will rise to over 12%. Foreigners will come in and buy American firms and properties at bargain basement prices. The poor will suffer immensely.
How did such circumstances come to be. A weak and stupid man assumed the presidency in 2001. He got a majority in the senate and in congress. This gave him carte blanche to do what ever he wanted. With all of this power and authority, he could have created a United States that would continue to lead the world throughout the 21st century. Instead, he raised the national debt from $4 trillion to over $9 trillion dollars. He embarked on a senseless war inIraq that cost us over $1 trillion dollars and the loss of our prestige and respect all over the world. He let his friends in the congress and the senate give out all sorts of money to their rich friends. He did nothing to stop the loss of $1 trillion dollars per year due to the importation of foreign oil. He was "asleep at the wheel" when $10 trillion dollars in questionable real estate loans on homes and commercial property were made.
To add to the madness, the US voters are getting ready to elect John McCain so "the party" can go on for four more years.
How can you protect yourself against all of these problems. You need to own gold. You need to have your cash savings in a very stable currency like the Norweigan Kroner. Store six months of food in the house. If your house is paid off, leave it that way. If you owe a lot of money on your house, just sit and relax. Inflation will eat up a lot of the debt and the government will bail out your mortgage.
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