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Guest Post: Let's Talk About Facts, Not Fear
Via Simon Black of SovereignMan blog,
[Editor's note: Today's letter is an excerpt from the edition of Sovereign Man: Confidential that will be published this afternoon.]
Let’s step away from the noise for a moment and look at the big picture. This isn’t about doom and gloom, or fear, but objective facts.
Undoubtedly, the Western hierarchy dominated by the United States is in a completely unsustainable situation. Across the West, national governments have obligations they simply cannot meet—both to their citizens and their creditors.
In the UK, national government borrowing is already 22% higher than at this same point last year, a record year for borrowing. Meanwhile, the UK’s budget deficit for August hit a record high.
In France, the new government of Francois Hollande passed a ‘historic’ and ‘austere’ budget that is still posting a deficit of 3% of GDP. That’s including a 75% tax on incomes exceeding one million euros.
In Japan, the government is mulling legislation that will fund 40% of the budget with ‘deficit-financing’ bonds.
In the United States, the government recently hit $16 trillion in debt about six weeks ago, after reaching the $15 trillion mark last November. It took 200 years to accumulate the first trillion in debt and 286 days to accumulate the most recent trillion.
Each of these countries has a debt level that exceeds 90% of GDP– the historic point of no return. More importantly, each of these countries also has to borrow money simply to pay interest on money they’ve already borrowed.
This is important because it makes the problems multiple. At the beginning of the 1780s, the French monarchy was spending around 30% of tax revenue to service its debt. Eight years later when the revolution began, they were spending 62%.
The next 26-years in France were filled with internal civil war, external war with Austria and Prussia, hyperinflation, crime, social unrest, and Robespierre’s genocidal dictatorship.
In the 19th century, the Ottoman Empire faced an even steeper financial decline. In just 11-years, the Ottoman central government went from spending 17% of its tax revenue on interest payments to spending over 52% of its tax revenue on interest payments. Then came default, in just eleven years.
In the US, debt service is also rising. According to the Government Accountability Office’s figures, the US government was spending 9% of revenue to service the debt in 2002. Throughout most of the last decade, in fact, the US government spent roughly 9% of its tax revenue on debt service.
But in 2009, the figure hit 9.75%, then 10.5% in 2010, then 11.5% in 2011. For the fiscal year that just closed on September 30, the Bureau of Public Debt reported cumulative interest expense of $375.8 billion on income of $2.45 trillion. This is a rate of 15.3%. See the trend?
But it’s not just debt burdens that are problematic. ‘Rich’ countries in the West are also rapidly debasing their currencies, spawning tomes of regulatory impediments, restricting the freedoms of their citizens, aggressively expanding the powers of the state, and engaging in absurd military folly from Libya to the South China Sea.
Once again, this is not the first time history has seen such conditions. In our own lifetimes, we’ve seen the collapse of the Soviet Empire, the tragi-comical hyperinflation in Zimbabwe, and the unraveling of Argentina’s millennial crisis. Plus we can study what happened when empires from the past collapsed.
The conditions are nearly identical. Is our civilization so different that we are immune to the consequences?
Probably not. And the cycle that has befallen so many great powers before us– decline, collapse, turmoil, and reset– will likely happen in our time too.
But it’s not the end of the world. Not by a long shot. It’s a complete reshuffling of the deck. A brand new game with brand new rules. And the old way of doing things (like printing money backed by nothing) will be resigned to history’s waste bin.
One of the things that we see frequently in history is that this transition occurs gradually, then very rapidly.
Think about the Soviet Union, which you may recall. One day, they were the greatest threat to the planet. The next day, the wall came down. It happened so quickly. It’s like what Hemingway said about bankruptcy– it happens slowly at first, then all at once.
Unfortunately we don’t know where we are along this path. And we won’t know until we’re over the cliff on the way down. Everything will feel normal until then.
Argentina’s millennial crisis is a great example of this. Argentines woke up in December 2001 and everything still felt normal. Within a few weeks, they had defaulted on their debt, the currency collapsed, and people were out in the streets doing battle with the police.
But since we don’t know precisely when things may happen, it’s a sharp idea to take responsible action that makes sense no matter what, even if all of the world’s problems are miraculously solved. Things like:
- Owning gold and silver (and storing it abroad)
- Acquiring agricultural property overseas.
- Holding savings in a strong, stable foreign bank
- Looking at healthy economies for top quality investment and business opportunities
- Improving tax efficiency and asset protection with proper foreign structures
- Developing relationships with like-minded people
- Learning valuable skills
- Traveling a bit and exploring potential relocation options
- Increasing your digital privacy
- Considering dual residency and nationality options
All of these steps make sense no matter what happens. Yet, should the thesis hold, and we indeed find ourselves on the precipice, then you and your family will be in the best possible position. And that too is a fact.
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It's not being inflated away; the price of gold, in dollars, is simply rising to meet the currency supply. This will continue. Long gold?
You show me yours, and I will show you mine :-)
224 years of empire from birth to peak.. Rome 44 B.C. - 180 A.D ... U.S. 1776 - 2000
Barbarians continued to ran sack Roman empire.. Terrorists will continue to ransack US empire.. but surely our Gov't/PTB are putting up a big fight.
sucks but we go down from here.
Ho! So it will be no different this time than any other time? Mankind will muddle through a relative "dark age" and reinvent itself?
On the contrary. Everything is now different. The world is both filled and exhausted. There is nowhere to turn, no new horizon to venture into. There are no weaker nations to enslave and no hidden mineral wealth to discover and exploit. The seas have surrendered their bounty, and died. The forests are hewn. The waters bottled. The rich lands paved over and the old ways forgotten.
It is oh so different this time around and history gives me little comfort. I wonder if somehow we do not turn this ship away from the rocks of utter annihilation and instead like all the uncounted forgotten peoples strewn as wreckage across the shadows of time, to vanish leaving only stones shaped like we were.
Well, with "easy oil" gone, coal banned ("Global Warming"), ongoing radiological pollution (Northern Hemisphere somewhat "Fukushima-d"), and Global unrest in the headlines every day, all day, you might have a point . . . . .
A few million years weathering and tectonic activity will completely remove any evidence of our being here anyway. Maybe there will be another "Brave New World", maybe not.
What is starting to get really tiresome, and counterproductive, is the casual and deceptive conflation of 'government debt' with the global elite tyranny. The two are not the same.
Most US fiscal problems could be solved fairly easily. The math is not the problem. The corruption and abuse of power that is delegitimizing the Western set of nations is the heart of the issue.
I am sick and tired of posts USING the critical condition of elitist corruption--and the associated but not identical problem of complex systems and their management (or failure)--to pander to defeatists in a heap of whining and collapse BS.
"Most US fiscal problems could be solved fairly easily."
We are beyond the point of solving this fiscal problem. When default comes, and it will come, it is productive to consider what will happen next.
The central piece missing from this article appears to be an understanding of the cause of all of these runups. Here is a clue, all three major monotheistic religions warn of it, and forbid it; usury a.k.a. INTEREST. This is when Mako's dry-style is sorely missed. This game has been going on for well over 5000 years, and as long as we continue to want to have something for nothing, we are going to have to deal with the consequences of our choices. Compound interest, coupled with fractional-reserve banking, makes the ending an absolute certainty. There is no use complaining about it. You just need to hedge accordingly...
'Get ready to run'? And go...where exactly? I hear the moon doesn't have a collapsing global economy yet. When the U.S. doesn't like the way things are going, it'll just beat everyone else up to make them worse. This is how we maintain a 'best country on earth' standard.
P.S. I love charts with no x or y axis labels, dots, and 'we are where?' arrows to stir poignant questioning. More drama than daytime tv but without people picking up chairs to swing at one another. Now if you'll excuse me, Mad Money is on...again... Sell sell sell!
Hey brother can you spare 220 trillion?
The Austrailian have a magic couch, they found 340 (m)(b)illion or some insane number. Just turned up. You should ask them to look around a bit.
Remember the story about some guy making drunken oil trades that caused the price to move about $1.75. I guess guys like him are doing it every single day.
Crude made a nice $4 turn from open until 3PM today.
Why did crude drop $2? Why did it suddenly hit a bottom and rally $2?
"Why did crude drop $2? Why did it suddenly hit a bottom and rally $2?"
You will never know why. Ever. And if they bother to tell you why, it will all be lies. Because they don't know why either.
It is no longer the puppet, it is now the master. You will never understand the meaning behind any of it but you will dance all the same.
Keep up on world news and gold research.Two of the websites that I like are Kitco and GlobalResearch.ca
For most of us these recommendations don't make sense. Most of us will be forced to be local preppers. But for somebody of modest wealth (say, a few million dollars in liquid wealth) who wants to hang on to it, these suggestions do make sense.
Where to find a "strong, stable" foreign bank?
And the answer is simple too...AND IT IS BEING DONE....baaaaaaaaaaarely. It's called "reduce overhead." I have proposed...right here actually...that the United States abandon entirely Eisenhower's Insanity....also called "the Interstate Highway System." that should save one trillion in the first year
That's a good idea. Sedans are for pussies.
Simon's portrait of a simple transition from one order to another, from corruption to liberty, belies his naivete. As the ancien regime collapsed in France, chaos reigned for nearly 2 decades, first in France and then abroad. The situation in Buenos Aires in 2001-2002 was deadly serious: lawless violence in the streets daily. The hyperinflation of German currency, followed by the Depression, gave rise to Nazism, Hitler, and global war. The emergence of new powers (Germany circa 1900 and Japan in the 1930s) such as China have always created serious tensions among the existing powers, especially during times when the power of the status quo is waning.
In all of these instances, firewalls existed, the chaos was limited to one country. In the world today every nation has been seduced by the whore of the American financial system. an every nation is dying of the same disease. This will be bloody. There will be violence on a global scale. This is not going to be pretty... not some great flowering of a wondrous new age... not for a while at any rate. This is going to produce a dark age for humanity. One by one, the lights are going out across the west, and it will be some time before we see dawn.
I don't know if this is all an accident. Lyndsey Williams, the preacher with connections to the Elite, just said on Alex Jones this will lead to a planned One World/Gold backed currency very soon. The plan is to indebt each Country, Town, State as far as possible in order to secure this launch. He also claimed his Elite source said hyperinflation was on the way in 6-8 months as dollars no longed used for oil trade start coming back to the States. I wish I could say this guy is a kook, but he has made some pretyy amazing calls the last few years on AJ. When I look look at Europe, I see a plan, not an accident.
Let me guess, they hope to convert individual and public debt to the NWO currency while maintaining disciplined gold backing for a while, thus ensuring that compound interest sucks up all the outside gold. Then they will restart the paper games, so they can buy all the real stuff with printed money and also bloat up the world government so that when people figure out they've been conned again, revolt will be nearly impossible. They'll give everyone a chip whose balance can be vaporized at the puppetmasters' whim.
One way to shut down the world currency is for everyone to go on the dole while doing odd jobs and barter underground. Will need something to pay property taxes, etc, and for this you give their own crap back to them. But no honest work for dishonest money. No honest work for dishonest foreign overlords.
Better for the interim collapse to be so quick and severe that the puppetmasters lose control; everything burns, everyone hangs.
Long metaldetectors.
I love Simon's posts...
Saves me from going to the Onion to get a few laughs.
I'm still wondering how I will get to my farmland and PM's in Bulgaria when the planes are grounded from lack of fuel.
Has anyone attempted to swim the Atlantic with a pair of water wings?
my bugout bag includes pms and a 2 hour drive to canada with a plane to panama
i didnt spend a month in cetral and south america wasting my time sightseeing
my consern is if america collapses the whole world is liable to be on fireso i may stay and join the rest of the good guys i call neighbors to seeif we can start to create a better society based on the founding principals of this country
- Owning gold and silver (and storing it abroad)
- Acquiring agricultural property overseas.
- Holding savings in a strong, stable foreign bank
- Looking at healthy economies for top quality investment and business opportunities
- Improving tax efficiency and asset protection with proper foreign structures
- Considering dual residency and nationality options
Nearly all of these suggestions really only work for about 10% of the population.
Not a single person in my circles have any ability to "Own AG property over seas" or Relocating outside the country.
Us 90%'ers will all have to go thru this nearly in-situ
ah yes,... indeed, reminds me of an ole fashion'd catenary-curve chainmail bridge... spanning the fiscal cliffs of the great abyss... this rubiconic delta of fait accompli? the one spoken of at present, being collaboratively made-up as a daisy chain of fused [beggar'd thy neighbour?] tin-cans. their metal lids meshed together by a thinly woven hemp fiat called a currency. sadly, this rehypothecated life-line curve is perilously upon the nadir of no return... but ironically it is knot? the hypsometric axis of evil[?], nein... but, a simplistic cashier's balance drawer... 'mia' a 'franklin', that fractures the vertex- bringing down this keynesian zenith ponzi republic built on a foundation of invisable electrons! this faustian operation... this 'cantenary can'd-kicked chainmail bridge'!
musing the day away looking upon the gatekeepers shadow that seems to have found 'fifty-shades-of-grey' in an endless twilight on a street call'd liberty hill?
btw Great read :-))
Since 'if" a collapse is certain and I, along with most of you beleive it is inevitable, the "when" will not matter if we are as ready as we can be when it arrives. Last week, I had a pick-up truck load of oats, wheat and grits under tarp rolling through my town. I was stopped at a red light when along side pulls another pick-up. Four people in the front seat, I couldn't help but notice the 200"(exageration implied but form the size of the box, it was a big mutha) LED TV in the back of the truck. I couldn't help but think about their kids and what will happen to them "when" it all comes down. However, my responsibility is to MY kids & grandkids first. Would I love to have a 200" TV? Maybe, but priorities come first.
"Argentines woke up in December 2001 and everything still felt normal. Within a few weeks, they had defaulted on their debt, the currency collapsed, and people were out in the streets doing battle with the police."
As an Argie myself, I'd debate this notion. Things went progressively bad during the De la Rúa presidency, having all the bad things he inherited from the previous administration (huge debt and currency peg), and made them worse progressively as the "Alianza" (the party, formed through an alliance of non-peronista parties) started to crumble. In the end when they brought Cavallo back we all knew that shit had hit the fan. Everybody was expecting a decoupling from the currency peg. The surprise was when Saa defaulted. That was unexpected, but was well received as those debts from the Menem era weren't very legitimate in the eyes of the people. After all during those days we had like 5 presidents in a week or something...
All of this economic turmoil has been brought about by humans and the materialistic urges that drive us. Just think about it, create something that's desirable and pitch it to people who want it but can't afford it so what do they do, they borrow! Whether its a house, car, HDTV, phone whatever, people will get into debt to acquire something they think is cool and they must have.
Governments only get into power (unless they're a ruthless dictator) because they promise people things that they want. Better health care, education, employment, a better economy, you name it. The thing is that most Governments can't deliver what they promise because they're too expensive but they have to appear to be doing the right thing so what do they do, they borrow.
The reality is that we are all rushing towards a capitalistic big bang where economies implode and war breaks out as countries entrench to protect their own nationalistic interests. With too many vested interests and different political views the world will soon get to an unmanageable state that will quickly cause outright confrontation, you can already see this starting to happen in some places in the world. Will this result in an all out nuclear war? You bet.
With any luck some people may survive and what's left of humanity will have to start again, let's hope that next time round they learn from our mistakes. Meanwhile, I'm off to live the simple life on an island in the sun and be as self sufficient as possible. Everything's planned right down to how I ship my dog out by air (with: www.passportforpets.co.uk/air-pets-shipping.php). Come on people, plan ahead and get ready for it oh, and don't forget to take a look at upper atmospheric winds to try and choose somewhere the fallout will not be so great, I'm hoping I've got it right! With luck things will stay as they are long enough until I get established with some crops in the ground.
Facts not fear?
It's either the slammer for the global cabal clowns or it's WWIII, and everybody knows it. The "good guys" want the global criminal cabal in handcuffs, while the "bad guys" want false flag attacks and WWIII. The FED banks and the BIS have had liens placed on them by the BRICs alliance of nations and THE WORLD WANTS IT'S STOLEN GOLD BACK. The end of debt-slavery, the end of dollar-denominated trade, and the return of the Republic are all within sight.