Porter Stansberry has been one of the most popular investment analysts over the past several years warning Americans about impending financial collapse. Here’s some of what he has to say in a new video-newsletter sales page.
He was prescient before the global financial crisis in cautioning about the fall of Fannie Mae and Freddie Mac, Lehman Brothers, General Motors and other major banks, insurance companies, etc. For years he has been warning about the financial catastrophe that is destined to strike America, the loss of the dollar as the world’s foreign reserve currency.
As bad as the 2009 global financial crisis was, Porter sees a much bigger crisis looming, one that will “shake the very foundation of America”.
During the last four years of stock market reflation by the Federal Reserve from quantitative easing, Americans have returned to a state of benign complacency. All appears well with the world. The stock market has recovered and gone to new highs. Real estate has recovered some of its losses. Unemployment has improved slightly and the housing market has fewer foreclosures and lower interest rates.
What most people don’t understand is that these improvements in the economy are the result of monetary policies with dire consequences for our future. The Federal Reserve has been printing money and buying all the bad debt of the banks that went broke in the global financial crisis. These banks have not used the money to reinvigorate the economy by loaning to businesses, but have instead used it to speculated in financial markets, creating another bubble in the stock market.
Therefore, the American financial system is actually in a far more dangerous and precarious position now than it was four years ago during the global financial crisis. How much more dangerous? According to Porter Stansberry, a lot.
He is calling for an end to life as we know it, a “near-complete shutdown of the“. Governments will shut down. Banks will close. Businesses will stop operating. He even expects to see martial law imposed by the US military. Say hi to Big Brother.
The collapse of the American economy and perhaps the global financial system is inevitable. It is the only logical conclusion that can be drawn by looking at the accounting and the numbers. It is not some wild eyed speculation based upon emotion, but the only endgame of a government that refuses to operate with fiscal responsibility towards creditors and the American people.
The savings of millions will be wiped out. This disaster will change your business and your work. It will dramatically affect your savings accounts, investments, and retirement.It will change everything about your normal way of life: where you vacation…
where you send your kids or grandkids to school… how and where you shop… the way you protect your family and home . . . I am literally afraid for my family’s future.
Americans have been fooled by their government into thinking that a policy of printing money out of thin air and going further and further into debt is sustainable in the long run. It is not. There will be dire consequences for the foolish, feckless decisions we are making. Our children will suffer for it. And we, the people, are responsible. We can blame our government all we want, but we, the people, are responsible for the government we put into place, or more importantly, allow to stay there.
It is we, the people, who were responsible for changing our government that is not protecting our civil liberties or acting with fiscal responsibility. We, the people, are responsible.
Porter Stansberry is calling for rampant inflation from the devaluation of the dollar due to the feds out of control printing, or “Quantitative Easing” if you want to put an official sounding name to it to confuse people into believing that what you are doing is sound monetary policy.
The problem is that the American government is going so deep into debt they soon will no longer be able to repay even the interest on the debt. The reason the Federal Reserve has been printing so much money is a desperate need to keep interest rates near zero so that we can keep the interest on the debt as low as possible to “kick the can down the road” awhile longer. What is he endgame? When is zero hour?
However, because interest rates are destined to rise and have already begun doing so, the interest on our debt is about to explode. We are already at the point of being unable to repay the interest on our debt, and with the rise of interest rates our ability to repay our debt will vanish into the vapor from whence came the “no money down” American Dream.
Ask the millions of people who are unemployed and unable to find a decent job how the American dream is working out for them. Ask the millions of people who have recently had their homes foreclosed how the American dream is working out for them. Ask the citizens of the city of Detroit that recently filed for bankruptcy how the American dream is working out for them.
Here are some numbers you may find interesting. Every hour the US government spends $200 million that it doesn’t have. To put that into perspective, “in just two months, the government borrows more money than the combined annual profits of the 100 largest publicly traded companies in America”.
Does that sound sustainable to you? Does that sound to you like a government that is acting responsibly towards its citizens? Does that sound like a government that should be hoisted into Boston Harbor?
The largest US banks went broke during the global financial crisis by committing fraud with mortgage-backed securities. Rather than prosecuting these criminals and putting them in jail where they belong, the government bailed them out by giving them $trillions of taxpayer money. “Various other government agencies and private companies taken over by the government also have obligations of nearly another $5 trillion. We’ve already booked complete losses on $140 billion worth of these obligations. Yet they remain completely off the federal balance sheet.”
When you add together all the debt obligations of the federal government today, we owe more than $20 trillion. “Far more than half of these debts were assumed under Pres. Obama”.
The US government today carries more debt than any country in the history of the world. More debt than every country in the European Union combined.
The US government has been sinking farther into debt than they can afford to go, and farther into debt that is morally and financially responsible. In order to pull off this scam, what will amount to the greatest transfer of wealth in history from the middle class to the wealthy 1%, the Federal Reserve has manipulated interest rates 10 times since August 2007 from 5 1/4% to somewhere between zero and .25%.
This was done to defer the time when the US government will have to default on their debt obligations — when Bernanke and Obama will have retired to their Caribbean yachts. This was an unprecedented manipulation of the financial system by the Federal Reserve in the interests of wealthy bankers and at the expense of the American taxpayer.
If interest rates were to rise to just 4%, a historically low level, America would have to repay $34.3 trillion to repay the debt that is owed now. If interest rates rise to 6%, our $20 trillion worth of debt will explode to $43 trillion.
“Now, of course, our politicians believe that through policy and currency manipulation, they can simply avoid paying any of these costs. They can order the Federal Reserve to prevent interest rates from ever rising to a level that would cost the American people anything. They believe they can manage the economy, so the debts of Fannie and Freddie won’t go bad. They believe (without any proof whatsoever) that they can stimulate the economy by even more deficit spending, so that it grows faster, allowing tax revenues to produce a surplus. Repaying these debts, they say, will be easy and painless.
But you know better, my friend. You must know better. The wages of sin must be paid. And they will be paid.”
“We are trapped. There is no way out.”
The reason why this financial con game will come to an end is because America’s creditors, the people to whom we owe money, are not so stupid as to allow us to continue to devalue our currency in order to repay our loans in worthless currency. We are only able to do that now because we are the only country in the world able to print US dollars, and the US dollar is currently the world’s reserve currency.
What does it mean to say that the dollar is the world’s reserve currency? What it means is that major commodities around the world must be bought and paid for in dollars, not the local currency of individual countries.
“Here’s what I mean… Let’s say you’re a German and you want to buy oil from Saudi Arabia. You can’t just pay for your oil in German marks (or the new euro currency), because the oil is priced in dollars.
So you have to buy dollars first, then buy your oil.
And that means the value of the German currency is of great importance to the German government. To maintain the value of its currency, Germans must produce at least as much as they consume from around the world…otherwise the value of its currency will begin to fall, causing prices to rise and its standard of living to decline.
But in America…?
We’ve been able to consume as much as we want without worrying about acquiring the money to pay for it, because our dollars are accepted everywhere around the world. In short, for decades now, we haven’t had to produce anything or export anything to get all the dollars we needed to buy all the oil (and other goods) our country required.
All we had to do was borrow and print more money.”
Governments like China, Russia, India, and various Latin American and Asian countries are planning ways to get off the dollar as the world’s reserve currency. That means that the US government will no longer be able to print dollars as a way to lower the interests on its debt. The game is over.
“As a result of what our government is doing today, I’m confident we will soon see an end of the U.S. dollar standard.”
Stansberry goes on to teach us a bit of history. British currency was the world’s reserve currency for most of the 18th and 19th centuries. That came to an end after World War II. Like Barack Obama today trying to socialize the losses of private companies and the government, Britain also pursued a socialist national agenda. The country went broke.
In 1967, out of desperation that mirrors Japan of today, the British Labour Party decided to devalue the British currency by 14% overnight. This was a disaster, as the devaluation of the Yen now will be for Japan, and Britain suffered one of its worst decades in British history.
Here’s a photo of the garbage that piled up because the British government was unable to pay garbage collectors a fair wage. Is this what America is coming to?
So consider the parallels between Britain and the United States. For 150 years the British sterling was the world’s reserve currency until Britain began to devalue its currency in exactly the same way as the United States is doing now. Will the same thing happen to the United States as happened to Britain?
The US government says inflation is well controlled, under 2%. Do you believe that? How much do you paying for gasoline at the pump now? How much are you paying for your child’s education? How much are you paying for food at the grocery store? How much are you playing for clothes and virtually everything else? Do you believe the US government when they say that inflation is under control?
Since 1900, the purchasing power of the US dollar has declined 96.4%. It has declined 50% since its peak in 1985, and 30% below its level when the Bretton Woods system was abandoned in the early 1970s.
As James Rickards writes in his new book Currency Wars: “If the currency collapses, everything else goes with it… stocks, bonds, commodities, derivatives and other investments are all priced in a nation’s currency. If you destroy the currency, you destroy all markets and the nation.”
Speaking of currency wars, why do you think Japan recently had to go on a massive Yen printing spree, devaluing its currency by about 15% overnight? This was in direct response to the trade war with China over the Diayu islands conflict.
And why do you think the price of gold was recently annihilated? Because countries like China have been buying gold in large amounts in an attempt to move away from the dollar as the world’s reserve currency. This devaluation of gold is an attack by the Western banking mafia on Asian countries over financial hegemony. This is the United States’ Way of saying, “so you want to buy Gold instead of the US dollar? Well here is what you get when you buy gold. We can control that too.”
“Remember, we as Americans are not immune to the basic laws of economics and finance.”
Even George Melloan from the Wall Street Journal has to admit, “Indeed, it is unlikely that Americans themselves will escape the inflationary consequences of current Fed policy…. The Fed is financing a vast and rising federal deficit, following a practice that has been a surefire prescription for domestic inflation from time immemorial.”
If the Federal Reserve continues to print money the way it has been, you can be sure that the United States will experience a crisis of inflation and currency devaluation. What that means is that life as you know it will change forever, and not for the better.
The recent bankruptcy of Detroit is a sign of things to come. “. . . according to the Center on Budget and Policy Priorities, a Washington, D.C.-based think-tank, some 31 states are working to close $55 billion in shortfalls for the 2013 fiscal year”.
Here’s what New Jersey Gov. Chris Christie had to say about this problem.
“It’s not like you can avoid it forever, ’cause it’s here now. And we all know it’s here. And the federal government doesn’t have the money to paper over it anymore, either, for the states. The day of reckoning has arrived. That’s it. And it’s gonna arrive everywhere. Timing will vary a little bit, depending upon which state you’re in, but it’s comin’.
“We spent too much on everything. We spent too much. We spent money we didn’t have. We borrowed money just crazily. The credit cards maxed out, and it’s over. It’s over.”
So remember what is really at stake here, and what the fundamental problem really is.
If you look at the promises the federal government has made with Social
Security, Medicare, Medicaid—the current value of those promises is
$124T. It is unreasonable to make these promises. It’s insane. If you
took the collective value of every privately owned asset in the country,
it comes to $99T. The government has not only promised more money than
it’s ever going to have, it has promised more money than we all
collectively have. Or consider this nonsense: Americans hold $1T in
student loans! Are you kidding me? Does it make sense to anybody to
spend $75,000 to become a dental hygienist? It has become the Fed’s job
to make this huge lie—the idea that we can borrow and spend our way to
** And this is the important point to remember: What most people don’t realize is that the U.S. government can only continue printing dollars… as long as the U.S. dollar remains the world’s reserve currency.
Alan Wheatley, a global economics correspondent for Reuters recently wrote:
Fed up with what it sees as Washington’s malign neglect of the dollar, China is busily promoting the cross-border use of its own currency, the yuan.”Displacing the dollar, Beijing says, will reduce volatility in oil and commodity prices and belatedly erode the ‘exorbitant privilege’ the United States enjoys as the issuer of the reserve currency at the heart of a post-war international financial architecture it now sees as hopelessly outmoded.”
In fact, in the past couple years, China has signed international currency agreements with Germany, Brazil, Russia, Australia, Japan, Chile, the United Arab Emirates, India and South Africa.
Veteran Middle East reporter Robert Fisk . . . wrote:
In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealing for oil, moving instead to a basket of currencies including the Japanese Yen, Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
Even the IMF, the International Monetary Fund, has discussed using “Special Drawing Rights”, or SDR’s, in place of the dollar as the sole reserve currency. So it’s not a matter of if the United States will lose the dollar as the world’s reserve currency, it’s just a matter of when because the process is already underway.
Did you know that one in seven Americans or 15% of the population – 46 million people – are living on food stamps? Did you know that the average household debt has risen over 1000% to $13 trillion in the last 20 years? Median household income 8.9% lower than in 1999?
This is the wealthiest country in the world?
If corporations are making so much money with record profits and balance sheet reserves, why is unemployment refusing to come down? In the old days, if someone didn’t have a job they were considered to be unemployed. Now, the government has come up with a brilliant scheme to skew the numbers and make it seem as if the employment picture is better than it really is.
Now a person is considered unemployed when they are receiving unemployment benefits, but when their unemployment benefits expire they are no longer counted as unemployed. Sound reasonable? In fact, the unemployment rate in America is far higher than the government is reporting.
14 million Americans get a disability check from the government each month. In West Virginia, almost 10% of the working age population is on disability. In Hale County, Alabama, 25% of the working age population is on disability. Is this the picture of a healthy country? Damn liberal bleeding heart socialist leeches of entitlement bringing down the country.
An article in Forbes magazine has estimated that over 14% of Americans are unemployed, about double the officially reported figure.
America now has the highest corporate tax rate in the developed world.
My favorite quote from Porter Stansberry:
We supposedly live in a free country—but try giving up your passport and leaving. We supposedly have free-market capitalism—but what happens to the entire world’s markets when Fed Chairman Ben Bernanke speaks? What he says drives all of the world’s stock markets, bond markets and currency markets.
I do not think we have free-market capitalism when one man’s opinion determines the outcome of every market in the world.
Get your money away from the despotic clutches of the American government. Open an offshore banking account. Get a second passport in another country. Acquire “safe” assets such as gold, silver and farmland. If you want to buy stocks, sell cash secured puts instead. Moved to a safe country outside the United States, like so many people are doing now.
There are so many beautiful countries outside the United States with less intrusive governments, lower taxes, and a far more affordable lifestyle. Open your eyes and look outside the box. You just may see a National Security Agency goon staring back at you.