- We are most certainly not out of the recession in ant real way. The main positive seems to be the stock market rally since the low of March 2009. What has Wall Street got to do with Main Street? Not much really! Bob Chapman explains the coming disaster facing America in this interview. He writes (emphasis mine):
One thing we can say for sure about 2009 is that markets witnessed the worst manipulation ever by the President’s “Working Group on Financial Markets.”
Over a 15-month period ending 9/30/09, together the Fed and Treasury borrowings were $2.81 trillion. This has been the greatest creation of financial aggregates in history. This tidal wave of money and credit was accompanied by just above zero interest rates. Then there was the Fed’s trillion-dollar purchase of toxic mortgage securities, which the Fed refuses to tell us what they paid for them and from whom they bought them. Total monetization has been well over $2.3 trillion that we know about.
The result of this tremendous infusion of money and credit has been the survival of banking, Wall Street and insurance, and a fall in household net worth of almost $7 trillion. We’d call that an uneven, unbalanced performance. The culprits have been bailed out and the public has paid for it. The next natural question is what will the Treasury and the Fed do for an encore? The treasury is running a $1.7 trillion deficit, and is the go to source for employment. The Fed says it is going to withdraw liquidity from the system and that they intend to raise interest rates in July or there abouts. If this is the case you had best prepare for a deflationary depression. We do not believe the Fed for one second. Do they really believe this will save the dollar? We do not think so.
That leads us to our latest information gleaned through private Fed meetings. They believe the period between July and October is when the financial fireworks will begin. The Fed will act unilaterally for its own survival irrespective of any political implications. In the last quarter of the year we could even see Martial law, which is more likely in the first six months of 2011. If Congress passes any kind of health care, the public will go ballistic and be prime for revolution. Our position is that bank lending will not improve nor will unemployment. If this is accompanied by official devaluation and default everything could break loose. The elitists realizing this will arrange another 9/11-type event with the usual cast of characters and we expect conflict will spread into Pakistan and that Israel will attack Iran enveloping the Middle East in flames. That would send oil prices considerably higher and cause a collapse of world stock markets, with the exception of gold and silver shares.
The excuse to impose Martial law would be apparent. The country could go into lockdown. Transportation could be limited, food and gas rationed, banks closed and many other major inconveniences. The current mainline media, Wall Street and governmental propaganda about economic recovery would end, they never having to prove that a recovery ever existed. During the first six months of 2010, Americans and others will continue to live in their world of inreality. These hopeless fools are again being taken down the garden path. The world as we know it is about to change dramatically, so prepare for it.
….. China has publicly stated the world has run out of enough dollars to service public debt. That means more Fed monetization, perhaps on a level of more than $1 trillion a year. That means hyperinflation, because the elitists won’t be ready, as yet, to pull the plug on the economy and plunge into deflationary depression. They have to increase terrorist events and world war on a parallel basis, so that all strike at the same time. This way they can blame the economic financial problems on the enemy who would be responsible for this horrible war. These are all the reasons for having freeze dry and dehydrated foods, a water filter and a method of defending your family as a first line of defense. All other funds should go into gold and silver coins and shares. For 20 years of publication we have been correct 98% of the time, thus, a word to the wise should be sufficient. If you do not follow these instructions your lives will be in peril. The bottom line is the Fed has no choice but to monetize and that means inflation is going to spiral out of control. You have to be prepared.
As this unfolds all currencies will fall versus gold and silver as they have for the past 6-1/2 years. Being long any currency is foolhardy. You should only have enough for three months operating expenses as a family and six months for business. No CD’s, cash value life insurance policies or annuities. Many insurance companies will go under and as a result not pay off. Things are not the way they seem to be. Nothing that emanates from government, Wall Street, banking and corporate America is to be trusted, it is 80% disinformation. That is why we do 30-hours of radio programming a week and publish 100 pages in the IF. We know we are one of just a handful of people in the world trying to bring the truth to the public to save them grief and perhaps their lives.
In the next 1-1/2 years we expect the US to officially devalue and default along with many other countries. There will be emergency meetings, one after another, as governments attempt to cope with, internal debt and a collapsing financial system. Not one government is attempting to solve the problems, only treat the disease. The system has to be purged as soon as possible and as an interm alternative the US dollar has to be abandoned as a world reserve currency, and replaced by the weighted currencies of the G-20, backed by 10 to 15 percent in gold. Later the gold reserve can be increased to 25 to 30 percent. That will put gold prices somewhere north of $10,000 an ounce. We now know that real inflation, since 1980, justifies a price between $6,700 and $7,150, but with hyperinflation on the way, who knows where the top price will be. As you can imagine we are probably two years away from currency controls. That means government permission to move assets in or out of the country.
Remember, irrespective of what the media, government and Wall Street tells you, we are already in a depression and we have been for almost a year. 21.9% unemployment, that will be 23% after February, denotes a depression and all the lying by these entities is not going to change this.