fuTuRe sHOcK

Bob Chapman
International Forecaster
…All of our government’s statistics are bogus. The bailout was for the most part for money center banks, the big financial conglomerates and transnational corporations. Those funds went to the insiders, not to smaller institutions. They were for the crime syndicate, the corrupt Illuminist mafia. The next step after the election is the monetization of money and credit and horrible hyperinflation. Soon the dollar short covering will be history. Libor has already fallen and is back in its normal place. Credit derivatives and credit default swaps has produced a demand for dollars for settlement payouts. That will soon end as well. Fifteen months ago these derivatives began to fail and that systemic failure is ongoing. It will end in the complete collapse of the dollar.

This is the same barbaric horde that just sent the commodity market down almost 60%. They are now waiting to take it back up again to plunder the public once more. They bashed commodities and gold and silver because the rush for real assets had to be destroyed even though it was temporary. As a result there was a rush into physical gold and silver products, a resultant shortage developed. The elitists saw that and not wanting more physical gold in the publics’ hands the mints in Johannesburg, Canada, the US and Mexico shut down. Do you really think that was coincidence? They do not want gold and silver attractive because they are going to hyper inflate. At least for the next two to three years inflation is going to rage. Money and credit are still expanding at 12-1/2% and inflation is 12-1/2%. What deflationists do not seem to grasp is that the elitists will keep the system running because they do not want a crash until they can get a major war underway, as a distraction; another way of adding wealth, and for getting a tighter grasp on power and to further exercise population control. The question is when will the viability of America debt be questioned?

Will the failure to deliver US treasuries break the market and not nonparticipation? We do not know but it is surely possible. This is why we have not for some time recommended US Treasuries, but instead Swiss franc Treasuries for those who prefer a partial cash position. It is very simple. The more debt the US government creates and the more money and credit the Fed creates the more the value of the dollar depreciates. Worse yet, the collateral being presented for the exchange of Treasuries is essentially worthless. We also believe Treasuries are being created and not being reported in order to satisfy the perceived flight to quality. Remember, these people do not tell the truth about anything and they believe as the Illuminated ones that they can do anything they please. That is why we continue to tell you to be out of US government and debt paper as well as the stock market. The only exceptions are gold, silver and oil and gas stocks. Cash out your retirement plans if you can and move them into gold and silver related assets.

We can promise you two things, hyperinflation and eventual Treasury default. Why do you think on 11/15 major nations are meeting to form a new monetary unit? It will take several months. But it is about to happen. The dollar as a reserve currency and as a store of value is finished and many other currencies will follow. Remember 64.5% of world central bank reserves are in US dollars. No country is going to survive this unscathed. There will be a trigger as there always is. It probably will be an economic event or a string of events that begins the dollar collapse. There are things going on we know nothing about, but which we will soon find out about.

We have another couple of bubbles coming. There is a pension bomb that is in process and the credit card bubble-bomb. Lenders wrote off about $21 billion in bad credit card loans in the first half of 2008, and they haven’t even scratched the surface yet. Companies are laying off millions of workers and it is currently conservatively estimated that by the end of 2009 they’ll lose another $55 billion. Currently losses are 5.5% of debt outstanding and probably will easily exceed 8%.

As lenders rethink their lending rules our credit-hooked nation is rethinking their credit habits. It is about time lenders smartened up and stopped being greedy and it is about time Americans started paying for gas, food and other items with cash. You should only be using credit cards for emergencies and you should pay off your debit every month. In 2005 mortgage extractions were $595 billion, in 2007 they fell to $470 billion and the second quarter of 2008 saw $9.5 billion. At that rate we’ll see a 90% drop from 2005.

Total loans from commercial banks grew by $89 billion yoy to December. Of that $61 billion was credit card debt. That means banks only lent $28 billion to business or to individuals. These numbers show you how stressed consumers are, amid accelerating job loss, low wages and high inflation, home price deflation, the effects of illegal immigration and the losses in equity in stocks, never mind having their retirement accounts clobbered. Credit card debt is up – it has risen more in the recent 10 weeks than it has in the previous 10 months. The increase is annualized at 48.3%. American Express delinquencies on credit payments rose to 4.1% in the third quarter, up from 2.5% yoy, their pool of uncollectible loans to a high of 6.7%. If it weren’t so sad the following would be laughable. The second largest credit card merchant vendor is McDonalds. This is a sign of very serious distress. This level of credit card usage is unsustainable.

All this comes as stock market losses worldwide reduced global wealth by $16 trillion. A good part of which was in retirement accounts. This coming year government will admit to unemployment of more than 9%. That puts U6 at 14% and long-term at 17% using government figures. The duration of current unemployment is nine months or 38 weeks. That will be at least 14 months at the end of 2009. Unless unemployment benefits are expended an additional six months they’ll be lots of people in serious financial trouble. That means less consumption, which will feed recession. Incidentally, that will widen the budget deficit. Unemployed don’t pay taxes and that means less revenue.

We see a 2009 budget deficit of $1.2 trillion plus, as the recession deepens. The only thing keeping the end of 2009 out of depression will be massive injections of money and credit and that will cause the dollar to fall and inflation, gold and silver to rise. With all this in the mix we see would-be newsletter writers, economists and analysts predicting already slow recovery by the end of 2009. In order to be politically acceptable they didn’t recognize recession until a few months ago, a year and one-half behind the curve. This in spite of massive welfare during the year. More

Tags: "credit default swaps", American Express, bailout, commodity market, credit derivatives, deflation, hyperinflation, McDonalds, US Treasuries