One portentous indication of trouble just surfaced on Jan. 3 when it was revealed in a headline: “Billionaires Dumping Stocks.” The article on Newsmax website reported that Warren Buffet is “dumping shares at an alarming rate.” In fact, he sold 19 million (no misprint) shares of Johnson & Johnson and he is very disappointed in Procter & Gamble, Kraft Foods, and others.

Billionaire John Paulson also dumped 14 million shares of JPMorgan Chase, and all of his shares in Family Dollar and Sara Lee.

Then there’s billionaire George Soros, the radical leftist that conservatives love to hate, who sold almost all his shares of JPMorgan Chase, Citigroup, and Goldman Sachs. Obviously, George doesn’t have any confidence in financial stocks. Humm, wonder what he and his fellow billionaires know that we don’t know?

Maybe these wealthy elite know that a massive correction is coming on Wall Street. Highly revered economist Robert Wiedemer, author of the best seller Aftershock, says that the stock market could fall 90%! Wiedemer predicted the collapse of the housing market in an earlier book.

Standard and Poor’s suggested that Wiedemer’s prediction “demands our attention,” while Philip Gross, founding CFO of American Online said the book was “A compelling argument for a chilling conclusion.”

CNN reported that about half of Americans agree with the doomsday predictions: “48% [of Americans] see a second Great Depression.” I think it will be called, “the Greatest Depression.”

We must remember that our government is $17 trillion in debt, almost $150,000 per taxpayer! But then we must take our pencil from behind our ear and add Social Security obligations, Medicare, etc., totaling more than $100 trillion!

The average American needs to look at the facts, analyze his personal financial condition, and make some difficult decisions. Does he believe Obama who said, “The private sector is doing fine,” or does he consider that statement like Obama’s assurance that “You can keep your doctor, period.”? Or maybe he believes the Washington Post that assured us with a headline: “No Housing Bubble to Pop” or the Washington Times’ headline, “No Housing Trouble,” or the conservative National Review’s article, “Hate to Burst Your (Housing) Bubble, But There Isn’t One.” Or the revered Wall Street Journal: “Housing Bubble? The Market Won’t Pop.” Pop, pop, pop. They were all wrong!

Or the average American could believe the financial wizards on the television shows who never said a word about the imminent massive collapse of Enron in December of 2001. The financial experts were telling us to buy right up to the collapse! And they never apologized!

Everyone knows that those experts and many others were wrong about the housing bubble as they have been wrong about many things.

So, when the stock market hits bottom, 50% of Americans are out of work, bankruptcies soar skyward, and cities and states go belly-up as is happening as I write, you will know the nation is on the cusp of a shutdown mode. Does that mean riots in the streets accompanied by martial law? Wiedemer thinks not, since “that did not happen in the Great Depression.” However, the astute economist may know finances but he apparently doesn’t know human nature: this disaster will be far worse than the 1930s and Americans today don’t have the character those citizens had. Plan on it: panic, suicides, hunger, food riots, gang violence, etc. A recent British study declared that we were “nine meals from anarchy!” I don’t feel lonely anymore!

How do the optimists in their rosy glasses defend their positive view in light of our massive debt? Today, the U.S. has more government debt than any country in the history of the world! In fact, we have more national debt than all the nations in the European Union put together!

So, what is the Fed’s answer? Well, the Federal Reserve has been printing $85 billion per month; that’s more than a trillion dollars a year! That means the dollars in your pocket are worth less, or is that worthless?

Presently, when a nation wants to purchase a product from us or any other nation they usually make payments in U.S. dollars. They could choose the British pound sterling, the Chinese yuan, or the euro; however, only a few nations bypass the dollar. That is going to end. We have begun to see the “flight from the dollar.” China, Russia, and the United Nations, as well as some Muslim nations are already on record that they want to back off the dollar as the world’s reserve currency.

Why is the U.S. dollar so special and is used by almost 70% of nations as the reserve currency? It is because the market for U.S. Treasury securities is “liquid and deep.” “Liquid” means the dollar can be sold quickly and “deep” means a large amount of dollars can be sold without impacting the price of the currency.

When I have traveled in Europe, Asia, the Middle East, Australia, etc., I never changed dollars into the currency where I was traveling. I always used U.S. dollars but those days have changed. It is now common for the dollar to be refused as I experienced in Africa and Japan.

Sam Zell, the 60th richest man in the U.S., told CNBC: “My single biggest financial concern is the loss of the dollar as the reserve currency. I can’t imagine anything more disastrous to our country…I think you could see a 25% reduction in the standard of living in this country if the U.S. dollar was no longer the world’s reserve currency.”

James Richards wrote in his Currency Wars, “If the currency collapses, everything also 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.”

In light of the above facts, it seems we are in the slowdown, and the shutdown or collapse is starring us in the face. So, how will the politicians extricate the U.S. from the bottomless pit– dug by the same politicians? Enter the shakedown phase.

The London Telegraph of January 4, 2014 reported, “Much of the Western world will require defaults, a savings tax and higher inflation to clear the way for recovery as debt levels reach a 200-year high, according to a new report by the International Monetary Fund.” Author Ambrose Evans-Pritchard opined that the debts of many nations are so huge that it “will require a wave of haircuts, either negotiated 1930s-style write-offs or the standard mix of measures used by the IMF in its ‘toolkit’ for emerging market blow-ups.” He says that what debtor nations must and will do is use huge taxes, massive inflation, and debt repudiation to stay afloat. He says we will all get a close-cut financial “haircut.” I think he means a scalping, not a haircut.

That amounts to a shakedown. There will be no other choice. Weary, worn, wrathful citizens will be forced to pay for the failure and corruption of generations of pompous, prissy, profligate politicians.

Slowdown, shutdown, or shakedown? All three are in your future ending with a showdown! I’m afraid that the sky is falling after all.

http://bit.ly/1iMLVfY  Watch these 8 minute videos of my lecture at the University of North Dakota: “A Christian Challenges New Atheists to Put Up or Shut Up!” And pass it on!

Copyright 2014, Don Boys, Ph.D.

DUMPies are Destitute Unprepared Mature People who had “confidence in the system” and who were “sure everything will work out all right.” However, their faith was in the wrong place.

My view of the immediate future is one of gloom but long-term it is glory! However, we must live in the here and now, and Christians would be wise to plan for “hard times” because hard times are coming.

The financial experts (those talking heads who never told people to sell before the dot.com crash and the present popping of the real estate bubble) always put a positive spin on every negative problem. It is always a “buying opportunity.” However, when you look at the unemployment figures, plunging real estate values, consumer spending, manufacturing, savings, bankruptcies (personal and corporate), credit-card debt and loan defaults, it is obvious that the nation’s economy is in deep trouble.

Those of us not trained in economics can understand a simple fact: when falling income and rising debt converge on the same family or business, the result is financial disaster. We are at that juncture today, even a Harvard professor knows we are in a recession and speeding swiftly into a major depression! Yet the wise guys on Wall Street and media pundits tell us “we are in recovery.”

However, remember that not one famous Wall Street oracle told us to SELL before the market started sliding. No, it is always a “buying opportunity.” You see they are called “brokers” because if you deal with them very much you will be broke! Do you know that none of the Wall Street hot shots or television pundits told us to sell Enron even as close as a couple of weeks before it sank! As the ship was going down, it was time to buy more shares of the Titanic!

I expect many large corporations, banks, S & Ls, and insurance companies to go belly up. If one has money, he should diversify. In fact, rather than have savings or CDs in banks, I would have some in Swiss annuities.

Swiss insurance and annuities are 100% funded by a currency not backed by gold but “as if it were.” There is no reporting to the IRS or any other agency and no taxes are paid until one receives payments, usually when one is much older and is required to pay less taxes. These financial instruments are easily purchased (at the present time) from US representatives—at no commission although Swiss companies may not solicit business in the U.S. One may buy directly from Swiss companies or use a U.S. rep. The interest on Swiss annuities is higher than what U.S. companies are paying.

My point is to do what the very wealthy have done for 300 years: send some of your money where it is safe. Often the very wealthy are greedy but they aren’t stupid. They send their wealth outside the states before the blood flows in the street—Wall Street, that is.

Our problems are not exclusively American. Japan had been sinking into recession for many years after many of their high dollar U.S. investments went south a few years ago. You may remember that Japan walked away from their investment in Rockefeller Plaza. Recently, Japan’s large banks have improved their financial standing.

Japan is the lender to the world—the source of 60% of the world’s loans. Where will the money come from when Japan dries up like an old Jersey cow?

The party is over in South Africa and disagreement, disdain, and distrust rule the day. The silver lining is gone and a dark cloud hangs over the nation in which liberals had put much hope. Mandela promised homes and jobs and was not able to produce, and the natives are restless on the reservations. It is a nation of malcontents, and any small spark could set off a powder keg that would reverberate around the globe.

Mexico has problems in at least 14 states besides Chiapas. Two political assassinations and about 200 extortion kidnappings have not helped stabilize the nation where the peso was devalued in 1994. The U.S. bailout was too little too late. I expect massive bankruptcies, social unrest, assassinations, political corruption and general turmoil. Moreover, it is folly to think it will not cross the Rio Grande. Everything else has!

Putin may lose control of Russia and a new “strong man” may appear who will try to reconstruct some of their losses after Communism’s collapse. I see many more problems between Russia and former members of the Soviet Union. Many of the “republics” have “former” Communists in the driver’s seat, and they can’t drive since they always turn left! In addition, the Russian mafia is almost running the nation. It is sure running many of the banks. Bribery, political corruption and intimidation are widespread. Not only could the economy collapse, but also anarchy could be their future.

Of course, there are massive problems in France, England, Germany, etc. The dark cloud covers most of the world indicating a storm is coming. Make reasonable preparations, and lash yourself to the Mast. Finally, be of good cheer for the Son is above the storm!

I am suggesting that the party is over. Difficult days are ahead for all of us. It is time to save, cut back, make do, do without, plant a garden, fill a large pantry with food and water, and buy some gold and silver. Abraham did!

DUMPies are Destitute Unprepared Mature People who had “confidence in the system” and who were “sure everything will work out all right.” However, their faith was in the wrong place.

My view of the immediate future is one of gloom but long-term it is glory! However, we must live in the here and now, and Christians would be wise to plan for “hard times” because hard times are coming.

The financial experts (those talking heads who never told people to sell before the dot.com crash and the present popping of the real estate bubble) always put a positive spin on every negative problem. Every downturn is always a “buying opportunity.” However, when you look at the unemployment figures, plunging real estate values, consumer spending, manufacturing, savings, bankruptcies (personal and corporate), credit-card debt and loan defaults, it is obvious that the nation’s economy is in deep trouble.

Those of us not trained in economics can understand a simple fact: when falling income and rising debt converge on the same family or business, the result is financial disaster. We are at that juncture today, even a Harvard professor knows we are in a recession and speeding swiftly into a major depression! Yet the wise guys on Wall Street and media pundits tell us “we are in recovery.”

However, remember that not one famous Wall Street oracle told us to SELL before the market started sliding. No, it is always a “buying opportunity.” You see they are called “brokers” because if you deal with them very much you will be broke! Do you know that none of the Wall Street hot shots or television pundits told us to sell Enron even as close as a couple of weeks before it sank! As the ship was going down, it was time to buy more shares of the Titanic!

I expect many large corporations, banks, S & Ls, and insurance companies to go belly up. If one has money, he should diversify. In fact, rather than have savings or CDs in banks, I would have some in Swiss annuities.

Swiss insurance and annuities are 100% funded by a currency not backed by gold but “as if it were.” There is no reporting to the IRS or any other agency and no taxes are paid until one receives payments, usually when one is much older and is required to pay less taxes. These financial instruments are easily purchased (at the present time) from US representatives—at no commission although Swiss companies may not solicit business in the U.S. One may buy directly from Swiss companies or use a U.S. rep. The interest on Swiss annuities is higher than what U.S. companies are paying.

My point is to do what the very wealthy have done for 300 years: send some of your money where it is safe. Often the very wealthy are greedy but they aren’t stupid. They send their wealth outside the states before the blood flows in the street—Wall Street, that is. However, I don’t believe there is much safety anywhere.

Our problems are not exclusively American. Japan had been sinking into recession for many years after many of their high dollar U.S. investments went south a few years ago. You may remember that Japan walked away from their investment in Rockefeller Plaza. Recently, Japan’s large banks have improved their financial standing.

Japan is the lender to the world—the source of 60% of the world’s loans. Where will the money come from when Japan dries up like an old Jersey cow?

The party is over in South Africa and disagreement, disdain, and distrust rule the day. The silver lining is gone and a dark cloud hangs over the nation in which liberals had put much hope. Mandela promised homes and jobs and was not able to produce, and the natives are restless on the reservations. It is a nation of malcontents, and any small spark could set off a powder keg that would reverberate around the globe.

Mexico has problems in at least 14 states besides Chiapas. Two political assassinations and about 200 extortion kidnappings have not helped stabilize the nation where the peso was devalued in 1994. The U.S. bail out was too little too late. I expect massive bankruptcies, social unrest, assassinations, political corruption and general turmoil. Moreover, it is folly to think it will not cross the Rio Grande. Everything else has!

Putin may lose control of Russia and a new “strong man” may appear who will try to reconstruct some of their losses after Communism’s collapse. I see many more problems between Russia and former members of the Soviet Union. Many of the “republics” have “former” Communists in the driver’s seat, and they can’t drive since they always turn left! In addition, the Russian mafia is almost running the nation. It is sure running many of the banks. Bribery, political corruption and intimidation are widespread. Not only could the economy collapse, but also anarchy could be their future.

Of course, there are massive problems in France, England, Germany, etc. The dark cloud covers most of the world indicating a storm is coming. Make reasonable preparations, and lash yourself to the Mast. Finally, be of good cheer for the Son is above the storm!

I am suggesting that the party is over. Difficult days are ahead for all of us. It is time to save, cut back, make do, do without, plant a garden, fill a large pantry with food and water, and buy some gold and silver. Abraham did!

Don’t become a DUMPy.