Posted on 12/24/2009 7:26:31 AM PST by FromLori
Do you believe everything the government tells you? Economist and statistician John Williams sure doesn't. Williams, who has consulted for individuals and Fortune 500 companies, now uncovers the truth behind the U.S. government's economic numbers on his Web site at ShadowStats.com. Williams says, over the last several decades, the feds have been infusing their data with optimistic biases to make the economy seem far rosier than it really is. His site reruns the numbers using the original methodology. What he found was not good.
Maymin: So we are technically bankrupt?
Williams: Yes, and when countries are in that state, what they usually do is rev up the printing presses and print the money they need to meet their obligations. And that creates inflation, hyperinflation, and makes the currency worthless.
Obama says America will go bankrupt if Congress doesn't pass the health care bill.
Well, it's going to go bankrupt if they do pass the health care bill, too, but at least he's thinking about it. He talks about it publicly, which is one thing prior administrations refused to do. Give him credit for that. But what he's setting up with this health care system will just accelerate the process.
Where are we right now?
In terms of the GDP, we are about halfway to depression level. If you look at retail sales, industrial production, we are already well into depressionary. If you look at things such as the housing industry, the new orders for durable goods we are in Great Depression territory. If we have hyperinflation, which I see coming not too far down the road, that would be so disruptive to our system that it would result in the cessation of many levels of normal economic commerce, and that would throw us into a great depression, and one worse than was seen in the 1930s.
What kind of hyperinflation are we talking about?
I am talking something like you saw with the Weimar Republic of the 1930s. There the currency became worthless enough that people used it actually as toilet paper or wallpaper. You could go to a fine restaurant and have an expensive dinner and order an expensive bottle of wine. The next morning that empty bottle of wine is worth more as scrap glass than it had been the night before filled with expensive wine.
We just saw an extreme example in Zimbabwe. ... Probably the most extreme hyperinflation that anyone has ever seen. At the same time, you still had a functioning, albeit troubled, Zimbabwe economy. How could that be? They had a workable backup system of a black market in U.S. dollars. We don't have a backup system of anything. Our system, with its heavy dependence on electronic currency, in a hyperinflation would not do well. It would probably cease to function very quickly. You could have disruptions in supply chains to food stores. The economy would devolve into something like a barter system until they came up with a replacement global currency.
What can we do to avoid hyperinflation? What if we just shut down the Fed or something like that?
We can't. The actions have already been taken to put us in it. It's beyond control. The government does put out financial statements usually in December using generally accepted accounting principles, where unfunded liabilities like Medicare and Social Security are included in the same way as corporations account for their employee pension liabilities. And in 2008, for example, the one-year deficit was $5.1 trillion dollars. And that's instead of the $450 billion, plus or minus, that was officially reported.
Wow.
These numbers are beyond containment. Even the 2008 numbers, you can take 100 percent of people's income and corporate profit and you'd still be in deficit. There's no way you can raise enough money in taxes.
What about spending?
If you eliminated all federal expenditures except for Medicare and Social Security, you'd still be in deficit. You have to slash Social Security and Medicare. But I don't see any political will to rein in the costs the way they have to be reined in. There's just no way it can be contained. The total federal debt and net present value of the unfunded liabilities right now totals about $75 trillion. That's five times the level of GDP.
What can we, the people, do to stop the government from, you know, taking all our money?
We should have acted 20 years ago. There's not much you can do at this point to prevent the eventual debasement of the dollar. This involves both sides of the political spectrum. It's not limited to the Republicans or the Democrats. They've both been very active in setting this up.
What can individuals do?
The only thing individuals can do now is look to protect themselves. I wish I could see a way, but shy of severe slashing of the social programs that is so politically reprehensible and would create such problems and social unrest, I don't see that as a practical solution.
If you're a young 20- or 25-year-old guy or gal, would you move to another country? What would you do?
We still have a great country. We're going through a period of economic pain. It's happened before. This is the kind of thing that's taken us decades to get into and it will take us decades to get out. Although the hyperinflation is going to be limited largely to the U.S., the economic downturn will affect things globally. I can't tell you how things will go with a hyperinflationary Great Depression, which is where I see things going.
It's the type of thing that will tend to lead to significant political change. People tend to vote their pocketbooks. You could have the rise of a third party. You could even have rioting in the streets. I'm not formally predicting that — anyone can run these different scenarios. For the individual, what you need to do, from an investment standpoint, look to preserve your wealth and assets. Don't worry about the day-to-day fluctuations in the markets. What I'm talking about here is over the long haul...
[Gold is] going to be highly volatile, as will the dollar, over the near term, but longer term, physical gold I would look at as a primary hedge for preserving the purchasing power of your wealth and assets. Maybe some physical silver. Get some assets outside the U.S. dollar. I might even look to move some assets physically outside the United States. The key here is to look at a longer range survival package, battening down the hatches, and preserving your wealth and assets during a very difficult time. Once you're through that, you'll have some extraordinary investment opportunities, and I can't tell you what it's going to be like on the other side of this crisis.
The invasion of the leftists was ongoing of course, starting earlier and having its victory party today.
This article then, might be of interest to you:
http://www.backwoodshome.com/articles2/wolfe111.html
Yep!
I think we have a lot more to blame than that...
With how things are, taking a good hard look at ourselves and our failure to react for a long, long time, contributed to the mess.
I know. We elected people who we thought would do a good job for us, then we went back to our daily lives and didn't pay attention to what they were actually doing.
It is frustrating and infuriating on so many levels.
It's a good article.
I know it is. When my nephew volunteered for the Marines after 9/11...I apologized for not giving him peace in his time. Eight years later and I am packing "time capsules" for his children. Sometimes I think about that bug out bag in the corner...What have I done!?
But, yeah there is a but, I realize the place we've arrived at wasn't the intended destination and I've apoligized now for my mistake, misdirection, and stupidity. That is only half the battle though, now knowing where we went wrong and setting the matters straight are my responsiblity.
That means for me:
1. Being prepared for what is coming.
2. No longer compromising my principles at election time for a fancy (R). The (R)'s will either get it or continue as they are. I won't contribute to that.
3. Reaching out to my friends and neighbors, silent no more.
Today I took that first step just like that article I posted earlier today encourages us to do. And I didn't let it be just my own little thing...instructions were sent out to my Patriots Hotline to do the same.
Do you know your neighbor's? If not, this might be a great time to drop by with an offering of Holiday Cookies, Basket of Fruits, even a box of donuts in red/green icing! The point isn't the "gift" it is the getting to know. Your chore this week is to get to know, by name, 5 neighbors. If you do know your neighbor's then the holiday visit will be just that...a holiday visit.
On the outs with a neighbor? Perhaps this action might be a way to "mend fences," "bury the hatchet," or at least mellow a bit with each other. The important thing with this kind of holiday cheer visit, is to not be offended if you get snubbed. You just learned something very valuable, should a crisis strike, about your neighbor.
Action today:
I nervously put together a few cookie plates, even splurged and bought the pretty crystal ones at the grocery store. I put together a box of holiday donuts for the family a few doors down, as I thought she could use them Christmas morning, while gifts were being unwrapped. Then, with my tote bag I took a deep breath and stepped out onto my cold porch stoop. For a split second I thought about forgetting the whole idea and eating my holiday treats myself....but man would that pack on the pounds...so another deep breath and I knocked on the first door...
Whew! I did it!!! And you know what I feel really good about extending my circle of friends in the neighborhood.
Doors that wouldn't normally open, opened. Frowning faces turned to smiles and hearty welcomes. Even the DOGS seemed much friendlier with wagging tails and happy eyes. ---------------------------------------------------------
1. Being prepared for what is coming. 2. No longer compromising my principles at election time for a fancy (R). The (R)'s will either get it or continue as they are. I won't contribute to that. 3. Reaching out to my friends and neighbors, silent no more.
I would like to add:
4. Prepare for rebuilding.
Remember too, 'birds of a feather flock together.' In Costa Rica, when things get tough, you're the odd man out.
We would buy the property in the resort area and build a guest house with a dental care wing.
Here's a quote about "how could you let it happen?" that stood out to me:
During the first year of Hitler’s rule most of us thought that he would disappear from the stage now that he had been given responsibilities. We had no doubt that he would fail, just as those before him had failed, and that would be the end of him and his histrionics.
Read into it what you will.
Revert back to my previous post about "time capsules" for my great nephew & niece. For me that is reachout across generations...as I may not be here to teach them otherwise.
btt
We will not ship this product during the winter season unless we can guarantee the temperature is above freezing.
YUP.
Someone else knows the score.
There was a hand pump on the backyard well on my great-uncle’s farm back in the 60s with another in the kitchen. I don’t even have a well - I’m on ‘city water’. I guess I’ll be buying a rain barrel in the spring.
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