Meltdown Approaching – Repeat of 2008 on the Way – While We Make 50% in One Month!

Remember what happened in 2008? I hope so, because it’s about to happen again. 

In March of 2008, Bear Stearns gave us a hint of the crash that was to come. Just one year earlier the stock had traded as high as $170/share…but by March 08 it came crashing down to near insolvency before getting a $10/share desperation buyout from JP Morgan. The fall of Bear was the first major shot across the bow. Within weeks we began to see mortgage co’s failing and closing their doors in record numbers. Shortly thereafter it was AIG, GM, Fannie and Freddie, Merrill Lynch, etc…and of course the massive bankruptcy of Lehman Brothers in September…you know, the one that nearly brought the entire global economy down. Good thing we spent trillions to bail the system out…otherwise the bankers wouldn’t have received those record bonuses just one year later. Whhooo…crisis averted!  

No one living has ever witnessed anything of this magnitude, because…well…nothing like this had ever happened before. 

In the two years that have followed we have seen the Federal Reserve (remember, it’s not Federal and there are no reserves) along with the US government and it’s counterparts globally, spend countless trillions in taxpayer funded bailouts, stimulus and loan guarantees in an attempt to restart the engines of the global economy. And history will tell us that it was all for naught.  

(For a complete understanding of the what, when, where and why of the collapse, along with the step-by-step playbook for becoming multi-millionaires in the next 3 incredible years, you can now purchase my new book; CrashProof Prosperity at:  http://wealthjournals.com/crashproof-prosperity.html )  

The only thing that an unprecedented amount of financial manipulation accomplished will be an increased level of pain that we will all have to endure once the real crash gets underway. And I believe that the real crash is just around the corner…

 All the signs of a Bear Stearns level event are flashing bright red lights.  

How about the developments in Wisconsin this week? Massive protests from union led public employees…teachers…apparently more distraught than Egyptian protestors…all due to the fact that the governor wants them to contribute a measly 8% to their OWN retirement accounts. I don’t know about you, but the only retirement account that I have is the one that I work 14-16 hours/day for in order to personally contribute 100% of the money. Oh that’s right; we forced them to be teachers. That must be the case or they wouldn’t have chosen the profession. Here’s my question: When do entrepreneurs get to unionize? Man, it would be great to have that kind of support and power behind me…not to mention a fully funded retirement account on someone else’s dime. 

Forgetting the sarcasm, the events in Wisconsin are a harbinger of things to come across the country. Wisconsin, like 46 other states, is broke…and has a budget shortfall of $3.5 billion. But that’s chump change. Combined, states across the US have a $3 trillion shortfall to deal with, and this doesn’t even include their beyond bankrupt pension systems which add another $5 trillion to this mega bar tab. 

Not frightened yet? Then what if I told you that the Federal government will no longer be able to secretly bail these states out through cleverly designed state bond auctions…auctions that over the past couple of years have financed as much as 20-30% of their combined debt offerings. The jig is up…and massive layoffs at the state level are just around the corner. This is why the unemployment issue nationally is about to get worse…much, much worse.  

Next Flashing Red Light – Inflation  

It seems like a lifetime ago that the vast majority of economists were telling us that deflation was their big concern. Instead, my concern was inflation…which has been well documented in these pages, and over the exact same time frame (but hey, I’m just a little newsletter publisher in Texas…what could I possibly know). For those that missed the debate, deflation is when the prices for everything collapse, due to lack of demand, triggering an economic collapse. In a January 2009 poll, more than 90% of top economists polled listed deflation, over inflation, as their expected outcome. So…where are these same dimwitted economists now? Hiding out together…probably with Democratic lawmakers in Wisconsin…would be my best guess.   

Unless you’ve been living under a rock, you already know that inflation is back…and with a vengeance. The prices of everything from sugar, wheat, silver, cotton, dairy, meat, copper, gold, coffee…you name it…have risen anywhere from 30-100%...in just 6 months. In fact the global food index just reached an all time high this week! Sound like deflation to you? Nope…of course not. 

And this is where the VRA is set to shine. Just a month ago I recommended a unique and highly leveraged silver investment that has already given CrashProof Prosperity Members a return of more than 50%! And it’s just getting started… Once these states and municipalities begin to collapse, the US dollar will implode (further) as well…and this is exactly why gold and silver have been the #1 investments since 2003…the same year that I recommended them….the smart money has seen what’s in store for our future for a long while…and that future is almost here.

And I almost forgot to mention that Chinese demand for gold and silver just skyrocketed 70% in just the last month. 1.3 billion people buying gold and silver can do a lot of good for us. Remember, until last year the Chinese were barely even able to purchase precious metals…not legally at least. Now however, the Chinese government is encouraging them to buy. The Chinese may own over two trillion in US currency and debt, but at least they want their citizens to prosper as their own investment in the US collapses…I guess. How nice of those communists….sorry….how nice of those State Capitalists. 

And I’d like to make one last point about inflation…one that I go to great lengths to explain in my book. Currency inflation…aka the massive printing of new US dollars in order to pay for our governments imperialistic dogma and to fund the FED’s purchases of our own debt…is the root cause of the collapse of our middle class, along with the collapse of every middle class in the history of mankind. This insidious tax on humanity is the reason that both spouses have to work just to bring home the same amount of money that one income accomplished just 20-30 years ago. Think about this for a moment…and then begin cursing every politician and central banker on the planet. Our founding fathers did their absolute best to warn us about the dangers of a private banking cartel, but the battle was lost when the FED was created in 1913.

 Wow, think about this. In the US (and most Western democracies), we only spend maybe 15% of our incomes on food…meaning we can more easily cope with skyrocketing prices. But what about places like Egypt…and most other dirt poor countries in the Middle East and Africa…that have 90% of their population living at the poverty level ($2/day). When food prices double in these countries, REAL pain is experienced. You see, they have to spend 50-80% of their incomes on food…if you can call $2/day income.

 Shame on you, protesting unionized teachers in Wisconsin…how dare you compare your situation to what’s being experienced by these poor souls in Egypt and elsewhere. Your unions are using you to empower and enrich your union bosses.  Beyond belief…and something that I can guarantee you will blow up in their face. Any wonder why jobs are leaving this country in droves? Hint; it's not free trade agreements or trickle down economics...its unions! And anyone that still believes that our education system in this country isn't broken and that unions and government interference are not the major reasons why, should immediately watch the documentary Waiting on Superman.  

The Meltdown is Close  

The red lights are definitely flashing. And, when the budget battles in Washington really start to heat up…and this looks to be soon…the next shoe may drop. Debt is oxygen to the government, and we may finally have some politicians willing to make the hard choices. But those hard choices will have consequences, and in this case it means starving the patient. While this must be done, the massive number of resulting layoffs and bankrupt states will push our economy over the cliff. Add to this the coming train wreck about to take place in Europe, where Portugal is next in line for a huge global bailout…one that will make Greece and Irelands bailout (both predicted in the VRA) look tiny by comparison. 

After Europe begins to collapse, the game will be over. The resulting crash in the Euro and US dollar will take the Japanese economy with it. Japan, already imploding due to two lost decades, has the worst fundamentals of all. A debt to GDP of more than 200% and a very depressed and aging population. Look to the land of the rising sun for our future in the US…where the same financial tricks will equal the same disastrous result.

Add to this an exploding Middle East, where all the signs point to an Islamic caliphate, and it’s not crazy to wonder if we are in fact witnessing the early warning signs of WWIII.               

Major Moves to Make - Profit on the Meltdown  

Sure…all of this can be depressing. There’s no way I can spin this as good news for most of the planet. But let’s at least control what we can…our own decisions. If I was an old paradigm financial advisor I would just keep selling you on mutual funds, real estate and saving your money in US dollar based investments. Believe me; I know plenty of guys that still are. There’s only one problem with this approach…the old paradigm has been dead for a decade. Don’t believe me? Take a look at the only thing that matters…the actual results of this approach over the last ten years….beyond disastrous. 

Instead, let’s use the approach of my good friend and the Worlds #1 Trend Forecaster since 1980, Gerald Celente (and of course, our partner in CrashProof Prosperity). In his now famous words, “the events of today form the trends of tomorrow”.   

No doubt about it….this looks eerily like the beginning of 2008. But this time we won’t have the money or political will to bail everyone out…much less the fraudsters that caused the mess in the first place. My best advice is to remain committed to becoming a new paradigm thinker…it’s much more fun and far more rewarding…and develop your own game plan for using CrashProof. The lights are flashing….

 Kip Herriage

Editor and Publisher, WMI and VRA  

Founder, CrashProof Prosperity