Wednesday, July 8, 2015

Economic Collapse Is Coming.........DO NOT MISS THIS!

Economic Collapse Is Coming

Europe Will Be The First To Collapse

That doesn't seem like much of a stretch: We all know that the European Union — the EU — nearly fell apart a few years ago. And we know that massively unpayable debts piled up by members of the Union were the reason. Greece, Ireland and Portugal, and later Italy, Spain and even France, all came dangerously close to defaulting on their debt.

Had these nations done so, they would have utterly imploded ... wiped out trillions of dollars of invested wealth all over the globe ... and destroyed the Union. Since then, watching the EU struggle to survive has been like watching a slow-motion train wreck, a painfully slow spiral down into oblivion.

Over the past seven years, the European Union and its Central Bank have repeatedly bailed out its member states. But the bailouts have only given politicians license to increase their reckless spending. And today, 22 of the 28 EU member states — including the largest states: Spain, France, Italy and the UK — are deeper in debt now than ever before. In Spain and France, it would take nearly all the money generated by their economies in an entire year to equal their national debts.

The governments of Cyprus and Belgium each owe MORE than their economies produce in an entire year.

Ireland owes 23% more than its economy produces. Portugal and Italy each owe 28% more.

The Greek government, still in the worst shape even after six huge bailouts, owes 75% more than its economy produces.

And there's no end in sight: Europe's debt burden is STILL rising at an alarming pace.

Excessive regulation, outrageous levels of taxation and obscene levels of government debt are literally killing Europe. The Italian economy is barely growing. France is stagnating. Germany, the economic engine of the Union, recently slipped into recession. As a result, Standard and Poor's and Fitch have consistently downgraded the troubled nations' credit ratings, further threatening their ability to borrow. In February of this year, Greece's debt was downgraded to junk status.

Meanwhile, governments across Europe are becoming increasingly desperate for cash — and instituting oppressive and patently unfair regulations and capital controls. In Spain, the government has begun taxing bank deposits. You pay an income tax on your paycheck then pay another tax when you deposit it in the bank. In France, police routinely search travelers, looking for large amounts of cash that's being smuggled out of the country to avoid taxation. They have every reason to be worried.

In 2013, Cyprus' leaders pulled off the crime of the century: To qualify for a bailout from the EU, they quite literally robbed their own nation's banks. Bank customers with more than 100,000 euros watched helplessly as the government seized up to 40% of their money. The bigger story, of course, is that depositors across Europe and around the world were sent a sobering message: "No deposit in any European bank is safe. If we want your money, we will simply take your money."

Ultimately, the euro will collapse — and, when it does, you could see civil wars inside many of these countries as opposing factions struggle for control. You could also see shooting wars erupt in Europe as old rivalries and resentments are revived.

Japan Will Be Next

Japan's economy has been under assault for more than a quarter-century now. In 1990, Japan's real estate bubble burst, wiping out vast amounts of wealth. In 1997, Sanyo Securities defaulted, triggering the collapse of Hokkaido Takushoku Bank, Yamaichi Securities and other large banks and vaporizing still more wealth. And in 2007, Japan was critically wounded by the U.S. real estate collapse and by dwindling demand for Japanese products due to the great global recession.

Japan's first crisis is the most massive government debt in the world: More than ONE QUADRILLION YEN. That's a "one" followed by FIFTEEN zeros! More to the point, it's 2.4 times the size of the entire Japanese economy and more than DOUBLE the debt load that recently pushed Greece, Ireland and Portugal to the brink of collapse. Worse: That debt is still skyrocketing. Social welfare spending in Japan, already one third of the 96-trillion-yen budget, is rising automatically by about one trillion yen every year.

Japan's second crisis is that the prices people pay for most things have fallen for 15 years. That means most things Japanese consumers and companies want to buy will be cheaper tomorrow. And that, in turn, means they have little reason to spend money ... and every reason to SAVE money. Plus, they're also hoarding cash because they're worried about the future.

They fear that Tokyo will have to cut their retirement checks and the other benefits they receive from the government. So they're saving as much as they possibly can for the rainy days they believe are coming. This is an extremely dangerous situation. It is threatening government revenues even as the nation's debt and the cost of servicing that debt is skyrocketing.

Europe's collapse will break Japan's back: As Europe — Japan's #2 trading partner — collapses later this year and next, exports — the lifeblood of the Japanese economy — will plunge. The economy will crater. Tax revenues will evaporate. In 2016, Tokyo will have no choice but to default on its massive 1.1 quadrillion yen debt.

Finally, It Will Be America's Turn 

The same fate suffered by Europe and Japan awaits us as well. The plain truth is that Washington, D.C.'s debts are far larger than most people realize. Everyone worries about our $18 trillion national debt; that it equals 107% of the value of all the goods and services the U.S. produces. Let me tell you: That's a drop in the ocean. In addition to that debt, our government owes another $238 trillion that it never wants to talk about. These are what it politely calls "unfunded obligations" — the money it owes primarily to veterans and to seniors in pensions, Social Security and Medicare payments. Altogether, Washington is on the hook for $256 trillion. That's more than 15 times the size of the entire U.S. economy. A line of 256 trillion one-dollar bills would reach around the Earth at the equator nearly one million times. It would reach all the way to the sun and back more than 133 times.

And, what's worse, trillions more dollars in additional debt and obligations are piling up with every passing year. Everyone knows Washington will never make a dent in its massive debt. What most economists know but won't say is that Washington won't be able to even service that much debt for much longer; any significant decline in the economy could ultimately push Washington into default. When that happens, the U.S. government's Treasury bills, bonds and notes won't be worth the paper they're printed on.

The bottom line is that our government, our economy and our society are living on borrowed time. It will all come crashing down. With two of America's largest trading partners — Europe and Japan — in ruins, global demand for U.S. dollars, stocks, bonds and real estate will evaporate. As bond prices crash, interest rates will skyrocket to levels that are unimaginable today. Mortally wounded by collapsing demand for its products and exploding interest rates, the U.S. economy will collapse like a cheap suit. The tax revenues Washington needs to pay its bills — including the skyrocketing interest it owes on the national debt — will dry up. The bond investors who have loaned more than $18 trillion to Washington will snap their wallets shut. The gravy train will stop.

After more than 60 years of out-of-control spending, Washington, D.C. will simply run out of money. Government payments to individuals — and to the companies it does business with — will simply stop. 2.7 million government workers risk losing their paychecks. Millions who thought they could count on Washington to care for them will suddenly find themselves destitute ... hungry ... abandoned ... and helpless. All hell will break loose.

Outraged at this callous breach of faith, armies of angry citizens will take to the streets in violent protests, just as they already have across Europe. Millions more will spend their days desperately hunting for food and safe shelter. Civil society will implode. Law and order will break down. Anarchy will rule. Americans who have known only safety and comfort in their lives will find themselves having to fight every day just to survive.

And the government — equally desperate to survive — will declare war on its own citizens. Privacy will be a thing of the past. Washington's spies will be everywhere. Revenue agents will seize citizens' savings, homes and other private property at the slightest provocation. Battle tanks, armored personnel carriers and heavily armed soldiers will patrol the streets. No man's life, liberty or property will be safe. We all know that it has already begun. It's as certain as death and taxes: 

We've always known that Washington could not tax, print and spend forever. It's simply unsustainable. 

We've always known that the day would come when it would all come crashing down. The only question has been, "When?" No one knows for sure but we are very close to the beginning of a massive collapse. The great global debt collapse that will begin in Europe,  will quickly spread to Japan and will inevitably strike America. 

This piece has not mentioned China or Russia to this point. China's economy is nothing but a state sponsored lie and is coming apart at the seams as I write this. Russia's economy has already collapsed, they have little to lose and will be very opportunistic as this all plays out. Once China reaches a point where their capitalistic experiment has obviously failed, they too will become very opportunistic. Opportunistic means that they won't hesitate to take by force what they need or want in order to survive and grow. It means WAR! They have both been preparing for this moment for quite a while. I suspect Russia in concert with Syria and Iran will move on middle eastern energy early in the coming conflict. 

All the pieces of the puzzle are coming together and the picture they paint is very disturbing! 

No comments:

Post a Comment