"Don't Worry, Not a Single Penny of your Tax Dollars Will Fund the Bailouts.", December 13, 2009
By James R. Holland "Author of Adventure Photographer"
This review is from: Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown (Hardcover)
"That's right. The bank and corporate bailout money is not coming from our taxes. Instead we're just borrowing it from foreign investors. We're also printing some of it...Of course, we will never, ever have to pay it all back, because even if we tried (and we won't), we never could." That is why the U.S. Government will eventually be unable to borrow money and the nation will have to start living within it's means. That will be the beginning of the brave new world of life in America. This book is how we are speeding toward this "Bubblequake" and its "Aftershock." Although somewhat depressing (like all bad news is), this book also tells people what they can do to survive this worldwide depression and how to actually be able to make money during the painful readjustment of the world's economies. While this is a scary book because of what is happening all around us, it is also a hopeful book. The nation will survive after the country stops ignoring the basic laws of economics. The three authors are optimistic (maybe overly so) that the American people will be able to make the adjustments needed to achieve economic survival without having to become survivalists who have to grow their own food and defend their homes from roving mobs with guns. They feel that even dictators will be unable rise from the chaos because Americans will be changing its government officials as soon as it's obvious their policies don't work. There will be frequent changes in elected officials.
The nation will survive because basically the country is wealthy and will still
be so after the economic bubbles have all popped and forced everyone and their
government to live within their means.
These authors "are not bulls or bears or gold bugs, stock boosters or
detractors, currency pushers, or doom-and-gloom crusaders," and "have
no particular political ideology to endorse, and no dogmatic future to
promote."
The goal of this book is "to tell you more details about the next round of bubbles to fall while there's still time to protect your assets and position yourself to survive and thrive in this dangerous, yet potentially highly profitable new environment...Although much of what we predicted in our first book that hasn't happened yet because most of the impact of the multi-bubble collapse is still to come. This is good news because it means you still have time to get prepared."
It's impossible to do justice to this book's message in a short review. The review copy I worked from is now practically destroyed by so many dog-eared pages and underline and highlighted passages. The three authors share a theory of the economy having being boosted by six economic co-linked bubbles. They are: The real estate bubble, the stock market bubble, the private debt bubble, the discretionary spending bubble, the dollar bubble and the government debt bubble. Four of those bubbles have already burst or are still in the process of collapsing. With the collapse of each bubble it puts more pressure on the remaining bubbles, and the two most important bubbles are in dire danger. The dollar bubble and government debt bubble collapses will change the face of America and the world. America will be bankrupt.
In their first book, "America's Bubble Economy" the authors accurately predicted the economic chaos of 2008 and 2009. This book picks up developments in 2010 and the following years and predicts the next economic bubbles that will pop. In the coming much worst economy, the book shows readers the best ways to protect, their jobs, businesses and assets. It explains how the housing crisis isn't "a sub prime mortgage problem whose contagion spread to other mortgages; it is a `housing price collapse.'" The number of home owners with mortgages that are underwater has risen from 14.3% in Q3 2008 to 33% in Q2 of 2009." Since 70% of the American Economy is based on consumer spending, the bubbles that have already popped or are still in the process of deflating won't be able to re-inflate. When the dollar loses it's value and the government can no longer pay its loans, and therefore won't be able to get any credit. America's golden age will be over.
Inflation, resorted to by the desperate government, will rack the nation bankrupting most businesses. "40 to 60%" unemployment may become the norm. There will be so many people seeking jobs that wages will tank. Everyone will be on Medicaid, not Medicare, and all the unemployed will be on welfare. The rich will have left the USA or be broke and all the government's taxes will come from the working people--the middle class. Since as much income as possible will be hidden, there will be national sales taxes and Value Added Taxes on every product or service. Family members will return home to live together with their extended families in order to control housing expenses.
After I finished this book I went home and made some of the changes suggested by this book. They include such obvious things as selling real estate if a buyer can be found and getting rid of variable rate mortgages if you can't sell the real estate. Variable rate mortgages are absolute poison. Selling off stocks is another suggestion. It doesn't have to be done all at once, it can be done over the next couple of years, but most stocks should be sold because the dollar bubble collapse will destroy stock market values. Collectables and art will be non-liquid and will drastically drop in value (90%) for the long term. Gold, and silver to a lesser extent, will retain its position as a hedge against inflation as well as a protection against the dollar bubble collapse. The authors also list the types of jobs that will be in demand during the coming perilous times. As one might expect some job categories will boom while the unnecessary ones will disappear. For example construction workers may want to start looking for jobs that repair existing structures rather than build new buildings. You'll have to read this book to get the answers to many of the questions that reading this volume will provoke.
The thing this reviewer liked the best about this book was the carefully explained logic of it's predictions. It provides a much better overview of the current economy. The readers will discover lots of new information that they've probably never heard or read before, but that the reader's gut instinct and personal experience will tell him or her is obviously true. While the authors may be wrong on some of their predictions, most of them will probably prove all too accurate. At the end of each chapter the authors list a website where more current information on that chapter's point can be gleaned before the next volume of this continuing series is published. This is a page turner, but it will be slow reading from the standpoint of having to constantly stop and make notes in the margin or pause to see how a particular point directly effects the reader's own situation. Reading this book will make you aware of economics like you've never previously been aware. Depending on your age, you may well recall your parents or grandparents advice that they'd learned during the Great Depression of 1929. The coming bubble bursts are going to be a more society-changing depression than the one 1929, although "few will suffer like they did in the Great Depression." The safety net will allow everyone to survive at a low standard of living. While the book didn't make this comparison, while reading it, I could easily visualize the United States as a colder, slightly wealthier version of Cuba. As I read it I also saw some visions of the movie "Dr. Zhivago" pop into my mind.
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August 13, 2010
By Scott Strzelczyk and Richard Rothschild
The United States' economic decline precariously resembles Argentina's economic collapse, which started in 1998 and landed Argentina in a depression by the end of 2000. What began in Argentina as a recession mushroomed into a full-fledged depression due to bad economic and monetary policy. The Obama administration and its congressional Democrat lackeys are on the precipice of following Argentina's disastrous economic and monetary policy decisions.
Arguably, the United States economy has been in a two-year-long recession, and while some may posit that the country has started an economic recovery, others suspect the country will plummet into a deeper recession, or perhaps a depression. In the past two years, the United States government instituted economic and/or monetary policies detrimental to American's short- and long-term economic prosperity.
In early 2000, Argentinean President Fernando de la Rúa's government evaluated options to end the recession. According to a 2003 report issued by the Joint Economic Committee of the United States Congress, the de la Rúa government evaluated several options and settled on raising tax rates as the solution:
The De la Rúa government was worried about the federal budget deficit, which was 2.5 percent of GDP in 1999. The government thought reducing the budget deficit would instill confidence in government finances, reducing interest rates and thereby spurring the economy, which was showing signs of recovery in late 1999. Among the options for reducing the deficit, cutting spending was politically difficult; the government doubted that cutting tax rates would spur enough growth in the short term to offset lost revenues; it did not wish to abandon the convertibility system and simply print money[.]
That left only one option: raising tax rates. President de la Rúa secured approval for three big tax increases, effective January 2000, April 2001, and August 2001.
Argentina's economy continued to shrink throughout 2000. In April 2001, the Argentinean government proposed cutting spending by 4.5 billion pesos over a two-year period. Public outrage ensued, and special interest groups protested. Furthermore, government monetary policies manipulated current valuations, causing fear and instability, and debt policies such as refinancing debt at higher interest rates exacerbated a deteriorating economy. In late 2001, a newly elected government took control, and the Joint Economic Report summarized their actions:
In a series of blunders that made matters even worse, from December 2001 to early 2002, succeeding governments undermined property rights by freezing bank deposits; defaulting on the government's foreign debt in a thoughtless manner; ending the Argentine peso's longstanding link to the dollar; forcibly converting dollar deposits and loans into Argentine pesos at unfavorable rates; and voiding contracts
Coincidentally, the United States is in a two-year-long recession, and Obama and congressional Democrats intend on letting the Bush tax cuts expire at the end of the year. The outstanding public debt stands at $13.3 trillion. Any opposing viewpoints from Republicans or conservatives on cutting spending or addressing entitlement programs are met with media outrage, accusations of racism, and accusations that Republicans and conservatives are coldhearted people incapable of compassion or benevolence.
The Obama government's actions ominously mirror the actions and the timing of the Argentinean government in early 2000, when the first of three tax increases was instituted. Higher unemployment, more debt, falling wages, and eventually inflation ensued. Moreover, the Obama administration and the mainstream media deceive the American people regarding the impact of the Bush tax cuts. Obama and the MSM repeatedly espouse that only tax rates for those rich Americans in the top income tax bracket will increase.
Unfortunately, the truth is that all tax brackets are impacted, and even the Obama lemmings will recognize they've been duped when their payroll tax deductions increase in 2011 and their take-home pay decreases. Perhaps then the lemmings will seriously consider what "hope and change" means and that elections do indeed have consequences. A summary of the Bush tax cuts expiring at the end of 2010:
Many economists recognize, though they many not publicly admit it, that inflation is the only feasible alternative. The government is limited to three possible revenue sources: taxing, borrowing, and inflating. Any sensible person realizes the country cannot tax its way out of a $13-trillion debt or sustain existing entitlement programs, much less government-run health care. The government borrows money by selling government-backed securities to investors. Eventually, investors will either stop purchasing government securities or demand substantially higher interest rates due to the increased risk. The only feasible alternative is to monetize the debt -- in other words, inflate it. Monty Pelerin's recent American Thinker article captured the essence of the problem:
The political class's survival is at stake. Eventually, anything that extends their rule will be tried. It is not concern for you or the economy that is driving policy, but the preservation of power of an increasingly wounded power elite. Their survival is now driving policy. Unfortunately, what benefits them is generally harmful for the economy.
Obama and congressional Democrats have chartered a course leading America down an Argentinean economic path. November may be the last reasonable chance to change course.