CRASH! Is BANG next?
A tidal wave is rushing toward America. Years ago I detected the undersea quakes that I knew would lead to a second American economic catastrophe. My predictions were not the result of mystical insight. I didn't consult with an astrologer or with some mystic text. I merely studied history. I noted the cycles of human existence. I learned of government and it's proper roll and the consequences of a government that exceeds that role. I studied economics. In other words, I learned, I thought, I reasoned. Just as one may predict a tidal wave as the result of an undersea quake, so too may one predict a depression.
A few thousand dollars aggressively placed in Options (puts) on Yahoo, EMC, Dell, AOL, EBAY and all the other bubble Internet stocks last spring and you'd be well into $100,000+ by now.
There's still a long way to go. The Nasdaq won't be finished 'til it's around 500 so we're looking at another 2000 point drop in that index. The Dow Jones, although suffering loses last year, should crash and burn before 2001 is over. I'll probably be targeting GE as well as any "recovering" technology stocks. By 2003, the DOW should approach and possibly fall beneath 1000.
Unfortunately there is no pleasant way out of this economic mess. Banana republic, fantasy currency, fantasy business ideas and trading with the enemy are the foundation of a false prosperity will exact its toll with Depression II. In 1987 we might have escaped with a minor dislocations. In 1998, maybe a heavy recession. In 1999 a surviveable depression. Each time when the fuse blew a bigger and thicker copper coin was stuffed in it's place. Irresponsible behavior has been shielded from its consequences and now the price to pay will be large indeed. The economy is going to burn to its foundation. Because of the paniced intervention of the Federal Reserve over a year ago in the face of Y2K, the bubble has grown more monstrous. Depression II is going to be far worse that I originally though
What does this mean for you? I was going to describe it for you myself, but the latest issue of The Wall Stree Underground outlined our future [see sidebar].
Here is what you must do. Pay attention. I've been very busy this past year with the crash in the Nasdaq and expect to be even busier when the DOW hits the fan. I am not going to repeat myself. Take precautions and we can all get through this. Those who fall at the wayside for lack of preparation will have to be left behind to keep from dragging everyone down.
1. GET OUT of ALL DEBT!
If you have a mortgage on your home that you can't pay off in two years max, sell it and get a trailer, apartment, a tar paper shack if you must.
If you still owe on your car. Pay it off now or sell it and get one you can afford for cash.
If you have any recreational (toys, wave runners, motorcycles, atvs, RV's, boats), sell 'em now, this weekend.
Live on half of what you earn. Save the balance in cash, gold, foreign currencies (Yen or Euro). If you have the temperment, gamble no more than 10% of your cash shorting the DOW and remaining tech stocks on Nasdaq. Use Put Options to gain additional leverage. The most important thing is preservation of your wealth, done properly $100 today will buy 10 times as much in three years.
Check out Japan's fate for the past 10 years. Learn. Interest rates near 0% and property values are still plunging.
Position yourself to snatch up properties at 10-20% of their current valuations in the depths of Depression in 2003-2004. Don't get yourself on the wrong side of this void.
Economic depressions result in a sour social mood. Purchase, at least, a handgun for every female in your family and make sure they know how to operate it. Every male should have some kind of rifle and handgun. And your home should be equipped with one home defense shotgun. Everyone in the family should know how to operate and access each firearm. The rifle should be a .30 cal something, 30-06, .308, 7mm, etc. A bolt action or lever action hunting rifle is fine, but a FN-FAL would be better. The handgun would ideally be a .40 or .45, either of which is easily handled by women and adolescents.
If you already have a revolver or two and a rifle, your focus should be on eliminating debt and accumulating savings. This is crucial.
2. GET RURAL
I disagree with Nick [see sidebar] on this. The government is going to have its hands full with riots, looting and burning in the cities. I don't think they'll spare the forces to go play batman in the boondocks. Moreover, I'm beginning to think it's time for families and the closest friends to converge into a area to surround themselves with those they can completely trust. This is a tough one for me. I'm prone to untying our dock lines and leaving America to her deserts. I am tempted by southern, mountainous, Argentina. If, collectively, we could all uproot and head there, I think we'd be better off. If five or six families sold off all their American assets we could surely come up with enough to buy a large Argentinian ranch property. Might be easier to coalesce in KY (I'd prefer WY or Idaho, but I can see that's unlikely) and after our visit over Christmas, I discovered many unique advantages of such a migration to Ky...can you say prolific wildlife, active militia, caves and other huge underground "shelters."
Our problems are not just economic. Economic problems I understand and can maneuver through. But there's something worse, and something I scarcely have a clue how to navigate...The USA is ripe for invasion and the invaders are making ready!
We are in need of wealth, liquidity, security in order to secure our families against what I'm inclined to believe is an approaching global war. Americans have come to believe that bacause consumers in China and Russia are impoverished that those countries are no real threat to the USA. But those are not consumer economies. Unlike America, China and Russian economies are organized not for consumer purposes, but martial ones. We build our plants in close proximity to one another. The Russians build their crucial plants underground. We judge our economy by how many cars, washing machines and homes we build. Russia and China by the number of planes, subs and missiles.
Moreover, according to the three highest ranking soviet defectors, the collapse of the USSR was orchestrated to lull the west into complacency. Anatoli Golitsyn warned in 1966 that we could even expect to witness the fall of the Berlin Wall as part of the strategy of deception.
Russia has the most advanced ICBM's in the world. They recently "demonstrated" their stealth superiority by repeatedly buzzing the USS Kitty Hawk aircraft carrier. China wants Tiawan, India, and Australia. Iraq wants Israel. North Korea wants to swallow up South Korea, Russia is luring in europe. The only thing standing in their way is the USA.
The USA no longer has the strategic advantage having lost navigational control of the Cape of Good Hope, the Panama Canal (with the Chinese positioned on each end), and the Suez Canal. China is building a deep water port in the Bahamas and was nearly presented with our Long Beach Naval base by Clinton and Co. The US Border Patrol has repeatedly engaged the Mexican army and once suspected that Chinese regulars where with the Mexicans. Cultural Marxism (homosexuality, feminization and affirmative action) has undermined our military. The military is short on parts, equipment and ammo.
IF the Russians and Chinese were to initiate a surprise attack on American military assets (as the three defectors say is planned), I believe America will be rendered impotent to counter a simultaneous move by Iraq, Russia, China, and North Korea. Moreover, America might herself be occupied by these modern day barbarians.
However, unlike the economic crisis where I have near 99% confidence in my forecase, the nature of war is deception so therefore, I cannot be as sure of the threat of global war...I'd say I'm about 80% convinced we'll see global war within this decade. The real problem is I haven't a clue how to navigate such an event.
The common perception is that nuclear war is not surviveable. My study of the subject leads me to think otherwise. My priorities here are: 1. Get Rural (I really despise big cities anyway). 2. Make plans to keep your sons out of harms way, military casulties will be exceedingly high...unlike WWII where we only lost 200,000 men, this time we're probably looking at casulties more like what the USSR suffered in WWII...7 million and likely far more when you include civilian casulties. Let the leftists send their sons and daughters, this whole f___ing mess is their fault. Let not our sons pay with their blood to make up for leftist illusions.
The magnitude of the mania may be gleaned from this long term graph of the DJIA index.
Mark A. Laughlin
aboard S/V Legacy
I’ve seen the future, brother, and it’s ugly
I’m going to give you a picture of the future that you may not want to hear about. Don’t bury your head in the sand. I know late at night, during the quiet times, you know something is very wrong out there. I know you know that something big is about to happen. You can feel it in your bones. You’re not crazy and you’re not wrong.
I’ll tell you what the future holds. You’ll see rioting in the streets. You will see people breaking into mutual fund offices, smashing equipment and looting the premises. You will see people standing in long lines to demand government redemptions from wiped out mutual funds– and receive ten cents on the dollar from the money they had in their mutual funds. And that’s of the money they put in, not the paper profits that they once had.
You will see people in bread lines. You will see people wiped out, losing their homes and their businesses. You will see the savings of America lost. You will see millions of Americans, who were actually millionaires at one time, living in abject poverty for their retirement. You’re going to see a real estate bust the likes of which America has never seen. You’re going to see an economic slow-down leading to a full-blown depression, the biggest in most of our lifetimes. It will be a lot worse than the vast majority of people now realize is possible. All of this brought to you by the greed of Wall Street and the thievery of the mutual funds.
But it gets even uglier. You will see America’s government become oppressive as a totalitarian state is built. You will see property seizures, bank accounts frozen, people imprisoned under money laundering laws. You will see destruction of freedoms, including, I’m sad to say, the free press. You will see government become a monster as people are wiped out and the government, in serious trouble, does its best to keep law and order. Even for you, some of my avid supporters, this may be hard to swallow. But I want you to look at your house and think about having to sell it for 10 cents on the dollar. I want you to think about your business completely wiped out – no customers, no money.
We’re talking crops that are ploughed under with no buyers. Inventories piled up on the shelves that won’t sell at any price. We’re talking about jumbo jets parked in the desert, with tarps over them, because people aren’t flying. We’re talking about military patrols on the streets and metal detectors replacing open doorways. We’re talking about urban warfare. We’re talking about a horrible world of confiscation of assets and concentration camps. And we’re talking about you and your family huddled behind drawn curtains and locked doors, hoping you don’t make a mistake and a military vehicle doesn’t drive up to your door and take you away. We’re talking about terrorist attacks being common… American houses looking like those in Third World countries, with bars on the windows and twenty-foot-high walls around them… inner cities where the killings are so common the police drive in once a day to pick up the bodies.
For those of you thinking you’ll be immune from all this, living on your rural 20 acres, think again. You’re the easiest targets of all. It’s actually harder to find people in big cities. Helicopters equipped with infrared sensors will come and get you when they turn your isolated refuge into a national park. It’s happening all over the country. They will find you and they will get you, unless you're are very wealthy and very clever. Why do they want you? Well, for one thing they can pay you just 20 cents a hour when you work in a prison factory. Sound preposterous? Well, that too is already happening. The government is already building factories in federal prisons. They even have a name, UNICOR. You know the beautiful desks you see in the offices of high government bureaucrats, like presidential cabinet members? They are custom-made for them at Leavenworth, made by lifers who get paid twenty cents a hour. They use the money to buy candy bars and "girlfriends."
That is the future we have. I want you to picture America with 260 million people suddenly losing all of their wealth. Do you really think it won’t dramatically change your world? Think again.
It doesn’t take much for concentration camps to be built or filled. You can look at any great country – from Rome to England, Spain to Germany, France and Russia and China –and you will see repressive governments prey on its citizens. It happens when the bad times come. And they all end up building prison work camps. China is literally building the world’s biggest economy based upon fifty cents a day prison labor. Won’t that solve General Motors’ labor problems! It sure solved Mercerdes’ labor problems during World War II, when the Third Reich loaned out prisoners of war to work as slave-laborers in German factories.
Unfortunately, the stock market wipe-out will be America’s turn. Sound preposterous? Could never happen here? Don’t forget: It already has! There was a time in America, not long ago, when Japanese Americans were picked up and taken away to slave labor camps, their property confiscated. The so-called free press was completely silent about what happened. They received an apology 50 years later. The country that brought the world great freedoms, that brought the world the wealthiest country that ever existed, and the world’s mightiest military, will now, as a result of the Wall Street poverty effect from the devastating stock market losses, become a monster that will be unleashed on mankind.
Nick Guarino, of The Wall Street Underground