NEW MOVIE: Meltdown America...

[singular_me]

ZeroHedge: Meltdown America: The Movie


Posted by silveristhenew on April 11, 2014



Be prepared for the next great transfer of wealth. Buy physical silver and storable food.

Listening to the Canary, submitted by Casey Research

By Terry Coxon, Senior Economist

During World War II, the British Royal Air Force (RAF) undertook a plan of misdirection to allow a squadron of bombers to approach an exceptionally valuable target in Europe undetected. The target was so heavily guarded that destroying it would require more than the usual degree of surprise.

Although the RAF was equipped to jam the electronic detection of aircraft along the route to the target (a primitive forebear of radar was then in use), they feared that the jamming itself would alert the defending forces. Their solution was to “train” the defending German personnel to believe something that wasn’t true. The RAF had a great advantage in undertaking the training: The intended trainees were operating equipment that was novel and far from reliable; and those operators were trying to interpret signals without the help of direct observation, such as actually seeing what they were charged with detecting.

At sunrise on the first day, the RAF broadcast a jamming signal for just a fraction of minute. On the second day, it broadcast a jamming signal for a bit longer than a minute, also around sunrise. On each successive day, it sent the signal for a somewhat longer and longer time, but always starting just before sunrise.

The training continued for nearly three months, and the German radar personnel interpreted the signals their equipment gave them in just the way the British intended. They concluded that their equipment operates poorly in the atmospheric conditions present at sunrise and that the problem grows as the season progresses. That mistaken inference allowed an RAF squadron to fly unnoticed far enough into Europe to destroy the target.

People will get used to almost anything if it goes on for long enough. And the getting-used-to-it process doesn’t take long at all if it’s something that people don’t understand well and that they can’t experience directly. They hear about Quantitative Easing and money printing and government deficits, but they never see those things happening in plain view, unlike a car wreck or burnt toast, and they never feel it happening to themselves.

QE has become just a story, and it’s been going on for so long that it has no scare value left. That’s why so few investors notice that the present situation of the US economy and world investment markets is beyond unusual. The situation is weird, and dangerously so. But we’ve all gotten used to it.

Here are the four main points of weirdness:
1.The Federal Reserve is still fleeing the ghost of the dot-com bubble. It was so worried that the collapse of the dot-com bubble (beginning in March 2000) would damage the economy that it stepped hard on the monetary accelerator. The growth rate of the M1 money supply jumped from near 0% to near 10%. This had the hoped-for result of making the recession that began the following year brief and mild.
1.A nice result, if that had been all. But there was more. Injecting a big dose of money to inoculate the economy against recession set off a bubble in the housing market. Starting in 2003, the Fed began gradually lowering the growth rate of the money supply to cool the rise in housing prices. That, too, produced the intended result; in 2006, housing prices began drifting lower.
But again, there was a further consequence—the financial collapse that began in 2008. This time, the Federal Reserve stomped on the monetary accelerator with both feet, and the growth of the money supply hit a year-over-year rate of 21%. It’s still growing rapidly, at an annual rate of 9%.

more
http://silveristhenew.com/2014/04/11/meltdown-america-the-movie/

WATCH MOVIE AND/OR TRAILER

http://www.caseyresearch.com/meltdown-america

[Dachsie]

Very interesting video. Thank you.

However, I do not believe Casey Researces "7 steps to financial prosperity and security" or whatever.

[Ponce]

You got it Dachsie, I am already at my final destination where is far away from the rest of the world, his report is good for those with x amount of cash who are looking for a hide away.......

V

[Shami-Amourae]

If the US goes down, I don't think there will be anywhere in the world safe for Americans. It's better to stay here and fight in my opinion. At least we can blend in and know the turf.

[Carl]

As I said somewhere else:

Doug Casey is selling Doug Casey and he's been using the same sales pitch, with updated panic buttons, for years.

"Dollar Collapse" is a misnomer, what will collapse is dollar based Credit (Hyper-Deflation), and it won't be just in the U.S., it's going to be world wide. There will be no place to hide assets, if any assets, especially paper based, survive. You had a taste of it in the 2008/09 crash when over 40trillion in credit based currency POOF!ed out of existence.

What you have, what is within the reach of your hands, is all you'll have.

Prepare accordingly...

[singular_me]

I concur, it is not a site that is a fav of mine because of that...




Very interesting video. Thank you.

However, I do not believe Casey Researces "7 steps to financial prosperity and security" or whatever.

[Sparky]

...
"Dollar Collapse" is a misnomer, what will collapse is dollar based Credit (Hyper-Deflation), and it won't be just in the U.S., it's going to be world wide. There will be no place to hide assets, if any assets, especially paper based, survive.
...

I would like to hear a discussion of what this really means. In the traditional sense, deflation means my paper dollar buys more stuff. I'm trying to understand the implications of a dollar based credit collapse. Why couldn't I simply protect my assets in paper FRNs?

[old steel]

Bought some .22LR shells today, i counted myself lucky to find some.

Box of 50 reduced to a box of 40 and the price was double what i paid 3 years ago.

Deflation, inflation and scarcity, all at the same time.

I don't think this is going to go down the way anyone thinks it is.

Strange days.

[Horn]

Why couldn't I simply protect my assets in paper FRNs?

Make sure it is all denominated in the new 100 series, as all the other denominations will be rendered useless due to the OpenSSL software wiping the digits away.

[Libertarian_Guard]

http://research.stlouisfed.org/fred2/graph/?id=WALCL#

[Cebu_4_2]

http://research.stlouisfed.org/fred2/graph/?id=WALCL#

What does that graph mean?

[Carl]

What does that graph mean?

It means the Fed has assumed to have enough unencumbered assets to cover adding about 3.1T to the real money supply of 1.22T

[Horn]

What does that graph mean?

LG is trying explain with the chart that by owning the world you can selectively choose who lives and dies in it.

He and Carl are trying their best to blend in with lilies of the field... :)

[Carl]

I would like to hear a discussion of what this really means. In the traditional sense, deflation means my paper dollar buys more stuff. I'm trying to understand the implications of a dollar based credit collapse. Why couldn't I simply protect my assets in paper FRNs? The devaluation of the FRN, causes price inflation. Continued devaluation cause support for the credit created and denominated in FRNs to collapse. If none of the other currencies collapse with the FRN (dollar) then you can expect high to extremely high price inflation on all imported goods even though you will have no FRNs and no credit to meet that demand. *(See: Iceland)

If, on the other hand, all other credit currencies collapse with the FRN based credit then no one will have any credit or cash to buy or sell anything. Prices will initially shoot up on available goods to absorb any free range cash then promptly collapse. Then it's every man, woman and child for themselves....of course, every government will jump in with their emergency measures before it comes to that.

*Note: Devaluation of the currency is accomplished by manufacturing excess credit.

[Sparky]

...
If, on the other hand, all other credit currencies collapse with the FRN based credit then no one will have any credit or cash to buy or sell anything. Prices will initially shoot up on available goods to absorb any free range cash then promptly collapse. Then it's every man, woman and child for themselves....of course, every government will jump in with their emergency measures before it comes to that.


So, I'm pretty sure the USD will be the last to fall, so let's go with this scenario. Why does FRN based credit stop? Why does no one have credit or cash? I thought they've devalued the currency so much that we're flooded with currency? Why would people have none? Where does the deflation part come in?

[Carl]

So, I'm pretty sure the USD will be the last to fall, so let's go with this scenario. Why does FRN based credit stop? Why does no one have credit or cash? I thought they've devalued the currency so much that we're flooded with currency? Why would people have none? Where does the deflation part come in?All credit is someone else's debt. Credit collapses because the supporting asset values collapse. The supporting asset values collapse due to debt saturation, there is no value left from which new credit can be extracted to keep the system going. Basically, the whole credit/debt structure collapses in upon itself. Credit only exists for as long as the assets that back it retain their value and the institutions that maintain it remain solvent and viable. Once asset values start deflating the credit they supported turns into debt and those institutions dependent upon the continued expansion of credit/debt must scramble to find new assets of sufficient excess value to fill the shortfall between the credit they've already created and the falling value of the assets held. Failing that, the institution becomes insolvent and all credit held turns into their debt. The institutions that were dependent upon that institution for value and credit, are now short and must go through the same mad scramble to find assets of sufficient excess value to cover their shortfall, on and on and on..... That, is the deflation, and the entire system could collapse in a matter of hours, hyper-credit-deflation. The banks that maintained your credit fail in a massive death orgy of debt taking all credit with them, including your bank account.

There are 1.22Trillion FRNs circulating around the globe, over half are held offshore, any within the banks when they fail will remain with the banks so, that leaves only the FRNs that are out and about, maybe 10, 15 billion.

I hope that helps...

[govcheetos]

Good discussions in this thread.

[Libertarian_Guard]

The U.S. Dollar: Currency Masquerading As Money

http://www.alt-market.com/articles/2091-the-us-dollar-currency-masquerading-as-money

People consider Federal Reserve notes, U.S. dollars, to be real money. This includes their digital equivalent in bank and credit card statements and Treasury-issued base metal coins. As a unit of account, all goods and services, and land and labor are priced in U.S. dollars. Declared legal tender, Federal Reserve notes are the country's medium of exchange.

This year marks the 100th anniversary of the Federal Reserve System. It is the third central bank in the country's history. The first two were short-lived compared to the Fed. The First National Bank, chartered in 1791, lasted 20 years, as did the second one, from 1816 to 1836.

When the Fed opened its doors for business in 1914 and for a while thereafter, until 1933, gold was money. People used gold coins to make purchases and pay debts—Double Eagles ($20 Liberties, minted 1850-1907; and $20 St. Gaudens, 1907-1933), Eagles ($10 Liberty Head, minted 1838-1907; and $10 Indian Head, 1907-1933), and $5 Half Eagles (1795-1929). Paper dollars were redeemable in gold, like the $20 Treasury-issued gold certificate shown here:

These dollar bills were redeemable "IN GOLD COIN, PAYABLE TO THE BEARER ON DEMAND," with gold then valued at $20.67 per troy ounce. Americans over age 90 (0.6% of the population) can remember gold coins being used as a medium of exchange. Few Americans today have ever handled a gold coin.

When the Fed began issuing Federal-Reserve-note paper dollars they were also "Redeemable in Gold on Demand at the U.S. Treasury or in Gold or Lawful Money in any Federal Reserve Bank." That changed in 1933 when the President signed an Executive Order making it illegal for U.S. citizens to own gold (gold jewelry and numismatic gold coins excepted). Then they became "Redeemable in Lawful Money," eliminating any hard asset backing. Since 1963 the declaration on U.S. dollars simply states that, "This Note is Legal Tender for All Debts, Public and Private."[1]

(Federal Reserve notes initially circulated along with two other kinds of U.S. dollars: 1) National Bank notes issued by the U.S. Treasury and redeemable in U.S. bonds in its possession, beginning in 1862 to finance the Civil War and up until 1966, when they stopped being printed; and 2) silver certificates, first printed in 1878 and redeemable in silver coins or bullion. The Treasury stopped printing them in 1967, and in June 24, 1968 reneged on redeeming the ones in silver still in circulation.)

The U.S. dollar has lost more than 95% of its value since the Fed began printing them. And now it can create them just with keystrokes entering numbers on a computer. As Richard Maybury, in his Early Warning Report, puts it, "At one time the biggest problem was paper money. Now it's vapor money. The government can create trillions of dollars just by pushing a few computer keys."[2] The government concedes that the dollar has lost 95% of its value over the last 100 years. Goods and services that cost $10 in 1914 now cost $200. Respected economic analyst (and fellow Dartmouth alumnus) John Williams, however, employing methods the government formerly used to gauge price inflation, calculates that the U.S. dollar has lost 99% of its value since the Fed opened its doors. Goods and services that cost $10 in 1914 now really cost $1,000 [3].

Americans do not comprehend this fact and generally view the Federal Reserve in a positive light, like my friend Ted, a prominent Seattle attorney my age (73). Like many educated people with a progressive bent who countenance government intervention in our lives, he argues that the Fed has an important job to do: "to keep inflation under 2 percent, or some other amount reflective of actual productivity increases." The economy needs an elastic currency to accommodate increases in GDP and productivity, and a central bank to print money when needed, especially "to help folks out" affected by disastrous events like 9-11 and Katrina, and large institutions threatened by the current global financial crisis. Limited to having a fixed amount of gold as the nation's currency won't do. From this Keynesian perspective, gold is a relic—and as Maynard Keynes would have it, a barbarous one at that. Freed from gold, my friend writes, "The 'money supply' needs to grow to accommodate increases in GDP from increased productivity."

The U.S. government severed the dollar's last link with gold in 1971. While people could no longer redeem the dollar for gold coins, its international convertibility was maintained. Foreign countries and their central banks could redeem dollars for gold bullion—(400 oz.) gold bars, priced at $35/oz. After World War II, with the money supply (M2) at $147 Billion, the U.S. had 21,770 tonnes (699,905,500 ounces) of gold, which backed 17% of the money supply. By 1964 the money supply had grown to $400 Billion, and U.S. gold reserves dropped to 13,885 tonnes, covering 4% of the official quantity of money. By 1971 the amount of gold backing the dollar had shrunk to 1%, rendering default inevitable.

Freed from any gold restraint the dollar now became a purely fiat currency. (Fiat comes from the Latin word fiere, which means "let it be done." A fiat currency is "money" that is not convertible into coin or specie of equivalent value, where government edict arbitrarily fixes its value.[1]) Accompanying the dollar's loss of a gold backing were the 5 cent cup of coffee, candy bar, beer, movie, cigar, and average $25,000 cost of a house, which also disappeared.

Since 1971 the St. Louis Fed's Adjusted Monetary Base (circulating currency and bank reserves), has risen from $70 Billion to $3,885 Billion today, a 55-fold (5,500%) increase. With the government no longer able to hold its price at $35/oz., gold now functions as a barometer of fiat currency expansion. Its rise in price to $1,895/oz. on September 5, 2011 is a 54-fold increase! At gold's current depressed level around $1,300, it still is a 37-fold increase. The Dow Jones Industrial Average has tracked U.S. dollar growth less well. Its rise from 890 in 1971 to 16,400 today is an 18-fold increase, half that of gold at its current price.

[Carl]

The U.S. Dollar: Currency Masquerading As Money.......

http://i48.photobucket.com/albums/f226/PsychoPsonic/Funny/notthisshiatagain.jpg

[Sparky]

All credit is someone else's debt. Credit collapses because the supporting asset values collapse. The supporting asset values collapse due to debt saturation, there is no value left from which new credit can be extracted to keep the system going. Basically, the whole credit/debt structure collapses in upon itself. Credit only exists for as long as the assets that back it retain their value and the institutions that maintain it remain solvent and viable. Once asset values start deflating the credit they supported turns into debt and those institutions dependent upon the continued expansion of credit/debt must scramble to find new assets of sufficient excess value to fill the shortfall between the credit they've already created and the falling value of the assets held. Failing that, the institution becomes insolvent and all credit held turns into their debt. The institutions that were dependent upon that institution for value and credit, are now short and must go through the same mad scramble to find assets of sufficient excess value to cover their shortfall, on and on and on..... That, is the deflation, and the entire system could collapse in a matter of hours, hyper-credit-deflation. The banks that maintained your credit fail in a massive death orgy of debt taking all credit with them, including your bank account.

There are 1.22Trillion FRNs circulating around the globe, over half are held offshore, any within the banks when they fail will remain with the banks so, that leaves only the FRNs that are out and about, maybe 10, 15 billion.

I hope that helps...

Right, so we need to make an important distinction to close the loop here, i.e. the distinction between dollars held electronically in a bank, and FRNs that you can fold and put in your pocket. In your scenario, the dollars held in the bank get devoured in the mad scramble for real assets. Poof! However, the FRNs are still in your pocket. And because all the digital dollars gets devoured, the paper version becomes a valued commodity in short supply, i.e. its buying power has actually increased.

This was my point: I can protect myself during the deflationary wave you describe by holding actual paper, which is different than holding what are sometimes referred to as "paper assets", i.e. liquid assets held by someone else (e.g. bank deposits, stocks, bonds, etc.). Big difference. This has been my point all along as we discuss the fate of the USD. For some transitional period, those paper dollars in your physical possession will have renewed strength during the first part of a financial "dislocation".

With FRNs in relatively short supply, the gov't reaction will be to re-supply the system with more paper, diluting its purchasing power. That's when the whole money system will be exposed as fraudulent, and precious metals will finally become respected by the masses.

[old steel]

I dunno is it just me or do the posts here regarding the biggest financial dislocation in the history of the planet sound sugar coated?

[Sparky]

I dunno is it just me or do the posts here regarding the biggest financial dislocation in the history of the planet sound sugar coated?

I don't think so because it's impossible to know how it will play out. It's a big, complicated system with many moving parts, and some big players with lots of resources who don't want to see a hard landing. It may come all at once, but I think it will be a series of controlled shocks that happen over a longer period of time.

Also, sudden severe collapses usually result from unanticipated forces. All the forces in play here are known.

What part do you think is being sugar coated?

[old steel]

Scenario #1. You live in a major city. Banks are closed and ATM machines are defunct. There is no electricity. Shops are closed and looted. Gas stations are burned out. There is no pumped water and toilets don't flush. There is no heat or air conditioning. Garbage isn't being collected and there are piles of it everywhere. Roads are impassable and neighborhoods are barricaded from each other with concertina wire and piles of burning tires and patrolled by armed gangs. Home invasions occur with gruesome regularity, especially in the wealthier neighborhoods where there is more to take. Police are nowhere to be found, but there are army checkpoints on all the major roads leading out of the city where people are turned back.

Scenario #2. You live out in the country. There is no electricity, no heating oil or propane deliveries. Gasoline is no longer available, and you can no longer drive 30 miles to the nearest supermarket or Walmart. In any case, these stores are no longer open for business because merchandise is no longer being delivered to them. You used to be on friendly terms with some of the neighbors, but now everybody is afraid of each other. In any case, it's too far, and too dangerous, to walk anywhere. Your drinking water used to come from a deep drilled well via an electric pump, which no longer works. There also used to be a sump pump and a dehumidifier in your basement, which is now permanently flooded and filling with black mold. Armed gangs are filtering through the landscape, looking for caches of food and other supplies. They are increasingly expert at what they do, and most people either give up their stockpile voluntarily or die trying to defend it.

Presented with such scenarios, most people react in one of three ways: denial, paralysis or panic.

Denial is where you tell yourself that these scenarios are so incredibly unlikely where you live that thinking about them is a complete waste of time. You may be right about that, but who is to say? Subjective judgments of likelihood are not particularly useful in risk mitigation.

Paralysis is where your gut feeling tells you that this could, in fact, happen, but you can't think of anything constructive that you could do about it—beyond trying to not think about it, to avoid distressing yourself to no purpose.

Panic is where you decide to act—by stockpiling food and weapons, or by developing plans to flee in some direction. Once you've done your shopping and planning, and the panic attack is over, you go back to paralysis (nothing more to be done) and then drift back toward denial (since it is mentally the most comfortable).

http://cluborlov.blogspot.ca/2014/04/business-as-usual.html#more

[Carl]

Why do you assume the electricity and water will stop working? I'm not saying that there won't be shortages in some areas but for the most part the autonomic systems should keep functioning.

And it's not like government will be left powerless.....

[Dogman]

Why do you assume the electricity and water will stop working? I'm not saying that there won't be shortages in some areas but for the most part the autonomic systems should keep functioning.

And it's not like government will be left powerless.....Most are not that automatic. Some for a time will work, mostly water systems. But oil/gas fired systems need people not just local, to switch loads on a grid. Only hydro may last for a bit. Simpler system. Load/demand auto systems still need human wet ware to keep things running. Month or so at max if that long then poof!

Sent from my Nexus 7 using Forum Runner

[Carl]

Most are not that automatic. Some for a time will work, mostly water systems. But oil/gas fired systems need people not just local, to switch loads on a grid. Only hydro may last for a bit. Simpler system. Load/demand auto systems still need human wet ware to keep things running. Month or so at max if that long then poof!

Sent from my Nexus 7 using Forum Runner The humans running those systems will not disappear. If anything, their sense of duty will compel them to work even harder, and the fact that most will probably be rewarded for sticking with it during our times of hardship....

[Dogman]

The humans running those systems will not disappear. If anything, their sense of duty will compel them to work even harder, and the fact that most will probably be rewarded for sticking with it during our times of hardship....

Mostly do agree, that is there jobs/life's.

But! Other than nukes and hydro power, all others need fuel.

The supply chain will need to stay unbroken, to keep the gens/genning power. Trains running and everything from the oilfield/pipilines working. Most will go to work if the gov crashes, but how long if society melts along with it? Most will go to work, until the money runs out if the financial system crashes also.

Water is mostly a local thing, unless you live out west, power is more regional.

Power will probably fail first, water, depends,but needs power for the pumps.

Crap shoot.

Sent from my Nexus 7 using Forum Runner

[Carl]

http://static.ddmcdn.com/gif/blackout-plants.gif

It appears that electricity will fair well, we produce enough coal, oil and nat gas to keep them fired.

[Dogman]

Mostly do agree, that is there jobs/life's.

But! Other than nukes and hydro power, all others need fuel.

The supply chain will need to stay unbroken, to keep the gens/genning power. Trains running and everything from the oilfield/pipilines working. Most will go to work if the gov crashes, but how long if society melts along with it? Most will go to work, until the money runs out if the financial system crashes also.

Water is mostly a local thing, unless you live out west, power is more regional.

Power will probably fail first, water, depends,but needs power for the pumps.

Crap shoot.

Sent from my Nexus 7 using Forum Runner


http://static.ddmcdn.com/gif/blackout-plants.gif

It appears that electricity will fair well, we produce enough coal, oil and nat gas to keep them fired.
As said above, it would depend on the supply chain holding up. If the chain breaks, the power for some will blink out.

[Carl]

As said above, it would depend on the supply chain holding up. If the chain breaks, the power for some will blink out. In that regard, I don't think government would allow their supply chains to break. Food and some goods will still be delivered, although there may be an initial break in those chains. We will undoubtedly return to some sense of normalcy after the initial shock but cities will remain a dangerous place to be.

[Dogman]

Was going by the thread title, yes you are right and I agree with you. But if we do have a gov meltdown, all bets are off.

[Carl]

Was going by the thread title, yes you are right and I agree with you. But if we do have a gov meltdown, all bets are off. I think it will be more of a dismantling than a breakdown, I hope the lampposts can handle the weight.....

[Dogman]

I think it will be more of a dismantling than a breakdown, I hope the lampposts can handle the weight.....
There is not enough frigging rope, to hang the weight on those posts!

6244

[Horn]

The supply chains may be stolen, no need for breaking naturally.

Gasoline is the number one issue with the U.S., even to distribute it to all the many places it needs to go.

[Sparky]

I'm more in line with Carl on this. There will be breakdowns and disruptions and shortages, but no reason to think that humans will stop functioning. If you're part of the supply chain and aren't getting paid, perhaps you stop working for a while. Things begin to break down and you see suffering around you. You realize that not working doesn't do you any good, but through working you can regain your self respect. So you start to contribute again. Those around you will have the same instincts, and a large remnant of functioning society remains intact, at a lower, slower standard of living.

I don't think this scenario is sugar coating. We are used to a very high standard of living; most take it for granted every day. The standard will be reduced. To what point in history will we return? The Stone Age? I don't think so. The hard part of advancing the standard of living is developing know-how; executing is easier. For a while, we will fail to execute. But a civilization doesn't typically lose its collective knowledge.

[old steel]

It's not going to go down how you or i think it will.

[Horn]

It's not going to go down how you or i think it will.

There will be a pulling of the rug from under the feet at some point.

If things are allowed to go the steady route downhill all control could be lost by them.

[mick silver]

i have breaking news the coal fire plants here in ky are being shut down , in a year are so all will be natual gas fired . all it takes is a pipe line to break and there go's those power plants . more people have been layed off this year in ky coal fleids, if i heard right i think the jobs gone this year alone are over 3000 . we all can thank obama for this also . there a map showing the doors that are clsoing on they plants all over the country .....Why on earth the government is always ranting about terrorist when it's the energy companies who are the terrorist?