The coming deflation could destroy America
by John Myers
“I spent my entire academic career studying the Great Depression. The Depression may have started because of a stock market crash, but what hit the general economy was a disruption of credit. Average citizens unable to borrow money, to do anything. To buy a home, start a business, stock their shelves. Credit has the ability to build a modern economy, but lack of credit has the ability to destroy it, swiftly and absolutely. If we do not act, boldly and immediately, we will replay the Depression of the 1930s, only this time it will be far, far worse. We don’t do this now; we won’t have an economy on Monday.” — Ben Bernanke, as portrayed by Paul Giamatti in the 2011 TV movie “Too Big to Fail”
For weeks, I’ve been telling Personal Liberty® readers that there are no aliens from Mexico or anywhere else in the galaxy and that neither ISIS nor even the evil governments of Iran, Russia and North Korea are the biggest threats to the United States.
The enemy that has cloaked itself so well and is the real threat to the nation is the federal government of the United States.
The federal government has piled up $18 trillion in debt. It’s acted recklessly with its Orwellian powers over Americans to play its shell game of calling out urgently for some false interdiction. The wars on drugs, terror and poverty have all fit the bill to some extent. But the real threat reared its ugly head last week and in the first hours of trading on Monday.
Over six trading days, the Dow Jones industrial average fell 1,600 points. If you think this is a case of justice against fat cat investors, you are woefully mistaken. I understand this because I have been through the bear markets of 1982, 1987, 1989 and the granddaddy in my lifetime, the stock market crash of 2008. In every case, the crunch on equities came months after a continual erosion of global commodity prices.
According to the CRB Commodity Index, commodity prices have fallen by a third in the past year. None have been more devastating than crude oil, which has fallen from more than $100 per barrel 14 months ago to its current price this week of less than $40 per barrel.
The demise of commodities that represent real wealth is taking a baseball bat to global markets. It is either amazing or sinister that our representatives in Washington have completely forgotten the capital crash of 2008, especially when you consider that Poland’s government has never forgotten a Russian invasion dating back four centuries. I see this as wishful thinking on the part of Washington or perhaps abject irresponsibility on the part of our elected leaders.
With the election just over a year away, presidential hopefuls, both Democratic and Republican, are talking about our need to be more politically correct or how America’s biggest challenge is “anchor babies.” Congress should understand that if this bear market of 2015 progresses and is not bought off with Treasury money, in just a decade millions of Mexicans will be complaining about American “anchor babies.”
If there is one thing the Mexicans are good at, it is living in poverty and not going on murderous street protests.
This won’t be your grandfather’s Depression. I have heard too many stories from my father and uncle about hobos who would come to the family homestead looking for a morsel of food. My grandparents had lost all of their savings during the commodity crash of the late 1920s but owned the homestead outright, and my grandmother never refused a hungry man a plate of food. My dad used to stay it was a different era and that some of the neighbors who couldn’t afford to give a potato away were never robbed or abused by desperate men.
We have seen quite a change over the past 85 years. Now, parts of the community believe it is their right to riot for no greater purpose than a liquor store closeout sale or that it’s their God-given right to jack a safe full of narcotics from a community drugstore. These crimes are occurring during relatively prosperous times. Guns and race rage will make 1929 seem like a slow year compared to the coming Armageddon.
Intelligent elected officials rail against the possibility of a financial collapse, even though the nation barely escaped an economic meltdown seven years ago. It has become too much of a habit for our federal government to obscure the real risk and focus on silly things, such as whether Iran may have a nuclear weapon a decade from now.
If this economic crisis goes into full swing, Iran won’t waste the money attacking what was once the United States of America.
In good times and bad,
–John Myers
For weeks, I’ve been telling Personal Liberty® readers that there are no aliens from Mexico or anywhere else in the galaxy and that neither ISIS nor even the evil governments of Iran, Russia and North Korea are the biggest threats to the United States.
The enemy that has cloaked itself so well and is the real threat to the nation is the federal government of the United States.
The federal government has piled up $18 trillion in debt. It’s acted recklessly with its Orwellian powers over Americans to play its shell game of calling out urgently for some false interdiction. The wars on drugs, terror and poverty have all fit the bill to some extent. But the real threat reared its ugly head last week and in the first hours of trading on Monday.
Over six trading days, the Dow Jones industrial average fell 1,600 points. If you think this is a case of justice against fat cat investors, you are woefully mistaken. I understand this because I have been through the bear markets of 1982, 1987, 1989 and the granddaddy in my lifetime, the stock market crash of 2008. In every case, the crunch on equities came months after a continual erosion of global commodity prices.
According to the CRB Commodity Index, commodity prices have fallen by a third in the past year. None have been more devastating than crude oil, which has fallen from more than $100 per barrel 14 months ago to its current price this week of less than $40 per barrel.
The demise of commodities that represent real wealth is taking a baseball bat to global markets. It is either amazing or sinister that our representatives in Washington have completely forgotten the capital crash of 2008, especially when you consider that Poland’s government has never forgotten a Russian invasion dating back four centuries. I see this as wishful thinking on the part of Washington or perhaps abject irresponsibility on the part of our elected leaders.
With the election just over a year away, presidential hopefuls, both Democratic and Republican, are talking about our need to be more politically correct or how America’s biggest challenge is “anchor babies.” Congress should understand that if this bear market of 2015 progresses and is not bought off with Treasury money, in just a decade millions of Mexicans will be complaining about American “anchor babies.”
If there is one thing the Mexicans are good at, it is living in poverty and not going on murderous street protests.
This won’t be your grandfather’s Depression. I have heard too many stories from my father and uncle about hobos who would come to the family homestead looking for a morsel of food. My grandparents had lost all of their savings during the commodity crash of the late 1920s but owned the homestead outright, and my grandmother never refused a hungry man a plate of food. My dad used to stay it was a different era and that some of the neighbors who couldn’t afford to give a potato away were never robbed or abused by desperate men.
We have seen quite a change over the past 85 years. Now, parts of the community believe it is their right to riot for no greater purpose than a liquor store closeout sale or that it’s their God-given right to jack a safe full of narcotics from a community drugstore. These crimes are occurring during relatively prosperous times. Guns and race rage will make 1929 seem like a slow year compared to the coming Armageddon.
Intelligent elected officials rail against the possibility of a financial collapse, even though the nation barely escaped an economic meltdown seven years ago. It has become too much of a habit for our federal government to obscure the real risk and focus on silly things, such as whether Iran may have a nuclear weapon a decade from now.
If this economic crisis goes into full swing, Iran won’t waste the money attacking what was once the United States of America.
In good times and bad,
–John Myers
http://personalliberty.com/the-coming-deflation-could-destroy-america/
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