The other day I watched a presentation by Porter Stansberry that was on the one hand, very alarming and on the other hand nothing that I haven’t been writing about for the last three years. The video was very well done and it presented all of the key issues together, at one time.
You can find it on the internet if you are interested, but it is really nothing more than a great presentation that is geared to get you to subscribe to his newsletter. Not a bad idea. I have not had the best success with his investment recommendations, but then most investments have suffered for the last year (outside of selected stocks in the stock market) so it is not surprising.
I am going to highlight a few of his predictions and I happen to agree with all of them and have written as much in the past. His presentation is a wake up call to Americans. These life-changing events are coming, and sooner than most of you are willing to believe.
Porter Stansberry says:
A specific event will take place in America’s very near future which could actually bring our country and our way of life to a grinding halt.
This looming crisis is related to the financial crisis of 2008 but it is infinitely more dangerous.
I expect there will be a near-complete shut-down of the American economy. Life as we have known it for more than 40 years will essentially cease to exist. Our governments on both the Federal and State level will shut down. Banks will not open. Businesses will at least temporarily shut their doors. I expect we’ll see martial law, enforced by the U.S. military.
I can tell you with near 100% certainty that most Americans will not know what to do when commodity prices – things like milk, bread and gasoline – soar. They won’t know what to do when banks close and their credit cards stop working. Or when food stamps fail. Or their Social Security checks to a halt.
Or when you will not be able to buy gold or foreign currencies.
In short, our way of life in America is about to change – I promise you. It is inevitable.
–Porter Stansberry, February 2013
What, you ask, would cause such a thing? Well, if you have been paying attention to what we have been writing at Miles Franklin, you should already know the answer.
Porter says, “We are about to see a major, major collapse in our national monetary system, and our normal way of life.” Bill Holter loves to say, “It’s a mathematical certainty.” Yes it is! As Porter points out:
Even if ALL U.S. citizens were taxed 100% of their income for an entire year… that’s every penny, earned by every citizen in the entire country… it would still not be enough to pay off our debts.
Last winter I presented a wonderful YouTube video on this topic, so this statement should not surprise you.
How can anyone think things are all right when the government has to borrow 46 cents of every dollar they spend? The public debt has more than doubled in the last four years! And that doesn’t take into account the many trillions in obligations that are not counted in the federal budget.
Here is what we do know.
Today, we have more government debt than any country in the history of the world. We have more debt than every country in the European Union.
We are closing in on the moment when we can simply no longer afford even the interest payments on our obligations.
The costs of maintaining our debts are about to skyrocket
–Porter Stansberry, February 2013
Why is that? Because the Federal Reserve will not be able to hold down interest rates to near-zero.
The Federal Reserve has lowered its benchmark interest rate ten times since August 2007, from 5.25% to a zone between zero and 0.25%.
But what will happen if the average real interest rate ends up being just 4% annually, and we pay it off over 30 years like a mortgage?
Incredibly, we’ll spend $34.3 trillion to simply repay what we owe right now.
–Porter Stansberry, February 2013
We are trapped and there is no way out!
The only thing that has allowed us to borrow and spend so far beyond our means is that the dollar is the world’s reserve currency! We can simply print more money. But our biggest advantage is about to disappear.
I believe our creditors (which include foreign countries and other investors here and abroad) will either completely STOP accepting dollars in repayment …or greatly discount the value of these new dollars. I’m sure you think that sounds crazy, but it is already happening.
I have written that China is already phasing out the dollar. They are setting up trade agreements with Russia, Brazil, India, Australia, Japan, Chile, the United Arab Emirates and South Africa that by-pass the dollar. They will trade with each other directly in their own currencies.
Veteran Middle East reporter Robert Fisk reported on this event in Britain’s newspaper, The Independent. Here is what he wrote:
In the most profound financial change in recent Middle East history, Gulf Arabs are planning, along with China, Russia, Japan and France, TO END DOLLAR DEALINGS FOR OIL, moving instead to a basket of currencies including the Japanese Yen, Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
–The Independent, October 6,2009
Porter Stansberry comments:
The IMF has proposed replacing the U.S. dollar with something called “Special Drawing Rights,” or SDRs.
The Fund also suggested that certain assets, such as oil and gold, which are traded in U.S. dollars, could be priced using SDRs.
This is a HUGE and important step to replace the U.S. dollar as the world’s reserve currency. I’m telling you… it’s coming…and it’s coming much sooner than most American’s expect.”
Any government or investor with any sense is looking to get out of the U.S. dollar as quickly and safely as possible.
It’s no mystery why gold and silver prices are soaring.
–Porter Stansberry, February 2013
O.K. Gold and silver are not soaring. This is the first time in the last 13 years that their prices have tumbled. So what gives? Is Porter all wet? My view is that this should be all the proof you need to understand that the price of oil and precious metals absolutely ARE manipulated and NOT allowed to rise, IN DOLLARS. It is so crystal clear that the dollar is falling out of favor and is a doomed currency that the Fed MUST hold back the rise in oil and gold and silver to hide the truth. Kill the messenger! Rising oil and gold send out a warning that the dollar is losing value! Inflation is not just rising prices, although that will come soon enough, it is about the debasement of the dollar.
The reason that the Fed is in a box and cannot get out is because they must hold interest rates close to zero or the interest component of our deficit will soar. Porter pointed out what would happen if interest rates rose to just 4%.
Last year the Federal government collected $2.7 trillion in taxes. If interest on the debt hits 4%, say by 2016, the one-year interest on the estimated $20 trillion debt will be $800 billion and rising, or nearly one-third of all taxes collected, leaving little left to run the country. At 6% interest this will gobble up nearly half the tax revenues. It’s coming, and that’s a promise. What that means to me and you is higher taxes, reduced services and standard of living.
Last fall I featured an article by James Dale Davidson. Davidson warned that the dollar would soon lose its “Petro Dollar” status. In other words, the Arabs would no longer require dollars as a means of payment for their oil. Porter agrees. The only thing holding up the “value” of the dollar is its Petro Dollar status. If countries around the globe can buy oil with other non-dollar currencies (it is already starting to happen) then they will not need to hold onto large amounts of dollars to use to import oil. The dollar’s “value,” like anything else, is determined by supply and demand. The supply of dollars is growing exponentially and the demand is on the wane. This is a guaranteed formula for disaster. That is why I have most of my net worth in non-dollar assets like Oceanside real estate in Florida, valuable antiques and collectables and lots of gold and silver. That is why I store my metals outside of the country.
From a short-term view, owning gold and silver has lost its luster, but that is being very shortsighted and foolish. If the Fed does not raise interest rates, they will have to continue purchasing most of the Treasury’s bonds. That will add pressure on the dollar. If the dollar falls, prices rise. If the Fed cuts back on QE and dollar printing, to support the dollar, the bond market will crash under the pressure of rising interest rates and the stock market will tumble and the economy will slide into a depression. They have no good choice, no way out.
We have a way out – out of the dollar and into gold and silver before it’s too late. You should be thankful for the manipulated take down in precious metals, allowing you one last chance to convert dollars into gold and silver. This is all so crystal clear! Stop thinking like an “investor,” in search of short-term gains. The gains will be short-lived and IN DOLLARS, which is exactly where you do not want to be. Seeing things as they are. We are headed for a catastrophe, a collapse of the dollar. Jim Sinclair has been telling you this for several years. The dollar will lose over half its value – it is coming. John Williams has been telling you the same thing. We all have, and prices are dirt-cheap, so what are most of you doing about it? Nothing! Gold and silver sales, (physicals) are setting records, but most of the buying is coming form China and India. You saw the pictures I posted in Monday’s daily from Zero Hedge. In case you missed it, here is what I am talking about.
And what are YOU doing? Waiting for prices to go lower? You are playing a game of musical chairs and this is not the time to be on the sidelines.
Please read the article by GEAB, below. It is very important and ties closely into what you are reading here. Time is running out!
I hope Porter’s presentation gets through to you. I have tried and so have Sinclair, Celente and Williams. Some of you listen; many do not. One of these days it will be all too clear that you should have taken our warnings. We do not enjoy publishing negative information, but we call it as we see it and we are doing you a very big favor, even if you do not realize it – yet.