The World Economy is Beginning to Unravel

May 12, 2010

We have unhappily been predicting a catastrophic economic collapse for a year now. We have also been predicting that state secessions would be borne out of that collapse. Gerald Celente predicts it will occur before the end of 2010.

Look at what’s happening in Europe, as the European Union member states and the International Monetary Fund (IMF) have ponied up $962 BILLION in paper money loans to prevent the collapse of Greece. What they didn’t tell you is that Ireland, Spain and Portugal are also teetering on the edge of collapse.

This newest infusion of counterfeit money only kicks the can further down the road…another way of saying that it buys some time. None of the fundamental causes for this insolvency, which is massive socialistic government spending, have been changed or fixed. And, as you’ve seen in the Greek riots, the people demand their bread and circuses. They are not interested in the massive spending cuts that the Greek government should make to save their own skin.

Even though it has taken about 80 years, the economics philosophy of John Maynard Keynes is being proven wrong before our eyes. Counterfeiting (central banking) and fractional reserve banking (also counterfeiting) only serve to impoverish nations, not create wealth. But you do understand that the criminals that infest the political class in nearly ALL nations embraced Keynesianism because it allows them to grow the government under the radar.

And, governments will NEVER reject Keynesianism…even if they go bankrupt and repudiate their sovereign debt.

You cannot fix the government criminals. You have to kick them to the ashheap of history and start over.

But what should you be doing for yourself and your family on an individual basis…RIGHT NOW? This is about SURVIVAL, not convenience.

First thing I recommend is to keep cash out of your bank and in a safe at home. When banks start declaring “holidays” or simply shutting down, you’ll be shit out of luck (SOL) if you want to get your money out of the bank. ATMs might also quit working, as well as credit machines at merchants and gas stations. If you have your paycheck automatically deposited into your bank account, remove the cash the same day.

Second…stop all automatic debits on your bank account. If you have some creditor, like your house payment or car payment that drafts your bank account each month, stop it and pay them by check or money order. This way, you control the amount of money in your account, and auto drafts won’t hit, causing big overdraft fees. Sure, its less convenient. But you ain’t seen nothing yet.

Third…stop using debit cards and only use cash. That will force you to spend smarter, but will also force you to stop keeping cash in the bank.

Fourth…convert cash into gold and silver coins and keep them in a safe at our home.

Gerald Celente of Trend Research Institute talks about the huge one-day “correction” in the Dow Jones Industrial Average this week.

Listen to Celente on this video. He says that he has 80% of his investments in gold, and a mix of currencies as his cash position. He says that it is insanity to be in the stock market now…what he calls a “rigged game.” He says that wealth preservation is king right now.

Investing in equities…even bonds…is OVER for the foreseeable future. You need to protect your cash positions and your wealth over the next 1-5 years. Forget return on investment…concern yourself ONLY with wealth preservation.

Gerald Celente is founder and director of The Trends Research Institute, author of Trends 2000 and Trend Tracking (Warner Books), and publisher of The Trends Journal. He has been forecasting trends since 1980, and recently called “The Collapse of ’09.”