When the Sovereign Debt Volcano Blows?
by Ron Holland
(Editor’s Note: To quote Davy Crockett…”you may all go to hell and I will go to Texas.”)
“People never believe in volcanoes until the lava actually overtakes them.” ~ George Santayana
Last fall, while on an investment cruise, I had the opportunity to visit a “dormant” volcano in Chile. There was even a ski area with lift, restaurants etc. near the top on the lava and cinders. I thought at the time how I would ski the volcano but never risk my funds on a real estate investment there for obvious reasons.
Today we find the United States and most of Europe in a similar situation. We risk an eruption and collapse of the mountain of unsustainable sovereign debt built up over the last two decades. Frankly, the US dollar and national debt situation is so dire and our means to contain a sovereign debt crisis so limited by multiple wars, Washington’s debt and political incompetence at home, that anything could happen – almost overnight. Even a minor foreign policy or economic event like a Greek default or Middle East crisis could reap havoc with the precarious interlocking sovereign debt pyramid in the West.
Of course, no nation wants a collapse – especially China – because a western debt collapse and write down is certainly uncharted financial waters and the contagion risks are global. Still, America and most European governments and the central banking elites, which created the criminal sovereign debt fiasco, are only trying to buy more time and delay the inevitable. This inaction means the threat of an immediate US debt and dollar collapse cannot be ruled out. Therefore, readers who have not protected themselves certainly have cause to worry because now could be too late.
It Is Exit Time For Your Gold, Wealth & Family
Although you may have some time, nothing else has to happen before a big collapse could take place, even within days. Consequently, after 30 years of watching, writing and creating protective retirement planning and financial strategies, today I’m finally going to yell “FIRE” inside the closed ‘financial iron curtain” which is America.
If you have failed to store your precious metals outside the US, diversify out of the dollar or reduce or terminate your private retirement plan, there is now a clear danger of a Washington dollar and sovereign debt crisis which could sweep away most of your remaining wealth and financial security.
I do not have a crystal ball or inside political information on a specific imminent threat, only the observation that the sovereign debt crisis from Europe, a debt ceiling misstep from the clowns in Washington or a Middle East event could suddenly trigger the collapse. Actually any major political or economic shock could bring the Madoff style Ponzi scheme, which Greenspan and Bernanke have created, down almost overnight on top of us.
This will likely happen over a weekend and the following Monday morning you could wake up to Presidential Executive Orders “means testing” you out of Social Security benefits if you still have substantial retirement benefits or personal savings. You’ll likely discover an end to your home interest deductions, new confiscatory taxes and restrictions on US gold and silver, controls on moving private wealth and funds to safety offshore and dramatic hikes in taxes and cuts in government programs. In addition, spiking inflation rates, violence and massive protests will immediately follow these confiscatory actions and cutbacks. You can also expect severe banking and stock market liquidity restrictions, or closures, and this will only be the beginning. In short your wealth will be trapped in dollars and locked up for the duration of the emergency inside the American jurisdiction.
Therefore if you haven’t already prepared for this type of crisis contingency ahead of time, I’m telling you there will be little you can do after the fact. Washington will simply take and throw your wealth and promised benefits at the problem thus buying them more time with your wealth.
The Central Banks, City of London & Wall Street Have Looted America and the World
Back in 2007, did the Federal Reserve or your politicians or financial experts predict a collapse in housing prices of 30 to 50 percent? Remember, Bernanke, George Bush and Barack Obama all promised this was a temporary blip in the long-term upward trend in housing values. All advised you to “stay the course.”
Today, Tim Geithner claims we have a “strong dollar policy” but have you observed the 35% plus appreciation in the currencies of Brazil and Switzerland to the dollar in the last year? The EU establishment has repeatedly claimed over the last few months that the Greek problems are solved but these fake solutions usually only last a few days at best.
Back here in the US, there is talk about deficit reduction, cutting programs and tax increases but nothing really happens because solving the problem is political suicide. The American and European elites are buying time knowing that only a crash or war will give them the opportunity to act as they did in the 2008 meltdown. They only wait for a cataclysmic event to provide the fear, excuse and public support for government action needed to grab our private wealth and to delay their problems.
The mainstream American press doesn’t cover it, however the rest of the world knows that Wall Street banks and their central banking buddies in London and New York created the sovereign debt crisis. They then sold their profitable template, or imposed it on the end of a gun, for debt democracy to politicians around the world as a means to buy votes and maintain political control. The scam is now over and no one has a solution to the tens of trillions in debt already spent.
While many millions of poor people overseas are going hungry because of our exported inflation on food costs, now the foreign middle classes are being impoverished just to pay interest on the sovereign debts to our banking elites. Although, much of the world correctly blames their thieving politicians who’ve been bought off by our banking elites as the problem, our nation is also a target for their outrage.
Foreign politicians will attempt to shift the blame to America and this will speed the end of our American free ride from the fiat dollar and our reserve currency status. The world is just waiting for the spark to start the run out of the dollar and our Treasury debt. No nation will really help us when the collapse comes.
What If You Have More Time?
Maybe we have months instead of weeks – or at most a couple of years before the event takes place. Allow our politicians “buying time” to work for your benefit instead of theirs:
1. Educate Yourself With Free Subscriptions: First, to protect yourself, you must assume the balance of establishment news coverage and opinion is all disinformation designed to delay panic and create actions which will benefit the establishment probably to the detriment of your best interests. Therefore I suggest you subscribe to the following free e-mail publications:
* Follow what the elites are planning ahead of time with The Daily Bell.
* Keep up with the real freedom news and philosophy by going to LewRockwell.com
* Get an Austrian economics view on the markets and gold with Mountain Vision – Subscribe.
2. Maintain Liquidity & Reduce Political Risk: Legally and following all reporting requirements, move your private wealth outside the US into safe secure investments which will remain liquid and trading should US markets close as they did following 9/11.
3. Create A Domestic Safe-Haven Location: The potential for violence, theft and property destruction in the US dwarfs what could happen in Greece. If you can afford a safe-haven second home away from major cities and high crime locations, then do so. Consider taking advantage of the real estate collapse and buying something you can enjoy in good times and have as insurance for bad times.
4. You Will Likely Be Safer Outside the US: In a serious crisis, most of the criminals out to steal your property and do harm to you will come with official government sanction and not from traditional criminal elements. Consider a more secure safe-haven jurisdiction where the rule of law might still prevail with a condo, second citizenship or residency in a nation outside the United States for the duration of the domestic disorder and economic collapse. Remember, currency and government debt collapse is common throughout the world and history shows the difficulties don’t last forever. My fear is we haven’t seen a world reserve currency collapse before and the aftermath is uncharted waters. I would expect a scenario several magnitudes worse than the 1991 Russian collapse.
5. Secure Your Gold: Finally move most of your gold or silver offshore where it will remain secure rather than become a tempting target for confiscation from parasitical groups and individuals. Washington will need your gold as I doubt there has been substantial gold at Fort Knox since Nixon closed the gold window. The eventual outcome of the crisis may well be some fake gold backing for the dollar. Why else would anyone use a collapsed currency?
6. Don’t Trust Washington With Your Retirement Benefits: Consider closing and taking a withdrawal from your retirement plans to avoid new taxes and penalties at withdrawal, the means testing and loss of your Social Security benefits or the forced investment into collapsing Treasury obligations.
You can read all about the gold and retirement threats in my Lew Rockwell archive. Pay specific attention to the following essays:
* The Greek Tragedy
* There’s Gold In Fort Knox?
* Retire In Poverty-Retirement Plan Nationalization
* The Obama Retirement Trap
The debt crisis is here and I promise you only that you will not hear the truth on cable financial news or from your establishment investment firm or professional. To avoid a panic, neither the government, the Federal Reserve or Wall Street will be honest with you about the risks we face, just like they all lied and covered-up before the market meltdown in 2008.
If you are an American, the last place you should keep most of your wealth now is in the dollar or your home country. You might personally get out but your wealth will be trapped for the duration and probably lost during the disruption.
Reprinted with permission from The Daily Bell.
Ron Holland is a contributing editor to the Swiss Mountain Vision Newsletter and Chairman of the Advisory Board of the Foundation for the Advancement of Free-Market Thinking (FAFMT) in Vaduz, Liechtenstein.
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