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Tuesday, February 4, 2014

Top 10 Triggers of a US Financial Collapse and the New Government Ponzi Scheme

Poor Man Survival

Self Reliance tools for independent minded people…


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Faith is one of the forces by which men live, and the total absence of it means collapse.

>>William James


A discussion of this topic was started on one of our social networks and I promised to write a condensed version of what I have touched on throughout the past couple of years.  If you recall how our economy fell apart after 911 and how Bush pushed for Americans to get out and buy stuff, this was a hint of what a calamity can cause.  Let us know what you think- leave your comments…


The dollar has lost 96% of its value since 1913…


Top 10 Potential Triggers of our Collapse


Over the years I’ve posed many examples of how our government treats citizens like crap.  Roughly 87% of Americans no longer like the federal government and with good reason:  Policies which have decimated middle class jobs, unfair tax system, a healthcare system which is proving to be a disaster, the trampling of our privacy and rights, an overregulated nation which is destroying job-creating entrepreneurism and so on.


The dollar became the world's reserve currency when President Nixon abandoned the gold standard in the 1970s. The dollar is used for 43% of all cross-border transactions. The dollar's value is strong as measured by central bank reserves -- 61% of these foreign currency reserves are in dollars.


China and Russia want an alternative to the US dollar and it could happen but it would take a tremendous amount work and resolve…


Altogether, foreign countries own more than $5 trillion in U.S. debt. If China, Japan or other major holders started dumping these holdings of Treasury notes on the secondary market, this could cause a panic leading to collapse. China owns more than $1 trillion in U.S. Treasuries. That's because China pegs its currency, the yuan, to the dollar. This keeps the prices of its exports to the U.S. relatively cheap.


Zha Xiaogang, a researcher at the Shanghai Institutes for International Studies, recently said:

The shortcomings of the current international monetary system pose a big threat to China's economy."

That's why China is now actively taking steps to phase out the U.S. dollar because of its frustration with the U.S. government's mismanagement of our currency. And how does our government respond? We have the audacity to label China a "currency manipulator!"


A few weeks ago I wrote a series of articles (including a free handbook) about how the government cannot even give us the truth about inflation.  Its number do not take into account health care costs, food prices or the cost of energy…all of which are crushing the finances of Middle Class Americans.



1.        The faith of citizens in the dollar, and our government finally evaporates.  We may be closer to that then what most think (but don’t worry, the government is spending full tilt to prepare for massive citizen uprisings.  This is one of the reasons DHS is militarizing local police forces).

2.       The faith in the US dollar by our debt holders and international investors fails.  To a degree, this is already taking place, especially in China, Russia and many other countries.

3.       The faith of our allies in Europe erodes due to the lack of leadership shown by Pres. Obama.  This too is already taking place with many in Europe looking to Germany for leadership.

4.       A national economic default or re-issue of a new currency.  This too is in the planning stage as is a federal takeover of all retirement accounts (mandating all retirement accounts be held in US investments).

5.       If our so-called leaders default on Social Security there will be hell to pay and civil strife like this country hasn’t seen since the Civil War.

6.       If the government pulls another FDR stunt whereby all citizens must turn their gold over to government authorities.

7.       Debt is a form of slavery.  International bankers run our money supply and citizens are in debt beyond anything reasonable.  It is virtually impossible for the nation to get out of debt short of default and that applies to many citizens as well.  As jobs pay less and offer zero benefits, many will no longer be able to afford to live here.  We’ve already lost 10% of the middle class and more people are leaving the US to live in cheaper countries.  More than 50% of citizens get some kind of government assistance usually in the form of food stamps, Section 8 housing, etc.  If those benefits are eliminated, chaos will reign.

8.       Public sector workers in many communities were over-compensated and promised gold-plated retirement benefits which taxes can no longer support.  Detroit is an example of 50 years of Democratic rule which bankrupted the city, killed public services and fostered a massive population exodus.  Many other cities will go the same route creating a lot of unhappy retirees (most public sector employees only had to work 20 years to get a full pension and benefits & politicians get EVEN better benefits from feeding at the public trough).

9.       Roughly 30% Americans have no emergency fund nor know how to budget or as the old adage states “most Americans are only a paycheck away from being homeless.”  If Washington whittles away or eliminates the various lifelines, civil rest will ensue.

10.   As the government continues to bankrupt the nation and trounce our Bill of Rights, enough folks will get angry and they won’t take it.  This is what has happened throughout history.





In many respects, America is at the end of its empire and a dollar collapse is possible, but not probable.


We’ve squandered our resources engaging in wars that enrich corporate America.  We have created a bizarre, unfair tax system which rewards the rich and works against small business owners and job creation.  Our legal system works well for the rich but no so well for the poor (we have more people in prison than any other nation).  We have more laws, rules and regulations (created primarily by unelected bureaucrats) than any other nation and it is choking the vitality out of our country.


If you read through this list, you probably discovered a common thread – FAITH in the system and how it is being eroded by dysfunctional politicians and bureaucrats at every level of government.


What’s truly sad is the fact there are so many spineless citizens who do not have a clue as to what is happening, to how our country is being destroyed from within.


This is actually the NUMBER ONE CAUSE OF OUR DESTRUCTION – citizens who do not care.


A dollar collapse is when the value of the dollar falls so fast that all those who hold dollars panic, and sell them at any cost. In this scenario, sellers would include: foreign governments who hold U.S. Treasuries, traders in exchange rate futures who trade the dollar versus other currencies, and individual investors who demand assets denominated in anything other than dollars.


What Would Cause This to Happen?

Several conditions must be in place before the dollar could collapse. First, there must be an underlying weakness. Second, there must be a viable currency alternative for everyone to stampede into. Third, a triggering event would need to occur.

The first condition does exist. The dollar declined 54.7% against the euro between 2002 and 2012. Why? The U.S. debt nearly tripled during that time period, from $5.9 trillion to $15 trillion. This increases the chance the U.S. will let the dollar's value slide, allowing it to repay the debt with cheaper money.

The economies of Japan and China are dependent on U.S. consumers. They know that if they sell their dollars, their products will cost more in the U.S., and their economies will suffer. Right now, it's still in their best interest to hold onto their dollar reserves.

China and Japan are selling more to other Asian countries, who are gradually becoming wealthier. However, the U.S. is still the best market in the world.



Naomi Wolf’s 10 key steps to close down an open society: a dictator's blueprint:

1.       Invoke an internal and external threat 2. Secret prisons where torture takes place 3. Develop a paramilitary force 4. Surveil ordinary citizens 5. Infiltrate citizens' groups 6. Detain and release ordinary citizens 7. Target key individuals  8. Restrict the press 9. Recast criticism as espionage and dissent as treason 10. Subvert the rule of law…



The signs of collapse are everywhere…


However, there are many who believe we cannot, as a nation, default on our obligations…

The economies of Japan and China are dependent on U.S. consumers. They know that if they sell their dollars, their products will cost more in the U.S., and their economies will suffer. Right now, it's still in their best interest to hold onto their dollar reserves.

China and Japan are selling more to other Asian countries, who are gradually becoming wealthier. However, the U.S. is still the best market in the world so why ruin your best customer?

A sudden dollar collapse would create global economic turmoil as investors rush to other currencies, such as the euro, or other assets, such as gold and silver.


“There is never a risk of default for a sovereign nation that issues its own free-floating currency and where its debts are denominated in that currency.” Mike Norman, Chief Economist for John Thomas Financial


Technically, this is true but in reality, the US would simply reissue a new currency and perhaps force Americans to turn in their gold or mandate all retirement accounts be switched over to government securities.  There is already a plan in place.


Judging by the past few Presidential administrations, freedom and Democracy are on shaky grounds in the US…Anti-citizen laws such as the un-Patriot Act have destroyed privacy, restricted our right to travel, militarized our local police and worse. Americans should prepare for a just-in-case scenario – hold physical supplies of gold and silver and other hard assets such as mortgage-free land.


What would happen if the US did default?


Traits Common to Declining Cultures...

Obsession with beauty

Decline of the middle class

Increase of violence (primarily among young)

Decline of the family

Decline of morals

Increase of immorality and ethics among leaders

An insolvent government

Failure of its people to see the decline

A decline in literacy and education

Decline of a belief in a Supreme Being


Documentaries For Americans

As an independent thinker, I find it important to open your eyes and see the world for what it is. There are many disturbing things going on in this country, and when we try to discuss it, it becomes a ‘Us vs. Them’  kind of battle.


A New Social Security Ponzi Scheme?


"Let's do more to help Americans save for retirement. Today, most workers don't have a pension. A Social Security check often isn't enough on its own. And while the stock market has doubled over the last five years, that doesn't help folks who don't have 401ks. That's why tomorrow I will direct the Treasury to create a new way for working Americans to start their own retirement savings: MyRA. It's a new savings bond that encourages folks to build a nest egg. MyRA guarantees a decent return with no risk of losing what you put in. And if this Congress wants to help, work with me to fix an upside-down tax code that gives big tax breaks to help the wealthy save, but does little to nothing for middle class Americans. Offer every American access to an automatic IRA on the job, so they can save at work just like everybody in this chamber can."

What are the differences between MyRA and Social Security? One difference is that MyRA will be voluntary — at least for now.

Another is that your MyRA account will have your name on it... although it is not too different from Social Security in that respect. Social Security does tell you how much you can expect to receive when you retire.

But there are also striking similarities between the proposed MyRA and Social Security. The main similarity is that the Treasury will take your money and spend all surplus funds.

For many decades, the government has spent the surplus money from Social Security. The government would collect Social Security taxes in excess of what it had to pay out in Social Security benefits, and the rest would be dumped into the general fund and spent.

There is no Social Security lockbox. There is a Social Security trust fund filled up with a bunch of IOUs from the government. Social Security holds more government debt than China.

This is how Bill Clinton was able to claim budget surpluses in the late 1990s. The government was still running a deficit, but the surplus funds from Social Security were enough to cover it. It has all been an accounting gimmick.

But with the major recession that began in 2008 came smaller than expected tax collections. In addition, we have seen the start of baby boomers hitting retirement age.

So in the last few years, we have seen an end to Social Security surpluses. And as Social Security goes further into deficit, the government is desperate for new funds...

What better way than to start a whole new Social Security-like Ponzi scheme?

Now the government can get more money for the Treasury to spend and write more IOUs. This time, the IOUs will be held by individual investors in their MyRA accounts instead of the Social Security trust fund.

As most of us have learned, government cannot be trusted to be good stewards of public monies and resources…


Until the next revolution,

Bruce ‘the Poor Man’


The Poor Man has been educating Americans about the systematic plundering of their resources and way of life and what they can do about it since 1999. Our Mission: To protect and promote your freedom, civil rights, financial well being and overall self reliance in these turbulent times.     

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escapeartist said...

There is always action to be taken. You can't sit idle and not take precaution. Our nation's current status isn't your fault... but it is your responsibility to protect yourself, and your loved ones. This is why I personally recommend using the Poor Man Survival resources

Schiff said...

The crisis is imminent, "I don't think Obama is going to finish his second term without the bottom dropping out. And stock market investors are oblivious to the problems. We're broke, we owe trillions. Look at our budget deficit; look at the debt to GDP ratio, the unfunded liabilities. If we were in the Eurozone, they would kick us out.
Peter Schiff

MIN said...

The average Joe in this country is asleep at the wheel - too many beers watching the Big Delusion (I mean NFL)...the morons are easily distracted by the Bread and Circuses...they'll make fine slaves.

Joe said...

The U.S. economy is in the worst position we have ever seen.
But, it is much worse than we’ll ever know >Joe