BIG Problems with Mercedes BENZ/BMW/PORSCHE

With the economy slowing and demand for new vehicles shrinking, Mercedes-Benz is offering buyout packages to the nearly 4,000 workers at its Alabama plant for the first time since the factory opened 11 years ago."We're responding to the demand in the marketplace by reducing our operations here at Mercedes Vance," said Taylor, president and chief executive of MBUSI.

No GM/Chrysler Money from the Govt. CNBC says
"The development adds a new element of uncertainty for the embattled U.S. auto industry as Detroit's political allies warn the sector faces a deepening financial crisis that threatens tens of thousands of jobs."
BMW to lay off up to 733 temporary workers

As many as 733 temporary workers at BMW’s Greer plant will be laid off in December as the German automaker begins to feel the effects of the world financial crisis.
BERLIN — The German automaker Porsche AG said Sunday it will slow production at its main plant for upgrade work at the end of the year and acknowledged that the global financial crisis had hit the auto industry hard.
Car makers across Europe are cutting production and jobs because of the economic crisis. German competitors Daimler AG and BMW AG said last month they would cut production, change deliveries or temporarily shut plants to accommodate a fall in demand.
Ford's U.S. auto sales plummeted 30 percent and Toyota's dropped 23 percent in October as low consumer confidence and tight credit combined to scare customers away from their showrooms.


Comment: My estimation is that the many of these high end car dealers will be the first to go in the coming depression. First, the rich become more frugal with their money. (that is how they become rich in the first place.) Secondly, the middles class will not be able to afford even a used Mercedes, due to the rich company becoming more frugal in keeping employees on their payroll ( LAYOFFS). The trickle down affect will become more serious as the months go by. The poor.. well they will just be happy to eat. I guess I wonder if this means we are in worse shape than the Great Depression at this point. I mean these guys survived the Depression but they can not survive this " recession"?

Bankrupt and Closing Retail Stores

Here is a list of Retail stores closing, is your favorite store here? This is quite scary folks!

Ann Taylor closing 117 stores nationwide.

Eddie Bauer to close more stores after closing 27 stores in the first quarter.

Cache, a women’s retailer is closing 20 to 23 stores this year.

Lane Bryant, Fashion Bug, Catherines closing 150 stores nationwide

Talbots, J. Jill closing stores. Talbots will close all 78 of its kids and men's stores plus another 22 underperforming stores. The 22 stores will be a mix of Talbots women's and J. Jill.

Gap Inc. closing 85 stores

Foot Locker to close 140 stores

Wickes Furniture is going out of business and closing all of its stores. The 37-year-old retailer that targets middle-income customers, filed for bankruptcy protection last month.

Levitz - the furniture retailer, announced it was going out of business and closing all 76 of its stores in December. The retailer dates back to 1910.

Zales, Piercing Pagoda plans to close 82 stores by July 31 followed by closing another 23 underperforming stores.

Disney Store owner has the right to close 98 stores.

Home Depot store closings 15 of them amid a slumping US economy and housing market. The move will affect 1,300 employees. It is the first time the world's largest home improvement store chain has ever closed a flagship store.

CompUSA (CLOSED).

Macy's - 9 stores closed

Movie Gallery – video rental company plans to close 400 of 3,500 Movie Gallery

and Hollywood Video stores in addition to the 520 locations the video rental

chain closed last fall as part of bankruptcy.

Pacific Sunwear - 153 Demo stores closing

Pep Boys - 33 stores of auto parts supplier closing

Sprint Nextel - 125 retail locations to close with 4,000 employees following 5,000 layoffs last year.

J. C. Penney, Lowe's and Office Depot are all scaling back

Ethan Allen Interiors: plans to close 12 of 300 stores to cut costs.

Wilsons the Leather Experts – closing 158 stores

Bombay Company: to close all 384 U.S.-based Bombay Company stores.

KB Toys closing 356 stores around the United States as part of its bankruptcy reorganization.

Dillard's Inc. will close another six stores this year.
Chili’s restaurants closing across the PacNW region

Bennigan’s / Steak & Ale
Mervyn’s
Steve & Barry’s Fashion
Sprint Nextel closing 125 locations
Sharper Image shutting down 90 to 180 stores
Pep Boys, 33 stores; Ethan Allen, 12 stores and Dillards, six stores
Kirkland's Stores Closing: 30 to 130
Why? Management of the national home-decor chain told analysts it intends to close 30 underperforming stores during the fourth quarter, which ended in January. It is considering closing even more stores (up to 100) in the next 18 months, saying it wants to focus on stores not based in malls.
Rite Aid Stores Closing: 28
Why? The drugstore chain announced in January that it was exiting the Las Vegas, Nev. market because the stores there had not been contributing to overall results. The company hasn't opened a new store in the Las Vegas area since 1999
Pier 1 Imports Stores Closing: 25
Friedman's, which operated 455 jewelry stores, is also closing after filing Chapter 11

American Express in BIG TROUBLE!

The credit crisis is slowly hitting credit card companies. One of these "credit companies" will be filing for bankruptcy, as many consumers are unable to make their payments. Any care to guess who is FIRST?

American Express, hammered by the credit crisis, says it will slash 7,000 jobs as part of a drastic cost-cutting initiative.

Real Estate in Canada to Plummet!

According to Garth Turner ( Former Minister of Revenue):

Garth Turner's Site
1. Eastern cities, including Toronto, will have markets fall another 10%, for a peak-to-Spring decline of 25%.
2. Albertan cities will decline another 10% as well, for a rout of 30%.
3. Vancouver will crash 20%, taking the average price down 25%, on its way to 40% prior to the 2010 games.
4. Montreal and Ottawa will decline about 12% by Spring from the peak, while Maritime cities will escape absolute reductions, and merely flat-line.
5 Condo prices will erode the most, especially in Vancouver and Toronto.
6. Flashy new landmark towers in those same cities will never be built, while in Calgary they already know the score.
7. Large builders like Mattamy, now desperately cutting prices by more than $30,000 a unit and giving away free cars, could see their business volumes fall by two-thirds.
8. Recent, equity-less owners will owe more than they own, and enough of them will walk to generate shocked headlines.
9. Interest rates will crash lower, but mortgage rates decline far less.
# Renters will trump owners.
10. Sometime next summer, maybe the fall, perhaps sooner, there will be major buying opportunity on certain kinds of real estate which have a sustainable future. More to come on that.

Heading for a DEPRESSION says Peter Schiff

Peter D. Schiff president of Euro-Pacific Capital, a Connecticut-based brokerage urged his clients to get their money out of U.S. stock and bond markets and look for safer investments outside of America or put their nest eggs into silver and gold. Here he is interviewed by the Financial Post:

Financial Post: How bad is the economic downturn going to get?

PS: As of right now, we are headed for a depression, meaning a protracted period of economic contraction with elevated levels of bankruptcies and unemployment. It's not going to be a recession the way we've come to know them. Whatever we call it, we're still going to be in it at the end of [U.S. presidential contender Barack] Obama's term. He's going to be known as a depression-era president. Unfortunately, [things he's proposing to do] could make it worse and drag it out. The economy will be the issue when he goes for reelection...We have to restructure the economy in a different way. That's going to involve a lot of pain. We haven't seen the full extent of the doom and gloom in real economy. It's showing up on Wall Street first because they funded all of the extravagance...But the bigger picture is the party is over. We're going to have to get used to a different lifestyle. We're going to have to start saving money again.

FP: When might the U.S. stock market bottom out?

PS: The U.S. stock market is still fairly expensive, especially if you factor in what future earnings are going to be. I think [the Dow] still has a long way to go down. Is it 7,500, 6,000, 5,000? I don't know, but I don't think we're there yet. Adjusted for inflation, I think in five years the Dow is going to be below where it is today.

Top 10 JOBS for the COMING GREAT DEPRESSION

1. Bankruptcy Attorney/Trustee/Advisor-Financial crisis advice for the bankrupt investor/home owner and average worker (with credit left)
2. Pawn Shop Attendee-Grab valuable items and give them little cash for their efforts
3. Government Worker-Make useless cash bring it home and burn it to keep warm
4. Tent Salesman- Sell tents for the upcoming tent cities that will be springing up everywhere
5. Bodyguard-Start working out so you can get paid to protect your neighbors from vagabonds
7. Garbage Collector-Work for the city AND find junk to put in your pawn shop-get paid twice!
8.Common Thief-Steal food to feed your family, thank you government for creating this job
9.Security Guard-Probably the most secure job since everything will be stolen everywhere
10.President-Become the highest paid thief in the country, then run to your farm in Paraguay when it gets too hot to handle

Beer sales go flat as economy worsens

Beer sales go flat as economy worsens
Oct 28, 2008 04:30 AM


Britons may be reeling from the global financial crisis, but few are crying into their beer. Suds sales are falling as the economy worsens, defying predictions that consumers would buy their brew at supermarkets to escape higher prices at pubs.

The British Beer and Pub Association said yesterday that total beer sales fell about 7 per cent in the third quarter – 161 million fewer pints compared with the same period in 2007.

Sales in pubs have been falling for years, leading to the closing of hostelries around the country. Now the association's Quarterly Beer Barometer reveals the downturn has broadened to supermarket sales.

Grocery and liquor store sales fell 6 per cent between July and September compared with the year-ago period, behind the 8.1 per cent drop at pubs, bars and restaurants.

US Depression is widening!

Steel industry shutting down 17 of 29 U.S. blast furnaces.

Published: October 25, 2008

The steel mills, big suppliers to many sectors of the economy, are shutting 17 of the nation’s 29 blast furnaces — a startling indicator of how quickly output is declining as corporate America struggles to adjust to the spreading crisis.

“We have seen a softening order book in the most dramatic ways in the last week,” said Tom Conway, a vice president of the United Steelworkers of America, adding that layoffs in the industry “are just starting now.”

Financial crisis cost moves toward $20 trillion

Financial crisis cost moves toward $20 trillion
Posted Oct 28 2008, 06:27 AM by Douglas McIntyre


No one with an abacus, a calculator, or a mainframe will ever know what the global credit crisis has cost in real money. Lost jobs means lost tax revenue. Lost bank capital means a drop in share values. Government aid must be near $1.5 trillion when the US's $700 billion is added to what all other nations have put in to shore up banks.

The Bank of England reckons the cost of the near-collapse of the financial system is $2.8 trillion. It does not say precisely how it came up with that figure, but in the guessing game that hardly matters.

Looking at the issue from a simpleton's perspective, Citigroup has lost $200 billion of is market cap. The number for Wachovia is more like $100 billion. The loses to Lehman and WaMu shareholders are of a similar magnitude. By these calculations, investors in US financial companies have seen well in excess of $1 trillion go down the drain. Lost jobs are certainly worth hundreds of millions in tax revenue. Most of these out-of-work investment bankers were rich.

The fallen value of hedge funds cannot be tracked, but some of the larger ones such as Citadel are down by several billion. Investors in these firms may never see most of that money back.

The fallen value of real estate due to lack of a real mortgage rescue program must be well into the trillions of dollars, especially if that pool includes housing and commercial real estate worldwide. More liquidity would not have saved the real estate market, but it might have arrested its rapid decline. Banks getting capital from the US government are not lending that out again, defeating much of the purpose.

The Bank of England's figure is probably a multiple of ten times too low. A figure around $25 trillion would be more accurate.

Largest Chicken Manufacturer going BANKRUPT!

FOAF just said Pilgrims Pride had two days worth of feed remaining. There could be a market flooded with chicken and low prices, quickly followed by skyrocketing prices. Lots of jobs will be lost also as neither Tyson or Waynes Farms would be able to take up all the slack. Talking about a coming depression!

MILWAUKEE (AP) -- The sky could be falling on Pilgrim's Pride Corp., the chicken industry's biggest producer.

With its temporary financing ending on Tuesday and credit markets tight all around, the company faces an uncertain future. Some analysts say it could file for bankruptcy, though Pilgrim's Pride has said that option is unlikely. Others say the company is ripe for a buyout, either in whole or in part, by competitors. "Essentially, Pilgrim's Pride as we know it today will cease to exist."
Company spokesman Gary Rhodes said Pilgrim's Pride won't be making any comments. Earlier this month, he was widely quoted as saying that filing for bankruptcy wouldn't be in "anyone's best interest."

Man Shot, Robbed of Final Paycheck on Day He's Laid Off

Is this what's coming when companies lay off their workers? The worst part about this, is he also had to pay taxes on the stolen money! He got robbed twice.


Man Shot, Robbed of Final Paycheck on Day He's Laid Off
Monday, October 27, 2008


DETROIT — A 37-year-old man who had been laid off from his job at a plant in Saginaw was shot in Detroit by a robber who made off with about $1,700 — the sum of the victim's final paycheck from his job.

WDIV-TV and the Detroit Free Press report Brad Mannie said he stopped Friday night at a store with his 12-year-old son. After they got back into their vehicle, a robber shot Mannie in the hip and took his wallet.

Earlier that day, the Inkster man had been laid off from his production and maintenance job at Stress-Con Industries Inc.

Despite the ordeal, Mannie says he's just happy to be alive.

Detroit police say a weapon has been recovered.

U.S. Dollar Currency Collapse Within 30 Days?

According to Eric_deCarbonnel who writes a column called "marketskeptics", the US dollar will collapse in 30 days. He and many others believe COMEX gold is a form of debt.

Right now, because of low margin requirements, sellers of gold futures only have enough gold to cover 10% of outstanding contracts stored in COMEX warehouses. If even a quarter of outstanding contracts asked for physical delivery, it would be enough to guarantee a default. Since a financial collapse would actually create the risk total default (insolvent banks can't produce the gold or cash)This is why COMEX gold prices are falling, while physical gold is disappearing from the market place.

The forces and trends behind the financial collapse are too powerful to stop.

If you have wealth and don't own gold, then you will soon be poor.

Lets announce the date as of Nov 27th and see if he is close!

New York Wall Street 2009

What will New York look like a year from now? The answer: bad and probably worse, and perhaps downright catastrophic. Three degrees of awful. The first step was passing the bank-bailout legislation. Now that it’s done—and if it didn’t get done we would have been looking at a guaranteed economic collapse—the critical issue will be presidential leadership. And while any president will be an improvement over the current one, there is a growing belief on Wall Street that Barack Obama has the capacity to lead us out of this wilderness while John McCain does not. I’ll go a step further: Obama is a recession. McCain is a depression. Although in my opinion, I think neither one will stop a freight train of financial destruction. The Dow below 7200? Perhaps. Your 401k, 50% off, your home 50% lower? Many of those without a nest egg will find themselves in foreclosure, personal bankruptcy, or other dire financial straits. Here is some morbid advice: Purchase a life insurance policy on a relative 65 years or younger. Make yourself the beneficiary. Make the payments. Cash out tax free when the inevitable happens. WAY Better than your 401k will ever be!

Depression JOBS

Here are a list of jobs one can do when the DEPRESSION HITS:

1. Locksmith: A profession that’s experiencing true growth, no joke this time. If you’d enjoy changing locks on foreclosed homes, a locksmith career might open some doors.

2. Bartender: Everyone drinks their sorrows away during a depression. Take the Bartending course (2 weeks)

3. Silver Collector: Collect silver coins. Check your local coffee shop tills for pre 1967 dimes or quarters (Canadian)pre 1966 coins (US). Take them to your local coin shops. They are worth 10 times face value!

4. Repo Man: Everyone loses their vehicles, boats and other large items from the bank.

5. Blogger: Set up a blog with advertising and collect money on the ads!

6. Credit Collector: Also known as bill and account collectors, try to convince debtors—people who owe money—to pay their overdue bills. Get paid doing it.

Funeral home BANKRUPT! Bodies EVICTED!

When this happens you KNOW we are into a depression, even the dead are evicted? WOW!

PONTIAC, Mich. — Even the dead can't escape foreclosure in suburban Detroit.

Five bodies and the cremated remains of 22 people have been evicted from the House of Burns Memorial Chapel, a funeral home in Pontiac.

After removal, they were delivered to the Oakland County medical examiner's office for storage early Friday. The medical examiner's administrator, Robert Gerds, said some of the cremated remains date to the 1990s.

Shipping Lines Face Collapse in 6 months

Commodity carriers will collapse in 6 months according to Fearnley Fonds ASA.
We will see a significant number of bankruptcies, that's for sure", given rental rates forecast by freight derivatives.
Industrial Carriers Inc, a Ukrainian operator of about 55 vessels, filed for bankruptcy protection last week.
Shipping rates have also been hurt by frozen credit markets.
And a reduction in banks' willingness to provide the letters of credit that traders use to fund purchases of cargoes.
Rental rates have slumped to less than US$10,000 a day (the market's peak may now be losing about US$140,000 a day)
To make matters WORSE:
In his testimony before Congress yesterday, former Fed Chairman Greenspan confessed that this financial crisis may be the worst in 100 years. If that's the case, then it's not beyond the realm of reason to anticipate a stock market decline that's also among the worst in 100 years.

Will a DEPRESSION HIT CANADA TOO?

Well according to Garth Turner the former minister of finance, it does NOT look well.
He claims there will be massive fallout both in the auto industry and housing industry. You basically will not be able to sell your house! CASH WILL BE KING! Read the forcast here:

Garth Turners COMMENTS

Should you make a MAJOR withdraw from YOUR BANK?

According to this report we are in the midst of a financial PANIC! Should you be doing a major withdraw? I think so!


Roubini Says `Panic' May Force Market Shutdown, Fund Failures

By Alexis Xydias and Camilla Hall

Oct. 23 (Bloomberg) -- Hundreds of hedge funds will fail and policy makers may need to shut financial markets for a week or more as the crisis forces investors to dump assets, New York University Professor Nouriel Roubini said.

``We've reached a situation of sheer panic,'' Roubini, who predicted the financial crisis in 2006, said at a conference in London today. ``There will be massive dumping of assets,'' and ``hundreds of hedge funds are going to go bust,'' he said.
Systemic risk has become bigger and bigger,'' Roubini said at the Hedge 2008 conference. ``We're seeing the beginning of a run on a big chunk of the hedge funds,'' and ``don't be surprised if policy makers need to close down markets for a week or two in coming days,'' he said.
`This is the worst financial crisis in the U.S., Europe and now emerging markets that we've seen in a long time,'' Roubini said. ``Things will get much worse before they get better. I fear the worst is ahead of us.''

Get ready for a tidal wave of BANKRUPT COMPANIES

In a report released Tuesday, ratings agency Standard & Poor's says there are 140 large U.S. companies in danger of not being able to pay their bills in the next few months, up nearly twofold from the beginning of this year. Among the troubled firms on the agency's list are such household names as clothing retailer Eddie Bauer, amusement park operator Six Flags and pizza chain Sbarro. Also on the list are doughnut baker Krispy Kreme and mobile technology titan Palm, as well as a number of the nation's largest airlines, including JetBlue and the corporate parents of United and American.Wickes Furniture and Sharper Image have already gone away. Whitehall Jewelers, Linens 'n Things and Shoe Pavillion are liquidating. And California discount department store Mervyns decided last week that it would go out of business after failing to find a buyer.

Government HOUSING FOR SALE-CHEAP!

Here is a site showing government housing for sale. These homes are between $10 and up. LIVABLE HOMES ARE AVAILABLE FOR AS LITTLE AS A DOLLAR TO $900 to a few to ten, twenty, thirty, and up. FREE GOVERNMENT WEBSITE list of thousands of government owned homes they are desperate to sell. Homeless? NOT IN THE USA!

GOVERNMENT HOMES

Here is a HOUSE FOR A $1, better than living in a car! 1188 Sq. ft.
Buy it fix it up and rent it.

$1 HOUSE

Global Meltdown Coming

Here is a summary of an article in the The International Forecaster

October 11 2008
International Forecaster Weekly

Summary: Derivatives at the heart of the crisis, catastrophic losses are inevitable, financial system headed for oblivion, the new world disorder, EU doomed, Credit Default Swaps at the heart of the problem, Plunge Protection Team history, coverups for globalization failures, Bloodbath for the Yen.

Derivatives are financial instruments whose values depend on the value of other underlying financial instruments. The main types of derivatives are futures, forwards, options and swaps.

The main use of derivatives is to reduce risk for one party. The diverse range of potential underlying assets and pay-off alternatives leads to a wide range of derivatives contracts available to be traded in the market. Derivatives can be based on different types of assets such as commodities, equities (stocks), residential mortgages, commercial real estate loans, bonds, interest rates, exchange rates, or indices (such as a stock market index, consumer price index (CPI) — see inflation derivatives — or even an index of weather conditions, or other derivatives). Their performance can determine both the amount and the timing of the pay-offs. Credit derivatives have become an increasingly large part of the derivative market.

The Greater Depression-its coming

The people who survived the Great Depression were the ones who had money to buy when everybody else was selling." -- My grandfather-----Very interesting post probably written by many grandfathers!
Nouriel Roubini (chairman of RGE Monitor and professor of economics at New York University's Stern School of Business. He's also a former adviser to the U.S. Treasury Department.) believes that this will be a "very painful and severe recession" that could last for 18 months or more, but it will be more like 1981 than 1929. Families may be eating soup again, but at least it'll be in their own kitchens.
Depressions aren't advertised in advance. Last time around we went from the Roaring '20s to bread lines in a matter of just a few years. Anyone who says that can't happen again either doesn't know history, doesn't understand how interconnected the world's economies have become, or is lying to you. While that doesn't mean you should panic, it does mean you should prepare -- something my grandfather would've done a long time ago.
by Glen Beck 2008...more

"We are in a historic housing bust comparable to that of the Great Depression. Prior to the Depression housing prices only rose 19% (between 1921 to 1925) and then fell 30% The cycle we are going through now, is a unique cycle; it will go down as the subprime cycle. The excitement in housing was unprecedented and the unraveling of that (bubble) will have unpredictable consequences....Real estate owned by households is roughly $20 trillion and we've already seen an 8% decline which means a loss of $2 trillion.

Who actually owns the FEDERAL RESERVE?

Here are the culprits that own, control and print money. The Federal Reserve is a conglomerate of companies and individuals responsible for the coming great depression. Here is the link:

Who Owns the Federal Reserve? THE LEHMAN BROTHERS!

Headlines in today's CNN talking about the Great Depression. Should you be ready? Purchase the survival guides on the side bar for only $2! It could save your life!

The Great Depression

US Dollar is finished

The U.S. Dollar as the world's reserve currency has now been called an experiment and a historical anomaly by the Council on Foreign Relations. This is an accurate assessment as never before in the history of man have we had a reserve currency on a global scale with no backing. A hundred years ago, it was inconceivable that a monetary system could exist without gold or silver, now many economists can’t conceive of a monetary system with gold and silver. It is literal madness, but that mindset might be changing. Currently, the U.S. Dollar and the Euro are competing for the status as the world’s reserve currency despite the fact that neither monetary unit has any backing. The economic elites are now pondering bringing back gold to play a role in the global economy. The Council on Foreign Relations has economists openly discussing this possibility as the experiment in paper money continues to unravel. This is a bullish sign for precious metals considering the influence that this group has with the establishment.

"Depression Deepening"

Very Interesting article:

We definitely live in interesting times, huh?

I believe future historians will allocate Monday, September 29, 2008 as the start of the second Great Depression. That is not to say we may yet see exciting corrections and even occasionally a stronger US dollar. Still, the ultimate trend is down, down, down.

Start of the Depression

The Dow and the Depression

As the markets continue their freefall, discussion of the Great Depression has begun to emerge:

CNBC Depression Talk

Depression Coming

Depression Coming

Chris Laird

I am going to write here about a coming depression in general terms. I have some suggestions for how to prepare, (as if anyone can). There are two types of depressions, hyperinflationary and deflationary. The end results are the same.

My last article, Chaos, talked about the unpredictability associated with the logistics equation. Logistics equations have been shown to be intimately tied to our economic life and looking at them, they compare the consumption of a resource to the supply of the resource. Now I'm not going back into it and I'm just going to speak generically.

First, the main thing the logistics equations suggest is that when the economic system becomes unstable, it is not possible to determine the outcome.

Let me be a little more specific. There are debates going on now, as to whether we are going to see hyperinflation, or deflation. Frankly, I don't see a heck of a lot of difference. Both of these phenomena mean that our economic life as we know it and depend upon are coming to an end. The implications of chaos are that we do not know whether it will be inflation or deflation, to me. I may do some research on this to use logistics equations to look at the inflation vs. deflation debate later. But the point is, we don't know whether is will be one or the other.

The same dilemma applies to our gigantic investment community. Whether it be the bond market. or the stock market universe, or the par excellence market-- gold, there are indications of both inflation and deflation in the winds. As I said, in the chaos article, the gold and bond markets are indicating to me a deflation to come. Not hyper inflation. However, as I said in that article, if the US government decides at any point to forgo its obligations, then we will indeed see a collapse of the US dollar, and ensuing hyperinflation. That decision has not been reached by either the market or the US government as of this time.

Now then what can I see coming, and what can we do about it?

What I see coming: A DEPRESSION.

In 1929 the US entered a depression lasting over ten years. The world quickly followed, and theirs was as bad or worse than ours. (all trading nations with the US). As I said some banana cultures lived just fine through it. In the 20's Germany went into a hyperinflationary depression, and the free world hence went into a deflationary depression. The end result was the same for both in many senses. Starvation, mass unemployment, and shifting winds of change of the governmental systems. The outcome was two societies: The free West vs. the fascist West, a world war of unparalleled destruction, preceded by massive social dislocation, starvation and suffering on both sides.

Essentially in both cases people were reduced to mere survival as a goal. The cultures that emerged from the cataclysms of WW2 were far more circumspect in their life goals, and most certainly were not big time speculators, but rather savers and builders.

The point is that both societies encountered severe depressions that led to a general war. We are in this period as of this time. The players are different, but the circumstances the same. The first thing we will have to face is a depression lasting at least ten years. The second will be a general war. I say this because we cannot continue to support the entire world on the back of the US consumer who is so preoccupied with their exciting housing bubble. The US government is highly indebted as well, as is the US corporate universe. All this means is that we are living on borrowed time, literally. As soon as the US consumer collapses under the weight of his debts, all the economic world dependent on them will too. It's that simple.

Now then. Surviving the depression:

I was listening to Doug Noland at financial sense talking to Jim Puplava. And at the end of this very insightful discussion of where we are at today, Jim asked Doug, well, what are investors to do?????

Well now isn't that the 64000 question? ! Every hedge fund is seeking that answer.

Alright, if Buffet loses 300 million dollars shorting the US dollar, and hedge funds lose billions because GM stock rises because Kirk Kerkorian wants to buy GM -- after all the hedging strategies say hedge using puts on GM stock....well my friends u are not going to outguess these professionals. A word of warning. DON'T NOT ENTER INTO ANY SPECULATION. PROTECT YOUR CAPITAL.

Upon being asked by Jim how to protect ourselves, Doug said, "all I can say is be risk averse, and diversify". Now Doug does know what is up. I have been asked repeatedly by investors, "Chris what shall I do?". The answer is the same as Doug's. Be risk averse, and in my case I add DON'T SPECULATE.

Now then, regarding metal stocks. Metal stocks are more risky than owning physical metals. Yes physicals are, well, hard to handle. In deflation metals languish. So what. The risk of inflation far outweighs the lost purchasing power of metals. I would rather have metals that deflate along with the stock than even try to ASSUME RISK in paper.

Another thing I want to point out. I am very uncomfortable with all the talk on energy and commodities. In a real worldwide depression these both will take if far worse than gold. Yes, China is a huge potential and present consumer. Well the fact is, they can just as quickly become a disconsumer. Same with the consumption crazy US. We can very rapidly become disconsumers.

Meaning? Deflation, depression, and commodities and energy collapse.

I have no Idea why many other analysts aren't saying this too. OK I am saying it, and I have wanted to for months.

I was interested that Doug Noland had the same view that I have, that we are in a time of extreme caution, and to be risk averse. He also mentioned that metals are one of his components as well as some foreign investments and diversification. In this I strongly disagree, do not send money overseas. Keep your wealth here and find out how to do that.

The best thing to do is be out of debt. Have a residence that is paid off, plan on living without the majority of monthly income. Have enough metal to pay property taxes. etc. Live very cheaply, no matter how much you have. We are in for bad bad times.

You might want to read my article "Subsistence Crisis" here at GOLD-EAGLE.

May 15, 2005

The Coming Depression

The global economic situation looks increasingly bad as we face a certain global depression primarily due to the insane monetary policies of the central bankers. The Federal Reserve is now attempting to bail out failing financial institutions by creating more money out of thin air. Some of the big banks are reporting losses greater than the assets they have on the books. Foreigners are also coming in and are buying up this nation’s infrastructure. It is a complete disaster. Amazingly, the Federal Reserve is indicating that they are likely to reduce interest rates again which will cause further value destruction of the U.S. Dollar. This combined with Bush’s so called economic stimulus package are phony solutions that will do nothing to stave off the coming economic calamity. In fact, the Federal Reserve is doing the exact opposite of what they should be doing if they sought a long term solution. A long term solution would involve strengthening the U.S. Dollar with a sound monetary policy. By devaluing the U.S. Dollar they are robbing the average American blind and most don’t even realize it. Much like the Great Depression, the international bankers are now preparing to consolidate more wealth through these irrational policies as an excuse to bring in regional currencies and regional governmental bodies. As a result, we remain bullish on gold, silver and other sound financial instruments in light of this economic tyranny. Expect short term volatility but in the long term expect gold, silver and commodities to rise in U.S. Dollar denominations.