Reposted from Collapsing Into Consciousness
There’s a lot of startling news coming out from a lot of different sources and we should be paying attention. Here’s what I’m reading and seeing, and, quite frankly, getting more concerned about almost on a daily basis.
While most people are paying attention to Europe’s financial woes—and they are serious—there’s a lot of instability in other places…places you might think don’t matter much, but they do. In a world of global finance, global industry, global climate, and global instability, it all matters, as all of these systems are interconnected and inter-related. It’s been called “a perfect storm of catastrophic confluences.”
According to a CNN article, corporate insiders are now selling nine times more of their own shares than they are buying…
Corporate insiders have one word for investors: sell.
Insiders were nine times more likely to sell shares of their companies than buy new ones last week, according to the Vickers Weekly Insider report by Argus Research.
What makes this so alarming is that corporate insiders have been exceedingly good at “timing the market” in recent years. The following comes from a recent CNBC article entitled “Sucker Alert? Insider Selling Surges After Dow 14,000“…
It begs the question, “What do these inside traders know that we don’t know?
Last week, there was also another extremely large bet (put option) of $11 Million was placed that says the economy will tank within the next 60 days…You would have to be VERY confident in your outlook to risk $11 million on this directional position as the markets are trying to break into new highs.
Instead of listening to the CBO (Congressional Budget Office) telling us everything is improving, and who has an incredibly dismal record of financial predictions, perhaps we should be listening to some of the men who successfully warned us about the last financial crisis:
-”Dr. Doom” Marc Faber recently stated that he “loves the high odds of a ‘big-time’ market crash“.
-Economist Nouriel Roubini says that we should “prepare for a perfect storm“.
-Pimco’s Bill Gross says that we are heading for a “credit supernova“.
-Nomura’s Bob Janjuah believes that the financial markets will experience one more huge spike before collapsing by up to 50%…
Earlier this week Argentine President Cristina Kirchner responded to her country’s sky-rocketing inflation rates by freezing prices on food, a move Forbes magazine says will soon lead to widespread corruption in the business community and government.
In Venezuela, where President Hugo Chavez has attempted to control all aspects of his country’s economy, price freezes instituted on essential goods like diapers and cleaning products over a year ago failed to curb soaring inflation which registered at over 22% last year. In response, with their quiver out of arrows, the Venezuelan government announced today that they are devaluing their national currency, the Bolivar, by over a third. The announcement had the immediate impact of increasing the price for a US dollar in Bolivar by nearly 50%.
According to USA Today, by boosting the bolivar value of Venezuela’s dollar-denominated oil sales, the change is expected to help ease a difficult budget outlook for the government, which has turned increasingly to borrowing to meet its spending obligations. But analysts said the move would not be sufficient to end the government’s budget woes or balance the exchange rate with an overvalued currency. Economists predicted higher inflation and a likely continuation of shortages of some staple foods, such as cornmeal, chicken and sugar.
Chavez, like the brilliant politicians, economists and financial wizards at the helm of U.S. recovery efforts, has tried to control his economy through central governance for ten years. It has failed on all counts. Inflation has continued unabated. Price controls have led to black markets in everything from goods to currencies. Despite promises to the contrary, people continue to suffer without respite.
While Venezuela is a small country, it is a major OPEC nation, and the devaluation of it’s currency will have BIG implications in the global price of oil in about 60 days (note the connection to the 60 day ‘put’ on Wall Street).
Argentina and Venezuela, two of the region’s largest commodity exporters, just went critical. It will spread. As has been noted previously, nationalization efforts were already under way before this week’s developments.
And, in Chile, businesses are already feeling the impact of Argentina’s price freeze.
We haven’t even discussed environmental changes that are already affecting billions of people round the world.
What might we expect from here?
How likely is such a collapse to occur? No civilization can avoid collapse if it fails to feed its population. Historically, we know that when currencies are devalued and someones $100 bill suddenly becomes worth $50 as prices remain the same as in a freeze, things will get very tough for most people. We can get a hint for how things are going to be by taking a look at what is going on over in Europe. Can you imagine what will happen to the elderly on fixed incomes? What will happen as people trample each other for food as is going in Greece right now? Check out this excerpt from a Reuters article…
Hundreds of people jostled for free vegetables handed out by farmers in a symbolic protest earlier on Wednesday, trampling one man and prompting an outcry over the growing desperation created by economic crisis.
Images of people struggling to seize bags of tomatoes and leeks thrown from a truck dominated television, triggering a bout of soul-searching over the new depths of poverty in the debt-laden country.
Greece is, by far, not the only debt-laden country in the world. Look at Spain, Ireland, Italy…look at the US. In fact, look at the entire global financial system. The whole thing is a house of cards that is solely predicated on keeping everything and everyone in debt. Debt is slavery, and don’t doubt for a minute that the whole thing was engineered. Its causes are many, including our own willingness to move blindly into the addiction of comfort and ease and failure to wake up.
But we must also take responsibility for the ones who are pathologically addicted to power and control… And just like a drug addict will destroy their entire family and loved ones for their next fix, the global banking system is helpless before their addictions even as they destroy the lives of billions of people, civilization, and maybe even life itself on this small, fragile, finite planet we call home. Still, we are the victims of comfort and we really can’t be bothered.
How Can we mitigate?
- If there’s any way you can, get out of debt as quickly as possible.
- Sell expensive items you don’t need (sell the corvette and get “cheap transportation”. You only need to go from here to there. You’ll still be living better than people did 150 years ago.
- Have what my dad used to call a “go-to-hell” fund. He never knew when he might have to tell an employer to go to hell.
- For what you can’t get out of debt for, try to put cash put away to make several months worth of payments with the worthless cash from a devalued currency (your lender will be obligated to take devalued money for house and car payments).
- Keep the cash for payments in the same bank your mortgage is. Even though the currency may be devalued, and the banking system down, your defense for your payments to them is, “well, it’s in your bank…” Keep other cash safely stored away outside of banks in case of a bank holiday. It’s happened before.
- Have a minimum of 3 months food and water stored. It could bring you returns of 50% or more, plus the benefit of not starving if the fragile just-in-time delivery system were to fail for whatever reason (and there are lots of reasons why it could).
- Try to grow at least some of your own food. Put in a “victory” garden. Support local food.
- Form relationships and community. It will make things much easier on all fronts. Try to educate your friends and family (good luck with that!)
Most of all, develop resilience and sustainability around physical, emotional, and spiritual preparedness. You never know when you might need them and you do not want to be starting from scratch when it happens.