18 signs, 6 charts, 3 videos predicting a major economic collapse in USA & Europe

Here is a list of the most wor­ry­ing signs indi­cat­ing an immi­nent esca­la­tion of the finan­cial sit­u­a­tion in the US and Europe. As, again, noth­ing has been solved dur­ing the 2008 reces­sion the com­ing eco­nomic col­lapse could be the worst in 100 years.

The eco­nomic sys­tem that most of the world relied on since the sec­ond world war is based on fiat money and never-ending increase of con­sump­tion and pro­duc­tion. It failed to address and reg­u­late the require­ment that in order to keep busi­nesses grow­ing the pur­chase power of the many (99%) needs to grow -  not the few (1%).

For decades, we were not liv­ing in a world of free trade but large-scale / accel­er­at­ing cor­po­ratism and arti­fi­cially enhanced con­sumerism pep­pered with planned obsolescence.

The con­cept of free trade does not work for the peo­ple ("the many") any­more  when the peo­ple are effec­tively manip­u­lated into their needs (not only via mar­ket­ing but also by the profit max­i­miz­ing media and gen­eral education).

 

List of infor­ma­tion indi­cat­ing an immi­nent eco­nomic col­lapse (not the usual reg­u­lar reces­sion) in Europe and the US

The fol­low­ing lists is a com­pi­la­tion of some of the most wor­ry­ing data in my opinion:

1. Three months US trea­sury bills show less con­fi­dence in the mar­ket than at any­time since 1943 — see chart 1. This also means that the fed­eral bank (FED) will find it very hard to keep the gold price low to tem­porar­ily sta­bi­lize its fiat cur­rency with the e.g. gold car­ry­ing trade — even with the cur­rent highly unusual neg­a­tive gold lease rates. [update dec 2011: more gold lease manip­u­la­tion]
2. The applied eco­nomic model has been based on ever-increasing con­sump­tion and debt for nearly a cen­tury in the US. Grow­ing busi­nesses rely on the increas­ing pur­chase power of the many not the few which has not been fol­lowed. Inequal­ity in income has been increased for 3 decades in the US and UK — see Gini index
3. The num­ber of trades i.e. vol­ume in the share mar­ket has been a small frac­tion com­pared to the years before 2008 see chart 2.
4. US main­stream media are not even pre­tend­ing any­more to be objec­tive or demo­c­ra­tic even in pres­i­den­tial elec­tion cam­paigns. Also last year's free­dom smash­ing leg­is­la­tion and pop­u­la­tion con­trol bills are also hint­ing the gov­ern­ment is prepar­ing for major civil unrest and a collapse.
5. The US does not even try to solve the debt crises seri­ously (they only cut increases in spend­ing or tiny cuts over many years) but instead focuses on attempts to bring down the Euro­pean econ­omy first by align­ing them­selves with China and con­vince  every­one to buy US trea­sury bills. It seems the US is hop­ing to use their 900 mil­i­tary bases and mil­i­tary dom­i­nance to force oil export­ing coun­try to keep trad­ing in dollars.
6. When Barack Obama first took office, the offi­cial U.S. unem­ploy­ment rate was 7.6 per­cent.  Today it is 9.1 per­cent. Chart 6 shows the spik­ing mean dura­tion of unem­ploy­ment in the US.
7. The num­ber of bets against the S&P 500 for the month of Octo­ber is absolutely astound­ing.  Some­body is going to make a large amount of money if there is a stock mar­ket crash this October.
8. Investors are pulling a huge amount of money out of stocks right now.  Do they know some­thing that we don't?  The fol­low­ing is from a report in the Finan­cial Post.…Investors have pulled more money from U.S. equity funds since the end of April than in the five months after the col­lapse of Lehman Broth­ers Hold­ings Inc., adding to the $2.1 tril­lion rout in Amer­i­can stocks.
9. An increas­ing num­ber of unem­ployed Amer­i­cans have become so des­per­ate that they have started to look for work over­seas.  For exam­ple, the num­ber of Amer­i­cans that are sub­mit­ting appli­ca­tions for tem­po­rary work visas in Canada has approx­i­mately dou­bled since 2008.  Other Amer­i­cans are even will­ing to learn for­eign lan­guages and travel to the other side of the world if that is what it takes to land a decent job.
10. Siemens has pulled more than half a bil­lion euros out of two major French banks and has moved that money to the Euro­pean Cen­tral Bank.  Do they know some­thing or are they just get­ting nervous?
11. The Fed­eral Reserve, the Euro­pean Cen­tral Bank, the Bank of Eng­land, the Bank of Japan and the Swiss National Bank have announced that they are going to make avail­able an "unlim­ited" amount of money to Euro­pean com­mer­cial banks in Octo­ber, Novem­ber and December.
12. So far this year, the largest bank in Italy has lost over half of its value and the sec­ond largest bank in Italy is down 44 percent.
13. After the US, Stan­dard & Poor cuts Italy's credit rat­ing from A+ to A.
14. Euro­pean cen­tral banks are now buy­ing more gold than they are sell­ing.  This is the first time that has hap­pened in more than 20 years.
15. The chief econ­o­mist at the IMF says that the global econ­omy has entered a "dan­ger­ous new phase".
16. Israel has dumped 46 per­cent of its U.S. Trea­suries and Rus­sia has dumped 95 per­cent of its U.S. Trea­suries.  Do they know some­thing that we don't?
17. The mid­dle class in most devel­oped coun­tries has been reduced and indebted too much to squeeze more debt out of it
18. Both the Euro­pean and the US economies are bound to col­lapse inde­pen­dently or together as both have sim­i­lar explod­ing world record debts. Accord­ing to pio­neer investor, Jim Rogers, the US is in deeper trou­ble though.

 

Charts indi­cat­ing an eco­nomic col­lapse in Europe and the US

The below charts under­line (and are ref­er­enced by) some of the points listed above. Note: a few charts have been added since the first publication.

 

 

 

 

 

 

Videos of experts warn­ing of an eco­nomic col­lapse in the US and Europe

 

Here is pres­i­den­tial can­di­date and best­selling author of books about eco­nom­ics and US for­eign pol­icy, Ron Paul's warn­ing that an eco­nomic col­lapse in the US and / or Europe is near and high infla­tion and social unrest and polit­i­cal chaos will take place. Video from July 2011:

BBC speech­less as pro­fes­sional trader, Alessio Ras­tani, talks openly about the unavoid­able col­lapse of the econ­omy and that invest­ment bank Gold­man Sachs rules the world — not gov­ern­ments (Sept 26, 2011):

[replaced with new link on Sept 1, 2012, as orig­i­nal video was removed from YouTube]

William Black, the for­mer senior reg­u­la­tor who cracked down on banks dur­ing the sav­ings and loan cri­sis of the 1980, reveals shock­ing exam­ples of large scale fraud within the finan­cial indus­try and its reg­u­la­tors. He describes how the finan­cial melt­down is dri­ven by fraud, lit­tle of which has been legally per­se­cuted or stopped but keeps on going. From April 2009:

In my opin­ion the most spe­cific threats of an eco­nomic col­lapse in both the US and Europe are (prob­a­bly in this order):

• high and accel­er­at­ing infla­tion (10–40% a year)
• high and increas­ing unem­ploy­ment rates (10–50%)
• sav­ings and other assets in banks may become inac­ces­si­ble or lost
• tem­po­rary short­ages of food and water, fuel and electricity
• reduc­tion and losses of ben­e­fits, pen­sion and other gov­ern­ment payments
• civil unrest

 

The cur­rently high­est risk coun­tries in Europe accord­ing to their pub­lic debt/GDP ratio based on IMF infor­ma­tion from 2010: Greece (130%), Italy (118), Ice­land (116%), Bel­gium (100%), Ire­land (94%), France (84%), Por­tu­gal (83%).

 

Here are some ideas how to pre­pare for an eco­nomic collapse:

• secure your assets: buy gold, sil­ver and keep cash acces­si­ble in a safe place, spread your money across dif­fer­ent banks, coun­tries and currencies
• con­vert vari­able inter­est loans into fixed inter­est for at least 5 years
• get rid of high and vari­able inter­est debt e.g. credit card debt
• buy food and water reserves for at least a few days if not weeks
• keep emer­gency medica­ments and first aid kits
• try to become some­what self-sufficient (grow food, keep chicken, invest in solar pan­els & other elec­tric­ity generators)
• com­mu­nity build­ing (get to know your neigh­bors, you may need to help each other)

 

It seems that those who were pre­pared in 1929 and had some income/job or assets could live pretty well with low prices and many new busi­ness oppor­tu­ni­ties. Let's hope that the world will aban­don the fiat money idea finally and use the pos­si­bly final col­lapse to launch a more sus­tain­able sys­tem — per­haps par­tic­i­pa­tory eco­nom­ics but hope­fully not another fla­vor of cor­po­ratism (left or right — wing).

Ref­er­ences

• 21 signs that some­thing big is about to hap­pen in the finan­cial world
• 30 signs that the US econ­omy is about to go into the toilet
• world fac­ing worst finan­cial cri­sis in his­tory, Bank of Eng­land Gov­er­nor says (added Oct.7 2011)
• Eco­nomic col­lapse : IMF advi­sor says we face a World­wide Bank­ing Melt­down 2–3 Weeks (added Oct 9 2011)
• 5 Collapse-Proof Invest­ments With Tan­gi­ble Fun­da­men­tals (added Oct 9 2011)