Last Updated: 31 March 2012
MASTER INDEX of articles written, posted online, or recommended by Alex Paterson
Below is an article I wrote in November 2005 forecasting the economic meltdown that began to unfold in late 2008. The fact that the forecasts made by myself and others in 2005 are now coming to pass does not mean we were economic geniuses. Rather, the forecasts made were the result of economic fundamentals that have been self evident for well over 30 years, but which most people throughout the world have chosen to ignore because they believed in the lie that they could get "something for nothing".
All governments through out world have embraced a policy of creating 'money' out of thin air in order to stimulate their respective economies (via a process called "credit creation") rather than encouraging their citizens to save money for the future and invest those savings in wealth creating enterprises. The notion that an economy based upon consumption (i.e. the "consumer society") as opposed to an economy based on production can somehow create 'wealth' (sic) is a lie of monumental proportions and one that has always amazed me that it was embraced so readily by the general public. The end result of using the printing press to artificially create 'liquidity' in an economy (i.e. money creation) in an endeavour to create wealth has always resulted monetary hyperinflation and economic disaster and this time will be no different.
The triple deficits mentioned in the article below have all but destroyed the American economy and doomed the US dollar to the eventual status of a banana republic pesos. The fact that nearly all other countries in the world have embraced the same modus operandi as the United States of America of creating credit out of thin air to fuel their respective economies and buy off their citizens till the next election ensures the forthcoming economic collapse will spare no one. The forthcoming collapse of the American dollar will precipitate a complete collapse of the world financial system and the resulting hardship will result in civil unrest, revolutions and civil wars in many parts of the world and may eventually lead to World War 3.
Although specific to the US economy, the points made below apply to all countries and the final stage of the meltdown will probably start with the collapse of European banks sometime in 2009 - 2011.
At the end of my article is an essay written by Michael Hampton title 'The Lessons of Grandparents - are we destined to repeat them?' printed by Financial Sense in Oct 2005 which serves to illustrate the points made in my article.
Readers are invited to agree with, disagree with, add their point of view or seek clarification about any of the subject matter below.
Alex Paterson March 2009
by Alex Paterson
US Dollar - a Fiat Currency
Like all modern
currencies, the US
dollar is a "fiat currency", meaning it is "money that a government
has declared to be legal tender, although it has no intrinsic value
and is not backed by reserves." (Source: Oxford Reference Shelf 1991)
In other words, it is a currency backed by nothing more than blind
faith as opposed to a currency backed by something tangible like gold
or silver. The statement "in God we trust" blazoned
all US Federal Reserve notes is in keeping with the cynicism of the
architects of the Federal Reserve system, because rest assured you
can't trust Federal Reserve notes as they are in the process of
disintegrating back into the nothingness they originally came
from. There is a history to this state of affairs which time
and space precludes me from going into in any great depth in this
article, suffice to say it began with the creation of the US Federal
Reserve Bank (FED) in 1913. It is pertinent to note that the
'Federal Reserve' (FED) is neither "federal" nor "reserve" - it is a
private banking cartel owned and controlled by an elite who call themselves
"the Illuminati". The 'FED' was tasked by the US Congress in
1913 to 'create' and print US currency, but this act of Congress was
illegal because it was in direct breach of the US Constitution which
clearly states that "US currency can only be printed and issued by
the US Government". (see Note 2 below) The fraudulent nature of the
Federal Reserve Bank being tasked to issue US currency was at least
mitigated up until 1971 by the existence of a gold standard in which
the US dollar was pegged to gold at $35/ounce and a fixed percentage
of Gold was allegedly held in the vaults at Fort Knox to match the
amount of US currency in circulation. This 'gold standard'
assured foreign governments of the ability to convert on demand their
holdings of US currency into physical gold if they so wished.
Gold standard greatly limits the power of national governments to
engage in irresponsible monetary expansion. (i.e. creating money out
of thin air) However, on the 15 August 1971 President Richard Nixon
unilaterally dumped the said gold standard in order to 'create' more
money (i.e. increase money supply) to fund the increasing cost of the
Vietnam war without raising US taxes. With the US dollar no
longer linked to a Gold standard, its status of being the 'de facto'
world trading currency (especially for oil) soon forced all other
national governments in the world to follow suit and dump the Gold
standard for their own currencies. All currencies in the
are now "fiat" currencies.
"Fiat" : a decree or order. etymology: Latin: "let it be done"
"Decree": an official order issued by a legal authority (sic)
"De facto": adjective denoting someone or something that is such "of fact" (Latin), whether by right or not. Source: Oxford Dictionary 1991
2: Article 1, Section 8 of the American Constitution states that
Congress shall have the power to coin money and regulate the value,
thereof. However, the FED, which is a privately owned company,
controls and profits from the coining and printing of US money
through the treasury, and regulating its value.
3: For a good description of history of the US Federal Reserve System
4: For a breakdown of who controls the Federal Reserve see:
5: For a good description of the history of money (especially
during 20th Century) and how Central Banks create money out of thin
air see Encyclopedia Britannica:
6: For a description of President Kennedy's alleged attempt to return the
issuing of US money back to the US Government and his subsequent
NOTE 7: See also G. Edward Griffin's rebuttal of the above theory that Kennedy was assassinated because of executive order 11110
President Nixon's irresponsible decision to drop the gold standard allowed the wholesale creation of 'liquidity' in the US economy via a process whereby the Federal Reserve 'lent' money it created out of thin air to the US Government and the issuance of bonds pertaining to the debt so created, along with straight out printing of US Federal Reserve notes, a practice that has been continued by all US presidents following Nixon. That's right, you did read correctly! I'll repeat it. The Federal Reserve lends money it creates out of thin air to the US Government and charges interest on the same, with the cost of the scheme being eventually borne by US tax payers through an increase in their taxes to meet the said interest payments and the insidious dilution of their wealth by the monetary inflation (i.e. devaluation) that is an inevitable consequence of the Federal Reserve fiat money creation scam. The scale of the scam is so huge it escapes the notice of most people in the world, including nearly all American citizens.
NOTE 8: The Illuminati have had an inordinate influence over the US government since the inception of the US republic and have totally 'owned' the US presidency since Jimmy Carter, as all Presidents from Jimmy Carter onwards have been Illuminati 'stooges'. Nearly all US Senators and Members of Congress are beholden to the Illuminati as it is virtually impossible to get elected to public office without the backing of the Illuminati and their resources. (i.e. money and media coverage)
It needs to be understood that the printing of fiat currencies is the primary source of monetary inflation, and not the pressure of wages growth and so called shortages of goods and services etc as argued by most economic 'experts' in mainstream academia and the press. Wages growth and price increases are a consequence of monetary inflation, not its cause. As more money is created out of thin air, the increased amount of money in an economy (i.e. money supply) ends up chasing the same pre-existing amount of goods and services in that economy (i.e. demand) which simply results in the 'value' of the increased amount of money in circulation becoming diluted and losing value. This process manifests as an increase in the price of goods and services. In summary, any increase in money supply that is in excess of the growth in the size of an economy is by definition inflationary, because the value of money in circulation becomes diluted. (i.e. each dollar buys less)
With the 'election' (sic) of George W. Bush the practice of creating US currency has been taken to levels never seen before, resulting in the current (as of November 2005) economic stock market and housing boom in the USA. The FED has used the printing of fiat money to fuel the current US consumer binge, which in turn has kept the world consumer economy bubbling along to new heights. Every time the US consumer economy looks like faltering the FED simply 'creates' more money out of thin air and issues it as bonds. (i.e. debt to the Federal Reserve Bank incurred by the US Government on behalf of its citizens)
The extra liquidity (i.e. money) sloshing about the US economy has spilled over into the rest of the world and fuelled the world's stock and property markets to the giddy heights they are now currently at. This policy has produced a huge economic speculation 'bubble' worldwide which is now running out of 'puff' and is on the verge of collapsing. This 'bubble' has resulted in, amongst other things, an horrendous triple deficit within the US economy, the size of which has never seen before. (described in detail below)
Like a drug addict hooked on heroin, there is only one outcome to this process and it won't be pretty. The unraveling of the American economy will begin sometime in 2007/2008, which in turn will eventually precipitate a world economic depression not seen since the Great Depression of 1929.
NOTE 9. The 'official' inflation figures put out by most governments are grossly understated, with nearly all government figures being understated by at least half and in some cases by two thirds. They effect this scam by not counting or 'discounting' many items that citizens need to buy just to live, such as the purchase of a house, which just happens to be the biggest item most people ever buy in their lives. To arrive at the real inflation of money one needs to double the official government inflation figures, and in some cases triple them. Thus for example, real inflation in Australia and America is at least 10% per annum, not the 4% spouted by the respective Government agencies. The same applies to most Western Government official inflation figures.
NOTE 10. The so called bull market on the world stock markets since the early 2000's is actually an illusion. When the true devaluation of money (via inflation) is taken into account nearly all stock market shares have actually fallen in value. Thus for example the US dollar has almost halved in value from what it was worth at the end of the 1990s and the stock market has certainly not doubled to compensate for that loss in value. The only stock market items that have out performed the devaluation of fiat money are gold and silver and some other commodities such as oil, industrial metals and some basic food items etc.
NOTE 11: The coming world economic meltdown will start out as a recession and deepen in stages over a period of years into depression.
NOTE 12: The American economy and its body politic is a bit like a person who has chosen to ignore a host of warning symptoms because they were in a state of denial and has subsequently found themselves to be riddled with untreatable cancer. A similar story for most Western economies, including Australia, I might add.
Now I contend, along with many others who are aware of the multi-dimensional, dualistic nature of the realms of perception (of which the physical universe is but just one example) and the innate 'Oneness' of Spirit that underpins the same, that none of this is an accident but rather was long ago planned by the 'Forces of Darkness' in their efforts to thwart the ascension process now underway of planet Earth and its inhabitants to a higher 'vibration'. (more on this subject another time)
As of 2005 the US triple deficits comprise:
1. US Trade deficit
US Trade Deficit (i.e. Current Account deficit) currently running at
about $680+ billion/year. In other words, Americans import and
consume $680 billion worth of goods and services more each year than
what they produce and export. This figure represents somewhere in the
order of 5% of Gross Domestic Product (GDP) and is expected to rise
to 7% by mid 2006. The US trade deficit is the direct result
"globalisation" which facilitated the winding down of American
manufacturing industry and its transfer to low wage regions like
Mexico, China and the Asian Tiger economies over the past 30 years
etc. (the same phenomena applies to Australia and most
nations) The US Trade deficit has been over 5% for three consecutive
years since 2002 and no national economy has ever survived without a major correction after three consecutive years with a trade
deficit in excess of 5%. That's right - there is no historical
precedent of a nation ever being able to trade their way out from
such a position without some sort of severe recession to correct the
2. US Government debt
US Government debt is now nearly $8 trillion. (that's an official
government figure, but see note 12 below for the real
This is more than ten times the amount of United States currency in
circulation as of 2005 (estimated to be $730 billion). The debt can
also be measured as a fraction of the nation's gross domestic product
(GDP); at present, the 'official' U.S. public debt is about 65% of
the GDP. This debt level is expected by many analysts to
out of control in late 2006 with the US budget deficit possibly
doubling due to a likely $200 billion of deficit-financed spending on
Hurricane Katrina/Rita recovery; another $70 billion in tax cuts for
the top 10% of the nation and the elimination of estate taxes costing
a further $38 billion per annum. Deficit spending of this
magnitude is fiscal madness of course and it is no accident that it
is rarely discussed in the mainstream press.
13: According to Nick Barisheff of Bullion Management Services,
real total US Government indebtedness rose by $11
2004 to $46 trillion largely due to under funded (and in many cases
unfunded) social security and Medicaid obligations. The
magnitude of this liability comes into focus when one considers that
the 2004 annual increase alone is equal to the entire GDP of the
whole country. It translates into $350,000 per worker and
both couples work in most families, this represents a $700,000
liability per family.
14: The projected US Budget deficit for 2005 has
dropped to $319bn from 2004's record $412bn figure.
both these figures are fraudulent, with the 'real' budget deficit
being somewhere in the order of $500bn.
For an explanation of how this fraud has been conducted see:
3. Consumer Debt
consumer credit, including mortgage and other debt, reached a
staggering $9.3 trillion by April 2003, representing a $2 trillion
increase from January 2000. This figure, representing credit card
debt, car loan debt and mortgages, translates into approximately
$88,000 per US household. The total credit card debt alone stood at
$735 billion, with the household card debt of those who carry
balances estimated to average $12,000.
NOTE 15: This debt level has got manifestly worse since 2003. I can't lay my hands on the 2005 figures just at the moment, although I have seen them - but I'm sure you get the picture. (Alex Paterson 2005)
4. Corporate Debt
I have not provided accurate US Corporate debt figure as it is not mentioned in the article below, however it is of the same magnitude as all of the above. (i.e. US corporate debt is at least $9 trillion) Corporate debt is usually dismissed by financial commentators as not being an issue because it is considered to be normal business practice to use debt to fund day to day business expenses between the receipt of payments from clients and business expansion. (both of which are true to a certain extent) However, the debt levels of a significant proportion of US businesses is now so high that they can never trade their way out of the diabolical mess they have got themselves into. The current dire straits that all US banks, financial institutions, airlines and car manufacturers now find themselves in is a pertinent example of this sort of thing. None of the major American airlines, nor car manufacturers are meeting their day to day operating costs, let alone their pension fund liabilities etc, and as such they are all technically bankrupt. The Worldcom and Enron disasters were just the tip of the iceberg. When mortgage brokers Fannie Mae and Freddymac go belly up some time in 2009 - 2011 all hell will break lose - nearly all banks will fail, along with most superannuation funds and financial institutions and there will be major job losses throughout all sectors of the economy etc. In the process the life savings of a generation (i.e. the baby boomers) will be immolated.
5. Real Estate Boom
The current real estate boom world wide has gone on for at least 3 years longer than 'normal' boom/bust cycles, mainly because of the US Federal Reserve Bank's irresponsible practice of 'creating' money out of thin air and 'lending' it to the American public through the auspices of bonds. Nearly all the Reserve Banks of other nations are engaged in a similar policy of 'credit creation' as the US Federal Reserve, which is what has fuelled the current real estate boom world wide (as of 2005). However, this boom is coming to an end. Real estate prices are now tracking sideways or contracting in Europe and Australia, although the boom continues in many parts of USA. The real estate market in America will undoubtedly collapse in the first half of 2008, eventually taking with it the two major US mortgage brokers, Fannie Mae and Freddymac. Because it has gone to such unprecedented heights, the forthcoming real estate correction will be the most severe since 1929 Great Depression and many commentators fear that it may eclipse 1929 collapse. (My personal view is that it will be much worse than the Great Depression of 1929, but I digress ... Alex Paterson)
16: For a good explanation and graph of the current real estate boom
This article pertains to UK real estate, but the graph and points raised in article apply to most real estate markets in the Western World.
17: As the then Australian Reserve Bank Chairman, Ian Macfarlane,
said in early April 2004 in a comprehensive critique of US Federal
Reserve policies and forewarning of the forthcoming economic
slowdown; "If you're about to buy property, then that's your fault
Source: Sydney Morning Herald newspaper article dated 26 April 2004 by John Garnaut titled "Ian Macfarlane sounds warning bell on Fed policy".
6. Derivatives Time Bomb
Derivatives are poorly understood by most people, including most share market traders, most fund managers, most banking officials and most Government officials tasked with overseeing the economies of their respective countries! Most people aren't even aware of the derivatives trade. This is despite the fact that the derivatives market now dwarfs all other financial transactions. (That's right, derivatives far exceed all other transactions) Derivatives are simply any financial contract or transaction that is derived from any tradable item, whether that be a Stock item, a Commodity, Currency or a Bond etc. Most 'derivatives' are Foreign Exchange (FOREX) bets between financial institutions such as banks, insurance companies, superannuation funds etc. In essence they are usually geared futures contracts and like most futures contracts were initially designed as a form of insurance. However, the original purpose of 'derivatives' has long since been perverted by rampant speculation. The derivatives market is not regulated as there is no central clearing house as applies to futures or options trading and because of that it has gotten so out of control that a significant number of derivative trades have gone bust, but in order to hide the financial disaster from their shareholders, derivative holders (usually banks or trading organisations) are choosing to simply roll the contracts forward into the future so that no one is actually taking delivery of the underlying contract. (a bit like the Japanese banks who still today have a significant number of "non-performing" - meaning bankrupt - mortgages on their books from the Japanese property boom which went bust in the early 1990s) This practice is so perverting markets that the 'price' of the many tradable items is being grossly suppressed even though there may be a huge physical shortage of the said item. Silver is an good example of this sort of thing - silver is grossly undervalued and there will inevitably be a price explosion of 'real' silver, as opposed to the 'paper' silver of Silver Exchange Traded Funds (ETFs) at some stage in the near future.
have become "weapons of mass financial destruction" and when they
finally unravel (which they inevitably will) they will undoubtedly
bring down the whole financial pack of cards that comprises the world
financial system. The derivative time bomb is so huge that most humans
can't get their minds around it and so it is rarely mentioned in the
To quote Bob Chapman of The International Forecaster:
"As of 9/30/04, JP Morgan Chase had $43 trillion in derivatives, which is about four times US GDP; Citigroup has $17.5 trillion and Bank of America $17.1 trillion. Other trillion dollar players are Wachovia and HSBC, Hong Kong Shanghai Bank Corp. Twenty-five banks held $86.9 trillion in derivatives. The collateralization for these derivatives was only $804 billion. 87% of all derivatives were interest rate bets, followed by foreign exchange bets of 9%. In the past three years, banks' derivatives holding increased by 25% and they have doubled since 2000. Since the end of 2000 derivatives have soared $44 trillion or 108%, while assets have grown only $2 trillion or 32% to $8.2 trillion, loans have grown $1.1 trillion, or 28%, to $4.8 trillion and equity capital has grown $292 billion, or 55% to $821 billion. Thus, derivatives are now 10 times assets, 17 times loans, and 103 times equity capital. The real danger of this massive bookmaking operation is that it is entirely unregulated. It is a Ponzi scheme. When the economy heads down and the stock, bond and real estate markets follow, the derivative house of cards will collapse."
Source: International Forecaster http://www.theinternationalforecaster.com
Definition: Collateral. Something pledged as security for repayment of a loan, to be forfeited in the event of a default." Source Oxford Dictionary
NOTE 18: Given the size of the derivative market it is interesting to note that the Oxford Reference Shelf Business Encyclopedia of 1991 makes no mention of them - Derivative Trading hardly existed in the early 1990s.
19: For a description of "Ponzi Scheme" see:
The US economy is now a debt ridden carcass, gutted of its manufacturing base that a generation ago made it the most powerful and innovative trading nation in the world. (similar story for Australia and most other Western economies I might add) America has become fat and lazy on a Ponzi scheme of illegally printed money and artificially low interest rates loans leading to massive debt through out all sections of the economy, and all the froth and bubble that goes with the resulting rampant speculation. The American economy is a bit like the millions of Americans (and Australians) who gorge themselves at fast food restaurants like McDonalds every day and wonder why they find themselves unhealthy and dying of cancer and heart disease at an early age.
It is very clear that the 'Forces of Darkness' who control the US and British governments (and by default the World economy) are planning to trigger the derivatives 'time bomb' and inflate the US debt into oblivion by immolating the US dollar. In other words they intend to render the US currency worthless and pay back the US debt using the same worthless currency and then replace the US dollar with a North American currency already created by them called the 'Amero'. In the process they will wipe out the wealth of middle class citizens throughout the world. Anyone with any sort of debt to their name - be it a house mortgage, personal loan or credit card debt - will be unable to service the debt during the forthcoming economic depression and will be bankrupted, losing all their savings and wealth. No one will be able to complain about this blatant act of theft because the US military (which is controlled by the Illuminati) will remain for some time the biggest gorilla in the cage. (China is in the process of eclipsing America, but that's at least 30 years away) It is the most audacious act of theft ever perpetrated on the world - its breathtaking in its magnitude and ruthlessness - so much so that most people are unable to comprehend it and so dismiss the notion that it was all planned long ago as "conspiracy paranoia". (as I once did!) This action will inevitably trigger a world wide depression, massive civil unrest and eventually lead to world war, and by using the resulting hardship and human misery the Illuminati intend to coerce people through out the world to give up more of their basic human rights and freedoms in exchange for "economic salvation". It is a classic case of what David Icke (author of 'And The Truth Shall Set You Free') describes as "create a problem, wait for the public to demand a fix and then offer the pre-planned solution" This is all part of the Illuminati's centuries old plan to impose a World Government controlled by them upon the world's unsuspecting population.
The Illuminati - a bit of background.
The Illuminati are an expression of the 'Forces of Darkness' who have been involved with the alleged 'evolution' of this planet for millions of years. In its current incarnation the Illuminati is centred around the Rothschild banking dynasty started by Mayer Amschel Bauerin in the 1760s. The Illuminati currently comprises seven interrelated family groups based in Europe and America with about 300 people from those families occupying most of the senior positions of power and influence in the World. It includes most of the Royal families in the world. Members of Illuminati families occupy, or control by proxy, the senior ranks of all the world's major religions, nearly all the world's national security services such as the CIA in America and MI5/6 in Britain, all the major political parties of the world and all multinational companies. The members of these families are to varying degrees (depending on their importance) spiritually 'possessed' and controlled by a cabal of demonic Astral beings. (they are demons in the true sense of the word) The 'Spiritual Possession' I speak of is invoked through the use of satanic rituals in which chosen members of Illuminati families are inducted into the higher ranks of the 'elite'. (e.g the rituals of the Skull and Bones Society and Bohemian Grove are but just two well known examples of this process)
They call themselves "The Illuminati" because they are certainly more 'illumined' about the multi-dimensional, spiritual nature of 'Reality' than most humans. It is no accident that most humans are completely unaware of other realms of existence besides the Physical Universe, as the Illuminati cannot really prevail unless the vast majority of humanity remains ignorant of the other realms of reality and of the Illuminati's existence. It is for this reason that the Illuminati have heavily manipulated human understanding about the nature of reality throughout history. To this end the Illuminati have interfered with the genetic make up of humans. (i.e. human genome used to comprise twelve strands of DNA as opposed to the current structure of two - a bit like a twelve cylinder car running on two cylinders) They have interfered with and heavily influenced nearly all religions and so called sciences. (sic) The Illuminati have an inordinate influence on the mass psychology of humanity through their control of most of the World's mass media outlets such as film, television, radio, newspapers, publishing houses and educational institutions. (schools and universities) The Illuminati's influence over religion has been (and remains) one of their most important tools for controlling human belief systems and it is no accident that the etymology of the word 'religion' is from the Latin verb 'religio' which means "to tie out of the way; bind fast, hold back" (Source: Merriam - Websters Dictionary 1898)
Illuminati also use technologies most humans are completely unaware
of such as the adverse subliminal vibrational effects of
electromagnetic radiation, of which the US military facility called
HAARP located in Alaska is but just one example. They also use HAARP
to heat up the ionosphere to create super storms such as hurricane
Katrina in August 2005 and then by suddenly switching HAARP off to
cause earthquakes. (such as the one that occurred in China in May
2008 that killed 90,000 people.
For more on this see Fulford re HAARP at: http://www.youtube.com/watch?v=InV0cVH6KZc.
They have 'stolen' and suppressed free energy technologies discovered by Tesla and others since the 1930s. Using such technologies they have established human bases on the dark side of the Moon since the mid 1950s (you read correctly - mid 1950s) and had humans landing on Mars using flying saucer technology in 1962. (Source: Alternative Three) They are the instigators and financiers of nearly all wars, famines and plagues throughout history as they literally get off on the discordant vibration associated with pain and suffering experienced by humans etc. (a bit like humans who get off watching cock fights etc). War is a major source of wealth for the Illuminati as they control all the military industrial complexes throughout the world. (That's right - they control them all, including Russia and China) The Illuminati also controls the drug industry (both legitimate (sic) and illegitimate) which is why the so called "war on drugs" will never be effective. Their arrogance knows no bounds and they consider humans to be morons, which is why they treat humanity like mushrooms - keeping them in the dark and feeding them bullshit. The few humans that wake up to what is going on are either co opted or coerced into joining the Illuminati, or are ridiculed as "paranoid conspiracy nuts" such as David Icke, author of 'And the Truth Shall Set You Free'. Those in positions of power and influence who wake up and refuse to cooperate with the Illuminati are either marginalised (e.g. current US presidential candidate Congressman Ron Paul), have their careers destroyed, or are murdered as happened to President John F. Kennedy and other members of his family.
For an good insight into the Illuminati's understanding of spirituality at its higher levels see:
For a good insight into the Illuminati's modus operandi see:
Sounds far fetched? Think again. The evidence pointing to the existence of the Illuminati and their purpose of world domination is overwhelming for those who choose to look. (Now, why did Building 7 collapse on Sept 11, 2001?) Faced with economic ruin, and the hardship that goes with the same, most people will undoubtedly embrace what ever deal is put to them in order to save themselves from their own stupidity and greed.
One final note. I don't agree with everything intimated in the article below. The author implies that the forthcoming financial collapse is simply the result of our collective stupidity and greed, but as a trader (and someone who is well aware of the existence of 'Spirit' and other realms of existence through direct personal experience) I see far too much evidence that it is much more the result of the deliberate machinations of an elite who use human greed and stupidity to manipulate the 'markets' and the world economy - a bit like a sheep dog driving a flock of sheep into the confines of a shearing shed to be "fleeced".
PS The forthcoming situation is not all bad as it will provide great opportunities for both spiritual and financial growth. I'll discuss share market specifics and strategies one can engage in to 'capitalise' what is coming down the pipeline another day
20: As someone who is able to maintain their consciousness associated
with the Physical realm within the Astral realm (i.e. astral traveling), I am well aware of
the existence of demonic astral beings through direct personal
experience. The dreams all humans experience at night during
their sleep emanate from within the Astral realm. Ironically, the
Astral realm is more 'real' than the Physical realm, but most humans
are completely unaware of this state of affairs as they are unable to
maintain their consciousness of the physical realm when experiencing
the 'dreams' of the astral realm. It is possible to train
oneself to maintain the consciousness of the physical realm within
the astral realm and those interested in pursing that course of
action may like to read 'Adventures Beyond the Body' by William
Bulhman. That said, exploring the astral realm without proper
spiritual training can result in some terrifying experiences and as
such is not something one should undertake lightly until one has a
good understanding of Spirituality and the innate sovereignty
pertaining to one's true self (i.e. Spirit) and the illusory nature of
the realms of perception, of which both the physical realm and the
astral realm are but just two examples. For a good explanation of Out
of body (OBE) experiences and Astral traveling advice I recommend
reading jazz singer Pamela Stonebrooke's account of her experiences.
(located midway in the article associated with the link below)
UPDATE Dec 2010
Since writing this article in 2005 a new term has appeared in the public domain called "quantitative easing". Quantitative easing is simply a spin doctor term designed to hide from the consciousness of the general public that the central banks of the world are now engaged in the the fraudulent process of wholesale printing of fiat money. The process of printing money has gone parabolic as of early 2010. This money doesn't even need to be actually printed, a book-keeping entry into a computer is all that is needed! The end result of the mass creation of currency has always been hyper-inflation and this time will be no different. The hyperinflationary destruction of the worlds' currencies is literally only a few short years away. For this reason simply triple or quadruple all the debt and inflation figures in the above article to arrive at a ball park figure for the state of the US economy as of 2010.
Finally, to protect any personal wealth you may still have, convert it into physical Gold or Silver bullion.
ABOUT ALEX PATERSON
Alex PATERSON is an Australian citizen by birth. He writes articles and advises on issues pertaining to aviation, politics, sociology, the environment, sustainable farming and forestry, history, computers, natural health therapies and spirituality. He can be contacted at:
Photograph of Alex Paterson
Below is an article by Michael Hampton printed by Financial Sense in Oct 2005
Original URL: http://www.financialsense.com/fsu/editorials/2005/1003.html
THE LESSONS OF GRANDPARENTS
Are We Destined to Relearn Them?
by Michael Hampton
October 3, 2005
They didn't know how Poor they were then... nor we, how Rich we are today.
Most of us are destined to relearn the lessons of our grandparents. This was the thought that came to mind recently, as I had the privilege of reading a family history. Not everyone has the chance to share in the wisdom of their parents and grandparents, and so I consider myself fortunate. My own father was always a busy man, too busy to reminisce over family dinner tables about the hardships of his youth. But he was not too busy, thankfully, to keep a promise to himself. So after retirement, he kept his word and wrote a family chronicle, which he entitled "My Fabulous Journey through Life."
To look forward, we sometimes need to look back. But one lifetime is not enough. Our lives are often unlike those of our parents. They tend to have more in common with those of our grandparents, particularly when it comes to the larger economic realities. Thus, 60 or 70 years ago is often the place to look for the lessons of today, and not in the adult memories of our own parents.
Thinking of that big cycle, I believed the childhood part of my father's story, was going to be the most relevant to today's news.
The years of the roaring '20s and the stock market and huge spending boom which preceded the 1929 top do seem to foreshadow the period we are living through now. After the Tech and Internet Boom of the 1990s, the market peaked and the stock market bubble burst. We now remember 2000 ushered in a two year plus stock market slide, but nothing to rival the Wall Street Crash of 1929-1932. The generosity of our modern Federal Reserve has, so far, saved us from a slide into economic crisis. People have kept spending, using cheap borrowed money, and easy credit supported by rising house prices. As I write this, the property bubble is still growing, and our American dream of never-ending abundant times are still intact. In those older days of my father's youth, people were also ambitious and optimistic. They traded up when possible, and borrowed money if needed, in order to improve the quality of their lives. My father wrote about those times:
"One afternoon in the summer of 1929, I heard a horn blowing in front of our house. I looked up and saw a brand new Model "A" Ford with my dad at the wheel. It turned out that he had traded the old Model "T" with the rumble seat in for a brand new Model "A". It was a great car and the whole family piled in and went for a ride. I was ecstatic!" (Hampton, James E., My Fabulous Journey Through Life, Family Archive, 2003, page 4.)
But that magical car did not stay in our family long. Within a few months, the economic climate had changed, and my grandfather lost his job, making it impossible to keep up the payments. So the car got repossessed, along with the new cars of many other unfortunates who also lost their employment and their regular wages. And with the job losses, the stock market crash of 1929 morphed into a severe downturn in the economy.
The slowdown was aggravated by a collapse in credit. In the roaring twenties, it was easy to borrow money, for building new homes or buying new cars. Some, like my grandfather who had worked as a piano tuner, got credit beyond what that they could readily service. So when the work dried up, and money got tight, the payments became impossible. In the thirties, America became glutted with repossessed cars and houses for sale. Demand for new products faded, and the wheels of industry slowed to a crawl.
With no pay coming in, my father's family lived for awhile on the property of his maternal grandfather, who was better off than they were. My father was very impressed by the apparent wealth of his grandparent: he possessed his own home and even a housekeeper. But there suddenly there were too many hopes riding on one old man.
"There was not enough room in this grandfather's house for our entire family so we were forced to pitch a tent in the front yard. We had use of the house for tending to our personal needs and for some of our meals."
Beyond most of his contemporaries, Grandpa Hupp was a man with intellectual curiosity. Perhaps as a sort of symbolic effort to hold onto his dreams in the fading good times, this grandfather began inventing. My father described his efforts:
"One thing I remember vividly about grandpa was his mechanical ability and aptitude. He invented, developed, and constructed an ingenious 'perpetual motion' machine. It was constructed of shiny metal and he kept it highly polished. It was about six feet tall and resembled a ferris wheel. All around the circumference of the wheel were attached frames which encased rolling weights which would flop over at the apogee and impart downward forces to the wheel. It was so efficient that it would rotate for long periods of time without the addition of any outside force. At the time I didn't know there was no such thing as perpetual motion, so I was convinced that he had a good thing. I often wonder how he felt when he found out it couldn't be done." (Ibid.,page 5)
Now for some reason, perhaps it is the Rube Goldberg images (Heath-Robinson for those in the UK), this passage makes me think of Mr. Greenspan, who seems to think that he has perfected a perpetual motion machine for our time.
In Greenspan's case, the motion he is seeking is that of dollars, since the economists of our time bizarrely measure growth in our economy in terms of spending, not in the number of jobs being created domestically. Greenspan's wheel was set in motion in the 1990s and early years of this new century, when the Fed made repeated cuts in interest rates. Lower rates, have worked like the accelerators on Grandpa Hupp's machine, triggering spending spurts as homeowners refinanced their mortgages. But this Greenspan mechanism may meet the same fate as did great Grandpa's non-perpetual machine.
Like the aggressive home and car buyers of the 1920s, people of our time have believed it is safe to borrow aggressively to improve their lifestyles, particularly when their homes have risen in value. Higher debt levels in a falling interest rate environment often come with little or no increase in monthly mortgage payments. So why not take the extra money, by borrowing more, when it seems it will be so easy to repay through a fixed payment, backed up by the security of a fast-appreciating home.
It is not a closed system, nor is this financing done in a vacuum. Money borrowed through our modern refi's has gone only partly into property investments. Consumer spending has shot up also. An important part of that money has circulated out of the US to China and Japan to pay for the imported goods that keep flowing into our country. Fortunately, our new bankers in the Far East also want to keep the big wheel turning, since from their point of view, all those exports to America create jobs back in China and in Japan. They also realise that the competitiveness of their goods in the global market might be endangered, if their currencies were to rise sharply against the dollar. So they have been investing their growing surpluses of dollars back into the US, usually buying Treasury Bonds. And this recycling operation has seemed like a virtuous cycle for the US economy. Strong foreign buying of bonds, have allowed Greenspan to keep both long and short term rates down. Confidence in the momentum of the economy has grown, even though actual job creation has remained anaemic, weaker than is normal in a recovery coming out of recession
The net result of the action of Greenspan's money machine is that Debt has grown in the US, while China and Japan have accumulated massive holdings of US debt. Meantime, other investors seeking better returns than on US government T-Bonds, have gorged themselves on mortgage-related debt, the product of the refi boom. By mid-2004, U.S. Household debt had risen to 86% of GNP, up from 64% just ten years earlier, and foreigners hold a majority of US treasury debt, up from almost insignificant amounts in 1994. (source: Comstock Partners, as quoted in Barrons, 25 Oct.2004)
So the wheel turns round and round, with consumer goods flowing into our country. Because the money flowed back from exporting countries- we have paid for purchased goods, not through working and earning higher incomes, but simply by increasing our debt. So far, this vendor finance, recycling operation has seemed painless. For a long time, we hardly noticed as debt built-up rapidly in the form of increased household mortgage debt and as massively increased liabilities of the US government. But the bad news is that, slowly and quietly, the US has lost control of its own destiny.
Grandfather Hupp couldn't get his wheel to turn forever. And neither will Mr. Greenspan be able to keep the foreigners money rolling into a profligate consumer economy. At some point, the Chinese and Japanese will lose their appetite for US debt, and when that happens we are likely to see a sharp collapse in the dollar. When that shock hits, interest rates may need to rise to much higher levels to bring our lenders back. And high rates will have a potentially disastrous impact on our overheated housing market and the fragile US economy which has lost so much of its manufacturing industry to workers in foreign countries. Meantime, the US debt bubble grows inexorably, and the system becomes more unstable.
The inevitable friction reveals itself in higher commodity prices, as the Chinese appetite for commodities like Energy and Metals grows along with their expanding economy. They are beginning to realise that it is better to hold commodities that they need to fuel their economy, and gold which holds its value, rather than dollars which are backed by nothing more than a future promise to pay.
Like my father, I wonder what will happen to Greenspan and our economy, when we wake up and discover that the wheel that keeps turning on cheap money and seemingly-perpetually growing debt cannot go on growing forever. The excess of the Twenties, were followed by the Long dark days of Depression. Our excesses will also bring a long period of repair and correction too. I can only hope it will not bring on another depression.
My father's memories of the depression are chilling, like a scene from a movie about a distant country, or distressed planet. A lot of things we take for granted, like cheap food and energy, were simply not affordable:
"Our family situation was very bleak. I remember on several occasions, taking a bushel basket in my wagon and going down to a store on Wyoming Street to get a bushel of coal for twenty-five cents to keep us warm for the night. When we didn't have any money to buy a bushel of coal, which occurred sometimes, we all gathered in the kitchen and lit the gas oven to keep us warm. Usually after a few days of this, we would get our welfare allotment of coal dumped into our coal bin and be good for another few weeks.
For our food, we depended upon welfare coupons. We used them at our local C.F. Smith store, which in those days could be found at strategic locations all over the city of Detroit. We never seemed to have enough food! I remember we ate a lot of potatoes, pork and beans, eggs, homemade navy bean soup, biscuits and corn bread, but not much meat. When we did have meat it was cheap ground beef. I'm sure this was because my mother was trying to get as much as possible with welfare coupons." (Ibid., page 11.)
When I read this, I am amazed when I recall that our modern concept of "core inflation" excludes food and energy. As if we could ever get by without these items. Instead, our current low inflation has been kept low by all those cheap things, from clothes to shoes to phones, which can be manufactured in China, which is maintaining its currency link to the US dollar, perhaps artificially, by recycling all those excess dollars from export sales to us.
Here's what my father wrote about how his family coped with minimizing those other expenditures:
"We seldom got any new clothes, but my mother always kept the old ones clean and well mended. I came up with a system of wearing socks with holes in the heel. I folded the good part of the sock, which was above the hole, down under my heel before I put my shoe on. Ingenious! I also became quite adept at cutting out card board inserts to place over the holes in my shoes. I could go on with this list, but you get the idea."
It does sound bleak, and very miserable. But the human spirit does not get crushed so easily. When everyone is enduring hardship together, something often blossoms from hardship: co-operation, generosity, and a sense of kinship. My father felt that too:
"Actually, we kids were happy at the time. I think one of the things that got us through the depression was that we didn't really know how bad off we were. Because most of our own neighbors were experiencing the same difficulties, I guess we thought that was the way things were supposed to be."
If hard times do return to America, I believe that once we get over the initial shock over the changes in our living standards, things will be alright. In times of abundance, we forget our neighbors. In times of hardship, we remember them, and they remember us. Then, maybe the true spirit of America can be reborn. America the wasteful, and America the world's policeman, can both be assigned to the dustbin of history. A new America, with a bigger purpose, can then emerge: the historical America of the inventive spirit. We can help ourselves and the world to find and build new forms of energy which will be less wasteful of limited resources, and kinder to future generations and the flora and fauna with whom we share the planet.
© 2005 Michael Hampton
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