2012: The End of America?
The following forecasts are based on trends that are and have been developing for months and years. Some are more likely than others. Some may never come to pass. Others are events that have a high probability of coming to pass, perhaps in 2012 or in the next few years. Whatever the case, they are scenarios that are, in many cases, interrelated . So, if you see one come to fruition, the chance that another will take place grows exponentially.
Europe Is Going Down
We don’t need to explain the seriousness of the situation in Europe other than to point out that Greece’s economic problems are nothing compared to Spain, Portugal, Italy and the combined eastern European nations. The entire European Union is under threat and we’ve heard talk of a potential break up of the currency, and even the possibility of countries exiting the EU altogether. Even Germany has discussed this possibility. The situation is dire and the only thing holding it up at this point is the same thing holding up the U.S. economy: monetary machinations. But, as Horace said (65 – 8 BC), “you can drive nature out with a pitchfork, she will nevertheless come back.“ The collapse of Europe is inevitable. It will not be stopped by more centralization. The Euro will be destroyed, and it may very well happen in 2012. In anticipation of the coming currency meltdown, the world’s largest lenders and investment firms are already pulling their money out of the European financial system and transferring those assets to perceived safety in US Treasuries and other instruments. We’re so close to a serious collapse in Europe that Britain has taken the unprecedented step of preparing evacuation plans for their citizens living in EU countries in case they are rendered penniless and without means to return to the UK when the Euro crashes. Other European governments are making contingency plans to deal with riots, violence and uprisings when the system goes critical.
Stocks Crash and Dollar Strengthens
You’ll know the European Union is in the midst of a waterfall collapse by watching stock markets, which will react violently and likely with unprecedented speed in their meltdown. While the big lenders and insiders may be exiting European investments, the general population, like Americans here at home, have no idea how bad the situation really is. It’ll happen when smaller investment houses and large individual investors start pulling out. This will cause a sell off of European debt, and subsequently European markets. As the money flows back into US dollars and the safety of treasuries, it will strengthen, possibly to multi-year highs. For a time we may see a repeat of 2008, where stocks and commodities collapse. The panic will build on itself, and investors who lost 40% or more of their money in 2008 will rush to exit in an attempt to avoid similar losses this time around. The negative feedback loop could send stock markets back to 2008 lows or lower. If it happens, it will be a panic unlike anything we’ve seen since 1929. Remember when stocks crashed 1000 points in a single day back in the 2010? Imagine that, but for real and for several days without reprieve
The Economic Depression of the 21st Century Goes Mainstream
The economy has been battered for years. Only those who are ignorant or refuse to pay attention don’t see that we are already in the midst of collapse. It’s happening right here and now. Most would still write-off a European collapse as “just a problem over there,” but since U.S. stock markets will collapse along with it, and this is how most people gauge economic health, it won’t be until Americans see their personal retirement savings destroyed that they start realizing there is no easy way out of this mess. Until the stock markets crashed in 2008 no one was talking about the recession that had already taken hold for three quarters prior to the Presidential election. This time, unlike 2008 where Americans figured it was just a typical eighteen month recession, millions who have lost their homes and livelihoods, and even those who still have shelter and gainful employment, will finally realize this is the real deal. The people will lose confidence in our government’s ability to mitigate the crisis and the depression will be apparent to everyone – even corporate media.
Real Estate Continues Slide
No, it’s not over yet. There has been no pause in the downward momentum of home prices, despite the government’s many efforts to instill confidence through tax breaks and rhetoric. Before it’s all said and done we will see a collapse of at least 50% in home prices (we already have in some regions of the U.S.), and we may even go the way of Japan, which saw a total decline from bubble to bust of some 75% after their real estate bubble burst in the 1990′s. During the Great Depression of the 1930′s, land was selling at pennies on the dollar, reportedly at 80% off the highs, so don’t dismiss this as a possibility in this Depression. It won’t all happen in 2012, but if stock markets crash and people lose money, they will be less likely to want to invest in a home, putting further pressure on the housing market. The only thing that real estate has going for it right now is low interest rates on loans, and those rates may remain low, especially if more money flows to the U.S. as a result of a debt collapse in Europe. For those wanting to buy with a mortgage, the next year or two may provide the final opportunity for low interest rate loans this decade. If the US dollar goes into crisis (see below) it means that interest rates will be rising. In the 1980′s we saw mortgage rates reach 15%. We don’t need to tell you what something like that would do to potential buyers and home prices. So, if you’re planning on paying in cash, you may want to hold off and let the market slide more. If you are going to take out a loan on a house, this may be a good time to find a deal, especially if the home/land you are buying will allow you to get out of major cities, produce your own food, and become more self reliant.
US Consumers Will Be Hit Hard - Food Assistance Participation Exceeds 50 Million
There are no jobs. Wages are stagnant. Inflation is destroying our standard of living. And things will only continue to worsen. In Broke and Hungry we predicted that over 50 million Americans will be on nutritional food assistance from the government by the summer of 2012. We will likely breach this threshold on schedule. Couple that with an economy that is showing negative growth and consumers who have spent their savings and taken on debt just to maintain some semblance of their former lives, and you have a recipe for disaster. We won’t even mention what rising oil prices will do if the situation in Iran goes hot-war (see forecast below). People are broke, and they aren’t seeing any trend changes in the way things are going. This and a complete distrust in the merger of government and business is what led to the Occupy protests of 2011. And it will be what leads to the next wave of civil unrest that is sure to grip major metropolitan areas in 2012 and beyond. #Occupy was nothing compared to what will happen on the streets of America when people can’t feed themselves and their families.
The Much Anticipated Dollar Collapse Is Coming
It won’t be long now, but a few things need to happen first. As we’ve discussed for a couple of years, there will be one more boom for the dollar, and it ill result from a panic run to safety when Europe goes under. This is happening now, and in due time we should see the US dollar regain its power. But this strengthening will be short-lived. As our economy delves further into depression and our gross domestic product goes officially negative (unofficially our economy is already shrinking) our government will run into a serious funding problem. President Obama is already looking for a $2 Trillion-plus debt ceiling increase (after Congress raised it over a trillion dollars in the summer of 2011). What kind of confidence do you think this instills in our lenders? The result will be higher interest rates as lenders will look to minimize their risk. On top of that, remember that we will probably have had a major stock market crash as a result of Europe, which means people will panic. Remember what happened in 2008? We printed trillions – trillions – of dollars to bailout failing institutions and the American public under the pretext that the system would be saved. It wasn’t. It’s going to be bigger this time, much bigger. The Fed and the Treasury will, of course, print even more. And, at some point our lenders will simply stop investing in the debt, no matter the interest rate. The dollar collapse will build up for a while, with interest rates rising to satiate the appetites of lenders, but eventually no one will be willing to put up any more money to fund a government that has no intention of ever paying it back. When the meltdown finally occurs it will be very fast, probably occurring over a period of days and weeks. We can only speculate about the consequences, but it’s quite likely we’re looking at a total paradigm shift in life as we know it today that will include violence and political uprising, as well as disruptions to food supplies and the normal flow of commerce.
Riots in the Streets
They laughed when we and others forecast widespread protest movements across America. Police were able to control the masses in 2011. This may not be the case in 2012. Any number of events can set off demonstrations, and there is a strong likelihood we will see them again this year, and for years to come. They will get progressively more violent. At some point we predict that it won’t just be the police engaging in beatings. The people will turn. They’ll turn on local businesses. They’ll turn on each other. They’ll turn on the police. The Molotov cocktails will start flying, and when they do we can expect the same response from our government that we saw in Egypt and what we’re now seeing in Syria where thousands of protesters have reportedly been killed by the Syrian military.
Deployment of U.S. Military On The Streets of America
It won’t take much for the President to declare an emergency or designate a certain area a battle zone at which point the United States military can and will be immediately deployed to quell civil unrest. If the economy gets as bad as we think it will, we can fully expect a significant response from the populace. Whether by chance or design, protests will eventually erupt into violence, and when that happens the President will be “left with no other choice” because our militarized police forces simply won’t be able to contain the situation. It’s been reported that over 20,000 U.S. troops have been trained in riot control and detention procedures, and that the Pentagon is actively preparing for large scale economic collapse and the civil unrest that would follow. They are ready. They need only a catalyst. It may happen in 2012, but it would require widespread, extreme circumstances to be justified, but be assured that there are those in our government who are more than willing and ready to pull the trigger.
Game Changer: FEMA Detainment Centers Open For Business
They didn’t build the scores of Federal Emergency Management Agency camps around the country for nothing. Purported to be for the protection of refugees in the event of mass evacuations, the camps are believed by some to be used for various contingencies, one of which is the mass detainment of American citizens. While it may have sounded like a conspiracy just a year ago, with the passage of the National Defense Authorization Act, which allows for the detainment of US citizens without a trial, it is becoming increasingly clear that the tin foil hatters were on to something. According to a recent report, FEMA is activating the camps and the US military has posted job opportunities for Internment and Resettlement Specialists. Hard to imagine, yes. Impossible? We’ll let you decide. But consider this: If the US military is ever deployed on the streets of America they will be detaining thousands of individuals. Do you think the local or county jail will have room for them?
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