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Will They Index Debts?

By: Tom Chatham

For those keeping up with the economic game of bumper cars we are playing, it seems likely that money printing will continue to the point of possible hyperinflation at some point. It is not a foregone conclusion but it seems likely. In that event what is the individual to do?

Some that have seen this possibility have come to realize that holding large amounts of debt before hyperinflation hits would allow them to pay off this debt with basically worthless currency and come out way ahead in the wealth game. That works in theory but how about in reality?

The bankers and politicians control the money supply and are even now cashing in their paper wealth for tangibles that are actually worth something. These people want it all and you can be assured of one thing. They will take the people to the cleaners before they are done with their redistribution of wealth.

Some may find themselves in a position to come ahead during any hyperinflation but they will be few and far between. The majority will not be allowed to come ahead at the bankers expense. The bankers after all created all of this easy credit that everyone uses and the sole purpose is to use it to separate the population from the hard assets that exist.

For those with substantial wealth accumulated, the first priority is to steal that paper wealth from the people. With that wealth gone they will not be able to preserve the hard assets they have that are not fully owned yet. Once that paper wealth is gone the bankers will need to inflate the money supply and force the majority into default on their assets. In a hyperinflation paychecks will not be able to keep up with rising prices and people will slowly fall behind until they lose it all.

For those that continue getting paid every week, the inflating pay will eat away at the debts faster and faster. To avoid losing real money, the bankers may index debts in order to prevent losing the leverage they created from nothing. When you index you basically increase the value of the debt at the same rate as inflation.

For those that say this will not work because they have a contract with the bank fixing the payment I can only say, do you really think these people will let you get over on them. These are the people that own the government and change the rules on a daily basis when it suits their needs. All that needs to happen is the government pass a law allowing the banks to index all debts and it will be a done deal.

I am not saying this will happen, but it could happen so you need to think about that and incorporate it into any plans you make to get through a currency collapse. If your plan is simply to pay off debt with devaluing currency and they index, you will not be in any better position than everyone else.

One way some will come out ahead is by having their excess wealth in precious metals. These assets will increase at or above the rate of inflation and allow the holders to maintain their buying power. The U.S. called in the gold in 1933 and could do it again but it is not likely. The main reason is that in 1933 gold was still part of the money supply and was held by the general population in large amounts. Very few people hold gold today and most of the ones that do are the very people that make the laws and they will not shoot themselves in the foot.

They may place a tax on any precious metals that are sold and use that as a way to control the smaller holders of metals but a house to house confiscation is not likely unless they just happen to target you for some other reason and find some in your possession and decide to take it. Ultimately, any paper currency only has the value that those printing it will give you. Metals can be used worldwide and have universal value. That is what makes metals more appealing than paper.

If currencies are destroyed in the future you can be assured that the perpetrators have a plan in place to prevent the majority from profiting from it on any large scale. Those that create the credit only care about owning everything they can get their hands on. Their greed knows no limits. With ownership of all assets comes complete control of the population. That is the end game for many. For those that see danger on the horizon it only makes sense to look ahead and plan for any contingency that may cost you everything you have.

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Global Electronic Currency; The Perfect Control Mechanism

By: Tom Chatham

In the pursuit of a control grid, for our own good, the global elite will need a global currency. This new currency will likely be completely electronic in nature. It will make it easier for the controllers to create, cheaper allowing them to keep more of the profits and easier to get their hands on what you have anytime they want. With a totally electronic currency there will be nowhere to hide any of your earnings. It will also be much easier for those in control to enforce payments for government mandated services. It will also be much easier for them to implement and enforce new taxes, for your own good.

Healthcare

So you say you don’t need any stinking health insurance. That’s too bad. It’s now mandatory so your account will be debited every week for your health insurance premiums. No way to get around that.

Green energy tax

Since everything is now electronic they will know how much gas you are buying for your car. If you drive too much you’ll be assessed an extra green energy tax for polluting too much. They know how much your electric bill is so if you are using too much electricity you’ll be taxed on that too. But don’t worry, they’ll just automatically deduct it from your account. No messy paperwork to keep track of. Isn’t that thoughtful of them.

Income tax

Since everything you earn has to go through your electronic account, they will know exactly how much money you are earning. They can just deduct your taxes straight out of your account every week. And with a graduated income tax, they will just deduct more as you hit certain income levels. No more messy tax forms every year. Isn’t that nice of them.

Sin purchases

So you want to buy a gun or ammo. Sorry, you don’t have the required permit so the transaction is prohibited. So you want to buy a bottle of wine or that fifth of bourbon?
Sorry, you are drinking too much as indicated by your purchases so this sale is denied. And if you have a DUI, don’t even think about it. Cigarettes are only for the global elite who can afford them so that’s a prohibited item as well. So you want to buy that new luxury car or SUV? Sorry but you don’t have the necessary carbon permits like the well connected people so you’ll have to settle on one of these smaller, more efficient models.

Food purchases

Since every purchase is monitored, everything you buy at the grocery store is monitored. You scan your card before your goods are rung up and anything you shouldn’t have is flagged. Obesity a problem? Not any more. You will be barred from purchasing certain products. Not eating what the government says you should? You will have limits on the quantity of certain items you buy forcing you to buy what they want you to eat. Buying more canned goods than they estimate you are eating? That could get you a visit from the food police to insure you are not hoarding. And don’t get caught growing your own food without the proper permits, you don’t even want to know the penalty for that.

Retirement savings

Since you are too stupid to save money for your retirement they will just deduct a little every week from your account and “keep it safe” until you need it for retirement. And when the time comes for retirement if you have too much money saved up they will just redistribute some of it to the less fortunate, bless their hearts.

Wealth tax

If you live in one of those wealthy countries you’ll have to pay an extra tax for that as well to be redistributed to the poorer countries. That’s only fair, right? Since everything you buy is recorded the tax assessment for property taxes will be much easier as well. How convenient!

Yes, a new electronic currency would solve a lot of problems and free us of all of that messy paperwork we have to do. And since we are too dumb to make our own decisions, the government can help steer us in the right direction in everything we do. Doesn’t that sound like Utopia?

The Police State Economy

By: Tom Chatham – Author of The American Dream Lost

It is important to talk about a possible currency collapse given the current financial conditions in the U.S. The people need the conversation to help prepare for the challenges that would immediately follow. Government control following a collapse would further degrade quality of life and personal freedoms. It would be a troubling time to say the least. Those that feel the need to prepare already know what the government is about and what it is capable of. They know it will be a long time following a collapse before any semblance of civilized society might return to the country, if it ever existed to begin with.

A police state economy can be identified by shortages, poverty, misery and brutality. The population has no drive for productivity and no chance for wealth creation or incentives for new product creation. The whole system breeds stagnation throughout the country insuring future generations will have a lower standard of living. People will do the minimum work necessary to survive as anything more will create no excess for them to keep and use.

A good question they might ask themselves now while they have time to ponder it is, what will the government use to pay its minions to carry out its plans after a collapse has destroyed the dollar. The sociopaths that fill the government ranks will no doubt do as they are told but at some point they will expect to get paid for their services to purchase the necessities their families need. What might this situation look like?

In normal times, a currency collapse would be followed by government reforms and possibly replacement of politicians by an angry populace. The government would issue a new fiat currency and the citizens would be slowly conned by the politicians to accept it. The game would start anew until the next collapse. In the case of the U.S. the populace at large is learning how the game is played and they won’t want any part of a new fiat currency by choice.

The emerging problem with the U.S. is that the politicians don’t care what the populace wants or is willing to accept. The fact that the U.S. is becoming a police state gives some indication of what a post collapse situation would look like. Being that the major banks own the government, in practice if not in name, the industry and resources seized by government will provide securities for recapitalization of the banks following repudiation of the dollar.

Immediately following a collapse of the dollar in the U.S. the government would seize control of all production capability and resources. It would have no choice because they know a new fiat currency would not be accepted by the working class and businesses. They would issue a new currency probably in connection with a type of debit card that government employees and those that support the government would get. The government would want to control every sector of society in order to ensure finished products are available to the selected groups. Everyone else would either have to fall in line and work as they are told to receive goods or be removed as a threat.

A barter society would arise quickly to provide the needs of communities but this would be a threat to government control so expect them to react against this activity very quickly and harshly. Any barter activity that eludes government scrutiny would need a medium of exchange outside of government control such as precious metals, diamonds or other hard commodities. All industries would have to be controlled by government in order for the new fiat currency to be accepted and used for commerce and to insure continued production of products. Any type of small business that is hard to regulate or control would be shut down by government officials. This would cause a severe backlash by the population and the critical infrastructure would have to be guarded by heavily armed government personnel to maintain control and prevent interference by citizens. This would require a large army with weapons and lots of ammo that will obey all orders from government officials.

The government may claim the new currency is backed by gold reserves but if it is not directly convertible into gold a gold backing will mean nothing. This would be one way to attempt to appease citizens into accepting a new paper currency. The prevention of barter or alternate currencies would be enforced with brutal force by the government acting in a totalitarian way to ensure its total control over the society. Currency controls would be such that officials would be able to prevent the accumulation of wealth by individuals. The absolute control of resources will ensure most of the population will submit or do without.

In the opening hours of a government takeover, the only way for citizens to prevent totalitarian rule is the acquisition of critical infrastructure and resources by force before government personnel can secure it. As the old saying goes, possession is 9/10 of the law. The acquisition of resources is only the initial problem that the citizenry would face as government forces attempt to take control away from citizens. The difficulty would come in restarting commerce with a hostile government still in place. Those that depend on the government would likely support any measures that would keep resources flowing to them. The large populations in the urban areas would be easy for the government to manipulate due to the need for a continuous flow of resources to those areas.

Citizens that can control the resources in the rural areas will curb government control as long as those areas can be held. Once government forces have complete control of industry and resources it would be very difficult to remove it from their hands. It is a historical fact that once a totalitarian government takes control, it is very difficult to end it. The regime in North Korea is a good example of what to expect if the U.S. ever goes down this road.

An informed and vigilant citizenry is the only defense against this type of scenario and judging from current events, Americans have little or no defense at this time. Once a total government takeover has occurred, nothing short of war will likely correct it. There are nonviolent actions that can topple a government, but only if the population acts in unison for a common goal, which is unlikely given the divisions we currently see in the U.S. The current course of the U.S. is troubling and barring a significant event that alters this course, the American people have some very difficult times ahead of them. When this paradigm shifts, the citizens that do not have supplies or local production capability will become beholden to the government for their every day existence and it will not be benevolent in its actions.

The Barter Exchange and Security

By: Tom Chatham – Portions of this article were extracted from The American Dream Lost.

In the days following the bottom of a serious crisis the ability to establish a new normal will be important to the community. Recovery will depend on how fast the exchange of goods and services are reestablished to provide the necessities people will need.

A barter exchange would be the best solution to the community’s problem. An exchange run by a person or small group could be set up in a secure area to facilitate the exchange of items. With most barter currency the script is purchased with dollars to put it into circulation but the collapse of fiat money would prevent that. A good solution would be to issue a barter currency that is backed by the items in the exchange. The exchange prints and maintains the currency. A person brings in an item to the exchange and the exchange gives the person barter currency for the value of the item. The item is then available in the exchange for the same amount. The person would be able to save the script for later use, use it immediately to purchase other goods available or to use as payment for services outside of the exchange. The exchange would generate currency by producing value added products. A bushel of corn brought to the exchange could be turned into corn meal which would have more value. The additional value of the cornmeal would be added to the exchanges “account” to pay employees and for the purchase of capital equipment. The value of any items that spoil or become unexchangeable would be deducted from the exchanges account. This would keep any issued certificates fully backed by physical items in the exchange. The exchange manager would decide what items are taken in and in what amounts to prevent spoilage and accumulation of unwanted items. The exchange would set the value of items and it would act to provide a frame of reference to those trading outside of the exchange. The barter currency would act as a medium of exchange in the community to allow an easier exchange of goods. The exchange could be one stop shopping depending on the support of the community and could carry food items, furniture, used clothing or homemade items as the exchange determines appropriate. The items could be valued as follows and we will call the currency units (CU).

1 oz Gold = 250 CU
1 oz Silver = 15 CU
1 Hour work = 3 CU
1 Month rent = 180 CU
30 KWH electricity = 1 CU
1 Gal fuel = 1 CU
1 Bu Wheat = 3 CU
1 Bu. Corn = 1.7 CU
1 Gal. Milk = 1 CU
1 Doz. Eggs = .5 CU
1 lb Cornmeal = .25 CU
1 lb Poultry = .33 CU
1 Chord firewood = 25 CU
1 lb Lead = .5 CU
1 lb Copper = 1 CU

.25 lb Nickel = 1 CU

These valuations are meant to be proportional. For example, six dollars in nickels contains 1 pound of copper and1/4 pound of nickel. Six dollars in nickels would trade for 2 gallons of fuel. A variation on the barter currency could be the use of copper/nickel coinage based on the metal content of the coins versus the face value. When you set the values of products it is helpful to look at the prices at a given point in time when you set the values to help keep everything proportional but supply and demand will also need to be taken into consideration.  If you assume that 1 CU equals $3 and do the math the above valuations may make more sense to you. Keep in mind that at the time these valuations were derived some prices may have been lower.

The currency units could be printed in the following denominations.

.1 CU fractional
.5 CU fractional
1 CU
5 CU
20 CU
100 CU

This is only meant to be a guide but will give you a good place to start. The currency could be paper or metal coins and should be produced in a way that makes counterfeiting difficult. Paper currency could be embossed or printed on special paper. This type of exchange must be kept out of the hands of government personnel otherwise they will do to the currency what they have done to the dollar. If you use gold and silver coins as an exchange medium you will basically have the type of barter system we enjoyed before paper currency became the norm. If an exchange is not operational prior to a crisis, the barter currency should be created and stored until needed along with any equipment needed. Those groups or communities that are concerned about a future currency crisis should take steps now to put this type of plan into effect if they have not already done so.

The second issue that needs addressing during a recovery is the security situation. No meaningful recovery can begin until the area is safe for travel and private property is protected from theft. This will require a security force of whatever sort the community determines is appropriate. This issue needs to be delt with as soon as possible to prevent hostile or criminal groups from becoming the dominant force in the area. A safe zone in and around the community will expedite recovery efforts and the production of necessary items to insure the community can return to an acceptable new norm as soon as possible.

The more area that is secured around the community the more potential resources that will be available and the larger the buffer zone will be against possible external threats. Adjacent communities, that can secure their respective areas with overlapping boarders, can provide a reinforcing cluster of safe zones that can be slowly expanded as resources become available. The security plan will be dictated by the needs and resources available to the community so pre-crisis planning is extremely important to assess future needs and secure materials for later deployment. Planning at the community level will be important to respond to the global problems we are about to face. Your plans should assume no outside help so you are not counting on non-existent resources should something happen.

It’s Almost Time For Panic. Five disasters that can push humanity off the cliff.

So much is happening these days that it is hard for the average person to keep up. There are a number of situations developing around the world that we need to pay attention to.

Water aquifers and surface supplies are rapidly dwindling in the U.S. and are causing potential shortages in the southern mid-west and Californias’ Central valley. These two areas produce most of our vegetables and grain. Weather patterns are changing and seem to be reverting to patterns seen in the 1930’s which caused the dreaded dust bowl. Many of our rivers and lakes are now so polluted they are permanent dead zones for sea life. This potential water shortage is becoming more of a reality every year. Without water, nothing lives or grows, it’s as simple as that. As this problem becomes more pronounced, rationing will give way to fighting over the dwindling resource. This fighting will go from local to international in scope and everyone will be touched by it.

Genetically modified foods are touted as the cure all for higher crop yields yet the research shows that GM seeds produce no more than Non-GM seeds. These new seeds are modified to produce their own pesticides in some cases and these chemicals are still present when they go into our mouth. Some of these seeds are modified to resist new weed killers that can be applied liberally to fields. Some scientists are now claiming that this over use of weed killers are producing super weeds. Some of these weed killers are now linked to colony Collapse Disorder which is killing off most of our bees. Without bees to pollinate some crops, the yields drop substantially. Monsantos’ answer to this problem was to buy the research firm doing bee research and kill the bad publicity. These GM crops are also being linked to some health problems now prevalent in people. GM crops which are so widely used in the U.S. now are cross pollinating with heritage crops causing untold damage to the natural seeds beneficial qualities and destroying their reproductive capabilities. Once all of the heritage seeds have been contaminated our ability to save seeds and produce healthy crops will be destroyed forever.

The radiation hazard from Fukushima is becoming better known every day and it looks very bad. The damaged reactors are still spewing radiation into the air and water. Low levels of radiation have been recorded just about everywhere in the northern hemisphere and there are reports that there were a lot of deformities in newborns along the west coast following the event in 2011. Areas around Tokyo Bay are showing higher levels of radiation than there should be and some reports state that any further destruction of the Fukishima plant will be catastrophic for a large portion of the world. In the 1960’s when the Chinese tested their fist Atomic bombs the radiation from those tests showed up as far east as the Tennessee Valley where it was detected in milk from dairy cattle. The radiation from Japan is much worse and could cause serious damage to our food production if it continues unabated or gets worse. The radiation from Fukushima that is being dumped into the Pacific ocean is starting to show up in sea life on the U.S. coast. Scientists recently tested 15 blue fin tuna caught off the coast of California and determined the radiation they contained was 3% above normal background radiation. This radiation consisted of Cesium 134 and 137. These fish are older and the fish spawned off of Japan just after the event could have much more radiation as this is where they spend most of their early life. These fish should start showing up on the U.S. coast soon and give us some indication of the extent of the contamination to seafood.

Next to food and water one of the linchpins of modern civilization is electricity. With our ever increasing need for energy to run all of our electronic gadgets we leave ourselves open to a disaster of epic proportions by not taking the threat of a grid down situation seriously. Cyber warfare or an enemy EMP can send us 100 years into the past very quickly. Many take for granted the systems we rely on daily for our most basic needs. Food, water, transportation and communications rely on a carefully choreographed system of electronics to transport and distribute the things we need and any disruption of the delivery system can be catastrophic. It would only take a few days without electricity to cause discomfort and a few weeks to cause general desperation by most of the population. It’s been said that a year after an EMP 90% of the U.S. population would be dead. Too few Americans have the skills or infrastructure to care for themselves like our ancestors. Cyber terrorists and unfriendly governments around the world target the U.S. power grid on a daily basis looking for weak links and planting worms and back doors for later deployment. Our SCADA systems are not as secure as they should be and our enemies know it. In the opening hours of hostilities a potential enemy could shut down most of our systems causing untold physical damage to systems. In the event of an EMP laydown, the war would effectively be over as far as we are concerned. The nation could not wage war while simultaneously trying to provide basic necessities and maintain order for its’ entire population due to a failure of the distribution system. We have the knowledge to harden our systems to prevent this from happening but we fail to take the threat seriously. This is one of the few ways this nation could lose a war.

The U.S. has allowed itself to build a house of cards consisting of a fiat currency. History has shown that every fiat currency ever created has collapsed. The politicians print money to buy votes and the citizens happily support it in order to ride the gravy train to happiness. Americans lack of historical knowledge keeps them blind to the end result of this process and insures the end will be chaotic and destructive. As more money is printed the price of goods goes up and the buying power and standard of living goes down, until one day everything comes to a casualty producing halt. When this type of process happens it can take decades to repair the damage to the national economy and political change can result in a dramatic loss of freedoms.

All of these disasters share three things in common. They are man made. They are being covered up to some extent by corporations and governments. They will have a disastrous effect on large populations around the world when they happen and the truth becomes known.

Our air, water, financial and physical health and food supply are being contaminated and destroyed. The pillars of our technology are at risk We have the capability to fix these things but those that know the truth refuse to even acknowledge the problem and one has to ask why? Some disasters are beyond mans control but these are self inflicted injuries and we need to ask why? Who will benefit from these destructive acts? Why would we do this to ourselves and posterity?

Anyone that finds these things alarming should take precautions now to limit the damage to their family in the coming years. Buying or building filtering systems for your air and water, putting aside some heritage seeds for future use and taking steps to preserve your wealth are just some of the things you need to consider now while you still have the ability to shape future outcomes for your family. The end of normal times is near. When the general population is finally confronted with the truth they will panic because it will be too late to make any meaningful changes and resources will be in short supply. When the population panics, don’t be part of the group. Be some place safe.