CRASH! Is BANG next?
A tidal wave is rushing toward America. Years ago I detected the undersea quakes that I knew would lead to a second American economic catastrophe. My predictions were not the result of mystical insight. I didn't consult with an astrologer or with some mystic text. I merely studied history. I noted the cycles of human existence. I learned of government and it's proper roll and the consequences of a government that exceeds that role. I studied economics. In other words, I learned, I thought, I reasoned. Just as one may predict a tidal wave as the result of an undersea quake, so too may one predict a depression.
A few thousand dollars aggressively placed in Options (puts) on Yahoo, EMC, Dell, AOL, EBAY and all the other bubble Internet stocks last spring and you'd be well into $100,000+ by now.
There's still a long way to go. The Nasdaq won't be finished 'til it's around 500 so we're looking at another 2000 point drop in that index. The Dow Jones, although suffering loses last year, should crash and burn before 2001 is over. I'll probably be targeting GE as well as any "recovering" technology stocks. By 2003, the DOW should approach and possibly fall beneath 1000.
Unfortunately there is no pleasant way out of this economic mess. Banana republic, fantasy currency, fantasy business ideas and trading with the enemy are the foundation of a false prosperity will exact its toll with Depression II. In 1987 we might have escaped with a minor dislocations. In 1998, maybe a heavy recession. In 1999 a surviveable depression. Each time when the fuse blew a bigger and thicker copper coin was stuffed in it's place. Irresponsible behavior has been shielded from its consequences and now the price to pay will be large indeed. The economy is going to burn to its foundation. Because of the paniced intervention of the Federal Reserve over a year ago in the face of Y2K, the bubble has grown more monstrous. Depression II is going to be far worse that I originally though
What does this mean for you? I was going to describe it for you myself, but the latest issue of The Wall Stree Underground outlined our future [see sidebar].
Here is what you must do. Pay attention. I've been very busy this past year with the crash in the Nasdaq and expect to be even busier when the DOW hits the fan. I am not going to repeat myself. Take precautions and we can all get through this. Those who fall at the wayside for lack of preparation will have to be left behind to keep from dragging everyone down.
1. GET OUT of ALL DEBT!
If you have a mortgage on your home that you can't pay off in two years max, sell it and get a trailer, apartment, a tar paper shack if you must.
If you still owe on your car. Pay it off now or sell it and get one you can afford for cash.
If you have any recreational (toys, wave runners, motorcycles, atvs, RV's, boats), sell 'em now, this weekend.
Live on half of what you earn. Save the balance in cash, gold, foreign currencies (Yen or Euro). If you have the temperment, gamble no more than 10% of your cash shorting the DOW and remaining tech stocks on Nasdaq. Use Put Options to gain additional leverage. The most important thing is preservation of your wealth, done properly $100 today will buy 10 times as much in three years.
Check out Japan's fate for the past 10 years. Learn. Interest rates near 0% and property values are still plunging.
Position yourself to snatch up properties at 10-20% of their current valuations in the depths of Depression in 2003-2004. Don't get yourself on the wrong side of this void.
Economic depressions result in a sour social mood. Purchase, at least, a handgun for every female in your family and make sure they know how to operate it. Every male should have some kind of rifle and handgun. And your home should be equipped with one home defense shotgun. Everyone in the family should know how to operate and access each firearm. The rifle should be a .30 cal something, 30-06, .308, 7mm, etc. A bolt action or lever action hunting rifle is fine, but a FN-FAL would be better. The handgun would ideally be a .40 or .45, either of which is easily handled by women and adolescents.
If you already have a revolver or two and a rifle, your focus should be on eliminating debt and accumulating savings. This is crucial.
2. GET RURAL
I disagree with Nick [see sidebar] on this. The government is going to have its hands full with riots, looting and burning in the cities. I don't think they'll spare the forces to go play batman in the boondocks. Moreover, I'm beginning to think it's time for families and the closest friends to converge into a area to surround themselves with those they can completely trust. This is a tough one for me. I'm prone to untying our dock lines and leaving America to her deserts. I am tempted by southern, mountainous, Argentina. If, collectively, we could all uproot and head there, I think we'd be better off. If five or six families sold off all their American assets we could surely come up with enough to buy a large Argentinian ranch property. Might be easier to coalesce in KY (I'd prefer WY or Idaho, but I can see that's unlikely) and after our visit over Christmas, I discovered many unique advantages of such a migration to Ky...can you say prolific wildlife, active militia, caves and other huge underground "shelters."
Our problems are not just economic. Economic problems I understand and can maneuver through. But there's something worse, and something I scarcely have a clue how to navigate...The USA is ripe for invasion and the invaders are making ready!
We are in need of wealth, liquidity, security in order to secure our families against what I'm inclined to believe is an approaching global war. Americans have come to believe that bacause consumers in China and Russia are impoverished that those countries are no real threat to the USA. But those are not consumer economies. Unlike America, China and Russian economies are organized not for consumer purposes, but martial ones. We build our plants in close proximity to one another. The Russians build their crucial plants underground. We judge our economy by how many cars, washing machines and homes we build. Russia and China by the number of planes, subs and missiles.
Moreover, according to the three highest ranking soviet defectors, the collapse of the USSR was orchestrated to lull the west into complacency. Anatoli Golitsyn warned in 1966 that we could even expect to witness the fall of the Berlin Wall as part of the strategy of deception.
Russia has the most advanced ICBM's in the world. They recently "demonstrated" their stealth superiority by repeatedly buzzing the USS Kitty Hawk aircraft carrier. China wants Tiawan, India, and Australia. Iraq wants Israel. North Korea wants to swallow up South Korea, Russia is luring in europe. The only thing standing in their way is the USA.
The USA no longer has the strategic advantage having lost navigational control of the Cape of Good Hope, the Panama Canal (with the Chinese positioned on each end), and the Suez Canal. China is building a deep water port in the Bahamas and was nearly presented with our Long Beach Naval base by Clinton and Co. The US Border Patrol has repeatedly engaged the Mexican army and once suspected that Chinese regulars where with the Mexicans. Cultural Marxism (homosexuality, feminization and affirmative action) has undermined our military. The military is short on parts, equipment and ammo.
IF the Russians and Chinese were to initiate a surprise attack on American military assets (as the three defectors say is planned), I believe America will be rendered impotent to counter a simultaneous move by Iraq, Russia, China, and North Korea. Moreover, America might herself be occupied by these modern day barbarians.
However, unlike the economic crisis where I have near 99% confidence in my forecase, the nature of war is deception so therefore, I cannot be as sure of the threat of global war...I'd say I'm about 80% convinced we'll see global war within this decade. The real problem is I haven't a clue how to navigate such an event.
The common perception is that nuclear war is not surviveable. My study of the subject leads me to think otherwise. My priorities here are: 1. Get Rural (I really despise big cities anyway). 2. Make plans to keep your sons out of harms way, military casulties will be exceedingly high...unlike WWII where we only lost 200,000 men, this time we're probably looking at casulties more like what the USSR suffered in WWII...7 million and likely far more when you include civilian casulties. Let the leftists send their sons and daughters, this whole f___ing mess is their fault. Let not our sons pay with their blood to make up for leftist illusions.
The magnitude of the mania may be gleaned from this long term graph of the DJIA index.
Mark A. Laughlin