Friday, March 13, 2009

Watchmen: Watch This

In medieval times cities had watchmen to warn the inhabitants of armed ruffians and invading armies. In these perilous time we look to economists to warn of the coming collapse. I believe we are in the tail end of a long credit cycle created unnecessarily by our debt based system which requires us to create a debt before we are allowed to create money and credit. In the tail end of a long credit cycle bad debts are canceled.

I am writing this to reveal the one economic indicator we need to follow in order to predict when the dollar crashes and the riots begin . I am not alone in saying we are entering a Depression far worse than 1929-1939. Gerald Celente one of America's most accurate forecasters has predicted food riots in America before the end of 2009. There is one indicator that will tell us when everything falls apart.

The one indicator I follow is Treasury Auctions.

Deficits must soar at the end of long credit cycles because when money is created the banks require us to also create a debt. The banks create enough debt money to pay the principal but not the interest. So debts will be re-financed until people are swimming in piles of debts they cannot pay, In the end of a long credit cycle all bad debts are canceled. From 1929 to 1939 bad loans were canceled which means that the money supply shrank and prices dropped. For the past few months our Federal Reserve and Treasury have been busy expanding the money supply so the next Depression will be inflationary unlike the last one. The end is nigh and will be foretold by Treasury Auction.

The current deficit is 1.2 trillion dollars. The Congress has added a 787 billion dollar Stimulus bill and a 410 billion dollar Spending bill. We also have continuing and numerous Bailouts to be financed by the sale of Treasuries. To this we must add up to 500 billion dollars to be borrowed by FDIC to cover depositors losses at failing banks. And there are other government agencies near bankruptcy that might soon require Treasury assistance. The Pension Benefit Guaranty Corporation has a liability to insure hundreds of billions of dollars in private pensions. On March 15th American corporations will have to pay 409 billion dollars into retirement funds. And then there are the 50 state and 3,000 county governments in America who have serious budget shortfalls and also owe hundred of billions in unfunded pension liabilities. They will need additional federal funding to avoid layoffs and benefit cuts. All of the above is to be funded by the sale of Treasuries at auction.

That 410 billion dollar Spending bill is to be added to the current deficit which means that it must be spent before October 1st of 2009. That is about two billion dollars a day in additional spending. That means that the Treasury will have to auction off two billion dollars a day or fourteen billion dollars in each week's auction.

Please remember that a debt based system was designed to fail us and to transfer all wealth from those of us who work to those who were given a license to print our money.

Interest rates have already been creeping up both at Treasury Auctions and at London's LIBOR. An analogy of what to expect would be if you were in charge of marketing for an apple growers association. You had been selling 50,000 bushels of apples a week and then 100,000 bushels and then 300,000 bushels a week. Now your new boss says you will be selling 600,000 bushels a week for the next three years. And you will be expected to flood the market with all those apples without lowering the price of apples. That is impossible.

When the Treasury doubles and re-doubles the amount of Treasury bills and bonds for sale the auction sale price of those Treasuries will go down just like the price of apples in our example which is to say that interest rates will go up. Rising interest rates will kill the economy. Increased home mortgage rates will stop all home sales and send America into the deep end of the coming Depression.

We are also facing another problem. There is a Great Contraction of international trade. Japan no longer has a surplus. Germany's surplus has almost evaporated. OPEC is suffering from declining oil revenues. And China's surplus has dwindled to five billion dollars a month. That means the main customers for our Treasury bonds will not even be able to cover that fourteen billion dollar a week Spending bill. And this assumes that our bondholders are willing to roll over or renew their existing Treasuries.

One day very, very soon foreigners will refuse to fund America's debts. They will refuse to buy trillions of dollars in worthless bonds. They will act in their own interest, dump the dollar and buy any commodity or currency available with their trillions of soon to be worthless American dollars. The Congress will respond by printing enormous sums to keep things going. The ensuing inflation will wipe out our Social Security and unemployment benefits, our pensions, our savings, and our paychecks. It will rob us of our futures. We will have nothing left. The nationwide food riots will signal the end of the America we knew. In many cities street gangs and militias will rule.

I expect the dollar to crash this year. I have been saying since 2005 that the dollar would crash in 2009 and that by Wall Street's design our after tax wages adjusted for inflation will be half what they were four years ago.

Keep an eye on Treasury Auctions so you will know when to go into survival mode to protect yourself, your family and friends from the looming financial collapse and social upheaval the likes of which we have never seen in America even during the Great Depression.

There are people on the inside of the Power Elite who are as smart as I am and know that our Treasury Auctions will soon self-destruct and take the dollar with it. They know that we will soon face riots in every major city. They know that our pensions,our savings, our jobs and paychecks will be insufficient to feed and house the majority of Americans. They know what will happen to us and have prepared draconian laws to put those of us who strenuously object to our coming impoverishment and enslavement. Stay tuned and keep your eyes on Treasury Auctions.


There is no need to create a debt when you create paper money and credits which means there is no reason other than greed for Depressions like 1929-1939 and the one we are now entering. To read about debt free money please go here:

To read about the Democrats plan for yet another Stimulus bill please go here:


Anonymous Anonymous said...

well, what happened? here it is the spring of 2011, and nothing remotely similar to what you describe has occurred....which is not to say that I don't think that we are not in serious trouble. I believe wwe are. But this setting times and schedules and "pretending" to know exactly when this chaos will dissolve everything, just weakens the message, so when the real chaos does occur, people will be apathetic because by then, it will be an old that your goal?

1:43 PM  
Blogger Daniel F said...

I wrote articles since then in which I explained that I had predicted an economic depression and a world war based upon one of two visions I had as a child.

The timeline I developed from my vision led me to believe that the dollar would collapse after the elections of 2008.

In the above essay I warned people to watch Treasury auctions.

Ben Bernanke solved that problem by printing enough money to buy Treasury bonds.

This will not last long.

I have a new blog.

I emphasize that Israel wants us to fight and lose WW III.

If they want us to attack Iran and to win, why do they have us fighting in Libya, Iraq and Afghanistan?

My answer is that they want us to lose World War III.

3:18 PM  

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