All this will happen and more most likely in 2016 because that trillion that the government injected into the economy to stop the crash was just a bandaid. All the underlying forces that caused the crash in 2008 still brewing under the cap. For example we are no longer on the gold standard so that the bankers could print more money and loan more money and make more money while the gov just keeps printing more money, to the tune of billions a month in order to keep things floating. The problem with that is this: Imagine you are playing monopoly and there is 10,000 dollars in the center of the game for the entire game. Each player gets money divided up and there remains money in the bank. The economy of the game hums along as you play it. Certain places you land are worth a certain amount, things you build on them like hotels and houses are worth a certain amount, all based on the net worth and the economic machines of the market based on that monetary fund, or pool. Suddenly another 50,000 grand comes into the game and gets placed in the middle. That starts to devalue all the money that is currently in play.suddenly prices start to rise as that 20 in your pocket is not worth that much. As a matter of fact, due to inflation, what you could purchase in 1900 for two cents would cost 1 dollar today. Think about that. Remember going to McDonald's 15 years ago and paying $3.85 for a value meal? That same value meal is now $7.85. Because what is it backed upon? Funny money that the US just keeps printing backed on nothing but the "full faith and credit" of the United States when we are close to defaulting on our world loans? Our currency used to be backed on Gold. Gold had limits because it physically exists in the world in only a certain amount, therefore causing its INTRINSIC value due to its scarcity. In the entire world there is only an 165 thousand metric tones of gold. This small amount in comparison to other elements makes Gold very valuable. So how much Gold is 165,000 tonnes?
In order to put it in scale, the below graphic will help:
Thats a lot less than you thought, isnt it. And to make matters worse, China is hording gold as the United States is losing gold in order to pay interest on its debt to china. Read about that here. You can see that our money is now changed after we took it off the gold standard in the early 70's:
When our money was backed with physical gold, our economy was much more solid. As soon as Nixon took us off the gold standard, huge inflation was the result in the mid 70's as well as a depressed stock market.
All the above forces are leading to another huge market crash. But are you ready for whats coming or are you sticking your head in the sand like most Americans? No one wants to think about it. Hell, its a pain in the ass even reading this post. You don't want to even think about the boat being rocked. You got your kids in school, house payments, car payments. But what happens when the shit hits the fan?
I would like you to read a post what could happen if the United States goes into full default. It would send everything off the tracks including everything about how you live your life: CLICK HERE.
Now that you read that, I know its the worse case scenario. But what if even a fraction of that happens? At the very LEAST I would have a stockpile of food and water to last for 3 months. Im not talking a basement full of bananas and fruit, but MRE's (meal replacement packs that you can order in bulk online with powdered vitamin C and meal replacement powders that are full of all the nutrients that bodybuilders use). Those meal replacement kits can be nuked, or just peeled back and eaten. You can find these supplies online. Water is also very important. Figure how much water you will need for 3 months. You can buy crates of bottled water at Sams, Walmart, Costco etc. BUT YOU CANT BUY THEM AT ANY OF THESE PLACES WHEN THERE IS A RUN ON SUPPLIES AND THE STORES ARE BEING LOOTED. You gotta be ready. Assume the worst. Maybe its just a small crash and there is not service interruptions. Maybe there is a big crash and the power and water goes out and your family is hungry and thirsty and there are gangs of people roving around breaking into houses looking for food and water. Which one would you rather be? Paranoid and ready for all eventualities or caught with your pants down?
Being paranoid is simply having total awareness. At the very least you are over prepared with a few skids of bottled water and MRE's in the basement. Big deal. But a WAY big deal if and when you need them. Also: how will you defend your home from hungry intruders? You need to think about that.
So: Yes. I am going to have water and MREs and a baseball bat. Ok. But what else can I do to get ready for this?
1. Dont have everything you have buried into 1 or two blue-chip stocks. Such as people who had their entire nest eggs in Enron and WorldCom in 2000. Thinking that they were good. Thinking that they were solid with a solid blue chip stock. They lost almost everything and then instead of retiring they were then door greeters at Walmart.
2. Leave your 401K alone. Yeah it will take a hit, but you will be hit with penalties taking it out. Instead you are going to do number 3 below to cover yourself.
3. Take 5 grand and purchase leap puts that expire two years out about 5-8 dollars below the money. Purhase QQQ, an NASDAQ 3x Put ETF (calls on that one because its the reverse- it makes money and goes up when the market goes down) and 3 other blue chip stocks. Just purchase them and forget them. When and if the big wack comes and the market loses 40-50% of its value, the QQQ is going to drop from say 110 to 51. And with your cheap little out of the money puts they will expand exponentially. Like going from .60 cents to 50 dollars. As long as money is still in use and the banks still work you are going to be sitting on a mountain of cash.
Stay tuned and stay aware and look at our national debt and how we keep having to raise the debt ceiling and what do we owe China...
Tradinginsider
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