There’s an old Chinese curse…”May you live in interesting times.” This phrase was the first of three curses, each a little more severe than the last. Next came “May you come to the attention of those in authority.” Then comes “May you find what you’re looking for.”
This new year is going to be “interesting” if nothing else. Let’s look at what could easily occur during the next twelve months. I would break this up into foreign and domestic events, but these days events are events. Hardly anything can be separated into either foreign or domestic any longer.
The Texas Nationalist Movement is betting the ranch on the next Texas Legislative session that starts January 11th in Austin. They will be bringing political pressure on the session to embrace the concept of Texas secession. To state that this is a daunting task is to understate daunting tasks. Perhaps the recent EPA power grab will motivate lawmakers. Perhaps immigration issues are the last straw. Perhaps there will be enough of a groundswell of voter outrage to motivate lawmakers and politicians to move toward Texas independence. And make no mistake…politicians only respect and fear political power. But even if the entire legislature embraced the concept of secession, Texas is not ready to be a nation. They have yet to establish the power of the sword and the power of the purse. When Texas has a militia and gold/silver standard real money, they will be ready to start planning to be a nation. But DumpDC wishes the leadership of the Texas Nationalist Movement Godspeed and mind-boggling results.
Keynesian economics policies (central banking, inflation and counterfeit currency) are coming to their logical conclusions. There are hundreds of US municipalities that are effectively and functionally “bankrupt.” These include cities, counties, states…and the US Federal Government. Nations of the European Union, like Portugal and Spain, are on the edge. But don’t forget that there are also giant government and union pension funds that are ready to default. It is not reasonable to think that these entities will avoid default by any means. So you should expect that various municipalities and pension funds will default in 2011. Washington will likely be the last to go, since they are the only one that can print money to stave off ruin.
These defaults and bankruptcies are, in practical terms, hoaxes. As we showed in articles HERE and HERE, governments have trillions in investments that they conveniently do not count except in their Comprehensive Annual Financial Reports. The hoax will continue.
Real estate and mortgage defaults
The real estate market has been a government-created bubble for over 20 years. It is quickly deflating. The real estate market will continue to dwindle downward in 2011. More unemployment means more residential defaults. More business closings mean more commercial properties will go into default. And that doesn’t take into account all of the adjustable rate mortgages scheduled to reset in 2011. Look for the highest number of mortgage defaults and foreclosures in history in 2011.
If the Fed increases interest rates, the economy will be further screwed. The Fed cannot really lower interest rates any further. So, either way, banks are screwed. Their mortgages will continue to go into default in higher numbers. Expect at least one large bank to fail this year…but hundreds of smaller banks will also fail.
The US dollar will eventually fail. The dollar will be replaced as the world’s reserve currency. There is no alternative to this event. Some more nations of the world will stop accepting dollars as settlement for debts in 2011. This is already happening. Iran’s oil bourse accepts Euros and other non-dollar currencies as payment for oil. China is settling debts in renminbi with lots of world nations. Some nations will stop buying Treasury debt this year.
As currency wars erupt, nations will move to protect their own currencies and economies from the rapidly-melting dollar. So expect tariffs to be slapped on American goods destined for export. Washington will respond with tariffs of its own. For example, DC recently hit China with a stiff tariff on Chinese tires. China hit back with tariffs on US nylon (used to make tires), chicken and auto parts. This will continue with more countries entering the fray.
Hyperinflation has only one source…the central bank of the government as it prints more currency than it holds in money reserves. Because there are no true reserves in actual money, the dollar is only worth what any two parties agree it’s worth. Hyperinflation will mean higher prices for EVERYTHING. Expect $5.00 per gallon gasoline ( but no shortages) in 2011. But do not expect wages to increase proportionately. That never happens.
Gold and Silver prices
Expect $2,500 per ounce gold. Expect silver to hit $45 per ounce in 2011.
Governments from top to bottom are running deficits. Tax revenue continues to shrink as unemployment swells. So, governments must come up with alternate ways to increase revenue. The police at all levels will hunt regular citizens as prey. Expect the number of traffic tickets to rise significantly at the same time that the fines increase in size. Utilities owned by government will raise rates and crack down on collections. Expect municipalities to begin assessing new fees and higher fees for a plethora of government services.
At the same time fees and fines go out of sight, governments will slash essential services FIRST. Less cops, less fire fighters, less services of all types. Why? Because they’ve been watching the schools screw the taxpayers for decades. When the taxpayers say no to increased property taxes, what do the schools cut first? Bus transportation, music programs, sports and physical education. Then when the taxpayers howl, the school board trots out another referendum. Outcome? Taxpayers usually swallow hard and pay higher taxes. But don’t look for governments to lay off middle managers, union employees or bureaucrats.
Expect more and more intrusion by government into personal liberty as governments try to regulate and control everything. They will justify this with…what else? Terrorism. The government’s definition of anti-terrorism trumps all else, and defies all good sense. Expect the TSA to try to expand into ground transportation, like bus and train services.
And speaking of personal liberty and privacy…What’s been happening between Washington and Wikileaks is only the beginning of the war over the World Wide Web. Governments worldwide will seek to censor the Web, and supporters and cyber warriors will fight back with every tool available. Government won’t win.
Crime rates will soar…first in the inner cities, then out into the suburbs. Desperate people will do desperate things to survive. Expect to see food riots in 2011. Expect to see burglaries and robberies skyrocket.
Explosion of entrepreneurship
There are millions of young people leaving colleges with expensive degrees they will never be able to use. They cannot find jobs at any price. Add to that the millions of people already in the workforce that have been laid off and can’t find jobs either. Despite the woeful paucity of economic education in high schools and colleges, millions of people, finding no alternative, will start new businesses. And, true to the Pareto Principle, 80% of them will fail before they are five years old.
Green activists will continue to shun clean, safe nuclear power for electrical generation, and push wind energy, solar panels and other non-workable alternatives.
Remember that the largest embassy complex on the planet is in Iraq, and the US owns it. American troops will be in Iraq until Washington collapses. The Afghan war will engulf Pakistan. The Pashtun tribes could wipe out the American military easily and quickly. And, if Israel or the US attacks Iran, watch news broadcasts to see entire carrier task forces lying at the bottom of the Persian Gulf.
Expect a major false flag “terrorism” event in 2011 on American soil with significant loss of life. Washington needs a reason to clamp down on liberty and property rights just like the one they successfully engineered in September 2001.
We at DumpDC hope that you are buying gold and silver, and setting aside survival supplies. Hell, when even the Feds recommendEmergency Preparedness, shouldn’t you start listening?
DumpDC. Six Letters That Can Change History.
© Copyright 2011, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.