If you came over from YouTube to hear the rest of the show you can start at the 9:30 mark.
In this report we will discuss the current economic collapse news. Part 3 Of The Series: “The Economic Collapse Will Be Much Worse Than We Think!” In addition to the current news we will compare the past 1929 Great Depression to the current Economic situation. We will analyze the past to predict the future.
- Tens of thousands of demonstrators are marching in dozens of Spanish cities to protest record unemployment rates and the government’s handling of the economic and corruption scandals. It comes just after Spain’s jobless figure hit the 5 million mark.
- “Poverty, unemployment, suicides. Enough is enough,” was the slogan chanted on Syntagma square by some 1,500 Greek demonstrators
- Pyongyang has cut a key communication hotline with South Korea, Seoul’s unification ministry said Monday. The tensions between the neighbors have once again flared after the UN adopted a fresh round of tough sanctions against North Korea.
- The New York Stock Exchange (NYSE) is preparing contingency plans wherein computers will replace outcry auctioning in case another disaster, such as terrorism or severe weather, forces the closure of trading in downtown Manhattan.
- NYSE Euronext is preparing to submit details of the plan, which would permit computers to take securities to market just as human traders have done on Wall Street for the last 221 years, to the US Securities and Exchange Commission, The Wall Street Journal reported on the weekend.
- The disaster plan would move trades on the NYSE to a fully-computerized sister system, called Arca, while Wall Street’s famed floor traders would be out of harm’s way. The transferal to Arca would make it the ‘primary market’, responsible for setting opening and closing prices for securities, the US business daily reported.
We will look at the past to predict the future. Here is a breakdown of what was happening in 1929 compared to what is happening today.
|The Great Depression (1929)||Prior To The Economic Collapse And The Economic Collapse Scenario (Present)|
|Banks invested their depositors’ savings — without their even knowing in speculative trading||Glass-Steagall Act was repealed in 1999 – Now allows banks to use Depositors’ money for speculative trading.|
|Banks didn’t have enough to honor depositors’ withdrawals. This caused a run on the banks and bank holidays. No FDIC||FDIC insures up $250,000. FDIC Insures $4.7 Trillion in Deposits with a $13.6 Billion fund, January 1, 2014, that rate will return to the previous limit of $100,000. Banks need to keep 10% reserve which means they only have 10% in cash on hand.|
|Prior to the crash there were warning signals in the spring and summer of 1929. Dow dropped went back up, dropped again went backup and made new highs.||We are seeing the same now. The dow drops and then it makes new highs, the dow drops and makes new highs. Take a look at my graphs that compare the patterns of 1929, 2008 and Present day stock market.|
|Economy shows ominous signs of trouble. Steel production is declining, construction is sluggish, car sales are down, and consumers are building up high debts because of easy credit. Yet the stock market continues its upward momentum, heedless of real economic indicators.||Economy shows signs of trouble. Walmart sales are down, retailers closing hundreds of stores. Consumers have high debt. Construction sluggish. Youth unemployment high, roughly 50% of college grads cannot find jobs. We do not produce anything anymore. But stock market continues to climb higher, heedless of real economic indicators.|
|Summer 1929 – Market continues to rebound, and stocks hit record levels month after month.||Jan 2013 – Feb 2013 Market declines but push back to make new highs each time.|
|The Dow Jones Industrial Average closes at 381.17. A newspaper headline trumpets, “Public Demand for Stock Appears Insatiable.”||The Dow Jones index has now more than doubled since a low point in March 2009, stunning many market watchers and coming against a still lacklustre economic recovery. Corporate profits hit record highs last year, fuelled largely by cost cuts|
|Economist Roger Babson gives a speech, saying, “Sooner or later, a crash is coming, and it may be terrific.” He has been delivering this message for over two years||Peter Schiff, Marc Faber, Jim Rogers, Gerald Celente and many others have been telling us the economic collapse is coming very soon.|
|September 1929 – The market fluctuates wildly up and down. Humans were involved in the trades which included human emotion.||Future Scenario: When we see the market fluctuate wildly up and down this will be an indicator of a crash coming. The plunge protection team and the high frequency trading will try to offset the fluctuations. Wall street is now proposing a Wall St. Disaster Plan, Trades without humans.|
|October 24, 1929 – “Black Thursday.” The economic bubble finally bursts. Stock prices fall sharply on a day of heavy liquidation. Ticker tape runs four hours later than normal at a volume of 12.9 million shares. Headlines will report the market’s paper loss at $5 billion. A pool of bankers acts to stem the drop by putting more money into the market, and President Hoover reassures Americans that U.S. business is sound. Within a few days, a headline will read, “Brokers Believe Worst is Over and Recommend Buying of Real Bargains.”||Future Scenario: Stock market bubble finally burst. Plunge protection and high frequency trading try to keep the market propped up. Market falls by 500 points or so. The Wall St. Disaster plan has been all ready developed and has been sitting on the side lines waiting to be enabled. The system is turned on to take the human element out of the picture. The stock market is now fully automated. The press reports that the newly enabled Wall St. disaster plan is working perfectly.|
|October 28, 1929 – “Black Monday.” The stock market falls 22.6%, the highest one-day decline in U.S. history. The crash triggers similar declines in markets around the world.||Future Scenario: Trading continues with only computers programs and institutional trading. All other traders are no longer in the market. The stock market is completely out of touch with the rest of the American economy. Layoffs begin in investment firms and banks. The press reports since humans are no longer needed in trading the investment firms and banks can reduce their overhead by letting employees go. Japan and Europe economies collapse. China sees whats happening and wants to cash in some of its Treasury Bonds.|
|October 29, 1929- “Black Tuesday.” Panic sets in as investors all try to sell their stocks at once. Over 16 million shares of stock are sold, setting a record — and the market records over $14 billion in paper losses. Stock tickers cannot keep up with the heavy trading volume. At the end of the day, the market is down 33 points, more than 12.8%. Some of the nation’s financial elite, including General Motors’ William C. Durant and the Rockefeller family, show confidence by buying stocks, but their efforts fail to stem the tide.||Future Scenario: Treasury Bond market starts to go into a tail spin just from the news from China. The Treasury Bond market is unraveling, the Fed is working hard to stop the bubble from bursting.The Mainstream news reports more retail stores will be closing because of weak sales. More layoffs from other companies are starting to hit the news. The news reports people leaving the buildings with boxes in hand. News that JP Morgan, Bank Of America, Goldman Sachs etc need a bailout.The Wall St. Disaster program is working hard to keep the market propped up, but real economic indicators are completely misaligned with the stock market. Since the Fed cannot lower interest rates any lower because they are already at “0”. The Fed reports that they will start QE5 to help the markets.|
|November 23, 1929 – After weeks in freefall, the market hits its bottom and stabilizes. The New York Times reports, “Regular Schedule to be Resumed, but Trading Will Be Suspended Last Half of Week; Business Nearly Normal.” The market’s daily volume is at 3 million shares with “orderly although irregular” prices.||Future Scenario: After the Fed announces QE 5 the dollar loses value quickly, other banks and investment firms need bail outs. Wall St continues with only computers running the stock market. No humans are involved and the market is going higher. People view this as unrealistic and unemployment is rising quickly as more companies layoff people.|
|More than 3.2 million people are unemployed, up from 1.5 million before the “crash” of October, 1929. People with jobs had to accept pay cuts, and they were lucky to have work.||More than 4.8 million are unemployed as of Feb 2013.Future Scenario: As the collapse begins it is reported that 8 million people are now unemployed and rising rapidly. Those who still had jobs were told that their salaries would be cut in half.|
|Demand for durable goods—housing, cars, appliances—and luxuries declined, and production faltered. By 1932 the gross national product had been cut by almost one-third. By 1933 over 5,000 banks had failed, and more than 85,000 businesses had gone under.||Future Scenario: All luxury items were in a sharp decline, automobiles, housing, appliances, computers, electronics etc. Automobile companies filed for bankruptcy. Half of Americas Small businesses had gone under. The gross nation product was in the negative numbers. As the dollar kept losing value and banks were closing people started to panic and started taking money out of the banks. The FDIC could not keep up with the number of banks failing and since people were removing their money from the banks, the bank’s reserves started to evaporate. People started to trade their cash for gold or silver to preserve their wealth.|
|Bank failures snowballed as desperate bankers called in loans which the borrowers did not have time or money to repay. With future profits looking poor, capital investment and construction slowed or completely ceased. In the face of bad loans and worsening future prospects, the surviving banks became even more conservative in their lending.(At that time, the amount of credit the Federal Reserve could issue was limited by the Federal Reserve Act)The FED contracts the money supply and the Banks built up their capital reserves and made fewer loans, which intensified deflationary pressures. A vicious cycle developed and the downward spiral accelerated.||Future Scenario: Bank runs escalated and more and more banks fail. Banks start to call in loans and mortgages early to build more reserves. People didn’t have the money to meet this. FDIC is now ineffective with the number of banks failures and with the number of people who want their money. FDIC collapses. The FED is printing billions and billions a day which in turn puts pressure on the dollar and the dollar value spirals downward very quickly. People raid the banks and the government issues a bank holiday and all banks and the stock market are closed. People go crazy smashing the windows of the banks demanding their money. The local police and government forces arrive to control the situation at the banks. Since the dollar is losing value people are quickly exchanging their dollars for physical gold and silver. Gold is now at $2500 and silver is at $47 and ounce.|
|Average family income dropped from$2,300 in 1929 to $1,600 a few years later. More than 12 million workers were unemployed—about one-fourth of the workforce.||Future Scenario: 1 week later Banks are still closed, dollar losing value and Gold and silver keep rising quickly. People have no food or money to pay for anything since everyone life savings are in the banks. People learn today that most of the retirement and their life savings are now gone or worth only a quarter of what they had. Gold is now at $3200 and silver is at $59. For those who are still working income the average income keeps dropping making it difficult for people to pay their expenses. Government debt is now at 25 trillion to keep up with the demand of all the people that are requesting government assistance. There is not enough to cover the interest payments on the debt so the Government needs to borrow more to cover the payments on the debt.|
|Demonstrations for benefits, hunger marches, looting, self-help groups, etc. Only later did the labor conflicts enter the arena, initially against pay cuts.Looting of stores on the rise. In July, 300 jobless marched on shopkeepers in Henryetta, Oklahoma to demand food, insisting they were not begging and threatening to use force if necessary. After several public figures intervened, the issue was settled without violence. By 1932, organized looting had become a nationwide phenomenon. Most often, shopkeepers tried to avoid the bad publicity of incidents by refusing to call the police||Future Scenario: People are refusing to leave their homes and others pack up everything and just leave to find work. Homelessness in the big cities is running at an all time high. People are starving, cold and desperate. People are demanding the government do something and many people are starting to march on the White House.Those with nothing to lose start looting stores for food, homes and other businesses. Violence was kept to a minimum but when shop owners, homeowners do not cooperate the situation becomes violent. Looting had spread across America. The government needs to contain violent looting so they send in Homeland security forces to work with local law enforcement to control the situation.|