8 Alarming Forecasts for 2011

Martin D. Weiss,  Ph.D.

If you haven’t seen our 8 Alarming Forecasts for 2011, it’s not too late to do so.

You still can protect yourself from the specific dangers we tell you about. And you still can act on the specific recommendations we make.

But you don’t have much time: The presentation is coming offline soon. The time window for taking action before the holiday markets is getting shorter by the day. And, most important, it looks like …

The Latest Deal-Making in Washington
Could Trigger a Bond-Market Calamity!

When Americans went to the polls last month, many thought they were voting for a return of fiscal sanity in Washington. And with fiscal sanity, we’d have far better assurance of bond-market stability.

Instead, three houses of ill repute — two on Capitol Hill and one on Pennsylvania Avenue — are joining to deliver one of the most wanton, deficit-busting, bond-wrecking bills of all time.

What most people seem to overlook is that there are actually two bills in the works. There’s the bill Congress will pass this year. And there’s the bill you and I will have to pay next year, the year after, and perhaps till the day we die.

President Obama and the Republican leadership are calling it a “grand compromise to stimulate the economy.”

In reality, it’s little more than a great conspiracy to slaughter our nation’s finances.

The sad irony is that nearly all key decision-makers in Washington — including some you and I may have voted for — are feasting on the spoils:

  • The Republican leadership is getting the biggest prize — the extension of all Bush-era tax cuts.
  • The White House is walking away with its own choice morsels — a 13-month extension of unemployment benefits, a major cut in payroll taxes, and more.
  • And even rebellious Democrats are rebelling with a goal: To get a few leftovers for themselves as well.

Nearly every leader in Washington has blood-red ink on his hands!

None of the deal-makers have assumed responsibility for our future or our children’s future!

The Biggest Self-Deceptions of All Time

Let’s step back for a moment and review how we got here.

Shortly after the failure of Lehman Brothers in 2008, I participated in a Washington forum of decision-makers and opinion leaders, including Treasury Secretary Tim Geithner, former Fed Chairman Paul Volcker, financier George Soros, and a long list of others of similar distinction.

As you may recall, that was a time of peak tension and fear — when the world’s largest financial institutions were going bankrupt, when the government was scrambling to bail them out, and when the Fed was pumping trillions of dollars of hard money and guarantees into collapsing credit markets.

Plus, it was also a time when many people spoke more openly about their concerns and fears:

During dinner, Tim Geithner admitted to the group that the government’s measures were among the most extreme in history.

After dinner, George Soros told me that the government’s intervention was so massive, it risked hyperinflation.

Between workshops, Paul Volcker told me that he never dreamed the U.S. government would have to take all the steps it had taken to prevent a collapse.

Yet no matter how risky and how radical, everyone at the conference justified the government’s actions as “a necessary evil.”

Their rationale: The debt crisis required a two-step response …

First, they said, we had to save the system. Then, only later could we startfixing the system.

First, they argued, we had to accept trillion-dollar deficits. Then, only later could we figure out how to reduce the deficits.

I was the lone dissenter. I repeatedly declared — both in open forums and in private conversations — that …

“The distinction you are making between the present emergency and a future solution is a fiction, an illusion. The only time to do the right thing is right now. You cannot honestly promise to make all the right choices tomorrow, while consistently deciding to make all the wrong choices today.”

In principle, no one disagreed. But in practice, no one else dissented.

In fact, every forum participant was asked to vote by choosing among various new proposals to resolve the crisis. But all of the proposals assumed that the government’s role to bail out the system was indisputable. None of the proposals recognized the fiction I had articulated.

So in the final vote tally, there was only one abstention — mine.

And, unfortunately, this forum was merely a microcosm of what we’ve witnessed since the first day of this crisis …

Rampant, Blatant Discrepancies
Between Their Actions and Words

We see the same pattern in the White House and at the Office of Management and Budget (OMB) … in Congress and at Congressional Budget Office (CBO) … among Democrats and Republicans … among deficit apologists and, often, even so-called “deficit hawks.”

For the current or upcoming fiscal years, the red ink is undeniable. So their budget estimates have routinely admitted the enormity of the deficits.

But as soon as they look beyond the immediate horizon, they have invariably projected deficits that conveniently dwindle over time.

And the underlying message has always been the same:

“Yes, we know we’re trashing the budget this year. But don’t worry. We promise to fix it in future years.”

History, however, proves that such promises are literally emptier than a banker’s heart.

For example, in its Baseline Budget Projections of September 2008

  • The CBO estimated that the federal deficit for fiscal 2009 would be $438 billion. The actual deficit for 2009 was $1.4 trillion, or over TRIPLE the estimate made just one year prior.
  • At the same time, for 2010, the CBO estimated that the deficit would be $431 billion. In reality, it’s coming in at $1.5 trillion, or 3.6 times estimates.
  • The government’s unbridled optimism regarding nearby years was exceeded only by its fantasies regarding future years: The CBO estimated that, by 2012, the deficit would be down to just $126 billion. Today, the official estimate is $828 billion, or over SIX times more!

What’s most frightening is that history is now repeating itself:

Today’s official government estimates of future deficits are based on the same kind of false, optimistic assumptions as the grossly understated estimates made in 2008!

They assume that the unemployment rate will decline sharply. In reality, it’s rising.

They assume that borrowing costs will stay low. In reality, they are also rising.

And most egregious of all, they have the gall to assume that someone will start doing something about the deficits very soon when, in actual practice, no one in power has any such intention.

The latest events are a classic example of this hypocrisy:

Even while the president’s bipartisan commission was testifying before Congress on the urgency of taking drastic steps to cut the deficit immediately … that same president and that same Congress were agreeing on equally drastic steps to enlarge the deficit — alsoimmediately.

Result: The administration’s latest budget estimates are already grossly outdated! The OMB’s own data, currently still up on its website, shows that the deficit is expected to shrink from its all-time record of $1.55 trillion this year to $1.27 trillion next year.

But now, because of the new deal that Mr. Obama and Congress have just cut, the deficit is likely to balloon again next year to an estimated $1.6 trillion. And that’s STILL assuming a significant decline in unemployment!

This means that, even in the best of scenarios, our leaders are now actuallyplanning to give us the biggest federal deficit of all time, surpassing last year’s record-smashing deficit. And they’re doing so while still giving lip service to “fiscal discipline.”

So here we go again! More budget-busting tactics … more promises of future fixes … and STILL more budget busting!

Ignoring the Grim Reaper

Don’t our leaders hear the cries of urgency and outrage from the leaders of the president’s bipartisan commission?

Don’t they even bother to read the CBO’s just-released report, Economic Impacts of Waiting to Resolve the Long-Term Budget Imbalance?

Don’t they see what’s happening to budget-busting states like California, Illinois, New Jersey, and New York?

Don’t they realize that the whole world is watching? That China, which holds the lion’s share of our Treasuries, is turning increasingly sour on the U.S. and far more willing to dump U.S. Treasuries?

Don’t they understand the shocking events in our bond market of recent days — where bond yields are now surging even as the Fed spends $600 billion to push them down?

Certainly they could not have missed the Grim Reaper who has alreadyknocked on the doors of Greece, Ireland, Portugal, and Spain! Certainly, they must know that our nation’s finances and economy are equally vulnerable to attacks by global bond investors.

Mark my words: Because of our ballooning deficits … because of Washington’s deliberate neglect … global investors are on the verge of major bond-market selling in the days ahead.

Result: We now have all the ingredients for the worst U.S. bond and U.S. dollar disaster in recent memory.

With This Danger Hanging Over Markets,
Your Action Plan Should Be Clear …

First, get out of long-term bonds of all shapes and colors — government, corporate, or municipal … high rated or low rated.

Second, although the higher yields on U.S. Treasuries could help support the U.S. dollar for a short while, don’t expect that to last. When global investors sell, they sell both Treasuries AND dollars at the same time.

Third, any decline in the dollar is bound to be very closely correlated with rising trends in precious metals, agricultural commodities, and emerging markets. Just don’t count on any market going up in a straight line. Wait for corrections.

Fourth, don’t miss our 8 Alarming Forecasts for 2001. Click here to watch it before it goes offline. Just bear in mind that, among all the investment recommendations throughout the presentation, I think the most important is the one I make near the end.

Good luck and God bless!


2 Responses

  1. Said I would not post..had to for this article and for your understanding. I love you.

    – Their government has to have a budget so it can stay operational, and the document in the above link shows that they’ve had an awakening (of sorts), and what is proposed be upsetting a lot of people Yes, they will spend more AND where it ‘finally should go”. Less will be pilfered off to people and into places where it never should have been. Those people and places are the ones upset and dissenting, and getting a chance to voice their complaints in news articles and on t.v.

    Hopefully you have learned the legal term ‘adult’ and are learning to use it in your interactions with the world. You are treated as an ‘infant’ from the day of your birth, all these trusts are being created all around you, and courts are bad about creating constructive trusts without telling you and placing you in a role of trustee who owes the party that came in as a beneficiary some performance, so they are ruling against you. You have to see more than you are seeing. AND you have to speak better than you’ve spoken…and ‘never’ be a person. Never.

    Listen to that judge speak on the record, ‘This is the case of XxX vs. XXX and the persons are before the court” Or something similar and it’s quick, but as long as it’s on the record that a ‘person’ appeared as a party to the case, then forget being considered or thought of or seen as an adult; if you don’t correct it. Forget being corporeal, or alive, allodial, etc.

    That quick definition is as powerful as me stating in the record that you are a thief, or an incompetent “insert insulting word here”

    They always ask you to state ‘Your name’. That’s a subtle way to get you to declare you are a ‘person’.

    Your response should be like the bible. You own no name anyway, a name is written down on paper.
    You should reply, ‘I am called ” . In the bible they say, “and he was called Noah”, or he was called Abraham….in Spanish, Como te llama is “What are you called?”

    person = name, body, entity, individual, corporations, partnerships, trustee, agent, representative, guardian, man including woman child, human being (and more deceptive words)

    You allow the rights you ‘thought’ you had to be legally stripped from you by the definition of ‘person’ that was slipped into the records to define who you ‘are’ to them.
    Go read your court transcripts. I’ve sat through many. It’s so quick if you think you’ll miss it. You have to be hearing them speak, not zoned out about what you want to say. Having an attorney makes you a ‘person’ so forget it if you have one of them ‘representing you’…you are not real, alive, corporeal, nor allodial, if you have to place a God before you to represent you in their court.

    In tennis some sets are won by one side and some are won by the other, but the bottom line is, one player is always a better player. Tennis is played on a court, you need a racket to play. Court….racket…yeah.

    Be one of the people, definition of State is people.
    If people are the State then how can there be a court case of The State of vs
    It’s not a State vs a corporeal
    it’s a corporation (named a state) vs a corporation (bearing a name, but that you are “Called”)

    When you push back on the definition, they force you into a competency evaluation by a state psychologist. If you are a ‘person’ they can declare you compentent, if you let them know you are an adult, alive, tell them to look at you, you are real, you breathe, you are alive, you are corporeal, you are live born, whole blood, and the same spirit in you is in them, so you are equal….then they have no jurisdiction over you, because you have a spiritual affinity within 1 degree, (the same spirit of the Creator, is in both of you) and any affinity within 3 degrees mean they can’t place themself above you and make themself your keeper or your guardian or anything above you. The can’t move against you.

    The same spirit will be revealed if you move in Love.
    The Creator is not an angry anything. Every experience is a lesson in Love.

    This article is full of distortions.
    The fiscal commission solutions in the link I provided will make a lot of those who are used to spending any money, creating entitlements, and spending inside the tax code, upset because that all will stop.

    While the purse is open to spend on unemployment benefits and yes that is an increase in the budget, the purse it tightened in the places these people have gotten rich and comfortable.

    Now they speak to the masses (the sheeple) who don’t read and study anyway, and tell us their version of the dire consequences so we can uprise and tell their Congress, not to look our way and help us, but to keep things status quo so they don’t experience any type of collapse of ‘their’ system.

    Do not listen to those people’s opinions about the future. The man’s article is a huge opinion of “mark my words:”, as he stated at the end of this.

    This article is blowing smoke. Read the link I provided above, to see where the fire is coming from.

    There are sweeping changes being recognized, and if you have awaken, you will realize that there are two sides to ‘every’ story. Once you hear one side, start looking for the other.

    Whoever controls the media is guaranteed to give you the side that benefits the Powers-that-want-to-be the most.

    At some point you cant run over here, and run over there and then take the opinion of the anchor-adult of your favorite news show or news link.

    As adults you take responsibility for what you ‘personally know’ about the situation and you can’t personally know, until you are aware of at a minimum two sides to the same story.

    If you have one side of the story, then what you know is an opinion as well.


    Light and Love
    adult, allodial, corporeal, free, freeman, whole blood

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