- NOTE: This document is not an attempt to promote or discredit
any particular Political Party. Our present economic situation is a bi-partisan
problem and will continue to be a problem requiring immediate attention
regardless of who is in the White House or which Party is dominant in Congress.
-
- (Further Note - Rense.com does not necessarily endorse
the purchase of the materials offered at the end of this article and are
passing it along as part of the primary article as received -ed)
-
-
- CONTINENTAL HERITAGE SECURITY REPORT
-
- This report will be one of the most important and timely
pieces of information you have ever read. It is alarming, but not speculative
nor intentionally sensational for the purpose of selling. When I returned
to the States a year ago after being overseas for two years, I noticed
an escalation of debt in this country. The danger signs present today are
nothing short of incredible. After a lot of research on my part, I found
that not only were my personal fears correct, but there are a lot of finance
wise people who see the same thing coming -- people who are getting out
of harm's way. Our economy is in DEEP DEEP TROUBLE, and that means your
investments, your pensions, and your savings are exposed to incredible
risk.
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- I. THE OVERALL ECONOMIC PICTURE
-
- The Forerunner
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- Early Tuesday morning Oct. 29, 1929, the stock market
opened as usual. The only difference on this particular day was that all
the trading activity on the floor was to sell, not buy. Not only did the
"crash" that followed affect multitudes of Americans, it affected
people and economies all over the world. Thousand of people lost their
jobs; their homes; and their life savings. The middle class was wiped out.
By the end of the year, commodity markets lost an unbelievable sum of 40
billion dollars in equity. Four years later, at the depth of the depression,
the national income fell by 50% and 5000 banks had closed their doors.
-
- >From the very beginning, our founding fathers had
always advocated that the federal government should not interfere with
the free enterprise system. However, due to the suffering induced by the
depression, the American people wanted relief and allowed the new President
Roosevelt to take action with programs that had been considered illegal
up to that time. The President boldly initiated his socialistic "New
Deal", and for the first time in history, the U.S. government intervened
in the affairs of private business with helps called "entitlements."
The stage was set for the federal government to dominate American business,
banking, commerce, and the economy as a whole.
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- Not only did this "New Deal" allow for more
government control in private enterprise, it also was the beginning of
the cancerous government debt that will eventually be financially perilous
to our economy. This country saw a great depression in 1929. We are dangerously
close to repeating history but with much more devastation.
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- The America that you and I grew up to know and appreciate
is a thing of the past. The upcoming crash is going to make the crash of
1929 look like a mild recession in comparison. Your job, your company and
your industry is much more dependent on other industries today than it
was in 1929. If our government continues to spend more than it takes in,
with 100 percent certainty, it will go broke. A time of rectification is
certain, it's only a matter of when.
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- The Problem Defined
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- Our government has the ability to generate $1.2 Trillion
in taxes. It spends $1.4 to $1.5 Trillion per year. The U.S. government
is spending more money each year than it raises in taxes. How does it do
that? It borrows the money to make up the difference. In 1992, it had to
borrow about a quarter of all the money it spent. This amount borrowed
is called the deficit. The government has been operating this way since
the 1960's. The accumulation of yearly deficits is called the National
Debt. By 1992, the National debt was estimated at over 4 Trillion dollars.
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- The government has given up on trying to pay back the
national debt and is struggling to just keep up with the interest payments.
Right now, interest payments is one of the top three expenditures in the
National budget each year. In just a few years, it will be the largest
expenditure. In 1980 the percentage of income tax used to pay the interest
of the debt was about 30%. In 1992, just 12 years later, that had doubled
to 60%. Experts project that within just a few years, the interest payments
alone will absorb all of the taxes collected. At this point, there will
be no money to run the country and America will be bankrupt.
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- Even if our budget was balanced, we would still be in
trouble because we don't have the cash flow left over to pay the interest
on our existing debt. This means we borrow to pay the interest which means
the existing debt is compounding. It doesn't take an expert to realize
the eventual results of that. If we continue to spend more than we take
in, the U.S. government is heading for an eventual collapse.
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- In the beginning of our country, the only time it borrowed
money was during time of war. This changed in the 1960's. When John F.
Kennedy was inaugurated as President, federal revenues and spending was
less than $100 Billion per year. The deficit was $3 Billion per year. After
1963 when Kennedy was assassinated, President Johnson made some drastic
changes in this country's economic policies. Johnson declared war on poverty,
war on Viet Nam and began borrowing money to achieve these goals at record
rates.
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- By 1981, Federal spending had increased to $500 Billion.
By the time Ronald Reagan left office, federal spending was up to about
$1 Trillion per year. Federal debt, which was $914 Billion in 1981, had
increased to 2.8 Trillion in 1989. By the end of the Bush presidency, the
debt was 4.2 Trillion.
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- The total federal debt today is around $6 Trillion (including
off budget debt which with unfunded retirement liabilities is another $2.5
Trillion). Consumer debt was $794 Billion in 1990. Business debt was $700
Billion. Only 2 percent of Americans own their home. Banks now hold nearly
$2 Trillion in first mortgages. In addition, they hold $80 Billion in home
equity loans. The average household debt is 84 % of their income. Both
federal and state health care costs are escalating out of control. Medicare
now costs $104 Billion. It is estimated that federally supported health
care costs will be more than $1.3 Trillion by the year 2000.
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- America owes (on-budget) 4 Trillion dollars. It must
borrow 1 Billion, 100 Million dollars every day in order to maintain the
pretense of prosperity. For a number of years, the U.S. has not only been
using up its capital -- that's all gone now -- but it has also been using
up its borrowing power. When its borrowing power is all gone; when no one
like Japan, Germany, etc., will be willing to invest into the American
economy, then that will be the "breaking point" -- and the breaking
point is upon us.
-
- Missed Opportunity
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- No one officially attempted to examine the problem until
President Ronald Reagan appointed a special group of American businessmen
to do anindependent study of the trends in government spending. It was
called "The President's Private Sector Summary on Cost Control."
It was headed by businessman Jay Peter Grace and became widely known as
the "Grace Commission." The Grace Commission was privately funded.
They raised about $70 Million from public sources for the project. They
enlisted 160 top executives and hired some 2000 employees. The Grace Commission
found over $500 Billion of waste, and offered over 2000 recommendations
on how this amount could be trimmed out of government spending on an annual
basis without changing a single program. The government didn't have to
cancel any of the "entitlements" that were strictly guarded by
certain Senators (i.e. welfare, Medicare, or social security, etc.). All
they had to do was go in with standard business practices and trim out
the waste (over spending, double billing, etc.).
-
- At the time, people didn't take the Grace Commission's
analysis seriously. They were considered alarmists. But if you go back
and look at the projections they made for 1986, 87, and 88, you will find
that their projected figures were quite accurate.
-
- The Grace Commission came to the conclusion that if the
government didn't make some sort of substantial change in the direction
of the economy and substantial reductions in the deficit, eventually the
government will reach a point where they will be unable to fund themselves
through taxes or borrowing.
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- The Commission also found that when the growth of U.S.
debt is comparedwith other countries, it is higher and growing faster than
any other industrialized country in the world. If the tracking record of
the Grace Commission continues to be accurate, in just a few short years
the country will be bankrupt.
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- The Warning
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- It was this startling revelation that prompted the co-chairman
of the Grace Commission, Harry Figgie Jr. to co-author a book to alert
the nations leaders as well as the citizens at large, to make needed changes.
It became a New York Best Seller entitled Bankruptcy 1995 - The coming
collapse of America and how to stop it.
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- Despite the warning, Congress continues its irresponsible
trend of overspending, contributing to the dangerous growth rate of the
National debt. The Graham - Rudman Act of 1985 made it mandatory that the
U.S. government be able to live within its means by 1991. The Grace Commission
tracked the discrepancies between the estimated budgets and actual spending.
Despite the legal mandate, the discrepancies soared to new heights by 1991.
According to the Grace Commission, the government had been using creative
ways of circumventing the law.
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- Stopgap Measures
-
- The government has become very creative in designing
measures to postpone the inevitable. The only problem with that is that
with each implementation of their creativity, the more extreme the final
debacle will be.
-
- One loophole Congress regularly uses is to apply for
temporary budget extensions. These extensions were designed to be used
only in emergency cases. It has now, however, become common practice. Another
method of deception is to siphon off funds from the social security trust
fund. This allows them to reduce the annual deficit numbers presented to
the public. We've been paying into the Social Security fund for a long
time, but it doesn't have a dime in it. The government takes the money
out, spends it in the general budget, to give the appearance of lower deficit
numbers, and substitutes an I.O.U. in the form of a zero coupon bond from
the government.
-
- Another method is to transfer budget over-runs or excess
spending into the next fiscal year. It's the illusion of reduced spending
without the pain of making cuts. A fourth method of deception is to shift
projects off budget. One example is the Post Office. It's not on the balance
sheets. Another example was the Persian Gulf war. The most scary example
are entitlements. Many of the entitlements have been taken off the balance
sheets. If you did this in business, you'd go to jail for fraud.
-
- The appearance in politics is that the budget is being
dealt with because it is talked about in every political campaign. The
truth is that very few have been bold enough to confront or even address
the issue of the impending financial crash.
-
- The most recent desperate attempt to offset the results
of the debt is to create a New Currency. Actually, the new currency has
been printed for a long time. The government has just been waiting for
the right time to implement it. The stated rationale for the new currency
and the actual purpose are two different things.
-
- The New Currency is promoted as an effort to find drug
dealers, terrorists, and counterfeiters, and to preserve the stability
of the dollar. However, the actual purpose is to drive out tens of billions
of dollars out of the underground economy; track, audit, and tax, (or re-tax
in some cases) billions of dollars of cash in hand; render worthless billions
of dollars that will never be turned in thus creating a giant windfall
for the U.S. Government; facilitate electronic tracking of money; and usher
in U.S. foreign exchange controls. How the U.S. government intends to accomplish
these exchange controls, and the ramifications thereof, can most certainly
cause serious repercussions in foreign and domestic markets.
-
- Addiction
-
- The government isn't blind, they know what is happening,
they just aren't willing to face the reality of the problem and they don't
want to give up their spending. The government is not going to attempt
to balance the budget because the cure is too tough to swallow. It's like
smoker saying he wants to reduce his usage. What he is really saying is
he wants to maintain the right to smoke. This is what Congress is doing.
They say they want to balance the budget, but the fact is they don't want
to pay the price of giving up their spending habits.
-
- Other Problem Areas
-
- America's debt is only the most visible element that
can cause economic calamity. There are other facets of our economy that
can equally bring the country to bankruptcy. Government regulations, declining
industry, health care costs, litigation, and a reducing number in the working,
tax paying population are just a few of the things, that in their own right,
can weaken our economy beyond recovery possibilities. Indeed, our economy
is in a very serious situation.
-
- Government regulations, taxes, and fines are choking
industry right out of business. This is causing a decline in industry and
is going to bring our economy to its knees. More and more businesses are
shutting their doors. Some are even leaving the country to get away from
regulations, taxes and fines. Health care costs have grown to an alarming
height and with the new health care package, it will grow even higher.
Litigation in this country is at an all time high and is out of control.
The declining tax base is another serious problem. We have less people
working and more peopler eceiving benefits than ever before in the history
of the United States. Last but not least, the trade deficit disparity is
widening at alarming rates. This is another area contributing to our overburdened
economy.
-
- Lost Leverage
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- Just a decade and half ago we were the leading creditor
nation. Today, we are the leading debtor nation. The economic peril that
we are in right now is eroding our leverage on the world scene. Thirty
percent of our debt is foreign held. Already our policies are increasingly
dictated by the creditors of that debt. The U.S. dollar is the worst investment
on the market. Who wants to invest in an economy when its own government
isn't responsible enough to balance the budget?
-
- The End Result
-
- What is going to happen when the government can't pay
its bills? There are several theories for what might happen.
-
- 1. The stock market could collapse bringing on another
depression much more worse than in 1929. 2. A hyper-inflated economy.
-
- A depression is the result of not enough money and productivity
and growth comes to a standstill. Hyper-inflation, on the other hand is
the result of too much money (induced by uncontrolled printing to pay off
the creditors). Both situations would yield catastrophic results. There
are good arguments for either scenario, however, more than likely, the
temptation and pressure of the situation will cause the government to do
what every other country has done when faced with this dilemma. They will
start printing money to pay their bills and postpone the inevitable. This
will start a vicious cycle of hyper-inflation. The more they print, the
less it is worth and the less it is worth, the more they will print, etc.
(Germany did this when they had taxed the people as much as they could.)
They started printing money and within 3 years, the marc had devalued to
2.4 Trillion marcs per $.
-
- Once you hyper-inflate the dollar, it doesn't matter
how much you have in the bank, it will be worthless. Fifty years ago, Argentina
was one of the richest nations in the world. They went into hyper-inflation
that badly damaged their economy. Within a six month period the inflation
rate was 500% per year. Before they got it stopped, it was 5000% per year.
-
- When the government induces hyper-inflation by printing
extra money, two things happen:
-
- 1. wages fall 2. savings and investments are wiped out.
-
- A person could have $20,000 in the bank and within just
a short period of time, it could be worth only $10,000 or 2,000. This is
where the middle class gets wiped out. All investments (stocks, bonds,
mutual funds, Keoghs, 401k's, everything), insurance companies, savings
accounts, etc. go right down the tubes. The Government will have to default
on their FDIC guarantee.
-
- Jobs will fall like dominoes. Sooner or later, the majority
of the work force will lose their job. You will not be able to depend on
the government or large corporations for employment. There will be massive
defaults and people will be losing their houses, their businesses, and
everything they have owned.
-
- A catastrophe such as this will lead to anarchy. There
will be large riots like what we experienced in Los Angeles. A large segment
of the population will be unemployed and out of work, and probably unemployable
due to loss of industry. You will have the makings of major civil unrest.
-
- If the police can't contain law and order when an unpopular
verdict is passed (Rodney King trial), how are they going to keep the peace
when the government has destroyed the economy? What happened in L.A. is
possible in any large city across the country if they have the reason to
do so. One of the reasons could be if they are unable to feed their family.
-
- These are sobering times. We need to know what is coming
and how to get out of harms way.
-
- Summary (Debt)
-
- The economic debacle we face will either be a depression
or hyper-inflation. Either of which will have catastrophic results. If
we are facing a depression, its going to be tough to find a buyer on Wall
Street when the economy begins to collapse and everyone is selling. If
we face a more probable hyper-inflation situation, the value of your investments
and the dollar are going to go down the tubes. Savings accounts are going
to be wiped out (be it in a bank or home in a shoe box).
-
- When you look at all these indicators (the National Debt,
Consumer Debt, Business Debt, the Trade Deficit, government regulations
out of control, health care costs, declining industry, litigation, reduced
work force, reduced tax base, etc.), it doesn't take a rocket scientist
to realize we are facing immediate problems of astronomic proportion.
-
- Our economy is in grave danger of collapsing. It would
be prudent to notice the indicators and heed the warning. The following
chart demonstrates the parallels between the indicators in 1929 and what
we see today:
-
- PARALLELS 1929 - 1990's
-
- 1. (1929) Explosion of consumer installment debt
- - (1990's) ditto
-
- 2. (1929) Mountain of mortgage debt
- - (1990's) ditto
-
- 3. (1929) Giant business debt
- - (1990's) ditto
-
- 4. (1929) Sharp drop in Corporation Liquidity
- - (1990's) ditto
-
- 5. (1929) Shaky Banking system
- - (1990's) ditto
-
- 6. (1929) Record Government Debt
- - (1990's) ditto
-
- 7. (1929) Consumer optimism and complacency
- - (1990's) ditto
-
- 8. (1929) Bull market since 1921
- - (1990's) Bull market since 1982
-
- 9. (1929) Large amount of unsophisticated investors
- - (1990's) ditto
-
- 10. (1929) Price to earnings ratio = 19
- -- (1990's) Price to earnings ratio = 31
-
- 11. (1929) Dividend yield = 3%
- -- (1990's) Dividend yield = 3%
-
- 12. (1929) Yield on long term Treasury Bond
- --- 1920 = 7.8%
- --- 1929 = 4.7%
-
- -- (1990's) Yield on long term Treasury Bond
- --- 1983 = 14%
- --- 1993 = 6%
-
- 13. (1929) Fed began policy of "easy money"
in 1924
- -- (1990's) Fed began policy of "easy money"
in 1989
-
- 14. (1929) Gluttony on commercial real estate
- -- (1990's) ditto
-
- 15. (1929) Rising tide of trade protectionism
- -- (i.e. Smoot Hawley Protective Tariff)
-
- -- (1990's) Protective legislation introduced
- -- (trade war with Japan)
-
- 16. (1929) Interests were high - then low -
- --- when started back up, the banks failed.......
-
- -- (1990's) interest rates have been low, and are
- --- on their way back up.......
-
- II. THE OFFER
-
- We face a serious situation indeed. When I realized this
myself, I kept saying "I know what is coming, but I don't know how
to prepare, what can I do to protect myself?" This is the reason I
did this research. What I found out is what I want to offer you. It is
simple and it is foolproof. Not only can you protect what you have, but
you can, at the same time, position yourself for tremendous gains when
everything else is going down the tubes. (This is not an Insurance policy
- this is real, tangible security).
-
- You have seen that I have gone to great lengths to present
a fair and thorough picture of the U.S. debt history. But it doesn't stop
there. There are several critical elements such as the continued weakening
of the U.S. dollar, the new currency changeover, and possible political
scandal investigations, that could cause current uncertainties to escalate
into an immediate catastrophe (i.e. the stock market fell 40% when Nixon
resigned). You need to have a clear picture of what is happening in our
current economy, and what affect all these elements can have, and will
have on international investors in U.S. markets. You need to be aware of
all the dangers, why you are at risk, and exactly what your options are.
-
- The Security Package offers information about why the
Dollar is dying and what it means; when the New Currency is coming and
what the real affects will be; as well as other things that could trigger
a collapse. Don't get caught when you could have done something simple
to avoid the risks. You need to know how to prepare for the coming economic
storm and how to protect your assets -- even make tremendous gains in the
process. The coming debacle is certain -- it's just a matter of when.
-
- The following outline shows the topics of information
I am offering in a complete information package. This is all you need to
know, but you need to know it now. As I have in this free report, I have
also recorded for you in the "Security Package," a very complete,
in-depth look at the facts (25 pages of timely, and truth-revealing information
you won't find in the media). The "Security Package" includes:
-
- PART ONE -- THE PROBLEM
-
- I. THE "TRUE" ECONOMY
- Debt
- Unemployment
- Inflation
-
- II. THE STOCK MARKET
- Bear Markets
- Derivatives
- Financial Fallacies
- Major Tops
-
- III. THE DOLLAR DECLINE
- The Reason for the weak Dollar
- Can the Federal Reserve help the Dollar?
- Consequences of the falling Dollar
- What can trigger a collapse?
-
- IV. THE NEW CURRENCY
- The Counterfeiting and Money Laundering Deterrence Act
of 1994
- When will the New Currency be shipped?
- What is the real reason for the Currency changeover?
- How is it structured and what adverse affects will the
changeover have?
-
- PART TWO -- THE SOLUTION
-
- I. CRISIS PROTECTION INFORMATION
- II. CRISIS PROTECTION STRATEGIES
- III. CRISIS PROTECTION SOURCES
-
- ORDERING:
-
- ********************
-
- To ORDER the all important "SECURITY PACKAGE,"
please fill out the
- following Order Form and return to:
-
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- TO ORDER:
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- To have the "Security Package" sent to you
on disk (DOS only):
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