Market struggles, dollar troubles portend bleak 2016, stress need for asset protection
By Patrick Vermeister
18 January 2016
The 2016 calendar year has gotten off to a rocky start with the U.S. stock market producing the worst opening fortnight in its history. To go along with this, news sites across the world have been sending a clear message that trouble is afoot and a crash is coming.
What's worse: This time, there may not be anybody on the rescue trail.
“The Federal Reserve is a giant weapon that has no ammunition left,” former Dallas Fed president Richard Fisher told financial analyst Mish Shedlock.
When the last collapse happened in 2008, the Federal Reserve bailed out banks that carried too much toxic debt, notes that couldn’t be repaid. If this happens again, or perhaps put more accurately, WHEN this happens again, no entity can prop up the markets, including the U.S. Dollar.
Now, the Federal Reserve is highly leveraged, which is bad news for the United States currency. Currently the world’s reserve currency, it’s also bad news for those around the globe who hold USD-denominated assets.
Recently, financial analyst and establishment insider Jim Rickards sent out an urgent message regarding the future of the U.S. Dollar as the basis for global trade, saying that a dollar collapse “may start” within the first six months of 2016. The first ripples may have already begun with the Dow Jones Industrial Average dropping around 1,500 points in the first half of January.
Rickards, the author of two New York Times best-selling books, calls what is currently happening at the Fed a “fraud” and the value of bank accounts, pension and 401(k) accounts, real estate and other USD-denominated assets could, over time, lose “80-90% of its value.”
That may seem like a worst-case scenario, but what if he has overstated the severity and the drop is only 50%? or 30%? Only time will tell what the reality becomes, but Rickards is not alone in his basic forecasting.
There are many other warnings out there, like the Royal Bank of Scotland imploring those to “sell everything” because 2016 will be a “cataclysmic year.”
Albert Edwards, strategist at Société Générale, a large French bank, says the U.S. stock market could fall by as much as 75% and added: “The illusion of prosperity is shattered as boom now turns to bust.”
Add to these dire warnings the fact that the U.S. Government has already started seizing cash from its law-abiding citizens in a process called civil asset forfeiture, to go along with its new war on cash, and the picture is clear that the United States monetary system is flat broke.
“This emphasizes the need for Americans to begin the thought process of how to best protect that which they’ve worked so hard for years to achieve,” said Adele Weiss, principal at the European-based Weiss+Associates, a financial-freedom consultancy group. “Not only is it wise to divest from U.S. Dollar-based assets, but it’s perhaps even more important to get your money and assets out of the jurisdiction of the United States.
“The creation of an IBC can accomplish both of those goals.”
An international business corporation is a perfectly legal enterprise incorporated in a country in which the business model allows commerce to take place in all countries other than the one in which it is incorporated. IBCs can possess bank accounts, brokerage accounts and other financial products, and can hold them in many different currencies.
“Given the leverage factors of the Federal Reserve — a private, for-profit institution that has the sole power to create money out of thin air — it is not wise to hold U.S. Dollar-denominated assets,” Weiss concluded. “If what Jim Rickards is envisioning comes to fruition, people could wake up one morning and find The Powers That Be have devalued the Dollar and stolen what it took years for you to accumulate.
“You can bet that your politicians will NEVER give you any advance warning that this is about to happen.” The IBC solution can be completed in a matter of weeks, and Weiss’ firm can help clients get set up.
“Yes, FATCA is a factor in this,” he added, “but as long as your account balance stays under the $50,000 treshold, there is no reporting. Even with the threshold breached, it still is vitally important to remove your assets from U.S. jurisdiction. This environment is ripe for criminal activity perpetrated by your servant government and its pseudo-partner, the Federal Reserve.”
The government’s war on cash is an effort to remove the anonymity of cash and force people to engage only in digital commerce. As flawed as fiat currency is, it is still a tangible product. Without that physical piece of paper, people would have their life savings strictly in digital form — numbers in a computer. And you can bet, whenever the government wishes, it can simply deduct what it wants out of your account. It was already done in 2013 in Cyprus.
Weiss’ sentiment mirrors that of other analysts, who are comparing that which is about to happen to events around the time of the Great Depression. The unsuspecting masses suffered a tremendous loss of wealth, but those who were forward-looking and prepared accordingly preserved their purchasing power, and some even became wealthy.
All this comes while President Barack Obama claimed the following during his January 2016 State of the Union address: “Anybody who claims America’s economy is in decline is peddling fiction.”
To borrow Rickards’ analogy and to counter Obama’s rhetoric, analysts are merely pointing out an unstable environment, like the accumulation of snow on a mountain side, creating the increased liklihood of an avalanche which could destroy the village at the foot of the mountain.
Whether we have weeks, months or years left to prepare, the unavoidable fact remains that a tremendous storm is approaching, one that will change the future of economic activity for those around the world. The days of U.S. Dollar hegemony are fading into the annals of history.
There is a good chance that the new system will be an improved model, one not based on a monetary unit created out of debt but rather from tangible assets like gold or silver.
“People around the world are getting sick and tired of being slaves to the system and are taking matters into their own hands,” Weiss pointed out. “The creation of Bitcoin has come, not from any government program, but from a grass-roots initiative. We don’t know if Bitcoin is a long-term solution, yet, but it’s important to note all the efforts currently being done by ordinary people to unplug from the matrix of governmental control and influence.”
More information on IBCs and Asset Protection can be obtained here.