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We here at the American Civil Defense Association felt this was important to share;
Statement for the Record
Dr. William R. Graham, Chairman
Dr. Peter Vincent Pry, Chief of Staff
Commission to assess the threat to the United States from
Electromagnetic Pulse (EMP) Attack
U.S. House of Representatives
Committee on Homeland Security
Subcommittee on Oversight and Management Efficiency Hearing
October 17, 2017
North Korea Nuclear EMP Attack:
An Existential Threat
During the Cold War, major efforts were undertaken by the Department of Defense to assure that the U.S. national command authority and U.S. strategic forces could survive and operate after an EMP attack. However, no major efforts were then thought necessary to protect critical national infrastructures, relying on nuclear deterrence to protect them. With the development of small nuclear arsenals and long-range missiles by new, radical U.S. adversaries, beginning with North Korea, the threat of a nuclear EMP attack against the U.S. becomes one of the few ways that such a country could inflict devastating damage to the United States. It is critical, therefore, that the U.S. national leadership address the EMP threat as a critical and existential issue, and give a high priority to assuring the leadership is engaged and the necessary steps are taken to protect the country from EMP. (Read entire address here.)
You Must Be Prepared for the Next Financial Crisis
An interview with Bill Bonner, editor, The Bill Bonner Letter – Bill Bonner is an American author of books and articles on economic and financial subjects. He is the founder and president of Agora Publishing, and author of a daily financial column, Diary of a Rogue Economist. Bonner is also co-founder and regular contributor to The Daily Reckoning.
(Bill recently joined Porter on an episode of The Porter Stansberry Show to discuss this potential disaster scenario. Bill recently published a warning that will remind longtime readers of Porter’s “End of America” thesis. But as you’ll read in the excerpt below, Bill is focusing on the risk to the global paper money system…)
Porter Stansberry: So I was just getting ready for this interview, and I came across a very ominous recording where you talked about ATMs not working, gas stations closing, people not being able to get into their banks to cash or deposit checks – sort of the apocalyptic scenario of an end-of-the-world banking crisis. What makes you think that this is something people should be worried about now?
Bill Bonner: Now is now. Now is where we are, but nobody knows when this sort of thing will happen, and when it does happen, it’s inconvenient. I mean, if people were fully prepared for something like this, it wouldn’t happen at all.
But things like this don’t happen that way. They always come as surprises to most people. And so it’s hard to say… The “now” question is tough because I don’t know why now and why not in 10 days or in 10 years.
We’re in a situation where there’s more and more debt in the world. The response to the authorities of the crisis of 2008-2009 was simply to add more debt to a situation that was already caused by too much debt. And so the problem that we had in 2008 was not resolved at all. It was made worse and postponed.
What we’re going to see at some point is a re-enactment of the crisis of 2008-2009, but worse… because there’s more debt. And the interest rates are already at zero now, so they can’t lower rates much more.
So the next time this occurs, it’s going to be much worse, and people have to be prepared for what almost happened last time, which was that the banks closed… and they were ready to shut the ATMs down, when meanwhile, people need cash. And so that’s what I keep saying make sure you have some cash on hand.
Porter Stansberry: Yeah, I had a hard time explaining that message as well. It’s not contradictory to say that we fear a collapse of the dollar and then suggest for you to have some in reserve… Because in the immediate days and weeks following a run on the dollar, that paper currency is going to be very important.
Bill Bonner: Well, yes. In all fairness, there are not that many instances of it, so it’s hard to form an average. But in a banking crisis, which is what we had in 2008 and what we expect now, the banks seize up because they’re going broke.
And people realize it. So their reflex is to go and get their hands on something they can hold onto, and that is cash. You’ve got a bank account, you’ve got money in it, you want to run to the ATM and get that cash out before the ATM runs out of money.
And they will run out of money, because there’s not enough cash in all of the United States to cover the obligations and the needs that people will have.
Porter Stansberry: There’s not enough cash in the United States to cover the liabilities of two banks – Bank of America and JP Morgan.
Bill Bonner: No, no, there’s not much cash because the country has shifted to credit. The whole story of the last 50 years has been the expansion of credit, and credit is what people use.
You’ve got to stand in line at a grocery store, and often the person in front of you is paying with credit. Maybe you are, too. And so when the credit stops, the whole economy comes to a stop.
I think people have to get a lot more sophisticated about money because we are so used to an economy and a society where the money was fairly reliable and you could say…
“Oh, I’ve got cash. I’m not worried about anything. I’ve got cash.” We’d say, “Where is the cash?” “Well, it’s in the bank.”
But having money in the bank is not the same as having cash. When you have cash, you have what they call trustless money. That means you can go and buy stuff with it. But when you have an account in a bank, it means the bank owes you money.
Now, you’ve got a counter party. You’ve got somebody on the other side, and if you study these statements of the banks, the balance sheets of these banks, those banks are all in danger of going broke because they’ve lent so much money to so many flimsy, flaky projects.
And all of that collateral that they’ve got on houses and the money they lent to companies for mergers and acquisitions… the equity… it disappears.
And so all of a sudden, the bank, which has very little in real reserves, is illiquid. It’s illiquid and bankrupt, so you have a credit.
Your bank account is not cash. It’s what you have as a credit against a bankrupt institution. So you’re going to be in big trouble.