Taking Down America: From Panic to Revolution to Dictatorship (Part 4)

By Don McAlvany on September 14, 2020 in Publisher’s Corner

Part IV. Economic Nightmare

Entering a Depression Far Greater than the 1930s

Introduction

With over half of the businesses in the world now closed and over half of the formerly employed people in the world currently out of work (despite the rosy picture painted by governments around the world, the mainline media, Wall Street, and politicians running for re-election), the world is now sinking into the worst depression in modern history. Yes, it was all planned or scripted. Yes, it is confusing as we see the stock markets at all-time highs, but that is because the trillions of dollars the US and other governments have been printing out of thin air have primarily flowed into the big banks, the mega-corporations, and the stock markets. Yes, hundreds of super-rich billionaires have seen their fortunes rise almost $600 billion in the manipulated financial markets, but most people are living on the financial edge or completely underwater. And it about to get much worse.

When millions of Americans were losing their jobs at the beginning of this pandemic, we were told not to worry because the lockdowns were just temporary, and virtually all of those workers would be going back to their old jobs once the lockdowns ended. We were told that everything would come bouncing back in the Third Quarter. Well, now we are finding out that was not even close to the truth — nor were the lockdowns temporary. Over the last 18 weeks, more than 52 million Americans have filed new claims for unemployment benefits, and a substantial percentage of them are dealing with a permanent job loss. In fact, one brand new survey discovered that 47 percent of all unemployed workers now believe that their “job loss is likely to be permanent.” We are facing the greatest unemployment crisis since the Great Depression. All of those permanently unemployed workers are eventually going to need new jobs. But, where will they come from?

Then why hasn’t the economy cratered even more, and more pain already been felt? Because of the $5 trillion in money the Fed has printed and the $600 a week benefit money (given to 5 million Americans March-July) — free money the politicians have given to millions of unemployed workers to provide the illusion of normalcy, to push the crisis further down the road, and to buy votes in the November elections. This was actually more than many recipients made in their previous jobs. (This has now expired as of July 31, but a fifth stimulus bill is now being put together.)

But virtually none of the bailout money has gone to small businesses which are dying, closed, and going out of business by the tens of thousands (110,000 at this writing). Tens of millions of now unemployed workers were in jobs that will never return. The US economy is in an epic free-fall, with whole industries like airlines, transit (i.e., taxis, buses, commuter trains), travel, hotels, retailing, restaurants, auto manufacturing/sales, health fitness gyms, construction, theaters, shipping, trucking, and more, collapsing.

[Ed Note: A sobering question: why are the politicians in both parties (especially the Democrats) allowing (actually causing) this to happen. Are these lockdowns part of a bigger socialist strategy — to literally control everything and everyone in America?]

US gross domestic product plummeted an annualized 34.8% (it’s down 40% in Europe) in the second quarter — the most in records dating back to the 1940s. This was the result of the Covid-19 panic causing Americans to stay home as states ordered widespread lockdowns — resulting in a collapse of consumer spending (2/3rds of GDP). Personal consumption dropped a record 36% in the 2nd quarter. Our entire system is melting down, but it will take some time for the drama that we are watching to fully play out. Our leaders in Washington and the bureaucrats over at the Federal Reserve will continue flooding the system with trillions in newly printed money in a misguided attempt to fix things. This will result in exceedingly painful inflation-and eventually hyperinflation. This new money is one reason why gold recently hit a historic high of almost $2100 at this writing and silver nearly $30 — before the recent correction.

Economic Losses So Far in the Spreading Depression

Restaurants

60% of independent US restaurants (not chains) are now permanently closed. Fear of Covid-19 will cause a large portion of the population to continue to avoid restaurants as long as the pandemic continues and well beyond. 80% of independent restaurants are not sure if they will survive the pandemic and lockdown. Recent reports say 231,000 of the nation’s total 660,000 restaurants will shut down this year — shedding millions of jobs.

The Travel Industry Has Collapsed

A close associate recently flew internationally (long-distance) on a plane that holds over 250 passengers — 20 seats were full. Most travel agencies are closed, as are many hotels. In many Asian countries, almost 100% of the hotels are closed. Nearly all cruise lines are shut down, and the very few who are operating have only 5-10% of passenger capacity filled. A number of these cruise lines are close to bankruptcy. Tourist travel is dead and could take years for recovery. Business travel is 20% of all tickets, but 80% of profits. But ZOOM business conferencing is now killing business travel — which may never return to what it was. This gives a grim outlook to hotels, buses, trains, taxis (think Uber, Grab), and travel agents everywhere.

Unemployment

US unemployment (54 million) is now higher than in the depths of the Great Depression. It’s getting worse: on July 23, 1,416 million persons filed new unemployment claims-up from a record weekly high of 695,000. In Feb 2020, the total US workforce was 152 million. Over one-third of the American workforce is now out of work. With each passing day, more companies are announcing layoffs. And every worker that gets laid off is another American that doesn’t have a paycheck to spend.

There was a 54% surge in job cuts in July — hardly the great recovery the politicians and Wall Street have been promising. 1.4 million Americans lost jobs in the last week of July, and 1.2 million in the first week of August, in the second dramatic wave of layoffs. Over 31 % of workers rehired in recent months have been laid off again.

In New York City

33% of small businesses will never reopen (76,000 out of 230,000). There is an 87% decline in rapid transit riders from one year ago. Four hundred thousand people have moved out of NYC — most of them well to do. The wealthiest neighborhoods have seen a 40% exodus since the beginning of the pandemic. New York, Chicago, San Francisco, and Los Angeles are the four cities people most want to move out of.

Us Air Travel

Is down 70% from a year ago. Airports are almost empty (airport shops and restaurants closed). United Airlines is about to lay off 30,000 workers. Over forty airlines around the world have declared bankruptcy or gone out of business this year. Boeing’s Aircraft orders have cratered, as no one is ordering new planes — likewise for Airbus Industries in Europe. Both companies are under severe financial pressure and laying off tens of thousands of workers. 34% (7600) of the world’s passenger aircraft are sitting idle.

Small Businesses

24% of all US small businesses are now permanently closed. 43% of small business owners anticipate permanent closure, with studies now predicting ultimately 55% total closures. Honolulu, San Francisco, and Las Vegas (and their respective states) have the most business closures mainly because of the collapse of tourism. Almost half of the San Francisco Chamber of Commerce members have lost 100% of their sales or closed down permanently. Shopping malls and retail stores are being decimated and are, for the most part, empty.

Hungry Americans

As of July 21, 30 million Americans said they did not have enough food to eat. Tens of millions cannot afford three meals a day. Food banks are now opening up all across America — very similar to the Great Depression, and are being overwhelmed.

Homeless Explosion

New reports forecast 28 million Americans will be homeless because they can’t pay mortgage or rents. Twelve million are currently behind on rent payments, and twenty million unemployed renters are at risk of eviction (with 11 million forecasted in the next few months). Recent reports say 25-30% of all US renters now face eviction.

The Auto Industry is Collapsing

With no one buying new cars or trucks. Michigan, the home of the auto industry is being decimated.

Large Retail Chains are in Trouble

Dunkin’ Donuts, McDonald’s, and Starbucks are closing 1400 stores as sales plunge (down 20%, 30%, and 38% respectively), and dozens of others are doing likewise or going bankrupt. Walmart is laying off thousands of employees. Popular chains that have declared bankruptcy so far include the following: Neiman Marcus, J Crew, Golds Gym, Pier One Imports, JC Penny, Hertz Car Rental, 24 Hour Fitness, GNC, Brooks Brothers, Lord and Taylor, Tailored Brands, CMX Cinemas, California Pizza Kitchen, Ann Taylor, Lane Bryant, Chuck E Cheese, True Religion, and many more.

Fitness/Exercise Businesses

Most of the 40,000 fitness clubs across the US are now closed with over 600,000 jobs lost. Many (over 25%) will never reopen, and many have declared bankruptcy. (Golds Gym and 24-Hour Fitness are just two examples.)

The Financial Squeeze

In the last week of July, over 50 million Americans went without paychecks, and 30 million had to borrow money from family and friends to make it through the month. Over a third of Americans have zero savings, and 50% are up to their eyeballs in debt. Personal bankruptcies will explode over the next 12 months.

Bars and Nightclubs

44% of US bars and nightclubs are permanently closed.

[Note: None of this would be happening if local, state, and Washington DC politicians from both parties (mostly Democrats — but including Donald Trump) had not forced the un-Constitutional lockdown on America in a greatly exaggerated plandemic. Ultimately, this lockdown will cost many more lives in America (and globally) than Covid-19. Are they totally stupid? Well, yes, many of them are, including many Republicans. But the establishment (global socialist) powers that be (behind the scenes) know exactly what they are doing. They are evil, but not stupid. They planned to crash the US and global economies as part of their giant power grab and move us toward a one-world socialist government.

To understand this strategy, study Section I : The Globalist Strategy: A Seven-Step Agenda from Plandemic to Totalitarianism

Financial Implications of the Plandemic / Lockdown

The manufactured panic accompanying the lockdown has punctured the “everything financial bubble” and is launching us into the greatest US (and global) depression and financial collapse in history. As 40-50 million US jobs evaporate in the “Covid Depression” the American government (and state governments) tax bases will collapse. This collapse and financial stampede have only been postponed by the Fed/government creation/printing out of thin air over $4 trillion since March (with trillions more coming) and propping up 25 million newly jobless workers with hundreds of billions in temporary benefits. Much of that has also gone into temporarily propping up the US stock and bond markets — creating the illusion of prosperity, a V-shaped recovery, and the belief that the worst is over. But. it’s not. It is just beginning!

National governments (led by the US) have responded to the Covid-19 crisis by recklessly spending bailout money (by the trillions). Central banks have responded by engaging in the greatest money creation spree in world history. (Never forget that hundreds of billions of dollars of bailout money have also been handed out to friends, relatives, and political supporters of our corrupt Congressmen and Senators.) Total world debt has grown from $125 trillion in 2006, to $270 trillion today, and at current central bank money printing rates, world debt should hit $300 trillion in a year or two. Meanwhile, US debt has grown 3-fold since 2006 (14 years) from $8.5 trillion to $26.5 trillion (from 60% of GDP to 123% today) and almost by one third in just the past year or so.

To put it in perspective, it took 204 years (from 1776 to 1980) for the US to accumulate $1 trillion in national debt. It took just forty more years (from 1980 to 2020) to multiply that debt 26.5-fold, and in the last year or so, it has grown by almost $6.5 trillion or 33%. So, in one year or so, we saw six times as much debt as it took 204 years to accumulate. As the government and Fed run the money printing presses at Mach 10 speed, this will lead, after the coming deflationary collapse, first to an inflationary depression, and then on to hyperinflation of the US dollar — ala Weimar Germany, or Zimbabwe or modern Venezuela. Already, US food prices have begun to rise sharply.

The US (and global) banking system is based on trillions of dollars of worthless debt. Just as the multi-trillion-dollar credit default pyramid came crashing down in 2007-2008, a much larger massively leveraged debt/derivatives pyramid (measuring in the quadrillions) is poised to come crashing down in our day. All it will take is one wild card event like a Lehman Bros. or a Deutsche Bank failure to trigger the falling dominoes.

That is why the Fed has dumped $5-6 trillion into the system over the past six months, with trillions more on the way. It’s not just to help their friends on Wall Street, corporate executives, and the elite Establishment — (which it DID, to the tune of almost $600 billion in profits). It is mainly to prevent history’s greatest ever debt pyramid from collapsing. Without the injection of trillions of dollars in newly created funds since March, the entire economy and financial system would have collapsed months ago.

But note that the bailout funds did not go into the real economy, but to support a bankrupt financial system and top financial executives. And of course, the Establishment and much of the US Congress and Democrat governors who precipitated the crisis with their lockdown mania want to prop up the system at least through November 3, so they don’t get blamed for the collapse and voted out of office.

It has just begun. More big corporations are going to go bankrupt; many more businesses will fail; more workers will be laid off; more families will go bankrupt, and more huge dominoes will fall. There is a looming tidal wave of evictions and mortgage delinquencies, a rising number over over-leveraged zombie companies, and a tsunami of defaults and bankruptcies on the horizon. Even if they come up with a vaccine and psych (deceive) the public that all is now well, it won’t cure the virus or the broken economy and financial system. We will discuss getting out of harm’s way in Section D below.

Understanding the Global Situation

All of these things and more are happening worldwide, including Asia, Europe, the UK, Australia, and New Zealand. This writer lives in Asia, where most cities and countries are in much worse shape with economic/financial/personal pain than in America. But these people are not suffering from the Covid Virus, which is quite minor. Instead, draconian lockdowns in these countries have put hundreds of millions of people out of work, creating mass starvation and desperation for millions. Many more are dying from the results of the lockdown than from the Covid-19.

For example, in two large Asian countries which are supposedly badly infected and are under stringent lockdown, the deaths as a percent of the total population are as follows: in one country, 3000 deaths, or .0000272% of the total population, and in the other, 5593 deaths, or .000021% of total population. These are infinitesimal death numbers — less than deaths from common ailments such as flu, pneumonia, TB, dengue fever, AIDs, pneumonia, etc.

Whether accidental or intentional (in America probably the latter), calling positive tests “cases” creates confusion. In these “tests,” the assumption is that if you are positive, you must actually be sick with the virus. (Remember, there are many Coronaviruses and most are not deadly.) This is happening in the US and all over the world, especially as more and more people are being tested, but the assumption is not true. Most of the positives are not and never will be sick with the virus. First — the CDC has quietly admitted that 50% of the test positives were false positives (i.e., inaccurate).

Second — most people who test positive never get sick (i.e., 90-95%) — especially if they are healthy or not over 75 or 80. People can test positive with a common cold, or common flu, or nothing at all. Even dogs, cats, various animals, trees, and plants are testing positive, BUT they do not have Covid-19.

Third — as the governments do more testing, they are coming up with more “positives” and calling them Covid “cases,” and when people die from any of dozens of different ailments, they are labeling it as “assumed Covid-19 death.” In America (and some other countries), when a patient dies, hospitals then get paid a hefty sum for handing the “dangerous Covid case” (in the US, $17,000). So, they are labeling most deaths as Covid-19. In this way, they are dramatically overstating how widespread and dangerous the virus really is and ramping up the fear.

Fourth — The key to understanding the severity of the Covid-19 threat is NOT positive tests, but how many people are actually dying from the virus — not basing conclusions and restrictive policies primarily on testing results but on actual really sick cases (not “suspected”) and actual Covid deaths — accurately diagnosed.

Most foreign governments understand little to none of this and are taking their instructions from WHO, the US CDC, and NIH, “experts” like Dr. Anthony Fauci or Bill Gates, or the American government. Most are following lockstep whatever the American government is doing or instructs them to do. And most are waiting for the coming vaccine.

Most of these countries are destroying themselves and causing irreparable long-term damage to their economies, financial systems, freedom, and people. If they enforce the coming vaccines as mandatory, they will do even more damage and suffering to their people than they did with the lockdown.

Protecting Yourself and Your Family in the Emerging Perfect Storm

In late summer and fall of 2020, we find ourselves in a perfect storm of accelerating financial/ economic collapse in the US (and globally); a vast well-strategized plandemic and draconian lockdown; a communist street revolution in America; and more social/political division in America than we have seen in 244 years — not even during the Civil War. The deflationary depression will morph into an inflationary depression (that is about to happen). Over the next year or two, this inflation will very possibly morph into a hyperinflation, as the Fed and US government create trillions of dollars out of thin air. What should thinking individuals who understand the times (a tiny minority) be doing to protect their families and assets in this perfect storm?

Get or be out of debt as much as possible and take on no new debt.
Minimize bank deposits in, or exposure to, the faltering US banking system.
Beware of vastly overpriced stock and bond markets — with the exception of precious metals stocks, and (for larger investors) a well-managed portfolio of stocks that also aggressively uses shorting.
As we have strongly recommended for years, 25-50% of your net worth should be in physical gold and silver — the best-performing assets in the world this year and actually for many years. Due to all the crises discussed above, and the coming decline in currencies (including the US dollar), gold is now skyrocketing toward $2100 (the highest price in world history) and silver toward $30. (Yes, there will be sharp corrections along the way, but the uptrend should continue as the financial crisis continues and expands.) By year-end, gold could rise to $2300-2500 and silver to over $40. ($5000-$10,000 for gold and $100-200 for silver over the next few years of financial turmoil is very realistic.)

A portion of your metals (i.e., 25% or more) should be held outside the country (i.e., Switzerland or Canada) — especially if the Democrats (aka, radical socialists) should take over the whole government in November. Never store metals with a metals dealer or leave them in a safety deposit box in a US bank. If you have retirement accounts, consider switching them to Gold IRAs — which we have recommended and which have done incredibly well over the last 10-20-30 years.
Get out of your urban real estate if possible (or at least reduce it) and acquire small town or rural real estate — as remote as possible, due to the coming wave of political upheaval and crime in most major cities.
Strongly consider personally relocating from a city or nearby suburbs to a more remote area or small town. It’s going to get much uglier in and around big cities (especially Democrat-run cities like New York, Chicago, Denver, Houston, Los Angeles, San Francisco, Portland, Seattle, and many more, as the BLM/Antifa/communist revolution continues to spread. Do it now!
If you have school-age children, definitely keep them out of the public schools (where children are being brainwashed, dumbed-down, lobotomized, homosexualized, and taught transgenderism) and home school them. There are many excellent traditional, classical, conservative, and Christian curriculums available. If you leave your children in the public schools, you will lose them.
Get an up-to-date passport for every member of your family (or renew old expired ones). If you are well funded and a bit paranoid (as some of our readers are), there are a growing number of good second passport options available.
Acquire between $20,000 and $50,000 in cash if you can (depending on your present financial circumstances) for emergency purposes, (and there are a number of massive emergencies coming maybe a lot sooner than you think). Hold it safely and close at hand. Tell no one outside your family about it and violate no cash reporting laws. This may not be possible much longer.
Wherever you live (hopefully not in a major city), store extra food (enough for several months) and extra water (unless you have a well). Have enough guns (rifles, pistols, shotguns, and ammo), in case the revolution or extreme violence comes into a neighborhood near you. The police or government will not protect you as current developments around the country are clearly demonstrating. A garden or way to produce some food is advisable.
Maintain an arsenal of vitamins and supplements for just such a time as this. Get Vitamin C, D3, zinc, quercetin, selenium, and other immune boosters. Build up a stock of them while times are still reasonably normal. Drink lots of water each day, avoid sugar, alcohol, and things that will weaken your immune system, and stick with or develop a consistent exercise regime.
In case there is a communist takeover of the US government (not as far-fetched as it sounds), a Plan B (for those so inclined or who can afford it) outside the US might be considered. We know that 99% of Americans (including most of our readers) would never consider this option, but for those few who might, consider one of the many attractive island nations in the Caribbean (which are quite reachable when travel restrictions are lifted and many of which are quite pleasant and affordable).
Develop a small group of likeminded friends (it may or may not include your adult family members) who understand the times and where we are headed, and who you can talk, plan, pray, and cooperate with if things turn really nasty — as this writer believes they will.
Don’t leave the God of the Bible out of your present or future plans — we are going to need Him, His wisdom, guidance, and protection more than ever in the turbulent times which lie ahead. To paraphrase the American Express card ad: “Don’t leave home without Him.”
Pray for America like never before — this coming election will determine if we are going to crash and burn, or perhaps remain free for a while longer. Pray for a great awakening in the US now. If the radical socialists come to power, implementing the above action steps will be more critical than ever.

Links for more from this edition of the McAlvany Intelligence Advisor on this topic:

This essay is an excerpt from the original edition of the McAlvany Intelligence Advisor, circular newsletter dated September 2020. Get the full newsletter The McAlvany Intelligence Advisor, [email protected]

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