Friday, August 28, 2015

Economic Collapse Predicted 35 years Ago!

In 1965 President Johnson launched ‘The Great Society’ (mass welfare) while simultaneously launching the Vietnam War and maintaining the Cold War.

Due to mass spending on the Cold War, Welfare and Foreign Aid, by 1975, the US national debt was increasing by $100 billion every year.

It was enough to alarm economist Paul Erdman to write a book called “The Crash of ‘79“ in 1976, predicting the bankruptcy and collapse of American Government and society.

In 1980, our national debt reached $908 billion under President Carter.

The magical approach to the unpayable $1 trillion mark inspired economist Douglas Casey to write a book called “Crisis Investing” that same year.

In 1981, our national debt reached the unimaginable $1 trillion mark for the first time under President Reagan.

Reagan’s massive increase in US military spending  and Foreign Aid while cutting taxes and borrowing made us reach the $2 trillion mark by 1985.

This alarming state of affairs made economist Ravi Batra write “The Great Depression of 1990“ 1987, predicting an economic Armageddon similar to that of Erdman’s and Casey’s.

In 1994, Brooksly Born, head of the Commodity Futures Trading Commission (CFTC) found out the big banks were now trading in something called “Over the Counter Derivatives” (OTCs).

OTCs were basically junk derivatives which ‘derived’ their value from pipe dreams and flowery words.

The trade of OTCs was occurring between the big ten banks secretly and without any accountability.

Born’s CFTC saw OTCs as secretive, destabilizing, illegal and dangerous.

In fact, she found few people knew what OTCs were in spite of the financial system being swamped in them and the fact that OTCs had caused the collapse of Bankers Trust.

Born’s CFTC merely began investigating OTCs when the entire weight of the Federal Reserve, the 10 largest banks in America, the Banking Lobbies and the US Congress was thrown on top of this (responsible) bureaucrat

The SEC, the Federal Reserve and the Department of the Treasury all put through hysterical phone calls predicting the end of the economic world if Brooksley Born continued to ‘interfere’ with the trade of OTCs

Born saw things differently, and stated she would continue to look into them.

Now the banks called in the big guns - the US Senate.

The Banking Lobbies proceeded to sic their dogs in the Senate on the unfortunate, well meaning and concerned head of the CFTC, Brooksley Born.

The Senate quickly called for special hearings to question (and skewer) Born.

In the 1998 hearings, Alan Greenspan (Federal Reserve), Robert Rubin (US Treasury), Larry Summers (US Treasury) and Arthur Levitt (Security and Exchange Commissions) all took turns “testifying” on how Brooksly Born was about to destroy the entire American economic system by “interfering” (actually all she was doing was investigating) OTCs. 

Then Senatorial slaves like Senators Phil Gramm and Richard Lugar took turns alternatively smiling warmly at the “testimony” of the money masters and scowling at Born every time she opened her mouth while figuratively breaking a chair over her head every time they spoke.

Why, poor ol’ Brooksly Born was being treated like public enemy #1 and a threat to national survival!

You can imagine the trauma on this poor woman, who was basically having the Federal Reserve, the Department of the Treasury, the SEC and the US Senate all pummeling her...for basically doing her job and trying to prevent illegal and destructive banking practices.

Needless to say, she did not last long.

She was dismissed and a Goldman Sachs employee put in her place.

Shortly after that the financial institution Long Term Capital Management (LTCM) also collapsed (due to OTC trading) and Greenspan told Congress to bail them out (which they did).

On her way out, Brooksley Born intimated to those who would listen that the system was a house of cards and that it was going to collapse.

This was in 1998!

But the system did not collapse...not yet.

The resilience of both the gigantic Euro-Japanese-American economies (and the Third World -  to which the result of all their economic largess was piled on, along with the exclusion of China and Russia from the world market) kept the entire system going for a while longer.

Indeed, what all these economists: Erdman, Casey, Batra, Born,  failed to predict was the resiliency of an international economic system centered in the United States, ,willing to use the entire world to salvage (or better said prolong) its economic viability of this one nation over all the others.

But what is inevitable, of course, is the final result.

Any nation submerging itself in debt will collapse.

It is not a matter of how...but when.

As you might have noticed, the ‘when’ has now arrived.

These economists were not fools or fear mongers. They saw the end of a viable national economy and they called it. What they did not see was the immense international financial system which would keep the United States from falling...temporarily.

How did it do this?

As I have said before, the entire product of economic misery produced by the non-viable American economy was passed on to the Third World.

America stopped producing, started importing, and in doing so, started exporting all its inflationary dollars to the outside world.

The latest (and final) scheme was the selling of trillions of dollars of US bonds to China.

The Chinese now seeing the end of the dollar, have begun cashing them in...and threatening to demolish the dollar.

In these dire economic times, when we finally see ourselves heading over the waterfall everybody saw us approaching since 1976, it is instructive to see Casey’s vision of what an economic collapse would look like.

“Surely this destructive political game must be nearing its end...But once Washington mandarins discovered the miracle of the printing press, the quick road to economic ruin had been paved.”

He expanded further by writing:

“Hyperinflation will automatically bring with it the death of the dollar, which in turn will leave millions of people impoverished. A devastated people can hardly be expected to sit back calmly and starve to death, not when political demagogues will be ranting and raving that “the rich” are responsible for everyone’s suffering. The obvious result of such a situation can only be chaos and a collapse of the democratic system as we know it, which must lead to the rise of a police state.” (p-2)

“future controls will be far more strict and comprehensive - and will include profits. Jail terms will undoubtedly be imposed for non-compliance with the spirit, as well as the letter, of these laws; examples will be made”

“As the national balance-of-payments deficits reach new highs, people will have to pay a heavy tax or get government approval to travel abroad...a limit will be placed on funds that can be spent abroad, and transfer of all funds abroad must be both reported to and approved by, the government. Foreign bank accounts will become illegal.”

“Industry will grind to a near halt because of draconian controls at home and the inability to import raw materials from abroad. The situation will approach wartime proportions, with rationing, black markets, searches, seizures, and confiscation sure to follow.”

“As it goes above ten percent, the government will resurrect the WPA and similar agencies to get people back to work - building roads that no one can afford to drive on.”

“Many banks will default, though at first the national government will bail them out. Later it will simply let them go under and then replace them with new federal agencies. Corporations will go belly-up on a massive scale, although once again the government will bail out those which are most inefficient...or most in the “national interest.”

“Many stocks will become worthless, along with bonds, and it will prove impossible to float new stocks or bonds. Brokerage firms will collapse. Long-term capital markets will dry up as inflation reaches about twenty percent.”

“The Federal Government will nationalize large bankrupt industries to get them back in production; they will go back into production, but at about the efficiency level of Congress, Amtrak, or perhaps the Post Office. Massive taxpayer-funded aid will be lavished on those who deserve it the least.”

“[banking collapses] leaving those who relied on them [401Ks] destitute. Social Security will at first be financed out of regular taxes after it has exhausted its own resources, then the system will default on its benefits...Of course, the government will [then] replace it with a new scheme.”

*Doug Casey “Crisis Investing” (p14 to 15)

Remember when I said all the economists CONTINUED writing about the untenability of our economic system every decade since 1976?

Well, economist Larry Burkett wrote “The Coming Economic Earthquake” in 1991, and he had the following descriptions of what a collapse would look like:

“The newspapers and the evening newscasts all carried similar headlines: “Nation’s Fifth Largest Insurer Collapses,” “First National Bank of Los Angeles Fails,” and “The Nation’s Banking System is in Trouble.”
     The demise of Northern Mutual left nearly $20 billion in unfunded policies outstanding. Within two days three more California banks holding loans to First National filed for bankruptcy protection. Congress demanded that the president create a special fund to protect depositors’ policyholders, more Federal funds would be used to underwrite failing institutions. The FDIC was unable to cover any further depositors’ losses.”

“In the next three weeks, seven states declared their insolvency, defaulting on their bond payments to creditors. Nineteen states stopped or greatly curtailed their welfare programs, and virtually all the states reduced their staff to the survival level. “

“[foreign companies] made good their threat to shut down their manufacturing faciities in the US. Two days earlier Congress had overridden
the President’s veto of the internal Tariff Act, levying a 50 percent excise tax on al lgood in the US by foreign-owned companies.”

“Congress assumed the posture of a government at war and in a further escalation of the trade war, immediately voted to freeze all foreign investors’ assets in American companies.”

“Americans quickly discovered that nearly 70% of all businesses were dependent either upon foreign sales or supplies.”

(Burkett 194-197)

“Inside the United States, panic dominated the dwindling banking community as foreign lenders demanded that their dollars be converted to the new world currency.”

“Overnight the dollar dropped to one-tenth of its previous value on the world market; America was bankrupt.”

“Inside the US those ho had any cash converted it into anything they could buy, from antique art to land.”

“Americans flocked to the stores to buy whatever was available before before prices went up further. This increased demand simply drove the prices of available merchandise out of the reach of all but those with abundant supplies of money.”

“Crime became so rampant in the major cities throughout the country that the National Guard was called out to patrol the streets after the federally mandated ten o’clock curfew.”

(Burkett -199)

So there you have it, the experts’ opinion on what an economic collapse in this country would look like.

My point in this essay?


We knew, the economists knew, a whole lot of people knew the economic system was not tenable in 1976.

From there they continued warning us from 1980 to 1987 and beyond in a myriad of books which began coming out in the late seventies and continued to be published every decade.

- “The Crash of ‘79“ by Paul Erdman (1976)
-"Crisis Investing” by Douglas Casey (1980)
-"The Great Depression of 1990“ by Ravi Batra (1985)
-"The Coming Economic Earthquake” by Larry Burkett (1991)
-"The Real Crash” by Peter Schiff (2012)

-and so on and so on, warnings given to the public by dozens of well informed economists writing books and screaming that our economic system is untenable and heading for destruction

In reality, and apparent to all the people in the know, The American (and the world) economic system was as non-viable in 1980 as it is today.

It was kept alive by economic scams which basically passed on our economic bad karma to the Third World.

Now that scam has been played out.

And now, after 45 years of economic abuse, we are finally getting ready to reap the whirlwind.

*a detailed explanation of the Brooksley Born drama can be found here:

*Frontline produced a laudable documentary on the Brooksley Born  CFTC and OTC incident entitled “The Warning” which is commercially available and can also be viewed here:


1 comment:

  1. Shalom
    Illuminatis has no power and cannot govern the world.
    Open thy Bible in Matthew 28:18 and you will discover therein that Satan has no power in heavens and has no powercon earth.
    In addition to this the WORD of GOD puts it clearly that Satan has neither wisdom nor knowledge because all the treasures of knowledge and wisdom are hidden in CHRIST JESUS.
    So folks, you just open thy Bibles in the Book of Daniel and thou will discover therein what is happening now and will continue to happen till a heavenly world order is established on earth: GOD using the CHURCH to dismantle the four satanic global empires.
    Shalom to all the nations of the earth
    Rev. Apostle Joseph TOUBI