America's Worst Economic Depression Read online

  Table of Contents

  Introduction

  Debt, Debt, and More Debt

  Real Estate

  Banking

  Population and Demographics

  Entitlements

  Retirement

  Political Failings

  Cycles

  Waves

  Reflections

  Deflation or Inflation

  Conclusions

  Weathering the Storm

  How to Survive the Coming World Economic Storm

  America is Leading the World into the Worst Financial Times in History

  By Robert M. Davidson, President, McCurdy Marketing, LLC

  Copyright August 14, 2013, by McCurdy Marketing, LLC

  None of the information provided herewith should be considered legal, accounting, tax, securities or investment advice. Such information should only be sought from professionals in those respective fields. Additionally, all rights are reserved in this manuscript and no part may be reproduced or transmitted in any form or by any means without the express written permission of the author and publisher.

  Introduction

  You will discover new, informative, and important secrets about the US Economy and its impact on the World Economy in this timely book. As you embark on reading, studying, and researching, you will quickly become aware of our surprising, inevitable, and unfortunate economic future. In approaching this book's conclusion, you will find relief through powerfully useful ways to find safety in the surefire face of this coming world economic storm. Your knowledge of the information in this book will prove a valuable benefit serving you, your loved ones, and your business.

  So, what do you think "world economic storm" means or stands for? Well, most of the Financial Brain Trust [FBT] members on this page believe it means the Second Great Depression or the Next Great Depression.

  While it may sound better to you, a few of these FBT members believe that the economic storm will be a much deeper contraction than the one we had in 2008. That's because of the massive, wrongful intervention and control of US financial markets by our political leaders.

  Many of these FBT members’ think a change in the US President might better what lies ahead. Most of these FBT voices of authority express that a Depression will mean a brighter, more promising future for our children and the generations to follow them.

  This living FBT is a partial list of persons either known and consulted directly by me, or indirectly, through my readings, research, and contact through others close to me. All these persons and dozens and dozens of others with similar views have been brought together in this book for your benefit and the many others who will read this book.

  The vast majority of all FBT members - living and deceased - as well as the other financial minds cited in this book believe America will go into another Great Depression much worse than the one experienced in the 1930s. Again, the primary purpose of this book is to make you aware of this likelihood, so you may be better prepared for its challenging consequences.

  Are you wondering why so many smart minds are calling for an Economic Depression, or certainly, wishing for one?

  You see an economic depression is the free market's natural way of cleaning up prior excesses in a nation's economy. Everyone knows that America was becoming increasingly excessive as we approached and came into the 2010s. We witnessed "blow offs" caused by our excesses, as these few examples might help to remind you: The Savings and Loan crisis of the 1980s & 1990s; the dot-com bubble of 1995-2000; the real estate bubble and collapse in 2007; and, Black Monday on October 19, 1987, ushering in years of continued volatility in our stock markets, which would be much more pronounced IF those markets were not being manipulated excessively by our Federal government.

  Understandably, you might be thinking: "well, if our stock market is not so volatile, isn't that a good thing?" Yes, and NO. You see the real issue behind every economic depression IS a nation's out-of-control spending, and the resultant debt. This is the excess driving all the other excesses cited.

  An economic depression's greatest claim to fame is its unique ability to make we, mere humans, face these debts and other wrongs. The free market's depression manages to resolve these debts and other excesses faster and more effectively than any other way - and it's all natural in a free market economy.

  While this book will try to explain all these matters more effectively, this explanation on a Depression is offered now so you can appreciate why so many wise minds suggest these economic storm clouds ahead for America and most of our Western allies.

  When you bought this book, you probably knew that it was also available as an eBook or Kindle. The intent in three book formats is to accommodate as many readers as possible. Of course what’s most important is that you now own it and will hopefully read it as soon as possible to prepare for the storm soon to arrive.

  As you read this book, please tap into as many of the additional internet research links via your computer or other suggested books, as may interest you and where you have the time.

  These internet links throughout the text as well as footnotes on each page offer exceptional additional and important information about the subject just presented. The opinions herewith have been shaped by research culled from 1000s of websites studied since early in 2008. While each link may offer other pages and resources, the subject addressed will be related to the page of the link provided.

  You will quickly consume succinct and relevant excerpts from 50+ books, 1000s of articles, and 1000s of proprietary emails that support this book's message for you. For your convenience, relevant quotations from such sources are, generally, in italics. Additionally, you may find appealing and helpful key parts of these larger quotes in bold text. Nonetheless, there are benefits in reading each quotation in its entirety.

  The book before you is the culmination of over three decades of business and financial education on US and global markets. With like experience, your conclusions might be similar to my own discovery: "Economic research contrary to prevailing opinions has often proven most effective for safety of principal and superior financial results."

  Here's another way of explaining the motivation behind the 100s and 100s of hours poured into this book over the recent 5½ years: How would you feel if you lost 30-90% of your net worth in the months and years ahead?

  Do words escape you? Well, that's how I feel, too. That question underlies the benefit to you in reading quickly this entire book. Your knowledge and awareness of what's ahead promises both money-saving and money-making solutions for you, your loved ones, and your business.

  Could these truths about our US and world economies prove uncomfortable for you? If so, know that such a reaction on your part is as far from my intentions as might be imagined! Throughout your read, will you please remember my desire is for you to become aware so as to help lessen any hardship on you and yours by introducing the economic challenges ahead?

  As regards this "economic storm", do you know how much money was lost when the last recession hit in 2008?

  [i] Some of our most conservative portfolios, i.e. those of University Endowments in America, averaged losses of 30-40% on their investment holdings in that 2008 year. Further, Forbes magazine reporting in its annual listing of The Richest People in America on September 30, 2009, wrote:

  America's super rich are getting poorer. For only the fifth time since 1982, the collective net worth of The Forbes 400, our annual tally of the nation's richest people, has declined, falling $300 billion in the past 12 months from $1.57 trillion to $1.27 trillion. Faltering capital markets and real estate prices, along with divorce and fraud, pushed the fortunes of 314 members down an
d drove 32 plutocrats off the rankings.

  And if that's not frightening enough, surely you agree that the wealthiest minds are generally the smartest minds, too. Yet, many of them did not see the 2008 collapse coming either!

  This $300 billion decline in America's wealthiest from the previous year represented an average loss of 19% – in just one year! And guess what? Some of these losses were by persons who influenced the research behind this book!

  So, let's do our best to get you and others informed, so you and they do not suffer similarly when the next economic storm hits. As you see this research, you'll have a better understanding of why this next storm is a certainty and will be more powerful in its hurt or harm to both of us and many, many others.

  Are you ready for the first chapter? Or, are you secretly afraid of what you might learn? Any thoughts on how this story might begin? Well, it's the biggest issue facing America and the rest of the world: Debt, Debt, and more Debt. As you start reading the beginning of this book, you find yourself drinking the cup of knowledge - valuable knowledge. Think now and throughout your reading how impressed everyone will be with your grasp of the coming economic storm.

  Debt, Debt, and More Debt

  Do you remember hearing about or experiencing personally how in business, real estate, even stock investments we often take out loans to leverage our business or investment - provided, of course, our risk is well taken? How many times might you have said to yourself, can't nations do the same - as if to leverage their GDP to enhance future growth?

  Do you know who leads the world in such leveraged debt? America, sadly, the world's leader, shared by certain European nations, next, and most every other world nation has followed this "leadership" on leveraging debt.

  You're intelligent enough to know that national leverage is equivalent to selling off the future of a country's own citizens. Unfortunately, as national debt levels have grown in America and other nations for years to decades, so, too, has the financial burden shifted from present generations to future generations.

  As the previous chart shows, the US debt totals at that time were well above $15 trillion. Today, the chart would look like this but is rapidly approaching $17 trillion. And this debt picture is not the whole picture. Sadly, it only gets worse.

  Does this seem grossly unfair to you? How does this knowledge make you feel? Depressed? Upset? Angry? Well, you are more than justified! Are you beginning to see how we are creating a bleak future for those very persons who are the promise of our nation? Wouldn't you like to change this picture?

  Comparing the US debt to a cancer that is spreading to nations the world over, isn't it amazing how these two links from the CIA powerfully makes that point? This first link finds America at the bottom of the list, as the world’s largest debtor nation - leading the world in this practice of borrowing or leverage:

  https://www.cia.gov/library/pu blications/the-world-factbook/ rankorder/2187rank.html

  This second CIA link shows each nation’s debt as a percentage of that country’s Gross Domestic Product, or GDP:

  https://www.cia.gov/library/pu blications/the-world-factbook/ rankorder/2186rank.html

  These next two links, produced by the same source with numbers not as current as the CIA links, will provide you a different perspective on debt per country first, and next as relative to GDP:

  http://www.nationmaster.com/gr aph/eco_deb_ext-economy-debt-e xternal

  http://www.nationmaster.com/gr aph/eco_deb_ext_pergdp-economy -debt-external-per-gdp

  Do you agree that the picture of similar data, above, fulfills the expression "a picture is worth a thousand words?" This picture graph shows America's debt to its GDP being about 350%, as compared to 246% when America descended into its Great Depression. Also, the US government's total debt, today, is over 10 times the total amount of debt held when America began the Great Depression.

  As we center our discussion on Debt, you might remember or recall the intense scrutiny by our leaders, the US financial markets, and in the press about the massive debts and near defaults of certain European nations. Those in the news most frequently in this regard are referred to by many sources as the PIIGS. That stands for Portugal, Italy, Ireland, Greece, and Spain.

  Many Wall Street sources and financial publications fear Europe's financial woes might adversely affect our markets and economy, too. Some of the sources aligned with this book's message suggest Europe may lead America and most of the world into the Economic Storm. What do you think?

  Well, how do you feel about America's Debt from your short read so far in this book relative to Europe's Debt? You probably also agree at this juncture that pictures are effective in painting this economic picture, like this one:

  Do you remember hearing what was most significant - and frightening - about our Halloween in these United States on October 31, 2011? According to news sources on that Halloween, America's Debt exceeded its GDP on that "Trick or Treat" day. Certainly, that was NO Treat! Don't you agree?

  Have you heard or read anything about Ross Perot's economic concerns for America? As you probably know, Ross Perot is a successful entrepreneur who has earned a multi-billion dollar new worth. He was also a former independent party candidate for the US Presidency.

  [ii]

  Perot's concerns on America’s growing debt problem was likely one reason behind his independent and unsuccessful run for the Presidency of the United States in 1992. In a June 17, 2008, article in the Atlanta Business Chronicle entitled “Ross Perot Debuts Web Site About the Economy”, Perot is quoted:

  The U.S. national debt reached $9.4 trillion on April 30, and it is increasing by more than $1 billion every day. We are leaving our children and grandchildren with debt they cannot possibly pay…. The economic crisis facing America today is far greater than anything since the Great Depression. Our Federal government continues to spend us deeper into debt.

  In 1986, when travelling on business in the Middle East and Europe to introduce an American money manager to prospective investors, my travel companion - well aware of America’s growing debts even then, remarked:

  You can borrow from the Piper, though when the

  Piper comes calling, you must pay the Piper back.

  [iii]

  Today, this money manager is considered one of the best ever in history in his specific niche and has been rewarded as one of America’s wealthiest according to Forbes magazine with a multi-billion dollar net worth.

  Wouldn't it be amazing to wrap your arms around a trillion dollars? Can you even imagine that? Well, then, have you ever thought about the many multiples of those trillion dollars that America and most other countries hold in debt today?

  And as you are thinking about drowning in a sea of debt, consider this:

  Say you’ve loaned money on several different occasions over an extended period of time to another person in your city. Now, you’re beginning to wonder if you’ll ever be repaid by this person - and it’s no small amount.

  This isn’t any ordinary person either. This person is recognized in your city, in your country - even throughout the world as possibly the world’s wealthiest individual.

  Not only that but this person is one of the first to help others when they are down. He/she buys more things from everyone than anyone else. They are well liked and highly regarded by many people the world over.

  Yet, this person owes you quite a sum of money, and you are now wondering if you’ll ever be repaid in full. How does that make you feel? Would ‘not so good’ be an understatement for you, too?

  Have you ever read any of Bill Bonner's books? Well, he writes books about many of the same areas cited in this book. In his 2006 book Empire of Debt, he offers these chilling words on America's financial woes and future:

  When an economy comes to depend on more and more credit, it must get more and more of it or the economy will come to a stop. A man who has borrowed heavily to finance a lifestyle he cannot afford must continue borrowing to keep up appearances
. Or else he must stop. In market manias, love, politics, or war, people rarely stop until they are forced to.

  Did you know that America’s national debt not only exceeds $16 trillion today, but by reliable reports, is growing by $1 billion a day? Are you curious about America's private sector debt?

  In his “Money and Markets” investment newsletter on September 21, 2009, Martin Weiss and his financial think tank offers this exceptional, trusted research:

  As Larry Edelson explained here one week ago:

  · Through August, the Federal deficit hit $1.38 trillion, or three times last year's all-time record deficit of $454.8 billion. And in September alone, the administration expects another $200 billion in red ink, bringing the total for the year to $1.58 trillion.

  · The U.S. government's official debt is now at an all-time high of $11.8 trillion, or over $100,000 for each and every household in America.

  · Both the administration and its opponents agree that, over the next 10 years, the cumulative Federal deficit will be another $9 trillion, driving the burden per household up to $177,000.

  · The Federal Reserve is also in hock up to its eyeballs, with more than $2 trillion in liabilities on its balance sheet. That brings the total burden up to $194,000 per household.

  · Perhaps worst of all, the government's unfunded obligations for Social Security, Medicare, and Federal pension payments are also ballooning higher and now stand at an estimated $104 trillion, or $886,000 per household.

  Total burden per household: More than $1 million!

  This is, by far, the largest Federal deficit in U.S. history — in proportion to household income ... in comparison to the nation's population ... or even as a percent of the total economy (other than during major World Wars).