You’ve heard the axiom “History repeats itself.” It does, but never in exactly the same way. To apply the lessons of the past, we must understand the differences of the present.

During the American Revolution, the British came prepared to fight a successful war—but against a European army. Their formations, which gave them devastating firepower, and their red coats, which emphasized their numbers, proved the exact opposite of the tactics needed to fight a guerrilla war.

Before World War I, generals still saw the cavalry as the flower of their armies. Of course, the horse soldiers proved worse than useless in the trenches.

Before World War II, in anticipation of a German attack, the French built the “impenetrable” Maginot Line. History repeated itself and the attack came, but not in the way they expected. Their preparations were useless because the Germans didn’t attempt to penetrate it; they simply went around it, and France was defeated.

The generals don’t prepare for the last war out of perversity or stupidity, but rather because past experience is all they have to go by. Most of them simply don’t know how to interpret that experience. They are correct in preparing for another war but wrong in relying upon what worked in the last one.

Investors, unfortunately, seem to make the same mistakes in marshaling their resources as do the generals. If the last 30 years have been prosperous, they base their actions on more prosperity. Talk of a depression isn’t real to them because things are, in fact, so different from the 1930s. To most people, a depression means ’30s-style conditions, and since they don’t see that, they can’t imagine a depression. That’s because they know what the last depression was like, but they don’t know what one is. It’s hard to visualize something you don’t understand.

Some of them who are a bit more clever might see an end to prosperity and the start of a depression but—al­though they’re going to be a lot better off than most—they’re probably looking for this depression to be like the last one.

Although nobody can predict with absolute certainty what this depression will be like, you can be fairly well-assured it won’t be an instant replay of the last one. But just because things will be different doesn’t mean you have to be taken by surprise.

To define the likely differences between this depres­sion and the last one, it’s helpful to compare the situa­tion today to that in the early 1930s. The results aren’t very reassuring.

CORPORATE BANKRUPTCY

1930s

Banks, insurance companies, and big corporations went under on a major scale. Institutions suffered the consequences of past mistakes, and there was no financial safety net to catch them as they fell. Mistakes were liquidated and only the prepared and efficient survived.

Today

The world’s financial institutions are in even worse shape than the last time, but now business ethics have changed and everyone expects the government to “step in.” Laws are already in place that not only allow but require government inter­vention in many instances. This time, mistakes will be compounded, and the strong, productive, and ef­ficient will be forced to subsidize the weak, unproductive, and inefficient. It’s ironic that businesses were bankrupted in the last depression because the prices of their products fell too low; this time, it’ll be because they went too high.

UNEMPLOYMENT

1930s

If a man lost his job, he had to find another one as quickly as possible simply to keep from going hungry. A lot of other men in the same position competed desperately for what work was available, and an employer could hire those same men for much lower wages and expect them to work harder than what was the case before the depression. As a result, the men could get jobs and the employer could stay in business.

Today

The average man first has months of unemployment insurance; after that, he can go on welfare if he can’t find “suitable work.” Instead of taking whatever work is available, especially if it means that a white collar worker has to get his hands dirty, many will go on welfare. This will decrease the production of new wealth and delay the recovery. The worker no longer has to worry about some entrepreneur exploiting (i.e., employing) him at what he considers an unfair wage because the minimum wage laws, among others, precludes that possibility today. As a result, men stay unemployed and employers will go out of business.

WELFARE

1930s

If hard times really put a man down and out, he had little recourse but to rely on his family, friends, or local social and church group. There was quite a bit of opprobrium attached to that, and it was only a last resort. The breadlines set up by various government bodies were largely cosmetic measures to soothe the more terror-prone among the voting populace. People made do because they had to, and that meant radically reducing their standards of living and taking any job available at any wage. There were very, very few people on welfare during the last depression.

Today

It’s hard to say how those who are still working are going to support those who aren’t in this depression. Even in the U.S., 50% of the country is already on some form of welfare. But food stamps, aid to fami­lies with dependent children, Social Security, and local programs are already collapsing in prosperous times. And when the tidal wave hits, they’ll be totally overwhelmed. There aren’t going to be any breadlines because people who would be standing in them are going to be shopping in local supermarkets just like people who earned their money. Perhaps the most dangerous aspect of it is that people in general have come to think that these programs can just magically make wealth appear, and they expect them to be there, while a whole class of people have grown up never learning to survive without them. It’s ironic, yet predictable, that the programs that were supposed to help those who “need” them will serve to devastate those very people.

REGULATIONS

1930s

Most economies have been fairly heavily regulated since the early 1900s, and those regulations caused distortions that added to the severity of the last depression. Rather than allow the economy to liquidate, in the case of the U.S., the Roosevelt regime added many, many more regulations—fixing prices, wages, and the manner of doing business in a static form. It was largely because of these regulations that the depression lingered on until the end of World War II, which “saved” the economy only through its massive reinflation of the currency. Had the government abolished most controls then in existence, instead of creating new ones, the depression would have been less severe and much shorter.

Today

The scores of new agencies set up since the last depression have created far more severe distortions in the ways people relate than those of 80 years ago; the potential adjustment needed is proportionately greater. Unless government restrictions and controls on wages, working conditions, energy consumption, safety, and such are removed, a dramatic economic turnaround during the Greater Depression will be impossible.

TAXES

1930s

The income tax was new to the U.S. in 1913, and by 1929, although it took a maximum 23.1% bite, that was only at the $1 million level. The average family’s income then was $2,335, and that put average families in the 1/10^th of 1 percent bracket. And there was still no Social Security tax, no state income tax, no sales tax, and no estate tax. Furthermore, most people in the country didn’t even pay the income tax because they earned less than the legal minimum or they didn’t bother filing. The government, therefore, had immense untapped sources of revenue to draw upon to fund its schemes to “cure” the depression. Roosevelt was able to raise the average income tax from 1.35% to 16.56% during his tenure—an increase of 1,100%.

Today

Everyone now pays an income tax in addition to all the other taxes. In most Western countries, the total of direct and indirect taxes is over 50%. For that reason, it seems unlikely that direct taxes will go much higher. But inflation is constantly driving everyone into higher brackets and will have the same effect. A person has had to increase his or her income faster than inflation to compensate for taxes. Whatever taxes a man does pay will reduce his standard of living by just that much, and it’s reasonable to expect tax evasion and the underground economy to boom in response. That will cushion the severity of the depression somewhat while it serves to help change the philosophical orientation of society.

PRICES

1930s

Prices dropped radically because billions of dollars of inflationary currency were wiped out through the stock market crash, bond defaults, and bank failures. The government, however, somehow equated the high prices of the inflationary ’20s with prosperity and attempted to prevent a fall in prices by such things as slaughtering livestock, dumping milk in the gutter, and enacting price supports. Since the collapse wiped out money faster than it could be created, the government felt the destruction of real wealth was a more effective way to raise prices. In other words, if you can’t increase the supply of money, decrease the supply of goods.

Nonetheless, the 1930s depression was a deflationary collapse, a time when currency became worth more and prices dropped. This is probably the most confusing thing to most Americans since they assume—as a result of that experience—that “depression” means “deflation.” It’s also perhaps the biggest single difference between this depression and the last one.

Today

Prices could drop, as they did the last time, but the amount of power the government now has over the economy is far greater than what was the case 80 years ago. Instead of letting the economy cleanse itself by allowing the financial markets to collapse, governments will probably bail out insolvent banks, create mortgages wholesale to prop up real estate, and central banks will buy bonds to keep their prices from plummeting. All of these actions mean that the total money supply will grow enormously. Trillions will be created to avoid deflation. If you find men selling apples on street corners, it won’t be for 5 cents apiece, but $5 apiece. But there won’t be a lot of apple sellers because of welfare, nor will there be a lot of apples because of price controls.

Consumer prices will probably skyrocket as a result, and the country will have an inflationary depression. Unlike the 1930s, when people who held dollars were king, by the end of the Greater Depression, people with dollars will be wiped out.

THE SOCIETY

1930s

The world was largely rural or small-town. Communications were slow, but people tended to trust the media. The government exercised considerable moral suasion, and people tended to support it. The business of the country was business, as Calvin Coolidge said, and men who created wealth were esteemed. All told, if you were going to have a depression, it was a rather stable environment for it; despite that, however, there were still plenty of riots, marches, and general disorder.

Today

The country is now urban and suburban, and although communications are rapid, there’s little interpersonal contact. The media are suspect. The government is seen more as an adversary or an imperial ruler than an arbitrator accepted by a consensus of concerned citizens. Businessmen are viewed as unscrupulous predators who take advantage of anyone weak enough to be exploited.

A major financial smashup in today’s atmosphere could do a lot more than wipe out a few naives in the stock market and unemploy some workers, as occurred in the ’30s; some sectors of society are now time bombs. It’s hard to say, for instance, what third- and fourth-generation welfare recipients are going to do when the going gets really tough.

THE WAY PEOPLE WORK

1930s

Relatively slow transportation and communication localized economic conditions. The U.S. itself was somewhat insulated from the rest of the world, and parts of the U.S. were fairly self-contained. Workers were mostly involved in basic agriculture and industry, creating widgets and other tangible items. There wasn’t a great deal of specialization, and that made it easier for someone to move laterally from one occupation into the next, without extensive retraining, since people were more able to produce the basics of life on their own. Most women never joined the workforce, and the wife in a marriage acted as a “backup” system should the husband lose his job.

Today

The whole world is interdependent, and a war in the Middle East or a revolution in Africa can have a direct and immediate effect on a barber in Chicago or Krakow. Since the whole economy is centrally controlled from Washington, a mistake there can be a national disaster. People generally aren’t in a position to roll with the punches as more than half the people in the country belong to what is known as the “service economy.” That means, in most cases, they’re better equipped to shuffle papers than make widgets. Even “necessary” services are often terminated when times get hard. Specialization is part of what an advanced industrial economy is all about, but if the economic order changes radically, it can prove a liability.

THE FINANCIAL MARKETS

1930s

The last depression is identified with the collapse of the stock market, which lost over 90% of its value from 1929 to 1933. A secure bond was the best possible investment as interest rates dropped radically. Commodities plummeted, reducing millions of farmers to near subsistence levels. Since most real estate was owned outright and taxes were low, a drop in price didn’t make a lot of difference unless you had to sell. Land prices plummeted, but since people bought it to use, not unload to a greater fool, they didn’t usually have to sell.

Today

This time, stocks—and especially commodities—are likely to explode on the upside as people panic into them to get out of depreciating dollars in general and bonds in particular. Real estate will be—next to bonds—the most devastated single area of the economy because no one will lend money long term. And real estate is built on the mortgage market, which will vanish.

Everybody who invests in this depression thinking that it will turn out like the last one will be very unhappy with the results. Being aware of the differences between the last depression and this one makes it a lot easier to position yourself to minimize losses and maximize profits.

So much for the differences. The crucial, obvious, and most important similarity, however, is that most people’s standard of living will fall dramatically.

The Greater Depression has started. Most people don’t know it because they can neither confront the thought nor understand the differences between this one and the last.

As a climax approaches, many of the things that you’ve built your life around in the past are going to change and change radically. The ability to adjust to new conditions is the sign of a psychologically healthy person.

Look for the opportunity side of the crisis. The Chinese symbol for “crisis” is a combination of two other symbols—one for danger and one for opportunity.

The dangers that society will face in the years ahead are regrettable, but there’s no point in allowing anxiety, frustration, or apathy to overcome you. Face the future with courage, curiosity, and optimism rather than fear. You can be a winner, and if you plan carefully, you will be. The great period of change will give you a chance to regain control of your destiny. And that in itself is the single most important thing in life. This depression can give you that opportunity; it’s one of the many ways the Greater Depression can be a very good thing for both you as an individual and society as a whole.

Editor’s note: America is about to enter a crisis far more severe than what we saw in 2008–2009.

It could all start after Trump’s inauguration and could change everything… in sudden, unexpected ways.

This is exactly why Doug and his team put together a time-sensitive videoexplaining how it could all go down.

Click here to watch it now.

The post Comparing the 1930s and Today appeared first on Gold And Liberty.

The text reads:

To the maximum extent permitted by law, the Secretary of Health and Human Services (Secretary) and the heads of all other executive departments and agencies (agencies) with authorities and responsibilities under the Act shall exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.

Bill Hemmer asked whether that means “do not enforce the law.”

Napolitano said that the order directs agencies to “dial back the severity of the enforcement and [not] to punish a person or a state for what you think is their non-compliance because it might not be non-compliance in a couple of months.”

Napolitano added that he’s never before seen a president say “you will exercise your judgment against the government and in favor of the individual. That is truly revolutionary and is exactly what [Trump] promised he would do.”

He said that Trump is telling government agencies to proceed with the expectation that the law will be repealed soon, especially with regard to tax penalties.

Moments before, Hemmer talked with Sen. Bill Cassidy (R-LA), who is introducing a replacement Obamacare plan called The Patient Freedom Act of 2017.

A major part of the plan is health savings accounts, funded by tax credits, that individuals would be able to use for health care costs.

Watch the interview below and Judge Nap’s analysis above.

The post Judge Nap: Obamacare Order ‘Truly Revolutionary,’ Exactly What Trump Promised appeared first on Gold And Liberty.

Gold. Apparently it will be very useful when the global economy collapses, although we don’t know why — you can’t eat it, and we doubt it would be of much use as a construction material when building your post-apocalyptic lean-to.

And yet, for whatever reason — maybe because there is only a finite amount of it, and it’s shiny, and the ladies love it, and warehouses full of Chinese mainframes can’t “mine” for it — gold is a valuable commodity that emerging economies use to create confidence in their currencies (or so the theory goes).

Anyway, to make a long story short, Russia continues a long trend of gobbling up all the gold it can buy. Is this part of Putin’s plan for a “gold ruble”? No, that is fake news. But it is probably a signal that Russia is taking the threat of global economic instability and trade wars very seriously.

As Sputnik reports:

Russia’s gold reserves grew by 14 percent in 2016 to 1,614.3 metric tons, the Bank of Russia said on Friday.

“The amount of monetary gold in Russia’s international reserves grew by 14.7 percent [199 tonnes] and totals 51.9 million troy ounces [1,614.27 tonnes], the financial regulator said in a report.

While all eyes are on the oil price and the ruble to dollar rate, the Central Bank of Russia has quietly been buying huge volumes of gold over the past year. In January, 2016, the latest data available, the Russian Central Bank again bought 22 tons of gold, around $800 million at current exchange rates, that, amidst US and EU financial sanctions and low oil prices. It was the eleventh month in a row they bought large gold volumes. For 2015 Russia added a record 208 tons of gold to her reserves compared with 172 tons for 2014. Russia now has 1,437 tonnes of gold in reserve, the sixth largest of any nation according to the World Gold Council in London. Only USA, Germany, Italy, France and China central banks hold a larger tonnage of gold reserves.

The post Central Bank of Russia Continues to Gobble up Gold appeared first on Gold And Liberty.

Check out this must-see video. Failure Is an Option. Practical Financial Insight With Joseph Meyer.

Topic: Straight Money Analysis.

Your Host: John B Wells

Subscribe to the John B Wells show on Caravan to Midnight today for the truth behind the headlines – Only $5 per month.

We are sensitive to the expectations of our audience and remain faithful to our mandate to provide educational, cultural and informational programs independent of commercial obligations or influence.

Former Host of Coast To Coast AM John B Wells is now in control on Caravan To Midnight & Ark Midnight

The post Failure Is an Option. Practical Financial Insight With Joseph Meyer. appeared first on Gold And Liberty.

Joseph E. Meyer, writer of the Straight Money Analysis Report has, for nearly five decades, been personally and professionally involved with the U.S. financial industry. He has literally helped thousands of people find their ways through the maze of questions that can arise in an ever-changing financial environment. Meyer has seen good markets turn bad and then turn back toward prosperity again. Joseph Meyer has the answers that only experience and common sense can provide.

1) The stagnant economy at some point in the future will require additional fiscal stimulus. The purported economic recovery has been very anemic with growth levels very low for a given number of consecutive years. The current strength in both the U.S. equity markets and the U.S. dollar are very temporary. I am looking for both to reverse soon.

2) World banking and global financial systems continue to be under pressure. Monetary scientists are riding the back of the tiger as the entire system is on the brink of insolvency. The days of the U.S. dollar being the world’s reserve currency are coming to an end. The world is now seeking a currency to anchor the global financial sector that is backed by gold. China continues to add to their massive holdings of both gold and silver. It also important to note that China is now the largest gold producer in the world. The long-held petrol dollar is now increasingly being bypassed as countries are now buying oil and gas with Gold.

3) Federal budget deficits now top over a $100 trillion. This will leave America’s long-term liabilities grossly unfunded. We are also running $1 trillion annual budget deficit on a consistent basis, with the current national debt exceeding $20 trillion. It is clear and apparent to all that will acknowledge it that at some point we will witness a massive debasement of the U.S. dollar. The world bond market is now the biggest bubble in history. It has grown from the level of just $10 trillion in 1999 to currently exceeding $100 trillion. If we look at the expansion of the bond market since the last financial crisis in 2006, the global bond market has gone up by 70 percent.

4) The recent price weakness in both gold and silver were very temporary, offering once again a very excellent long-term entry point into these markets. The current and continuing strength the price of crude oil is also signaling to me we will see much higher both gold and silver prices in 2017 and beyond. Few will acknowledge the fact that he U.S. equity markets is extremely over-valued, widely over extended, and rampantly euphoric.

For subscription please click on the following link: Straight Money Analysis

The post 4 Positives For Gold Moving Forward appeared first on Gold And Liberty.

In his latest interview for the X22 Report, Claudio Grass shares his views on the future of the Euro, the Trump Presidency, the collapsing monetary system and the advantage of gold in these times of global uncertainty.

As election season is upon us in Europe and the both political and economic tensions are heating up, Claudio Grass hits the nail right on the head: “The euro is the most artificial currency in history”, he said, highlighting one of the most fundamental problems at the heart of the EU troubles. However, it is undeniable that public awareness is growing, as he pointed out, and actively opposing the very idea of centralised power. Thus, a breakup of the EU is a possible scenario, one that must be taken seriously into account as it could trigger a domino effect, with extensive repercussions. Brexit and Trump have created a strong precedent that could fuel many more surprises for the establishment in the upcoming EU elections.

And that’s exactly where the Swiss advantage comes in. Claudio Grass highlights that, contrary to its neighbours, Switzerland is the only country that still respects individual liberties, financial sovereignty and private property. These values are inscribed in its constitution, limiting the powers of the state and making sure that it is the people who control their government and not the other way around.

Regarding gold, Claudio Grass’s outlook is a crystal clear one: The physical ownership of gold is insurance, it provides security over the long haul. Especially in the light of the current political and economic global instability, topped with deep-rooted social tensions, investments in gold are not to be seen as speculation vehicles, but as the only real way of saving and maintaining value over the uncertain years to come.

Asked if anything has changed since 2008, he points out that if anything, things got worse: The financial system is more centralised, government debt keeps piling up, the people are even more disempowered while government-sponsored jobs are on the rise – so are food stamps recipients. On a social level, the obliteration of the middle class, combined with the exacerbation of mainstream media propaganda and political correctness, are only pushing people to reach for an alternative. They are getting tired of being told what to think and how to think, which opinion is allowed and which is not.

We are now only in the beginning of what will likely be a rough and turbulent transition period. One can only hope that it will be peaceful, although there is no reliable way of predicting the exact outcome. He still sees room for optimism, however: “It’s never too late” for citizens to stand up and reclaim their liberties.

Listen to the full interview:

The post Claudio Grass: “People Need To Understand That Their Biggest Asset Is Individual Liberty” appeared first on Gold And Liberty.

With nearly four decades of experience in the financial industry, Joseph Meyer, author of the Straight Money Analysis newsletter, joins The Power hour to give his forecast on the ever-changing financial environment.

by Kathryn  Russell on The Power Hour

The post Must-Listen Market Update by Joseph Meyer appeared first on Gold And Liberty.