And So I Go: Yesterday, Today and Tomorrow

Predicted future crisis by Porter Stansberry.

Posted on: June 25, 2011

I have been a follower of Porter Stansberry’ financial advice for some time and ( tho I haven’t much left to invest) I have found hime to be  right almost 99% of the time.   Today’s newsletter is of great importance to all of you whether or not you are an active investor yourself because if you have a retirement plan at work someone is investing money for your future.  And just having an idea what may be happening will help you prepare yourself in a practical way at home for the future.

Mr. Stansberry is also the originator of The Project to Restore America which I introduced to you the other day and invited you to join with me.

I have no faith that our elected officials on any level of government (city, county, state, national) are willing to do what is necessary to bring our country back.  In fact, in most cases the elected officials (especially our President!) are doing everything possible to destroy us as a nation.   We the People must therefore take things in our own hands and  do what we can as individuals and groups to restore our faith in God, our knowledge of history so we do not repeat mistakes, acceptance of the reality of our crisis and finally  to use our  American ingenuity to solve our problems in a new way.
We The People MUST learn to stand on our own two feet proud and free Americans! BB

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Porter Stansberry: The world’s global currency system is collapsing
Saturday, June 25, 2011
We’re about to see a return to crisis-like conditions in the world’s credit markets. This will devastate financial stocks. It should also hit commodity prices and commodity-related stocks hard. In today’s essay, I’ll show you why I believe this will happen. I’ve always run my research company with a few simple principles in mind. Among them, I strive to provide you with the information I would expect if our roles were reversed. You should know… abiding by this principle often requires me to share information with you before I can be 100% certain it’s correct.

That’s the case with today’s essay. I want to show you the warning signs as I see them, right now. I want to guide you through my thinking process. And while I’ll give you my predictions about what these things mean, I hope you’ll realize that, as Yogi Berra famously said, predictions are tough – especially about the future.

The next stage in the ongoing global financial crisis will feature the collapse of both the Spanish and the Italian economies. This should occur within the next six months. Concurrently, I believe the “Chinese miracle” will be unmasked as mostly a fraud powered by a huge increase in bad lending from state-controlled banks.

Ironically, the coming wave of financial trouble will probably force people back into U.S. dollars. Gold will also do well. In the currency markets, I believe the euro will collapse in the second half of this year, as will the Australian dollar, which serves as a proxy for the Chinese economy.

I expect this next “down leg” in the world’s markets to be more severe than the crisis of 2008, because the balance sheets of the Western democracies are now less prepared to manage the losses.

Finally, I believe the euro will simply cease to exist.

The first thing I want to show you is the share price of UniCredit. You have probably never heard of UniCredit, but it is a major European bank, with significant operations in eastern and southern Europe. UniCredit is based in Italy. I’ve been keeping my eye on UniCredit for years, for reasons I’ll explain below. UniCredit is the ultimate “canary in the coal mine” of the world’s global currency system.

Most people don’t know that UniCredit is the direct descendent of Oesterreichische Credit-Anstalt, the largest bank in Eastern Europe before World War II. Translated, the name means: Imperial Royal Privileged Austrian Credit-Institute for Commerce and Industry. It was a Rothschild bank. The family founded it 1855, and it became one of the most important banks in Europe.

Credit-Anstalt held assets and took deposits from all over Europe. In 1931, the bank failed as a direct result of the U.S.’s Smoot-Hawley tariff. The act crippled Germany’s economy and led French investors to redeem all the capital they’d lent to the bank. The failure of Credit-Anstalt caused Austria to abandon the gold standard, which set off a series of economic dominoes. Germany left gold… then Great Britain… and finally, in 1933, so did America.

The failure of Credit-Anstalt is what really kicked off the Great Depression. I have long been convinced the failure of its successor bank – now called UniCredit – would presage the next global monetary collapse.

I first began warning investors about UniCredit’s likely collapse and historic role in the world’s monetary history back in March 2010. Since then, the bank’s shares have grown weaker and weaker. And since March, the shares have fallen off a cliff, hitting lows not seen since March 2009.


The sudden weakness in UniCredit’s shares (down 23% in the last several weeks) indicates to me that big trouble is brewing in Europe. I don’t believe efforts to stop the crisis in Greece will work. The austerity measures undertaken in Ireland, Spain, Italy, and Greece have severely weakened these economies, causing loan losses to banks like UniCredit.
And if there’s a run on UniCredit (and I believe there will be), the losses will be too large for Italy to manage without a huge international bailout. UniCredit has borrowed $300 billion from other European banks. And Italy’s government already owes creditors more than 120% of GDP. There aren’t any easy solutions to this problem.

Another warning comes from a friend who is a senior executive at a major Wall Street bank. He sees more high-yield bond deals than just about anyone else in the world. He told our Atlas 400 group recently that credit markets around the world were suddenly shutting down. Yields were moving up. Spreads (the cost to borrow above the sovereign rate) were getting wider for the first time since March 2009.

Why? Because the market knows the U.S. Federal Reserve is going to stop buying $85 billion-plus per month of U.S. Treasury debt. But the Treasury is going to continue to issue more debt. In total, 61% of the entire federal debt will mature within four years. That means roughly $10 trillion in U.S. Treasury bonds will have to be sold, plus whatever the total deficit adds up to over the next four years – maybe another $6 trillion.

It’s difficult to imagine this amount of Treasury issuance won’t have a big impact on the world’s credit markets because these bonds always sell first and at the lowest yields. As these yields “back up” because of the large issuance, they should drain liquidity away from other issues, causing other bond prices to fall. This will reduce liquidity and make issuing debt more expensive across the credit spectrum.

China’s boom since 2009 was fueled by massive domestic debt issuance, which was unsustainable and is reversing. In addition, one Chinese company after another is being revealed as a fraud – and then crashing. These are not isolated events. I have studied Chinese companies for more than a decade. Out of all the stocks I’ve analyzed closely, I’ve only seen a handful I didn’t believe were fraudulent.

So far, none of the major Chinese banks have come under serious scrutiny. But I believe they will… and I believe major fraud will be discovered. Take the recent weakness in the shares of China Life Insurance (LFC), for example. This isn’t a minor company. It’s a $90 billion life insurance company. As fraud allegations spread into major Chinese financials, the entire underpinning of the Chinese boom will fall apart. It has all been fueled by debt and fixed-asset investments (land, buildings, equipment, and machinery). Consider just a few of these facts…

Fixed-asset investment remains greater than 50% of GDP in China, for the 12th year in a row. No other country has ever had more than nine years of this kind of sustained fixed-asset investment.

In the first five months of 2011, fixed-asset investment grew by 25.8% according to China’s National Bureau of Statistics. That’s $1.39 trillion worth of investment.

Jim Chanos, the famed short seller, says China is currently building 30 billion square feet of commercial real estate. That is enough to provide every person in China with a five-square-foot cubicle.

Jeremy Grantham, one of the world’s most astute investors, points out that China has been purchasing gigantic quantities of raw materials. The scale of these purchases makes them impossible to sustain. China makes up 9.4% of the world’s economy, but it is currently consuming 53% of the world’s cement, 47% of the world’s iron ore, and 46.9% of its coal.

A massive increase in China’s domestic debt fueled this investment. In 2010, for example, Chinese banks extended $55 billion in loans – up 95% from the year before. Now, banking regulators are increasing reserve requirements, greatly reducing the amount of available credit. In May, lending was down 25% versus last year.

With Europe’s crisis heating back up, with credit tightening in the U.S. (thanks to the end of quantitative easing), and with China’s boom unraveling… it’s time to be extremely cautious. I don’t know when it will start… but we’re entering another period of soaring volatility, increasing interest rate spreads, and falling stock and bond prices. How the authorities deal with these problems will set the stage for what happens next. If they try to paper over these continuing crises again – with new money-printing programs from the Federal Reserve – you can expect a massive inflation and what I call The End of America.

Our best hope for more stability and a return to prosperity is for people to realize that bailing out banks doesn’t solve these problems. It only makes them worse. But… I’m not optimistic. In the June issue of my newsletter, Stansberry’s Investment Advisory, I detail my best two new ideas to profit from the next stage of this crisis. If you want to learn more about my advisory and access the issue, which came out last week, click here.

Regards,

Porter Stansberry

Editor’s note: The Weekend Edition is pulled from the daily S&A Digest, produced by Stansberry & Associates. The Digest comes free with a subscription to Stansberry’s Investment Advisory. To learn more about our research, including how to protect yourself and your family from the most important problem America is facing right now, click here.

13 Responses to "Predicted future crisis by Porter Stansberry."

Great post BB, and you may have great bless day:)

With all the bad news out there I wonder why Obama’s numbers are still in the 40’s. Example there reporting 89% of the people think we’re going down the wrong road yet he has a 47% approval rating?????????

Certainly amazes me too. I am not however part of that 47%! BB

I appears you are aware of the Rothschild/Crown Corporation/the Unfederal Reserve/ and maybe all of the central banks of the world are now controlled by them from their perches in the city of London, the United States, and Israel, and elsewhere. You also must know that that Amschel Mayer Rothschild said in 1790 that whoever controls the money supply of a country, doesn’t care what politicians are in office. That is the point that the world is in at this moment, and the general public is becoming at a rate of a geometical progression, around the whole world, due to the internet, that incidently started as I.B.M., working for Hitler, categorizing German people to be sent to concentration camps! This is not about Democrats, Republicans, Libertarians, etc., they all work on the same team that has been working for One World Order since 1776,that began in Frankfurt, Germany.

Yes Mr. Maki I have read some about this group of people. Do they exist? Yes, I think so. Are they at the heart of what is happening today and what has been happening in the past and will happen in the future? Yes, I seem to agree to this also. Is it a Jewish plot? No! It is certainly not a Jewish plot if that is what you are attempting to say. It is Jewish only because the control of money and lending was forced upon the Jewish people by their Christian leaders a thousand years ago. You see the handling of money was seen as an unclean nasty hateful occupation even tho it was a very necessary evil. It was therefore forced upon the one group of people whom the Christians considered unclean and evil—the Jews. In fact, no other professional occupations were allowed the Jews! The Jew could farm, clean streets, catch rats all while starving, or lend money. Those who could of course chose to lend money and of course charge interest for their efforts. Those who were not killed by the very people they helped with their money so that the debts became null and void became very wealthy families over the centuries.
Rothchild was perhaps the first to say he who controls the money supply controls all else, but he certainly was not the last. Today we have many who control a share of the money supply and who use it effectively to control. George Soros is a prime example of one who uses money for evil purposes. He has single handedly destroyed two economies and is doing everything he can to use the Obama’s of the world to take down the largest economy which is the United States. I do not believe he is a member of the group you have mentioned!

Do we have anything to fear from this group you have brought up? No, I don’t think so. Even if they are at the top of the dung heap of humanity they are interested in controlling and destroying what they are controlling is hardly in their interest. Booming economies and a happy active mob of little pissants like us is what makes them more powerful. So when you and I are happy and believing that we are controlling our own destinies with our little ineffective governments then the happier and more powerful are those at the helm.
Thank you for visiting my site and giving me a reason to spout off this morning. 🙂 BB

If you have any questions about Stansberry and Associates, please do not hesitate to call customer service at 1-888-261-2693. We would be happy to assist you. We are open Monday – Friday 9-5 EST.

Thank you but I now get Mr. Stansberry’s newsletter and have faithfully followed his investment advice. BB

Sorry my computer warns me away from the site you reference. BB

You have a virus then. Have a friend you trust look at the site I posted. It’s for your own good. Seriously.

I finally decided what you wanted me to know was that he was sued by the
Securities and Exchange Commission becaause of the Newsletters he put out giving his views of America’s position atr present and in the future. He refused to pay the fine and was taken to court where he claimed his first amendment rights to free speech. I personally believed him at the time he released the newsletters and subsequent events have proven him right! Now I refer you to what your favorite Wikipedia has to say:

“Frank Porter Stansberry is an American subscription-based investment advisor and the creator of the 2011 online video and infomercial titled “End of America” (77 min).[1] Commercials advertising Stansberry’s “End of America” video and website (with narration by radio host Alex Jones) have been featured on an array of U.S. media outlets.
Contents
[hide]

1 Career
1.1 Fraud Lawsuit Loss
2 Financial predictions
2.1 United States
2.2 Europe
3 References
4 External links

[edit] Career

In 1999 he founded Stansberry & Associates Investment Research, a private publishing company based in Baltimore, Maryland.[2] He is currently the editor of Agora Inc.’s internet financial newsletter Porter Stansberry’s Investment Advisory and the weekly trading service Porter Stansberry’s Put Strategy Report.[2]
[edit] Fraud Lawsuit Loss

In 2002, the SEC subpoenaed Porter Stansberry’s company as well as parent company Agora, Inc for the names and address of every single subscriber of each company’s database. Stansberry’s company filed a protective order citing the protection of the 1st amendment, and as a result the SEC counter sued. [3]

Stansberry was successfully sued for fraud in 2003 by the U.S. Securities and Exchange Commission for a “scheme to defraud public investors by disseminating false information in several Internet newsletters”.[4]

In 2007, he and his investment firm, then called “Pirate Investor,” now known as “Stansberry & Associates,” were ordered by a U.S. District Court to pay $1.5 million in restitution and civil penalties, the court stating “Stansberry’s conduct undoubtedly involved deliberate fraud, making statements that he knew to be false.”[5]
[edit] Financial predictions
[edit] United States

Stansberry’s 2011 online video and infomercial titled “End of America” paints a very grim picture of the financial future of the United States.[1] The 77-minute video forecasts the end of America’s global economic dominance, which Stansberry predicts will ultimately result in rioting and protests across the country.[2]
[edit] Europe

In an August 2011 online debate with James Altucher, Stansberry predicted that Europe’s debt crisis will only intensify in the coming year, with Italy’s Unicredit being “the next big domino to fall.”[6] Stansberry predicts that once Unicredit falls, Germany will not bail them out, and that in fact Germany will leave the European Union within the next twelve months (by August 2012).[6] Additionally, Stansberry predicts that the U.S. Dollar will lose its reserve status and the U.S Treasury “bubble” will burst.[6] As a result of these oncoming financial calamities, Stansberry recommends that investors convert their assets to 50% gold and 50% cash, if they are not willing (or able) to actively short stocks.[6]
[edit] References

^ a b “The End of America”: Porter Stansberry Sees the Future … And It’s Grim by Stacy Curtin, Yahoo! Finance, February 16, 2011
^ a b c Porter Stansberry Profile at Townhall.com
^ [1], by Porter Stansberry, “Why The SEC Sued Me – And Why You Should Care”
^ Securities and Exchange Commission, Plaintiff, v. AGORA, INC., PIRATE INVESTOR, LLC and FRANK PORTER STANSBERRY United States Securities and Exchange Commission, 2003-11-14.
^ $1.5 million payback ordered in SEC suit, by Tricia Bishop, August 10, 2007
^ a b c d Dow 20,000 vs. “The End of America”: James Altucher Debates Porter Stansberry article and video at Business Insider, August 17, 2011

[edit] External links

“End of America” — full online video by Stansberry Associates (77 min)
Alex Jones interviews Porter Stansberry — Part 1 – 2 – 3 – 4 – 5
The Greatest Economic Disaster in Recorded History by Porter Stansberry, Townhall.com, April 8, 2009
Three Ways to Protect Yourself From the Coming Chaos by Porter Stansberry, Townhall.com, April 9, 2009
Stop the Lies Mr. President by Porter Stansberry, The Austin Report, April 16, 2011

If you are interested in more information about the SEC lawsuit, please visit this website:

http://www.stansberrysecinfo.com

Unibet didnt fall, Germany did not leave the EU, the euro and European Union are still very much alive and kicking and will probably let Greece go bankrupt. The rest of the members take their losses. Paying all greece’s debts will hurt but that’s it. Stansberry and associates is playing into fear struck americans, plenty of them. Want to invest? Buy real estate in a good location.

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