David W iedemer and Robert Wiedemer two brothers published in 2006 a book called America’s Bubble Economy along with sidekick Cindy Spitzer. Their book predicted four bubbles in the American economy that would burst. Those four bubbles, the real estate bubble, the stock market bubble, the private debt bubble and the discretionary spending bubble all burst after 2006.
They’re back with another warning in a book titled, Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown. Their new book brings good news and bad news.
The bad news is, they write: “The worst is yet to come”. The good news is, the worst is yet to come(with the emphasis on the word, yet). There is still time for individuals and businesses to cover their assets and even find ways to profit in the Bubblequake an Aftershock. But first you have to see it coming.
What exactly do they see coming? Basically, they warn that U.S. governmen’t debt has been, “bubble” destined to burst, with far reaching consequences. Our thought is” with no plan to pay it off and not much ability to pay it off either, it is quickly becoming the world’s largest toxic asset.”
The authors foresee a collapse in U.S. government debt (the biggest bad loan in history) analogous to the collapse in subprime mortgage debt. This will also entail the collapse in the dollar as smart people rush to get their assets out of the United States.
Their warning is that the collapse may happen quickly.” When the dollar bubble falls, most foreign held investments in dollar denominated assets will not have a chance to run out of the United States. Instead, the capital will go to the same place your home equity went when the housing bubble popped. It will go to the same place your 401 K and other retirement account funds went when the stock bubble dropped to half its peak value. It will go to the same place all that bubble money goes when a bobble pops: It’s all going to “Money Heaven”.
Of course, this book may not sit well with the Obama Administration. They seem to be in a parallel universe of reality. While the administration and they hype- mongers on CNBC have pronounced the economy to be in recovery, a closer look shows trouble on the horizon. For one thing, but deleveraging process set in motion by the credit crisis is still unfolding. Consumer credit has contracted by a record amount and is destined to continue contracting as bankruptcies intensify in the months ahead.
But even if you don’t buy the deleveraging story, there is another compelling indicator of a deeper stage of contraction ahead. When ever the year to year change in inflation adjusted money growth has turned negative, the economy has always plunged into a major downturn.
Historically, the broad measure of money supply that was most often tracked was M3. Ben Bernanke has decided that M3 should no longer be published or revealed to the public by the Federal Reserve.
Consider that projections of recovery and stability within the U.S. banking system are dependent on positive economic growth in the year ahead. The economic and systemic solvency problems in the United States remains severe in scope and depth. The U.S. deficiencies also are much worse than those of its main trading partners, and the eventual recognition of same should have a negative impact on the U.S. dollar’s exchange rate vs. most major currencies.
A significant break in the dollar should begin to disrupt the abnormal relationships seen currently between the various financial markets in the United States, were a weak dollar is countered by strong stock prices and vice versa.
A weak U.S. economy and faltering fiscal conditions should result in U.S. dollar weakness, which in turn should be reflected in tightening domestic liquidity, higher interest rates, and lower equity prices.
In such a circumstance, the dollar’s intensified weakness also should be reflected in mounting inflation pressures and much higher gold and silver prices.
In short, a severe economic downturn, of the sort projected by the Wiedemers and Spitzer in Aftershock, is all too credible.
After reading this book myself I concur with everything written in this summary, and also advise all my readers too quickly go and read this book in order to better prepare yourself for what’s coming.
This summary came from an article written by: James Dale Davidson and his article in Financial Intelligence Report
