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How to protect your savings, income and standard of living during the coming depression

Experts agree that the next crisis is to be expected within one or two years, so there is not much room left for preparation. Even worse, it may be even more damaging than the meltdown of 2007-2008 and its aftermath. The following guide gives you tips about the key actions that will help to protect your savings and standard of living. (reading time 5-7 minutes)
It is clear that the next economic crisis is not far away. Experts agree that it may be even more damaging than the meltdown of 2007-2008 and its aftermath. Public Gold Sarawak has prepared a few important notes that can make a big difference in how well you fare.

I. The next crisis

Who is predicting it

Peter Schiff - has identified the subprime mortgage bubble as early as 2002 and repeatedly warned his clients and the public on CNBC, CNN and Fox News. In 2010, Peter is warning about a new, even more serious crisis: “the value of the dollar is going to implode. That is the next big bubble to burst — the U.S. dollar and U.S. government bonds. In other words, the next crisis will be a currency crisis and a sovereign debt crisis! It’s coming to the United States, and there’s no escaping it.”

Gerald Celente
Gerald Celente - Celente’s accurate forecasts include the 1987 stock market crash, the collapse of the Soviet Union in 1991, the 1997 Asian currency crash and the 2007 subprime mortgage meltdown. By 2012, he expects a crisis “worse than the Great Depression”.
Nassim Taleb
Nassim Taleb - In his 2007 best-seller book “Black Swan” Nassim Taleb warned that Fannie Mae was sitting on a barrel of dynamite. He also claimed that large banks are too similar and interlinked and a failure of one would lead to a global banking crisis. His predictions came true. He also made a fortune out of the 2008 crisis betting on the collapse. In 2010, he is predicting a hyperinflationary crisis: “We are facing an environment with a huge amount of debt. The next mistake is going to be overprint, which is going to be the way out for them, which is why I fear hyperinflation.”

These three gentlemen may have the best credentials because of their track record. While back then they were among the very few who warned about the 2008 meltdown, this time there are many more economists blowing the whistle and some of their predictions are even more dire.

What is going to happen—a wrap-up

For many years, the U.S. government has been spending much more money than it makes in taxes. The missing money is being borrowed abroad. Many experts argue that the debt has grown so big that it can’t be repaid. But because the debt is in U.S. dollars, the U.S. can print the money. The massive printing (that has already begun in 2008) will soon dilute the value of the dollar and bring extreme price increases, otherwise known as hyperinflation. It makes little difference if that scenario is preceded by a contraction in the economy (current recession evolving into a double dip recession) which would cause a temporary deflation. It would likely spur even more money printing. All we know is that the ultimate outcome is going bring a strong economic shock.
Prices of import products will increase particularly sharply. The U.S. is heavily dependent on foreign oil and manufactured goods from Asia. It also imports more food than it exports. The falling value of the dollar and sky-rocketing prices mean that savings get destroyed, spending is curbed and more people lose jobs. A similar recession will soon evolve in Europe as the two economies are interlinked and Europe is also heavily indebted. According to many economists, the 2007-2010 recession is a walk in the park compared to what is coming.

When is it going to happen?

There is no way of knowing. We have seen predictions from Harvard scholars as early as 2011. Some forecasters, like Gerald Celente, say “by 2012″. You can never tell exactly. The bursting of the subprime bubble started with the bankruptcy of Lehman Brothers. There is evidence that the situation at Lehman was serious as early as 2000. At about the same time, the subprime situation also started to get out of control andfirst warnings appeared. Hence, both conditions for the crash were met years before the actual crash. It was impossible to predict that it would take the markets such a long time to recognize the severity of the situation and panick. The market crash could have easily happened in 2002, 2005, but also 2009.
The same applies to the next depression. All the explosives are in place. You can wait until the first sparks appear and set off a chain reaction, but then it may be too late to react.
A smart way to look at this: let’s say the likelihood of a trigger event (such as the fall of Lehman Brothers) is 10% in 2010, 20% in 2011, 30% in 2012, and so on. Those numbers are realistic and some of the experts above may put them even higher. If there is a 20% chance you will be involved in a car crash next year, you may not stop driving, but you sure are going to get a car with superb safety ratings and a decent insurance. (In reality, the odds of a fatal car accident within the next year are only 0.02% and most people still try to buy safe cars and have them insured). You should apply the same dilligence in anticipation of economic crashes. After all, financial health is often directly connected to your physical health and mental well-being.


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