Archive for March, 2012

Signs Of The Time, Part 41

Ever hear of Pic de Bugarach? It’s a mountain in southern France that’s often called the “upside-down mountain” because geologists think when it exploded after its formation, the top landed wrong side-up. It’s believed that the mountain inspired Jules Verne’s Journey to the Centre of the Earth and the Steven Spielberg film Close Encounters of the Third Kind.

And these days, Pic de Bugarach is inspiring others. From Oliver Pickup on the website of The Independent (UK) last Sunday:

A mountain looming over a French commune with a population of just 200 is being touted as a modern Noah’s Ark when doomsday arrives – supposedly less than nine months from now.

A rapidly increasing stream of New Age believers – or esoterics, as locals call them – have descended in their camper van-loads on the usually picturesque and tranquil Pyrenean village of Bugarach. They believe that when apocalypse strikes on 21 December this year, the aliens waiting in their spacecraft inside Pic de Bugarach will save all the humans near by and beam them off to the next age.

(Editor’s note: Italics added for emphasis)

According to Pickup, up to 100,000 people are thought to be planning a trip to the French mountain in time for December 21, 2012. From the piece:

Jean-Pierre Delord, the perplexed mayor of Bugarach, has flagged up the situation to the French authorities, requesting they scramble the army to the tiny village for fear of a mass suicide. It has also caught the attention of France’s sect watchdog, Miviludes.

A genial sexagenarian, Mr Delord says: “We’ve seen a huge rise in visitors. Already this year more than 20,000 people have climbed right to the top, and last year we had 10,000 hikers, which was a significant rise on the previous 12 months. They think Pic de Bugarach is ‘un garage à ovnis’ [an alien garage]. The villagers are exasperated: the exaggerated importance of something which they see as completely removed from reality is bewildering. After 21 December, this will surely return to normal.”

Aliens living inside a mountain? Alien garage? I came across the following in a BBC News piece back on July 8, 2011. Chris Bockman reported:

For years, rumours have circulated on the internet that extra-terrestrials live in the mountain, and come the apocalypse, the top will open and they will emerge with spaceships, and rescue the local inhabitants.

From the esoterics? Just kidding.


Pickup, Oliver. “Hippies head for Noah’s Ark: Queue here for rescue aboard alien spaceship.” The Independent. 25 Mar. 2012. ( 29 Mar. 2012.

Bockman, Chris. “French village of Bugarach spooked by doomsday cults.” BBC News. 8 July 2011. ( 29 Mar. 2012.


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Thursday, March 29th, 2012 End Times, Europe, Signs Of The Time, Space Comments Off on Signs Of The Time, Part 41

Peter Schiff In Rebuttal Lecture To Fed Chair Ben Bernanke

You may have heard that Federal Reserve Chairman Ben Bernanke has been on the lecture trail lately, giving a series of four public lectures at George Washington University that some think is the U.S. central bank’s latest effort to counter negative public sentiment. Truth be told, I haven’t been really following it, but a cursory glance at some of what the Fed Chair’s been saying is “interesting,” to say the least:

I think the view is increasingly gaining acceptance that without the forceful policy response that stabilized the financial system in 2008 and early 2009, we could’ve had a much worse outcome in the economy

-March 27 lecture

There’s no consensus on this, but the evidence I’ve seen suggests that monetary policy did not play an important role in raising house prices during the upswing

-March 22 lecture

I think, though, that the gold standard would not be feasible for both practical reasons and policy reasons

-March 20 lecture

While surfing the Los Angeles Times website this morning, I came upon a piece that announced “crash prophet” and Euro Pacific Capital CEO Peter Schiff would be giving a rebuttal to Chairman Bernanke’s lectures later today. From a March 26 press release on the website of Washington, D.C.-based non-profit FreedomWorks:

WHAT: FreedomWorks Foundation and Reason will co-host a special lecture by renowned economist Peter Schiff as he responds to Federal Reserve Chairman Ben Bernanke’s four-part College Lecture Series at George Washington University School of Business.

WHEN: Thursday, March 29, 2012 at 3:00pm ET, lasting approximately one hour.

An opportunity for Q&A and a reception will follow the formal response.

WHERE: Reason’s DC Headquarters, 1747 Connecticut Avenue, NW, Washington, DC 20009.

The event will also be live-streamed from the FreedomWorks Facebook page,

WHY: While Chairman Bernanke explains to students how the Federal Reserve “saved the economy,” Peter Schiff will outline the ways in which the Federal Reserve contributed to the housing crisis and current economic recession in the first place.

The Federal Reserve bears significant responsibility for every financial crisis over the past century, including the Great Depression, stagflation in the 1970’s and most recently, the 2008 economic meltdown.

A 2011 audit of the Federal Reserve found $16 trillion in secret bailouts to corporations and banks around the world in less than three years. Documents released in the same year revealed foreign banks to be one of the largest recipients of Federal Reserve money during the 2008 economic downturn.

These secret deals, bailouts, and massive expansion of the Federal Reserve’s balance sheet were all overseen by Ben Bernanke, with almost no Congressional oversight.

You can RSVP to watch the streaming video on the FreedomWorks website here.


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Thursday, March 29th, 2012 Bailouts, Banking, Bubbles, Crash Prophets, Depression, Federal Reserve, Housing, Monetary Policy, Precious Metals, Recession Comments Off on Peter Schiff In Rebuttal Lecture To Fed Chair Ben Bernanke

Chicago: Public School System Faces Massive Deficits, $7 Billion Infrastructure Initiative Set To Be Announced

Both good and bad news coming out of the Windy City this morning. First the bad. The Chicago public school system is in financial trouble. Again. Joel Hood and Noreen Ahmed-Ullah reported yesterday on the Chicago Tribune website:

Despite severe cost cutting, scores of layoffs and wholesale restructuring last year, Chicago Public Schools faces a budget deficit estimated at $600 million to $700 million in 2013, with the cost of a longer school day still unknown, officials said…

The deficit could top $1 billion by 2014 when the district’s four-year pension holiday expires and the district will have to resume making full pension payments, said CPS spokeswoman Becky Carroll. CPS projects pension costs to increase that year by almost $340 million, Carroll said…

CPS officials closed a budget deficit of more than $700 million this year through a combination of staff cuts, program reductions at some schools and renegotiated contracts, while also raising taxes to the highest level allowed by law.

(Editor’s note: Italics added for emphasis)

Back on August 24, 2011, Joel Hood and Noreen Ahmed-Ullah also covered that tax hike on behalf of the Chicago public school system. They wrote:

Chicago Public Schools’ governing board today unanimously approved a tax increase to support a $5.9 billion budget for next year amid growing concerns about the district’s long-term financial health and an escalating public battle with the teachers union over longer school days and pay.

Despite $400 million in cuts in 2011-12, a property tax increase that will cost an average homeowner roughly $84 a year, and potentially hundreds of layoffs, the school district remains in financial peril. CPS staff says escalating pension and health care costs will contribute to an $860 million budget deficit in 2014, and that’s assuming all other expenses remain flat.

(Editor’s note: Italics added for emphasis)

“An $860 million budget deficit in 2014.” Make that possibly more than $1 billion now according to that latest Tribune piece.

And I’m guessing Chicago homeowners will be seeing another property tax hike shortly.

Now the good news. From John Schwartz on The New York Times website this morning:

Chicago is embarking on a $7 billion plan to transform the city’s infrastructure from the skies above to the pipes underground.

Mayor Rahm Emanuel is planning to announce the initiative Thursday. It includes projects to expand the city’s largest airport and improve its streets, water system, schools, community colleges, parks and commuter rail network. The city estimates that these initiatives will create 30,000 jobs over the next three years

In the speech, to be delivered at the Chicagoland Laborers’ Training and Apprentice Center, Mr. Emanuel will describe the financing for the sprawling plan…

(Editor’s note: Italics added for emphasis)

Many Chicagoans will be very interested in learning more about the financing of this massive undertaking. While higher taxes aren’t supposed to be part of the equation, the term “user fees” has been mentioned.


Hood, Joel and Ahmed-Ullah, Noreen S. “CPS budget for 2013 has huge shortfall.” Chicago Tribune. 28 Mar. 2012. ( 29 Mar. 2012.

Hood, Joel and Ahmed-Ullah, Noreen S. “CPS board passes tax hike.” Chicago Tribune . 24 Aug. 2011. ( 29 Mar. 2012.

Schwartz, John. “$7 Billion Public-Private Plan in Chicago Aims to Fix Transit, Schools and Parks.” The New York Times. 29 Mar. 2012. ( 29 Mar. 2012.


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Thursday, March 29th, 2012 Deficits, Education, Employment, Entitlements, Fiscal Policy, Government, Infrastructure, Spending, Taxes Comments Off on Chicago: Public School System Faces Massive Deficits, $7 Billion Infrastructure Initiative Set To Be Announced

New Episodes Of Doomsday Bunkers?

To date, three episodes of Discovery Channel’s TV series Doomsday Bunkers have aired. These were:

• Episode 1, “Bunkers, Bullets and Blast Doors!”
• Episode 2, “Pyramid Pod/Booby-Trapped Bunker”
• Episode 3, “Tsunami Pod/Nuclear Fallout Shelter”

As there doesn’t appear to be an episode 4 on the Discovery Channel tonight, fans of the show may be wondering if that’s it for now.

Well, here’s what Deep Earth Bunker, the shelter company that’s the focus of the television series, has to say on their website under their “News” section:

TV SHOW AIR-DATES March 7(1st ep) March 14(2nd ep) March 21(3rd ep) No dates on the rest as of yet! Enjoy the show.. On Discovery Channel. Show was changed from BUNKER PEOPLE to DOOMSDAY BUNKERS at the last minute..

(Editor’s note: Italics added for emphasis)

Anyway, if I hear of any new episodes scheduled to be aired, I’ll blog about it on Survival And Prosperity.

In the meantime, my review of Doomsday Bunkers, episode 3, will be published by tomorrow.


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Wednesday, March 28th, 2012 Emergencies, Man-Made Disasters, Natural Disasters, On TV, Preparedness, Shelter, TEOTWAWKI Comments Off on New Episodes Of Doomsday Bunkers?

STRATFOR’s ‘Fundamentals Of Terrorism’ Part 2: Detection Points In The Terrorist Attack Cycle

Back on March 16, I talked about Scott Stewart of the global intelligence company Strategic Forecasting, Inc., or STRATFOR, authoring a series of Security Weekly reports entitled “Fundamentals of Terrorism.” The first of these, “The Myth of the End of Terrorism,” was released on February 23, and I wrote:

It’s a good, informative read, and serves as a reminder that just because major terror attacks directed against the United States and its interests haven’t been too successful lately, the threat hasn’t gone away.

The second “Fundamentals” report, entitled “Detection Points in the Terrorist Attack Cycle,” came out on March 1, and pointed out that those planning a terrorist attack must follow something called a “terrorist attack cycle,” and certain stages opens them up to detection.

Reprinted with permission of STRATFOR:

Detection Points in the Terrorist Attack Cycle

By Scott Stewart

Last week’s Security Weekly discussed the fact that terrorism is a tactic used by many different classes of actors and that, while the perpetrators and tactics of terrorism may change in response to shifts in larger geopolitical cycles, these changes will never result in the end of terrorism. Since that analysis was written, there have been jihadist-related attacks in Afghanistan, Nigeria, Yemen and Pakistan, an assassination attempt against the president of Abkhazia, and a failed timed-incendiary attack against the Athens subway. (The latter incident, which militant anarchists claimed, reinforces that jihadists are not the only ones who practice terrorism.)

But while terrorism is a continuing concern, it can be understood, and measures can be taken to thwart terrorist plots and mitigate the effects of attacks. Perhaps the most important and fundamental point to understand about terrorism is that attacks do not appear out of nowhere. Individuals planning a terrorist attack follow a discernible cycle — and that cycle and the behaviors associated with it can be observed if they are being looked for. We refer to these points where terrorism-related behavior can be most readily observed as vulnerabilities in the terrorist attack cycle.

The Attack Cycle

Many different actors can commit terrorist attacks, including sophisticated transnational terrorist groups like al Qaeda; regional militant groups like India’s Maoist Naxalites; small, independent cells like the anarchists in Greece; and lone wolves like Oslo attacker Anders Breivik. There can be great variance in attack motives and in the time and process required to radicalize these different actors to the point that they decide to conduct a terrorist attack. But once any of these actors decides to launch an attack, there is remarkable similarity in the planning process.

First, there is the process of selecting or identifying a target. Often an actor will come up with a list of potential targets and then select one to focus on. In some cases, the actor has preselected a method of attack, such as a vehicle-borne improvised explosive device, and wants to find a target that would be vulnerable to that specific type of attack. In other cases, the actor will pick a target and then devise a method of attack based on that target’s characteristics and vulnerabilities. Simply put, the execution of these steps can be somewhat fluid; some degree of planning or preparation can come before target selection, and sometimes target selection will be altered during the planning process. The time required to execute these steps can also vary considerably. Some attacks can be planned and executed within hours or days, while more complex plans, such as those used in the 9/11 or Mumbai attacks, may take months or even years to complete.

Frequently, those planning an attack will conduct detailed surveillance of potential targets to determine what security measures are in place around the target and to gauge whether they have the ability to successfully attack it. If the target is too difficult to attack — commonly known as a hard target — the attack planners will typically move on to their next target, which may prove easier to attack. (When they do continue with attacks against targets whose security measures exceed the attackers’ capabilities, those attacks fail.) We refer to this stage as preoperational surveillance, which means surveillance that is conducted before the operation is fully planned.

After the target has been selected, a second round of surveillance is conducted. This round will be far more detailed and is intended to provide all the details necessary for planning the attack. For example, if the attack is being planned against a static facility, this round of surveillance will generally try to obtain a detailed description of the target’s physical security features and security force procedures. It will also focus on establishing a baseline understanding of the activity that can be expected around the facility at the time of day the attack is anticipated.

If the target of the attack is an individual, the individual’s residence, office and other places the individual frequents will be surveilled. Additionally, the surveillance team will look for patterns and routines that the target follows between these known locations. The team will often analyze the target’s usual routes looking for choke points, or places the target must pass to get from one point to another. If the surveillance team identifies a choke point that the target passes through predictably, it will then try to determine whether that point will allow the attackers to deploy in secret, permit them to spot and control the target, and provide them with good escape routes. If it does, this point will frequently be chosen as the attack site.

In the case of large organizations, different groups or individuals may conduct different phases of the surveillance. Many organizations use specialized operatives for surveillance, though the operational planner will often attempt to get eyes on the target to help with the planning process. For instance, it is known from court testimony in the Mumbai case that David Headley made five extended trips to Mumbai as those attacks were being planned. The repeated trips were required because the operational commanders in Pakistan considered India a hostile environment and the operational planners could not go there to conduct the surveillance themselves. As a result, Headley was sent to observe and report on specific things as planning for the attacks progressed.

During the planning phase, the personnel to be used in the attacks are identified and trained in any special skills they may require for the mission, including languages, marksmanship, hand-to-hand combat, small-boat handling or land navigation. To protect operational security, the operatives may not be briefed in any great detail about the target of their operation until they are very close to being deployed.

Many times the planning phase will end with a dry run, as the preparation did for the 9/11 attacks, when some of the hijackers took their assigned flights in August 2001. While conducting a dry run, the attackers will generally be unarmed to ensure they do not needlessly bring law enforcement attention to themselves.

Sometimes an attacker will have acquired weapons for the attack before the planning phase. Other times the concept of the operation will be constrained by the weapons and money available. But quite frequently, the weapons for the attack will be acquired during the planning phase, after the target has been selected and the means of attack have been established.

Once planning, training and weapons acquisition are complete, the attack team can be deployed. The attack team frequently will again conduct surveillance of the target, especially if the target is mobile and the attack team is deployed and waiting at a predetermined attack site.

If it was properly planned, an attack is very likely to succeed once it has moved to the operational phase. Sometimes attacks do fail because of mistakes or bad luck, but by and large there is no way to stop an attack once it has been set in motion.

At the attack’s conclusion, the attackers will seek to escape the scene. The exception is suicide attacks or when, like Breivik, the attacker intends to be captured as part of the media exploitation phase, the final step in the cycle.

Regardless of whether the attack is a suicide attack against a church in Nigeria or a timed-incendiary attack against a subway in Athens, the same attack cycle is followed. With an eye toward averting future attacks, a thoughtful observer can use the attack cycle model to understand how an attack was planned and executed.


While plots are occasionally thwarted at the last second, for the most part law enforcement and security personnel must detect and interdict the plot before it gets to the attack phase to have any chance of stopping it. Once the bullets fly or the explosive device is detonated, there is little security forces can do but initiate their immediate action drills in an effort to reduce the body count. This means that an emphasis must be placed on identifying attackers earlier in the process, well before they are in a position to strike.

Unless security forces have a source inside the group that is planning the attack or manage to intercept the group’s communications, the only way to identify attack planners is by noting their actions. This is especially true of a lone wolf attack, where no external communication occurs. The earliest point in the attack cycle that the attackers can be identified by their actions is during the preoperational surveillance required for target identification.

There is a widely held conception that terrorist surveillance is generally sophisticated and almost invisible, but when viewed in hindsight, it is frequently discovered that individuals who conduct terrorist surveillance tend to be quite sloppy and even amateurish in their surveillance tradecraft. We will discuss what bad surveillance looks like, and how to recognize it, in more detail next week, but for now it is sufficient to say that poor surveillance tradecraft is a significant vulnerability in the terrorist attack cycle.

As noted above, additional surveillance is often conducted at later stages of the attack cycle, such as in the planning stage and even sometimes in the attack stage, as the attackers track the target from a known location to the attack site. Each instance of surveillance provides an additional opportunity for the assailants to be identified and the attack to be prevented.

During the planning phase and as the operatives prepare to deploy, communication between and movement of group members often increases. Additionally, group members may engage in outside training that can attract attention, such as playing paintball, visiting the firing range or, as was the case with the 9/11 pilots, attending flight schools. This increase in activity, which also might include money transfers, leaves signs that could tip off the authorities.

Another significant vulnerability during the attack cycle is weapons acquisition. This vulnerability is especially pronounced when dealing with inexperienced grassroots operatives, who tend to aspire to conduct spectacular attacks that are far beyond their capabilities. For example, they may decide they want to conduct a bombing attack even though they do not know how to make improvised explosive devices. It is also not uncommon for such individuals to try to acquire Stinger anti-aircraft missiles, automatic firearms or hand grenades. When confronted by this gap between their capability and their aspirations, grassroots operatives will often reach out to someone for help with their attack instead of settling on an attack that is within their ability. Increasingly, the people such would-be attackers are encountering when they reach out are police or domestic security agency informants.

As far back as 2010, jihadist leaders such as Nasir al-Wahayshi of al Qaeda in the Arabian Peninsula recognized this problem and began to encourage grassroots jihadists to focus on conducting simple attacks against soft targets. Nevertheless, grassroots jihadists are consistently drawn toward spectacular attacks, as seen in the Feb. 17 arrest near the U.S. Capitol of a Moroccan man who thought his handler, who was in fact an FBI informant, had equipped him for a suicide attack. Unlike most jihadists, other types of grassroots militants, such as anarchists, are far more comfortable conducting simple attacks with readily available items.

Personality traits and psychological profiles aside, anyone desiring to plan a terrorist attack must follow the attack planning cycle, which at certain stages will necessarily open them up to detection.

Detection Points In The Terrorist Attack Cycle is republished with permission of STRATFOR.

Part 1 of STRATFOR’s “Fundamentals of Terrorism” series is reprinted here.

(Editor’s note: Link to original STRATFOR report added on “Resources” page)


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Wednesday, March 28th, 2012 Foreign Policy, Public Safety, SP Resources, Terrorism, Training Comments Off on STRATFOR’s ‘Fundamentals Of Terrorism’ Part 2: Detection Points In The Terrorist Attack Cycle

Thousands Of Iranian-Backed Hezbollah Agents Could Be Inside The U.S.

Despite ObamaCare and Trayvon Martin hogging recent headlines, the Iranian nuclear crisis continues. From Roberta Rampton (Reuters) on the Chicago Tribune website late this morning:

The Senate may soon consider a new package of proposed sanctions targeting Iran’s oil revenues, Democratic Majority Leader Harry Reid said on Tuesday.

The sanctions would focus on foreign banks that handle transactions for Iran’s national oil and tanker companies, and include a host of measures aimed to close loopholes in existing sanctions.

Back on March 15, 2012, I discussed the role Iranian intelligence (Ministry of Intelligence and National Security of the Islamic Republic of Iran, or MISIRI) might play in the event Iran’s nuclear facilities were attacked by the West. I wrote:

Others think MISIRI could carry out terror attacks here inside the United States. Retired CIA veteran Michael Scheuer, who tracked Osama bin Laden as Chief of the Bin Laden Issue Station (“Alec Station”) from 1996 to 1999 and later as a special advisor to the unit from 2001 to 2004, told Lou Dobbs on the FOX Business channel several days ago:

The Iranians don’t have a military capable of conducting themselves on an even basis with the United States, but within the United States, within Canada, within Mexico, within the Caribbean area, the Iranians have an intelligence and terror apparatus that’s perfectly capable of exacting revenge for them here at home. Much more than Saddam. Much more than Al-Qaeda. And although they won’t use it unless they’re attacked, I’m afraid they will use it if our Arab and Israeli friends go ahead and attack the Iranians.

(Editor’s note: Italics added for emphasis)

Apparently, MISIRI loves company (just had to fit that one in somewhere), and word is getting out that the Iranian-backed militant group Hezbollah may have hundreds- if not thousands- of operatives inside the United States. Taking part in a Homeland Security hearing on Iran, U.S. Representative Peter King (R-NY) appeared on the CNN show Starting Point on March 21 and warned viewers of the threat Iran poses from within the country. He said:

Most Americans don’t realize that Hezbollah has had agents and operatives in this country for many years. The conventional wisdom among intelligence and law enforcement officials was they were here for fundraising, for facilitation, recruitment, and not necessarily to carry out terrorist attacks. However, we do know that a number of them have been trained as terrorists. The question is, how quickly they can be made operational, and would they carry out an attack?

King added:

The American intelligence community… believes we are very much at risk for an attack by Iranian operatives- which would be Hezbollah. That is a terrorist-trained force in this country. It really is the “A-Team” of international terrorism, and far more sophisticated than Al-Qaeda.

(Editor’s note: Italics added for emphasis)

How many Hezbollah operatives are possibly inside the United States? The Chairman of the Homeland Security Committee says:

We estimate it to be at least in the hundreds, maybe the thousands, of Hezbollah agents here in this country.

(Editor’s note: Italics added for emphasis)

“King: Iran could be ‘serious threat’”
YouTube Video

Staff at the Daily Mail (UK) added on March 21:

Mitchell Silber, the NYPD’s director of intelligence analysis and one of the witnesses to the [Homeland Security hearing] panel, confirmed that said since 2005, New York law enforcement officers have interviewed at least 13 people with ties to Iran’s government who were seen taking pictures of New York City landmarks. Police considered the activity to be pre-operational surveillance.

He added that New York’s international significance as a terror target and its large Jewish population make the city a likely place for Iran and Hezbollah to strike.

In May 2005, Silber said, tips led the NYPD to six people on a sight-seeing cruise who were taking pictures and movies of city landmarks like the Brooklyn Bridge. In September 2008, police interviewed three people taking pictures of railroad tracks. And in September 2010, federal air marshals saw four people taking pictures and videos at a New York heliport.

Interviews with law enforcement revealed that all were associated with the Iranian government, but they were ultimately released and never charged, Silber said.

(Editor’s note: Italics added for emphasis)

Stay tuned…


Rampton, Roberta. “Senate to soon move on new Iran sanctions: Reid.” Chicago Tribune. 27 Mar. 2012. (,0,5523379.story). 27 Mar. 2012.

“‘We have a duty to prepare for the worst’: Peter King warns Iran has ‘hundreds’ of Hezbollah agents in the U.S.” Daily Mail. 21 Mar. 2012. ( 21 Mar. 2012.


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Tuesday, March 27th, 2012 Commodities, Energy, Foreign Policy, Government, Middle East, North America, Public Safety, Terrorism, War Comments Off on Thousands Of Iranian-Backed Hezbollah Agents Could Be Inside The U.S.

Make Mine Freedom

When anybody preaches disunity, tries to pit one of us against the other, through class warfare, race hatred, or religious intolerance, you know that person seeks to rob us of our freedom, and destroy our very lives.

-Harding College’s Make Mine Freedom (1948)

“Make Mine Freedom (1948)”
YouTube Video


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Tuesday, March 27th, 2012 Class Warfare, Fascism, Freedom, Government, Racism, Religion, Socialism Comments Off on Make Mine Freedom

Peter Schiff: ‘Phony Economy’ Will Come ‘Toppling Down,’ Pain Worse Than 2008-2009

Last night I blogged about Jim Rogers and his appearance on the CNBC show Fast Money last week. It turns out another “crash prophet,” Peter Schiff, dropped in on the show last night- with some dire warnings for viewers. The CEO and Chief Global Strategist of Euro Pacific Capital talked about the following in the seven minute segment:

• Federal Reserve money printing is enabling a government spending bubble and preventing the U.S. economy from restructuring
• A big drop in the bond market is coming, and the Fed didn’t make the banks stress test for this because they would fail
• Ben Bernanke and the Fed are keeping interest rates artificially low to prop up the housing market
• Equity markets appear to be gaining value because the U.S. dollar is losing value- “This is not about the stock market going up. It isn’t going up. That’s a delusion created by the Fed.”
• Beware Ben Bernanke and the Federal Reserve- “The Fed is the biggest enemy of this economy. In fact, Ben Bernanke, as far as I’m concerned, he’s public enemy number one.”
• Economic pain is coming, and it will be worse than in 2008-2009- “Oh, it is going to be. Absolutely going to be. Because the Fed is creating more damage now than it did when it blew up the housing bubble. The problem is going to be eventually, the world is going to figure out that the government is lying about inflation. Inflation is a much bigger problem than the CPI numbers show… Once the world realizes that inflation is running out of control in the U.S., and the Fed will do nothing about it. Because the minute the Fed takes this punch bowl away, the minute it raises interest rates to cut off the inflation, the banks are going to fail, the federal government is going to have to declare bankruptcy, it’s not going to be able to pay the interest on the national debt. This whole phony economy the Fed has constructed with cheap money is going to come toppling down. But the reality is we have to kill this phony economy because it’s unsustainable. We need to replace it with a viable one but unfortunately to do that there’s a lot of short-term pain because we’ve got to unwind this bubble, and the Fed doesn’t want that to happen. The Fed is letting our politicians off the hook. It’s trying to postpone our day of reckoning until after the next election. But there is always another election coming. We have got to deal with these problems. We can’t keep making them worse. That’s what we did when the stock market bubble burst. And we created the real estate bubble. But we learn nothing from our mistakes, all we do is repeat them but on a grander scale.”

At this point in the segment, someone in the Fast Money crew joked:

Sounds like Pete is running for office again [multiple laughs]

You know what? It sounds like 2007 again when a small number of financial types like Schiff warned about the coming financial carnage but the rest of the financial community ignored and/or ridiculed them.

You can watch this informative, sobering video segment on the CNBC website here.

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)


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Tuesday, March 27th, 2012 Banking, Bankruptcy, Bonds, Bubbles, Crash Prophets, Currencies, Debt Crisis, Defaults, Deficits, Federal Reserve, Fiscal Policy, Government, Housing, Inflation, Interest Rates, Investing, Monetary Policy, Money Supply, Spending, Stocks Comments Off on Peter Schiff: ‘Phony Economy’ Will Come ‘Toppling Down,’ Pain Worse Than 2008-2009

Jim Rogers Shares Latest Investment Strategies

I just got done watching a video segment from the March 22, 2012, installment of the CNBC show Fast Money in which legendary investor Jim Rogers shared his latest investment strategies with viewers. The CEO of Rogers Holdings and Beeland Interests, Inc. discussed the following in the 4 minute 56 second video:

• China- “I hope that the Chinese market collapses so I can buy Chinese shares”
• Global Economy- “I certainly expect the world to have more of a slowdown in the next year or two, and that will be an opportunity for all of us”
• Commodities- Rogers is long here
• Emerging Country Stocks- Short here
• U.S. Stocks- “I’m very pessimistic about the U.S. stock market”
• Myanmar (Burma)- “I find it wildly exciting”
• Long-Term U.S. Government Bonds- Short here
• Gold/Silver- Long here; “Gold is going to go much higher- and silver- over the next decade”

You can watch this very informative segment on the CNBC website here.

(Editor’s notes: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein; info added to “Crash Prophets” page)


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Monday, March 26th, 2012 Asia, Bonds, Commodities, Crash Prophets, Emerging Markets, Government, Investing, Precious Metals, Stocks Comments Off on Jim Rogers Shares Latest Investment Strategies

Marc Faber Talks Again About Investing In Remote Farmland To Counter Growing Social Tension

Investment adviser and fund manager Dr. Marc Faber attended the CFA Institute’s Third Annual Middle East Investment Conference in Qatar these past two days. According to Ed Bace, the CFA’s head of education for the Europe, Middle East, and Africa (EMEA) regions, “Doctor Doom” (labeled that by the press for his contrarian investment style that is often interpreted as being bearish) told conference attendees that continuing growth in Asia and South America will put further pressure on the world’s resources, thereby leading to increased geopolitical tension. As such, the Swiss-born Faber shared the following investment recommendations. Bace wrote on the conference website earlier today:

So how should investors play this situation? Faber states that diversification is key alongside low leverage. His recommendations are as follows: cash and bonds are not hugely attractive, given negative real interest rates, but equity-like corporate bonds could form 25% of a portfolio. Another 25% could be made up of stocks, especially in emerging markets, with a further 25% in precious metals (which tend to be severely underweighted in a typical pension fund). Real estate in certain areas (such as Asia) could make up the remainder. He added that US house prices are looking decidedly cheap.

Faber closed his speech by emphasizing that the crucial question over the next decade is not “where will my returns be highest?” but “where will I lose the least money?” In fact, he believes that losses of 50% should be considered as a relative success. He advised that an investment in remote farmland could pay off, as growing social tensions could make urban life intolerable. In his view the welfare state has evolved from the many helping the few to the few helping the many and that the inevitable crash, or “rebooting the computer,” will simply have to be endured. Whether this crisis occurs soon, as further credit expansion is voluntarily abandoned, or occurs later, as the currency system meets final and total catastrophe, Faber cannot predict.

(Editor’s note: Italics added for emphasis)

The investment in remote farmland that Dr. Faber talked about reminds me of a piece I read on The Times (UK) website back on February 22, 2010. Leo Lewis wrote in that article:

The world’s most powerful investors have been advised to buy farmland, stock up on gold and prepare for a “dirty war” by Marc Faber, the notoriously bearish market pundit, who predicted the 1987 stock market crash…

Speaking today, Dr Faber said that investors, who control billions of dollars of assets, should start considering the effects of more disruptive events than mere market volatility.

“The next war will be a dirty war,” he told fund managers: “What are you going to do when your mobile phone gets shut down or the internet stops working or the city water supplies get poisoned?”

His investment advice, which was the first keynote speech of CLSA’s annual investment forum in Tokyo, included a suggestion that fund managers buy houses in the countryside because it was more likely that violence, biological attack and other acts of a “dirty war” would happen in cities.

(Editor’s note: Italics added for emphasis)

Sobering stuff. But I wouldn’t expect anything less from the publisher of The Gloom Boom & Doom Report.

(Editor’s notes: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein; info added to “Crash Prophets” page)


Bace, Ed. “Marc Faber: Continuing Financial Crisis Must Be Endured.” CFA Institute Middle East Investment Conference. 26 Mar. 2012. ( 26 Mar. 2012.

Lewis, Leo. “‘Buy farmland and gold,’ advises Dr Doom.” The Times. 22 Feb. 2010. ( 26 Mar. 2012.


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Monday, March 26th, 2012 Agriculture, Asia, Bonds, Civil Strife, Class Warfare, Commodities, Crash Prophets, Credit, Currencies, Emerging Markets, Entitlements, Farming, Housing, Investing, Natural Resources, Precious Metals, South America, Stocks, War Comments Off on Marc Faber Talks Again About Investing In Remote Farmland To Counter Growing Social Tension
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