Class Warfare

Rich Americans Keep On Prepping

Regular readers of Survival And Prosperity know that I’ve been observing and blogging about “prepping” for several years now. Case in point, this 2011 post recapping a new TV show called Doomsday Preppers (ever heard of it?).

Early on I noticed wealthy Americans were getting into preparedness. They recognized and took steps to deal with potential TEOTWAWKI scenarios- just like their lower-net worth compatriots.

And such activity continues to this day, spurred on not just by concerns over major emergencies and man-made/natural disasters, but fears of a financial crash, civil unrest/war, and impoversihed and angry masses turning against the rich.

Earlier this evening I finally got the chance to read an article from the January 30, 2017 issue of The New Yorker entitled “Doomsday Prep For The Super-Rich.” Evan Osnos penned:

Survivalism, the practice of preparing for a crackup of civilization, tends to evoke a certain picture: the woodsman in the tinfoil hat, the hysteric with the hoard of beans, the religious doomsayer. But in recent years survivalism has expanded to more affluent quarters, taking root in Silicon Valley and New York City, among technology executives, hedge-fund managers, and others in their economic cohort…

The lengthy-yet-interesting piece took a closer look at the prepping mindset and priorities of the wealthy these days. One notable passage was:

I asked [prominent investor and co-founder of LinkedIn Reid] Hoffman to estimate what share of fellow Silicon Valley billionaires have acquired some level of “apocalypse insurance,” in the form of a hideaway in the U.S. or abroad. “I would guess fifty-plus per cent,” he said…

There was also this from Osnos:

In building Reddit, a community of thousands of discussion threads, into one of the most frequently visited sites in the world, [co-founder and CEO Steve] Huffman has grown aware of the way that technology alters our relations with one another, for better and for worse. He has witnessed how social media can magnify public fear. “It’s easier for people to panic when they’re together,” he said, pointing out that “the Internet has made it easier for people to be together,” yet it also alerts people to emerging risks. Long before the financial crisis became front-page news, early signs appeared in user comments on Reddit. “People were starting to whisper about mortgages. They were worried about student debt. They were worried about debt in general. There was a lot of, ‘This is too good to be true. This doesn’t smell right.’” He added, “There’s probably some false positives in there as well, but, in general, I think we’re a pretty good gauge of public sentiment. When we’re talking about a faith-based collapse, you’re going to start to see the chips in the foundation on social media first.”

(Editor’s note: Bold added for emphasis)

I’ve noticed a growing amount of anger directed against President Trump and the Republicans on my Facebook “home page” these days.

“Early signs” of significant civil unrest coming?

If you’ve got some time to spare, head on over to The New Yorker website and check out the Osnos piece here.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Martin Armstrong: ‘The United States Will Most Likely Break Apart By 2036’

Back on January 27, 2016, I asked:

Do any readers follow Martin Armstrong, economist at Armstrong Economics (and former chairman of Princeton Economics International Ltd.) and the creator of the Economic Confidence Model? While the jury’s still out on him (for me), I do read his blog almost daily…

I still “read his blog almost daily.” And something Armstrong wrote last week really caught my attention. From “The Termination of Cash Approaching Rapidly”:

I am becoming deeply concerned that the United States is headed into its version of a communist revolution under the label “progressive” and the bankers, who Larry Summers has always supported, will be used as the scapegoat for Wall Street and the “rich” who have to be stripped of their liberty and their money for the “good of the people” as they always say. The United States does not look like it will be a country we can recognize by 2032 if we can even make it past 2024. The United States will most likely break apart by 2036. There are separatist movements rising in many areas from Vermont and Texas to California, who reasons they voted for Hillary not Trump justifying their departure.

The entire purpose of eliminating cash is to strip us of our assets, liberty, and to prevent bank runs. The youth, who have been brainwashed by Bernie Sanders and people like Elizabeth Warren, will turn against the older generation and enslave them if at all possible. This threatens our future with outright civil war. They will not be satisfied until they destroy the freedom of their opposition. It is starting to appear that 2036 is our date with destiny

(Editor’s note: Bold added for emphasis)

America kaput by 2036- if not earlier?

That’s a pretty disturbing thought. And reading that blog post reminded me of an article I pulled up almost eight years ago on The Wall Street Journal website (my how time flies) by Andrew Osborn, who discussed a similar prediction made by Russian academic Igor Panarin, a former KGB analyst and Dean of the Russian Foreign Ministry’s school for future diplomats (then and now). On December 29, 2008, Osborn wrote:

Mr. Panarin posits, in brief, that mass immigration, economic decline, and moral degradation will trigger a civil war next fall and the collapse of the dollar. Around the end of June 2010, or early July, he says, the U.S. will break into six pieces — with Alaska reverting to Russian control…

California will form the nucleus of what he calls “The Californian Republic,” and will be part of China or under Chinese influence. Texas will be the heart of “The Texas Republic,” a cluster of states that will go to Mexico or fall under Mexican influence. Washington, D.C., and New York will be part of an “Atlantic America” that may join the European Union. Canada will grab a group of Northern states Prof. Panarin calls “The Central North American Republic.” Hawaii, he suggests, will be a protectorate of Japan or China, and Alaska will be subsumed into Russia…

(Editor’s note: Bold added for emphasis)

Obviously 2010 came and went… and the good ol’ U.S. of A. remains intact.

But I can’t help but wonder if Panarin’s prediction might not be in the same category as an infamous forecast made by the American financial analyst Meredith Whitney about a wave of municipal defaults. I wrote back on December 22, 2010:

Last night Whitney, now CEO and founder of Meredith Whitney Advisory Group, appeared on CNBC and warned that a wave of defaults by state and local governments in the coming months will cause a sell-off in the municipal bond market, hurting U.S. economic growth and stocks- and causing social unrest

I blogged a year-and-a-half later:

Whitney will eventually be vindicated about the wave of defaults (her timing was just off)…

“Her timing was just off”

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is 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 contained herein.)

Sources:

Armstrong, Martin. “The Termination of Cash Approaching Rapidly.” Armstrong Economics Blog. 24 Nov. 2016. (https://www.armstrongeconomics.com/world-news/taxes/the-termination-of-cash-approaching-rapidly-the/). 1 Dec. 2016.

Osborn, Andrew. “As if Things Weren’t Bad Enough, Russian Professor Predicts End of U.S.” The Wall Street Journal. 29 Dec. 2008. (http://www.wsj.com/articles/SB123051100709638419). 1 Dec. 2016.

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Chicago Should Prepare For Baltimore-Style Civil Unrest

Have any readers been following what’s been going on in Baltimore as it concerns the protests and riots over the death of Freddie Gray?

Do Chicago-area readers think such civil strife could happen here someday?

It’s happened before. And considering the potential flash points that currently exist (ongoing racial tension, limited economic opportunities in lower class neighborhoods, growing divide between the economic/political elite and everyone else) which could be sparked by intense financial pain as the business cycle inevitably turns down and/or some crisis, I think it could definitely happen again. I’m not the only one. Early Tuesday I was watching the WGN morning news when Corey Brooks, Senior Pastor at New Beginnings Church of Chicago, came on. The South Side reverend advised:

I’m hoping and praying that it never happens in Chicago. But it would be best if we would prepare.

“But it would be best if we would prepare”

Amen to that.


“Chicago Pastor Corey Brooks headed to Baltimore to help stand against violence”
WGN News Video

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Chicago Wakes To Proposed Property Tax Hike On April Fool’s Day

Many Chicagoans probably wish what’s being widely-reported in the local news this morning about a proposed property tax hike is just a silly April Fool’s joke.

It’s not.

Fran Spielman wrote on the Chicago Sun-Times website last night:

Chicago property owners will face $250 million in property tax increases over five years while city employees make increased pension contributions that will cost them at least $300 more a year, under landmark reforms unveiled Monday…

The new revenue the mayor had promised only after pension reform will come in the form of $50 million property tax increases for five straight years, beginning next year and continuing through 2019.

Top mayoral aides estimate that would cost the owner of a home valued at $250,000 with an annual property tax bill of $4,000 roughly $58 more or $290 over the five-year period. That’s on top of expected increases for the Chicago Board of Education and Chicago Park District…

(Editor’s note: Bold added for emphasis)

A couple of thoughts here:

First off, is anyone really surprised this is happening?

Regular readers of this blog shouldn’t be.

Higher fees, fines, and taxes. Less government services.

I’ve been squawking this for quite some time now.


“Black Dynamite- Who saw that coming?”
YouTube Video

Second, a $250,000 home? When discussing a Chicago Board of Education property tax hike last August, I blogged:

$230,000? You’d be hard-pressed to find a home for that little money in my former stomping grounds on the Northwest Side.

The same holds true for a $250,000 one (especially if it’s a property big enough for a family and doesn’t require a ton of work).

Which means many of my old neighbors will be coughing up significantly more than just $58 annually/$290 over five years as a result of this proposed hike.

And they already pay a big chunk of change to the City’s coffers.

Third, Spielman added last night:

The bottom line, according to Emanuel, is a plan that spreads the burden between employees, retirees and homeowners without raising property taxes so high that it triggers a mass exodus to the suburbs…

“Mass” being the key word here, because an exodus has already started. Former Chicago residents who have awakened to the “writing on the wall” are moving to the suburbs (yours truly included), leaving Cook County, and departing the state.

The push to make “temporary” personal and corporate income tax hikes permanent and the pursuit of class warfare in the form of a proposed millionaire tax hike by the ruling political party in the city, county, and state certainly don’t help the situation either.

Fourth, I can’t stand when tax hikes are proposed despite the lack of significant belt-tightening. Think the City of Chicago is as lean-and-mean as it possibly can be with its operations and set-up?

As long as 50 aldermanic wards exist, I’d argue no.

Fifth, as it stands right now, there’s still a state-required $600 million contribution due next year from the City to stabilize police and fire pension funds that this proposed property tax hike doesn’t address and has to be dealt with. Hal Dardick an Bill Ruthhart reported on the Chicago Tribune website this morning:

But the proposal the mayor and his top aides outlined late Monday would not address huge pension shortfalls for Chicago police, firefighters and teachers. Nor would it deal with the city’s most immediate, pressing financial problem: a state requirement to pay a whopping $600 million more toward police and fire pensions next year, a provision that could lead to a combination of tax increases, service cuts and borrowing

(Editor’s note: Bold added for emphasis)

You read right. Possibly more “tax increases, service cuts and borrowing” coming down the line shortly for Chicago residents.

Stay tuned…

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Spielman, Fran. “Pension deal pinches city workers and taxpayers.” Chicago Sun-Times. 31 Mar. 2014. (http://politics.suntimes.com/article/chicago/exclusive-pension-deal-pinches-city-workers-and-taxpayers/mon-03312014-821pm). 1 Apr. 2014.

Dardick, Hal and Ruthhart, Bill. “Emanuel’s pension fix: Shrink benefits, raise taxes.” Chicago Tribune. 1 Apr. 2014. (http://www.chicagotribune.com/news/local/ct-rahm-emanuel-pension-property-tax-increase-met–20140401,0,1662095,full.story). 1 Apr. 2014.

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Illinois Millionaire Tax Hike Could Pass As Part Of Class Warfare Push By Democrats

While I’ve been putting a lot of time lately into my offshore Web projects, Illinois Democrats have been grabbing the local headlines as they replicate President Obama’s class warfare strategy to win votes in November. Monique Garcia, Ray Long, and Maura Zurick reported on the Chicago Tribune website last Friday:

Illinois Democrats went all-in Thursday with their election-year class warfare theme as Speaker Michael Madigan pitched the idea of asking voters to raise taxes on millionaires, Senate President John Cullerton advanced a minimum-wage increase and Gov. Pat Quinn compared wealthy opponent Bruce Rauner to TV villain Mr. Burns…

The newest front in the campaign battle came as Madigan held a rare news conference to announce he wants lawmakers to put a question on the Nov. 4 ballot asking voters whether the state should raise the income tax by 3 percentage points on those who make more than $1 million a year.

The powerful Democratic speaker said the tax hike on millionaires is a way to generate more than $1 billion for elementary and high schools. Madigan based his calculations on what he said are roughly 13,675 millionaires that lived in Illinois in 2011, brushing aside a question about whether such a tax hike might drive them out of the state.

“Well, if they’re in Illinois today, they’re probably so much in love with Illinois that they’re not going to leave,” Madigan said

(Editor’s note: Italics added for emphasis)

I’m not as optimistic as the 71-year-old Speaker of the House is about Illinois millionaires sticking around if they’re targeted with a tax hike.

After all, money typically gravitates to where it’s being treated the best.

And recent demographic data suggests Chicagoland and Illinois residents may not be “so much in love” with the area as Mr. Madigan claims.

That includes the rich as well.

“Cook County’s population grew by 17,000 people in 2012, about .3 percent- but much of that gain came from immigrants, according to Census Bureau estimates released Thursday.

The figures showed that about 32,000 more domestic residents moved out of Cook County than moved in. But a net increase of 17,000 immigrants, along with a high ratio of births over deaths, contributed to an overall gain for the county…”

Chicago Sun-Times website, March 13, 2013

Moving Out
The top outbound states for 2013 were:

1. New Jersey
2. Illinois
3. New York
4. West Virginia
5. Connecticut
6. Utah
7. Kentucky
8. Massachusetts
9. New Mexico”

-United Van Lines press release, January 2, 2014

“As the Great Recession churned job prospects for many, Cook County lost about 13,000 residents with six-figure household incomes to other places, despite the widely hyped revival of downtown housing and jobs…”

Crain’s Chicago Business website, February 14, 2014

“Roughly 13,675 millionaires that lived in Illinois in 2011”

Should Illinois Democrats jack up their income taxes, I suspect the number of Illinois millionaires right before the tax hike is implemented will plummet. Revenue will follow. Out-of-state vacation homes in Indiana and Wisconsin will be declared as primary residences.

“A way to generate more than $1 billion for elementary and high schools”

I highly doubt that.

So does the proposed millionaire tax hike have a chance of becoming reality?

Consider what Greg Hinz blogged on the Crain’s Chicago Business website Friday:

Springfield Democrats have such big legislative majorities that they won’t need any Republican votes to pass the measure if they hang together. And Springfield insiders are saying that odds are much better that Democrats will unify behind the speaker’s proposal- which, after all, would affect only millionaires like Bruce Rauner- than behind another plan being pushed by Senate Democrats to implement a graduated income tax, which would affect far more voters.

Stay tuned. If you can stomach it.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Garcia, Monique, Long, Ray, and Zurich, Maura. “Illinois Democrats go all-in on class warfare theme.” Chicago Tribune. 21 Mar. 2014. (http://articles.chicagotribune.com/2014-03-21/news/chi-speaker-madigan-proposes-asking-voters-to-raise-taxes-on-wealthy-20140320_1_tax-hike-bruce-rauner-income). 24 Mar. 2014.

Hinz, Greg. “GOP leaders blast Madigan’s millionaires tax, but idea likely has legs.” Greg Hinz On Politics.” Crain’s Chicago Business. 21 Mar. 2014. (http://www.chicagobusiness.com/article/20140321/BLOGS02/140329950/gop-leaders-blast-madigans-millionaires-tax-but-idea-likely-has-legs). 24 Mar. 2014.

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Ryan Defeats Biden In U.S. Vice Presidential Debate

Well, I just got done watching the U.S. Vice Presidential debate between Congressman Paul Ryan (R-WI) and sitting Vice President Joe Biden.

Despite the mainstream media trying so hard tonight to portray the debate as an actual contest, it really was anything but.

The Wisconsin Republican won. The Delaware Democrat lost… it.

While the Republican candidate for U.S. President, Mitt Romney, brought his “A” game to the debates last week, I thought Congressman Ryan’s performance was a “B.”

Ryan was composed, articulate, and sounded authoritative with his use of numbers and statistics (the “wonk” in him I hear). Yet, while he got a few jabs in at the Vice President, several windows of opportunity emerged where he could have savaged Biden even more, but didn’t- perhaps in homage to the “respectful” debate performance given by President Barack Obama back on October 3.

In contrast, Vice President Biden came out of the debate looking “unhinged,” as some in the MSM are calling it (they will be corrected, I mean, they will correct this observation later).

To sum up Joe Biden’s night, I saw it like this:

• Faces (lots of them)
• Noises (snorting, huffing, and puffing- watch out or he’ll blow your White House down)
• Interruptions (his constant interrupting of Congressman Ryan was so annoying that I thought I was watching one of those panel-type TV shows where everyone is interrupting and talking above everyone else).
• It’s the Republicans fault (if only they would just “get out of the way”- SNL material there)
• Tax the rich (not sure raising taxes is such an effective strategy when the economy sucks)
• Supposedly big on facts, but brought up “stuff” and ‘things” instead
• Big on fairness (thought moderator owed him more time at the end of the debate)
• More face-making, noise-making, and interrupting

I hate to say it (as I actually like Joe Biden the man from what I know of him), but watching the Vice President reminded me of the Wacky Waving Inflatable Arm Flailing Tube Man on an old episode of Family Guy:


“Wacky Waving Inflatable Arm Flailing Tube Men!”
YouTube Video

Regarding the moderator of the debate- journalist Martha Raddatz- some might argue she appeared to be helping the Vice President by pressing Congressman Ryan more on questions.

Perhaps viewers should have been informed beforehand that not only was President Obama a guest at her wedding, but he also appointed her ex-spouse to chair the Federal Communications Commission.

Inquiring minds might want to know.

One last thing. When Congressman Ryan was giving his closing statement, my girlfriend remarked, “Wow. He looks more like a president than Mitt Romney.”

Wonder if independent voters watching the debate also thought that tonight.

On to the next one.

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Romney 1, Obama 0

Just got done watching the first in a series of U.S. Presidential debates between former Massachusetts Governor Mitt Romney and the sitting President Barack Obama.

This one was no contest. Romney spanked Obama.

The Republican candidate was articulate, appeared knowledgeable (the mainstream news outlets are unleashing their “truth squads” as I type this), and attacked his opponent with growing intensity as the evening went on.

Not only was Romney in the driver’s seat, but he seemed to be enjoying the ride as well.

President Obama, on the other hand, didn’t look like he wanted to be there, was not articulate, and didn’t put up much of a defense against Romney’s attacks.

In fact, summing up Obama’s talking points for the evening might look something like this:

• My Republican predecessor caused a lot of the nation’s problems
• I’m all about the middle class
• We need to be fair, but we need more revenue
• The rich have been successful, so let’s tax them to redistribute some of that money they’ve earned
• Obamacare is the way to go
• Improving education will make us prosperous

Finally, Obama kept trying to hammer his Republican opponent for not going into the details of a number of plans he’s proposing.

However, politicians, for the most part, know better than to fall for this should they be held accountable for something that’s said should they get elected.

Being vague here tends to be the general rule of thumb.

As soon as the night was wrapped up, I turned to MSNBC on the satellite TV to see their reaction.

Even Chris Matthews was declaring Romney the winner in this showdown.

Changing over to one of the local Chicago television stations, I happened to catch a “political analyst” declaring President Obama had won the debate.

Not really too surprised to hear that, considering it’s the U.S. President’s adopted hometown we’re talking about here, and a city, county, and state chock-full of dyed-in-the-wool Democrats.

Judging by the look in Barack Obama’s face at the end of the night, I’m guessing he’s going to come out swinging the next time around. And I hope he does. Because it will make the next debate all the more interesting to watch.

And if I get the chance to watch that one I’ll call it as I see it too.

In the meantime, enjoy the forthcoming White House spin as it regards the President’s performance tonight.

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Survival And Prosperity
Est. 2010, Chicagoland, USA
Christopher E. Hill, Editor

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