In The Greatest Outpouring Of Money And Credit In History Bob Chapman talks about the inherent problems in our economy, wealth preservation and expectations for 2010 and beyond.

“There are two basic schools of thought regarding the economy. One is buying bonds for safety and the other with virtually no interest money is gambling in the markets. As a result we have a bull market in bonds and a bear market rally in the stock market. These factors lead investors and the public to the perception that a recovery is underway when nothing could be further from the truth. If it was true someone has to explain to us why consumer spending is off 20% yoy, which makes up 69.3% Of GDP? It is no wonder households are not spending. They have just lost $13 trillion in home equity and the housing bubble still has 20% to go to the downside. Quantitative easing has been a failure. We are still in a prolonged period of credit contraction that has been subdued temporarily by massive does of liquidity. Those hardest hit are small businesses and homeowners. All that retirement money is gone, because the Fed created a housing bubble. In 2009, homes lost 40% of their value and they have 20% to go and who knows how long the housing market will bump along the bottom. Reducing debt and spending is the new mantra. This will certainly reduce demand and economic growth. Blatant market manipulation in the long run will not be successful. 2.8% GDP growth is non-existent. The stock market may be booming on zero interest Fed funds, but as we pointed out last February middle America is in depression. In order to keep this façade going and the bubble in tact, the Fed has no choice but to inflate. They want to withdraw funds, but they cannot. They are recalling TARP funds, which will be quickly gobbled up by a new stimulus program and a call from the Treasury to buy more Treasuries, Agencies and toxic waste. Bernanke has to be running around in circles as members of Congress grill him on poor performance and the House passes HR1207, the Bill to audit and investigate the Fed. In addition bank lending is off 16.2% yoy and there are no signs of any loosening. We are looking at object failure by the Fed, which we reflected almost three years ago. There is no normality and no recovery. You cannot spend your way into recovery. It just doesn’t work. Look at the 1930s. It didn’t work then and it won’t work now. Government guarantees challenge reality and reality always wins. As a result of fed policy we have corporatist fascism at its worst. Day by day we attract less foreign capital and that is because any semblance of free markets are gone. All the Fed has done is rescue its owners and other connected elitists and such a plan is doomed to failure.”

If you watch mainstream news and listen to the propaganda coming out of Washington, you’d think Bob Chapman has completely lost his mind. But, dear reader, if you are here at SHTF Plan, then this likely reinforces everything your gut is telling you. While impossible to time, there is a serious crash brewing. And we’re not talking about the stock market. The whole friggin’ system is going to get hit with a ton of bricks. If you’re not protecting yourself with precious metals, reserve food supplies and skills development, that ton of bricks is going to fall right on top of you.

We highly recommend to our readers that they visit Bob Chapman’s web site The International Forecaster, or regularly follow our Chapman Updates. This man has been around for a long time and knows what he’s talking about.

Some other notable quotes and excerpts from his recent article:

“Those in their 40s and younger are about to get an education in how real life works. Not the life created by Wall Street and the Fed, because that era is about to end and with it the fairy tale life they have been used too.”

——

“There is no question that another bout of inflation is on the way and that the dollar will continue to fall in value. We do not believe gold and silver are today reflecting reflation. They are reflecting a flight to quality because professionals and a minority of other investors have lost faith and trust in the top 20 central banks. Thus, today we are witnessing a flight to quality and safety.”

—–

“We believe that the US dollar will be officially devalued in a year to 1-1/2 years from now to be replaced with an international trading unit. That will cause another flight to quality to gold and silver.”

—–

“We are well on our way to joining the third world and if you do not let Congress know you know what they are up too, then you will eventually live in a slum reminiscent of Calcutta, either that or in some US detention camp. The bottom line is a lower dollar is disastrous for the US economy. The US is being slowly strangled to death. Who wants to invest in a country that is on the edge of real trouble, plus all the environmental laws and onerous taxes? Readers, most people do not have a clue as to how bad it is.”

Read the full article: The Greatest Outpouring Of Money And Credit In History