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The Coming Collapse? © August 2012 Center for Trends Research and Analysis. All Rights Reserved Page 1 The Coming Collapse? Michael J Price Mark Keillor Center for Trends Research and Analysis www.CenterforTrends.com Perspective It is probably fair to say that everyone wonders where the current financial crisis will lead. If history and human nature are any indicators, the destination is apparent, and there are numerous trends supporting both the direction and the outcome of the world-wide financial situation. Since 2007, the world’s major economies have been experiencing various economic downturns and threats. Though recessions and other financial crises have come and gone for decades, the current situation has been worsening now for five years, longer than any previous recession and already half as long as the Great Depression of 1929 to 1939. In the U.S., we tend to measure economic progress based on the stock market. On October 9, 2007, the Dow Jones Industrial Average closed at 14,164.43, an all- time high. However, fourth quarter GDP growth was -1%, announcing the start of the recession. Since then, we have weathered the housing bubble and subsequent dive of the housing market, failures and bailouts of the nation’s largest banks. The latest iteration of the current crisis is coming in the form of financial corruption, increasing world debt, widespread unemployment, and civil unrest. It is perfectly fair to say that America’s financial troubles ar e the results of our governments spending habits and taxing policies. As much as there would be to say on these topics, we won’t be visiting them in this article. The damage is done and the aftermath is already leaking out. Government finances will have to be reconciled in the future, but it won’t, and can’t happen soon enough to reverse the trends we see now. We can’t avert the iceberg, so we’ll have to don life jackets and hope for rescue. The world is in free fall, yet average Americans wouldn’t know. Talk of more stimulus efforts, a steady stock market with its little gains and losses, presidential candidates each promising solutions, loopholes in the jobless reporting numbers, and relatively steady retail sales present a devious illusion of economic stability. All these economic reports tend to take the focus away from the big picture, the global financial situation, where the drama is really playing out. America has developed a short memory exacerbated by the population’s inadequate grasp of history. There are many parallels between the Great Depression and the current crisis which will be discussed in detail. What most Americans do not realize is that the 1929 financial crisis in the United States brought down governments around the world. World- wide economic decline created a social and political climate ripe for the rise of the Nazis and the Fascists. Desperate citizens became mindless followers of dictators hoping to better their financial circumstances. Consider these similarities:

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The Coming Collapse?

© August 2012 Center for Trends Research and Analysis. All Rights Reserved Page 1

The Coming Collapse?

Michael J Price

Mark Keillor Center for Trends Research and Analysis www.CenterforTrends.com

Perspective

It is probably fair to say that everyone wonders where the current financial crisis will lead. If

history and human nature are any indicators, the destination is apparent, and there are numerous trends

supporting both the direction and the outcome of the world-wide financial situation.

Since 2007, the world’s major economies have been experiencing various economic downturns

and threats. Though recessions and other financial crises have come and gone for decades, the current

situation has been worsening now for five years, longer than any previous recession and already half as

long as the Great Depression of 1929 to 1939. In the U.S., we tend to measure economic progress based

on the stock market. On October 9, 2007, the Dow Jones Industrial Average closed at 14,164.43, an all-

time high. However, fourth quarter GDP growth was -1%, announcing the start of the recession. Since

then, we have weathered the housing bubble and subsequent dive of the housing market, failures and

bailouts of the nation’s largest banks. The latest iteration of the current crisis is coming in the form of

financial corruption, increasing world debt, widespread unemployment, and civil unrest.

It is perfectly fair to say that America’s financial troubles are the results of our government’s

spending habits and taxing policies. As much as there would be to say on these topics, we won’t be

visiting them in this article. The damage is done and the aftermath is already leaking out. Government

finances will have to be reconciled in the future, but it won’t, and can’t happen soon enough to reverse the

trends we see now. We can’t avert the iceberg, so we’ll have to don life jackets and hope for rescue.

The world is in free fall, yet average Americans wouldn’t know. Talk of more stimulus efforts, a

steady stock market with its little gains and losses, presidential candidates each promising solutions,

loopholes in the jobless reporting numbers, and relatively steady retail sales present a devious illusion of

economic stability. All these economic reports tend to take the focus away from the big picture, the

global financial situation, where the drama is really playing out. America has developed a short memory

exacerbated by the population’s inadequate grasp of history. There are many parallels between the Great

Depression and the current crisis which will be discussed in detail. What most Americans do not realize is

that the 1929 financial crisis in the United States brought down governments around the world. World-

wide economic decline created a social and political climate ripe for the rise of the Nazis and the Fascists.

Desperate citizens became mindless followers of dictators hoping to better their financial circumstances.

Consider these similarities:

The Coming Collapse?

© August 2012 Center for Trends Research and Analysis. All Rights Reserved Page 2

In the area of economics, the Wall Street crash led to unprecedented unemployment, food lines, and

multiple government efforts to bring the country back to a comfortable level of prosperity. In the

years after the crash, people simply could not afford food. Today, we are faced with inflation of

food prices combined with future food scarcities resulting from the 2012 drought and a globally

networked food supply system vulnerable to delay, interruption, and disintegration.

In the area of society, riots occurred throughout the 1930’s all over the world and intensified as

global economies got worse. Similar protests and riots have been occurring now for the last few

years and include the Occupy movement, activities of the Tea Party, riots in London, and

demonstrations in virtually every country of Europe. Turmoil in the Middle East has also

intensified with a combination of economic concerns, social justice issues, political corruption, and

religious tensions. None of today’s conflicts are even remotely close to resolution.

Politically, the 1930’s political gridlock gripped governments across the globe. A “blame game”

began among nations and within nations as all political parties and candidates were blaming

someone else for the problems. Compare this to 2008 and the years since. Democrats,

Republicans, and all the smaller parties are blaming someone else for the crisis and few are offering

workable solutions. Radical right-wing political parties and movements arose in the 1930’s just as

we are seeing a resurgence of right-wing activities all across the world today. Some governments

suspended their constitutions to allow leaders to use force in regaining control of the population as

is being done today and as the U.S. government is making plans for the same kinds of actions.

Wars developed, escalating at last into World War II, as a method of distracting divided and

impoverished peoples away from their economic troubles and allying with the governments.

The world is in free fall and most Americans wouldn’t know. The chaos and complexity of the

global system is confusing and staggering, even for the well-equipped. The downward trajectory of global

fiscal health is descending to disastrous levels. Globally, central banks are printing and pumping money

into stagnating economies delivering a lethal dose of pending inflation to the world’s citizens.

Unfortunately, our weakened global immune system is not strong enough to protect nations from collapse

and bounce back afterwards. Due to central banks’ ineffective vaccinations and pathological financial

corruption throughout the financial sector, a collapse seems inevitable.

Mike’s father and he would discuss world affairs and politics over a cold local brew on

weekends. They’re both profoundly concerned for the state of our global financial and banking systems.

His father’s two biggest concerns are whether he could comfortably retire with his mother in coming

years, and how his four sons could weather this financial storm. He’s a gifted and perceptive man who

can keenly decipher what is going on. They’d joke and quip back and forth on what the future will bring.

With his sophisticated and astute insights, he’d term the coming events as implosion —which for many is

acerbic and sobering. Many Americans would opine that this proclamation is unrealistic, but we would

bullishly interject and point to the facts which paint this gloomy landscape. We fear for those who

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© August 2012 Center for Trends Research and Analysis. All Rights Reserved Page 3

ignorantly defy reality, and even more for the many who choose to look the other way and continue living

their neatly construed lives in the face of pending danger.

Economic Trends

Hunger Games

This summer’s heat wave has been hellish to say the least. The lower 48 states have been hit hard

by this heat which continues to damage essential crops such as corn and soy. The U.S. produces slightly

half of the world’s corn crops. Most of this production comes from Iowa, Nebraska, Minnesota, and

Illinois. The U.S. diet is highly dependent on corn and soy, both of which are essential ingredients in

thousands of food items. Most of the corn-based crops are used to make high fructose corn syrup which

is in soda, cookies, chips and many other products. Approximately ¼ of products on the shelves in

supermarkets contain corn. A majority of the food served in fast food chains is also dependent on corn.

Soy is used as meat filler, meat substitute and protein supplement throughout the food industry.

The drought of 2012 has hit the breadbasket of the U.S. severely in other key farming states like

Kansas and Nebraska. [1]

According to an Associated Press article, “the U.S. Agriculture Department has

twice slashed its forecast for this year's corn and soybean output because of the punishing drought.” [2]

Expect food prices to rise sharply and significantly.

This summer’s drought has been both wide-spread and intense. It has also been global. Most

Americans do not realize that food supply is an international operation. Though the U.S. has proudly

touted its image as the Breadbasket of the World, much of the food we eat on a daily basis is imported

from other countries. According to a GlobalPost article, “as drought parches the US, Mexico, and Chile,

meteorologists warn El Nino could further devastate food supplies.” [3]

The National Oceanic

Atmospheric Administration (NOAA) is expecting “the early signs to develop into a full-blown El Nino

during August or September as higher water temperatures translate into warmer air currents.” [4]

World

food prices are going to spike and this could pose serious problems to food security and supply. Food

issues could have long-lasting effects for months and even into next spring when farmers can begin to

plant corn and soy crops. This, of course, assumes that next year’s weather will be more agriculturally

friendly.

The drought has had such a devastating effect that it is already sparking market panic. According

to the UK Telegraph, “commodities traders have warned they are seeing the first signs of panic buying

from states [countries] concerned about the political implications of rising prices for staple crops.” [5]

When people are hungry and food is consuming a higher percentage of their budgets, they become

discontent, if not alarmed, and the negative political implications could be a force with which to be

reckoned. Moreover, the article states that “authoritarian governments across the world are aggressively

stockpiling food as a buffer against soaring food costs which they fear may stoke popular discontent.” [6]

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© August 2012 Center for Trends Research and Analysis. All Rights Reserved Page 4

Hoarding by these governments is an important dimension of this issue as it will have an impact on

international food trade.

World Financial Predicament

The world is in a state of economic stagnation. As we reported in our Economic Trends June

2012 article, the European and Chinese central banks have lowered interest rates to spur growth by

pumping more money into their economies. We’ve predicted that the Federal Reserve will do the same

with a QE3 or ask Congress to act with another stimulus bill. The economic situation across the globe is

so bad that economies of 27 member countries of the EU contracted by 0.2 percent. [7]

Emerging

economies such as Brazil and India are stagnating. Such stagnation is a problem for developed nations

because it threatens the wealth-creating export industry of other nations.[8][9]

This slowdown has sparked

the Brazilian government to pass a $66 billion stimulus plan for infrastructure. [10]

In India, Prime

Minister Manmohan Singh urges more investment and that “urgent steps must be taken to boost the

country’s ailing economy.”[11]

The financial straits of the United States are in such terrible shambles, that

Chinese companies have been pulling out of the U.S. stock market because “low share price fails to

reflect the strength of their business.”[12]

This means that China has lost confidence in the profitability of U.S. companies. A perfect

example of an overvalued but underperforming company would be Facebook. Since announcing its IPO a

few months ago, Facebook has lost half its valuation. U.S. stocks are so heavily inflated that a CNBC

study found that the S & P 500 “would be more than 50 percent lower—at the 600 level—if the bullish

price action preceding Fed announcements was excluded.” [13]

The notion that central banks move the

markets today is echoed and supported in a USA Today article proclaiming “the direction of stock prices

has been greatly influenced by the words and actions of the world's top bankers” and “thanks to their

ability and willingness to help sick economies get better by injecting various forms of stimulus into the

financial system, are viewed by investors as a lifeline.” [14]

This is why Chinese companies have been

pulling out of the U.S. stock market; because U.S. companies’ lack of true profitability and speculation of

deceptive accounting practices. The highly taunted social media companies such as Zynga, Facebook and

Groupon were highly valued but have underperformed.

These social media companies have a common independent auditor-Ernst & Young. [15]

According to Bloomberg, a lawsuit was filed in New York, “accusing Ernst & Young LLP of facilitating

a major accounting fraud by helping Lehman Brothers Holdings Inc. (LEHMQ) deceive the public about

its financial condition.” [16]

According to the U.K. Telegraph, Lehman Brothers “secretly borrowed

billions of dollars [$18B] from the US Federal Reserve months before the investment bank filed for

bankruptcy.” [17]

This is the sort of corruption plaguing our financial system. Banking irregularities and

corruption are also being uncovered in other countries. We have deceptive public accountants accused of

fraud, a Federal Reserve pumping countless dollars into the system, inflating stock prices, and we are

losing investor confidence in our own companies.

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The global financial situation is declining so rapidly, that “U.S. regulators directed five of the

country's biggest banks, including Bank of America Corp and Goldman Sachs Group Inc., to develop

plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count

on government help.” [18]

According to Der Spiegel, “banks, companies, and investors are preparing

themselves for a collapse of the euro.” [19]

These two reports came out days apart indicating something

massive is on the horizon, but the question is what and when?

Scramble to Gold

The interesting part of the global financial picture is that Chinese investors have withdrawn from

U.S. stocks and are instead shifting their investments towards gold —another trend that we have been

following. When the price of gold rises, it is a prime indicator of fear, in this case, the fear of a looming

financial collapse. [20]

The article on Chinese companies pulling out of U.S. stocks was published on

August 14, 2012, and the report on China’s state owned China National Gold Group Corporation is in

talks with African Mining Company, Barrick Gold, came out two days later. The Chinese want to buy a

“74 percent stake” in the African company.

[21] The reason they are investing in African gold is that they

have a “desire to push further into Africa to invest in commodities in order to support its rapidly

expanding economy.” [22]

Even mega-billionaire George Soros (#22 richest person in the world) has lost confidence in those

banks who were told to prepare for a collapse when he “completely dumped his stakes in Citigroup

(420,000 shares), JP Morgan (701,400 shares) and Goldman Sachs (120,000 shares)” and instead bought

“884,000 shares (approx. $130 million) of Gold via the SPDR Gold Trust.”[23][24]

According to Forbes,

billionaire manager, John Paulson “purchased 4.53 million shares of the SPDR Gold Trust

(GLD). Paulson also added to his holdings of NovaGold Resources (NG) and maintained his position in

Barrick Gold (ABX).” [25]

With the looming financial panic and uncertainty worldwide, and the continual

devaluation of the dollar, it’s very likely the price of gold will spike.

Italy’s financial situation is also further deteriorating. According to AFP, the Italian police

announced “a 78 percent jump in the amount of gold, silver, and cash they have prevented from leaving

the country illegally in the first seven months of 2012.” [26]

According to the UK Telegraph in 2011, the

U.S. is number one in the amount of gold it holds with 8,133 tons or $361.8 billion, with Germany at

second with 3,401 tons and the International Monetary Fund (IMF) with the third largest holdings of gold. [27]

In this article, China is listed as being the sixth largest holder of gold, but with the recent news of their

interest in investing in African gold, their holdings could place them much higher in the world’s gold

ownership standings. The greatest question posited by all these activities is what do mega investors,

international investors, and central banks know that we aren’t being told? The rich, like rats, are fleeing

sinking ships.

Social Trends

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© August 2012 Center for Trends Research and Analysis. All Rights Reserved Page 6

Gun Control

The trends put forth in this article are not segmented incidents but rather puzzle pieces that form a

real picture. Since the third week of July, the issue of gun control has been a hot trend to follow. The

number of different gun-related trends popping up is related to the number of killings occurring in the

country. This most recent trend started with the Colorado massacre in July where James Holmes open fire

in a movie theater killing a dozen, and wounding more than 50 mostly young victims.[28]

Since this

incident, there have been shootings in Wisconsin, Detroit, Washington D.C., Texas, and Louisiana all in

just over a month. The increase in gun related violence has sparked political opponents such as NYC

Mayor Michael Bloomberg, who lambasted both President Obama and Presidential candidate Mitt

Romney for ignoring the issue [29]

to make their pleas for more gun regulation.

Even though the last few months have been riddled with gun related violence, The Wall Street

Journal points out, “changes in laws are unlikely, partly because of a lack of support for new measures in

Congress and among the public at large.”[30]

Mostly this fear comes from the ever powerful NRA. After

the shooting in Colorado, the Denver Post reported “background checks for people wanting to buy guns

in Colorado jumped more than 41 percent.”[31]

The Associated Press alludes to why gun sales spiked after

the shooting because “buyers express fears about both personal safety and lawmakers who are using the

shooting to seek new weapons restrictions.”[32]

People want to bear arms for personal protection and fear

lawmakers will use these incidents for political gain by passing gun control legislation.

A Pew Research Poll found that people are divided over the issue of gun control concluding that

“47% of Americans say it is more important to control gun ownership, while 46% say it is more important

to protect the rights of Americans to own guns.” [33]

A CNN/ORC International Poll found the same

divisiveness over the issue, “with 50% saying they favor no restrictions or only minor restrictions on

owning guns and 48% supporting major restrictions or a complete ban on gun ownership by individuals

except police and other authorized personnel.”[34]

This explains why politicians avoid debating gun

control and clamping down on the second amendment. With this type of division over gun control and the

mighty power of the NRA, gun control seems unlikely at the Federal level.

Hate Crime

As the blame-game continues among politicians for economic problems, hatred and blame is

escalating in the society based on religious, political, sexual preference, and racial differences. Hate

crime and gun control are related issues though hate goes well beyond the use of guns. These also are

both a result of, and a distraction from, economic problems.

On May 4, Marian Wright Edelman, President of the Children's Defense Fund wrote in the

Huffington Post: “The growth in hate groups and the use of their divisive and negative language in the

mainstream political and media arena is cause for national alarm. Already this year several horrendous

hate crimes, possible hate crimes, and crimes committed by people with ties to hate groups have received

national attention.”

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These crimes are being perpetrated by white supremacists, vigilantes, neo-Nazis, common thugs,

and gangs. According to the Southern Poverty Law Center, hate crimes in America typically involve both

random and targeted killing sprees as well as harassment, assault, torture, stalking, and other acts that end

up as killings.

In its latest "Intelligence Report for Spring 2012," the SPLC reported that news on hate groups in

America was frightening. There were 1,018 hate groups in the United States in 2011 continuing a trend of

significant growth that has lasted more than ten years. Other findings from the report include:

[t]he radical right grew explosively in 2011, the third such dramatic expansion in as many years.

The growth was fueled by superheated fears generated by economic dislocation, a proliferation of

demonizing conspiracy theories, the changing racial makeup of America, and the prospect of four

more years under a black president who many on the far right view as an enemy to their country.

The truly stunning growth came in the antigovernment “Patriot” movement -- conspiracy-minded

groups that see the federal government as their primary enemy. Many Americans, infused with

populist fury over bank and auto bailouts, and a feeling that they had lost their country, joined

Patriot groups. The swelling of the Patriot movement since that time has been staggering.

Similar shifts to the radical right occurred in the 1930s setting the stage for Adolf Hitler’s rise to

power. It also preceded the establishment of fascism in Italy. Author Richard Palmer writes: “The worse

the financial crisis grows and the more popular the extreme groups become, the more you will see the

mainstream politicians adopt a harder line in order to get votes.”

Ms. Wright Edelman asks “What does it mean for the country,, our children and grandchildren

are inheriting when there is so much poisonous divisiveness in the political and media culture and the

number of hate groups is on the rise?” She hopes for a change in the next generation at best and suggests

that schools teach tolerance in the classroom as a preventive measure. However, schools and teachers are

measured on different standards and funding is determined more along students’ abilities to pass

achievement tests. Finding the time and space for cultural education in public schools will be a major

challenge.

There are millions of Americans who do not condone hatred, bigotry, or violence and never will.

Unfortunately, those who do live by hate are willing and able to purchase the deadly weapons and take

drastic steps to enforce their views. As government budgets continue to shrink, and as hate groups

continue to expand and arm themselves, crimes against all perceived minorities can expect to continue.

Personal Financial Independence

With the growing amount of debt and stagnate global growth, individual financial health is weak

and faltering. If the economy does bottom out and collapse, this would leave many here in the United

States vulnerable to loss of employment, loss of housing, lack of food, disenfranchisement, anger, and

exposure to personal harm. There seems to be no political will to solve our debt issue and we are likely to

hit our debt ceiling again this winter. According to the Wall Street Journal, economic data released by

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© August 2012 Center for Trends Research and Analysis. All Rights Reserved Page 8

the White House suggests that the “federal government will hit its $16.395 trillion debt ceiling in

mid to late December.”[35]

We are accruing a national debt of an average of $102.6 billion a month. This

is likely to emerge as a major problem and a source of conflict during the week of Christmas, delivering a

potentially crucial blow to American businesses, communities, society, economies, emotions, and morale.

The current financial situation has demonstrated how financially insecure most Americans are — albeit

much too late. A study reported by CNBC states that “28 percent of Americans have no money saved for

emergencies.”[36]

To be resilient a person and a family needs to have enough emergency funds in savings

to last at least a few months and be less inclined to use credit.

The most alarming trend in the news is how destructive the Great Recession has been to

individual assets. The burst of the housing bubble in 2008 and subsequent steady decline have reduced the

worth of most homes in America. According to a study, “close to half of Americans die owning very

little in financial assets, with senior citizens relying heavily on Social Security to help get them through

their retirement years” and finding “themselves with under $10,000 in financial assets by the time they

die.”[37]

This study shows that most have little financial security and rely too much on government

assistance. With the escalating number of Baby Boomer’s entering retirement, this will place a heavy

burden on Social Security and Medicare. The devastation created by the recession, and the numbers of

those needing to rely on the government, will likely increase. As the government amasses an

unsustainably high level of debt, and with the lack of political courage to make the hard decisions,

politicians have put all Americans at risk.

Inasmuch as the national debt has been a trend in itself, we should note that the current debt

situation dates back to World War II. The U.S. was able to mobilize its population and reconfigure its

industry in such a way that little money was borrowed to pay for the war. The amount of debt remained

stable and low until about 1970 when the costs of the unpopular Vietnam War ran headlong into

resistance to higher taxes. Borrowing the money was the politically safe, but economically dangerous,

solution. Since that time, the government has used borrowing (debt) as a means to finance more and more

government programs, services, purchases, and military excursions rather than increase taxes to pay for

what the government spends.

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United States National Debt, 1941 to 2010

Social Security was established as a financial safety net and, as it currently stands, will cease to

help Americans retire comfortably in the not-too-distant future. The Congressional Budget Office (CBO)

forecasts that by 2040, if no changes are made, the program will dry up. The possible loss of Social

Security will have a lasting effect on different generations. This could be a source and catalyst of

generational conflict, seeing the young resenting their elders. We don’t doubt that politicians will utilize

this sentiment for their own political gains, thereby continuing their divide and conquer method to gain

power.

For the New Silent Generation, or Generation Z (b.2001 to present), there is no reliable forecast,

only two possible extremes of something or nothing. For the Millennial Generation, or Generation Y, (b.

1980 to 2000-Mike’s generation) possible extreme discontent as they pay into a system now that will not

be there for them when they retire. Most members of Generation X (b. 1965 to 1979) will live into the

years of Social Security’s predicted demise possibly competing for fewer benefits or seeing benefits

restricted or rationed. The Baby Boomers (b. 1946 to 1964-Mark’s generation) are already collecting

benefits and the system is apparently stable enough to support most, if not all, of them into retirement.

The Silent Generation (b. 1925 to 1945) who brought this great safety net to us will sadly be gone.

Intergenerational conflict will be an unwelcome, yet possible result. The Associated Press states

that “the average American who retires now will receive less Social Security money than what he

contributed over a working life.”[38]

This statement in conjunction with the CBO’s estimate, each year the

program is paying less and less to benefit recipients.

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A study published by NPR News on how the Poor, the Middle, and the Rich spend their money

helps illustrate the issue clearly. Each class segment spends roughly the same percentage on housing,

clothing and shoes, and food outside the home. The disparities end there and diverge as “poor families

spend a much larger share of their budget on basic necessities such as food at home, utilities, and health

care. Rich families are able to devote a much bigger chunk of their spending to education, and a much,

much bigger share to saving for retirement.”[39]

In short, poorer people are likely to spend larger portions

of their budget on basic necessities such as food at home, utilities (i.e. energy) and health care. More

income also avails more money for retirement and education which are increasingly unavailable to lower

income Americans.

The drought this summer and the possibility of a spike in food prices will provide an even bigger

staggering blow to those with less money. Lack of employment growth, stagnant or waning wages, and

increasing costs of living will mean that fewer people are able to save adequate sums for retirement,

placing even more dependence on Social Security.

“Today, we have over 100 million Americans receiving some form of federal welfare” states the

Weekly Standard. [40]

This equates to approximately 1 in 3 people now receiving some form of financial

payment from the federal government. This is an extreme example of financial insecurity. People

support their governments (or at least they should, barring the use of debt over the last 50 years). It is

economically impossible for governments to support their populations. One in three is a dangerously

high number of citizens for any government to support.

Government support of individuals is a problem at the state level as much as at the federal level.

State governments are overwhelmed, particularly by the welfare system. A Government Accountability

Office (GAO) reports that one-third of states are turning to charities to help fund welfare. [41]

The problem

is ballooning so big, that state governments are having a hard time delivering welfare benefits to those in

even the greatest need. With so many Americans financially insecure, the supply of basic needs and

services is a growing humanitarian concern.

Dangerous dichotomies are breeding dangerous situations in America. On one hand, we have

growing numbers of Americans becoming increasingly vulnerable who are at risk of financial demise,

inadequate sustenance, and failing physical health. This is a multi-cultural, multi-racial, multi-ethnic

situation affecting all generations and putting future generations at even greater risk. On the other hand,

millions of Americans are paying lower tax rates, with personal fortunes, and who exercise much control

over political and economic systems. Where these situations have existed in the past and in other

countries, civil unrest, riots, coups, and wars have erupted.

Political Trends

As mentioned in the beginning of this article, the historic political tendencies during a crisis of

this magnitude have been toward disinformation and control. Current events and trends demonstrate that

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these tactics are already being used in some countries and indicate that governments are preparing to use

the same tactics and strategies if, or when, matters get worse.

It’s all about the money —and that’s a problem. The economic and social trends currently in

motion are driven by money, or the lack of money. Since there are no workable economic or social

solutions in the works, they are likely to reach resolution in the political arena. As noted above, the

financial health of individual Americans is at risk. This kind of personal financial stress is counter to the

American culture. The need and desire to have a job, a business, or other career resource has all but been

eliminated with increased outsourcing and rising unemployment. The American Dream of owning a

home has been dashed for millions with the crises in housing and finance.

The Great Depression is now so far in the past that all most Americans have known until recently

is prosperity. Americans no longer have connections to the social and economic conditions in 19th

Century Europe that brought our ancestors to this country. Few remember the days of rationing and

sacrifice during World War II that brought us together as a nation more than any event since 1776. We

have grown accustomed to prosperity and opportunity, and we expect our government to ensure that they

continue. The hopes of voters and the promises of candidates for increased opportunity and prosperity

have fueled every presidential election for the last 50 years.

Many Americans would say that national political leaders are out of touch with the American

public. On the other hand, there is evidence that government leaders do recognize the plight of middle

and poorer class Americans. They realize that the current economic situation is damaging lifestyles and

devastating dreams, and so leaders are preparing for the worst —not creating solutions to the problems.

The evidence of this preparation is in recent purchasing activities of certain government agencies which

we will discuss shortly.

Human reaction to national economic struggles has already been demonstrated and documented

across the Middle East, throughout Europe, and even in the streets of American cities with both the Tea

Party and Occupy movements. According to Richard Palmer, who wrote in the September 2012 issue of

The Philadelphia Trumpet: “The 1930’s are coming back”.

At the Center, we define politics as the process of deciding who gets how much of what, where,

and when. Throughout America, we are seeing a growing and polarizing dichotomy when it comes to the

resources of American life including health care, income, education, housing, taxes, and employment.

“Republicans have been waging class warfare for years -- and winning without working up a sweat. For

proof, just take a look at the welfare program for the wealthy that is the U.S. tax code. Such victories

aside, Republicans have always claimed that it’s Democrats who play the class card. Whisper that the top

1 percent pays the lowest tax rate in 80 years and you’re trafficking in class resentment. Help the working

and middle classes get health care and you’re a socialist.”[42]

The point is, politics is becoming a

distraction away from real issues that matter, and politicians are using divisive rhetoric to garner votes. �

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The American political landscape is being shaped more and more by money. Over recent decades

we have continually seen unprecedented amounts of money being waged for the mudslinging we

flippantly call elections. The landmark Citizens United vs. The Federal Elections Commissions Supreme

Court case has ensured that elections will continue “to be bought” for the foreseeable future.

Trends indicate that American politics is becoming less of a decision-making process and more a

purchasing decision and a case of enforcement. The burgeoning coffers of political candidates are well

known and not necessary to this discussion. However, there are other interesting events, situations, and

trends that we would like to bring forth.

Taxation

First of all, there is the matter of collecting U.S. taxes over which both major political parties

fight and which provide little in the way of improving the American quality of life. A new proposal will

give the government even more control over the tax payment process. The Internal Revenue Service is

now recommending that all preparers of income tax returns register with the federal tax agency. [43]

The

IRS also sets out procedures and requirements for continuing education, competency testing, and

compliance among other requirements essentially regulating what used to be a completely free enterprise

industry. At first glance, it appears to be a sensible step toward consumer protection. On the other hand,

this makes the income tax return element of the tax system an extension of the IRS’s collection process.

This is no small undertaking. By all estimates, there are more tax preparers, including accountants,

lawyers, and other tax professionals (approximately 1.2 million) than there are public safety workers

surpassing the combined number of police officers and firefighters in the nation by approximately

100,000.[44]

Government Preparation

In addition, there are at least three government agencies preparing to counter expected civil unrest

that could arise before, during, or after the 2012 presidential elections. These include the Department of

Homeland Security, the Federal Aviation Agency, and the U.S. Army

The DHS, whose mission is to “ensure a homeland that is safe, secure, and resilient against

terrorism and other hazards” has been purchasing large quantities, hundreds of millions of rounds, of

lethal ammunition. The primary purpose of the DHS is to work across government and the private sector

to prepare, respond, and recover from large-scale emergencies. Its responsibilities include Customs and

Border Protection, Federal Emergency Management Agency, Immigration and Customs Enforcement,

Transportation Security Administration, U.S. Citizenship and Immigration Services, U.S. Coast Guard,

U.S. Secret Service, and the Office of Inspector General. A rash of solicitations by federal agencies for

hollow point bullets in recent months has stoked fears that the government is preparing for civil unrest

caused by a financial collapse on a scale similar to or even larger than scenes already witnessed in Europe

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over the last two years. The National Oceanic and Atmospheric Administration (NOAA) had put out a

contract for 46,000 rounds of hollow point bullets along with 500 paper targets. [45]

The ammunition being purchased is .357 Sig 125 grain bonded jacketed and 40 caliber hollow

point pistol ammunition. An online ammunition retailer describes the bullets as suitable “for peak

performance rivaling and sometimes surpassing hand loads in many guns,” noting that the ammo is “a

great personal defense bullet.”[46]

Hollow point bullets are designed to expand as they enter the body,

causing maximum damage by tearing apart internal organs. The lethal munitions purchase began in

March of 2012 year, when DHS gave the defense contractor ATK a deal to provide 450 million .40

caliber hollow-point ammunition over a five year period. That’s a lot of lethal firepower to unleash on

American soil.

The government has, apparently learned some lessons from history. The 1968 Democratic

National Convention was held in Chicago. The convention was held during a year of violence, political

turbulence, and civil unrest, particularly riots in more than 100 U.S. cities, following the assassinations of

Martin Luther King, Jr. and Senator Robert F. Kennedy. King and Kennedy represented hope for a wide

spectrum of American citizens. The Chicago proceedings became notorious for the large number of

demonstrators and the use of force by the Chicago police. Rioting took place between demonstrators and

the Chicago Police Department, who were assisted by the Illinois National Guard. The disturbances were

well publicized by the mass media, with some journalists and reporters being caught up in the violence.

According to CNN: “Outside the official convention proceedings, anti-war demonstrators clashed

with 11,900 Chicago police, 7500 Army troops, 7500 Illinois National Guardsmen and 1000 Secret

Service agents over 5 days. When the convention was finally over, the Chicago police reported 589

arrests had been made and 119 police and 100 protesters were injured. [47]

This paragraph is worth re-

reading to get the full impact of the numbers. Also note that there were only two main issues at the

demonstration, civil rights and the Vietnam War. Today, we still have civil rights and war issues

accompanied by issues of corruption, terrorism, finance, health, employment, and class differences. We

also have the power of the Internet to mobilize protestors and record events just as has been done in the

Middle East.

The 2012 presidential elections and the national conventions of both parties are being preceded

by unrest over economic conditions resulting in more unemployed Americans than any time since the

Great Depression. Modern communications, and especially the Internet, are mobilizing unprecedented

numbers of Americans concerned about wealth and income disparities, access to and affordability of

higher education, health care, the government’s foreign policy, corruption among public office holders,

ineffective economic stimulus efforts, bailouts of multi-million dollar corporations, and fraud in the

financial sector.

Twenty years ago, all this may have been dismissed as a “tempest in a teapot” —a small event

that has been exaggerated out of proportion. Modern communications, broader access to information, and

higher educational levels have produced quite the opposite situation. Instead of being exaggerated out of

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proportion, each of the top disconcerting issues plaguing the American public is being further justified,

more specifically detailed, and witnessed in real time by millions. And the public is developing an

increasing understanding of it all.

So how does this further define 2012? The Department of Homeland Security has ordered

masses of riot gear equipment to prepare for potential significant domestic riots at the Republican

National Convention, Democratic National Convention and next year’s presidential inauguration. The

total amount ordered is about 150 sets of riot helmets, thigh and groin protectors, hard-shell shin guards

and other riot gear. The riot gear will be worn by Federal Protective Service agents who are tasked with

protecting property, grounds and buildings owned by the federal government. On top of that, the DHS

has recently purchased a number of bullet-proof checkpoint booths and hired hundreds of new security

guards to protect government buildings. Local law enforcement and the National Guard are already

equipped with riot gear as well as with major crowd control equipment such as water cannons and tear

gas. [48]

Even if no lethal munitions are used, there are many ways in which protestors under these

circumstances can be injured, even fatally. This is hardly the democracy envisioned and created by the

Founding Fathers. Our government and our whole political system have been hijacked, kidnapped,

cannibalized, and murdered.

Most Americans know about the Guantanamo Bay Detention Camp where prisoners can be held

with no access to constitutional legal rights. Many who know their World War II history know of the

Japanese “relocation camps” —essentially prison/work camps— where more than 100,000 Japanese

Americans, German Americans, Italian Americans, Latin Americans, and others were forcibly taken and

held from 1941 to 1944. New, similar facilities are on the horizon.

A leaked U.S. Army document prepared for the Department of Defense contains shocking plans

and procedures for “political activists” to be pacified by “PSYOP (psychological operations) officers”

into developing an “appreciation of U.S. policies” while detained in prison camps inside the United

States. [49]

The manual outlines policies for processing detainees into internment camps both globally and

inside the United States. The document makes it clear that the policies apply “within U.S. territory” and

involve, “DOD support to U.S. civil authorities for domestic emergencies, and for designated law

enforcement and other activities,” including “man-made disasters, accidents, terrorist attacks and

incidents in the U.S. and its territories.”

The manual states, “These operations may be performed as domestic civil support operations,”

and adds that “The authority to approve resettlement operations within U.S. territories,” would require a

“special exception” to The Posse Comitatus Act, which can be obtained via “the President invoking his

executive authority.” Aside from enemy combatants and other classifications of detainees, the manual

includes the designation of “civilian internees,” in other words citizens who are detained for, “security

reasons, for protection, or because he or she committed an offense against the detaining power.” The re-

education process is the responsibility of the “Psychological Operations Officer,” whose job it is to design

“PSYOP products that are designed to pacify and acclimate detainees … to accept U.S. I/R facility

authority and regulations.”

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The Drone Wars

New efforts are also being taken so the government can keep tabs on Americans —suspicious and

otherwise. The Federal Aviation Agency (FAA) is clearing the path for the use of drone aircraft in

American skies for both security and surveillance and has already authorized their use by 106 federal,

state, and local “entities”. The same actions are being taken in Great Britain as well.

Of course, issues of privacy have been raised. The collection and use of surveillance data has

been cited as the most important. “Members of Congress, civil liberties organizations and civilians have

expressed concerns that the potential increased use of Unmanned Aerial Surveillance, UAS, in the

national airspace by law enforcement or for commercial purposes has potential privacy implications,” said

Gerald Dillingham of the General Accounting Office “Currently, no federal agency has specific statutory

responsibility to regulate privacy matters relating to UAS. Stakeholders have told us that by developing

guidelines for the appropriate use of UAS ahead of widespread proliferation could in fact preclude abuses

of the technology and negative public perceptions of the potential uses that are planned for these

aircraft.”[50]

This simply means that no one is responsible for privacy and, that by forging ahead with no

concern for privacy, the technology and its use can proceed unencumbered, unregulated, and

unsupervised.

If anything in the U.S. has gotten better since September 11, 2001, it is the government’s ability

to gather intelligence and develop action plans based on what agencies have learned. Federal agencies

preparing for the worst is one thing. Their being right is another thing. Americans getting hurt —or even

killed— as a result of exercising their constitution rights is yet another. There is no known historical

precedent of government agencies preparing to “square-off” with the American public. Even during the

tumultuous Civil Rights era, the government, and primarily the Federal Bureau of Investigation, focused

on only a few individuals and a relative few locations. The preparations and precautions of 2012 are

being developed on a national scale.

If and when this anticipated civil unrest occurs are interesting questions. If the unrest is less than

anticipated, we might assume that life will go on as it has for the last few decades. If the civil unrest is

equal to or more than anticipated, it may evolve as the most significant event in American history.

Nothing will go unnoticed or unreported. The news media is a completely different and more

technologically advanced industry than it was in the 1960’s when it helped shape public opinion about

Civil Rights and the protests at the DNC convention in Chicago. As we have seen all across the world

with the Internet and social media, all the gory details will be revealed through the magic of cell phones

and the World Wide Web.

If the government wants to stifle any dissenters, shutting down the usage of cell phones and the

Internet would be necessary to cut off the lines of communications in an attempt to prevent the eruption of

a riot. This occurred in the summer of 2011 in San Francisco, when transit officials shutdown the

cellphone wireless network on protestors who organized a demonstration because “they were afraid

organizers of protests would endanger riders as people gathered on platforms.”[51]

If this were to occur, it

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is likely that protestors would resort to physical communication and other means to sustain a long-lasting

resistance. We are completely neutral on this topic, but if electronic communication is hampered, the

impacts will be only temporary.

Should the unrest be significant and before the elections, it will, at a minimum, have enormous

impacts on the 2012 elections. Not only are we electing a president, but also 33 senators and 435

members of the House of Representatives. Governors in 11 states and two territories are also up for re-

election. This may actually be the preferred alternative because American voters will have an opportunity

to express themselves at the polls hoping that their votes will make a difference.

Should the unrest be contained until the presidential inauguration, we may see our society

devolve into a third world mindset. A large portion of Americans will focus their anger, resentment, and

disenfranchisement on the president, the administration, and the federal government in general. What

would this look like? It would look like recent events in Syria, Libya, and Egypt.

Do you think you’ve heard it all? Try this:

The Social Security Administration is also purchasing lethal ammunition. The ammunition is to

be shipped to 41 locations within 60 days of purchase. These locations include the Social Security

headquarters in Baltimore, Maryland as well as major cities across the country such as Los Angeles,

Detroit, Oklahoma City, Dallas, Houston, Atlanta, Denver, Philadelphia, Pittsburgh and Seattle.

Speculation is that the Social Security Administration is purchasing the bullets as part of preparations for

civil unrest. Yes, lethal ammunitions to protect workers from angry seniors. Social security is estimated

to keep around 40 percent of senior citizens out of poverty and contributes a safety net for widows,

widowers, and children of deceased. Should the tap run dry in the aftermath of an economic collapse,

which the Federal Reserve has already told top banks to prepare for, domestic disorder could ensue if

people are refused their benefits.[52]

The United Nations has tried fervently to pass an international Small Arms Treaty and a review

Conference is scheduled between August 27th and September 7th.

[53] With the growing division on the

issue of gun control between the American populace, and the unwillingness of politicians to address the

issue in Congress, in fear of losing their jobs, we foresee this issue being regulated at the international

level. The reason the right to bear arms is likely to be decided at the international level is that this option

allows American politicians to wipe clean all responsibility related to gun control, in spite of the

Constitutions, and defer all political accountability. Since politics is a primordial influencer, we see the

Obama administration signing this after the November election.

Political Partisanship

On August 18, Dan Balz and Jon Cohen published this in The Washington Post:

“The study conducted by The Washington Post and the Kaiser Family Foundation,

underscores that the gulf between Republicans and Democrats has never been wider. Partisan

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polarization now presents a potentially insurmountable barrier to governing for whoever wins the

White House in November.

Like families, the parties coalesce to repel threats from outside — typified this summer

by the scorched-earth tactics of the campaigns of President Obama and Republican Mitt Romney.

But both parties also are fractious coalitions of people who may converge on some core issues but

whose worldviews, economic situations, and attitudes on policy are far from uniform.

The Post-Kaiser survey examined the breadth and diversity of the electorate to explore

the changing shape of a Republican coalition that has become more Southern in its base and more

conservative in its views, and yet encompasses groups with significant disagreements over

whether confrontation or cooperation with the Democrats is the preferred path for governing.

The study looks, too, at a Democratic Party that, while women make up a clear majority

of supporters and grass-roots activists have a large voice, is a coalition of groups with divergent

views on government regulation of the economy, the size of government, the role of religion in

public life and such hot-button social issues as abortion and same-sex marriage.”[54]

Political extremities are seldom, if ever, places where cooperation and collaboration exist. As

voters and non-voters continue to experience declines in their quality of life and dismemberment of their

plans for the future, they will look for answers and solutions. However, in an environment where political

collaboration is less and less likely, the seeking will change to anger, blame, hopelessness, and impending

civil unrest … or worse. We don’t see this conflict and political partisanship simmering down regardless

of who wins this November’s election. We don’t see either Romney or Obama as the solution to the

issues. These two parties are so far apart on issues, we could sail a Seawise Giant down the middle

(world’s biggest boat).

Rounding Up the Veterans

Earlier in the month of August, a 26 year old former U.S. Marine Brandon Raub was detained for

his Facebook post. According to the Blaze, the attorney for Mr. Raub stated that psychiatrists threatened

to brainwash his client with medication in a Veterans Hospital. [55][56]

Mr. Raub has expressed political

dissent on the truth of 9-11 and is harboring questionable beliefs on reports of the event. Regardless, in

America we have the First Amendment right to free speech, as long as it’s non-violent, and in his case he

was nonviolent. The arresting of political dissenters reminds us of the Seditions Act of 1918 which

punished and imprisoned those who expressed "disloyal, profane, scurrilous, or abusive language"

towards the U.S. government. As this goes on in the U.S., Americans and others are protesting the

imprisonment of Russian musicians “Pussy Riot” for essentially the same offense, exercising free speech.

The report states that there are “about 20,000 civil commitments alone in Virginia each year” but in this

particular case, the federal government had no “legal grounds to hold him” and the judge released him

from the psychiatric facility.

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The media has recently trended toward casing U.S. soldiers in a negative light. In the last few

days, the media has been reporting on shootings involving former military soldiers. The BBC reported

that “anarchist U.S. soldiers plotted government overthrow and planned to assassinate President Obama. [57]

A couple days later, Reuters reported a story were three people were shot and killed at a New Jersey

grocery store by a “former Marine and a disgruntled worker.”[58]

Our nation’s military veterans have not fared so poorly since the Vietnam War. Many returning

from that jungle conflict were accused of being murders and baby killers. Many were accosted and spit

on as they returned from duty. But the threat they imposed had been left on the other side of the planet.

A perception is being created that the current generation of war veterans are bringing the threats home

with them.

In 2009, Secretary of Homeland Security, Janet Napolitano and the FBI have both listed returning

Iraq and Afghanistan veterans as possible terrorist threats to the United States.[59][60]

Now remember these

reports were back in 2009, and today, we are seeing the detainment of returning war veterans such as

Brandon Raub. With the government focusing on returning war veterans and recent news on veterans

killing innocent victims, we posit that our veterans will continue to be monitored for criminal and

political dangers, but that the conditions that have created unstable realities and perceptions of veterans

will continue in the military.

Homeland Security Training

Over the last few months, we’ve been tracing the movements of Homeland Security. In

Boston, DHS released “bacteria in the MBTA tunnels to test the safety of the subway” to see if their

installed sensors can detect biological agents. [61]

We find this a little odd. Why would DHS release REAL

bacteria in a public subway, when it could conduct the same sensory detections in a secure and

environmentally controlled laboratory? The bacteria they are releasing are called B-subtilis, and DHS

states the bacteria “has been rigorously tested and has no adverse health effects for low exposure in

healthy people.”[61]

If it’s safe for healthy people, what are the health effects on those who are unhealthy?

And what is low exposure? It surely is not the same for everyone.

The efforts of DHS have expanded into sporting events urging fans to report anything “suspicious

they see.”[62]

This type of program is meant to segregate us from our neighbors and creating a further

divide amongst ourselves. This program is called “See Something, Say Something” campaign which

encourages “people to report suspicious activity in an effort to prevent terrorist attacks.”[63]

A study

published by NPR News which “obtained and evaluated 125 suspicious-activity reports at the Mall of

America. Many of the shoppers were stopped for trivial activities such as taking photographs or losing

their cellphone. And as our Under Suspicion investigation found, it was often easy for ordinary people to

become listed on police and FBI databases of suspicious persons.”[63]

We believe this program is meant to

create distrust amongst our neighbors, friends and family to break the social cohesiveness. This

breakdown creates vulnerability amongst the populace. Our country is in a time when it is most important

that we come together as a nation, as a people with common purpose, to heal our wounds, deal with our

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problems, and cooperate for a better future. Instead, our government is creating an atmosphere of fear

and distrust.

Militarization of our Police Forces

In July, we came across an article reported by the Associated Press that the U.S. Marine Corps

created its first law enforcement battalions to “quickly deploy worldwide to help investigate crimes from

terrorism to drug trafficking and train fledgling security forces in allied nations.”[64]

“The Marine Corps

has had police battalions off and on since World War II but they were primarily focused on providing

security, such as accompanying fuel convoys or guarding generals on visits to dangerous areas.”[64]

The

article goes on and states “Marines have been increasingly taking on the role of street cop along with their

combat duties over the past decade in Iraq and Afghanistan, where they have been in charge of training

both countries' security forces. The war on terror has also taught troops the importance of learning how to

gather intelligence, secure evidence and assist local authorities in building cases to take down criminal

networks.”[64]

Just like the drones, which started out as a military tool in combating the war on terror, these

tactics are increasingly being integrated into local U.S. law enforcement tools. It does not take any stretch

of imagination to see local law enforcement is being transformed into para-military forces domestically.

Law enforcement agencies are already para-military organizations with trained members, lethal

equipment, established protocols, and ready to be assimilated into a new command.

Why would we as Americans accept the federal militarization of our local police departments?

The war on terror has already transformed our police agencies into a domestic military brigade. Much of

their training is now dictated by the DHS and much of their budgets are derived from federal homeland

security grants.

We’ve detected several incidents where police have used questionable force against civilians in

routine traffic stops. Recently, two LAPD officers were caught on video body slamming a nurse during a

traffic stop for a cellphone use violation, and “after placing her in the cruiser's backseat, the two appear to

share a celebratory fist-pound.” [65]

This same police force had five police officers accused of killing a

woman “who stopped breathing during a struggle that included an officer stomping on her genital area

and the use of additional force by others to take her into custody.”[66] We could write a whole report on

the militarization of our police force, but for the sake of time, we’ve only included two recent reports.

There is one aspect of this trend that concerns us the most. The subjugating of civil rights is

already being practiced in the U.S. and the effort is led by the federal government. Starting with the

Guantanamo Bay Detention Facility, where who knows what happens on a daily basis to the streets of our

cities and roads of our rural areas where local “law enforcers” deliver on-site justice. On then to

America’s prison system, the largest in the world that houses innocents and non-violent offenders as well

as dangerous felons. Our law enforcement systems are in danger of being conscripted and used against

the same people they are sworn to protect. If and when civil unrest occurs, these police officers are

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certainly going to use warfare tactics on civilians. Even though the American people out man the police

force 300 to 1, the police have all the advantages.

Already at their disposal are drones, loaded with grenades and ammo, to fire upon civilians as

“urban warfare.” These drones as stated previously are “moving from the middle east to Main Street.”[67]

It was Republican Governor Bob McDonnell who “suggested during an interview on Washington radio

station WTOP last month that drones be used by police domestically since they've done such a good job

on foreign battlefields.”[68]

The problem with his statement is domestically we aren’t terrorists who are

firing upon our local police departments. His statement is evident how politicians and possibly law

enforcement view us, their constituents. They see us as domestic threats that need to be controlled and

processed like terrorist. As previously stated, we will soon see drones flying overhead, capturing and

digitizing the individual movements of the masses. In a digitized surveillance world, our every written

and voice message is subject to scrutiny as is our every movement and change of place. George Orwell

wrote this famous line stating “As I write, highly civilized human beings are flying overhead, trying to

kill me.” With our freedoms being constantly hindered as threats to the Republic, we can’t help but

thinking the same thing. We as free men are being persecuted for exercising our freedoms put forth by the

Constitution and Bill of Rights. Before we know it, “civilized human beings will be flying drones

overhead trying to kill us.”

In 2012, we’ve tracked conjunctive training between local police forces and the military. In LA,

the LAPD and military Special Forces were seen conducting “multi-agency tactical exercises in the skies

above downtown LA” and many witnessed “Black Hawk helicopters and four OH-6 choppers – or ‘Little

Birds’” flying over the city. [69]

Local police departments from Denver, Chicago, and Minneapolis flying

Black Hawk helicopters are also conducting urban training exercises. [70][71][72]

These incidents have all

occurred over the last six months, and we don’t doubt many other large city police departments are

conducting the very same exercises. Again, this is the militarization of our police forces. Black Hawk

helicopters are used in wars to transport troops into battlefields and used to perform various military

missions and assaults. The use of this type of war-based technology is yet another clue that governments

and police agencies are preparing to quell civil unrest and take control of the population.

The Scenarios

With all the trends we’ve been studying over the last few months, we believe something of

unprecedented nature and proportion is on the horizon. It’s difficult to predict with absolute certainty, so

we’ve laid out several scenarios that could occur. With mounting evidence, we think there’s a possibly of

a false-flag type event. A false flag, it is a covert operation conducted to deceive the population in a

manner that makes it appear it was executed by other entities. What we mean by this is that the window of

opportunity and the events occurring in the coming months will provide a proper environment for an

event to occur. Usually false flag operations are meant to galvanize support behind a particular action and

to garner popular support against the enemy they framed for the event. Unfortunately, no one ever knows

the truth about a successful false flag operation. Years and decades after the events, some still suspect

that the political assassinations of the 1960’s and the 9/11 attacks were false flags. Instigators,

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government agencies or rogue elements, could also utilize an event not caused by a false flag. A real

traumatic or emotional incident could use the reactions of people and redirect them toward an unjust

blame.

Though we shudder at the idea of using it, we have no better term than “war gaming” to describe

how we have taken trends and information to set up possible scenarios. With the provisions in the Patriot

Act and the National Defense Authorization Act (NDAA) the President could initiate martial law, and

even suspend the presidential election to address these possible crises.

1: Racial Division

The Trayvon Martin incident is a good example of a significant post-civil rights racial issue and

how a single event can mobilize the nation. The murder lead civil rights activists such as Al Sharpton to

take the stage and call attention to racial tensions in America. It also sparked an Internet meme of people

wearing hoodies, and we even saw a Congressman get thrown off the House floor for wearing a hoodie in

protest of the crime. Now his murder did spark outrage and a movement, but not to the level of national

unrest. In January, a shooter from Idaho shot a number of rounds at the White House, and he was later

arrest and accused of trying to assassinate the President. [73]

Earlier in this report, we spoke of a group of

American soldiers who had plans to overthrow the government and assassinate the President.[74]

Any crime or significant event that hosts one race on one side and another race on the other side

is a candidate for sparking racial tensions. As we know from the numbers of hate crimes and hate groups

in the U.S., this tension festers just below the surface of our seemingly content society. At present,

people of color, the minority races, are at greatest risk overall. However racial tension outbursts can

endanger any individual or group of individuals when small groups are involved. Such an event could be

used to rally the American people together, or to create further racial division. Such an event could also

be staged … a false flag.

2: Economic Collapse

In our previous analysis, we cataloged how U.S. regulators warned U.S. banks to prepare for a

financial disaster. These dire warnings were echoed in Europe. We are now beginning to see how this

infectious financial conditions is spreading and trickling down, through states, provinces, communities,

and employers, to the individual level. With so many people unable to weather such a financial crisis, in

terms of savings, debt, and personal wealth, we see economic collapse as the world’s greatest current

danger. We are sorry to steal any thunder from environmentalists, as we share the concern for the

condition of the Earth, but we see economic conditions affecting greater numbers of people and sooner

than wide-spread environmental disasters. An even greater misfortune is that economic collapse is likely

to further impede efforts to stabilize troubling environmental and wildlife trends.

With the debt ceiling debacle coming later this year, possibly around Christmas or weeks before,

and with a bitterly divided Congress, our fiduciary situation will again become a source of major dispute.

Though the U.S. debt ceiling has been raised consistently since Ronald Reagan was president, our ability

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to support the debt, in collusion with the world-wide debt situation, will make raising the debt ceiling and

economically and politically impossibility.

America’s fiscal health is being mirrored all across the globe. Billionaires have pulled their

wealth from stocks and put it into gold reserves. China has withdrawn from the U.S. stock market and is

investing not only in gold, but in the gold industry. There are more red flags surrounding this situation

than there are in Moscow on May Day. With stagnant economic growth worldwide, and central banks

unable to print their way out of this conundrum, we believe inflation, shrinking wealth, higher energy

prices, higher consumer prices, and food shortages are destined to occur. U.S. debt is approaching 16

trillion dollars and many states and municipalities are facing shortfalls. Some are already in bankruptcy.

The question is not if this will happen, but rather when. With our fiscal house in its current state of

disorder, the possibility arises that the IMF or the World Bank will have to come to the rescue … to

bailout the government of the United States of America. This will change life in the U.S. drastically and

forever. No longer will we be the masters of our own financial destiny (admittedly, we have already

botched that) and we will return to being a colony of a foreign power, just as we were up until 1776. Our

economy will be beyond our control and our citizens can expect to live under austerity measures just as

citizens are now in Greece and Spain.

3: Riots in American Cities

This scenario could come weeks before or after the election, or the inauguration. Regardless of

who wins this November’s election, we believe people will riot in protest. The tension is rising in this

year’s election, and the stakes have never been any higher. Employment is at record levels. Wages are

stagnant. Higher education is becoming unaffordable. Families are being foreclosed out of their homes.

Personal credit levels are out of control. Infrastructure is failing. Governments at all levels are cutting

services. Retirement security is threatened for all generations for the foreseeable future and beyond.

Class and racial tensions are running high in the 2012 elections. Religious preferences of the

candidates have come to the forefront as seriously as any time in American history. If there is one

absolutely truthful sentiment being aired in the current political campaign, it is President Obama’s

assertion that “this election is about two fundamentally different approaches to America’s future.”

As we have seen in the past, this scenario could go hand-in-hand with the racial division scenario.

Many political pundits on the left will frame this election as a narrative of race and class. On the other

hand, many on the right fear what will happen if President Obama is reelected. As the campaign

progresses, tensions will continue to elevate, and the rhetoric coming from both sides will provide the

appropriate fuel which could spark a fire of rioting. Here in the state of Kentucky, when the beloved UK

Wildcats won over Louisville, fans took to the streets and lead to scenes of couch burnings, flipping over

cars, and all out mayhem. [75]

The sad thing is this event occurred because people were happy to see their

team win. Political tensions in the U.S. have been escalating for decades, and increasingly over the last

four years. The elections of 2012, in which Americans have already decided they have an unprecedented

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© August 2012 Center for Trends Research and Analysis. All Rights Reserved Page 23

chance to make unprecedented change, are a critical point in history. Will the greatest impacts be felt in

the advent of the elections … or the wake?

4: War

We have never before faced so many issues in our foreign policy. Even managing the alliances of

the two fronts of World War II pale in comparison to the policy and political weight of current events.

We are [allegedly] winding down wars in Iraq and Afghanistan and have pending diplomacy and military

situations in Iran, North Korea, and Syria. Even without formal declarations, everything about the Mid-

East is a world war. Both Russia and China are supplying the Assad regime with weapons, while the U.S.

is arming the rebel forces and Al-Qaeda has infiltrated the rebel forces all with our support. [76]

Egyptian

President Mohammed Morsi is urging the world to back the rebel forces in Syria. [77]

World powers are

jockeying for position in the Middle East, yet nothing is being settled. The world continues to rely on oil

to fuel industrial economies, keep transportation moving, and keep citizens comfortable. Civilizations

need to consume resources has already wrecked ancient civilizations and deforested entire continents …

and with a mere fraction of our current population. Just as the stakes are high in the upcoming

presidential election, the stakes are immeasurable when it comes to the ownership, control, and

distribution of natural resources. The U.S. is deeply entangled in every aspect of the Middle East

situation with absolutely no exit strategy.

Regarding Syria, it is bordering on collapse. If Assad is deposed, there will be a vacuum of

power, providing ample opportunity for the Muslim Brotherhood to gain control of the country. All of

this shuffling presents opportunity for the U.S. to become involved militarily, either as a member of

coalition forces or with troops serving under UN command.

In Egypt, President Morsi took control after Hosni Mubarak was deposed from power. Morsi is a

leading figure in the Muslim Brotherhood. His vocal support of the rebels supports the possibility of

having a member of the Muslim Brotherhood run for election and be become the ruler of Syria.

Another Mid-East threat is Iran. With tensions between Israel and Iran elevating, it’s unclear if

war is probable, or if it will be avoided due to the strategic threat of nuclear weapons. Iran continues to

proliferate nuclear weapons, and Israel is threatening to bomb their nuclear facilities. A first strike by

either nation will likely create a catalyst for all-out war in the region. The U.S. Defense Department has

already expressed concern over the military’s capacity to support our current engagements. The preferred

state of military readiness in recent years has been to have enough resources to meet current demands

with a state-side reserve to meet unexpected calamities. Even with the use of our military reserves,

individual service members have been subject to multiple deployments leading to some of the emotional

problems of active duty and veteran members mentioned earlier.

The U.S. set to hold military exercises with Israel in October and Iran has announced they will

hold a massive air defense drill the same month. [78]

These drills, in such close proximity to each other,

could possibly spark an act of war among the forces. However it is unclear if either country is fully

committing to these drills, or if they may not happen at all. If Iran continues on their nuclear program,

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© August 2012 Center for Trends Research and Analysis. All Rights Reserved Page 24

this could force Israel to follow through on its pledge to attack, and the U.S. would be carried into fight to

support Israel. If war does occur, it would be the ideal opportunity for North Korea to enter the picture.

The two nuclear rogues, North Korea and Iran, could consider this an ideal opportunity to flex their

destructive muscle against the West. Then what? The most likely result would be an escalation bringing

in China and Russia. At this scale, we will have ushered in World War III.

Time Frame

These scenarios are based on long-term trends and events of the past few months. All have an

equal probability of occurring. Tensions are high on all fronts and in all corners of the earth. All that is

needed is an event to spark chaos. Regarding the scenarios presented, we forecast a probable time frame

of late October to the second week of April for some iteration of these possibilities to manifest. There are

four time periods in which we should be particularly aware: 1.) weeks before and after the November 6th

election, 2.) the month of December (the debt ceiling debate), 3.) January 21st (when the President

continues or begins his new term), and 4.) April 15th (tax day). These times are very important because

each surrounds one or more tense political, social, or economic conditions.

Civil unrest or other actions related to these dates and the underlying tensions could cause one, or

even all scenarios to occur. Furthermore, to the spark of any one could create a cascade of civil unrest and

instability setting off the others. The economic scenario could occur at any time, and it’s much harder to

predict than the other three. Central banks and politicians will make every attempt to keep the economic

news as agreeable as possible, delaying the inevitable.

Maybe some good will come of this as well. We see guns being confiscated and dissent being

stifled. In Gary, Indiana, local authorities teamed up with the church to be a place where individuals

brought in their firearms and in exchanged received Wal-Mart gift cards. [79]

They took 129 guns off the

streets with this buyback event. Now just imagine if you were hungry, and your local authorities offered

you food in exchange for your guns? Would you make the trade? Desperate times call for desperate

measures. When people are desperate, they will enact their desperation in all kinds of ways. We may

even see people giving up their rights in exchange for food, water and shelter.

We should all be on the lookout for power plays and power grabs. In the environments that will

ensue as a result of any of our proposed scenarios, two new dichotomies will emerge, the desperate and

the non-scrupulous. Not only will we be in danger of war, bodily injury, hunger, and joblessness, we will

be in danger from one another as governments, communities, businesses, individuals, try to acquire

enough resources for survival. Governments are sweep in to assist the disadvantaged, but will that mean

that individuals will lose a little more control over their own lives.

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© August 2012 Center for Trends Research and Analysis. All Rights Reserved Page 25

Conclusion

In summary, we predict a dire future for food, finances, society, and politics. The probable

negative impacts will be wide-spread and intense. We’ve considered these trends:

Most of the Western world, especially the U.S., has enjoyed decades and generations of relative

peace and prosperity since WWII. The lifestyles of current and future generations are now being

threatened.

Education and communication have opened up the Eastern world to more Western ways of

thinking and Western values. They see enormous opportunities for improving quality of life.

Possible food shortages and rising food prices are being exacerbated by the drought, and will

likely be even worse due to the interdependent global food economy. Insufficient food supplies

will affect production and employment in the food industry. As the food industry slows down,

other industries like transportation and packaging manufacturing will also experience declines.

Though the drought is affecting plant-based foods, meat prices will also increase due to the

enormous amounts of corn and other crops used to feed cattle. Shortages of corn, in particular,

will increase the price of ethanol contributing to higher energy costs, especially for transportation.

Food shortages and high prices could also fuel domestic and international tensions. Within

national borders, the masses of virtually all countries already spend large percentages of their

incomes on food. The inability to find or afford food could pose a dangerous threat to domestic

peace and security. Food shortages may reduce the amounts of food being exported by all nations

and increase the demand for food imports at the same time. Restrictions of food trade will have

economic, social, and political consequences —all potentially negative.

The world’s financial situation is currently playing out on a global/macro level. With the

exception of nations like Greece and Spain, much of the world’s population is being temporarily

shielded from the consequences. Austerity measures have already been implemented in countries

with the worst financial conditions. Governments at all levels and all across the globe are

reducing spending and cutting services. Though some industries are maintaining production and

employment levels, large numbers of people are unemployed in many countries. At best,

governments are trying to maintain the circulation of money. Money circulation provides an

illusion of prosperity but is an ineffective strategy because in all economies, as money circulates,

it also leaks out.

Fraud, insolvency, and corruption are gaining a stranglehold on the financial industry. Large

investors are shifting their funds which could affect global markets.

Crime and violence are on the rise, particularly in the area of hate crimes and deadly shootings

with assault rifles. The U.S. is sharply divided on the issue of gun control. Numbers of hate

groups are rising. The ability to cope with these kinds of crime is stagnant. We see the UN

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© August 2012 Center for Trends Research and Analysis. All Rights Reserved Page 26

stepping in to solve the gun control issue. This will allow politicians to absolve themselves from

any political consequences.

Individuals are experiencing declining financial resources and lessening opportunity.

The ability to remedy the consequences of national debt is virtually non-existent which means

that financial situations, along with their consequences, will get worse before they get better.

The pending demise of Social Security, America’s safety net may place future older generations

in conditions of permanent poverty.

The world political situation is shaping up much as it did in the 1930s culminating in World War

II.

Fear of civil unrest has permeated the U.S. government at top levels. Plans and actions are in

progress to quell unrest with measures never before used in our country.

The American democracy has devolved into a cult and culture of corruption. Elections are being

won by the biggest spender through misinformation and graft. Every issue is being used to garner

political gain.

The social impacts on communities could pit neighbors against neighbors competing for jobs,

food, child-care, health services, and other necessities. As we’ve seen in the past, racial and other

tensions based on differences may escalate even though most Americans vehemently oppose this kind of

thinking. On the International stage, food and energy could become the new weapons of war as exporters

hoard supplies and force importers into submission.

The political fallout could be literally deadly. Starting at the top, mudslinging and other negative

campaign techniques in the presidential election are aimed at further splitting an already polarizing

electorate. The 2012 elections are being shaped due to unprecedented spending by PACs and superPACs

in addition to spending by the campaigns. The objective will be to draw more and more voters from the

middle to the ends of the political spectrum. Americans cling to their constitutional right to keep and bear

arms. At the same time, the government is arming itself against the population.

The government is using local police departments as the countervailing force to combat civil

unrest. We’ve witnessed over the years, the militarization of our police forces, now adopting drone

technology, spying and surveillance techniques, and military force and equipment. U.S. society is being

further divided through the installation of distrust among ourselves and exacerbated by the DHS “see

something suspicious and report it” campaign. This is the same sort of tactic used by Nazis, Fascists,

Stalinists, Saddam Hussein, Moamar Kadafi, and others to purge disloyal citizens. We have veterans

disappearing and placed into psychiatric facilities for their anti-government rhetoric. These actions by the

government will force many to censor themselves, be secluded in thought and mind, and forfeit their first

amendment rights to free speech. Inasmuch as freedom of speech is the most essential element of a

democracy, these actions will have a devastating effect on our country.

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© August 2012 Center for Trends Research and Analysis. All Rights Reserved Page 27

This report is a forecast based on news gathered and assembled from various state, local,

International, and Internet sources. This is classically not rocket science, but it has taken the news, and all

we did to put the pieces together and look at what could happen in the coming months. We hope to inform

as many people as possible to prepare for any event.

So what advice do we offer?

First of all, be a free, open-minded thinker. We know that you will only take action toward

those things in which you believe. Now that we have pointed out some of the major dangers

facing us all, look for your own evidence and how it will affect you, your family, and your

community. Do what we’ve done; look for trends, related incidents, and even seemingly

unrelated incidents that point to danger. Use your own information or intuition to decide how

you will react and prepare.

Secondly, whether or not you ascribe to our forecasts, we urge everyone to make emergency

preparations. This is always a good idea and is a relatively small investment of time and

money. The world is in danger of all kinds of calamities resulting from weather, geologic

upheavals, and a myriad of natural and man-made problems. The best resource we can

suggest is the Department of Homeland Security’s readiness website: www.ready.gov. Here

you will find detailed instructions for preparing your household to cope with unforeseen

disasters. In spite of what we have reported on DHS, they do have an invaluable resource and

all Americans should be aware of and use it.

Third, think about the black market. Should an economic catastrophe develop, the black

market will be the source of most essentials. Think about what you have that you could trade

for food, water, shelter, clothing, medicine, or other of your basic needs. Know what it is,

keep it readily accessible, and if you have to abandon your home, protect it with your life.

Strengthen your 3 F’s: Faith, Family and Food. The DHS guidelines provide suggestions on

keeping in contact, or renewing contact, with loved ones. We would like to add … know

your neighbors, and be sure that your neighbors know you. They could be your lifeline in an

emergency.

Think about the 3 G’s” Guns, Gold and a Getaway strategy. We certainly do not promote

armed conflict, but do recognize the possibility that firearms may be necessary for personal

protection. Regarding gold, it is the asset that has proven to retain its value throughout all

history and all calamities. If you have gold, guard it, take it with you, and use it wisely.

Your Getaway strategy may be as a simple as how to get out of your house or more

complicated such as how to avoid danger during a prolonged, dangerous event. Make plans

and forge sensible partnerships with others.

Lastly, we would love to be wrong. But someone will have to prove it to us.

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© August 2012 Center for Trends Research and Analysis. All Rights Reserved Page 28

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© August 2012 Center for Trends Research and Analysis. All Rights Reserved Page 29

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© August 2012 Center for Trends Research and Analysis. All Rights Reserved Page 30

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