As the Fantasy Dies: “Panic Will Ensue”

The US government may have funded studies and propaganda material which says that people will not panic, loot or go hungry in the midst of a crisis, but the fact of the matter is that history has shown otherwise.

Image: Northern Rock bank run.

It’s often the case that, despite countless warnings from those considered to be fringe lunatics, the vast majority of the populace is blindsided by horrific, paradigm-altering events. The signs are almost always there, but people simply refuse to believe it can happen to them. ”It” always happens somewhere else, and we get to watch it play out on television from the comfort of our living rooms.

But, as financial guru and strategic investor Bill Fleckenstein points out in the following highly insightful interview with King World News, America’s fantasy of unlimited borrowing, consumption and confidence will soon be revealed for the sham that it really is. And when the masses realize what has happened – that the government and Federal reserve are trapped and the “great unwind” finally begins – it will lead to nothing short of widespread panic on a level never before seen.

And this time, it’ll be right outside of our front doors.

Right now, people continue to believe that the same idiots that created all of these problems, namely the central banks, are going to somehow get us out of it with the exact same policies that got us into it, only at a much higher (aggressive) level of pursuing those policies.

We’ve had so much artificial stimulus, and we’ve misallocated so much capital.  And over the couple of decades we’ve been doing this we’ve kind of broken the economy and the financial system.  So, I don’t think you can worry about what’s on the other side.  We haven’t even gotten people to understand the charade that we have.

What the masses have done over and over again is to believe one more time that it’s all going to be OK … We are in a unique moment in history.  The whole world is printing confetti, and (yet) people seem to think that’s going to work out fine.

…

The longer you keep pursuing insane policies, the more you pile (them) on top of each other, the worse it gets … So, when the Fed can’t print money and we have to deal with this, it’s going to be brutal.

…

The fact of the matter is Americans, in the aggregate, don’t see any reason to own metal.  They believe in the lunatics at the Fed, and the rest of the Western world is that way (as well).  Obviously Asia doesn’t quite see it that way.  But it’s understandable why the average American doesn’t buy gold — If they believe in a fantasy, why would they need it?

As the fantasy dies, then they will understand the need to own gold.

Via King World News: Full Interview

As an investment adviser and strategist, Fleckenstein obviously focuses his dialogue on the financial and economic, and in this case the asset that would protect his investors from the disaster that is coming. This is not to say, however, that he is solely recommending gold as the only crisis-proof investment.

Read between the lines and if you understand the need to own gold in this environment it means you also understand why precious metals will soar in value during a crisis.

Likewise, you would no doubt understand that should gold and silver skyrocket in price, so too will other essential assets.

When the US dollar is crushed by our foreign creditors and our government can no longer support the 100 million Americans dependent on electronic government benefits to put food on the table or keep a roof over their heads, it is then that the whole system as we have come to know it goes into meltdown, complete with panic, looting, and emergency intervention under the banner of martial law.

Gold and silver are just one of numerous asset classes you should stockpile in your preparedness portfolio. A well developed crisis plan should also include other key investments such as long-term food storage, home defense tools, arable land and barterable trade skills.

As those around you come to the realization that their world has been built on pillars of fantasy, commerce comes to a standstill and stability turns to pandemonium, those with the foresight to have insulated themselves from the worst will have, at the very least, a fighting chance.

Prepare for panic. It’s coming.

20 Comments on "As the Fantasy Dies: “Panic Will Ensue”"

bobinget on Mon, 16th Sep 2013 2:53 pm 



Often, more often then we would like to remember
media and their editorial staff get slapped up-side the face by a collection of distasteful facts.

Sunday’s news that former Treasury Sec Summers was dropping out of the ‘race’ for Fed Chair caused global markets to rebound. Investors who once championed
‘austerity’ and Sec Larry saw the kind of unproductive investments championed by the authors of this “Panic”
article

No nation buys more gold (and silver) then India.
A lotta good this has done Indians. Faced with back to back Climate Change crop failures all the world’s gold
won’t feed India’s billion poor people. Well, not exactly.
Indian women have been forced to sell that gold to buy onions and imported grains. As any child should be taught, Massive selling brings down prices.

I realize most readers here (obviously, PO editors)
share the opinions expressed above. I do not.

If you have any loose cash, buying gold may be in your own selfish interest. Before you do, think of onions.

My advice, it’s always great to listen to internet Fools
like myself, invest in your community, build a greenhouse, insulate and patch cracks in your home.
Educate your kids. Then, no matter what happens, stock market up or down, gold at $3,000 or $950.
you will be safer.

rollin on Mon, 16th Sep 2013 4:13 pm 



Chicken Little was more convincing.

CAM on Mon, 16th Sep 2013 5:05 pm 



When the “Great Unwind” comes, gold, silver etc. will be useless. The markets will collapse, industry will come to a standstill. There will be no jobs, no government, no social security. Everyone will be in search of their next meal. Better to have food and fuel on hand, and if you do, you won’t sell any of it for any amount of gold!!

actioncjackson on Mon, 16th Sep 2013 5:28 pm 



I tried having a conversation with one of my good friends of many years regarding how our current way of life is made possible by oil, and that oil is non-renewable. He is very bright and I thought that he would have heard of peak oil before. He said something to this effect, “They’ll think of a replacement. The government probably already has one and is waiting to make full profits on oil before they introduce it. Like the electric vehicle technology being bought up and concealed.” It’s crushing when you can’t talk to your family and friends about such an important issue. I don’t try to convince them or really even mention it, because if I do, it’s answers like this I get, which is fine everyone is entitled to an opinion. They have their own world up in their heads like so many others… so guess I’ll just continue slaving until I die or the collapse comes, either way I don’t think I care anymore, just make this shit stop.

Stilgar on Mon, 16th Sep 2013 7:37 pm 



It’s amazing how many sources I’ve read recently about the coming demise of our economy, from Kunstler, Heinberg, George Mobus, Tom Whipple, Stoneleigh (Nicole Foss), Gail Tvorborg, Zero Hedge website, Oil Drum, the article above here on Peak Oil and so many more that it seems eminent, or at least not far off.

Would full on panic ensue tomorrow if it was suddenly announced that all QE will taper to zero by year’s end and the budget will always be balanced starting in 2014? “Oh no, you mean live within our means with oil over $106 a barrel?!”

For now we all have a little more time to get our ducks in a row. Seems like it takes so much though to keep up with current expenses that paying down debt, getting solar, a greenhouse, food storage etc. always seems to be on the wish list. Got to run faster than the red queen to get some of those other things. Hurry, run!!!

TIRBS on Mon, 16th Sep 2013 8:30 pm 



I stopped reading this blog when it became blatantly apparent that the editors are willing to muss with facts and hype the stories they report on for the purposes of revving up their readers. I was able to overlook all that and enjoy the perspective until an article was written that asked leading specious questions that implied connections that were not based in reality. The questions asked were so bad and the implied connections so tenuous that I was compelled to add a comment for the first time. I wrote my comment in the same vein as the article and eagerly awaited it’s posting and subsequent debate. Unfortunately, the owner’s of the blog exercised their right to censor. I saw comments go up after mine was submitted and continue to go up over a week so I know they had an opportunity to read it. I thought in my humble opinion that the comment was well written and there was no reason to censor it – it was simply excluded on the basis that it didn’t support the blog author’s perspective. I also pointed out that each of the questions contained links to facts that we’re indeed issues in the American economic spectrum, however the article asked the questions in such a way as to evince a systemic economic issue instead of an isolated economic anomaly.

I enjoyed the blog in the full knowledge that the articles were designed to evoke a fear reaction in it’s readers. The arguments are sometimes will constructed and if you want to believe them it’s easy enough to cease all higher brain function and go along for the ride. It’s scary that this is being considered the counterpoint to the mainstream news or even simply just news. These are carefully constructed contrarian opinions that are filtered through a single worldview that strive to fear monger instead of debate and are motivated by a desire to sell more and more survivalist equipment. It’s frightening to me that the kind of uni-directional free speech as exercised on blogs like these can be disguised as intelligent discourse and that people allow themselves to be manipulated into action by people such as these.

pinger on Mon, 16th Sep 2013 8:39 pm 



actioncjackson I totally agree with you. I am 20 years old. I tried to talk to my parents and grandparents on the issue ,i even showed them data to back my viewpoint. I got my grandmother to read Jared Diamond’s the Collapse.But they don’t get anything ,they always blame the politicians and the communists (i live in a former communist state). And when i tell them that they and the vast majority of people are idiots and stupid ,they will start telling me that i should see a psychologist and that they have a tertiary education and that they can’t be stupid.They tell me they have experience ,but i said the universe is 13.8 billion years old. But they don’t listen ,they don’t take me serious. Only one person i know could understand this. Very sad.

mike on Mon, 16th Sep 2013 9:59 pm 



Action Jackson, just remember that “they’ll think of something” is the lords prayer of the progress myth/cult. You can pretty much stop bothering trying to convince anyone who responds with that comment as they are so deeply inside the myth/cult . The Green Wizardry system of learning as many post industrial skills as you can so if the system does go down you become effectively the wise man of the community is a much better use of time and energy. It also has the upside that if “they” really do think of something at least you’ve learned some new skills and not wasted your time.

J-Gav on Mon, 16th Sep 2013 10:47 pm 



TIRBS – This is a website, not a blog. Wake up, sober up, deal with whatever it is you’re missing before blundering in like an idiot. People here often disagree with site content and feel free to say so. Why don’t you do the same instead of blathering criticisms disguised as meaningless generalities? The above article for example, does have weak points – you can’t eat gold or silver! And though it may be correct to point out the fragility of the system, it’s hardly worthwhile to invite people to panic.
If you’re unable to make more content-related commentary, then it would seem obvious you’re nothing but a sad little troll.

IanC on Tue, 17th Sep 2013 12:47 am 



Horsefeathers!

You can’t eat gold or silver! Invest your money in goats, seed potatoes, hand tools, and how-to books. Land is the new gold.

Cloud9 on Tue, 17th Sep 2013 1:07 am 



In a total collapse, gold and silver would count for little. The basic threes will start to sort things out in short order. Three minutes without air, three days without water and three weeks without out food will go a long way towards thinning the population. In a total collapse, the population will drop below the preindustrial mean. Then things will begin to rebound. In the post-apocalyptic farmer’s market would you rather swap your surplus cabbage for a frn or silver eagle.

actioncjackson on Tue, 17th Sep 2013 1:13 am 



You missed one between air and water… It’s three hours without core thermal regulation.

GregT on Tue, 17th Sep 2013 2:47 pm 



Cloud9 has hit the nail on the head. IF there is a post-apocalyptic farmer’s market, eventually there will be surpluses that will require some sort of ‘currency’ for trade. Will it be gold or silver? There are numerous wealthy individuals, banks, and sovereign nations that seem to believe so, and it definitely will not be the same paper that caused the collapse to begin with.

For pinger, actioncjackson, et al, a short video on 911 and cognitive dissonance might help in understanding human psychology. There are also a few pointers on how to converse with those that sadly, have their heads so firmly buried in the sand.

http://www.youtube.com/watch?v=gpz85MHdBD8

GregT on Tue, 17th Sep 2013 3:33 pm 



“My advice, it’s always great to listen to internet Fools like myself, invest in your community, build a greenhouse, insulate and patch cracks in your home.
Educate your kids. Then, no matter what happens, stock market up or down, gold at $3,000 or $950.
you will be safer.”

Good advice, and if I might add, move away from large population centres, and learn a trade or a skill set, that will be needed within your community.

Pezza on Tue, 17th Sep 2013 7:18 pm 



I think the issue of worthless gold and silver is only valid in a sudden collapse, ie if there were a worldwide famine, or a sudden loss of 50 – 75% of the world oil supply. A large shock in the logistic supply capabilities of the major countries.
Peak Oil etc will deliver more of a gradual slide, first into economic oblivion and then into some sort of slow motion negative population growth over several decades.
It is extraordinarily difficult to predict what peak oil will force on globalised society, but it is a range of options from Star Trekian type future with fusion (admittedly very low probability) at one end of the scale and a small scale hunter gatherer existence for a vastly reduced population at the other end of the scale. The time line and outcome are ranges with their own probabilities and dependent on certain events such as war and climate.

GregT on Tue, 17th Sep 2013 7:25 pm 



I think that the scale is more than likely somewhere between small scale, local sustainable communities, and global mass extinction, with the hunter/ gatherer lifestyle a distinct possibility, in the middle.

Pezza on Tue, 17th Sep 2013 7:44 pm 



GregT,
Provided no large scale wars or famines late in the piece, I see a slow economic decline that gathers speed, merging into a population and technology decline that adversely affects the third world more than it does the first world. We will all downsize in population and technology, but I think the first world will see less of the grimmer features. If there is a large scale war or sudden climate change, then all bets are off.

GregT on Tue, 17th Sep 2013 8:16 pm 



Pezza,

If you really think about it, many in the third world already live in abject poverty, and have little to no access to electricity, oil and gas, or potable water.

Their lives will not be affected nearly as much, as those in the first world. It is us, that will be heading for an existence, much like theirs.

It would appear that catastrophic, runaway climate change may already be too late to stop. If we are lucky, and somehow Arctic ice loss reverses itself, and we stop adding more greenhouse gasses into the environment now, we might avoid a mass extinction event. If we keep burning fossil fuels, as it appears very likely that we will, at best we are in for a very unpleasant future, at worst we are done for as a species on this planet.

Pezza on Wed, 18th Sep 2013 12:38 am 



I know a lot of the third world is already in poverty, but I am thinking more like the situation in Rwanda a few years ago. Yes, the first world has further to fall in terms of societal and technological complexity, but it is population density that will probably determine the level of chaos that a society will go through. Some of the third world will be alright; they won’t change their lifestyle too much, but there are a lot of countries in SE Asia that have a high population density that import a lot of their food and other supplies.

GregT on Wed, 18th Sep 2013 1:48 am 



I would agree. Areas with large population densities, that import food and goods from distant places, are most likely to be hurt the most. That pretty much describes most cities in the western world, and the cities in the third world that are considered to be westernized.

If your food supply depends on fossil fuels that continue to rise in price, and an economy that is already showing signs of trouble from rising energy costs, then it is you that is most at risk.

People that are already self sustaining, will notice little difference as economies continue to decline.