In the American experiment, man's authority to govern himself was the principle protection afforded by the Constitution - the very same Constitution which was structured specifically to avoid the rise of tyranny in any branch of government, duly insulating the three branches from one another and holding each accountable through various parallel mechanisms, with the federal government organized as a truly federal government rather than national government, subservient to the People and the several states (except as carefully excepted), as the best protection of the People's liberty.
Barack Obama is none of those men, but under his Administration government has entrenched itself further into American life than ever before. Government is now mandating that individual citizens enter into a private health insurance contract, under penalty of law, as a deeply flawed application of federal taxation authority. Call it whatever you like - at the end of the day, it has removed a small piece of your liberty to make your own decisions for your life by requiring you to engage in commerce purely as a consequence of existing.
Until now, the federal government was granted leniency under the interstate commerce clause to dictate terms and conditions on damn near anything, under the guise that such dictation represented a "regulation" of commerce between states. Government was allowed to "regulate" your specific behavior or anything related to your behavior which might possibly affect commerce between states, no matter how tiny or inconsequential. Indeed, government was permitted by the Court in 1942 to deny a private farmer the right to grow his own crops in whatever amount he pleased, even if for the express purpose of personal consumption (and not for resale), under the reasoning that such growth meant that the farmer would purchase fewer crops from someone else (possibly across state lines), thereby affecting interstate commerce.
Last year, the Patient Protection and Affordable Care Act was upheld under the basis that government can force a citizen to enter into a private contract, therefore "regulating" not only all economic activity (as in the Filburn ruling), but also economic inactivity. The authority was apparently discovered in the unwritten portions of the Constitution describing the federal government's taxing authority. When paired with the Filburn ruling, the government now possesses the authority to "regulate" all economic activity and inactivity whatsoever, so long as even the weakest case imaginable describing an effect on state-state commerce can be made, and if it cannot, that a tax be imposed as a penalty upon the behavior.
If government can compel a private citizen to engage in commerce against his will, whether such force benefits society as a whole or not, that citizen is no longer free. If government can compel a man to enter into a private health insurance contract, a power not enumerated in Article 1, Section 8 (and rather reserved to him under Amendments 9 and 10), what else can it compel him to do which is not enumerated that might pose some supposed benefit to society? Can it compel him to purchase life insurance? If he dies without it and leaves nothing behind, his relatives are left with the burden of his estate and burial. Can it compel him to consume a particular quantity of vegetables each week and record his calorie count for government inspection? His health affects the community and everyone has to pay for his decisions.
In the 18th century, tyranny was a parliament and king bent on taxing the People without their consent or consultation. In the 21st century, tyranny is a government bent on taxing its People for not purchasing health insurance and infringing upon their right to own a firearm. Tyranny, in both cases, is the arbitrary or unrestrained exercise of power . In the former, such tyranny led to armed rebellion. In the latter, so long as a government of the People's representatives enables tyranny in paper and words, any rebellion is necessarily limited to the same as a matter of conscience.
Regardless, tyranny is the natural progression of government, because government in the hands of man invariably seeks to rule rather than govern.
Government is like fire. When controlled and monitored, it keeps us warm and protects us from starvation and danger. When allowed to control itself, without the constant checks of the People, it burns and consumes everything in its path, whether a majority of us chose to light the fire or not.
Warning against creeping governmental tyranny and being prepared to take a stand against it, with pen or rifle as the need requires, is not simply a sideline distraction destined for the annals of the internet - it is the duty of all Americans to jealously guard the liberty their Creator thought necessary to bestow upon them at the moment of their creation.
For today, the weapon of choice must be the pen.
Tomorrow? Liberty or death.
In love of liberty,
The Bulletproof Patriot
Updated (15 May 2013): "Government is like fire" quote is falsely attributed to George Washington and I could find no sources prior to about 1915 which could confirm otherwise. The attribution has been removed.
As the nation watched in the aftermath of the Boston Marathon bombings, the Boston Police department (with the help of the FBI and neighboring law enforcement officers) apparently cordoned off a 20 block area to search, house to house, for 19 year old Dzhokhar Tsarnaev. The suspect was eventually found hiding inside a dry-docked boat in the backyard of a neighbor . Tsarnaev was arrested following nearly 24 hours of intense manhunt.
After all was said and done, the Police had packed up their armored vehicles, AR-15s, and helicopters, and the people of Boston applauded the effort and hailed the Police as heroes.
After reviewing the footage of the manhunt and contemplating the scene for a day or so, it seems clear that the people of Boston should be absolutely ashamed of themselves for allowing a Police force to willfully trample their rights and shut down the entire city at a cost of nearly $1 billion.
You read that correctly - one billion dollars. All to catch a wounded 19 year old terrorist who never even bothered to flee the city.
The terrorists won.
As we've all now seen clearly over the past couple of days, all it takes to shut down an entire city, put all of the residents on lockdown, cease all public activities, and enforce orders to 'shelter in place' is two terrorists with a couple of pressure cookers and some gunpowder. In addition to the three lives these two pieces of garbage consumed in their Islam-driven  hysteria, the two managed to:
- Consume a full 24 hours of Police presence totaling 9,000 officers. At a rate of $100 per hour (salary, benefits, equipment, and overhead during an emergency) per officer, the cost for one day of Police response totaled at least $21.6 million.
- Shut down all economic activity in a city of 625,000, effectively wasting one full day in a city having a GDP of $315 billion . The net cost in pure lost commerce, per day totaled about $900 million.
- Force the residents of the 20 block 'house to house' search area to give up their 4th Amendment rights to protection against unlawful search, when Police removed residents from their homes at gunpoint, hands above their heads.
Don't believe me? Here's the video:
This is not only shameful, but illegal. Private residents cannot lawfully be removed from their homes without a warrant for their arrest (or search of the home), upon probable cause, or by voluntary consent. Voluntary consent does not entail being commanded to exit at gunpoint with your hands over your head.
Anyone who allowed the Police to forcibly remove them from their own homes without cause and without the freedom to do so voluntarily is an embarrassment as an American.
Your Fourth Amendment rights to be secure in your own homes applies to situations exactly like this and are most important during times of crisis. These are not "priviliges" which the Police can simply suspend when they feel the situation warrants - they are yours and yours alone. Guard them with your life.
Unfortunately, none of this is surprising. Massachusetts has whittled away at the rights of their own law abiding citizens to protect themselves for decades - really, the people of Boston should expect nothing less when the Police feel that if the 2nd Amendment does not apply, neither does the 4th. You have succeeded in marginalizing the rights which have been endowed upon you directly by God.
And if the 2nd and 4th don't apply, it won't be long until the 1st dies as well.
The terrorists have won.
In love of liberty,
The Bulletproof Patriot
WARNING: This post contains graphic images of murdered children. Proceed at your own risk.
Under the American understanding of natural law, or organic law - that is, rights which are granted directly by our Creator and which cannot be limited or denied by man - all men are created equal and endowed with the unalienable rights to their own life, their own liberty, and pursuit of their own happiness. These rights are sacred, unbreakable, and individual. Your right to your own life is absolute - no man may violate this right without due process of law, through a fair trial of your peers. The same goes for your right to your own liberty. These rights, expressed in the Declaration of Independence in 1776, have been formally codified into U.S. Code and form the foundation of American law .
When taken in the proper context, each of these rights can be extended to describe the basis of all law - your rights to your own life and liberty are absolute and so are the rights of your neighbor to his own life and liberty. No law may justly prevent you from altering (whether constructively or destructively) your own life or liberty so long as the life and liberty of another person are not unduly harmed in the process. You have the right to live your life to the fullest or to end it tomorrow - it is yours. The decision lies between you and God.
Law which is just can only exist to protect the lives and liberties of separate persons from adversely affecting each other - you cannot kill your neighbor because you would be violating his right to his own life. You similarly cannot rob him of his belongings because you would be violating his right to his own liberty.
Months after the Newtown massacre , President Obama invited Francine Wheeler, the mother of Ben Wheeler, a six year old who was savagely killed in the Sandy Hook massacre, to speak at his weekly radio address . In Wheeler's statement, she pleaded with the listeners to "do something" to prevent their horror from spreading across the nation and pushed the Senate to pass the White House gun control agenda, which would ban virtually all semiautomatic rifles, many types of semiautomatic pistols and shotguns, and limit the capacity of magazines , none of which would have prevented the Sandy Hook massacre since the weapons used in the killings were stolen. All are simply feel-good measures  designed to make us believe we have "done something," while sidestepping the issue of social and family decay entirely and limiting the ability of the law abiding to defend their own lives and liberties.
After Ms. Wheeler and the President managed to climb down off the bodies of the 20 dead children, having shamelessly used them for nothing more than political points and as 'ammunition' for blanket disarmament of the law abiding and confiscation of their God-given rights to the defense of their own lives and liberties, the focus turned to Rhonda Fields, a Colorado state Representative who was the main backer of the state gun control measures, the most notable of which banned magazines of greater than 15 rounds . When speaking to NPR recently, Fields described the murder of her son in 2005 as having been "riddled with an assault rifle ." Problem? Yes - according to the DA's office, a 9mm and a .45 were used in the murder, neither of which is an "assault rifle" (or even a rifle at all). Both are rather common semiautomatic pistol calibers.
In the same method of the Newtown gun control parents, Rhonda Fields has managed to climb up on the body of her deceased son and lie about his murder in order to sensationalize the gun control debate in her favor. She, just the same as Francine Wheeler, is willing to intentionally misrepresent and exploit the murder of her own child in order to limit your ability to keep yours alive by restricting the sort of firearm you may lawfully own and use. All of this in the name of "doing something."
Under the concept of natural law, neither Wheeler nor Fields possesses the authority to restrict my ability to protect and defend my own life or those of my family against whatever threat may be present, regardless of whether they believe society will be safer without "high capacity" magazines. Removing them from the hands of the 99.99% who are law abiding just to weed out the few who are not, in the name of "safety," is not an act which I find to be in compliance with my natural, God granted rights to my own life and liberty.
This is not about gun control, reducing murders, or limiting gun violence, since none of the proposed measures will do so. This is about people control - there is simply no other explanation.
Progressivism is a disease which consumes both life and liberty.
Why else would Wheeler, Fields, and the media ignore the 260 schoolchildren who have been murdered in Chicago since 2010 ? Why else would they ignore the estimated 40,000 victims of abortionist serial killer Kermit Gosnell ? (Why would they most likely defend Gosnell's "right" to murder these thousands of children under the guise of it being about a "woman's body" rather than about the right of the unborn child to his own life?)
How can an honest person recoil in contempt at school shootings when done with a semiautomatic rifle, ignore the deaths of 260 children killed in the gun control utopia of Chicago, and in the same breath defend the practice of murdering the unborn?
Simple - because these two children, both murdered by Kermit Gosnell (and their own mothers) mere days before birth, were not killed with semiautomatic rifles. These babies were killed in an abortion clinic by delivering them (alive) and cutting their spinal cords through the back of their necks with a pair of scissors.
To those willing to simultaneously stand on the bodies of the murdered at Sandy Hook with your empty, political bullshit megaphone and victoriously bathe in the blood of 40,000 murdered babies afterwards in the name of "women's healthcare," I can only properly express my deep and profound contempt for you and your sick, twisted, and demonic vision of "social justice" with three very colorful words.
Go fuck yourselves.
In love of life and liberty,
The Bulletproof Patriot
As the national "conversation" on gun control has veered to the right, with actual gun owners finally being heard by the public at large (and the emotional clamor to "just pass something" fades out of public popularity), the gun grabbing nutbags have gone into overdrive, doubling down on the current strategy in earnest - stringing together even more scary sounding words to describe something they think everybody should be terrified of. (This is where the Progressive phrase "high capacity military-style assault ammunition cop killer bullet clips" comes from, despite an actual gun owner having never used the phrase at any point in the history of the universe.)
Despite ignorant gun control rhetoric having already seemingly reached a fever pitch in stupidity, Colorado Representative Diana DeGette has successfully found a way to make the situation even worse.
At a Denver Post forum on gun control earlier this week , Rep. DeGette responded to a question regarding the efficacy of Colorado's new high capacity magazine ban (which limits magazines to 15 rounds) by responding that magazines "are bullets":
I will tell you these [magazines] are ammunition, they’re bullets, so the people who have those know they’re going to shoot them, so if you ban them in the future, the number of these high capacity magazines is going to decrease dramatically over time because the bullets will have been shot and there won’t be any more available.
Ahh... such incompetence could only derive from a Congresswoman without even the slightest clue as to what a high capacity magazine even is. No worries though - despite her glaring ignorance, Rep. DeGette is so certain that high capacity magazines are a public menace that she has introduced federal legislation to ban their purchase and possession. And not just one time, I might add, but in multiple Congresses . Despite having had literally years to educate herself on the subject, this wonderful piece of Congresstrash opted instead to pull a Carolyn McCarthy (who famously couldn't explain what a "barrel shroud" was or why it was banned by her own gun control bill - the video would be hilarious if it weren't so pathetic ) and brazenly showcase her own ignorance on the issue at a very public forum.
Many media outlets picked up on DeGette's initial comments on the subject, but few have reported her office's "clarification," which was issued early today :
The congresswoman has been working on a high-capacity assault magazine ban for years and has been deeply involved in the issue; she simply misspoke in referring to 'magazines' when she should have referred to 'clips,' which cannot be reused because they don't have a feeding mechanism.
[Side note: Apparently she hasn't been "deeply involved" enough in this issue to actually know what it is that she is banning, but that is obviously beside the point - magazines are evil.]
Um... no. The confusion between "magazines" and "clips" is due solely to your friendly gun control ignoramus. Any gun owner can reasonably explain the difference if you'd be so kind as to even bother asking. This is what happens when your entire gun education has come from video games and Hollywood and you've never owned or fired one yourself, despite being so educated about them as to believe with absolute certainty that they need to be banned.
The idiocracy has officially taken hold.
In love of liberty,
The Bulletproof Patriot
If you've ever wondered just how exactly this whole $16.5 trillion national debt thing is going to turn out, look no further than your friendly, local, Democrat-turned-Republican-turned-Independent, Progressive, illegal, power grabbing, third term, New York City cesspool nanny Mayor, Michael Bloomberg :
We are spending money we don’t have. It’s not like your household. In your household, people are saying, ‘Oh, you can’t spend money you don’t have.’ That is true for your household because nobody is going to lend you an infinite amount of money. When it comes to the United States federal government, people do seem willing to lend us an infinite amount of money. …Our debt is so big and so many people own it that it’s preposterous to think that they would stop selling us more. It’s the old story: If you owe the bank $50,000, you got a problem. If you owe the bank $50 million, they got a problem. And that’s a problem for the lenders. They can’t stop lending us more money.
So, just to recap, the solution to $16.5 trillion in national debt is to borrow an "infinite amount of money," because as we all know, they "can't stop lending us more money." After all, the solution to alcoholism has always been more alcohol. Forget the bottle. Just wear an IV bag around with a liter of ethanol strapped to the back of your neck.
How do you get an ink stain out? More ink. If that fails, just use even more ink.
Yes, we can live on unlimited amounts of borrowed money!
Yes, we can continue to inflate the bubble to infinity!
Yes, we can have it all without consequences or having to take responsibility for anything!
If you've ever wanted to see the Progressive delusion in its bare, naked form, look no further than Michael Bloomberg.
In a normally operating universe where 2+2 still equals 4 and the Ministry of Truth has not yet started scrubbing history anew with each passing day, people like Michael Bloomberg would acknowledge that the markets are signaling that they are unwilling to "lend us an infinite amount of money."
That is already happening, and it's the reason that the Federal Reserve has had to purchase up to 90% of our own Treasury bonds (which is ironically reported by Bloomberg news ) and has begun directly monetizing our debt . We are having to buy our own debt (i.e. printing money) because foreign lenders are unwilling to lend us an infinite amount of money.
Where the hell has Bloomberg been?
The recent chatter in the news has been about how horrific the consequences of the "reckless" sequester will be - the President has even gone on what can only be described as a "sequester tour," yelling high and loud about how there won't be any Police, firefighters, teachers, automobiles, electricity, running water, or military. You might as well go out and buy your hanging rope today, before they're all sold out, because if we recklessly cut 2% of our annual "budget," we're all dead and there's nothing left living for anyway. (Except, of course, that even after the 2% sequester "cut," we will still be spending $15 billion more this year than last year. Reckless!)
If we are to right this boat, we not only need this sequester, we need nineteen more sequesters stacked on top, each and every year, and if we fail to do so, a gentleman by the name of Mr. Arithmetic will right this boat for us in due time,
and his method of righting us will be much more painful than if we buckle down and do it ourselves.
But, alas, nevermind, as the breaking news of the day is that the DOW has nearly reached "historic highs ," so the economy is just fine. Nevermind that American household incomes have dropped more than at any point in the past 20 years . Nevermind that 'take home pay' has dropped to levels not seen since 1959 .
This sort of fiscal insanity is exactly what precipitates the death of a currency as I mentioned the other day , and hyperinflation becomes an ever more real outcome the less willing the rest of the world is to lend us money and the less willing we are to reduce our own spending.
We might have had a chance at one last exit on this Highway to Hell with Mitt Romney (and I emphasize, might), but instead elected Dumb and Dumberer to guide us through this crisis.
When this shit eventually hits the fan, at least we can all rest in the sound advice of our mildly retarded Vice President - just grab your shotgun, fire two blasts off the balcony blindly into the night , run downstairs, and fire two more blasts through your front door .
That should do it.
In love of liberty,
The Bulletproof Patriot
The economy is in the toilet and anybody paying attention is aware of it, at least in so far as they allow themselves to see through the daily charade perpetrated by the usual band of Keynesian fools and their willing accomplices in popular culture. GDP, when correctly adjusted for inflation, has been flat or negative for nearly a decade , an indicator which hasn't made the headlines at any point that I can recall. This indicator alone, which began to slide well ahead of the 2007/2008 financial crisis, is enough to cause serious concern for America's future.
The labor force participation rate has been in decline since January 2009 . Yet, we are repeatedly told that the economy is "in recovery ". The President even coined the term "Recovery Summer" in June 2010 to persuade the country that our economic woes were coming to an end . As of this writing, Recovery Summer - Part IV is just around the corner.
The budget deficit has exploded on an annual basis beyond anything this country has ever seen, despite ongoing rosy delusions from talking heads at every turn.
Reports have recently surfaced from the Bureau of Labor Statistics indicating that in addition to the 2012 Q4 net slide in GDP to -0.1% (which I previously discussed ), 2012 Q4 overall business productivity (less farms) decreased by 2% . This is a terrible indicator, as continual growth in business productivity is necessary to sustaining a continual borrow/spend deficit state. This, combined with the GDP reduction (the two are correlated), will push the outstanding national debt north of nearly 110% of GDP by the end of 2013. The media, however, has failed to report on this circumstance, preferring instead to focus on the supposed "positives" in the latest monthly unemployment report that showed a net increase to a mere 7.9%, despite the number of employed having continually declined ever since 2009 . This is the governmental definition of "recovery":
Underneath the burgeoning cesspool of economic whoppers lies a far more dangerous truth - the United States is facing serious economic consequences of some sort if we don't correct our borrowing and spending problem, and quickly. Whether those consequences present as a hyperinflationary systemic collapse is anybody's guess - a deflationary collapse is theoretically possible (although of the crises in the last several decades, deflation was almost never the culprit in the long run and has never been the prime mover behind sovereign collapses worldwide in modern history as far as I am aware), an extended period of stagflation is possible (high interest rates and high unemployment), and a correction is even possible under certain, albeit very limited circumstances, many of which are outside the control of the federal government to influence.
However, given the situation the United States is currently in, namely being highly leveraged among developed countries, the most reasonable end game as far as I can tell is a hyperinflationary collapse. As the circumstances surrounding such a collapse are constantly moving and changing, it is not possible to predict when or if such an end game will ever appear, although the evidence seems to point in that direction. Intelligent discussion on this matter is routinely had in more detail at places such as ZeroHedge.
Part of the problem in getting our neighbors to recognize not only the fundamental cracks in the economy (nearly everybody anecdotally understands that government spending and debt are a major concern), but also to recognize the consequences of the problem, is that most people have no idea what hyperinflation entails and have no idea what to keep an eye out for. Fortunately, of the two dozen or so cases of hyperinflation in recent history, they tended to follow a series of reasonably well defined steps. I have organized these steps into six distinct stages, with Stage 6 being a complete and total meltdown. As best as I can tell, the United States is somewhere in the neighborhood of Stage 2.
While these six stages appear to be common among such historical collapses, they have been revised as much as possible to reflect the modern world - fiat currency, deficit spending, the U.S. being the world's reserve bank (essentially), etc. Additionally, moving from one stage to the next does not necessarily occur in a linear fashion - any number of events could potentially trigger a rapid climb of the staircase from Stage 2 to Stage 4, for example.
It is also important to keep in mind that movement between Stages occurs at an increasingly rapid pace as the process goes on. For example, the early Stages (1 and 2) tend to occur very slowly and the process speeds up as the floor falls out from beneath the consumer in Stages 3 and 4. By the time Stages 5 and 6 arrive, many people may not even take notice as their lives have already been so drastically affected that additional changes are simply accepted as commonplace.
So, rather than simply screaming from the rooftops about the risk of inflation and being labeled as just another right-wing nutbag "hyperinflationista," I humbly present the following Bulletproof Guide to the Six Stages of Hyperinflationary Systemic Collapse (with a major hat tip to Vincent Cate, et al., who gathered an enormous amount of data, some of which has been incorporated and reorganized here).
Stage 1 (pre-hyperinflation): Annual budget deficit exceeds 40% and national debt exceeds 80% of GNP
- Annual budget deficits may fluctuate, but national debt continues to rise. This continues over the course of a number of years.
- Investors gradually move to shorter term bonds.
- Widespread realization that the national debt and annual deficit will continue to perpetually rise, despite government promises to the contrary. This realization is unlikely to be acted upon by the masses and tends to be more of an anecdotal conversational tool than anything else.
Impact to the Common Consumer
- Impact to the consumer is minimal at this point, and perhaps even beneficial, as he may be receiving increased governmental benefits (health care, social security, food stamps, etc.) which are being procured at the expense of debt. For this reason, the common consumer is unlikely to regard his current position as one of pre-hyperinflation.
Stage 2 (pre-hyperinflation): Central bank begins buying government bonds
- The primary reason for the central bank to purchase its own governmental bonds is to ensure that bond rates stay low (to enable the government to continue 'borrowing' at 'affordable' rates) and is typically sold to the public as a form of economic "stimulus." This can also occur if the central bank has become the "lender of last resort" - a precursor to Stage 3, in which private investors are unwilling to take on additional governmental debts due to concern about the ability to be repaid in the future.
Impact to the Common Consumer
- Much as in Stage 1, the common consumer is unlikely to regard his position as precarious, considering that the charade is being papered over by additional piles of borrowed money which he never sees nor has to pay for.
Stage 3 (trigger event): The Treasury experiences a failed debt auction
- When the Treasury is unable to offload a large percentage of its freshly created debt to either the private investor (or perhaps even to the central bank under some circumstances), the debt auction may be deemed as a failure. The average consumer would experience this in the form of being denied future credit card purchases after having hit the card's credit limit.
- Capital flight begins to move domestic wealth offshore at a pace that becomes noticeable.
- The Federal Reserve can’t allow interest rates on bonds to rise to attract more buyers because doing so would also raise interest rates on government debt, which would make the interest payments on the national debt unaffordable - this phenomenon has recently been observed in the 10 year bonds, wherein the Fed's QE binges have artificially suppressed yields by more than 30% [14a]. At the current 10 year bond rate of approximately 2.04% , the annual interest payments on $16.59 trillion in outstanding debt would be $338 billion, which is roughly in line with the Treasury reported interest payments for 2012 of $360 billion . Currently, our interest payments total about 15% of all federal taxes collected.
- If the 10 year bond rates went up to 7%, as has happened in Europe just last year  , the 2013 annual interest on a projected $17 trillion in national debt would be approximately $1.190 trillion, or 41% of all federal revenues. There are nowhere near enough "millionaires and billionaires" to cover this cost.
- Every penny spent on increased interest payments represents an equal reduction in the ability of the government to spend on domestic programs – at increased interest rates, additional borrowing to fund the difference is no longer possible under the "realistic" and "investment" terms fantasized about by the Krugmans of the world. Therefore, every penny spent on debt interest would come directly out of Medicare, Social Security, Defense spending, or any of thousands of other programs (many of which are both unnecessary and unconstitutional to begin with). This is unavoidable and rather than allowing a systemic collapse to occur by reducing borrowing, the government directly prints and spends even more to cover the gap (100% of this is directly monetized since no external entity will lend money any longer). This is the beginning of "formal" debt monetization - "formal" only because it is more or less publicly acknowledged as such, even though it has likely been happening in the background for quite some time.
Impact to the Common Consumer
- This is the first stage at which the common consumer begins to feel that something is wrong, although the media and government are likely to continue their propaganda "hail Mary" until the bottom finally drops out. In all likelihood, a significant percentage of the population would continue to stay asleep at the wheel since their ability to buy the latest $300 Air Jordan sneakers with their welfare check would likely continue unabated, at least for a brief period.
Stage 4 (hyperinflation): Consumer prices rise and the people spend their money before prices rise further
Current Status: Consumer prices are already rising dramatically due to inflation and other factors . Fuel prices are also averaging out at historical highs, even when excluding refinery and supply shortages, as well as crude prices . The average consumer has not yet attributed this price increase to inflation.
- This is the stage at which the average consumer realizes that hyperinflation is actually occurring and is not simply a fantasy of internet bloggers. This is also the stage at which hyperinflation can no longer be averted (and whether it could be averted even at Stage 3 is questionable).
- As prices rise, consumers pull their money out of the banks and move to alternative currencies such as barter (trade), foreign cash (Swiss Francs), or gold and silver. When too much money has been withdrawn (remember, the banks are only required to keep a small percentage of deposits on hand in actual cash), the government declares what has popularly been referred to as a “bank holiday,”closing all banks and freezing accounts. Your debit card suddenly no longer works.
- The government also may attempt to fix food and fuel prices at this stage. This is currently happening in Argentina  and is being billed as an attempt to "constrain inflation ." (Hint: It won't and historically such attempts have never been successful in the long run.)
Impact to the Common Consumer
- Finally, the common consumer awakens from his decades-long economic slumber when he discovers that his $4.98 grande skinny caramel macchiato suddenly costs $12.50. A week later, the same latte costs $19.75. Months in, the latte sells for $476,942,691.17 (a stack of $100 bills a quarter of a mile high), or, ironically, two silver dimes.
- When the common man begins to see his purchasing power finally slide before his very eyes (despite the Fed promising that inflation is perfectly matching the 2% "target"), panic sets in and shelves go bare.
Stage 5 (hyperinflation): Wages and prices are fixed to a stable foreign currency or to precious metals
Current Status: The U.S. Dollar is still the world’s reserve currency, so this stage still seems to be rather distant. Historically, when small countries have stopped hyperinflation by pegging their local currency to a more stable currency, it has almost always been the U.S. Dollar. If and when hyperinflation occurs in the U.S., we won’t have the same luxury – we will need to peg our currency to either 1) an international “basket of currencies” such as the IMF Special Drawing Right (SDR), which has been previously floated as a replacement to the U.S. Dollar , or to some mixture of gold, silver, platinum, copper, diamond, etc.
- As consumer spending increases (with consumers immediately spending their earnings to avoid losing purchasing power if earnings are saved), the velocity of money increases, flooding the market even further and driving dollar-denominated product prices even higher. This positive feedback loop (I'm an electrical engineer and couldn't resist the temptation to use a control system analogy) ensures that the problem worsens even further. The more prices increase, the faster consumers spend their money, which floods the markets with cash, raising prices even further.
- This is also the stage at which pre-hyperinflation purchases of precious metals potentially become the most valuable. All debts can be paid off with hyperinflated currency, so long as the currency is still in circulation. Have a $20,000 line of credit? Congratulations – before the currency is fixed to metals, you can sell an ounce or two of silver and pay the credit completely off. Note that the window to do this is limited. At some point, the banks and government will re-value the currency or intervene to adjust existing contracts to peg them to inflation. Current debts are not normally pegged to inflation, so you would need to take advantage of this window at the opportune moment while the currency is still accepted for payment and before Stage 5 is fully underway.
- This stage is particularly problematic because our own currency is the world's reserve. We don't have another, larger currency to peg to in order to cease inflation, which is why the fears behind a U.S. hyperinflationary collapse are becoming more and more widespread - the world has never been in quite this position where the largest economy is teetering on the brink. In February 2013, if Argentina experiences hyperinflation (as they are), nobody in the U.S. notices because it doesn't affect the dollar. In February 2014, if the U.S. experiences hyperinflation, the entire world will notice and the whole thing risks being dragged down. The stakes are potentially much higher in this scenario than ever before.
Impact to the Common Consumer
- Impact at this stage is similar to Stage 4, although potentially more prolonged. By Stage 5, the store shelves have likely long since gone bare and a barter economy has established itself in earnest.
Stage 6 (collapse): A black market develops and local currency becomes totally worthless
Current Status: While there are some very limited circumstances of barter and metals-exchanges beginning to develop, this stage is a long way off.
- At the point when a loaf of bread requires a stadium full of cash to purchase, it becomes normal and practical to exchange a single silver dime (worth about $2.30 in 2013 dollars) for the loaf of bread.
- Government revenue completely ceases, as taxes are not paid on black market or barter exchanges. Government shuts down.
- Hyperinflation has completely taken hold and if an external currency or metals peg is not established or accepted by the populace at the end of Stage 5, a total systemic collapse becomes inevitable. With the dysfunction and chaos already existing in Washington, making an exit at Stage 5 is questionable.
- Many government employees (including members of the police, military, firefighters, and National Guard) are no longer showing up to work to earn a paycheck in a worthless currency and are busy trying to feed their own families and protect their own neighborhoods from criminals and hoards of the starving.
- The explosive charges for this situation have already been set - there are currently 48 million Americans dependent on Food Stamps ("Electronic Benefit Transfer" cards) in this country  and 58 million Americans receiving Social Security . The moment those EBT cards stop functioning and the Social Security checks stop arriving in the mailbox, a full 25% of the population suddenly finds themselves starving to death. If recent events during Hurricane Sandy and the Carnival cruise ship disaster are any indicator, people start behaving like animals within a matter of a few days.
- If a full-scale societal collapse occurs, the risk of governmental overthrow rises dramatically. Think it's going to be small government, libertarian types that just want to leave you alone who rise to power? Ask the Germans of 1933 how that worked out.
- Realistic possibilities for the future after Stage 6 are 1) dictatorship, 2) civil war, and 3) global government. None of them are good. A libertarian minded, small government is only likely to emerge as the result of a successfully prosecuted civil war, which are generally unsuccessful in preserving long term liberties (the American Revolution being the notable exception).
Impact to the Common Consumer
- The common consumer is more than likely dead due to starvation, war, or totalitarian government. Congratulations. You probably should have been listening in 2013 when your idiot blogger neighbor was whining about false inflation "targets" and Keynesianism.
Whether or not the United States will wind up in a hyperinflationary systemic collapse in the foreseeable future is anybody’s guess - the target is constantly moving and our situation is quite fluid. However, recent trends indicate that the U.S. is currently in Stage 2 of the process and may be approaching the end. As soon as a failed treasury auction occurs (or any other 'trigger' event, such as China liquidating their dollar-denominated assets rapidly), we move up to Stage 3. While we could conceivably exit the hyperinflation process, history strongly suggests that this will not happen as the decisions necessary to do so are painful enough that politicians will avoid them at all costs, preferring instead to sink with the ship. We will, in the most strong sense, become our own worst enemy.
Equally difficult to determine is the timing of the stages. While we seem to be firmly and perpetually planted in Stage 2, nobody knows how long it will take for the world’s largest economy to crumble at the rate we’re moving, especially when the distraction of Europe is thrown into the mix. It could be by the end of 2014 as credible others have long predicted , or it could be many years off. A hyperinflationary systemic collapse is not a single event as so many seem to believe – it simply appears as such because so many consumers refuse to see it coming (they don’t recognize the problem until Stage 4), at which point the slide has sped up considerably. In reality, a hyperinflationary collapse is a drawn out event. The bottom line is, so long as our debt continues to increase faster than the growth of GDP, the risk of future problems is inevitable.
Watching television shows like “Doomsday Preppers” probably isn’t going to help the average person interested in "reasonable" preparation, because the average person has no interest in living like a caveman lying in wait for an economic collapse, surviving on a diet of Tilapia and Kale grown in his backyard pool that has been converted to closed-system hydroponic greenhouse. (Seriously, some people are doing this.) The thought of eating Tilapia six nights a week makes me want to puke all over the keyboard.
Selling everything you own to buy a shack in the woods probably isn’t going to help, either, particularly if you have no resources left, no method of transportation to get there, and nothing to survive on when you arrive.
In other words, don’t stop living life out of fear over hyperinflation. Plan ahead sensibly in the event that it happens to occur. If you're doing it right, your preparations should be functional in lesser circumstances as well - layoffs and unemployment, natural disasters, etc.
Remember that there is always a chance that everything will turn out to be fine – don’t stop contributing to your retirement fund out of fear over hyperinflation. That 5% company match will be invaluable resources lost in case the worst never comes. But, do consider keeping your money in safer investments such as bond markets and gold funds that are less susceptible to inflation (the irony on bond markets here is duly noted, but many 401(k) accounts don't have any safer options). Even better, if you don’t have an employer match that is keeping you in a traditional 401(k) or 403(b), consider moving to physical assets – gold and silver have a strong tendency to appreciate with inflation and are unlikely to lose substantial value over time. Keeping all of this in mind, while retirement investments may still make sense in 2013, come Stage 3 or 4, pulling out of them entirely may be a more wise option. Only time will tell and all circumstances are unique. (Word to the wise: I'm also an engineer, so what the hell do I know about retirement investing?)
In addition to the usual common sense financial advice, good, reasonable preparation should consist of the following specific items at a bare minimum:
- Assemble a nonperishable food storage. I strongly suggest a six month supply of calories in #10 cans for every member of your family at a minimum (and working up to 12 months over time), which can be obtained from your local LDS cannery at very low cost - I'm also not Mormon and they treat me just fine there, so don't be afraid to walk right in. Rice, beans, sugar, wheat berries and/or flour, dry milk, and fruit are all commonly available in bulk packaging (a bulk package of six #10 cans of white rice sells for about $20 at our local LDS cannery, for example). The best part is, a six month supply of food storage is not difficult to build up (it takes up a corner of a basement on a couple of shelves) and generally keeps for 10 – 25 years without maintenance. Even if no disasters occur and you wind up not using it, in 20 years you have six months of food that you don’t need to put in the budget. Remember, food storage is a form of saving.
- Buy a method to filter your own water. Clean water is essential to life and to avoiding disease. The lowest cost option is to buy 1 lb packages of Pool Shock (you should buy ONLY those containing 68% Calcium Hypochlorite and 32% INERT INGREDIENTS – any other type of pool shock is dangerous to consume). This sells for about $3 a pound, is available on Amazon, and each pound will treat thousands of gallons of water. Simply strain water through a cloth into a 5 gallon bucket to remove large debris, treat with the prescribed small amount of pool shock, stir, wait an hour, and drink. (Note – This method kills most bacteria and parasites but does not necessarily kill viruses, so boiling is always a good idea if at all possible.) This method is also highly preferable to using chlorine bleach to purify water, as bleach tends to break down into various salts over a period of a few months. Pool shock packets lose 3-5% of their available chlorine per year of normal storage, so a 68% packet should store for a good five years or so before needing to be rotated out. (Note: The exact method to measure and use pool shock for water purification is described in several other places  .)
- Buy a small supply of nonhybrid vegetable seeds. These are commonly available pre-packaged in cans with a five year shelf life and will grow in most climates . For a cost of less than $40, you can have seeds on a shelf to grow your own food supply if necessary - cheap insurance if I've ever seen it. The six month food storage supply is intended to get you through a winter or a period long enough to the point where you can grow your own food in an extended crisis. This suggestion may sounds nuts now, but it could wind up being the best $40 you've ever spent.
- Buy a firearm. If a crisis comes to pass, there are bound to be millions of starving people in the streets, not to mention plenty of looters looking to take advantage of the situation as seems to happen after virtually every natural disaster these days. My strong recommendation is an AR-15 - expect to pay about $850 for a base model when the market recovers from the most recent Obama/Feinstein gun control nonsense. Contrary to the usual gun control narrative, the AR-15 is ideal for home defense and is particularly suitable for women. It's light, extremely accurate, and has minimal recoil due to the semi-automatic action and standard .223 caliber charge. If you can't afford an AR-15, any semi-automatic firearm in a major caliber is better than nothing. If you're not interested in a rifle or want to go cheaper, consider the Beretta 92fs or 90-two in 9mm caliber (for men - about $600) or the more compact Walther PK380 in .380 ACP caliber (for women or smaller hands - about $350). I would not suggest going below the .380 ACP caliber and would consider a 9mm to be 'standard.' I happen to own all three of these firearms and would trust them all to perform reliably. Oh - and don't forget ammunition and at least three magazines, preferably the evil "high capacity" ones the President wants to ban as a part of his latest delusion. For the AR-15, this would be 30 round magazines - try to get a hold of magazines made by Magpul. For the Beretta 92 or 90-two, this would be 18 round magazines - Mec-gar makes great aftermarket magazines which are very reliable. For the Walther PK380, you're more or less limited to the factory 8 round, so get a few of them. In addition to all of this, get a good cleaning kit and learn to fire your weapon safely and accurately.
There are any number of websites on the internet which can (and do) suggest additional preparations to those I have listed, but the above list is a good, basic start that all Americans should be making. Nothing in these four or five items is in the least bit "extreme" and all were at one point considered to be simple common sense.
If only we could return just a sliver of that "common sense" back into our culture, perhaps we wouldn't need to publish guides to identify and survive hyperinflationary collapse.
In love of liberty,
The Bulletproof Patriot
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