Winds of World War III The Impact on Financial Markets How to Protect Your Wealth Where New Fortunes

Will Be Larry
Found Edelson

Winds of World War III The

Impact on Financial Markets
How to Protect Your Wealth
Where New Fortunes Will Be
Found
By Larry Edelson
October 29, 2015

Real Wealth Report

RWR-0122

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Winds of World War III The Impact on Financial Markets How to Protect Your Wealth Where New Fortunes Will Be Larry
Found Edelson

Winds of World War III

The Impact on Financial Markets
How to Protect Your Wealth
Where New Fortunes Will Be Found
by Larry Edelson

Peace makes plentie, plentie makes pride,

Pride breeds quarrell, and quarrell brings warre:

Warre brings spoile, and spoile povertie,

Povertie pacience, and pacience peace:

So peace brings warre and warre brings peace.

— George Puttenham

The Art of English Poesie, 1589

Contents

Preface

Foreword by Martin Weiss, Ph.D.

1 A Peek into One of the Most Chaotic Times Our Country Has Ever Seen

2 The Cycles of War: Why Unstoppable Social and Economic Forces Virtually Guarantee
Governments Worldwide Will Wage War Against Their Own People… and Each Other!

3 Why the New Cold War With Russia Is Turning Hot

4 Why Europe Will Collapse

5 China’s Quest for World Domination Will Lead to Wars Throughout Asia

6 The Middle East and How the Seemingly Never-Ending Religious and Cultural Wars Are
Coming to a Final Head

7 The United States of America: How Its Leaders Are Making All the Same Mistakes of
Former Great Civilizations That Have Come Before It.

8 Consequences: How the War Cycles Will Impact Financial Markets

9 How to Use What You’ve Learned to Protect and Grow Your Wealth

10 Epilogue

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Acknowledgements

About the Author

Bibliography

Notes

Index

Foreword

By Martin Weiss, Ph.D.

A series of conflicts and wars are now beginning to explode — In Afghanistan, Iraq, Syria,
Europe, Asia, and Africa.

The author of this book, Larry Edelson, is probably the only one who has explicitly warned this
would happen and accurately forecast its economic consequences. For the past decade, I have
read each and every one of his articles as they were published and sent to hundreds of thousands
of investors. I have watched as each of those forecasts was pooh-poohed and derided by Wall
Street “experts.” And I have marveled as each has come true.

In this book, he will not only tell you what’s likely to happen next in explicit detail but, more
importantly, will also give you the guidance you urgently need to insulate your money, guard
your family’s safety, and build incalculable wealth.

The Global War on Terror and the Global War on Financial Crisis

On September 11, 2001, a small group of terrorists attacked the very heart of our nation. They
killed almost 3,000 people. They caused at least $10 billion in damage. And they set off a tragic
chain of events that have continued to ricochet through time, with a tremendous cost in life and
treasure: The U.S. invasion of Iraq … the fall of Saddam Hussein … the emergence of Al-Qaeda
in Iraq, … and then the rise of the Islamic State, the most brutal, most powerful terrorist
organization of all time.

This chain of events has weakened our nation. It has propelled our government to spy on us.
And it has now brought us around full circle to the danger of larger terrorist attacks on our soil.

At the same time, in parallel to the global war on terror, we’ve also seen a global war on
financial crisis.

Twenty months before the 9/11 attacks on America, our technology stocks began to crumble,
only to crash even further after that fateful day. Over $5 trillion in equity value was wiped out.
Our entire economy was temporarily paralyzed. And what’s worse, that crisis set off a tragic
chain of economic events that continue to ricochet through time: Radical interest-rate cuts by
Federal Reserve Chairman Alan Greenspan … a great housing bubble and bust … the collapse of
major Wall Street banks … the emergence of a deadly debt crisis … and then the largest
government money-printing of all time, under Fed Chairmen Bernanke and Yellen.

This chain of events made the rich, especially wealthy Wall Street institutions, richer. It has also
propelled many investors to take unprecedented risks. And it is likely to bring us around full
circle to the brink of another, potentially bigger, financial crisis.

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The global war on terror. The global war on financial crisis. Two parallel and powerful historical
sequences that are gaining momentum and reaching a crescendo.

A Lot Closer to Home Than Most People Think

Despite all this, many people in America today think global wars and conflicts are distant or
irrelevant. They feel insulated and isolated from what’s happening overseas.

U.S. news networks devote air time to domestic affairs — summer or winter storms, the
immigration debate or the next election cycle … Obamacare or the latest epidemic … the VA
crisis or the NFL scandal.

Only global conflicts with the most dramatic imagery and the largest contingent of Western
journalists get coverage. But that’s definitely not the case overseas. And I hope it’s not the case
with you.

We don’t know what the future will bring. But there is one thing we can forecast with virtual
certainty: Global conflicts and wars are not going away. They are deepening, escalating and
spreading more rapidly than almost anyone expected. Here are just a few of the most impactful.

The Arab-Israeli Conflict

In recent years, Israel has repeatedly gone to war against Hezbollah militias on its northern
border with Lebanon and against Hamas militants on its southwestern border with the Gaza Strip,
each time with untold repercussions.

And never forget: It was precisely the Arab-Israeli conflict, with its vivid images of civilian
victims broadcast globally by Arab-language news networks, that originally played a critical role
in the emergence of jihadist groups in the last century … gave rise to al-Qaeda … led to the 9/11
attacks … which, in turn, triggered the twin U.S. invasions of Afghanistan and Iraq.

Clearly, despite other cross-currents, we can draw a solid line of cause and effect from the Arab-
Israeli wars of yesteryear to the global jihad of today, raising new, urgent questions for the entire
global community:

To what degree will continuing conflicts give jihadists everywhere — in Africa, Europe, the
Middle East, the Caucasus, South Asia and East Asia — a new tool to help invigorate their
movements, accelerate their recruiting operations and unite against a common enemy? How will
Western governments react? What new wars and revolutions will break out?

Unrelated to people living in the United States? Of course not! In military aid alone, the U.S. has
provided at least $83 billion to Israel and is deeply committed to its support. In more ways than
one, any war in the region has a major impact on U.S. foreign policy. And this also gives a new
excuse to jihadists like the Islamic State and others to refocus their attacks on U.S. interests.

Pakistan

Meanwhile, in Pakistan, the military continues to ramp up its attacks on al-Qaeda and Taliban
havens in the remote North Waziristan. But even as the government touts some victories in the
remote north, Sunni extremists have expanded massively all across the country, especially in
major population centers of the south.

As The New York Times reported, “The growth of these fundamentalist groups, many with links
to armed factions, has been alarmingly rapid, and has brought violence in its wake.” That
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includes Hindu temples defaced, Shiite Muslims assaulted, and Christians, charged with
blasphemy, attacked by rampaging crowds. What’s most alarming is that the Sunni supremacist
ideology of these groups is similar to the one that’s been used so successfully by Islamic State to
conquer major cities in Syria and Iraq.

Not relevant to U.S. interests? Nothing could be further from the truth. Pakistan is a nuclear
nation, a major U.S. ally, and a centerpiece of U.S. policy in the region. Moreover, the U.S.
military itself is directly involved in Pakistan’s war against the Taliban, with U.S. drones making
major strikes in the same region.

Korean Peninsula

The U.S. and South Korean armies periodically conduct major joint exercises, while North
Korean leader Kim Jong Un tests new missiles and miniaturizes nuclear weapons for multi-
warhead models. Not important to American citizens?

Certainly, no one in the Pentagon would ever agree with that statement. The U.S. still has 28,500
troops stationed on the DMZ between the two Koreas. The U.S. is committed to promptly come
to South Korea’s defense in the event of any attack. And Kim’s missiles are now capable of
reaching the West Coast of America with nuclear warheads.

Remember the Korean War? Well, officially speaking, that war never ended. It continues to this
very day.

Eastern Europe

In separatist-controlled Eastern Ukraine, a “local war” was abruptly transformed into a global
conflict when a Russian-made anti-aircraft missile shot down a Malaysian commercial jet flying
from Amsterdam, and all 298 aboard perished.

“Not relevant to the daily lives of most Americans,” you say? Then consider this: Washington
and Western Europe’s sanctions against Russia have hit the Russian economy dead center,
smacking their energy, banking and defense sectors, including companies like Rosneft, Russia’s
largest oil company; Novatek, a major Russian gas producer; and Gazprombank, the country’s
third-largest lender. These are giant firms, many listed on the New York Stock Exchange, with
shares owned by U.S. mutual funds, pension funds, ETFs and individual investors.

Moreover, that “local war” has now helped turn the geopolitics of the entire world upside down.
Russia has shifted from the West to China. Both China and Russia are now building their
defenses — and offenses — against the United States, both economically and militarily. Back in
Eastern Europe, one country after another is choosing sides.

Unexpected Investment Consequences

So, make no mistake: The drums of war are beating everywhere and are getting louder every
day. If you don’t hear them — or you underestimate their importance — it’s time that you listen
carefully: Global conflict is a powerful force that impacts your investments in strange ways and
will continue doing so for years to come. Very few analysts understand it. But after you’ve read
this book, you will. And that alone could make the difference between you suffering major
investment disappointments and you enjoying major successes.

Just bear in mind that not all is black and white. For example, in a simplistic view of the world,
global conflicts would automatically impact U.S. markets negatively. But that’s not always the

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case. In fact, as the author has forecast repeatedly and unambiguously, troubles overseas have
driven large sums of fear money into the U.S. stock market, pushing our share prices higher, not
lower.

This is one reason why our markets have been going up. Another reason is the Federal Reserve.
Years ago, bad economic or political news meant bad news for investors — a rationale for
avoiding stocks. But today, the Fed uses bad news as an excuse to keep interest rates low, to
pump up the stock market and inflate the economy even more — with tactics that would have
been unthinkable years ago. Plus, some stocks have been soaring regardless of the fear money or
Fed money, based on their own merits!

Here’s the key: More so than ever before, with much of the world in turmoil and Washington in
gridlock, the onus for defining your destiny falls squarely on you. The wealth preservation and
wealth-building guidance you will find in this book are no longer just options; they’re a must.

More so than ever before, you will need money in order to insulate yourself from the geopolitical
and financial threats, to live in the world’s safest places, to be less dependent on the job market,
to secure your retirement, and to preserve your personal freedoms.

This is the goal that Larry Edelson pursues for you here.

1. The World Out of Control

A Peek Into One of the Most Chaotic

Times Our Country Has Ever Seen

In 2012, at a seminar attended by hundreds of investors, I made a forecast. Everybody thought I

was crazy. But I said:

“Forget about the central banks! They’re not going to matter going forward. Forget about the real
estate crisis. That’s done. It’s healing. It’s almost over. The next big problem the world is going
to face going forward is a series of escalating wars overseas — and it will begin in late 2013 or
early 2014, ramping up over the next six years until 2020.”

I warned that geopolitics was going to rule the markets going forward. I predicted a period of
civil wars and rebellions — social protests, internal conflict and wars between countries.

Now, with further refinement and computer studies, I have been able to map out a chart of these
projections. It shows that for the period from 2013 through 2017, the world is, sadly, at very
high risk of a major, international war, a war that will go down in the history books as World
War III. Not a traditional world war, like World War I or World War II, but a world war
nevertheless.

Already, since January 2013, we have seen 201 terrorist attacks worldwide. Plus …

In the Middle East, eight countries are officially at war, involving 163 different militias, separatist
and anarchic groups.

In the Congo, Mali, Nigeria, Somalia and Sudan, there are 24 countries and 141 different groups
involved in wars.

In Europe, there are eight countries involved in official wars, involving 65 different groups of
militias, guerrillas and separatists.

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Even in the Americas, at least five different Latin American countries are experiencing war-like
conditions involving more than 25 separatist groups.

Sadly, my research shows that the cycles of war and conflict continue to ramp up; and that this
escalation will not peak until the year 2020.

Moreover, these are fought on multiple levels — not just isolated terrorist events or localized
protests.

You will see currency wars and trade wars, revolutions and rebellions, mass social upheavals
and the overthrow of governments. You’ll see swings from socialism to fascism. And we will
continue to witness the spread of cyber espionage and the outright loss of liberty.

Each of these can potentially damage or destroy the safety and wealth of billions of people —
not only in distant lands, but also in your homeland.

War Cycles in America?

Here’s the key: War cycles and social unrest, domestically or internationally, are contagious.
Such is the nature of mass behavior. And, yes, war-like conditions, rebellions and revolts are
coming to America. We will see riots in the streets, protests, escalating tax rebellions.

As in Europe, social unrest will rise dramatically higher. According to a report from the
International Labor Organization, the risk of social unrest “is highest among the EU-27
countries” and has increased from 34 percent of the population in 2006-07 to 46 percent in
2011-2012.”

That’s not surprising when you consider the steps Europe’s leaders continue to take — for
example, confiscating bank-depositor money … implementing immigration controls (the very
thing that the EU was supposed to help eliminate) … and embracing the International Monetary
Fund’s (IMF) proposal to implement a 10 percent wealth tax on everyone.

It wasn’t very long ago that many people believed we were entering a new golden age. After the
fall of the Berlin Wall in 1989, the collapse of the Soviet empire and the emergence of the United
States as the world’s sole superpower, some historians even began to talk about “the end of
history,” the notion that international conflict would gradually fade away as more nations
embrace liberal democracy and free markets. Like polio and cholera, war would become an
extinct scourge of the past, they said.

Well, it hasn’t quite worked out that way. Across the globe, conflicts old and new are now
erupting … and the prospect of a true world war is now gaining credibility — including regional
wars in the Middle East and North Africa … civil wars in Europe … plus a major conflict
between the West and the East.

Pope Francis seems to agree: In September 2014, he declared that World War III had already
begun “in piecemeal.” As he put it: “Even today, after the second failure of another world war,
perhaps one can speak of a third war, one fought piecemeal, with crimes, massacres,
destruction.” But wars don’t just happen. Yes, sometimes they are triggered by seemingly
random, isolated events — like the assassination of Archduke Ferdinand right before World War
I. But, in reality, they are the result of global social and economic forces that build up over a
period of years. And it’s those forces that create the conditions in which the outbreak of conflict
is virtually inevitable, regardless of what may trigger them.

Historians and social scientists have studied these forces for hundreds of years. But in just the

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past century, a handful of mathematicians, cultural anthropologists and sociologists have noticed
that the social and economic forces that give rise to war display repeated patterns — patterns that
can be studied and, in most cases, predicted with stunning accuracy.

These patterns are what I call “war cycles.” “War cycles” is simply a term that refers to regularly
repeating patterns of social and economic behavior that lead to wars among nations, within
nations, or between governments and their own people (civil wars).

Thus, World War III is a combination of all three.

What Exactly Are War Cycles?

Start by considering that, in dress styles, entertainment, education, politics, business and much
more, what may have once been considered “old fashioned” suddenly becomes fashionable
again — and vice-versa. This happens in a cycle. And for our purposes, a “cycle” is simply a
pattern of phenomena or behaviors that repeats itself over time.

Rigorous analysis of war statistics, correlated with vast new databases of global economic and
social information, reveals abundant evidence that there is a regular pattern to the outbreak of
warfare.

We have analyzed in detail more than 14,000 wars spanning nearly 5,000 years of human
history — and used special types of statistical analysis involving more than 3 billion different
computations to identify the periods in time when war and geopolitical conflict, domestic or
international, are most likely to break out. These cycles are now ramping up and converging in a
way not seen since the late 1800s, and they are likely to increase in intensity each and every year
all the way into late 2020.

Moreover, these cycles will alter everything you thought you knew about the economy, financial
markets, governments — even the way we live our lives And if you are not proactive now, they
threaten to destroy your wealth.

Consider just some of the major hot spots …

Russia versus Ukraine and other former Soviet satellites, versus Europe and the U.S.
The reign of terror by the Islamic State (formerly ISIL or ISIS). This group of terrorists,
best known for beheading Western journalists and aid workers, is so violent and extreme
that they were actually kicked out of al-Qaeda. And now they are the most well-funded
terror group in the world with nearly $500 million in the bank — plus countless affiliate
groups worldwide.
Nigeria, where Boko Haram Islamists have killed thousands of villagers and brazenly
kidnapped several hundred young school girls by posing as Nigerian soldiers, hijacking a
school bus, rounding everyone up and opening fire. The girls are still missing.
Kenya, where the al-Qaeda affiliate Al-Shabab terrorist group instigated a recent
bloodbath in Mpekeoni, a well-known tourist area; where more people were massacred by
Islamic extremists and Al-Shabab in the coastal areas; and where an additional 48 World
Cup fans were also slain.
Pakistan, where more than 70,000 civilians are now homeless refugees, fleeing from
government troops who killed 105 militants in North Waziristan’s Shawal area.
Canada, where a Calgary suicide bomber who killed 19 Iraqis has become a propaganda
tool for jihadists, who are urging Muslims to follow his “great example” and demanding
that Canada change its “oppressive” foreign policies.
China, where in the Xinjian region, the Chinese government recently executed 13 people

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found guilty of organizing and leading terrorist groups.

China versus Japan, Vietnam, Indonesia, Malaysia, the Philippines, in an international
dispute over the Spratly and Senkaku Islands and their vast oil and gas reserves. China is
claiming territorial jurisdiction, seizing land and waters from neighboring countries. This
ongoing dispute will ultimately lead to an international war.
Then there’s Syria, Yemen, Egypt, Turkey, Iran, North Korea, Venezuela, Myanmar,
Libya and a host of other countries where widespread violence is rapidly rising.

Also look at how they are impacting every continent on the planet except Antarctica …

Africa: Fully 24 countries are now actively engaged in war, with 146 different militias-
guerrillas, separatist and anarchic groups waging violence. The hottest spots: The Central
African Republic (civil war), Democratic Republic of Congo, Egypt (popular uprising
against the government), Mali, Nigeria (war against Islamic militants), Somalia, Sudan and
South Sudan (civil war).
Asia: 15 countries are at war, with 129 different radical and separatist groups contributing
to the conflicts and uprisings. The hottest spots: Afghanistan, Myanmar, Pakistan, the
Philippines and Thailand (Army coup d’état May 2014).
Europe: Nine countries are under siege via 70 different militias-guerrillas, separatist
groups and anarchic groups. The hottest spots: Chechnya, Dagestan and Ukraine.
Middle East: Eight separate countries are now engaged in bloody conflict, with 169
different rebel and separatist groups fanning the flames and firing bullets. The hottest
spots: Israel, Yemen, Syria (civil war) and, now, Iraq (sectarian civil war).
The Americas: Five countries are either at war or experiencing massive domestic unrest,
with 25 different rebel and separatist groups and drug cartels instigating the violence. The
hottest spots: Columbia, Mexico and Venezuela.

All told, some 61countries worldwide are actively engaged in war, and an incredible 540
anarchist, separatist and rebel groups are taking up guns, bombs and other weapons.

And these are only the “official” wars. Other smoldering hot spots around the world are almost
certain to ignite in the near future into either civil or international war. Not to mention the
secessionist movements (civil strife) that are now occurring in many parts of the globe —
Catalonia wanting to secede from Spain, Northern Italy fighting Southern Italy, Scotland still
wanting out from the United Kingdom, Quebec from Canada — and more, including 10
secession movements beginning to gain strength in the United States.

In parallel, we see governments waging war on their own citizens via rising taxation, witch hunts
against dissenters, class warfare against the rich, spying on their own citizens, stiffer regulations
of businesses, and much more.

As I said, what I am predicting is not a traditional world war. Instead, you can make a list of
every possible variety of warfare you can imagine — civil war, war of attrition, cold war, proxy
war, revolution, rebellion, guerrilla war, terrorist attacks, economic warfare, cyber warfare —
and that is what we will witness during World War III.

It can also include regional conflicts — between China and its neighbors in the South China Sea,
for example. It can include civil wars erupting in many different parts of the world
simultaneously — especially in the Middle East and Africa. It can include a collapse of the euro
and a disintegration of the European Union due largely to a schism between the richer northern
countries and the debt-ridden southern countries.

We will see financial trade warfare launched via currency devaluations. We will see governments

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confiscating private assets and dramatically raising taxes on their citizens so that they can fund
their war machines.

We will see the continued proliferation of terrorist and jihadist movements, as well as a dramatic
rise in acts of domestic terrorism.

We are already witnessing massive cyber-warfare being waged between countries — as well as
cyber-espionage by governments against each other and against their own people.

We will see governments increasingly imposing restrictions on capital flows — to block their
citizens from taking their own money with them when they flee from creeping authoritarianism.
(Yes, the U.S. is gearing up to do this too).

We will see an increasing loss of liberty and privacy.

Nuclear war? I certainly hope not. But in the worst-case scenario, what if North Korea presses
the button to attack South Korea, Japan or even the United States? Or suppose Israel launches a
pre-emptive attack on Iran’s nuclear facilities. And what happens if extremists come to power in
nuclear Pakistan, the arch enemy of India’s Hindu regime, also a nuclear power? Can anyone
calculate the mathematical probability that each of these countries will always avoid pressing the
hot buttons on their nuclear weapons? No. And therein lies one of the greatest uncertainties of
all.

Why Civil Strife Is Escalating Worldwide

Wars and other forms of international conflict are only one part of the war cycles. Domestic war
cycles are ramping up at the same time as the international war cycles.

Why?A key reason is that governments around the world are in various stages of financial
bankruptcy.

In the first stage of bankruptcy, they pile up a mountain of insurmountable and unpayable debts.

In the second stage of bankruptcy, they find it increasingly difficult to sell their new debts to
investors and must rely on their central banks to print money to purchase them. In the third
stage, they seek bailouts from other, financially stronger countries. Needless to say, this door is
closed to countries that are already among the largest in the world — Germany, Japan and
especially the United States.

In the fourth stage, they default. This is what happened in Russia in 1998 and in Argentina in
2001. It’s the story of Greece and even countries like Spain, Portugal and Italy.

Finally, in the most advanced stage of government bankruptcy — either in a desperate attempt to
avoid default or to recover from one — governments turn on their own people to confiscate the
money. And it’s at this stage that the danger of civil unrest is the greatest of all.

Because bankrupt and destitute governments are now acting like caged animals, striking out
against their own people by raising taxes, engaging in confiscatory wealth measures and capital
controls and spying on their own citizens.

Some prime examples:

Cyprus: In March 2013, the government confiscated depositors’ savings accounts to bail out the
country’s banks, a policy that has now been embraced and legalized for all of Europe. Have
money in a European bank? Good luck, if that bank goes under, your money is at risk of being
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confiscated.

Poland: In September 2013, Poland announced the confiscation of retirement accounts. Fully
half of all private retirement assets in that country were transferred to the state without offering
retirees any compensation whatsoever for their losses.

France: The income tax rate already goes up to 75 percent. Even more worrisome, France’s
Marine Le Pen’s Front National championed a report by several well-known French economists
that concludes that 60 percent of French public debt is illegitimate, sowing the seeds for a French
sovereign-debt default down the road.

Argentina: Massive sovereign debts have been unpayable, and confiscatory measures against
pensions have been commonplace.

United States: Government and private organizations engage in broad spying on citizens and
foreigners alike, tracking everything you do, every penny you spend or squirrel away.

Western Europe: Ultra-nationalist, even neo-fascist parties have gained ground in reaction to
mass immigration from North Africa, the Middle East and Eastern Europe.

All across the globe, the tide of geopolitical unrest is rising at a quickening pace. When
governments are bankrupt — like the United States and Europe are today — historically they
turn first against their own citizens by raising taxes, by attacking the rich, by spying on them, by
engaging in confiscatory measures and more.

This is one reason the egregious spying on private citizens by the National Security Agency
(NSA) continues, despite the public outrage against it.

It also hints at what we could see in the future as Washington adopts increasingly Draconian
measures, repeating the same old mistakes that have caused the decline of every major power
throughout history.

The Role of Geopolitics in Investing

Without a doubt, war cycles and geopolitics are two of the most important forces you need to
monitor in the months and years to come. Both can have a devastating — or electrifying —
impact on the flow of global capital.

Moreover, among all the factors investors have to reckon with, they are also the most opaque,
and the least understood. The inevitable result is a series of shocks and surprises with the
potential to change everythingyou thought you knew about the markets.

Contrary to what many investors assume, it could be primarily war and geopolitics — not
inflation or monetary policy — that will drive several new bull markets in stocks and
commodities.

We know that most commodity markets respond bullishly to rising geopolitical tensions and
war. They move up in response to the inevitable hoarding, both by nations and individuals, that
happens as individuals seek to prepare their households for a possible catastrophe and to get
their money off the grid.

That’s the key reason why collectibles, diamonds, art, jewelry and related markets surged
dramatically in the wake of spreading global conflicts, hitting one new record price after another,
achieving record sales volumes, and promising to continue on that path.
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It’s also why industry sources have reported to me that as much as four-fifths of Swiss gold
exports are no longer flowing toward traditional havens in the West but, rather, to geopolitically
safer, off-the-grid depositories in Singapore and Hong Kong.

And ironically, the bad news for Europe and the increased tensions worldwide will also propel
the stock market much higher in the years ahead.

I know it may sound counter-intuitive. But the same thing happened between 1932 and 1937,
the last time Europe went bankrupt, driving tidal waves of European money into U.S. equities.

Both then and now, despite America’s own problems, the United States wins the global beauty
contest for the “least ugly.” And it’s the large, highly liquid U.S. financial markets that are the
most sought-after safe haven for capital that’s fleeing the instability of Europe, the Middle East
and beyond.

Adding still more momentum to that trend, U.S. equities will also become the favored safe-haven
destination for capital rushing from the arms of a bankrupt governments. Investors will dump
sovereign bonds. And when they do, the only other alternative will be the highest quality
equities in the most stable companies of the safest countries in the world.

That does not mean the market will go straight up. Nor does it mean investors can simply buy,
hold and throw away the keys. To the contrary, sharp pullbacks are periodically needed to pave
the way for higher prices.

Nevertheless, it would be a mistake to underestimate the speed at which war cycles could
overpower nearly all traditional influences on the financial markets. And it would also be a
mistake to underestimate how high the U.S. stock market could ultimate rise.

My long-term models consistently project that the Dow Jones Industrial Average is headed to
31,000 or higher in the years ahead — not in spite of rising geo-political conflicts… but because
of them!

Get Ready for the Coming Great Confiscation

When I look at the total picture of what is presently happening in the public arena, when I review
the evidence of what’s likely happening behind closed doors, when I consider everything I know
from my studies on war cycles, I react in two ways: I write to warn you, as I’m doing with this
book. And I get nervous about my own money.

I get more nervous when I consider what has been revealed about the brazenly long arm of the
U.S. government, its egregious intrusions on our privacy, and its efforts to mandate our health
choices. And I get especially nervous when I witness the oppression of governments around the
world that make America seem like a paradise of freedom by comparison.

Unfortunately, these trends point in one — and only one — direction: The massively indebted
governments of the world, including the United States, will ultimately seek to pay off their debts
with your money. And they will do so by confiscating your wealth in a variety of ways.

Hard to believe they could reach that far? Then just look at Obamacare. It was sold to the public
as a noble effort to provide health care to every American, including the poor and those falling
between the cracks of health coverage. How many people would really oppose such a noble
intention?

But, in reality, Obamacare is little more than another type of confiscatory tax on the wealth of
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middle- and upper-income Americans. That is precisely what the U.S. Supreme Court effectively
declared when it ruled that Obamacare is constitutional under the government’s authority to tax.

Thus, Obamacare is, in essence, a new tax on top of hundreds of taxes Americans must pay
every day at every level. And it’s also the kind of tax that is virtually guaranteed to increase
substantially over the coming years.

This sort of sneaky, confiscatory tax increase and outright confiscation of individual assets has
been happening with growing frequency all over the world.

The Red-Light Warning Sign from Cyprus

Although it’s a small country, Cyprus is a member of the European Union and a part of the
eurozone. This not only means it’s expected to respect the same standards as every other country
in one or both of those blocks, but it also means that what happens in Cyprus can be a canary in
the coal mine for the rest of Europe, including countries with major banking and financial
centers like France, Germany and the UK.

This is why the events of March 2013 are so significant: Suddenly and without warning, Cyprus
leaders grabbed between 7 and 10 percent out of every savings account on deposit in Cypriot
banks in order to bail out their desperately broke government and banking system.

Cyprus then enacted laws restricting citizens from withdrawing their remaining cash and taking it
out of that country to safer havens overseas.

It was an unprecedented government theft of private assets, which sent shock waves around the
world and especially terrified savers in other debt-ridden eurozone countries, such as Spain, Italy
and Greece.

The message was clear: Have money in a European bank? Good luck! If that bank goes under,
your money is at risk of being confiscated.

When governments are desperate for money, pension funds are even more vulnerable.

In 2001, Argentina confiscated approximately $3.2 billion of pension savings in a desperate

attempt to avoid default.

Then, in 2008, they did it again, this time grabbing $29 billion to fund the deeply indebted
operations of President Cristina Kirchner’s regime.

In 2009, Ireland seized $5.2 billion from its Pension Reserve fund to bail out its banks and then
seized another $3.5 billion in 2010.

The year 2010 was also when citizens of Hungary were given a stark choice: Either remit your
individual retirement savings to the state, or lose the right to the basic state pension, even though

you’ll still be forced to make your regular contributions to that same fund. At stake: over $14
billion of individual retirement savings.

In 2011, it was Portugal’s turn. In a last-ditch effort to meet its deficit targets, it raided over $6
billion of pension fund assets.

Also in 2011, Bulgaria made moves to transfer $300 million in private retirement funds to the
state’s control.

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Most recently, in 2014, the Russian government did the same, seizing citizens’ pension
contributions. Normally, 6 percent of Russians’ salaries, or approximately $8 billion, is
earmarked for their retirement. But now that $8 billion was used to finance government spending
instead.

Most American citizens think that nothing like that could ever happen in the United States. But
citizens of Argentina, a modern nation with high levels of education and strict rule of law,
thought the same thing. So did the people of Poland, Hungary, Portugal, Bulgaria and Russia.

Clearly U.S. savers should not be complacent about the confiscatory threat posed by our own
government, especially considering the U.S government’s current $17 trillion debt and recent
rumblings by the U.S. Consumer Protection Bureau that the government should step in and
“help” U.S retirees better manage their 401K retirement savings.

As long as U.S. financial institutions and foreign investors have both the resources and the desire
to continue holding the $17 trillion in U.S. debts, it’s not a problem. But as soon as the U.S.
economy weakens, the U.S. dollar falls in value, or confidence is shaken in some other dramatic
fashion, those investors will rush for the exit doors, and the U.S. government may have no
choice but to replace those funds by taking desperate actions.

Consider, for example, a recent bill in the U.S. Congress sponsored by Senator Barbara Boxer. It
would allow the U.S. government to confiscate your passport when you owe more than $50,000
in federal taxes, a law that was also enacted in ancient times by the Romans. Before traveling
abroad, Roman citizens were required to prove they owed nothing in taxes.

The Foreign Account Tax Compliance Act (FATCA), a law that requires every American to
report overseas financial accounts, is equally worrisome.

All of these power grabs are justified by politicians as efforts with the sole intent of “helping to
protect you.” One of the intents? Perhaps. The sole intent? No.

How many times have we seen laws passed for purposes that nearly all citizens would readily
support, only to be subsequently used against those same citizens?

The Patriot Act is a classic example. It was sold to the American public as a powerful tool to
protect us from foreign enemies, but has already been used, ad nauseum, as an equally powerful
tool to intrude on the lives of average citizens.

Similarly, FATCA, enacted to help prevent tax evasion, could also be used in the future to
facilitate wealth confiscation via special tax levies on U.S. citizens’ assets invested abroad. And
Senator Boxer’s bill, if passed, could be used to confiscate wealth via heavy fines to retrieve
one’s passport.

Thus, nothing is ever exactly as it seems in the halls of government. That’s true even in the best
of times. And it’s invariably far more severe in the worst of times. The unfortunate result is that,
in years ahead, investors may have to spend more time reading between the lines of what
governments on both sides of the Atlantic are doing and saying than they spend deciphering
economic statistics or central bank monetary policies.

All This Is Why the Rich Are Now

Starting to Hoard and Hide Their Wealth.

After all, you can’t hide real estate or savings. Nor can you hoard copper, oil or corn.

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And ironically, this is also a factor behind the U.S. stock market’s rise. Increasingly, equities are
viewed as safer than government bonds, and even safer than bank accounts — not to mention
the fact that they produce far higher returns via capital appreciation and dividends.

Moreover, unlike bank accounts, strict securities laws and the lobbying power of Wall Street are
seen as helping to make equities far less vulnerable to confiscation. Even less vulnerable than
cash in the bank. Hard to believe? Then just ask anyone who held assets in a bank in the country
of Cyprus back in March 2013.

Civil Conflict: The War of the Public

Sector Against the Private Sector

In parallel with international conflicts between nations, we are also witnessing the emergence of
a global battle between the public and the private sectors… a battle that is being fought in almost
every country… and a battle that will soon come to Main Street, USA.

By public sector, I mean local and central governments and all related institutions. My definition
of private sector, meanwhile, is very broad — not just corporations and all forms of private
enterprise, but also the general public, including both their economic and political behavior.

Naturally, the battle will take a different form and arise for allegedly different reasons when it
strikes America.

But its essence will be the same: It will be a backlash of the private sector against the public
sector, against the widespread loss of privacy, against rising confiscatory taxation, against
Washington’s fiscal irresponsibility, against a bankrupt Social Security system, against an ineptly
run Veterans Affairs Department, against student loans that Washington underwrote and that are
now bankrupting scores of college and postgraduate students … and perhaps most of all, against
an increasingly heavy-handed, poorly managed Internal Revenue Service that seeks to monitor
everything you do, every penny you save, every penny you spend, every item you buy — all in
the name of collecting taxes to bridge an out-of-control government deficit.

But instead of responding to these rebellions with reforms, the U.S. government is more likely to
take a harder line and intrude even more consistently into the financial and personal lives of
American citizens.

Hard to believe? This scenario is already beginning to play out with …

The NSA’s Turmoil program, the dragnet surveillance system that basically collects
metadata on ALL Internet and phone activity, globally. That means everything you do
online with your PC or mobile device is fed into a massive government database, where it
is stored, and potentially reviewed for up to 15 years! So much for your Constitutional
right to privacy!
Its Dishfire program that sweeps up hundreds of millions of cellphone text messages,
extracting information on your location, contacts, travel plans and financial transactions.
Its Dropoutjeep program that can hack into your iPhone and remotely retrieve just about
all your iPhone data, including your personal text messages, photos, contact names and
telephone numbers, your whereabouts 24 hours a day, your voice mail messages and
more.
Police departments across the country that have been installing license plate readers on
police cruisers and city buildings to track, in real time, the movements of virtually every
car in their jurisdiction.
The IRS, caught red-handed targeting specific groups of conservative taxpayers and anti-

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tax organizations solely because of their political beliefs.

The White House, authorizing the use of an estimated 30,000 unmanned drones to patrol
U.S. airspace, snooping on private cars and homes.
The Department of Homeland Security (DHS), purchasing 1.6 billion rounds of hollow-
point ammunition that is used to train the entire U.S. army in combat.
The “Constitution-Free” zones that have been created by Washington, where the DHS can
search the contents of your laptop and cell phone, without providing any reason for this
search, in a clear breach of the Fourth Amendment.

And never forget the Internal Revenue Service’s Foreign Account Tax Compliance Act
(FATCA), which I mentioned earlier — the federal law that requires every U.S. citizen, including
individuals who live outside of the United States, to submit financial information to the IRS on
their financial accounts held offshore, while also requiring foreign financial institutions to report
on their U.S. citizen customers’ activities to the IRS.

The Government’s Attempt to Track and Tax Your Every Penny

Most people know about — or have even come around to supporting — the U.S. government’s
obsession with spying on its own people to protect the homeland from terrorist attacks. What
most people don’t understand — or greatly underestimate — is how easily those same laws,
institutions and the powerful technologies, ostensibly dedicated to anti-terrorism activities, can
be redeployed for the purpose of confiscating your wealth.

And both sides — the public and the government itself — fail to grasp how this blatantly
unconstitutional invasion of privacy and continual violation of the Fourth Amendment will
backfire.

First, it’s going to do exactly the opposite of what the government intends. It’s going to send
more and more small-business transactions underground.

Second, it’s going to fuel a boom in under-the-radar bartering, and more attempts by individuals
to use private digital currencies like Bitcoin for their financial transactions. It’s going to compel
citizens to send their money into hiding, to every extent possible.

Third, it’s going to send more and more money — and assets — offshore. Yes, any money you
place offshore, any gold or silver bullion, now needs to be reported to the IRS, per FATCA. But
that won’t stop money and precious metals from heading offshore. In the minds of most
investors, and in the real world as well, the further away from Washington’s reach you stash
your money and many of your assets, the safer they will be.

Fourth, and most important, it’s going to have a mind-boggling effect on nearly all financial
markets. Namely, it’s going to drive capital in a way that is constantly seeking out what I call
portable wealth.

That includes money and alternative assets that can be easily transported and hidden from view.
Examples: Artwork, diamonds, jewelry, gold and silver coins, collectibles like rare coins, stamps,
books, valuable historic documents and more.

These kinds of assets not only hold their value for the super-rich, but can be squirreled away, off
the grid, from prying eyes and easily transported. They are assets with great portability.

But it does not stop there. Portability can also be achieved by holding assets that are deemed
non-confiscatable, such as stocks. Own a government bond and Washington knows you own it.
Own a share in Apple and it’s unlikely Washington will subpoena Apple for a record of your

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shares. And it’s equally unlikely they will confiscate your Apple shares (especially if you take
delivery of them).

Stocks — and especially gold and silver — also have another important aspect — fungibility.
Each share of stock, each ounce of gold or silver is a standard unit that’s identical to every other
share or ounce of the same company or grade of metal. And each is traded actively in large,
well-regulated markets. So when you need cash, digital or otherwise, stocks, gold and silver are
easily converted back to a more liquid medium of exchange.

And it is this superior portability and fungibility that will be major factors behind the next move
higher in gold and silver. Ditto for stocks.

The Secret Wars Being Waged Today

The big point here is that there are major economic wars currently being waged behind the
scenes, and the biggest of all is Washington’s preparations to confiscate large portions of your
wealth. I never thought it would come to this, but it has.

It started way back in September 2011, when U.S. Federal Reserve Chairman Ben Bernanke
announced his quantitative easing program known as QEIII. In an effort to pump cash into the
faltering U.S. economy, the government purchased massive quantities of U.S. Treasuries and
other government-backed securities.

But the money-printing failed to have the desired effect. Gold, instead of soaring, plunged. What
did start to soar, however, were collectibles and portable wealth, such as gold coins, jewelry,
loose diamonds, art work, rare books, rare watches and more.

In short, savvy investors and insiders began hoarding their wealth and getting it off the grid to
the greatest extent they could. And this is what they are doing now more than ever.

The reason: The money-printing in Europe and the United States is not working. You see, the
money-printing was designed not just to bolster the economies of Europe and the United States,
but also to inflate away Europe’s and Washington’s debt problems by devaluing their respective
currencies. But here’s the catch: Right now, with the exception of the equity markets, inflation is
not happening in the United States and in Europe. Quite to the contrary, in some key markets
and regions, outright deflation has the upper hand.

Why? Because there are huge supply gluts of key commodities like oil. Plus, there’s simply too
much government debt in the world today, and savvy investors know that the collapse of that
debt means deflation.

In a nutshell, money-printing is not working to inflate away Washington’s or Brussels’ huge

debts. So now, both governments are actually turning against their own citizens and are
preparing to usurp their wealth to pay off their gargantuan mountains of federal debt.

Remember what I told you about the alarming steps taken in Cyprus. The government there
literally confiscated a portion of people’s bank accounts to pay off mounting government debts
and rescue the country’s banks.

So brace yourself. As the war cycles heat up, egregious government acts of repression, intrusion
and confiscation will expand — plus, along with it, the roots of popular rebellion will grow.

In fact, they already are growing.

This is why, in 2013, a USA Today poll concluded that “more than half of Americans view
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government as a threat to their freedom.”

It’s also why a Huffington Post May 2013 poll reported that 29 percent of all voters surveyed
believed that “an armed revolution in order to protect liberties might be necessary in the next
few years.”

Mark my words: The revolutions that are spreading around the globe will make their way to
Main Street, USA. And ultimately, we will see most, if not all, of the “bums and clowns in
Washington” thrown out of office, replaced by a new government that restores the rights laid
down by America’s founding fathers. Unfortunately, we may have to take a side trip through
chaos and suffering before we get there.

Are popular uprisings really possible in America? World history tells us that no country is
immune. And recent American history is even more explicit on this issue — the Vietnam era
protests that shut down America’s largest universities in the wake of shootings at Kent State, the
many hot summers in the 1960s and 1970s that brought rioting to major cities across the United
States, not to mention recent national protests against America’s police forces.

Beware. When governments realize they’re broke and their very existence is at risk, don’t be
surprised if future rebellions in the U.S. make the kind of unrest we saw in the 20th century seem
like a walk in the park. We see it already happening now in Europe. And in all major
industrial nations, we see the coexistence of a nasty set of conditions that historically foment
unrest…

1. Governments acting against other governments.

2. Governments acting against their own people.

3. People rebelling against their governments.

Not since the Cold War, at least, and possibly not since World War II, has the world seen so
many shifting alliances and hotspots erupting across the globe simultaneously.

It’s OK to be afraid of this. So am I. But it’s not OK to be afraid and complacent. It should
prompt you to take deliberate, well-planned, rational steps — and to rethink every investment
you own.

I repeat: My studies on the war cycles in human history point to the coming years as being the
most chaotic period in our lifetime, and one of the most chaotic in modern history.

World War III has already begun. Even Pope Frances recognizes it. It’s about time you do, too.

The world is heading toward very troubling times. The war drums are beating louder and louder
nearly every day.

And never forget: The agent of war, at least modern war, is government. People don’t wage
wars. Governments do .

More precisely, elite groups of politicians and modern-day warlords use the machinery and
technology of government to initiate military strikes against people in foreign lands or on their
own soil.

Most people think of military conflicts in a very one-dimensional way — for example, as friction
between Russia and the United States, between Israelis and Arabs, or between Sunnis and

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Shiites.

They think that these distant conflicts have nothing to do with them, here at home, thousands of
miles away. Yet, all of these conflicts have something very important in common: Not just
economics but also, in an even more dramatic way, the global battle between the public and
private sectors.

Consider the religious wars in the Middle East. On one level, they might be viewed as battles
between different sects of Islam, vying for ideological control of the masses.

Yet, there is also another force fanning the flames of these heated sectarian blood baths: A
centuries-old attack by all of the factions in Middle East against what they perceive as Western
imperialism, which is also, in a different way, a battle between the private sector versus the
public sector.

The same holds true in Europe. All across Europe, we are seeing people rising up against the
European governments. They’re rising up against the single currency. They’re rising up against
the EU and the domination of Germany.

In other words: This is about governments waging war against other governments and against
their own people, largely because those governments are bankrupt.

In order for governments to save themselves, they have to do several things: They have to raise
taxes. They have to print money. And, ultimately, they also have to confiscate wealth.

2. The Cycles of War

Why Unstoppable Social and Economic Forces Virtually Guarantee Governments Worldwide
Will Wage War Against Their Own People… and Each Other.

“There are only patterns, patterns on top of patterns, patterns that affect other patterns. Patterns
hidden by patterns. Patterns within patterns. If you watch close, history does nothing but repeat
itself.” — Chuck Palahniuk.

We live in a time when war, rumors of war, terrorism and domestic social unrest are reaching
extremes greater than anything we’ve seen in decades, and all signs point to a continued
escalation for years to come.

Throughout the 2000s, I said that the global conflicts of the next decade would be a historic
turning point for all mankind. That’s because I saw that the cycles of war were rapidly ramping
up higher, setting the stage for major changes in nearly all financial markets.

Those changes are now unfolding right before our eyes. They’re not just typical market- driven
changes — small scale, minor moves that mean little in the overall scheme of things.

Nor are they limited to the markets. The events we are now seeing unfold affect not only every
major market, but also every economy and every society on the planet. They will change the
way we view the world, the way we look at other countries, their governments, our money, and
how we invest or trade in the markets — even how we live our lives.

Indeed this phenomenon — the escalating cycle of wars and revolutions — is the single most
important development that you need to know about in order to protect your wealth. Period.

And the cycles we are seeing now will continue ramping up all the way until 2020. That means
that civil wars, domestic violence, geopolitical hostilities and even major international conflict
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will only get worse.

We are about to witness the most turbulent times since at least World War II. I don’t say all this
to scare you. I am not an alarmist, a fearmonger or end-of-the-world doomsayer.

I am merely a student of history, of society, of mass human behavior, of markets — and of the
cycles that drive them all. I rely on facts and observations, with a keen eye toward history and
how certain behaviors and patterns in markets, economies and governments repeat themselves at
periodic intervals of time.

The Three Tiers of Global Conflict

Of course, not all of these conflicts pose the same level of threat. The Council on Foreign
Relations, an independent, nonpartisan think tank based in New York and Washington, D.C.,
ranks the world’s violent hot spots into three categories:

Tier One conflicts that could directly threaten the U.S. homeland, that will likely trigger
military involvement by the United States because of treaty commitments, or threaten the
supplies of critical strategic resources. They include:

The European sovereign debt crisis linked to the collapse of the euro, which they fear
could trigger another U.S. recession or debt crisis.
A disruptive cyber-attack on critical infrastructure in the United States (e.g.,
telecommunications, electrical power grid, gas and oil reserves, water supply, banking and
finance, transportation and emergency services).
A mass human casualty attack on the U.S. homeland or on that of a treaty ally.
A severe North Korean crisis.
A major military incident with China involving the United States or allied forces.
An Iranian nuclear crisis.
Drug-trafficking violence in Mexico that spills over into the United States.
Major internal instability in Pakistan.
Political instability in Saudi Arabia that endangers global oil supplies.
A U.S.-Pakistan military confrontation, triggered by a terrorist attack, or in response to
U.S. counter-terrorism operations.

Tier Two conflicts that impact countries of strategic importance to the United States — but
do not involve a mutual defense treaty commitment. They include:

Political instability in Egypt and the resulting regional implications.

Rising tension in the eastern Mediterranean Sea between Turkey and Israel.
Intensification of insurgency or terrorist attacks in Afghanistan.
Widespread civil violence in Syria, with the potential for outside intervention.
Renewed civil violence in Yemen.
The potential for the U.S. to get re-involved in Iraq due to the civil war there.
A South China Sea armed confrontation over competing territorial claims.

Tier Three conflicts that could have widespread humanitarian consequences:

Increased military conflict between Sudan and South Sudan.

Heightened political instability and sectarian violence in Nigeria.
Increased conflict in Somalia, with continued outside intervention.
Political instability in Venezuela.
Renewed military conflict between Russia and Georgia.
Political instability in Libya, the Democratic Republic of the Congo, Armenia and
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Azerbaijan.

You may think that all of these conflicts are far away, unrelated or simply the result of disputes
between isolated factions of religious extremists, with no impact on you. But mark my words:
Look closely, as I have done, and you’ll see that all or nearly all of the above conflicts —
whether religiously inspired or not — have two common threads:

1. The people (i.e. private sector groups) are rising up against authoritarian, unjust and corrupt
governments.

2. Additionally or alternatively, they are rising up against governments that want to increase
taxes or even confiscate wealth while, at the same time, levying austerity measures on their
people to slash previously promised benefits.

In many of the lesser developed countries, it’s the result of government corruption, imperialistic
actions taken by developed countries, pillaging of natural resources, and more. Yes, the conflicts
are shrouded in religious, especially Islamic extremism. But when distilled down to their
essential causes, the forces driving the conflicts are no different than the forces that are driving
the civil and international unrest you are now seeing in developed countries.

The differences boil down primarily to a matter of form or degree. But an impartial and objective
study of the forces that are driving the war cycles higher — wherever in the world they are
playing out — reveals that they are all rooted in the great battle between the public and the
private sectors, and that the primary spoils of that battle are scarce resources and wealth.

And make no mistake: All this is merely the beginning.

As of this writing, most of the unrest falls under the rubric of civil wars and conflicts. Looking
ahead, not only will we see more of the same, but we’re also likely to see more international
conflicts.

North Korea will act up again. The China, Spratly and Senkaku Islands dispute will lead to
military conflict between Japan, Korea, Indonesia, the Philippines and Vietnam. And yes, the
United States will undoubtedly get involved.

Meanwhile, Putin will grab more territory from Eastern Europe, dragging Europe and the United
States into a proxy war with Russia and even possibly a direct military conflict.

It may not happen tomorrow, or next month. But we have every reason to believe that it could
happen in the years ahead.

War is a Predictable

My experience tells me that the social and economic patterns that make war likely — that create
the conditions in which warfare usually breaks out — are nearly as predictable as the movement
of the moon across the sky.

I first became interested in warfare as a social phenomenon when I studied cultural anthropology
at Columbia University and researched conflicts that had erupted between Indian tribes in North
America and between the U.S. government and the various Indian nations.

I also studied warfare among the nomads of Afghanistan. What I determined from my research
was that, warfare was economically motivated in virtually all cases, even among very small and
primitive societies.

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What’s more, one could almost always trace the underlying causes to the scarcity of natural
resources — inequitable distribution of food, water, land and more. While the trigger events that
sparked hostilities were varied, such as territorial expansion, the motivation for that expansion
was economic — the fight over limited resources.

In the early 1980s, when I was running my own brokerage firm in New York, my interest in the
underlying causes of war was rekindled. My interest was stoked by the negotiation of an
international agreement known as the Plaza Accord.

This agreement was initiated by the U.S. government in Washington in an effort to devalue the
U.S. dollar, namely against the Japanese yen.

In 1985, the G7 nations assembled and declared that the U.S. dollar was too strong, was hurting
the world economically, and so the dollar should be devalued. This pronouncement set off a
trade war — which prompted me to look back to my earlier research on the causes of
international conflict.

As I was reviewing my previous research, I discovered the work of the Foundation for the Study
of Cycles, founded at the behest of President Herbert Hoover after he had left office. Hoover was
devastated by the effects of the Great Depression and the stock market crash, and he wanted to
delve more deeply into the causes. He sought to know how these things can happen — and that
led him to research business cycles and other economic phenomena.

Later, in 1941, as the United States was plunging full force into World War II, Hoover helped to
establish the Foundation for the Study of Cycles, and urged his former chief economist, Edward
R. Dewey, to head up the Foundation with a focus not only on economic ups and downs but also
on cycles tied to domestic and international armed conflicts.

Needless to say, no historian can follow human events with anywhere near the precision of an
astronomer tracking celestial bodies or an ecologist measuring biorhythms. But on average,
Dewey found that significant wars break out every 17.71 years. Given the vagaries of history,
this pattern is remarkably regular, going all the way back to 600 BC.

Some other analysts, also familiar with Dewey’s work, date the cycle lows and highs somewhat
differently than I do. But we all agree that the statistical pattern provides a firm basis for helping
to anticipate the ebb and flow of major conflicts.

Specifically, we find that the actual cycle lengths can often vary by a year or two. But in recent
experience, I have rarely seen them crest early. Either the peak arrives roughly on time, or it’s
delayed for a year or two.

This time around, according to my research and calculations, we may not see the worst of the
conflicts until late 2020, with the potential to stretch to 2022.

Dewey was an economist. He was especially adept at statistical analysis. What’s more, Dewey,
like Hoover, wanted to unravel the apparently mystifying complex of causes behind the Great
Depression, including the severe drought that occurred in the Dust Bowl.

With that goal in mind, researchers at the Foundation collected data on a wide variety of cyclical
phenomena. They were genuine pioneers in a field of study that would eventually become an
important component of what scientists call “systems theory” — the interdisciplinary approach to
systems with the goal of discovering general principles that can be applied to all systems,
whether in human society or nature.

Dewey himself went on to publish reams of studies about cycles in just about every facet of life
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— from animal life and the seasons to migrations and weather to the cycles of warfare. And he
was the intellectual grandfather for the effort to apply cycle theory to social and economic
phenomena.

More to the point, Dewey created the first database of social and economic data related to
warfare, going back about 5,000 years and relying on data obtained from Raymond Wheeler’s
Wheeler Index of International and Civil War Battles.

This Index was — and still is — the most authoritative chronicle of war ever published by an
analyst within this particular field. Wheeler’s work, published in 1961, was exhaustive and has
been used by many analysts in the field of war.

Using this data, and without computers, Dewey performed some rudimentary manual
observations and statistical calculations on the data. And he came up with some fascinating
correlations. In the end, he found that there is a regular cycle to major wars, roughly one major
war every 50 to 60 years or so.

That’s as close as he could get without the aid of computers. He concluded that every 50 to 60
years there’s going to be a major world war. He didn’t know why. He was strictly seeking to be
faithful to what the data showed him. He suspected these major wars were due to recurring
economic forces and pressures but he didn’t have the data processing power to dig deeper. He
just noticed that, from a big-picture outlook, certain cycles resulted in economic situations that
appeared to be conducive to war.

It was this research that drew me to Dewey’s work.

I became a member of the Foundation for the Study of Cycles. I purchased Dewey’s and
Wheeler’s data. More importantly, I took advantage of the immense power of modern computer
systems and advanced mathematical tools to analyze the data that Dewey and Wheeler could
only scan at the surface.

While Dewey looked at the data solely from an economic perspective, because he was an
economist, I also looked at the data from a sociocultural perspective due to my background as a
cultural anthropologist. It wasn’t guesswork. It was based on solid statistics and a computer
program that analyzed hard data on economic cycles and wars.

The pattern was clear: I discovered a 17.7-year cycle of war that has continued to the present
day. For example, when I performed my research, the last peak of the war cycle had occurred in
1974, just at the end of the Vietnam War. My model projected 1991 as the next peak, which
came shortly after the fall of the Soviet Union and China’s Tiananmen Square.

Using more detailed data, in 1988 when I published the research, I fine-tuned the projections and
went on record forecasting August 1990 as the point in time when the war cycle would next
emerge. In late August 1990, Iraq under Saddam Hussein attacked Kuwait, right on schedule. I
did not know who would attack whom. But in terms of its timing, Iraq’s invasion of Kuwait, and
the subsequent Gulf War I, came as no surprise to me.

The Three Major Cycles of War

In my analysis, I observed two major war-cycle patterns that repeat themselves consistently: a
17.7-year war cycle and an 8.8-year war cycle. These, in turn, are sub-cycles within a larger war
cycle.

Before computers, Dewey was able to determine that the larger cycle of global war comes

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roughly every 50 to 60 years. My work has refined it further, into cycles of 17.7 and 53.5 years:

1. The 17.7-Year War Cycle. The most influential rhythm within war cycles is the 17.7-year
frequency I discovered after extensive analysis with the Wheeler Index data. The cycle has been
validated all the way back to 600 BC, and its accuracy in pinpointing turning points

within the realm of civil and international conflicts is high. The track record and major data
points (dates) for the crests of this cycle for the 20th century are labeled in the chart:

The key turning points are:

The peak of the Civil War.

The bottom of WWI in 1918.
The rise from 1936 into WWII.
The Korean War and the Vietnamese War.
A turning point in 1997, which is when al-Qaeda plotted its attacks against U.S.
Embassies in Nairobi and Tanzania.

Most importantly, from 2014 heading into 2019, we should see increased global tensions and
more social protests and civil war. Heading into 2020, we will see a monumental rise in tensions
with the potential build-up for a worldwide conflict on the scale of WWIII.

2. The 53.5-Year War Cycle. This is the mother of all war cycles, the one that worries me the
most and that tracks major international-type wars.

In my work, I have researched and compiled literally

hundreds of economic cycles of varying degrees, from
as short a duration as four years to as long as 75 years.

In addition, I have accounted for adjustments that

reflect shifts seen in the economy over the past 40
years. As a result, I believe I have identified a long-
term war cycle that exhibits a high degree of regularity
and accounts for the major turning points within the U.S. economy.

The cycle I have researched is 53.1 to 53.5 years in length — although I sometimes refer to this
as the “54-year cycle.” This 53.5-year cycle may be broken down in six waves of nine-year
cycles and three waves of 18-year cycles. Each sub-cycle has accounted for minor economic
turning points as well as major international events. I call it the “Granddaddy of the War Cycles.”

When Cycles Converge

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Once you’ve identified certain regular patterns that recur over a time, you will sometimes find
that some of these patterns periodically converge. And when they do, their impact on markets
and on history is multiplied.

For instance, let’s say that you have discovered two distinct and proven time cycles in the history
of steel prices. One cycle has a duration of 15 years from high to high; the other, five years and
36 days (5.1 years).

Although the first start-date of the two cycles may be different times, at some point they will
converge — the peak in the 5.1-year cycle and the peak in 15-year cycle will impact the
commodity at approximately the same time, creating even more powerful pressures on the
market.

It may take centuries for different cycles within the same market (or different markets) to
converge, but the net result is the same. In this case, one would anticipate an extremely bullish
market for steel prices as one entered the period where the two cycles begin to converge.

The important fact to know about the current war cycle situation is this:

All three of my documented and proven war cycles — the 53.5 year cycle, 17.7 cycle and 8.8—
are now converging at the same time!

This strongly suggests we are entering a period in which economic and social conditions
virtually guarantee the outbreak of numerous wars all over the planet.

How War Cycles Can Predict Events

I wrote my first detailed report on War

Cycles in 1985. The forecasts in that report
came true with an accuracy that surprised
even me.

My team and I made a forecast that the 1985

Plaza Accord, which devalued the U.S. dollar
in order to combat a growing U.S. trade
deficit against Japan and Germany, would set
into motion a series of trade wars that would
cause a collapse in the U.S. stock market.

More specifically, I predicted that, as the dollar was devalued, the Japanese yen would surge and
become greatly overvalued. I said this would temporarily trigger a stock market crash in the
United States — leading to new highs for U.S. stocks in the1980s. But what was equally
important, I wrote it would also make Japanese exports extremely expensive, drive their foreign
sales down and set the stage for a long-term deflation in Japan.

Sure enough, in 1987, the U.S stock market suffered its worst crash since 1929. U.S. stocks then
recovered and went on to make new highs, just as I expected. And later, also following the
script, Japanese exports plummeted, setting the stage for a decades-long deflation beginning in
1990.

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This is just one example of the value — and reliability — the war-cycle analysis is in predicting
economic and financial events.

Three years later, in a 1988 follow-up report, using the same research data, I made the following
forecasts:

“These cycles when combined show us that there will be extreme political and cultural volatility
beginning in May of 1989. This volatility will increase in momentum into June of 1990 …

“As the War Cycle kicks off in the middle of 1989, a sharp correction will unfold probably
beginning after June of 1990 and based upon international fears stemming from global political
tensions.”

The report said that the war cycles data were pointing to “after June of 1990″ for some sort of
international conflict. I didn’t know what it would be, or what would precipitate it.

As it turned out, that event began just 33 days after the last day of June — on August 2, 1990 —
when the Iraqi Army invaded Kuwait. It took the United States four months to pull together an
international response, and in January 1991, Operation Desert Storm began with an aerial
bombardment of Iraqi forces inside Kuwait. Again, the war cycles were right on the money.

For most of the ensuing decade, the war cycles predicted relative peace in the world.

But then, in the late 1990s, the war cycles were ramping up again. By this time, I was working
with Weiss Research. Dr. Martin D. Weiss, the founder of Weiss Research, asked me what the
war cycles data showed going forward, and I told him that the data showed a major event
striking sometime after 1999 and before the end of 2001.

Of course, no one could have possibly known what that “major event” would be. But exactly
two seconds after 9:03 AM on September 11, 2001, when we all saw, on live TV, Flight 175
crashing into the South Tower of the World Trade Center at 590 miles per hour, we knew. The
news anchor was saying it was the second such crash — less than 15 minutes after the first. At
that moment, we knew it was not an accident. We knew it was themajor event predicted by the
war cycles. And we knew it would be just the beginning of a new war cycle, the subject of my
next chapters.

3. Russia on the March

Why the New Cold War with Russia Is Turning Hot

Much of the world was shocked when Russian troops seized control of the Crimean Peninsula
early in 2014, triggering international condemnation and fear over renewed Russian military
expansion. I wasn’t. I saw it coming.

Then, in the first few months, many thought — or hoped — it could end there. But it didn’t. It
spread to Eastern Ukraine. It escalated into a major economic war between East and West —
wave after wave of sanctions imposed by Europe and the United States, followed by a series of
retaliatory import blockades by Russia … a bloody civil war in Ukraine … Russian troops
streaming into its eastern provinces, U.S. arms likely on the way to its western provinces.

It all goes to underscore what I stressed at the outset: The world is heading into a prolonged
period of regional and civil wars. … and a few savvy investors will make vast fortunes in what
will almost certainly end up being the last great bull market in our lifetimes.

As the bloody chaos in Eastern Europe, the Middle East and Asia spreads, hundreds of billions
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of dollars are about to come flooding into the safety of U.S. financial institutions, sending the
prices of select U.S. stocks and other U.S.-based assets through the roof. That’s the primary
dynamic of unprecedented opportunities for investors.

Yet, with the possible exception of Iraq and Syria, most analysts downplay these growing
military confrontations overseas. Or, at best, they recognize their significance but fail to connect
the dots to the investment opportunities.

That’s no surprise. U.S. media outlets are primarily focused on domestic news and “info-
tainment” (e.g. Kim Kardashian’s new bikini.) They typically ignore — or devote only minimal
airtime to — overseas news … until, that is, the news comes with shocking images of a bloody
war or revolutions already in an explosive, mature phase.

But make no mistake: The drums of war are being heard all over the world right now… and
nowhere more loudly than in the Middle East and Eastern Europe.

The Middle East is a conflict I’ll cover in a subsequent chapter. But it’s the conflict in Eastern
Europe that more directly pits America’s Cold-War allies in the West against its Cold-War
enemies in the East … the United States, Western Europe and Japan against Russia and China …
Barack Obama and his successor against Vladimir Putin.

Here’s the most frightening factoid of all: The Russians justified their seizure of Ukrainian
territory the same way Hitler justified invading the Sudetenland: that it was necessary to protect
ethnic Russians living in the region, much as Hitler said he was protecting ethnic Germans).

What many people didn’t know was that the seizure of the Crimea was also motivated by Putin’s
grab for oil resources. That’s because the Russian annexation instantly gave it access to
underwater oil and gas resources in the Black Sea potentially worth trillions of dollars.

In fact, petroleum analysts believe the Black Sea energy resources may rival those of Britain’s
North Sea, which have enriched Norway and the U.K. for decades. In addition, the Crimea
region is increasingly perceived to be critical in the emerging battle to dominate energy transport
corridors linking the oil and natural gas reserves of the Caspian basin to European markets.

Russia is now the world’s second-largest producer of petroleum, and the number one producer
of natural gas in Europe and Asia . Regardless of the direction of world oil prices, a new network
of pipelines allows Russia to ship natural gas and petroleum to its neighbors.

Separately, in 2013, Russia completed the final stage of the Eastern Siberia-Pacific Ocean
(ESPO) pipeline, which now allows it to export as much as 25 percent of its crude oil to Asia .

What’s more, Russia’s swift takeover of Crimea proves that Putin is playing for keeps. With
ruthless determination, he has guided his once-bankrupt nation from a full-blown depression in
the 1990s to one of the most powerful nations in Europe today. Since 2000, the Russian
economy has more than doubled in size … aided in part by the rapidly expanding Russian
energy markets . And even with the recent slump in energy prices, it remains a major economic
powerhouse in global markets.

What’s more, along with a rising economy came a massive program of rearmament: Russia is
now engaged in its largest military buildup since the collapse of the Soviet Union more than two
decades ago. Military spending has jumped a whopping 92 percent since 2010 alone.

With its new military and economic might, Russia has also proven that it is more than willing to
use its vast oil and energy resources as economic weapons.

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In 2009, during one of the harshest winters in memory, Russia shut down the natural gas
pipeline supplying Europe, leaving millions without heat. “With Russia’s invasion of Crimea,”
writes T. Bone Pickens, “the threat is greater than Vladimir Putin’s ambitions, the real danger to
the world is that oil and natural gas are once again being used as a weapon of war.”

An even bigger danger: Even if oil prices remain low, Putin is well positioned to take advantage
of Europe’s desperate need for energy resources to ignite regional wars in Eastern Europe — a
ploy to reclaim vast swaths of territory Russia lost in the collapse of the Soviet Union.

“Russia has threatened NATO with military strikes against Poland and Romania if missile
defense radar and interceptors are deployed in Eastern Europe,” reports the Daily Telegraph. The
paper quotes General Nikolai Makarov, Russia’s most senior military commander, that “a
decision to use destructive force pre-emptively will be taken if the situation worsens.”

Putin is no dummy. He outmaneuvered Obama in Syria and in Crimea. And in 2015, Russia still
supplied 70 percent of Europe’s energy. The pipelines that go through Crimea are strategic. And
in earlier episodes, he shut off the flow of natural gas and crude to Europe on more than one
occasion. His goal: Control — to prevent the United States from muscling its way in through the
Middle East, through its relationships with Saudi Arabia.

That’s why Syria was such an important piece for Putin. The Saudis aimed to build a pipeline
through Syria to Europe to cut out, or at least weaken, Russia’s energy supply channel to Europe
and gain a better share for themselves and for the United States. This is the energy theme
underlying the new Cold War between East and West.

Why Care About Eastern Europe?

Many people think that Eastern Europe and countries such as Ukraine have nothing to do with us
in North America. But they do — and in more ways than one.

First, Russia is a dying empire.While Russia is powerful militarily, the country itself is bankrupt,
rife with corruption and no rule of law. It is led by an authoritarian oligarch, Vladimir Putin, who
wants nothing more than to divert the population’s attention away from problems at home.

After an initial burst of economic activity following the collapse of the Soviet empire, Russia’s
built-in structural problems — its rampant corruption, inadequate infrastructure and authoritarian
politics — have led to increasingly desperate situations for large numbers of ordinary citizens.

Second, Putin is dead-set on restoring the glory of the former Soviet Union — not its communist
ideology, but its territorial imperative. On numerous occasions, Putin has declared that he
believes the greatest single event of the 20th century was not the collapse of communism, but the
loss of the Soviet Union’s former territories. Translated: He will not back down on Ukraine. Nor
will he relent in Russia’s westward expansion.

That’s why he went into Crimea. That’s why he sent his troops into two embattled eastern
provinces of Ukraine, Luhansk and Donetsk. And that’s why he sought to transform those two
provinces into an “Autonomous Republic” under direct Russian control — much as he had with
Transnistria, which broke away from Moldova in 1990, and with Abkhazia, which broke away
from Georgia in 1999.

He also senses that Europe is on its knees, and his instincts are mostly right. There’s not much
Europe can do about it. Nor can the United States.

Neither is politically or financially ready to confront Russia militarily. Putin knows that. And

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feels he has virtually carte blanche to keep Crimea, muscle his way into Eastern Europe, and
eventually other former Soviet satellites.

Coming next is a new, emerging conflict in Hungary. Then, Latvia, Estonia, Lithuania and
Belarus. Moldavia and Georgia. Even Poland, Czechoslovakia, Romania, Bulgaria, Albania and
Serbia. His beachhead: Enclaves of Russian-speaking populations or factions of Russian-
sympathizing politicians.

Never forget — there is a lot of popular discontent with the financial condition of Europe and the
fall of the euro. So it’s not hard to envision a trend toward political factions, regional splintering,
class warfare, civil disobedience and even civil war. In fact, it’s hard to envision a future in
which most of these do not occur.

The primary dividing line: populations siding with Russia versus those siding with the West.

The big wildcard: Russia and its likely economic depression, desperation for revenue and panic
among its leaders to maintain popular support.

Like most nations in Europe, due to the last few years of commodity price deflation, Russia is
sinking fast. But unlike, say, Germany, Russia can only extract a limited amount of money from
its already impoverished people.

As a result, it is looking greedily at the additional tax revenue it could generate by reclaiming
(through intimidation or outright invasion) the peoples of the former Soviet bloc territories along
with the rich natural resources and supply routes that would accrue.

Ukraine is the classic case. It’s a former territory of the Soviet Union and closely intertwined
with the history of Greater Russia. Its Eastern provinces share the same language and culture.

But its economy was greatly weakened by the massive corruption of its former president, Viktor
Yanukovych, who is said to have pilfered the country for as much as $38 billion, hidden away in
foreign bank accounts. And the economy was further gutted by the recent civil war.

The irony is that Ukraine is the breadbasket of Eastern Europe, and a major transit route for
natural gas flowing from Russia to Europe. It is also home to vast untapped sources of natural
gas in its adjoining Black Sea — estimated at nearly 3 trillion cubic meters —a large portion of
which Russia has already acquired via its annexation of Crimea.

Chevron, Shell and ExxonMobil have already signed deals with Ukraine to explore, develop and
produce the natural gas. Don’t think for a moment that Putin isn’t targeting the United States by
taking over Crimea or all of Ukraine. He is.

And let’s not forget that from 1921 to 1991, Kiev, Ukraine’s largest city and its capital, was the
former capital of the Ukraine Soviet Republic, the founding member of the Soviet Union.

Ukraine is going to become a tipping point for Europe.

Just prior to this crisis, European leaders were considering including Ukraine in the European
Union. The motives were simple: More tax revenues would be had, and just as importantly,
Europe would gain a more secure supply of natural gas; 30 percent of Europe’s natural gas
comes from Russia, but is transited through Ukraine. By losing Ukraine to Russia, that 30
percent of Europe’s gas needs become 100 percent at the mercy of Putin.

4. The Coming European Civil Wars

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When people think of Europe, they tend to imagine Paris in the spring… or the gondolas of
Venice… or the magnificent cathedrals of Rome. They rarely think of war or social upheaval.

Yet that is precisely what the war cycles are indicating lie in Europe’s future. Europe isn’t just in
a prolonged recession. Everything I see indicates Europe is going to splinter apart at the seams.

All this started long before the schism with Russia: The European Commission (EC), the
International Monetary Fund (IMF) and the European Central Bank (ECB) clamped down hard
on weaker European peripheral countries with austerity programs … when, in reality, they had
no one to blame but themselves for the financial and social mess Europe is in.

Yes, countries such as Greece, Cyprus, Portugal and others were profligate. But the stronger
countries of Europe — Germany especially — were equally to blame. They are the countries that
practically forced the weaker European countries to adopt the euro, putting them in a position
where they could not compete against the stronger economies of Germany and France.

And they are the countries that rammed loans down the throats of the weaker EU members —
debt that is now virtually unpayable.

For all intents and purposes, Europe is in the midst of a full-blown depression. The German
economy — the only leg holding the eurozone from plunging deeper into a depression — is
continually at risk of becoming the next to suffer rising unemployment, to roll over into a
recession and to send European capital scurrying for safety.

What’s most astonishing is that European leaders seem willing to sacrifice their principles, hurt
their people, and pawn off their most valuable assets — all for the sake of kicking the region’s
sovereign debt crisis down the road. But these postponement tactics solve nothing. They only
serve to create far more massive problems, a deeper depression, a break of the euro currency,
and ultimately a collapse of Europe as we know it.

And just when most people think it couldn’t possibly get any worse, it will.

The big danger: Just as in the 1930s, many countries in Europe turn toward socialist
governments, while others remain steadfast on capitalist austerity measures. This alone creates a
great rift on the continent.

Within the eurozone — a region with just one currency controlled by one central bank — this is
a deadly combination that will likely lead to more unemployment, increased social unrest, and a
worsening in the bad debts that are flooding the eurozone: Debts that will overwhelm
governments and the European banking system.

When Europe goes down, many asset classes will get clobbered. Soon, all this could lead to civil
war, and perhaps even to the first land war in Europe since World War II. Right now, aside from
the Ukraine, there are virtually no armed conflicts on the Continent. But the same social and
economic forces — the same war cycles — that gave rise to two world wars in the 20th Century,
both with primary theaters in Europe, are back with a vengeance.

The danger is this: The great capitals of Europe erupt into flames. Millions take to the streets. The
ancient and modern highways of Europe again see tank columns, civil unrest and perhaps
outright war.

Sound far-fetched? It shouldn’t. We forget that Europe has been erupting sporadically into
violent civil wars for the past 30 years: The Croatian War of Independence (1991-95). The
Ossetian-Ingush conflict of 1992. The Bosnian War (1992-95). The first Chechen War (1994-
96). The Kosovo war (1998-99). Wars in Georgia and Dagestan (1999)… the insurgency in
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Macedonia (2001)… a renewed outbreak of hostilities in Kosovo (2004 and 2008). The second
Chechen War (2009). And now the Ukrainian civil war (2014 – present).

There is, however, another factor as well: the exploding Muslim population in Western Europe
and its increasingly strident demands to enforce Sharia law in the EU’s most liberal democracies.
Americans are largely unaware of this issue, but some of Europe’s most traditionally open and
liberal societies, such as France, Denmark and Sweden, have been flooded in recent years by
waves of Muslim economic refugees — and flooded again in recent months by even larger
waves of war refugees.

These unassimilated migrants have largely failed to learn the local languages and are now
beginning to chafe at what they see as their second-class status. Terrorist attacks, often under the
banner of the Islamic State, are also becoming increasingly common.

This has led to growing conflict throughout Europe — and to the rapid growth of nationalist,
even neo-fascist parties such as the UK Independence Party, the National Front in France, Geert
Wilders’ Party for Freedom in Holland, the Sweden Democrats in Sweden, and even extreme
right wing parties in countries like Poland, where the Law and Justice Party won the presidential
election on May 25, 2015.

It’s gotten so bad in Europe that the rise of outright neo-Nazi parties is astounding. In Greece,
the neo-Nazi “Golden Dawn” party rose in popularity from 0.3 percent of the Greek people
polled in 2009 to as much as 7 percent in 2014 — a 23-fold increase in just three years.

From the north of Europe to the Mediterranean in the south, fascist and neo-Nazi parties are
growing at an alarming rate, gaining over 15 percent of the vote in recent local elections in many
countries. As EU Home Affairs Commissioner Cecilia Malmström recently stated, “Not since
World War II have extreme and populist forces had so much influence on the national
parliaments as they have today.”

Will Europe See a Civil War?

Unless Europe can somehow abruptly change course, unless the rich nations concede a whole
new round of liberal financing to the heavily indebted countries — all of which is unlikely — I
believe Europe is headed toward widespread civil unrest and war. Indeed, the winds of war are
now striking Europe from two sides:

On the one side, Europe’s financial problems are causing civil unrest. On the other, Russian
President Vladimir Putin, an Old World strongman seeking to restore the glory of the former
Soviet Union, is pushing relentlessly against Europe’s Eastern borders.

All across the European Union, jobs are being hemorrhaged. Personal income is falling. Social
services are deteriorating. Crime is soaring.

Even before debt default, a record 28 percent of Greece’s work force was jobless, and Citigroup
projected it would go much higher. For those under 25, a catastrophic 61.4 percent were out of
work.

In Spain, the jobless rate was 26 percent, and for its youth, a staggering 54.3 percent. The youth
in Europe were once again being called “the lost generation” — originally a moniker given to
the survivors of World War I.

Many households have no income at all, as all family members were out of work. According to
the international charity Oxfam, nearly 1 in 10 working households in Europe were living in

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poverty.

And it warned that up to 25 million more Europeans are at risk of poverty by 2025. All this as
the European aristocracy sought to preserve their own wealth, looting the economy by raising
taxes, slashing wages and cutting social services for the working class.

Worse is the following scenario — witnessed during the debt crisis and likely to be seen again:

The country’s bonds collapse in value. Interest rates explode to over 200 percent. In just six
months, its stock market plunges 75 percent. The common people suffer tremendously: A
staggering 60 percent of the workforce is paid only partially and receive their paychecks months
after they were due.

As the economy implodes, millions of average citizens fall victim to crime and corruption. The
police demand bribes for traffic violations, whether real or imagined. Public officials line their
own pockets with the people’s money.

Organized crime syndicates divvy up the country into their own private fiefdoms, profiting from
protection rackets, prostitution, smuggling, narcotics-peddling and even murder for hire.

The government itself admits that the criminals own or control about half of the country’s private
businesses.

A friend of ours is an engineering student at a national university. Here’s his story, in his own
words:

“My first notion of how serious the situation would become hit me when I noticed that my cost
of living nearly doubled. I was just a poor student, so the rising cost of food and petrol and
books hit me hard. Many banks, including some of the largest in the country, shut down. They
closed their doors forever. Our savings were wiped out. All people could do about it was to go to
their banks and hammer on locked doors. Other people demonstrated on the streets. They carried
their devalued money in miniature coffins and marched past our central bank. The government
didn’t even have enough money to pay the military. So hundreds of thousands of soldiers were
broke and many used their skills to resort to crime.

“Today, I want to go back to an engineering career, but I can’t. All my academic records were
destroyed in the chaos. So there is simply no possible way to prove I have a degree. It was the
worst economic disaster in 100 years. I now live in the United States. I pray to God that nothing
like that ever happens here.”

Sound unbelievable? All this did in fact happen — in what was one of the most powerful
countries in the world — Russia. But an objective analysis reveals that Russia’s leaders had
made many of the same mistakes America’s leaders have made — or could soon make. Russia
paid dearly for its leaders’ sins.

Europe is about to pay a very high price as well. Yes, of course, the EU has stronger democratic
institutions than Russia had. But EU nations have abused their historic strengths to take greater
financial risks than Russia even had the capacity to take.

A Global Currency Crisis

The world is threatened not merely by a sovereign debt crisis but, even worse, by a currency
crisis. The facts:

In 2014 and 2015, the euro sank fast, taking much of Europe down with it. The trillion-dollar
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bailouts and money-printing operations engineered by Europe’s strongest economies only made
the situation worse.

The plunge in the value of their currency — any currency for that matter — is the pivotal
financial consequence of a sovereign debt crisis, the major consequence that I have warned
about.

I repeat: This is a currency crisis. Currencies are cornerstones — the stock — of a country. It’s
an explosive crisis that can wipe out people’s wealth without them even knowing it. But it can
also provide astute investors with some of the broadest opportunities for profit.

Greece is the perfect example of what happens when a government spends beyond its means.
Numerous times over the past few years, we’ve seen that cradle of Western democracy engulfed
in flames as rioters attacked banks, businesses and government buildings. And numerous times,
we’ve seen how the entire country was plunged into chaos. All before a debt default!

In 2010 and 2011, we saw outright riots, the firebombing of banks and blood in the streets. Once
again, the crisis was created by the nation’s politicians and bureaucrats. Once again, the common
man had to pay the price.

Home values plunged. Unemployment soared. One in four Greeks, including over 450,000
children, were forced to live in poverty. Crime exploded.

A Greek friend of ours tells the story this way: “To lower government deficits, the politicians
imposed high taxes on business owners. But all they did was drive them out of business. Athens
looked like a ghost town. Everywhere you looked, shop windows were boarded up. Of those that
were still open, most were running going-out-of-business sales.”

For years, we knew Greece’s government was going wild with its spending, and some analysts
warned about it until they were blue in the face. But even amid all the warnings, Greek
government officials would go on TV and say: “What’s the problem? If we really were doing
something wrong, we’d have trouble borrowing money. But look! We have hordes of investors
buying our bonds. We can borrow as much as we want for less than 3 percent. So where’s the
crisis?”

That continued year after year until one day the party ended. No one rang any bells to warn
them. No one could pinpoint a single event that triggered it. The worries and warnings that had
been percolating for years simply reached a critical mass and blew up.

Suddenly, bond investors declared a virtual buyer’s strike. Suddenly, Greek bond markets
collapsed. Suddenly, their interest rates were doubling and then doubling again.

A collapsing bond market goes hand in hand with a collapsing currency. Both are driven by the
same government spending, borrowing and reckless money printing. Both are driven by the
same global investors. When they sell euro-zone bonds, they sell the euro. If they sell U.S.
dollars in denominated bonds they are going to be selling the U.S. dollar.

Take a look at the accompanying chart that shows recent plunges in the euro. For example, in
just three weeks in 2010 it got smacked down from 1.36 to 1.25.

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That’s a massive, 8 percent decline — in just three weeks. It did the same thing again in 2012…
and then again in 2014.

Remember, this isn’t just a single stock or stock market. It is the foundation of the entire
European Union economy, the largest economy in the world. It is their currency. It represents, in
essence, the equity value of the economies of 18 countries, almost an entire continent!

If the euro falls in half, it means that everything Europe produces or owns loses half its value.
Connect the dots. Consider gold. It is real money and has been that way for 5,000 years. If the
euro falls in half, gold, as measured in euros, doubles in value.

In the past, when the euro was falling, so was gold. That’s not likely to be the case going
forward. Instead, you could see a bull market in gold in terms of all major currencies.

The lesson to take away from this experience: It doesn’t matter which major currency is
crashing. They are all losing purchasing power. The key: If gold rises in response to the euro’s
decline, imagine what it could do in response to a collapse in the world’s reserve currency — the
dollar!

UK, Spain, Ireland and Italy

And it isn’t just the “crisis” countries of Europe that are threatened. Spain, Portugal, Italy and
even the United Kingdom have also experienced popular uprisings of ordinary people against
their governments.

You don’t have to go back far in time to see how severe these kinds of crises can get. All you
have to do is read the headlines of current times, and you’ll see a sneak preview of the social
upheaval that’s possible throughout Western Europe.

Ask British Prime Minister David Cameron. He could tell you what he’s been through. Soon after
Cameron came to power, he encountered a fiscal mess similar to those the U.S. Congress and
U.S. presidents have often fought over when the U.S. reaches its debt ceiling.

But unlike U.S. government “solutions” that typically kick the can down the road, Cameron was
able to pass what many considered a package of Draconian austerity measures, including
massive cutbacks in social programs for the youth and the poor.

At first, it seemed to be effective, helping the UK avoid the contagion of fear that was spreading
across the Continent at that time.

But in the summer of 2011, the government of David Cameron was punished by the people for
“overly severe” austerity. In the United States, punishment came from the financial markets. In
the UK, in contrast, the punishment was dished out by rioting youth gangs ransacking and

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burning neighborhoods of London, Liverpool, Birmingham and Bristol.

Another example is Ireland. Before the 2008 debt crisis, Ireland’s economy was booming. Banks
loaned people money hand over fist to finance homes, cars, vacations — all the joys of modern
life.

Then, the bubble burst. Real estate values crashed. Mortgage defaults and bank foreclosures
soared. Suddenly, the banks lost billions of euros and were in danger of failure.

So, just as in the United States, the Irish government stepped in and bailed out the banks. And
soon, it was the government itself — not just the banks — that was in danger of going under.

In May 2010, with Dublin on the verge of defaulting on its debts, Europe rode to its rescue with
a $140 billion bailout.

But as a result, the Irish people had to live under crushing austerity measures. Countless jobs
were wiped out; the official unemployment rate surged to 15 percent. Salaries were cut to the
bone; pensions and health benefits, slashed.

Paddy Quigley, a resident of Moneygall — the ancestral home of President Obama’s mother —
put it simply: “The banks ripped us off. The government ripped us off.”

Similar stories were told in Madrid, Barcelona and 53 more cities across Spain, where tens of
thousands of workers took to the streets to protest a problem they thought they would never see
again in their lifetime: 26 percent official unemployment.

A Spanish friend of ours said: “You wouldn’t believe what I’m seeing here on the streets of
Madrid. In big central squares like Plaza Mayor, or even in small, picturesque ones like Plaza de
la Villa, it seems beggars outnumber tourists and protesters outnumber beggars. In front of
Parliament, riot police stand watch to protect lawmakers from angry mobs.”

All over Spain, in Viscaya, Cataluña, Andalucía, we saw the same thing.

Worse, the crisis clearly spread like wildfire — to bigger and bigger countries, such as Italy. The
combined GDP of all three countries that needed a bailout — Greece, Ireland and Portugal —
was $739 billion. But the GDP of Italy alone was over $2 trillion, nearly three times more! So a
financial disaster in Italy would have triple the impact on global markets as the failure of
Greece, Ireland and Portugal put together.

If Europe’s largest banks merely recognized the true value of their loans to the bankrupt
countries of Europe, most of those banks would be wiped out. Thus, the people of Europe are
only beginning to pay the price for their leaders’ greed and stupidity.

If history proves anything, it’s that when the next shoe drops in Athens, Dublin, Lisbon, Madrid,
Rome or other struggling capitals, the pain they have felt so far will pale by comparison. As in
Russia, these nations will also be sentenced to years, perhaps decades, of deepening poverty and
lost liberties.

You’re probably thinking: “Powerful countries like the United States, Germany or Japan are
different. Nothing like that could ever happen there.”

Well, the people of Russia, Greece, Spain and many other nations never dreamed it could
happen there, either.

The truth is, our own leaders have made the same financial errors that leaders of Russia and the

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EU countries have made, the same blunders that destroyed their people’s wealth and freedoms.
The pattern is clear:

First, the government spends everything it has.

Next, the government borrows all it can from its people.

Then, it borrows still more from foreign countries and banks.

Finally, the debts become so onerous that panicky political leaders turn on their own people.

As another Greek associate put it: “Nobody believed that the bailouts of Greece and other failing
nations would work — not the people on the street, not the politicians in our capitals, not even
the European officials who were giving us the money. What we discovered in Greece and what
you will discover in the United States, too, is that you can’t save a nation that’s drowning in debt
by throwing more debt at it any more than you could save a drowning man by throwing more
water on him.”

A Replay of the 1930s?

To me, all this is very dangerous because, in some critical aspects, it’s a replay of what happened
in the 1930s.

Back then, the side of the Great Depression that few remember from the history books is that
most major countries in Europe went belly up, unable to pay their sovereign debts.

As a result, capital stampeded out of Europe, headed to U.S. shores for safety, and sent the
dollar, gold and U.S. stock markets soaring higher simultaneously.

The premium on American Gold Eagles soared to 75 percent over the spot price of gold, and the
Dow Industrials rocketed more than 380 percent higher from 1932 to 1937.

The dollar also exploded higher — so much so that the very strong dollar threatened to cause
even greater deflation in the U.S. economy.

To counter the threat, President Franklin Roosevelt took two actions of great historic
consequences: He confiscated gold and devalued the dollar by raising gold’s price from $20.25
to $35 an ounce.

Many economists believe that those radical measures did help prevent severe deflation from
continuing to ravage the U.S. economy. But on the other side of the Atlantic, Europe sank
further into a cycle of defaults and deflation. And it’s that combination of events which sowed
the seeds for the rise of Hitler and World War II.

Though the names and places have changed, the similarities to what’s happening today are
striking:

Much of Europe is essentially in a deflationary depression, with several European

countries on the brink of bankruptcy and sovereign default.
Unemployment in Europe, especially among the youth, is soaring, sowing the seeds for a
massive rise in Neo-Nazi groups throughout Europe.
Europe’s leaders are making many of the same mistakes as in the 1930s: Raising taxes,
confiscating wealth, attacking the rich, and waiting stubbornly to the last minute to
actively devalue the euro to try and kick-start the economy.

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Debts out of Control, Tax Revenues Plunging

Some people seem to think the EU’s sovereign debt problems are limited to just a few countries
that have been in the news. Others seem to assume that the debts are relatively static and
unchanging.

But the hard data show that, in reality, Europe’s debt troubles are widespread, making almost
every country vulnerable to the contagion now spreading across the continent:

Greece with gross government debt of $360.2 billion … Spain with more than triple that amount
($1.2 trillion) … and Italy with debts that are double Greece’s (y $2.4 trillion).

But what about the countries that have so far been viewed as “stronger”? Are they debt free?
Absolutely not!

France’s debts are almost as large as Italy’s — $2.3 trillion. And Germany’s debts are actually
larger than Italy’s — nearly $2.5 trillion.

Plus, don’t forget others in the EU, including Austria (with debts of $315.9 billion), Belgium
($486.5 billion), Finland ($137.5 billion), Ireland ($230.9 billion), the Netherlands ($512.3
billion), Portugal ($255.9 billion) and more.

Needless to say, not all countries are equal. Relatively speaking, some are stronger and others
are weaker. But here’s the key: They all belong to the same economic entity (the EU) and they’re
all entangled (either as borrowers or lenders) in the same sovereign debt crisis.

That’s why it’s so important to note that total government debts owed by EU countries are now
$10.8 trillion.

Worse, despite all the sworn promises of austerity and all the solemn pacts to control deficits, the
hard evidence also demonstrates that these debts are growing by leaps and bounds.

Official data show that EU countries have added nearly $1 trillion in new debts just since the
sovereign debt crisis began. And that doesn’t even include the massive new obligations of the
EU institutions providing bailout funds.

And what’s most shocking is that nearly every effort to cut deficits has resulted in even larger
deficits. The main reason: Government cutbacks have slammed the economy.

They have strangled the finances of the people. They have bankrupted their businesses. When all
that happens, the end result is inevitable — people and businesses can’t pay their taxes. Thus,
the downward spiral continues.

Spain is a classic example. In fact, the collapse in Spanish tax revenues is replicating the pattern
in Greece, where fiscal revenues have fallen 4.8 percent per year and Value Added Tax (VAT)
revenues have plunged 14.6 percent.

That’s why The Daily Telegraph of London concluded that “Spain is in the gravest danger since
the end of the Franco dictatorship.”

Spain’s former premier, Felipe Gonzales, calls it “a total emergency, the worst crisis we have
ever lived through.”

Not long ago, Spain’s borrowing costs soared to 7 percent, widely considered the dividing line
between stability and chaos. Italy’s short-term borrowing costs also jumped wildly, as much as

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164 basis points in a single day.

Other European interest rates followed a similar path. This meant that on top of collecting a lot
less in revenues, they now have to pay a lot more for the money they desperately need to
borrow.

But sinking government finances has been just one of the traumas striking Europe in recent
years.

Europe’s Banks Teetering on the Brink of Insolvency

This is no secret. In fact, with growing public awareness of the bank troubles, we have already
seen bank runs in Europe. At one point recently, in Greece, Ireland and Portugal, foreign
deposits fell from their peaks by an average of 52 percent and foreign government bond
holdings by an average of 33 percent.

In other words, foreign investors in the eurozone were already withdrawing their money and
heading for the hills.

Meanwhile, domestic European investors also exited in droves. European portfolio investments
in recent years saw a net outflow of $44.58 billion with most of it going to the purchase of
foreign investments outside the eurozone, and mainly toward bonds and liquid money market
instruments in non-eurozone economies.

These are some of the biggest outflow figures in decades. And it’s merely a trickle of the capital
flight we could soon see coming out of Europe.

Bank runs are the most damaging types of financial panics. They can destroy an economy and a
market almost overnight.

Americans saw their own banking panic in 2008, when Lehman Brothers went under. But the
reality is that a banking panic in Europe could easily make the 2007-08 U.S. financial meltdown
look like a Sunday walk in the park.

It’s not just because of the sheer size of the eurozone’s banking system and the region’s bad
debts. The more important reason is the huge differences between it and the U.S. financial
system.

Since the 2008 debt crisis, we’ve seen periodic respites and rallies. But Europe’s problems have
not been solved. At best, they’ve been kicked down the road.

Meanwhile, Greece’s debt load is getting worse. And so is its unemployment. Catalonia, the
wealthiest region of Spain, has threatened to secede. Italy’s debt load has worsened and its
economy is slowing further. Ditto for France, and even Germany.

In addition, no progress has been made in creating a true fiscal union, a true bank deposit
guarantee program (like the FDIC) and more.

My view: The EU will collapse, and the trigger could be Greece. If it pulls out of the EU, it will
set off a chain of misguided government actions and market reactions. If it stays in the EU, it will
merely perpetuate the current cycle of more debt and more depression. Either way, it is only a
matter of time before the euro currency implodes.

Who Saves Whom?

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Late in 2013, the bonds of major European governments were sinking fast and Europe seemed
on the brink of a meltdown. So the European Central Bank (ECB) decided to come to the rescue
with the aid of the largest banks.

The plan was simple: The ECB hands the money over to the banks via special loans. The banks
hand the money over to sovereign governments by buying their bonds. And everyone’s happy,
right?

Wrong! The plan backfired: The government bonds sunk anyhow. And the banks were stuck
with even greater losses.

Now, a “new” old plan is hatching. Instead of banks helping to bail out their governments by
buying their bonds, the idea is for governments to bail out their banks with money borrowed
from the stronger governments of the EU. So one day they talk about banks saving the
sovereigns. Next day, it’s the sovereigns saving the banks. They can’t seem to make up their
minds as to who will save whom.

The Public is Beginning to See Through this Charade!

The people are waking up at last. They remember how many times the authorities have vowed
that “the crisis is over.” They see the politicians toasting the CEOs of large companies while the
unemployment lines grow longer, living costs ever higher. They see the crisis feeding on itself.

So they are beginning to ask the real question of the day: Who sinks whom? Will the sovereign
debts sink the banks? Will the banking crisis tear down the sovereign governments? Or will they
both go down in a spiraling cycle of bond market collapses and bank failures?

Again, you need only look to Europe for the tragic results: Rioting, civil unrest and depression-
like conditions that become a permanent fixture in the life of millions.

It all boils down to simple basics: When you can’t feed your family and you can’t find work no
matter how hard you try, it can absolutely crush your soul — all as the European aristocracy
preserves their own wealth by looting the economy, slashing wages and cutting social services.

It’s easy to see these as isolated events. It’s easy to bury your head in the sand and ignore
because it’s happening “someplace else.” It’s easy to forget that, behind all the economic
numbers, millions of real people are suffering very real consequences; quickly finding
themselves living in total desperation with little hope for a “normal” life.

This is the real-life face of my war cycle models, which have consistently predicted that Europe
will erupt into a nightmare of social chaos, failing banks and a collapsing euro.

And in this tragic theatre — both Greek and Orwellian — the next act promises to last longer and
go deeper than any previous ones. It won’t be the end of the world. But the social fabric of
Europe’s profligate nations will be stretched and torn.

Sadly, looking back through economic history, all too often war is the manifestation of simple
economic entropy played to its logical conclusion. I believe that war is an inevitable
consequence of the current global economic situation — and especially of Europe’s.

This is also why we could see two things happen that rarely coincide in the same timeframe: The
dollar will likely rise. And at the same time, precious metals will also rise. Why? Because of a
massive exodus of capital out of Europe into both the U.S. dollar and precious metals at the same
time.

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I know, it’s hard to believe the dollar and gold can both rise simultaneously. But as I’ve said
many times before, that’s exactly what happened back in the early 1930s when Europe
collapsed: The dollar and the black-market price of gold rose so strongly that, in 1933, President
Roosevelt was forced to devalue the dollar by raising the official price of gold.

More recently, we got a glimpse of this phenomenon in 2008 and again in 2010-11, when gold
exploded higher, even as the dollar soared. So don’t be surprised if it happens again in a big way
when Europe goes under.

I repeat: Europe’s leaders have officially implemented a Cyprus-style bail-in for all banks of the
EU. As a result, depositors with over 100,000 euros could simply see their money confiscated
should another bank fail. France has now officially raised taxes on the wealthy to 75 percent of
income. Other countries in Europe could soon follow suit.

Meanwhile, leaders in Europe have embraced the IMF’s proposal for a one-time 10 percent
wealth tax on everyone. — to help fund their bankrupt economies, governments, and financial
institutions.

They are doing all this with impunity. But they underestimate the power of the people — people
who can rise up, rebel, and get their money out of Dodge.

This is why you could see both the dollar and precious metals rally together. And this is why it’s
critical that you understand what’s about to happen in Europe and how it will impact so many
markets. It will turn the world upside down.

Along with the ramping up of the war cycles and geopolitical tensions, the dollar will benefit, but
so will gold, silver and other commodities. This is the single biggest, most powerful force that
will impact the markets in the years ahead, and I want you to fully comprehend it.

Most investors, analysts, economists and even hedge fund managers will probably miss it. Don’t
be among them.

5. China’s Coming Military Expansion

China’s Quest for World Domination

Will Lead to Conflicts Throughout Asia

For most of this century, I’ve been reporting on the global financial markets while based in
Bangkok, Thailand. Living in Southeast Asia, just a few hundred miles from China’s border, has
given me a unique perspective on world events. It’s also allowed me access to news of imminent
wars that is rarely, if ever, reported prominently in U.S. media outlets.

I’ve been able to use the intelligence I gather overseas to make astonishing profits — profits far
beyond what most investors are able to make in the United States.

As I stressed at the outset, the world outside of the United States is heading into a prolonged
period of intensified regional wars. And as I’ve said, few savvy investors will make vast fortunes
in what will almost certainly end up being the last great bull market in our lifetimes.

As the bloody chaos in the Middle East, Africa and Asia spreads, hundreds of billions of dollars
will flood to the safety of U.S. equity markets. It will result in unprecedented opportunities for
U.S. investors. And you could make a fortune very quickly if you make a few simple, low-risk
changes to your portfolio.

Asia is a prime example of both the dangers and the opportunities. We see a rising tide of
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violence and rapidly rising stock markets.

Right now, a potentially horrific war is looming in the South China Sea between China and Japan
but also dragging in Vietnam, Malaysia, the Philippines and inevitably even the United States.

China is engaged in a land grab — plus escalating close encounters on the seas and in the air in
two strategic areas:

Senkaku Islands in East China Sea. These are five uninhabited islets administered by Japan.
The main source of the conflict: The Senkakus have enough offshore oil and gas that they could
supply all of China’s energy needs for the next 45 years.

The resources there are so vast that some experts compare the Senkaku fields to those of Saudi
Arabia. Understandably, oil-thirsty China is eying the oil fields greedily, and recent incidents
show that is China engaged in a dangerous game of chicken with Japan.

Most Americans know very little about this — or about what is happening right now in the
region. But the situation is growing increasingly unstable. More and more major media outlets
are picking up on this brewing conflict:

The U.S.-based Council of Foreign Relations reports that “The risk of conflict in the South China
Sea is significant.” CNN reports that “the fragile relationship between China and Japan came
under fresh strain … as ships from both sides crowded into the waters around a disputed group
of islands.” And Military experts are terrified that even a minor, accidental military confrontation
between China and Japan could quickly escalate into a world war.

“Don’t be too surprised if the U.S. and Japan go to war with China over the uninhabited rocks
that Japan calls the Senkakus and China calls the Diaoyu islands,” writes The Sydney Morning
Herald. “And don’t assume the war would be contained and short.”

Indeed, during an official state visit to Japan in 2014, President Obama reaffirmed that the
Senkaku dispute falls under the U.S.-Japan bilateral security treaty — meaning that the U.S.
would be honor-bound to defend Japan if it became involved in a military conflict with China.

A few weeks earlier, Lt. Gen. John Wissler, the commander of the III Marine Expeditionary
Force based in Japan, even told reporters that U.S. forces could retake the Senkaku Islands if
they were seized by Chinese naval force — a comment that enraged the Chinese government.

A government-controlled Chinese newspaper responded: “These U.S. warships roaming around

here in the East China Sea are slowly being considered by us Chinese as our moving targets right
in front of our eyes.”

Meanwhile, Japan has been so worried that Prime Minister Shinzo Abe’s Cabinet has reversed
the country’s World War II war-renouncing Constitution to allow the country its right to
collective self-defense.

Spratly Islands in South China Sea: This is home to an undeveloped — but easily exploited —
100 billion barrels of oil and 882 billion cubic feet of natural gas.

The problem: The Spratly Islands have been caught in a decades-long dispute among six
countries — the Philippines, Brunei, China, Malaysia, Vietnam and Taiwan. There have already
been two naval battles in the region, in 1974 and 1988 — between China and Vietnam. Relative
calm prevailed for years thereafter.

With its huge thirst for oil and gas, my sources in Asia tell me that we’re likely to soon see China

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aggressively stake out a claim to the Spratly Islands, provoking a six-sided war in the South
China Sea. Already, in 2015, the Chinese military began major construction projects to pile sand
on the coral reefs, create new islands, and build airstrips.

Again, as with the Senkaku islands, it’s mostly about oil. China desperately craves oil for its
economic expansion. China is expected to become the world’s No. 2 oil importer and, within a
year, surpass the United States as the biggest importer of oil in the world. That’s despite China’s
recent economic slowdown.

China needs oil, and it will stop at almost nothing to secure it. If that means a war in the South
China Sea to secure as much as 100 billion barrels of oil reserves, Beijing won’t hesitate, which
is precisely why it’s rapidly ramping up its military presence there.

How would a war in the East or South China Sea impact oil prices? Immensely! After all, we’re
talking potentially huge new supplies of oil and gas. Would China take the risk? Absolutely!

Moreover, any aggression in the South China Sea could easily disrupt the global supply of oil,
sending prices to the moon.

And make no mistake: The South China Sea is also a major oil highway. The amount of oil that
is shipped through the South China Sea in and around the Spratly Islands is three times greater
than the amount of oil that is shipped through the Suez Canal and pipeline, and fifteen times
greater than the oil that flows through the Panama Canal.

As you can see, this isn’t just a game of chicken. It’s powerful winds of war, growing stronger
by the day. World War I began with a single gunshot in a small country no one even cared
about. When it was all over, an entire generation of young men — 9 million soldiers — were
dead.

China’s Historic Quest for World Domination

Make no mistake: China is on a long march to world domination. Its pace is accelerating. And
it’s about to threaten your financial future. Over the past several years …

Consider China’s cyber-attacks. China’s online army has not only unleashed a bevy of attacks
against our communications and infrastructure assets but also against U.S. defense contractors,
human rights groups and oil companies. All of which has been traced back to People’s
Liberation Army Unit 61398, headquartered in a non-descript 12-story building in Shanghai’s
financial hub.

Their mission is frightening and clear:

1. To steal American commercial secrets for their own profits, and

2. To wipe out our communications and other networks during wartime.

What they are stealing from America in advance of their long march to victory will alarm you.

According to NBC news, Chinese cyber-thieves are taking everything but the kitchen sink:
Blueprints for the next generation of auto parts, formulas for pesticides and pharmaceuticals, and
other information that makes American companies competitive in the global marketplace.

Their goal: To weaken America financially by stealing U.S. corporate information about pricing,
contract negotiations, manufacturing, product testing and corporate acquisitions so that Chinese
companies can rule the markets.

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Nortel CEO Frank Dunn would tell you the same thing. His company’s product designs and
customer information were stolen by China’s hackers in 2004 — an event that precipitated the
company’s bankruptcy five years later.

And it’s all because Chinese spies knew what companies Nortel was buying, Nortel’s future
product lines and their profitability.

It’s no surprise that China has surpassed Japan to become the world’s second-largest economy
and surpassed the United States as the world’s largest manufacturer. Nor is it a surprise that it has
jumped light years ahead of the U.S. space program by launching astronauts into space while
building its own state-of-the-art space station along with a new generation of ballistic missiles.

And it’s all given an extra boost because China is using these cyber-attacks to steal our military
and business secrets to grow economically and militarily stronger.

Never forget: China is also the home of the world’s fastest bullet train, the world’s fastest-
growing military and the world’s greatest deep sea exploration capabilities.

Plus, China lends more money to governments and firms than even the World Bank.

Even as China threatens its neighbors militarily, its business and political leaders are using their
economic power to buy up two-fifths of the world’s coal, zinc, aluminum and copper. Plus, they
systematically wield their economic club against countries that challenge their interests in
territorial disputes or defy their terms in business deals.

In a dispute over fishing rights, they punished the Philippines by blocking banana imports from
entering China, dealing a major economic blow to a country that exports more than 30 percent of
its bananas to China.

They punished Norway for attending the 2010 Nobel Peace Prize ceremony honoring Chinese
dissident Liu Xiaobo by imposing “new” veterinary inspections on Norwegian salmon that cut
imports by 60 percent.

And they punished Japan over the sale of the disputed East China Sea islands by China pulling
out of the IMF summit. The chain reaction caused Japanese stocks to drop sharply.

China is a very old country with a very long memory and patience. The Chinese leaders are
playing a game of geopolitical chess. They are playing for keeps. And they are flexing their
country’s economic muscles while simultaneously buying up the world’s resources and
modernizing its military.

It’s only a matter of time before China uses its reserves of over $2 trillion as a battering ram to
push its foreign policy objectives — not just in the East and South China Sea, but wherever it
feels its interests are threatened.

The result won’t just be the theft of more jobs or the blockade of our exports. It will also strike to
the core of our financial lives — our companies, our money and even our retirement.

Unless we see a dramatic change very soon, there’s very little a near-bankrupt U.S. government
can do to stop it.

Where you work, where you live, what car you drive and what you pay for food, clothing and
energy — you name it — will be indirectly controlled by China because they will soon control
the money, the energy, the natural resources, and ultimately much of your financial life.

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The only way you’ll preserve your financial freedom is if you take action yourself — and sooner
rather than later.

Unlike a military victory that would turn our cities to rubble, the fallout from a Chinese
economic victory will crush the money you’ve ever saved or invested.

Unless you take action now, the value of your investments, your savings and your retirement
accounts could be eroded, cut, or even wiped out.

Don’t think this can’t happen.

You’ve already seen the tremendous economic, technological and even military advances
China’s made in recent years and how they are wielding their economic power around the world.
The next steps they take could pull the plug on your financial future and set back your savings
for years.

I know that many in the financial media will dismiss this notion and label me as some kind of
extremist.

But they said the same thing when I warned of China’s rise as early as the 1980s and when I
forecast the great bull market in gold since 2001 — not to mention the bursting of the tech
bubble in 2000, the great housing bust in 2007, and the European sovereign debt crisis in 2010
— each time saving readers of my financial newsletter millions of dollars.

Each time, my financial research and global economic outlooks were right on the money. Read
on, and you could be among a handful of investors who will be able to turn this crisis into
profits.

And while the steps in China’s quest have been many, again, their strategy comes down to three
shrewd and well-thought-out stages: (1) control the U.S. economy; (2) monopolize the world’s
natural resources, and finally, (3) destroy the dollar to achieve their ultimate financial superiority.

So let me walk you through all three stages of their plan. That way you’ll have a better
understanding of what’s about to take place and the kinds of investments that will rise when
China makes its next move.

China’s Step #1: Gain Greater Control Over the U.S. Economy.

You can see China’s rise to power every time you go to Costco, Wal-Mart or Lowe’s. It has
flooded the United States with cheap Chinese goods.

That’s no accident. But it’s just the first step in China’s takeover strategy: Flood the United States
with cheap goods to strip us of our manufacturing base so they can line their own pockets with
trillions of our dollars.

According to Ed Gerwin and Ryan McConaghy of the economic think tank ThirdWay.org, their
actions are clear violations of World Trade Organization (WTO) rules that have resulted in 5.6
million lost jobs since 2001.

For evidence, just look at the 20 WTO complaints the U.S. government has filed against China
over the past 11 years.

Or look at this stat from the U.S. Bureau of Labor Statistics: The U.S. manufacturing industry has
lost nearly 2 million jobs to China in four years.

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These jobs are unlikely to come back to the United States, due to China’s lower-cost tax,
financing, labor and currency advantages they’ve gained over a decade of one-sided trade
practices.

You should see China’s 12th Five-Year Plan. Atlantic Magazine calls it “China’s New Plan for
Economic Domination.” It’s no wonder. It makes their previous currency manipulations and
tactics look like small trial balloons.

That’s because their new plan is an even bolder attack: A controlling interest in strategic
emerging industries. I’m talking about the very-high-profit sectors worth nearly $4 trillion that
we’re counting on to grow our own economy, including …

Alternative energy
Alternative-fuel cars
New-generation information technology
High-end equipment manufacturing
Advanced materials
New energy technologies

The Chinese are going to steal these advanced industries away from us using the same illicit —
and even illegal — tax and fiscal policies that have already cost us millions of jobs.

All using the same tactics that filings at the U.S. Commerce Department show China has used to
gut the U.S. solar industry over the past five years — mammoth government subsidies, massive
cash grants, heavily discounted materials and utilities, multibillion-dollar low-interest loans and
outright product dumping.

All while keeping their currency severely undervalued to grab more of our money. They do this
for every industry they sink their hooks into. They undercut U.S. companies by giving Chinese
companies an array of unfair — and sometimes illegal — subsidies, grants and loans while
sticking it to us with mafia-sized tariffs. Just look at the tariffs they place on U.S. goods:

45 percent on U.S. steel products

22 percent on U.S. automobiles
30 percent on U.S. motorcycles
30 percent on U.S. video, digital video and audio recorders

Then compare this with the far smaller tariffs we place on Chinese imports:

2 percent to 10 percent on yarns, cotton and man-made fibers

10 percent to 18 percent on woven fabrics
10 percent to 17 percent on home furnishings
10 percent to 24 percent on travel goods

There you can see with your own eyes a key reason why the U.S. trade balance with China has
ballooned to $295 billion … and why China is sitting on nearly $4.0 trillion of our money Those
numbers don’t include even the $48 billion worth of pirated U.S. software that the International
Trade Commission says cost U.S. businesses another 2.1 million jobs in 2009 alone.

As a result, it’s hardly a surprise that China’s newest Five-Year Plan has been characterized by
the U.S. Chamber of Commerce and many major multi-nationals as another “blueprint for
technology theft on a scale the world has never seen.”

It’s the kind of economic theft that could wipe out your savings in the blink of an eye!

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You needn’t take my word for it. The employees and investors in American Superconductor
Corp. would tell you the same thing — China will do whatever it takes to steal our jobs and our
technology.

Here’s what happened to them. When its biggest Chinese client refused to accept or pay for new
shipments of its wind-turbine technology software, its technicians discovered that the company
had hacked the source code for the software. Why pay, when you can steal it free?

This rip-off not only cost the company $140 million in sales, it also triggered a 70 percent
collapse in the company’s stock value. This is just one example of how some companies in
China will lie, cheat and steal, helping China to control the U.S. economy on its road to world
domination while wiping out the investments of American investors.

Rare events? Not even close! Gen. Keith Alexander, former head of the military’s Cyber
Command and the NSA, tells us that there have been 155 more examples of Chinese cyber thefts
in recent years that are currently being prosecuted.

Sound scary? Then consider this: After a year-long nonpartisan investigation, the U.S. House of
Representatives recently issued a strong warning to all U.S. corporations to stop doing business
with China’s two leading semi-conductor companies.

Why? Because these Chinese companies are unable to refuse demands by the Chinese military to
seed their communication equipment with spyware and malware that could threaten America’s
networks, including those used by the U.S. military.

When you add everything up, what China has done to gain greater control over the American
economy and your wealth is indeed very frightening.

UC-Irvine Professor Peter Navarro puts it this way: “In 2001 we let China into our markets here
in the United States and, since that time, we’ve shut down over 50,000 factories, lost 6 million
manufacturing jobs … and got 25 million people in this country that can’t find a decent job, and
we now owe $4 trillion to the world’s largest totalitarian nation.”

Tragically, the U.S. government can’t do anything to stop China from stealing our jobs, our
industries and our money — all thanks to the trillions we now owe them.

The reason is simple: To debtors, creditors are dictators. And China is simply the world’s biggest
financial creditor/dictator of all. You see, without the trillions we borrow from them, America
wouldn’t have enough money to pay its bills, since America spends over $1 trillion annually —
nearly 25 percent more than it takes in in revenue.

That’s how, and why, the Chinese can continue to keep the yuan undervalued, flood the U.S.
with cheap goods, keep their factories humming, amass a $3 trillion hoard in U.S. dollars, and
gain control over the U.S. economy to their heart’s desire.

No matter how much the United States cries in the press, there is nothing we can do to stop it.
That’s just the first step in their Long March to world domination: Control the U.S. economy.

Their second step is equally frightening because of what they are doing right now with the
trillions they have stolen from us. But as you’ll see, there’s an excellent opportunity here for you
to safeguard your savings and preserve your financial independence.

China’s Step #2: Monopolize the World’s Natural Resources.

You don’t need to have a Ph.D. in economics to know that if you control the world’s energy

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supplies, you can control the world. The Arab oil embargo of 1973 proved just that, when OPEC
stopped selling America oil in retaliation for the U.S. selling arms to Israel during the Yom
Kippur War.

The “oil shock” quadrupled gas prices almost overnight, forcing Congress to reduce the national
speed limit to 55 miles per hour while asking Americans to turn their thermostats down to 68
degrees.

While the oil embargo is now a very distant memory, what’s not is this: The United States still
imports 45 percent of its oil and is vulnerable to the whims of OPEC.

That’s a fact that has not been lost on the Chinese. That’s why the Chinese are out to stop U.S.
energy independence, as Forbes reported. They are using their $4.0 trillion in foreign reserves to
buy up the world’s energy resources to do just that. It’s an incredible Triple Crown win for the
Chinese:

They use their dollars to buy up the world’s energy reserves to meet their own growing oil
needs,
They acquire assets that will go up when the dollar goes down, and, as a result,
They can control the price we pay for oil, putting us even deeper in debt and more
beholden to their economic rule.

Economist Dambisa Moyo, author of Winner Take All: China’s Race for Resources and What It
Means for the World, backs up what I say. “Like a nineteenth-century colonial power,” Moyo
writes, “China has ranged the world over to secure the resources needed to meet its ambitions.”

Since 1977, the Chinese have acquired interests in exploration and production in Kazakhstan,
Russia, Venezuela, Sudan, West Africa, Iran, Saudi Arabia and Canada.

Today they buy 1.005 million barrels of oil per day from Saudi Arabia, 623,000 barrels of oil per
day from Angola, and 555,000 barrels of oil per day from Iran.

They have invested more than $17.5 billion in exploration contracts with Repsol YPF, Nexen
Inc. and Devon Energy Corp. You should see the size of their Venezuelan and Canadian oil
deals, which are projected to be near $45 billion.

And that’s not even the half of it. Recently, they not only purchased an Aruban oil refinery from
Valero, but also took a $2.2 billion stake in Devon Energy, giving them a one-third stake in
Devon’s oil and gas fields from Louisiana to Michigan.

That’s on top of the $5 billion they paid to get their hands on Canadian oil sands, the $7 billion
they paid for a share of Brazil’s deep-water oil assets, and the $2 billion purchase of Canadian
oil sands operator OPTI Canada.

This is oil that we were counting on to reduce our dependence on Arab oil, but now it belongs to
China, too. By buying up oil in our backyard, they are putting the U.S. over a barrel — forced to
continue to buy oil in the Middle East, with all its associated risks.

Looking ahead, China is already planning for its future oil demand and ensuring its supply
chain. Some of their recent transactions …

A $4 billion loan to Venezuela in exchange for an additional 100,000 barrels per day in
oil.
China won the right to explore Brazil’s largest oil field, Libra, which has an estimated
reserve of 8 million to 12 billion barrels of recoverable oil.

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A 30 percent stake in Refineria del Pacífico, an new Ecuadoran refinery, expected to

process 200,000 barrels of crude oil a day.
Beijing’s $12 billion master plan with Pakistan for Gwadar port to meet fuel needs,
including securing 60,000 barrels of oil per day.
China PetroChina’s more than $1 billion takeover of the Dover oil sands projects from
Athabasca Oil Corp., a Canadian company, to add oil reserves.
An 8.3 percent stake in KazMunaiGas, a subsidiary of Kazakhstan’s national oil and gas
company, in a deal totaling close to $5 billion by China National Petroleum.
A $2.6 billion acquisition of Peru’s Petrobas by PetroChina to expand its scale of oil and
gas in Latin America.

Not to mention its $270 billion long-term supply deal with Russia to secure crude oil and its
latest historic 400 billion deal for natural gas.

“The turning point in China’s energy strategy was the Iraq war,” the scholar Tong Lixia told The
Washington Post. He’s an energy expert at the Chinese Academy of International Trade and
Economic Cooperation, which is affiliated with China’s Commerce Ministry. “After 2003, the
government realized China could not rely on one or two oil production areas. It’s too risky.”

Beijing University security expert Zhu Feng noted, “Many people argue that oil interests are the
driving force behind the Iraq war… For China, it has been a reminder and a warning about how
geopolitical changes can affect its energy interests. So China has decided to focus more intently
to address its security.”

Chinese envoys fanned out over the globe with diplomatic and business missions to secure a
diverse base of future oil supplies.

The massive, aggressive Chinese oil grab constitutes the biggest single new demand factor
affecting the market today. China has pursued deals for oil in the Middle East, Eurasia, Russia,
Africa, South America and even North America.

Their urgent quest for oil has brought the Chinese right to the doorstep of the United States. They
failed in an attempt to acquire American oil producer Unocal … but the Chinese are making
headway in tapping into resources Americans had long assumed were the privilege of the United
States — in Saudi Arabia, Canada and Venezuela.

Former Chinese President Hu Jintao visited Riyadh to strengthen ties with the Saudis, China’s top
oil supplier. He found a cordial reception. “We are opening new channels, we are heading east,”
said Prince Walid bin Talal, a billionaire member of the Saudi royal family. “China is a big
consumer of oil. Saudi Arabia needs to open new channels beyond the West. So this is good for
both of us.”

Indeed, China’s stock has been rising throughout the Arab world, in part because of uneasiness
or even hostility over American actions in the Middle East, and in part because the Chinese don’t
ask about internal affairs.

In fact, the Chinese have been outflanking the U.S. all over the globe, grabbing up oil most
notably in areas where the West turns up its nose because of social conscience. China has no
qualms about dealing with countries off-limits to Western oil companies, countries considered
pariahs because of undemocratic actions and poor human rights records.

The pragmatic Chinese need oil, and they make it a point not to poke their noses into the affairs
of countries able to supply them with that valuable resource.

An unidentified government energy adviser, speaking anonymously for obvious reasons, told
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The Washington Post: “No matter if it’s a rogue’s oil or a friend’s oil, we don’t care. Human
rights? We don’t care. We care about oil. Whether Iran would have nuclear weapons or not is not
our business. America cares, but Iran is not our neighbor. Anyone who helps China with energy
is a friend.”

Consequently, China has made big investments in the oil industries of Iran, Sudan and other
countries considered rogues by the United States, including Venezuela.

Top Chinese leaders, including both Prime Minister Wen Jiabao and former President Hu Jintao,
have made highly visible tours of Africa to bolster strategic relations and wangle all the oil they
can get their hands on. They’re calling it the Chinese “Year of Africa.”

These two top Chinese leaders visited Egypt, Ghana, the Republic of the Congo, Angola, South
Africa, Tanzania, Uganda, Morocco, Nigeria and Kenya. And it’s paying off nicely — they
didn’t leave empty-handed from any of those meetings.

Meanwhile, recently nearly a dozen senior Chinese officials have swarmed across Africa with 36
missions to 25 countries. China has come to view the race for oil supplies to be a zero-sum
contest with the United States. They’re winning the contest for supply, but at the price of driving
prices higher with demand.

And it’s not just the oil they’re buying up. You should see the food stocks, grains and precious
metals that they are now hoarding:

$6 trillion in gold
$316 billion in copper
$9 billion in iron ore
$2.8 billion in soybeans

In fact, China invested $322 billion in nonfinancial investments, according to Bloomberg, to

“secure energy and commodity resources, buy technology, and build internationally competitive
businesses,” to which they added another $35 billion in the first half of 2012.

As Gary Lamphier of the Edmonton Journal writes, their ultimate goal is twofold: “To fuel the
country’s expanding industrial and urbanization needs at home, while mitigating China’s
exposure to the U.S. dollar and other potentially volatile paper assets.”

China Puts the Pedal to the Metal to Secure Natural Resources

A few years back, when China National Offshore Oil Corp. (CNOOC) made an $18.5 billion bid
for California-based Unocal, almost everyone from Washington to Main Street screamed at the
top of their lungs, “NO WAY!?”

Since then, China’s quest for natural resource security and asset diversification away from the
dollar has largely escaped public notice, not only in the United States, but also in Europe.

When the global financial crisis hit, most assumed China’s pursuit of natural resources would
slump. So it flew almost completely off the radar screen of those in Washington who might be
sensitive to China’s need for resource security.

But I’ve taken the time, along with the help of my research department, to see what’s really
going on with China. And the results will shock you.

Not only is the pace of China’s state-sponsored resource spree accelerating, but the average
“deal size” is exploding higher as Beijing directs more and more investment into natural

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resources — essentially while the rest of the world is pre-occupied with its own problems.

In recent years, although China has made fewer deals, it’s on pace to more than double the
dollars committed. All told, I count …

27 deals in oil and gas, with an average deal size of $2.6 billion
5 in energy, averaging $1.9 billion
6 in coal, averaging $683 million
10 in hydro/power/solar, averaging $919 million
5 in various rare metals such as cobalt and chromium, averaging $1.8 billion
11 in copper, averaging $1.2 billion
3 in steel, averaging $667 million
9 in iron ore, averaging $1 billion
6 in aluminum, averaging $3.2 billion
3 in nickel, averaging $620 million
1 in glass, at $310 million
1 in food, at $140 million
2 in chemicals, averaging $440 million

Moreover, these deals are locking up substantial amounts of the world’s key existing reserves of
natural resources, in 44 countries, in every region of the world …

In Asia, where an estimated $20.1 billion has been invested

Latin America/Caribbean, $21.1 billion
Africa, $21.3 billion
The Middle East, $26.6 billion
Europe/Eastern Europe, including Russia, $38.6 billion
Australia/Oceania, $20.3 billion
And in North America, a mere $405 million

In terms of the number of deals, the top three countries where China is investing and scooping
up natural resources: Australia (12 deals), Indonesia (9), and Peru (4).

Where China is Putting Most Of its Natural Resource Money

Needless to say, in terms of total dollars invested, at the top of China’s shopping list is energy.
Although China accounts for a relatively still small but very rapidly growing 22 percent of total
nominal world economic growth, as the second-largest consumer of energy after the United
States, China now accounts for 31 percent of the global growth in oil demand.

And that’s with China currently using only about one-ninth as much energy per capita as the
United States. If China consumes just half as much energy per capita as the United States does —
almost inevitable — nearly 60 percent of the world’s current oil supplies will have to be diverted
to China.

Where is China securing its energy? Counting coal, oil and gas, since 2006 China has invested
…

$920 million in Australia

$3.1 billion in Indonesia
$25 billion in Russia
$6.8 billion in Iran
$10.2 billion in Brazil
$4.8 billion in Venezuela

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$5.0 billion in Niger

And that’s not counting the more than $21.8 billion in 15 different energy deals in a wide range
of other countries including Angola … Great Britain … France … Iraq … Colombia … Syria …
the UAE … and more. Moreover, the pace of acquisitions in the energy markets is increasing. So
far, China’s oil and gas acquisitions are up 22 percent from a year ago.

Nor does this include the $17 billion bid by China National Petroleum Corp. and CNOOC Ltd. to
acquire all of Repsol YPF’s stake in its Argentine unit YPF. What’s more, state-owned China
National Petroleum Corp. (CNPC) said it will speed up acquisitions of assets in Africa and South
America, to boost China’s energy security. But it’s not just in the oil and gas sector where China
is rapidly on the hunt for resources.

Since 2002, China has …

Gobbled up almost 10 percent of the world’s free oil reserves outside of the Middle East,
more than 5.2 billion barrels worth
At least 5 percent of the world’s annual aluminum production capacity and 5 percent of
the world’s aluminum reserves
30 percent of the world’s aluminum and steel production
35 percent of the world’s iron ore

Plus substantial interests around the world in a variety of important base and rare earth
metals including nickel, zinc, cobalt and more.

When I first wrote about China trading dollars for assets in my Real Wealth Report newsletter
way back in 2009 — and how they were using this strategy to unwind their dollar holdings to
ultimately dump the dollar — everyone said I was nuts.

Yet, that’s exactly what China has been doing for the past years: Using their war chest of $3.0
trillion to buy up the world’s oil, gold and other resource assets.

This strategy not only feeds the Chinese global growth machine, but also will give China even
greater economic leverage over the U.S. economy — and ultimately your financial future.

That’s because they will have virtually cornered the market on natural resources as they
ultimately reduce their dollar holdings to the detriment of the U.S.

That’s why the third step in their Long March to gain control of the global economy could be the
nail in the coffin for your financial future:

China’s Step #3: Make the Yuan a Global Reserve Currency

China is moving ahead at light speed to promote the yuan as the world’s next reserve currency.
And when that happens, it will set off a chain reaction of events that smashes the U.S. dollar.

The outcome will blindside millions of Americans who have placed their financial future in the
full faith and credit of the U.S. dollar.

For more than 10 years, I have been telling subscribers to my Real Wealth newsletter how China
has been making huge strides toward pushing its currency, the yuan, onto center stage — with
the express intent that one day it will knock the U.S. dollar from its perch as the world’s reserve
currency.

That’s why China has been buying oil, gold, silver and commodities on a massive scale while

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systematically curtailing their dollar purchases, with one long-term goal in mind: Replace the
dollar with the yuan as the world’s reserve currency.

Do you realize what this means? That’s been the end game of their Long March to world
domination since the beginning. I repeat: Their plan is to use their reserve dollars to monopolize
global resources, and make their currency a major part of a new global reserve currency.

When this happens, China will often be able to dictate to the United States and the rest of the
world virtually anything they want since they will virtually control most of the world’s money
and its energy supplies.

And there is nothing the U.S. government can do about it. China is already using its vast
economic power against the United States in its pursuit of world domination. You need only look
at the speed at which China has been buying up energy resources and signing yuan trading
agreements to know what they say is true. For example …

In November 2010, China and Russia hammered out a $200 billion deal to use their own
national currencies instead of the U.S. dollar for bilateral trade.

In December 2011, China head-locked America’s largest trading partner, Japan, into direct yen-
yuan trading — bypassing the U.S. dollar altogether.

In January 2012, China signed a yuan-for-oil deal with the United Arab Emirates worth $5
billion — ending the petro dollar’s 38-year reign in the UAE.

In March 2012, China signed a currency deal with Australia worth $31 billion. In June, they
signed a deal with Brazil worth another $31 billion.

Also in 2012, China signed loan agreements with the BRIC nations for international and cross-
border trades, which HSBC estimates could boost the yuan share of trade by 50 percent.

And in 2013, 2014 and 2015, I count many similar deals — not the least of which is a major new
alliance with Russia.

With this megatrend under way, it’s only a matter of time before the dollar loses its singular role
as the world’s reserve currency.

I’m not the only one who is saying this; Iwan Aziz, head of the Asian Development Bank, said
the same thing during a CBN news report: “It’s only a matter of time.” Especially now that both
the United Nations and the IMF also support a new world reserve currency too.

This is not to say that the U.S. dollar can’t continue to rally right in the months ahead. As I
pointed out earlier, one of the direct consequences of rising conflict in the world is a rush of
global fear capital to the U.S. dollar, driving its value up.

But that’s much like the bow of the Titanic rising as the boat sinks. In the grand scheme of
things, it’s not a sign of true strength — just the prize for winning the “least ugly” contest among
world currencies today.

Longer term, the rise of China spells the end of the U.S. dollar as a reserve currency and an
eventual decline in the dollar’s value.

And while I can’t tell you exactly when it will happen, I can tell you this: Central banks and Wall
Street insiders are already preparing for the end of the dollar’s reign as the world’s single reserve
currency right now. Their gold purchases over the past year or two seem to prove just that. India

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has purchased 773.5 tons of gold worth $41.6 billion. France has purchased 6.9 tons of gold
worth $376 million. Germany has recently purchased 154.5 tons of gold worth $8.3 billion. And
nations of the greater China region — including Hong Kong, Taiwan, Japan, Indonesia, South
Korea, Thailand and Vietnam — have followed suit, purchasing 828.3 tons of gold worth $44.7
billion.

This is why the smart money is buying up oil, gold and natural resources, to turn the impending
crisis into profits. And this is why, despite some near-term setbacks, you should be making these
investments, too, just as the world’s central bankers and insiders do. They’re no fools. They see
the handwriting on the wall and are repositioning their assets to take advantage of China’s long-
term assault on the dollar.

My own work, which has nailed almost every major move in gold’s new bull market, shows that

An ounce of gold is heading north of $5,000!

I’m not the only one who sees today’s oil, gold and commodities prices as tomorrow’s bargains.
Big-money hedge funds and other big speculators do too and are pouring into commodities at
light speed as well. I’m not surprised.

For these reasons, if you don’t have a position in gold, energy or food stocks, you could find
yourself in the poorhouse with the rest of the unwitting. But you’ll need to act quickly. The
reasons are compelling and clear …

America has never been weaker financially or militarily. We’re in debt up to our eyeballs,
and our military is stretched too thin around the world.
China has never been stronger. They own trillions of our dollars, they control billions in
gold, and they have locked in gas and oil reserves around the world.
While China is building huge reserves of oil and other resources, Washington is blocking
exploration, drilling and production — and has even halted the construction of the
pipeline from Canada.
Our European allies have their own economic problems and are in no position to bail us
out. How can they? Their own currency, the euro, is on the brink of collapse, along with
the entire EU.
Political bickering has never been greater. The gridlock will continue to sink the paralyzed
United States and the noose of high deficits and entitlement spending will continue to
choke the life out of the economy.
America’s financial position will only get weaker as our own central bank keeps printing
endless billions of dollars at the same time.

That’s the whole reason the Chinese are using their dollars to buy oil, gold and commodities
right now while behind the scenes they work to engineer a coup on the dollar.

When you add up what China has been doing over the past three years to trade dollars for gold
and energy assets … the speed at which they’re negotiating currency deals … the actions of
central bankers buying gold … and the amount of money hedge funds and Wall Street insiders
are pouring into oil, gold and energy assets, too … the facts tell me that the axe will fall soon.

Highly placed sources inside the banking system would tell you the same thing, too, directing
America’s largest banks “to make plans for preventing collapse.”

And as Reuters also reported, emphasizing that “the banks could not count on government
help.”

To think that we are invulnerable to similar kinds of disasters would be foolish and naïve —
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To think that we are invulnerable to similar kinds of disasters would be foolish and naïve —
especially given the $16 trillion we’re in debt and the choke hold the Chinese already have on
our economy and the rest of the world.

Tragically, by the time most Americans wake up to what is taking place around them, it will be
too late — just like in 2000 and 2007 — when major busts and stock market collapses sent
millions of unwitting Americans to the poorhouse.

While I’m proud that my warnings saved my newsletter subscribers tens and even hundreds of
millions of dollars in each of those cases, countless others lost their savings, their investments
and their homes.

China as an Investment Opportunity

It’s not surprising to find that plenty of folks still take a cautious view about investing in China
— especially given everything we’ve discussed in this chapter.

Plus, fears of an overinflated housing bubble and imminent credit crunch in China abound. You
can’t find many bulls on Chinese stocks today, and that’s precisely why this market deserves a
closer look. From a true contrarian investor’s perspective, it doesn’t get much better than this,
because fears of an economic meltdown in China appear overblown.

But peel back the top layer of the inefficient, old state-owned enterprises, and you’ll find a
vibrantly growing domestic economy driven by a unique brand of oriental capitalism.

New political leadership in Beijing at the start of 2013 stressed social reform and rebalancing
China’s economy away from industrial-led export growth, in favor of more organic domestic
consumption growth.

Greater reliance on consumer goods and services means faster employment growth and higher
wages, which in turn promotes rising consumer wealth and spending. Despite a slowdown in the
pace of growth, China is well on its way to becoming the world’s largest economy. Indeed …

* China accounts for 16 percent of worldwide GDP, a share that has doubled in just the past 15
years. And consumption now accounts for more than half of total Chinese economic growth …

* China’s fast-growing consumer class now spends more as a percentage of global GDP than
Japan’s, and they’ve pulled dead-even with consumers in all of Europe …

* And these are savvy consumers too. China already has almost three-times more people online
as in the United States and internet usage is growing 10 percent annually, versus only 2 percent
in the United States. Plus there are nearly four times more mobile phone users in China as in the
United States already! In fact, in recent years China contributed more to global consumption
growth than any other nation on earth, including the USA.

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Still, the critics contend that much of China’s recent growth has been squandered in misguided
capital spending. But nothing could be further from the truth. In fact, the chart above shows that
in historical terms, China’s expansion is following roughly the same trend as in the United States
— but China is only on par with U.S. levels when Neil Armstrong first set foot on the moon 45
years ago.

That means there are still plenty more railroads, airports, pipelines, factories, businesses and
shopping malls to be built. China has plenty of room for capital investment and growth for
decades to come.

And Beijing is directing capital spending toward more productive industries including:
technology, clean energy and consumer services.

In spite of this remarkable transition from an export-led economy to internal consumption

growth, investors remain skeptical about China’s investment prospects. I can understand why: Its
stock market has lagged far behind, but that’s beginning to change.

It appears the tide may finally be turning in favor of Chinese stocks, which also happens to be
one of the world’s most undervalued markets.

Bottom line: Investors aren’t paying as much attention to China’s stock market after several
years of underperformance. As a result, Chinese shares are incredibly inexpensive right now, on
sale at less than half the valuation of U.S. stocks and offering twice the dividend yield. For my
money, select stocks in China are worth a much closer look.

China’s Meteoric Rise has Now Put It in the Driver’s Seat

In short: China has awakened. And just as Napoleon warned in 1803 — it’s about to shake the
world to its foundations, starting with the United States.

Three billion of the world’s 7 billion people live in Asia. Anyone who thinks their newly
awakened souls will stop desiring better lives for themselves, and their children, is sadly
mistaken.

Asian demand will remain a strong force, even as the Western economies of Europe and the
United States go down the drain. And China is the poster child of Asian demand. Even despite
the global slowdown — and despite what the naysayers may tell you — China’s economy is still
growing much faster than America’s is.

The Beijing government has approximately $5 trillion in debt; Washington has nearly $145
trillion in debt and obligations.

The People’s Bank of China — the country’s central bank — now has nearly $4 trillion in its

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piggy bank and its cash reserves are growing ever larger, month after month; Washington has
almost no cash on hand to speak of.

China has over 800 million workers, nearly five times more than the 156 million workers in the
United States. Not only that: 97 percent of all Chinese workers are employed; 19 million U.S.
workers are either unemployed or underemployed. In China’s urban areas, wages are rising by
about 10% per year. In the U.S., inflation-adjusted wages for U.S. workers have been falling,
stagnant, or at best, rising only marginally.

It gives me no pleasure to say this, but America has squandered its birthright. The age in which
our nation led the world is ending. Of course, there’s another reason why China is now in a
position to dictate economic policy to the United States:

Without the billions Beijing loans Washington, the entire U.S. government would go bust.
Washington would become a virtual ghost town.

Millions who count on government checks would be financially destroyed. And make no
mistake: The Chinese know they’re in the driver’s seat. I can’t even begin to tell you how painful
it is for me to tell you any of this.

I live and work in Asia, but I will remain an American citizen to my final breath. My sister, my
brother and my three grown kids all live in the United States. I want nothing but the best of
everything for them and for my country.

If my nearly four decades as a financial analyst and historian have taught me anything, it’s that
terrible things happen when we ignore reality. But if you grasp the reality that Beijing is now in
charge, you’ll find it’s quite easy to insulate yourself — and even make a substantial sum in the
process!

6. Never-Ending Jihad

The Middle East and How the Seemingly

Never-Ending Religious and Cultural Wars
Are Coming to a Final Head

If there is one part of the world in which my war cycles analysis is coming true, it’s in the
Muslim-majority nations and regions of the Middle East, the Persian Gulf and Africa. The wars
now raging in those vast areas are not separate conflicts. They are all part of a single, complex of
wars that is continually deepening, spreading and escalating.

It is not just a regional war. It has all the earmarks of a world war, dragging in arch-enemies Iran
and Saudi Arabia … Turkey and others on Continental Europe … Britain and the United States
… plus Russia and China. Even Japan, thanks to its new self-given powers to participate in
foreign wars, could ultimately send troops to the area.

With the Islamic State taking the lead, major civil wars are unfolding in Iraq, Syria, Libya and
Yemen, dragging in both Iran and Saudi Arabia. And these conflicts make the decade-long Iraq
War look like a minor skirmish by comparison.

There are economic and political battle lines of all stripes and colors. But the most consistent is
religious — between the Shia and Sunni sectors of Islam.

On the Shia side of the conflict are the regimes of Iran, Iraq and Syria plus Hezbollah in Lebanon
and powerful Shia militias in Iraq.

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On the Sunni side are the governments of Saudi Arabia, Egypt, Turkey and many others.

And fighting both the Shia and the Sunni is the Islamic State.

Just five years ago, the Middle East was relatively stable. Today, the entire region is descending
into utter chaos:

Iraq and Syria are now both involved in bloody jihadist-backed civil wars that will likely result
in partition and/or invasions by neighboring states such as Iran. In fact, in a last-ditch, desperate
effort to prevent the fall of Baghdad, Iran has already sent arms and its dreaded El-Quds special
operatives into Iraq.

Egypt, Yemen and Pakistan are all in various stages of collapse, where the rule of law is
virtually gone and chaos begins to reign. Libya has already collapsed and is now the training
ground for Islamic State.

Lebanon could sink rapidly into yet another civil war, which directly impacts Israel and other
neighboring countries. The last Lebanese civil war lasted 15 years, claimed an estimated 120,000
fatalities … caused a mass exodus of a million people … and dragged Israel plus other foreign
powers into the conflict. This one could be equally bad, or worse.

Turkey, a member of NATO, has been dragged into the madness, which, in turn, is exacerbating
its own domestic political divisions.

When you add in the additional wild card of Shiite Iran,which despite any deal with the West, is
still pursuing its goal of building nuclear weapons to use against Israel and its Sunni enemies, the
possibility of catastrophic Middle East oil war increases exponentially.

One chilling possibility now being widely discussed: An Iran-Saudi war, with the United States
this time inserting itself somewhere between the warring parties and the jihad-obsessed Islamic
State.

The United States is already deeply involved. Analysts are already calling it “America’s Thirty
Years War,” referring to the war in central Europe (1618—1648) that almost bankrupted the
entire Continent.

Already, in a very short time, Islamic State has been able to undo the work that the United States
and its allies spent a decade accomplishing — at a cost of more than $1 trillion and the lives of
4,500 U.S. soldiers.

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What a Difference a Decade Can Make!

With the benefit of hindsight, we can now look back at a decade in which foreign intervention
did little more than foment chaos, revolution and more wars. For the evidence, just compare the
two maps above and below. The map above shows what the region looked like in 2009 when the
wars of Iraq and Afghanistan were still in full swing; the United States was still debating
withdrawal; and nearly all American citizens voted for the presidential candidate they thought
could do the best job of ending the conflicts.

* Libya, Egypt, Syria, Lebanon and the entire Arabian peninsula were stable (green areas in
map) …

* Iraq and Afghanistan were the only theatres of war (red), and …

* Iran was the only other country where long-term stability could be seriously questioned
(yellow).

So the focus of the United States and its NATO allies was strictly on Iraq and Afghanistan. And
their only major challenge was to bring the troops home without leaving chaos in their wake.

The Palestinian-Israeli conflict was raging, as always. But in contrast to the new wars elsewhere,
that six-decades-old conflict was such a known quantity, one would be hard pressed to argue
that it was a significant destabilizing factor for the region.

In short, we had:

Just two, at most three, conflicts to seriously worry about …

Moderate impact on the major world powers …
No broad threat to the global economy, and
High hopes for future long-term stability.

Now, look how dramatically the picture has changed:

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This second map shows how the litany of woes in the region is unprecedented in modern history
…

1. All the green areas (representing stability) have disappeared. In fact, the word “stability”
is gone from the lexicon of any serious observer in the region; every country in the region is
impacted — internally and externally … politically and socially … in terms of trade, the
influx of refugees and the stirring of pre-existing conflicts.

2. Egypt, Yemen and Pakistan — are in various stages of becoming collapsed states, where
the rule of law is virtually gone and chaos rules the day.

3. Iraq’s “Arab Awakening,” largely responsible for the end of its first civil war, is dead. In
its place, we see the Islamic State conquering big swaths of territory and the country’s
largest cities outside of Baghdad.

4. In Libya, according to the Mideast Mirror, the security breakdown has been extreme: “It
is no longer possible to sense any form of authority that can be relied upon and that could
lead Libya to the shore of safety and rid the country and its people of the militias of various
forms and allegiances that now impose their law and authority alone. Libya … is now
hostage to outlaw forces, armed groups, thieves, and arms and human smugglers. These
have transformed the country into a safe haven for terrorism, assassinations, intimidation,
killings, and random extra-legal detentions.”

Worst of all, the sum of each of these mostly internal conflicts has now transformed the region
into…

The Balkans of the 21st Century

You see, until recently, most of the conflicts in the Middle East were primarily domestic. The
threads of cross-cutting alliances were often tangled. Direct support by regional and world
powers was either limited or hidden.

So the danger of a great Middle East war was not an immediate concern. Now it is.

And as I mentioned earlier, much of the conflict is driven by a great religious divide. Overlaid
onto the geopolitical and economic rivalries is the most powerful mobilizing force of all in the
Muslim world — the millennial split between Shia and Sunni, dating back to the death of
Muhammad in the year 632.

Former German Foreign Minister Joschka Fischer puts it this way: “What makes the civil war so
dangerous is that the players on the ground are no longer its driving forces. Rather, the war has
become a struggle for regional dominance between Iran on one side and Saudi Arabia, Qatar and
Turkey on the other. As a result, the Middle East is at risk of becoming the Balkans of the 21st

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century.”

But anyone who still thinks there’s a wall surrounding the region that can contain such a broad
regional conflict needs to check into the same institution as those who think they can fix it. Iran
and Saudi Arabia are more than just regional powers — they control massive resources that help
power the global economy. All five permanent members of the UN Security Council — the U.S.,
the U.K., France, China and Russia — are heavily involved in the region. Plus, Islamic State
jihadists are pouring out of the region into Europe and Africa.

But unlike the conflicts of five years ago, the major world powers have drawn a line in the sand
— the United States and its NATO allies vs. Russia and China.

Unlike any time in the past, we’ve seen U.S. and Russian battleships move into the area. And
unlike any time in the past, the economic consequences of the next phase of this regional war are
boundless, raising urgent questions for investors:

How will it impact U.S. relations with Iran, Saudi Arabia and Israel?

To what degree will it drive even more scared money into U.S. markets?

When will that money also start flowing into safe havens like gold?

What impact will it have on energy prices?

The 100-Year, Not 30-Year, War

If you think the Middle East conflict began just a few decades ago, you’d better take a closer
look at history. The instability in the region can actually be traced back to 1916, nearly one
hundred years ago.

In 1916, Britain and its allies were locked in a horrific epic war with Germany and its allies.
Every possible means to vanquish the enemy was deployed — the first air war, the first
widespread use of chemical weapons, and the largest attempts ever to manipulate deep-seated
ethnic rivalries.

Here’s how that last aspect ties back to the Middle East: Germany formed an alliance with the
great Turkish Ottoman Empire, the colonial power in what is today Israel, Gaza, West Bank,
Jordon, Lebanon, Syria and beyond.

In an attempt to undermine the German-Ottoman alliance, the British persuaded Arab leaders to
rebel against their Turkish rulers, promising to help the Arabs establish an independent state,
including Palestine.

Then, in the following year, the British made essentially the same promise again — but this time
to the Jews in the region. This was the famous Balfour Declaration, which stated that “His
Majesty’s government views with favor the establishment in Palestine of a national home for the
Jewish people.”

To make things worse, Britain also cut a deal with France to carve up the Arab provinces of the
Ottoman Empire and divide control of the region.

This combination of contradictory cross-deals and alliances was one of the biggest foreign policy
blunders of any major world power in the 20th century, setting the stage for the suspicion,
confusion and conflict that have endured to this day.

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After World War II, the newly formed United Nations compounded the problem. They
recommended the partition of Palestine into two states and the internationalization of Jerusalem.
The beleaguered Jewish population in Palestine, reeling from the Holocaust, disliked the terms of
the proposal (the Arabs got most of the land) but felt they have no choice but to accept.

The Arabs unilaterally rejected the partition plan and, instead, launched an attack against the
Jewish settlements in Palestine that was the start of the 1948 war. The State of Israel was
proclaimed on May 14, 1948.

But the Arab states rejected the partition of Palestine and the existence of Israel. The armies of
Iraq, Syria, Lebanon, Trans-Jordan, Saudi Arabia, Yemen, and Egypt attacked. And they were
promptly defeated by the Israeli army.

That seemed to end the conflict, but it didn’t. Eight years later, Egypt nationalized the Suez
Canal, and in response, Britain, France and Israel invaded the Sinai Peninsula of Egypt —
supposedly “the war that would end all wars in the region.” Did it? No.

In 1967, Gamal Abdel Nasser ordered UN peacekeeping troops out of the Sinai Peninsula and
brought up several tank divisions to the border with Israel. Egypt, Syria and Jordan were
threatening to invade within days.

To forestall an invasion, Israel launched a pre-emptive strike against the Egyptian air force and
Arab troops. Israel’s resounding victory then convinced many observers that this time, finally,
peace would prevail, but it didn’t.

On Yom Kippur, 1973, Egypt and Syria attacked Israel in an attempt to regain lost land. But they
failed, as Israel retaliated and won still another war.

Five years later, Israel and Egypt signed Israel’s first-ever peace treaty with a major Arab country
— the Camp David accords.

“Now,” said the analysts, “this will finally end the conflict.” Famous last words! Again, the
conflicts returned.

In fact, the vitriol, venom and terror merely shifted — from one set of countries seeking Israel’s
demise to another set of countries seeking its demise.

Indeed, just as Israel was establishing diplomatic ties with one of the largest powers in the region
(Egypt), tensions were escalating with another (Iran).

And not long after Israel befriended its eastern neighbor (Jordan), the threat from Jordan’s own
large neighbor to its east (Iraq under Saddam Hussein) went off the charts.

Now, nearly all those who had forever expected, predicted, hoped for, or prayed for peace in the
Middle East have largely given up doing so. U.S. Secretary of State John Kerry’s super-shuttle
diplomacy to patch together a peace deal was a wild goose chase.

No one paid attention. No one really believed it would work. And Kerry himself admitted it was
a total failure.

The U.N.’s warnings to Hamas and the Israeli government — that they must immediately stop
their mutual rocket and bomb attacks or risk an all-out war — also fell on deaf ears. Besides,
they already are at war, and anyone who thinks otherwise is dreaming.

How U.S. Policymakers Grossly Underestimated

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The Depth of Ethnic Conflicts in the Middle East

In short: A long series of U.S. foreign policy mishaps, stumbles, and outright failures have set us
on a collision course toward a new, hotter cold war — with far-reaching consequences for all
investors.

Just a few years ago, the West was applauding the “Arab Spring” — a wave of democracy
movements that began in Tunisia, spread east to Egypt and the Arabian Peninsula, then West to
Libya.

But today, those movements have morphed into a series of violent, multinational ethnic conflicts,
largely between the region’s two most deeply entrenched groups — Shiite and Sunni Muslims.

My colleagues and I first warned of this conflict in 2006, at a time when Washington was hailing
the “success of the first democratic elections” in Iraq. But we saw it differently. We wrote that
those elections were opening “a new, more violent chapter in the war between Shiite and Sunni
Muslims — the ethnic-religious conflict born with the death of Muhammad’s grandson during
the Battle of Karbala of 680 AD, over thirteen centuries ago.” We described a scenario in which
“The Sunni population rises up in a broader rebellion” and “Iraq bursts into civil war and the
conflict spreads to neighboring countries in the region.”

Plus, we warned: “Throughout the West, the depth and deadliness of this millennial conflict is
severely misunderstood and grossly underestimated.”

Now, just as we feared, the millennial Shiite-Sunni conflict has escalated dramatically across the
region, thrusting the U.S. into inexplicable, unjustifiable and untenable positions — virtual traps
that can make mincemeat of U.S. policy in the region.

For a better understanding, look at the accompanying map. The dark and light brownish areas
have majority Shiite populations, while the balance of the countries shown are predominantly
Sunni.

Moreover, the map belies the fact that all countries in the region have a mix of both Muslim
sects: Kuwait has a Shiite minority of 27 percent; Saudi Arabia, 3.3 percent; Oman, 12 percent;
and the United Arab Emirates, 16 percent.

And in most of those countries, the hatred and resentment between the two Muslim sects run
deeper than those associated with virtually any other ethnic conflict in the world today.

The Continuing Threat of Iran

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The Middle East is the classic example of being stuck between a rock and a hard place in terms
of allies.

How do you choose the lesser of multiple evils when all your choices are evil? How do you
choose the “least bad” bad option?

To fight Islamic State, the United States is forging alliances with Syrian rebel groups with ties to
al-Qaeda … and even having to do back-channel deals with Iran. At the same time, the United
States wants to stop Iran from developing the Islamic Bomb. It’s not a good situation.

My view of Iran is fairly straight-forward. The mullahs who rule the country are dangerous loose
cannons. Their heads seem filled with a jumble of anti-Semitic, anti-Western venom, rabid
nationalism, and flaming Islamic fanaticism.

The evidence: Over the past few years, the mullahs have outraged the world with
pronouncements that the Holocaust is a myth, that the State of Israel should be wiped off the
map and that Iran has the right to work on uranium enrichment whether the rest of the world
likes it or not.

The mullahs seem to be working overtime to pick a fight, not just with the United States but with
the entire Western world.

The bad news is that I believe they’re going to get their wish one way or the other. After years of
political jockeying, phony diplomacy, economic sanctions and shaky dealings toward a nuclear
pact, mark my words, we will eventually be at war with Iran.

Exactly why the mullahs of Iran want to start a war eludes me. They are certifiably delusional if
they think Iran would come out on top. Iran is not Iraq.

This time, the West is less likely to be split between those that are for and those that are against
some action. There will likely be a solid alliance of Western forces that can defeat the mullahs —
not just the United States and Britain and not just a token showing from obligated friends.

The undeniable reality: Iran has repeatedly thumbed its nose at world opinion. It insisted on its
right to resume its nuclear research. And it set off a potentially dangerous chain reaction of
events.

Iran says that it’s only interested in uranium enrichment for “peaceful purposes.” It says it’s to
advance its ability to produce “much-needed power” from nuclear reactors. I don’t buy that, and
nor do most Western leaders.

They know that Iran’s real intent is to resume atomic research with one overarching goal: To
produce nuclear weapons.

It’s bad enough that India and Pakistan have nuclear arsenals. Give an atomic bomb to Tehran,
and we’d be looking at a really bad hair day.

U.S. political leaders know that an Iranian nuclear bomb is a real threat to Western security.
Republican Sen. John McCain of Arizona called the nuclear standoff with Iran “the most grave
situation that we have faced since the end of the Cold War.”

Bottom line: Despite any nuclear pact, eventually the United States or one of its allies may
launch a missile strike to destroy Iran’s nuclear ambitions.

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What Happens if the Middle East Spins Out of Control?

As I write these words, Iraq is on the verge of falling, and the greatest mistake anyone could
make is to underestimate the consequences.

If it were falling to freedom fighters, right-wing generals or even leftist guerillas, it wouldn’t be
so shocking. We’ve been there, seen that — we’d know how to deal with it somehow.

But that’s not what we have in Iraq today. They are the Islamic State, worse than al-Qaeda. In
fact, they’re so radically extreme, so vicious, so uncontrollable, even al-Qaeda itself has cut off
all ties.

If the Islamic State were just a typical terrorist organization, operating in small splinter cells,
planning random attacks on isolated targets, we’d know how to deal with that as well.

But that’s not who they are. They’re an army. They’ve swept Iraq in a blistering blitzkrieg.
They’ve snowballed in size, gathering thousands of Iraqi army defectors and militants into their
fold. They’ve taken over government army bases, arms depots, refineries, power stations, big
cities, even entire provinces.

If Iraq were a small, inconsequential country, maybe we could just write it off. But,
unfortunately, what happens in Iraq matters. It is the most populous Arab nation in the Persian
Gulf region, the second biggest in area, and the second-largest in terms of oil reserves.

If Iraq were disconnected from U.S. history and destiny, maybe our government could find a
way to ignore it.

But, again, the reality is that the United States has spent more than $1 trillion in direct war-related
costs plus trillions more in interest, veterans’ benefits and other costs. The grand total, according
to a recent Brown University study? Close to $6 trillion, or sixty times more than Washington’s
cost estimate announced just before the Iraq war began.

If we could just put the past behind us and move on, that might be an escape of some kind. But
that’s not possible. If Iraq falls, it’s bound to set off a chain of events that chops up our foreign
policy, ricochets through time and impacts nearly everything we do, or plan to do.

All of this raises urgent questions.

Could the United States Save or Win Back Iraq?

Very unlikely. The U.S. government and military would have to do things that are so
unthinkable, only a certifiably insane White House would even consider them.

It would have to expand its air strikes to bomb millions of Iraqi people.

It would also have to coordinate closely with the hated Assad regime of Syria — for the simple
reason that he’s currently fighting against precisely the same enemy.

It would even have to directly enlist the allegiance of Shiite Iran, the only big power in the
region that’s actually very close to the Shiite regime in Iraq.

And in the process, it would have to take the risk that Iran’s sworn Sunni enemy, Saudi Arabia,
cuts off all ties with Washington, or worse.

None of this is likely to go forward. Even baby steps in these directions would be blocked at the
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None of this is likely to go forward. Even baby steps in these directions would be blocked at the
pass or lead to immediate disaster.

What happens if the U.S. lets Iraq fall?

First, you’d hear a deafening rally cry of “great historic victory” by all anti-American forces in
the region, injecting new vigor into their quest to take Lebanon … topple regimes on the Arabian
Peninsula … return to power in Afghanistan … conquer most of North Africa … and, worst of
all, rule nuclear-powered Pakistan.

Second, it would be the biggest U.S. foreign policy disaster since Vietnam, dealing a severe blow
to U.S. credibility, hegemony, and influence — not just in the Middle East, but also in Eastern
Europe and the Pacific … not only with potential adversaries, but also among close allies in
Western Europe and Latin America.

Third, there would be a power shift in the new cold war. The old Cold War divide between East
and West has again burst onto the scene, with new fault lines appearing very near where the old
ones were before. And now, if the United States loses Iraq, it automatically emboldens China and
Russia.

Fourth, there would be economic consequences — a new bull market in gold, rising oil prices
and more.

The Investment Consequences of a Middle East War

When Allied forces first invaded Iraq in 2003, one of their most urgent priorities was to secure
the oil fields of the southern region of Basra, and they managed to do so very quickly. Even as
M1 Abrams tanks and Bradley Fighting Vehicles closed in on Baghdad, oil engineers employed
by Houston-based KBR were already working alongside the Army Corps of Engineers in the
country’s most productive Basra fields, seeking to secure key wells, pipelines, storage areas and
port facilities.

The reasons were obvious: Iraq has 115 billion barrels of proven oil reserves, the second-largest
on the planet, surpassed only by Saudi Arabia’s. A large portion of the country’s oil reserves and
production are in the southern Basra region. And Basra has Iraq’s only port, Umm Qasr, through
which almost all of Iraq’s oil exports are being shipped today.

Imagine what could happen to the price of crude if those supplies are suddenly removed from
the world’s already-tight oil market!

However, there’s also room for optimism: Thankfully, the United States is far less dependent on
Iraqi oil, OPEC oil — or any imported oil for that matter — than it was in the past.

Already, select oil companies have benefited tremendously. And already, smart investors are
making money hand over fist.

First, U.S. production of petroleum and related products, which had been declining for nearly
two decades, has recovered — and done so very quickly. That’s a dramatic turn of events with
lasting consequences for investors who target the right sub-sector of the energy world.

Second, thanks to the rising production, U.S. reliance on imported oil has plunged.

Does this mean that the United States is invulnerable to the oil and gas wars now exploding
abroad?

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No. Unfortunately, the oil wars are breaking out suddenly and right now. In contrast, America’s
trend toward energy independence is a slow process that will take many more years.

But Don’t Forget the War Dividend

No one doubts that a major war in the Middle East will have profound consequences for energy
prices and the global economy. The fact is, skirmishes over oil, oil pipelines and access to
natural gas are springing up all over the world.

But as I wrote earlier, there is another factor most people don’t consider: U.S. stock markets
usually skyrocket during periods of military conflict overseas. It may seem counter-intuitive but
it’s actually true.

The reason is because during periods of heightened global conflict overseas, money literally
pours into the United States as desperate investors overseas seek the protection of U.S. markets.
That’s exactly what happened during the Iraq War.

Hundreds of billions of dollars in Middle Eastern assets rushed into the relative safety of U.S.
markets when the war began, helping to prompt a stock market boom that lasted for a full five
years.

Between March 2003, when the war began, and the peak in 2008, the Dow Jones Average rose
steadily upwards, not crashing as many ill-informed analysts predicted.

During that period, I guided subscribers of my investment newsletter to some of the biggest
profits we’ve ever seen.

One of my recommendations saw a profit of 949.8 percent, turning every $10,000 investment
into $104,980 in exactly 12 months.

Another investment in this period rose 309.11 percent. A third was up 271.7 percent

I believe we will see the same dynamics unfold over the next several years.

If you think energy is hot right now, just wait to see what happens as Baghdad falls or a second
Iraq war breaks out over access to oil supplies in the region… or if an oil war breaks out in Asia.
The price of oil could go berserk, and energy investments could make you a fortune overnight.

During the first few years of the Iraq War, oil company stocks did a moon shot.

Exxon skyrocketed 196.8 percent, from $32 to $95 a share.

Chevron gained 293.7 percent, going from $32 to $126 a share.
And Conoco-Phillips gained 291.6 percent.

And those were just the big boys! Mid-tier oil companies made their investors vast fortunes
during the same period:

China’s Sinopec was up 422.8 percent between 2003 and 2007…

Noble Energy was up 485.5 percent…
And Hess did a moon shot, earning its investors a staggering 755 percent in just six years.

Get Ready to Make Life-Changing Profits

The battles over oil and energy resources will shape your financial future for the next decade or
more. I know this may continue to strike you as counter-intuitive — that oil wars overseas could
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coincide with a global stock market boom and the rapid accumulation of vast wealth.

But I said it before and I’ll say it again: These new oil wars around the globe will coincide with
the last stock market boom of our lifetimes — a boom that many investors will miss out due to
bad advice and even blind panic.

Now, as I stressed at the outset, large swaths of the world outside of the United States are
heading into a prolonged period of regional wars fought largely over oil and energy resources…
and a few savvy investors will make vast fortunes in what will almost certainly end up being the
last great bull market in our lifetimes.

As the bloody chaos in the Middle East spreads, hundreds of billions of dollars are about to
come flooding into the safety of U.S. financial institutions, sending the prices of select energy
stocks and other U.S.-based assets through the roof.

It will result in unprecedented opportunities for U.S. investors. And you could make a fortune
very quickly if you make a few simple, low-risk changes to your portfolio.

7. The End of the American Empire

How America’s Leaders Are Making All the Same Mistakes of Former Great Civilizations That
Have Come Before It

“I sincerely believe that banking establishments are more dangerous than standing armies, and
that the principle of spending money to be paid by posterity, under the name of funding, is but
swindling futurity on a large scale.” — Thomas Jefferson

The horrific terrorist attacks of September 11, 2001, were more than a single, tragic footnote in
our nation’s history. They signaled a new era of mass global conflict, accompanied by an
Everest-sized mountain of new debt for the United States.

As we’ve seen in earlier chapters, war cycles are the natural rhythms of social and economic life
that predispose societies to descend into chaos, hatred, civil and even international war.

They’re a kind of volatility index, measuring the cycles of mass human social unrest. What’s
more, they are documented and scientifically proven. And this is what terrifies me: The war
cycles are ramping up in a way that has not happened in at least 100 years!

In January of 2013, I released my war forecasts showing political turmoil was set to start rising
substantially. According to various sources, since that time, 201 terrorist attacks have been
staged worldwide. In the Middle East, there are now eight countries officially at war, involving
163 different militias, separatist and anarchic groups. In the Congo, Mali, Nigeria, Somalia and
the Sudan, there are now 24 countries and 141 different groups involved in wars. In Europe,
there are now eight countries involved in official wars involving 65 different groups of militias,
guerrillas and separatists. In the Americas, war is taking root as well, where over five different
Latin American countries are experiencing war-like conditions involving more than 25 separatist
groups. All told, there are now a near-record high of 60 countries involved in war, involving 512
militias and separatist groups.

My research shows the world is still on the cusp of a dramatic increase in geopolitical conflict
and social unrest. No doubt Washington will drag us into countless more of these, and all at
monumental cost.

For the coming years — until the cycles peak in 2020 to 2022 — it’s time to batten down the
hatches, to protect and grow your money like never before!
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hatches, to protect and grow your money like never before!

When Things Fall Apart… They Fall Apart Fast!

America is now the world’s sole superpower, an empire if ever there were one. Yet the tragic
lesson that history teaches is that, once the long years of slow simmering conflict are passed,
empires can unravel with terrifying speed — eight years for the bulk of the Roman Empire, 17
years for the British Empire, 11 years for the Ottomans, eight years for France and just two years
for the Soviet Union.

In each case, the people of these empires ignored the writing on the wall, thinking it couldn’t
happen to them.

In each case, the government feigned ignorance, swearing on a stack of Bibles that the worst was
over.

And in every case, the majority of the people failed to prepare and suffered the consequences of
complacency.

You only have to look at the headlines — or turn on the TV — to know it’s already hitting our
shores. The frightening reality is that despite the greatest central bank money-printing era of all
time, the U.S. economic recovery has been one of the weakest in modern history. This begs the
question: What happens when central banks in the U.S. and all over the world stop or reverse
their printing presses?

This is the great question of our day. This is why hundreds of once-great American cities have
been transformed into rotting, decaying hellholes. We never dreamed it could happen here. But it
is happening.

Right now, before our very eyes. And right here, in the United States of America.

Every nation that’s met with this tragic fate suffered the same disease; one that slowly choked the
life out of it before ultimately killing it.

Each left behind important clues on how to survive a similar fate. America is now on the same
road as nearly every global empire before it. The “War on Terror—escalating global, civil and
regional wars — and America’s grim financial stateall but guarantee it.

As I said earlier, I am simply a historian, steeped in how governments and markets are cyclical in
nature and how those who fail to learn from history are doomed to repeat the mistakes of the
past.

I learned as an anthropologist to question anything and everything I see. What’s more, I wasn’t
trained in traditional economics, most of which is dead wrong. And I’m not stuck in old
economic models that simply do not work.

You know the maxim: “Those who cannot remember the past are condemned to repeat it.”

I am deeply concerned by what is happening in the world — and especially in America — right
now. The injustices and travesties being perpetrated on us by our own government — the very
people who swore an oath to protect and defend the Constitution — will likely make your blood
boil, as it did mine.

That said, there’s no doubt in my mind that America as a nation will survive the coming storm.
But I also have no doubt that America as a world leader — as an empire — will not.

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The months and years ahead will challenge us to the very core of our being. The dangers will be
unprecedented. I expect riots and mass protests in the streets of America. I expect the fabric of
our society to be stretched to its breaking point. Mark my words: We will go through a period of
hell, like the 1960s or worse.

Great nations and empires like the United States follow the same progression of events. First,
there is a period of great prosperity followed by a period of delusion and, then, ultimately, a kind
of national suicide. In every case, the pattern is clear:The government spends too much on
military and makes too many promises to its citizens.

It wakes up one day to find it is dead broke —and so it borrows all it can from its own people,
and still more from foreign countries and banks. The debts become so horrendous and unwieldy
that eventually investors and taxpayers finally scream “Enough!” and slam their wallets shut.

And that’s when panicky political leaders turn on their citizens: They confiscate their wealth ,
destroy their freedoms, and tax them into oblivion in a frantic effort to avert financial
Armageddon.

Great global civilizations don’t die by conquest, or even from hyperinflation, or from any other
single event. Instead, they destroy themselves. At its height, the Roman Empire was a beacon of
prosperity. Its complex developments of senatorial government, historical writings, stunning art
and architecture, flourishing trade and commerce were a testament to its power and wealth.

It was arguably the most important and influential civilization the world has ever known. Yet by
the end of the 3rd century AD, the Roman Empire had been transformed into a military state that
sought to control almost every aspect of its citizens’ lives.

It died largely because of abuse of power by politicians and rapidly rising taxation that drove
many of its citizens into destitution — and onto the public dole — and drove other citizens away
from the Empire.

It died because of a corrupt treasury and justice system that tracked down and confiscated
citizens’ wealth — largely to fund the government’s debts.

As the historian Will Durant — author of the Pulitzer Prize-winning series “The Story of
Civilization“ — put it: “A great civilization is not conquered from without until it has destroyed
itself within. The essential causes of Rome’s decline lay in her people, her morals, her class
struggle, her failing trade, her bureaucratic despotism, her stifling taxes, her consuming wars.”

Archeological evidence shows a startling decline in standards of living during the 5th century. It
was a change that affected everyone, from peasants to kings.

And it was no mere transformation — it was a decline on a scale that can reasonably be
described as the end of a civilization. The costs of military and the pomp of emperors increased,
even as the means of meeting those costs steadily eroded. In the end, there was simply no money
left to pay the army, build forts or ships, to protect the frontiers, or to support the growing needs
of the massive empire.

The barbarian invasions were merely the final blow to the Roman state, the culmination of three
centuries of fiscal deterioration. Rome’s crumbling social order offered so little, its citizens
actually saw the invasions as liberation from onerous obligations to the ruling class.

This pattern is common in history.

The Byzantine Empire — which was the sequel to Rome — also faced a number of external

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enemies. Yet, as with the Roman Empire, it was largely internal decay that destroyed it.

The British Empire, under the rule of Queen Victoria, controlled nearly one-quarter of the world
at the turn of the 20th century and ruled just over one-fifth of the population. It was the largest
empire in the history of the world, with over 400 million people under its rule. But its power
quickly eroded. A series of wars, on multiple fronts, left it financially exhausted and heavily in
debt.

All sound familiar? It should. This has been the inescapable destiny of virtually every global
economy throughout history — the Roman Empire, the Byzantine Empire, the British Empire,
and yes, it is the same path the American Empire is on now.

Yes, the stock market recovered from the 2009 wipeout and the U.S. economy mended, at least
partially.

But please do not make the mistake of thinking all is OK. As the people of Europe are now
intimately aware, the consequence of complacency is catastrophe.

All the attempts Washington has taken to prop up the economy and mask reality are just that:
props. They may work temporarily, but they will ultimately fail. And when they do, the millions
of investors who’ve let down their guard — wrongly believing that recovery is here, and
wrongly believing that our leaders in Washington truly have our best interests at heart — risk
losing everything.

And that time is closer than you think. The United States has suffered a number of deadly
wounds since the dawn of the 21st century; each potentially fatal by itself.

But taken together, they’ve significantly increased our nation’s decline.

How the U.S. is Borrowing Its Way to Oblivion

It will go down in history as the day the financial world nearly ended. On September 15, 2008,
Lehman Brothers collapsed under the pressure of the sub-prime mortgage meltdown and serious
corporate fraud, shocking financial markets to the core, panicking global bankers and triggering
the deepest economic downturn since the Great Depression — both in the United States and
globally.

Between October 9, 2007, and March 6, 2009, the Dow plunged 50 percent; by November of
2008, the S&P 500 — the broadest of the U.S. market indices — had plummeted 45 percent
from its 2007 high. It’s estimated that by the fall of 2008 …

25 percent of American wealth had been vaporized in just 17 months…

Housing prices in the U.S. had fallen off a cliff, collapsing 20 percent from their 2006
peak…
Total home equity had plunged more than 32 percent — delivering U.S. homeowners a
$4.2 trillion loss…
Total retirement assets had fallen 22 percent — wiping out $2.3 trillion of wealth in the
blink of an eye …
Savings and investment assets had fallen $1.2 trillion and pension assets had cratered $1.3
trillion.

The U.S. government and Federal Reserve threw more than $13.9 trillion at the crisis, including
the $700 billion TARP program — the largest government bailout since 1933 — and the $787
billion economic stimulus package.

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But the immediate fallout from the crisis was just scratching the surface of the gaping wound it
created as the U.S. government’s unprecedented fiscal stimulus and institutional bailouts led to
the wildest money-printing spree in the history of the world!

The Federal Reserve’s balance sheet quintupled in size, from $834 billion when Ben Bernanke
took the reins as chairman in February 2006 to an unprecedented $4.1 trillion today.

And it’s not just in the United States. We’ve also seen the biggest money-printing program ever
in Japan … the biggest rate-cutting program ever in the euro’s 15-year existence … and the
biggest easy-money program ever in the UK. All told, more than $4 trillion of “funny money” —
printed by the U.S. Federal Reserve, European Central Bank, Bank of Japan and Bank of
England — is now sloshing around the global banking system. And it’s a ticking time bomb of
historic proportions for the U.S. bond market!

There are two chief reasons …

First, despite the Fed’s herculean efforts, long-term interest rates still moved higher. After
bottoming in July 2012, rates have zigzagged from a low of 1.38 percent on the benchmark U.S.
10-year yield, to 2.73 percent. That’s almost a doubling of the 10-year rate.

The writing is on the wall: A small group of smart investors see that the U.S. sovereign bond
market is the world’s biggest bubble — and it has to burst!

Investors no longer see the Fed as being able to stop rates from rising. Nor do they believe
Washington will ever fix its terminally ill balance sheet.

Consequently, they no longer see U.S. sovereign bonds as a safe place to park their money.

And they’re right. No matter what the Fed says or does, it cannot control the free market.

When free market forces take over and decide the U.S. bond market is no longer a safe place to
invest, it’s lights out for Treasuries. And that’s exactly what is happening now.

Second, central bankers’ wild money-printing has created a veritable powder keg of inflationary
pressures. The slightest spark could set it off like a gunpowder factory in a five alarm fire.

With so much funny money sloshing around global markets, rampant inflation is a serious threat.

But it hasn’t been a problem yet — and here’s why money printing in itself isn’t inflationary if
investors and consumers don’t want to spend or borrow money. For years, the private sector —
consumers, investors and businesses — have been retrenching.

So the majority of that money is sitting in commercial banks’ coffers. It was designed to bail the
banks out, and it did. But because loan demand is still soft, they’re not lending. They soon will,
and that money — $4 trillion worth — is likely to run rampant through the global economy.

The Fed and other central bankers believe, when the time comes, they can reel all of that excess
liquidity back in, snuffing out the next inflation surge.

That might be true in a more normal economy, but it’s totally backward in today’s economy.
Because rates are so low to begin with, once investors and consumers see rates going up, they’ll
want to buy more and borrow more.

So as central banks raise rates, they’ll see precisely the opposite of what they intended. Credit
and loan demand will surge — and the prices for everything from food and clothes, to rent and

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college tuition, to the most basic goods and services, will surge along with it!

Right now, consumer price inflation is in a long incubation stage. But history proves that, once
the first symptoms appear in the form of major price hikes on consumer goods, it will be far too
late to reverse!

Still, with many analysts screaming “hyperinflation” from the rooftops, it’s critical you
understand one thing: The United Sates will never suffer from the nightmare of a Weimar or
Zimbabwe-like hyperinflationary catastrophe.

Hyperinflation is not — and never will be — a danger for the United States.

There was a time when you could have expected the U.S. economy to eventually experience
hyperinflation because of the severe bear market in the dollar.

But then in September of 2011, the price of gold failed to react to the Fed’s QE III
announcement of virtually unlimited money-printing and the yellow metal entered an interim
bear market.

That’s when I knew something had radically changed. So I further researched known periods of
hyperinflation in the world. And I found something that completely changed my view: There has
never been a major core economy that died at the hands of hyperinflation.

Hyperinflation strikes the periphery in emerging and third world countries. It never happens in a
core economy.

There was the Weimar Republic, Zimbabwe, Brazil, Argentina and countless other small
economies, of course … but they were never at the core of the global economy.

Upon further study, I found even the Roman Empire — certainly a core economy during its
reign — didn’t die of hyperinflation. And neither did Byzantium or Great Britain.

Was there high inflation in Rome before it fell? Yes, but nothing of the sort of hyperinflation like
we subsequently saw in Weimar Germany. The Weimar Republic had no stock market, no bond
market and — in the aftermath of World War I — it had no infrastructure either.

But there’s another set of reasons why the U.S. won’t suffer hyperinflation. It has to do with
everything I’ve already discussed, plus rising taxation, FATCA, the bankruptcy of social
services and more. Let’s start with …

How the 800-Pound “Obamacare” Gorilla has Inflicted Massive Damage

Yes, the Affordable Care Act (Obamacare) has been beaten to a pulp in the court of public
opinion.

With the exception of Democrat politicians whose careers depend on it, everyone with a brain
knows that Obamacare has been an unmitigated disaster.

The president was revealed to be an outright liar after promising that “If you like your health
care plan, you can keep it” —and became a national laughingstock as a result. More than 5
million Americans lost their health care plans.

The Manhattan Institute’s analysis shows that health insurance premiums will rise dramatically
— by as much as 99 percent for men and as much as 62 percent for women — with some groups
rising by as much as 305 percent.

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Deductibles, co-insurance fees and out-of-pocket maximums are already skyrocketing —

running as high as $6,350 for a single person and $12,700 per family for some policies.

The Congressional Budget Office estimates Obamacare will end up costing U.S. taxpayers
$1.798 trillion.

Meanwhile, the Republican Senate Budget Committee says the CBO’s estimates are overly
optimistic and puts the true cost at $2.6 trillion.

Whoever you believe, Obamacare is expected to cost taxpayers between $1.8 trillion and $2.6
trillion over the next 10 years.

This despite the fact the CBO study also found that just as many Americans will lack health
coverage in 10 years as before the law was passed — even as two million fewer will be working
than if the law hadn’t passed.

So let’s call a spade a spade: Obamacare is just another tax on hardworking Americans that are
already stretched thin financially, and it’s the final nail in the coffin for a middle class that’s been
systematically destroyed by the Obama administration.

It’s also yet another reason to take action right now to shield your wealth — and your family —
from the massive storm that’s building.

America’s Out-of-Control Welfare Crisis is at Nightmare Proportions

Yet Obamacare is merely one example of out-of-control government spending. In an interview

with the Los Angeles Times in January of 1970, Ronald Reagan said, “Welfare’s purpose should
be to eliminate, as far as possible, the need for its own existence.”

So he must surely be rolling over in his grave at the travesties of America’s bloated welfare state
today.

In 1970, there were 4,340,000 — or roughly 1 in every 50 — Americans on food stamps. In

2013, the U.S. Department of Agriculture reported a record 47,636,000 — or 1 in every 6.6 —
Americans on food stamps.

Let me put that another way: The number of Americans needing food stamps just to survive has
increased nearly ELEVEN TIMES since the 1970s.

But it’s when you compare it to the 33,490,000 Americans on food stamps in 2009 that a
shocking picture comes into razor-sharp focus: The number of Americans on food stamps has
skyrocketed a mind-boggling 42.2 percent in just a few years.

From a historical perspective, since Lyndon B. Johnson started the War on Poverty in 1964, the
government has spent $21.5 trillion (inflation adjusted) to fund the growing list of roughly 80
welfare programs.

As Robert Rector — Senior Research Fellow for the Heritage Foundation — pointed out in
Congressional testimony in April of 2012 , welfare spending is nearly THREE TIMES the cost of
all military wars in U.S. history, from the Revolutionary War through the current war in
Afghanistan.

New research from the Republican Senate Budget Committee shows the U.S. federal government
spent $3.7 trillion on welfare just over the last 5 years.

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That’s nearly FIVE TIMES greater than the $797.4 billion spent on NASA, education and all
federal transportation projects combined.

If this were merely remnants of the global downturn … if there were serious plans in place to reel
this insanity back in … you might be able to sell me on the hope that things are improving.

But reality is a far better pitchman. And the fact is, America’s welfare engine is

just getting warmed up!

According to the President’s budget, combined annual federal and state spending on welfare
programs will explode 80 percent by 2024 to $1.4 trillion per year — a total cost of $12.9 trillion
over the next 10 years.

Yet, despite the fact that welfare spending has already skyrocketed by more than 32 percent
since President Obama took office … and despite the fact that current annual welfare costs are
already twice the amount necessary to lift all Americans out of poverty… it’s still NOT improving
the situation.

The latest U.S. Census Bureau report shows 46.5 million Americans are now living in poverty.
For the first time since 1965, America’s poverty rate has remained at 15 percent, or above, for
three consecutive years.

When you factor in the cost of living, states such as California have a real-world poverty rate of
greater than 23 percent! That’s worse than many Third World countries. The fact of the matter is
our welfare state is growing by leaps and bounds, with NO end in sight.

Destroying America
I am outraged at how quickly Washington is destroying the nation we love. But even more
shocking to me is the callousness with which they’re doing it.

Our leaders know all too well that the measures they’re taking to stamp out the economic fires —
and stop America’s financial hemorrhaging — are merely band aids on a gaping wound.

What’s more, they know exactly what’s at stake. They understand this fundamental new reality:
Central bank monetary policy will have little or no impact on the markets going forward. At best,
it will cause short-term gyrations and confusion.

Instead, what will matter is this: Politicians in Washington and Brussels.

All of the money-printing was designed not just to try and bolster the economies of Europe and
the United States — it was also designed to inflate away Europe’s and Washington’s debt
problems by devaluing currencies.

But here’s the catch: Right now, disinflation still rules the day in the United States and in Europe.
Deflation has the upper hand.

In a nutshell, money-printing is not working to inflate away Washington’s or Brussels’ huge

debts. So both governments are now turning AGAINST their citizens and are preparing to
outright usurp their wealth to pay off gargantuan mountains of debt!

Look: I’m not the paranoid type. I’m not an alarmist or one who sits around conjuring up
conspiracies . Far from it.

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But when I connect all the dots — from my studies on the war cycles, to the history of how other
great nations and empires have died by their own hand , to what’s happening around the world
and behind closed doors… and then I factor in what the markets are telling me.

What the NSA spying says. What Obamacare and its 16,000 new IRS agents — who will be able
to eavesdrop and stick their nose into everything you do — means. What the big, savvy money
is doing right now.

I come to one conclusion: The massively indebted governments of the U.S. and Europe are
getting ready to tax you more — and even confiscate large portions of your wealth!

Washington and Brussels want — no, they NEED — your money. And they’re prepared to do
everything possible to get their hands on it — even if it means sacrificing your family’s future;
the future you worked so hard to build.

They’re engaging in financial repression, so they can pay their debts with lower interest rates,
and their bills with cheaper currency. They’re spying on you like never before — not just here in
the U.S. but also in Europe, hunting down as much of your income and wealth to tax.

They’re engaging in capital controls, limiting the movement of your money. They’re raising
taxes, starting confiscation policies, slashing retirement and entitlement benefits, and more.

Consider this …

The EU has passed a financial tax on all stock and bond trades by any of its citizens
worldwide …
In France, tax rates on the rich have been raised to a whopping 75 percent and new and
very tough reporting requirements have virtually shuttered the nation’s gold dealers,
sending them packing. Try buying gold anywhere in France today. It’s almost impossible.
In September of 2013, authorities in Poland confiscated bonds held in private pension
funds without giving 1 cent of compensation to pension owners…
In March of 2013, EU finance ministers confiscated the wealth of all deposits above
100,000 euros in Cyprus banks — and they’ve now enacted legislation approving the
confiscation of funds in any EU bank that goes down the drain.
Why should you care? As Europe goes, so goes the U.S.
In Washington, proposals are now underway behind closed doors to enact similar
depositor “bail-in policies” for U.S. banks.
Plus, I have it from a rock-solid source behind the scenes that our leaders in Washington
are seriously considering the 10 percent wealth tax that the IMF recently proposed as a
solution to pay off government debt. A tax that would be levied on every American
citizen.

And here’s the real kicker: According to another well-placed source, Washington is also
seriously considering nationalizing part of, or all, IRAs and 401(k)s — a confiscation in
disguise.

There’s no sugarcoating it: Our leaders are doing everything in their power to hunt down every
penny of citizens’ wealth, no matter what the cost!

The U.S. Government is Now an Enemy of Freedom

The greatest cornerstone of our Constitution is the promise of freedom —freedom of speech,
freedom of the press, freedom of assembly, freedom of religion, and freedom to petition. But
right now, every one of those freedoms is under attack … by our own government.

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ALL of your electronic communications — through your computers, tablets and cell
phones — are being collected and accessed by the NSA.
“Constitution-Free” zones have been created within 100 miles of all of our borders —
including where our shores border the sea — in which the Department of Homeland
Security (DHS) can search the contents of your laptop and cell phone, without any reason
given, in clear breach of the Fourth Amendment.
The DHS is reported to be ordering 1.6 billion rounds of ammunition, including hollow-
point rounds — which are forbidden by international law — for use within our borders.
AND they are also buying heavily armed personnel carriers, also for use within our
country.
Militarized drones are flying our skies, “loaned” by the government to law enforcement
departments across the country.
The army is being trained to identify potential “domestic terrorists,” with a focus on
Americans who care deeply about individual freedom, civil activism, self-government and
strong individual and constitutional rights.

In fact, I’m possibly putting myself at risk of being labeled a domestic terrorist simply by sharing
what I’m about to tell you.

Even worse, I may be put on a watch list by our own government as a “persistent threat” who
needs to be silenced and locked away.

If you find this hard to believe, I don’t blame you. But please keep reading. Because this just
scratches the surface of what I’ll be sharing with you.

For all his smiles and promises, Obama has done nothing to reverse any of this. Quite to the
contrary, he has been instrumental in creating a nation in which none of us will be even remotely
free.

As I’m about to show you, even our most cherished freedoms have become little more than
illusions.

Let’s remind ourselves what Thomas Jefferson wrote in his draft of the Declaration of
Independence — “We hold these truths to be sacred and undeniable; that all men are created
equal and independent, that from that equal creation they derive rights inherent and inalienable,
among which are the preservation of life, and liberty, and the pursuit of happiness.”

And let us also remind ourselves that these undeniable truths are now being denied — by our
own government — at every turn.

This is a pivotal time for our country. It’s time to take a close, hard look at how Washington is
eroding our freedoms, and taking us further and further away from being the country our
Founding Fathers fought for.

If Obama demanded that you remove all the curtains, shades and blinds from your home — so
the police could look in through your windows at any time — you’d probably be pretty upset.

And rightly so. Of course, he hasn’t banned window coverings. But then again, he doesn’t need
to. He can already find out what you are doing in the privacy of your own home. Before I shock
you with the reach of the NSA, FBI, FISA Court and other organizations, let me plant a small
thought in your mind.

As Americans we like to say that we live in the land of the free. Well, let’s see just how free we
are. And ask ourselves how free we can really be when Big Brother has us in his crosshairs 24

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hours a day.

Our forefathers went to war over general warrants. They fought the American Revolution to be
free of them.

And now they are being issued by our own government, through secret courts.

Did Obama cover the unconstitutional activities of the NSA during his 2014 State of the Union
address?

Did he recognize how un-American it is to spy on your own citizens, through general warrants
issued by secret courts?

No. Out of his 6,778-word speech he devoted just 37 seven words to the NSA and its invasion of
our privacy.

The NSA employs over 30,000 people at its headquarters at Fort Mead. Nobody knows how
many people work at its massive data-processing center in Utah, although we do know this
center cost $7.5 billion to build. So… given that it has tens of thousands of employees, and a
multi-billion dollar budget … given that it has developed the most sophisticated surveillance
systems the world has ever seen … and given that it monitors all Internet and cell phone activity
across the country 24 hours a day … given all that … how many terrorist attacks has it prevented
by monitoring the communications of Americans here on our own soil?

The answer, according to the former director of the NSA himself, Gen. Keith Alexander, is …
wait for it … ONE. The NSA foiled a plan by a man in San Diego to send $8,500 to Somali
militants.

When I first learned about this ONE foiled “plot” I honestly thought it was a mistake. How could
such a massive spy agency have had only one success?

But the figure was confirmed recently by John Inglis, the deputy director of the NSA, during a
lengthy NPR interview.

Over $10 BILLION in funding, and tens of thousands of employees… and ONE success?! How
could this be possible?

It’s very hard to fathom, unless… The hidden purpose of the NSA isn’t merely to uncover
terrorist plots, but also to spy on Americans at home!

But Washington isn’t just spying on you. The government’s definition of a “domestic terrorist”
now includes millions of Americans whose only crime is to love their country and express their
constitutional rights to free speech and free assembly.

After the events of 9/11, I think we all understood the need to fight terrorism head on. We
absolutely have the right not only to defend ourselves against terrorists, but also to seek out
terrorists before they attack us.

And the men and women of our counter-terrorism organizations should be applauded for the
work they do to protect us.

I don’t think any American would argue with that. However… when it comes to U.S. citizens,
just how broad should the definition of a “domestic terrorist” be?

Let me give you an example. When two protesters held up an anti-Keystone XL pipeline banner

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at the Oklahoma City headquarters of Devon Energy, they were charged by the police with
perpetrating a “terrorism hoax.”

You may or may not be against the Keystone pipeline project. It doesn’t matter which side you
are on. As a patriot you recognize everyone’s right to express their opinions. You also know that
free speech and free assembly are explicitly provided for in the First Amendment of our
Constitution.

In the case of these two protesters, you can imagine them being charged with disturbing the
peace, or trespassing, maybe. But terrorism?

How on earth did two peaceful protesters find themselves charged as domestic terrorists? Well …
it seems the banner had some glitter on it, and a little of that glitter fell to the ground.

The Oklahoma police decided to define the glitter as a “hazardous substance.” And that allowed
them to charge the protesters as domestic terrorists. Yes, it’s insane.

But the purpose was clear. It was to send a message … to make American citizens too scared to
exercise their rights.

According to Doug Parr, the lawyer who represents the two protesters: “I’ve been practicing law
since the 1970s. Quite frankly, I’ve been expecting this. Based upon the historical work I’ve
been involved in, I know that when popular movements that confront the power structure start
gaining traction, the government ups the tactics they employ in order to disrupt and take down
those movements.”

Yes, Washington is working hard to deny us our rights to free speech and free assembly. Maybe
it’s time to remind ourselves — and the folks in Washington — of the words of Benjamin
Franklin:”Any society that would give up a little liberty to gain a little security will deserve
neither and lose both.”

Think about that statement for a moment. And compare in your mind the vision Benjamin
Franklin had for our country with the country we live in right now.

And if you really want to understand just how insane the “war on terror” has become here on
American soil, consider this…

A few years ago the FBI sent an intelligence bulletin to law enforcement agencies, warning them
to look out for people in possession of almanacs.

According to them, “Terrorist operatives may rely on almanacs to assist with target selection and
pre-operational planning.”

Really? Using that argument, the police should watch out for people driving cars, which can be
used to drive to those targets.

I don’t imagine the folks at the FBI who wrote that bulletin understood the irony of their action
— because Benjamin Franklin was also the publisher of “Poor Richard’s Almanac.”

Doubtless he would have been listed as a domestic terrorist. Actually, we can be pretty sure that
he would have been. Not only did he write and publish an almanac, but was also deeply
suspicious of overly-powerful federal government.

According to Arie Perliger, who is the director of terrorism studies at the West Point Combating
Terrorism Center, anyone who is concerned about “the corrupt, tyrannical nature of federal

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government” or who supports “individual freedom, civil activism, self-government and strong
individual and constitutional rights” should be viewed with deep suspicion.

Are you getting the picture yet? If you are a patriot, exercising your rights laid out in our
Constitution, you could be targeted as a domestic terrorist by your own government.

If, in spite of all this, you still believe America is the land of the free, I have some more
disturbing information to share. Washington is spending billions of dollars on weapons,
ammunition and military vehicles for use right here, on American soil.

Maybe you’re OK with the lengths to which the government will go in order to spy on us and
prevent us from speaking and acting freely.

Maybe you agreed with Jake Tapper of CNN, when he said, “I think the American people,
honestly, want security over freedom.”

For the record, I absolutely do NOT agree with Jake Tapper. For me, there is no “America”
without freedom. Our freedom is what defines us.

But just suppose you are OK with Washington’s overreach. Would you still be OK if you learned
that our government was stockpiling weapons for use against us, the American people?

Would you be OK with the fact that the DHS — the Department of Homeland Security —
plans to buy 1.6 BILLION rounds of ammunition?
Or that the DHS is buying 7,000 select-fire assault weapons?
Or that the DHS is buying heavily armored personnel carriers — the same ones we used in
Iraq and Afghanistan?

These aren’t purchases being made by the Army, the Marines or Special Forces for use overseas.
These items are for use right here on American soil.

And this is way more firepower than is required to put down a local, violent insurgency, even if
such a thing were to happen. That purchase of 1.6 billion rounds of ammunition is enough to kill
every American five times over.

And this ammunition isn’t just for target practice. It also includes specialized sniper ammo and
hollow-point rounds (which are illegal under international law).

It’s hard for me even to comprehend that our own government is buying all this firepower for
use against us, the American people.

And for anyone who might accuse me of exaggerating, let me be totally transparent about that
ammunition purchase. The number of 1.6 billion rounds was reported by the Associated Press.
The DHS quickly denied the figure and said they were planning to purchase only 750 million
rounds.

Well, that’s still enough to kill us all — men, women and children — two times over. To put that
into context, during the war in Iraq the U.S. military used just 6 million rounds of ammunition a
month.

That means even if the DHS is telling the truth when it says its buying “only” 750 million
rounds, they still have enough ammo to fight a hot war, here in America, for OVER 10 YEARS!

But would American soldiers, on American soil, really fire on their fellow citizens? Well, it
seems the folks at the DHS asked themselves the same question. Which is why they contacted a

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company called Law Enforcement Targets, Inc. and spent $2 million on their “No Hesitation”
brand of paper targets.

These targets include pictures of a young girl, a pregnant woman and a young mother with a
toddler. The company claims that these targets help law enforcement officers desensitize
themselves. The plan is to help the officers pull the trigger without hesitation — even if they’re
shooting to kill a pregnant American mother on American soil.

And how long will it be before drones in our skies are loaded with weapons to rain fire down on
our heads?

The Customs and Border Protection agency operates the largest fleet of drones outside of the
Defense Department. They use these drones to patrol our long borders, to the north and the
south.

I have no argument with that. Drones are great tools for catching smugglers and other criminals
crossing our borders illegally.

But I am disturbed by the fact that the agency loans out its drones to other agencies in the United
States. Between 2010 and 2012, border agency drones were launched on over 700 surveillance
missions on behalf of OTHER government agencies.

And while the border agency won’t reveal which agencies were involved, it has acknowledged
that it flies drones for “other law-enforcement departments.”

What are their missions? Who and what are they spying on? We don’t know. These are not just
small, “domestic” drones. This is a fleet of Predator drones — the exact same drones used by
the CIA overseas in Afghanistan, Pakistan, Iraq, Yemen, Libya and Somalia.

The Predator is a military drone, designed not only for surveillance purposes, but also to carry
and fire Hellfire missiles. So here is my question — which I feel scared to answer:

If Washington is building and deploying a fleet of drones for domestic use, in American airspace
… and if the stated purpose for these drones is surveillance … why have they chosen to deploy a
fully militarized drone which is capable of raining missiles down on our heads?

Why am I scared to answer that question? Because I’m an American, and proud to be an
American. And I find it very hard to accept the possibility that Washington chose to use Predator
drones in American airspace BECAUSE of their ability to fire Hellfire missiles.

The erosion of our rights under the Constitution, the loss of privacy, the arming of the
Department of Homeland Security, the idea of militarized drones flying overhead. How can we
possibly claim that we still live in the land of the free?

But apparently it’s not enough that Washington wants to take away our FREEDOM. They also
want our MONEY. I guess it makes a cruel kind of sense.

If Washington is going to spend billions of dollars to create a police state here in America, the
money to pay for it has to come from somewhere. And it isn’t coming from the nation’s
piggybank — because it’s empty.

So where else can they get the money from? From the pockets of hard-working Americans.

Stripping us of our wealth is the logical next step after taking away our freedom. Money is
power. Money gives us the freedom to live our lives as we choose.

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And that’s why Washington wants to grind us down and make us poor. We already pay some of
the highest tax rates in the world.

When you add up the impact of state, local and property taxes, the average American is one of
the most taxed citizens in the industrialized world. Our federal corporate tax rates are the second
highest in the world after Japan’s.

All Americans, no matter where they live and work, are taxed on their worldwide income. And
yes, Obamacare also means higher taxes — for both individuals and for business.

Washington is grabbing as much of our money as they possibly can. And I predict some much
more draconian cash-grabs coming down the road:

Rising income taxes.

A 10 percent wealth tax.
Increased estate tax.
Increased dividend tax.
The confiscation of other assets, like gold was confiscated in the 1930s.
Capital controls to prevent moving any of your money overseas. (Washington is already
forcing banks to inform them when you transfer just $3,000 or more to a foreign bank.)
And, ultimately, the nationalization or confiscation of IRAs and 401(k)s.

On the subject of retirement savings, Obama’s new MyRA account, which he announced during
his 2014 State of the Union Address, is, in my view, just another way for Washington to get its
hands on our money.

They get to spend our money now at its full dollar value. And then they’ll pay it back to us at
some point in the future, when each dollar will buy just a fraction of what it buys now.

Much of this cash-grab will be handled by our friends at the IRS. And we certainly can’t trust
them. The Taxpayer Advocate Service, an independent office within the IRS, has slammed the
IRS for consistently breaking the law. Recently, it published a two-volume report on the heavy-
handed and illegal activities of the IRS. Here is a small sample of their findings.

The IRS refuses to pay back tax penalties that have been incorrectly imposed, in spite of the
legal advice of their own chief counsel. So far, they have refused to correct penalties that were
incorrectly applied to 90,000 American taxpayers. The report also states that, if you do appeal
decisions made by the IRS, you have only a 2 percent chance of winning. (You would be better
off going to Vegas.) In other words, the IRS is making a cash-grab, with a frequent, documented
disregard for the law. And they are also being used by Obama as a weapon against certain
political groups, like the Tea Party.

This is a timely reminder that history does repeat itself, over and over again.

In the 3rd century, Emperor Caracalla made the following observation about Rome’s tax policy:
“For as long as we have this,” he said, pointing to his sword, “we shall not run out of money.”

It’s not hard to imagine Obama saying the same thing, pointing to his DHS army, here on
American soil, and encouraging the IRS to collect more and more taxes. (And as anyone who
studies history knows, the Roman Empire did run out of money, not long after the emperor made
this boastful statement.)

What would our Founding Fathers say?

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Our Founding Fathers would be sick to their hearts. Their greatest sadness would be that the
actions of Washington today are almost identical to the actions of the British government back in
1776. Our Founding Fathers took up arms against the British because they saw a better way.

They didn’t want a nation in which all the power was vested in the hands of an elite few,
such as the British aristocracy.
They didn’t want a nation in which regular people had no hope of improving their lives, or
those of their children.
They didn’t want overly-powerful central government.
And they absolutely didn’t want a rule of law that included “general warrants,” enabling
the government to invade our homes and privacy without due cause or a warrant.

But that’s exactly what we have in America right now. It’s as if the American Revolution had
been fought for nothing. And the dreams of our founding fathers have turned to dust.

Now for the trillion-dollar question: WHY is our government doing all this to us, the people? To
those of us who remember the America of 30 or 40 years ago, it seems inconceivable that we
now have a government that spies on us, treats us as potential terrorists, is equipping itself to go
to war with us, and is taxing us into poverty.

What happened? Put simply, we have reached a particular point in a cycle that has applied to
every civilization in recorded history.

It happened to the Roman Empire and the Byzantine Empire. It happened to the Weimar
Republic of Germany. It’s happening in Europe right now. And it’s America’s turn next.

In a nutshell, Washington has run out of money. And when a government runs out of money, it
often turns against its own citizens.

And yes, Washington has definitely run out of money. The U.S. government is the most indebted
government on the planet. The data is unquestionable. The U.S. is now in debt to the tune of…

$17.5 trillion of national debt, or more than $55,000 per citizen.

A whopping $113 trillion of unfunded liabilities in Social Security, Medicare, and
prescription drug benefits; that’s more than $350,000 for every man, woman and child in
the United States.
$4.6 trillion owed to foreign investors.
As much as another $12 trillion in new debts from deficits projected over the next 10
years.
At least another $3 trillion needed for health care reform.

Total debts and obligations of U.S. government: Nearly $148 trillion.

And on the asset side of our balance sheet, total ASSETS in this country, including all personal
assets, corporate assets, small business assets, real estate, and non-profit organizations: $77.2
trillion.

That means that even if we liquidated every penny of assets in this country… We’d still be in the
hole by $70.9 trillion, or $221,385.51 for every man, woman and child in this country. More
than $885,000 for a family of four!

There is no way out of that hole, and Washington knows it. And it is behaving in the exact same
way as every other government that has ever faced similar financial ruin.

There is only so far you can push a population before it rises up and protests. Washington is

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preparing to crush any and all protests, as our country descends into financial chaos.

You might think, “Hey, when civilizations like the Byzantines and Romans ran out of money,
their leaders might have turned against their own people. But that couldn’t happen in a modern
democracy.” But as I have shown you, it already has — in Europe.

Just watch the news and see militarized police using batons, water cannons and tear gas against
their fellow citizens. And let me review for you the sequence of events that has repeated itself
throughout history.

Event #1: A government gets into serious debt. It starts to devalue its currency but finds that
even that can’t inflate away all the debt. Then…

Event #2: It taxes its population into poverty.

Event #3: It spies on its own people and restricts their freedom to speak their mind and assemble
in groups.

Event #4: In anticipation of popular protests, it militarizes its police force.

Event #5: It deploys that militarized force, in its own streets, to try to crush all resistance.

Read through that short list again and place a check mark against each event that has already
taken place right here in America. I’m guessing you checked the first four. Right? In other
words, we are now very, very close to an Event of the Fifth Kind. If you, as a freedom-loving
American, want to regain your liberty you have to take action NOW.

Revolution 2.0
But first, let me clarify what I mean by regaining your liberty — American Revolution 2.0. As an
individual, it’s hard to stand up to the massive power of the NSA, DHS, FBI and IRS.

But that doesn’t mean we should just shrug our shoulders and give up. Far from it. Regardless of
what Washington does, there are steps you can take as an individual to secure your freedom,
protect your assets and even increase your wealth —dramatically.

In other words, while the folks in Washington may have forgotten what it means to be a patriot
and an American, you don’t have to.

Remember what Patrick Henry cried during the first American Revolution — “Give me liberty or
give me death”?

That cry has long been forgotten by our leaders who, driven by greed and fear, are interested
only in power. Liberty? Liberty for ALL Americans? Not anymore.

And if you expect everything to suddenly “get better” you’re deluding yourself. Nobody is
going to hand you back your liberty on a plate.

Now is the time to be self-reliant, to swim against the tide, and secure your own freedom once
again.

If enough of us do that… we’ll create the American Revolution 2.0 … from the ground up, one
patriot at a time. We’ll create a rising tide made up of courageous individuals who believe in the
America our forefathers fought so hard to create.

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Why The Wealthy Are Getting Out of Dodge…

Given all these threats, savvy investors are now hoarding their wealth and getting it off the grid
as much as possible.

Why? Because all the money-printing in Europe and the United States is not working.

You see, the money-printing was designed not just to try and bolster the economies of Europe
and the United States — it was also designed to inflate away Europe’s and Washington’s debt
problems by devaluing currencies.

But here’s the catch: Right now, with the exception of the equity markets (for good reason which
I’ll explain in a moment), disinflation still rules the day in the U.S. and in Europe, clear-cut
deflation has the upper hand.

In a nutshell, money-printing is not working to inflate away Washington’s or Brussels’ huge

debts.

So both governments are now turning AGAINST their citizens and are preparing to outright
usurp their wealth to pay off gargantuan mountains of debt.

During the Weimar Republic and again during Nazi Germany, persecuted groups of Jews,
Christians, Gypsies, Jehovah’s Witnesses, homosexuals, blacks and prostitutes all began to hoard
their wealth in gold, diamonds and artwork, so they could get out of Dodge with at least some
wealth intact.

Throughout history, in countries where revolutions occurred, in emerging economies, and

wherever governments were fragile and heavily indebted, hoarding various forms of “moveable
wealth” became the means of survival. But never before in the history of the world — even
during World Wars I and II — have we seen such a widespread movement of moveable assets,
coming from virtually every corner of the globe.

In Europe, wealthy investors are gobbling up diamonds and artwork in droves.

In the United States, the wealthy are spending money like never before on diamonds, fine wine,
art, watches, and other collectibles.

The same can be said for Asia, where wealthy Asian investors — worried over the future of
Europe and the United States — are now moving into any asset that can help them preserve their
wealth, and that can be easily moved and hidden from view.

And savvy investors are paying up to get a piece of moveable wealth. Here are just a few
examples:

In a recent auction, rare coins fetched $10,778,040, the highest auction price ever in terms of
value per coin ($399,186). Many of the coins sold for twice what experts considered possible.

A set of four 1879-1880 Stellas sold for nearly $5,000,000 — almost twice the precaution
estimate of $2.75 million.

One of the most often cited reasons for the surge in the rare coin market is that coins are portable
—you can hide them in your pocket and get off the radar screen. A million-dollar coin can fit in
your pocket and a customs agent would hardly notice it.

The same is true for diamonds, which are also on a tear. In October, a 118-carat, flawless D-

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diamond sold for a record $30.6 million when it was auctioned at Sotheby’s.

A stash of 64 Argyle diamonds recently fetched a record number of bids over $1 million. The
highlight was the Argyle Phoenix, a 1.56-carat gem which sold for more than $2 million, the
highest per-carat price paid for any diamond ever produced from Rio Tinto’s Argyle mine in
Western Australia.

Another record was set for a 2.51-carat Fancy Deep Pink diamond, which sold for more than $2
million, to a U.S.-based dealer.

According to data from market research firm Euromonitor, China’s diamond market is now the
world’s second largest after the United States, having more than tripled to $22.8 billion over the
last five years.

The art market is also exploding higher. Christie’s May 15 auction of post-war and contemporary
art achieved its highest sales total ever in the history of art auctions — a whopping $495 million.

Sales included $58.4 million paid for U.S. artist Jackson Pollock’s “Number 19, 1948.” Edvard
Munch’s “The Scream” set a new auction record for any work of art last year when it sold for
$120 million.

According to Wealth Insight’s 2020 Foresight Luxury Investment Report recently released in
London, alternative assets such as diamonds, art, and antiques have increased in value at a
compounded annual growth rate of 14.58 percent from $210 billion in 2008 to $362 billion in
2012.

According to the same study, from 2013 to 2017, the alternative collectibles investment arena is
expected to grow at an annual rate of at least 10.34 percent to reach $621 billion.

Savvy investors want to get off the grid as much as possible. They want to minimize taxes. They
want to preserve and hide their wealth. They want privacy, to the highest extent possible. And
why do they want all that? Because savvy investors know that…

1. The Western governments of Europe and the United States are imploding. And as they do,
they are hunting down as much private wealth as they can.

2. As a result, it’s only a matter of time before the current monetary system also collapses, and
with it the dollar reserve, ushering in a new era and a new currency reserve system.

Think of the fall of Rome, the fall of Byzantium, and countless other governments that have
come and gone, countless revolutions that have changed the course of history, and more. That’s
where we’re headed. That’s where Western society is going — toward chaos, breakdown, and
revolution.

8. The Cost of War

How the War Cycles Will

Impact Financial Markets

Wars and insurrections overseas do not mean the end to investing; far from it. That’s because,
almost without exception, overseas wars have been followed with substantial gains in the U.S.
stock markets.

I’m not talking about war profiteering, people who make fortunes by selling weapons or black
market food. I’m talking about what happens when large groups of people seek safety in fortress
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America — for themselves but mostly for their money.

It is very important that you understand this because what I am about to show you is so contrary
to what most people believe and expect. When wars break out, U.S. investors’ natural response
is often to “seek safety” — and they often do the exact opposite of what they should do.

They flee the stock market in droves right before staggering, life-changing gains are made. The
only people, then, who end up “profiting” are the professional financiers, like Joseph Kennedy,
who made several fortunes investing during World War II. Let me give you some concrete
examples so you can see for yourself what I am talking about.

Take the Iraq War. Between March 20, 2003, when the United States launched a “surprise”
attack against Iraqi forces, and December 18, 2011, when the U.S. combat mission in Iraq
formally ended, the Dow Jones Industrial Average rose from 8,286.60 to 11,866.39 — a gain of
90.76 percent, even including the 2008 stock market crash.

Or look at Vietnam. The Vietnam War divided America like no war since the Civil War. It lasted
11 years, cost an estimated $686 billion, and killed 58,000 American soldiers and an estimated
1.2 million North and South Vietnamese.

In many respects, the Vietnam War was a complete disaster. Yet how did the U.S. stock market
respond? Mostly by going up! Between mid-1963, when 11,000 American military personnel
were first sent to South Vietnam and January 1973, when the ceasefire agreement was signed in
Paris, the Dow Jones Industrial Average gained 53.9 percent.

While this may not seem spectacular, it was far better than the three years before U.S. troops
were sent. In the first three years of the 1960s, the Dow actually lost 5 percent.

And despite what many people expected, the end of the Vietnam War did little for the stock
market: Following the signing of the Paris Peace Accords on January 27, 1973, the Dow
plummeted to a low of 577.60 in 1975 — a loss of 42.5 percent in just two and a half years.

Then there was Korea — a brief but bloody conflict that lasted only three years but which still
cost 33,000 American combat deaths. Investors who thought the Korean War would hurt their
investments missed out on some very solid gains. The S&P 500 gained 25 percent during the
three-year conflict.

Well, you might argue that the Korean, Vietnam and Iraq wars were all relatively small conflicts.

What about the really big wars? Surely they must make the markets nose dive?

Strangely enough, not for the U.S. On the day after Japan attacked the U.S. Pacific fleet on
December 7, 1941, the Dow closed at 112.52. By V-J Day, August 14, 1945, it had risen to
164.79 — a gain of 46.43 percent in just three and a half years. That’s a little better than 10
percent a year during the most violent military conflict in history in which an estimated 61
million people were killed worldwide.

Now, let me make one thing perfectly clear right now: I’m not saying that war is good for
business … or good for America. Far from it.

The stock market is hardly the only component that matters in an economy, and wars are often
terribly destructive for the economies even of the victors — by causing massive debt, staggering
inflation and unemployment.

This is what happened after the Vietnam War in the 1970s — when inflation was over 10

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percent, unemployment was in the double digits and the national debt skyrocketed.

However, the point I’m trying to make is this: Foreign wars have not historically caused a stock
market crash in the United States, as many uninformed analysts claim. In fact, just the opposite
is true. During most of the wars of the 20th century, money poured into the safe haven of the
U.S. equity markets, usually causing rallies that lasted for years.

This even occurred during the bloody and prolonged World War I when billions flowed into the
United States. More than 16 million people were killed in World War I. Yet between the end of
1914 and the early months of 1917, the Dow nearly doubled.

I’m telling you all this history because what I am about to say will strike many investors as
counter intuitive. We are about to enter a new era of serious social and military conflict all across
the globe — bloody regional and civil wars overseas, and unprecedented repression in the U.S.

As we recently learned, the U.S. government has been spying on its citizens to a degree many
suspected but few realized the scope of — including illegally wiretapping members of Congress
and the media.

The IRS has been caught red-handed targeting taxpayers and organizations for their political
beliefs and leaking information on conservative and anti-tax organizations to liberal
organizations.

The Obama Administration will go down in history for institutionalizing the use of assassination
and death squads as a formal policy of the U.S. government.

Soon, thousands of unmanned drones will be patrolling U.S. airspace — and the Department of
Homeland Security has been recently caught purchasing more rounds of extra-lethal hollow-
point ammunition than is used to train the U.S. army.

You don’t have to be paranoid to see the writing on the wall: The U.S. government is quietly
building the infrastructure of a full-blown police state and will soon use that infrastructure
against its own citizens.

We are entering a new era in which the people are at war with their own governments — and in
which foreign governments launch attacks on other countries as a means to distract their people
from the misery that their policies inevitably cause.

What do you think will happen if and when North Korea launches a strike against the South —
as it has threatened to do repeatedly over the past several years?

Or if Iran detonates one of its nukes over Tel Aviv or in the Straits of Hormuz? What will happen
if China attacks Taiwan … or occupies Japan’s Senkaku Islands?

What if there is another successful terrorist attack within the U.S. itself — say, a bomb detonated
on the New York subway?

Well, two things will happen. First, the entire weight of the U.S. surveillance state will come
crashing down on U.S. citizens, and what few civil liberties remain will be taken.

And second, tens of millions of Americans will flee the stock market in panic, falsely believing
that these military conflicts will cause a stock market wipeout.

The truth, however, is that the market will go into overdrive … and the savvy few who prepare
now will make vast fortunes.

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Many people forget that the U.S. stock market was plummeting in the weeks before the
September 11, 2001 terrorist attack.

The exchanges were closed for 10 days following the attack … but when they reopened, on
September 21, the U.S. markets did a moon shot. The Dow skyrocketed from 8,235 on
September 21 to 10,632 on March 12, 2002 — a gain of 29.1 percent in just five months!

The same thing is going to happen over the next few months and years. Major military conflicts
may trigger temporary sell-offs in the market, as many small investors flee Wall Street in panic
(but then the flood of institutional money pouring into the market will trigger a major stock
market rally).

When the war cycles are rising and revolutions are in the air, markets are often turned inside
out and upside down, leaving the majority of investors either frozen on the sidelines, or worse,
caught on the wrong side of the markets, costing them their portfolios.

It’s why, for instance …

Most precious metal investors will get caught flat-footed, looking for evidence inflation is
starting to soar instead of realizing that rising geopolitical unrest is already starting to light
a fire under the precious metals and mining shares and will do so for many years to come.
Most investors will start selling the stock market, expecting a bear market in times of war
and social chaos … when instead, this great battle between the public and private sectors
will see money leaving the public sector (government bonds) in droves, reinvesting for
safety and a return on capital in the private sector … and the U.S. equity markets will
explode higher, more than doubling over the next few years.
A slew of investors will flock to the alleged safety of U.S. sovereign debt, only to find the
price of those bonds crumble in their portfolios as savvy investors dump those bonds en
masse, sending interest rates soaring.
Most investors will expect the U.S. dollar to collapse, when in reality it will first soar as
capital pours out of other, less stable regions of the world, into the dollar, pushing it higher
only to collapse later once the chaos finally strikes Washington.

In the months and years ahead you will see some astounding moves in many markets, moves
that defy logic, and to understand, you must reject everything you thought you knew about
economics and markets.

Instead you must grasp new and very different fundamentals that are now impacting every
corner of the world. Do that, and you will protect your wealth and grow it. Don’t do it, and you
will lose your shirt.

The Role of Capital Flows in Stock Market Booms

Allow me to explain, in more detail, why equity markets are headed substantially higher, why
the Dow is headed to 31,000, and which sectors will perform best. It all has to do with a little-
known fact from the Great Depression, one that most analysts never tell you about.

It’s called capital flows. It’s the never-ending search for a return on investment.

Capital has the ability to forever search out the safest, best returns possible. If you understand the
way capital flows like a powerful undercurrent through the world — driving markets in a
turbulent time — I promise you will be well-positioned to make a fortune over the next few
years.

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You see, no matter what world conditions are, there are always people and companies all over
the world with huge amounts of capital to invest. And that capital will always search and flow
towards the safest, best returns possible, no matter where they are in the world.

All the economic troubles we see are like a storm that troubles the surface of a huge river. But
the flow of capital in the world is like the powerful river current that keeps flowing no matter
what happens. Capital always knows that somewhere in the world, there is a place where it can
preserve and make money.

And it will, without fail, move in that direction — not in spite of failing governments and sour
economic conditions, but because of them!

So where is the capital flowing today? And why is this flow of capital driving the bull market we
are seeing right now?

The chief reason is this: When governments of the world are in trouble, capital shifts away from
the public sector (government bonds) and shifts to the private sector (stocks) into companies and
assets that will outlast governments.

Look at Europe, an entire continent in crisis. With countries all over Europe in deep trouble,
people in these countries want their money out of European bond markets — and fast.

They want to invest their capital in assets that are much more dependable and profitable than
these very shaky governments. This represents an enormous amount of capital on the move.

You see, capital is unique. It cares not what the market is, but only where the best, safest returns
can be had. It cares not what the underlying economy is doing, for there are always ways to
preserve and make money. But so very few people understand this, they are destined to get the
markets almost always wrong.

That’s especially true, post-1971, in a world where there is no longer a gold standard, where the
value of money is constantly in flux, and where asset prices are also free to rise and fall, often in
direct proportion to the rise and fall in the value of a currency.

They fail to understand that without a gold standard, all asset values are free to fluctuate, free
and unrestrained to rebalance when the value of money changes.

And perhaps most importantly, they fail to understand that inflation and deflation are ever
present, two sides of the same coin, two forces that are intertwined, like yin and yang.

For instance, when currencies are devalued and lose purchasing power, they are deflating. But in
a post-gold standard world, asset prices inevitably float higher as currencies lose purchasing
power.

In other words, the argument is not whether there is deflation or inflation, but where the deflation
is striking most, and what asset prices are inflating to compensate.

Think of it as a scale. If the value of money is deflating or depreciating, asset prices inevitably
have to compensate, sitting on the other side of the scale.

We know that almost all paper currencies are losing purchasing power, with the exception of
most Southeast Asian currencies. Meanwhile, the euro, the Swiss franc, the pound, and the U.S.
dollar are all deflating, losing value, pressuring the left dish of the scale lower, while the right
dish, almost all asset prices, must therefore rise in value.

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But that’s just one aspect of today’s economy that most analysts get wrong. The other, equally
important force they terribly misunderstand — one that has enormous consequences — is that
they fail to understand capital flows and capital’s ability to preserve itself and generate a healthy
return.

Right now, and precisely as I have been warning for years, sovereign bond market bubbles are
starting to burst. Capital that sought to preserve itself by flooding into sovereign bond markets
during the first phase of the great financial crisis is now beginning to realize that it went from the
frying pan into the fire.

Western governments are broke. Europe is bankrupt. Japan is beyond bankrupt. Washington is
almost worse than Japan.

As a result, the capital that successfully sought shelter in government bond markets is now on
the move. Out of bonds — and into securities.

It’s searching for new bastions of safety. Asset prices that have a chance of rising as currencies
and sovereign bonds fall in value.

Until we have another planet or solar system to invest in, that capital leaving the bond markets
and searching for safety and a return as currencies also depreciate will stay on planet Earth.

It will seek out investments and asset classes deemed to be safer than the governments of the
world. If you understand this single dynamic of the lifeblood of capital, you will be well-
positioned to make a fortune over the next few years, more money than you ever dreamed of.

You can understand why this is true by seeing what happened during the Great Depression —
and what it means for today’s equity markets.

J. Paul Getty, one of the most successful businessmen in American history, became a
billionaire at the height of the Great Depression. How did he do it? To put it simply, Getty and
other shrewd investors who reaped enormous profits in the 1930s stock market understood this
secret of capital flows.

In early 1932, the stock market crash of 1929 bottomed out. The Dow Industrials plunged from a
high of 386.10 in September 1926 to a low of 40.56 in July 1932.

The U.S. economy was in a depression. So was Europe. So was most of Asia,and Latin America.

Savvy investors like Getty who saw this knew what it meant: That there would be a TON of
capital from Europe looking for somewhere to go. They knew it wouldn’t go into U.S. bonds —
although the U.S. government was solvent back then, all government bond markets were coming
under suspicion.

They knew it couldn’t all go into gold and commodities — then, as now, the commodities
markets were simply too small to absorb that much capital.

So the only place left was the U.S. stock market, the last bastion of capitalism then, just as it is
today. And despite the fact that the economy was in the tank and governments of the world were
in the tank, there were still many American companies in good shape.

Almost no one expected the U.S. equity markets to recover.

But behind the scenes, two forces were at work. In Europe, 17 different countries were about to
default on their sovereign bonds. Investors in Europe’s debt markets were in turmoil.

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Understandably, they wanted their money out of European debt markets.

Meanwhile, in the United States, rumors began to circulate that Washington would devalue the
U.S. dollar by raising the official price of gold.

Savvy investors, knowing what that meant, even under a gold standard, began to position
themselves accordingly, with the scale-in buying of stocks.

Other savvy investors, focusing on Europe’s debt defaults, also began to buy stocks.

Yet the majority of analysts on Wall Street and most investors stayed focused on the
deteriorating global economy and wouldn’t touch stocks with a 10-foot pole.

Fast forward to July 1932. Business conditions continued to deteriorate. Bank failures continued.
Real wages were plummeting. Unemployment amongst nonfarm payrolls reached an astounding
37 percent.

Yet, miraculously for some, stocks began moving up again. First the Dow hit 50. Then 60. Then
75.

Almost no one could believe it. The majority of investors and so-called experts kept calling it a
bear market rally … a rally that would only give way to another crash and fresh new lows in the
markets.

It couldn’t possibly be a genuine market rally, the experts said, because the economy was in a
depression! Sound familiar? Sure it does.

But guess what happened to the Dow Industrials back then? It soared like a rocket! In fact, it
gained an eye-popping 382 percent, rallying from a low of 40.52 in July 1932 to a high of
195.59 in March 1937!

And all in the middle of the worst depression in our nation’s history!

Getty and other savvy investors were able to position themselves for incredible profits, while
nearly everyone else was hunkering down like a toad on mowing day.

Why? Because they understood the truth about capital flows — that when you have a struggling
world economy plus shaky governments throughout the world, this will trigger a massive flow of
capital toward the best available opportunities — out of bonds and into stocks.

The cash didn’t go into U.S. sovereign bonds. There were worries that the U.S. — even though it
was a creditor nation at the time — might also have bond market contagion problems.

Even more money then plowed into U.S. equities when President Roosevelt confirmed the
rumors, and devalued the U.S. dollar by a tad more than 69 percent, raising the official price of
gold from $20.67 to $35 an ounce.

Savvy investors, knowing then that asset prices would inflate as the currency defaulted,
continued to invest in more stocks and made out like bandits as a result.

Money flooded into U.S. equity markets — and, as John F. Kennedy famously put it, a rising tide
lifts all boats.

An equivalent move up in the Dow today, counting the March 2009 low of 6,495 as the
equivalent of the 1932 crash low in stocks, would put the Dow just north of 31,000.

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A 382 percent gain can make you rich — but only if you understand the forces I just described
and ignore the pundits who keep telling you stocks must fall because the economy is not so great
… or because Washington is in trouble… or because the governments of Europe and Japan are
also collapsing.

All these things are true, but they don’t matter! Whatever excuse the so-called experts come up
with merely reflects a fundamental ignorance of how capital flows impact the stock market —
and the way capital flows shift with the geopolitical and military winds.

What does this mean for you? It means that stocks will continue rallying higher over the next
several years not in spite of a not-so-hot economy… not in spite of the gargantuan federal debts
… not in spite of the gridlock in Washington … not in spite of Europe’s sovereign debt crisis or
Japan’s… but because of them!

It’s capital’s way of preserving and growing itself.

It’s also capital’s way of shifting away from the public sector (sovereign bond markets) to the
private sector and into companies and assets that will outlast those of bankrupt and failing
governments.

These sectors and assets include great multinational companies, natural resource companies,
companies that have cash and little debt, companies that provide real goods and services for the
private sector — as opposed to governments, which provide little of value and charge far too
much for what little they do provide.

Governments actually steal from the private sector in the way of debt, interest, taxes and other
burdens.

If you understand this point — and act on it — it’ll make you rich. And if you want proof … just
look at what’s been happening since 2009.

Do you remember spring of 2009? It looked like the end of the world! The stock market was
collapsing … banks were collapsing … insurance companies were collapsing … real estate was
collapsing.

And many were saying the economic system itself would collapse and we would not recover.
And yet, here we are, with the stock market hitting new record highs — even though most of
those basic problems still exist.

Yes, some problems are on the mend. Thankfully, the economy is improving slightly. But we
still have high debt and gridlock in Washington … profound troubles in Europe and Japan …
insane tax policies … currency wars … fragile institutions … and more. And yet, stocks keep
rising not in spite of those problems, but because of them!

Why Government Bonds Will Get Slaughtered

During the financial crisis of 2007 to 2009, as real estate companies, banks and brokers went
bust or were on the verge of going bankrupt, investors all over the world flocked to U.S.
Treasury bonds.

In that shaky time, investors were more interested in a return of their capital than getting a
return on their capital. And U.S. Treasury bonds looked like the safest bet.

So they piled in … and bid up bond prices. Predictably, the yield on 30-year U.S. Treasuries

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plummeted from 5.43 percent to 2.44 percent. And still they kept piling on.

But soon, the reverse will happen: The tide that came in will go out.Bond rates will hit bottom.
Washington is broke. Europe is broke. Japan is broke.

So investors all over the world who were piling into U.S. Treasury bonds will slam into reverse.
They’ll leave bonds like rats jumping off a sinking ship.

And there is simply nowhere else these tens of trillions of dollars can go … but back into stock
markets! Why? Because it’s the ONLY other liquid market on the planet.

How much capital? Well, it’s not just savvy investors who will be stampeding out of bond
markets. It’s big, cash-rich companies too. And there are plenty of them.

Apple alone has $147 billion in cash, most of it invested right now in U.S. Treasuries. When
Apple Chief Financial Officer Luca Maestri realizes that their U.S. Treasury investments are at
risk of a massive decline in value, he will have to make a move.

And there are scores of cash-rich, low-debt companies in the same boat. My research staff took a
look at their balance sheets and were stunned to find how much cold cash some companies are
sitting on…

Microsoft with over $80 billion in cash and cash equivalents

Google with $58 billion
Verizon with $57 billion
Pfizer with $33.7 billion
Johnson & Johnson with $25.1 billion
General Electric with over $10 billion
And many, many more

In fact, Warren Buffet’s Berkshire Hathaway alone has a cash balance of $201 billion. And as I
said before, Apple has an astounding $147 billion in cash and equivalents.

Many of these companies have more cash than the annual production (GDP) of some important
countries. More cash than even the U.S. Treasury.

And they are going to start shifting their massive hordes of cash around, deploying their capital
into all kinds of different investments, including equities.

Bottom line, this is just one more HUGE reason, along with the others I’ve mentioned, why
you’re going to see the Dow soar much higher in the months and years to come.

Dow 31,000 May Be Conservative!

The truth is, I actually believe that Dow 31,000 may be too low of an estimate. The Dow’s rise
since 2009 is one sign that we are on the doorsteps of a new bull market in equities.

The rally in Japan’s Nikkei, more than 20 percent higher (even as the Japanese economy sinks
further), is another sign.

The last great bull market of our lifetimes is coming, and I want you to profit from it. I want you
to be one of those savvy few investors who make more money than you can dream of over the
next few years — while those who refuse to acknowledge these overwhelming geopolitical and
economic forces lose their shirts.

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Impossible, you say? Actually, it’s already started. Over the past years — with all the economic
mayhem we’ve lived through — not only has the Dow skyrocketed, but many stocks have
already seen stratospheric gains. Over the past four years …

J.P. Morgan Chase (JPM) rose 258.6 percent. A $10,000 stake in this stock would have
turned into $35,862 .
Caterpillar (CAT) zoomed up 302.7 percent. A $10,000 investment would have turned
into $40,270.
Walt Disney (DIS) rose 325.4 percent. Your $10,000 stake would have turned into
$43,541.

Home Depot (HD) exploded up 384 percent. A $10,000 investment would have turned into

$48,397.
And American Express (AXP) rocketedup 669.8 percent. Your $10,000 investment in
Amex would have turned into $76,983.

And there’s more to come because all the signs are pointing to even more explosive gains in the
months and years ahead as the Dow takes off for 31,000.

So let me go on record right now: We are entering a period in history that very few will
understand until it’s too late.

The simple truth is that the vast majority of investors and alleged experts are caught up looking
at the world with old economic models stuck in their minds — so much so that they don’t have
the ability to understand what is actually happening.

Allow me to explain why I think Dow 31,000 may actually be too low of an estimate. Unlike the
1932 to 1937 period, we have not just one part of the world, Europe’s government, going bust.
We have the governments of Europe, Japan and the U.S. going bust.

That means there will be even more capital “in flight.”

Secondly, we have a “race to the bottom” going on in the currency markets. Japan, Europe and
many other countries are all actively seeking to devalue or deflate their currencies, meaning asset
prices, will have to inflate all that much more to compensate.

Third, we no longer have a gold standard. There are no restraints whatsoever on how much asset
prices can inflate as money pours out of sovereign bond markets and seeks safety and a return
on investment that’s also proportional to the amount currencies deflate.

Cashing in on the Last Great Profit Opportunity

What should you do to prepare for the great bull market in the years ahead?

First, realize that the market is not going to go straight up. Indeed, there are many technical
indicators that show that most equity markets are overbought in the short-term and vulnerable to
a pullback.

But the confirmed signals I have are rock-solid. And they tell me that the winning strategy will
be in the equity markets — to establish long positions in the sectors and companies that will
shine the most in the months and years ahead.

That means, with rare exceptions, you should not be looking to make money from the short side
of the stock market. Instead, you should position your portfolio on the long side, for the
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inevitable rally the Dow will experience, soaring to 31,000 or more over the next three years.

Second, a new bull market in equities will not be limited to the Dow Industrials, or to the United
States. I do expect U.S. equity markets to outperform those of Europe because the United States
has some of the biggest, most influential and most profitable multinational companies in the
world. It still has some of the greatest entrepreneurships in the world, too.

However, there will be outstanding opportunities to profit from emerging markets as well,
namely in Asia’s markets, where I expect new record highs in equity markets in countries like
China and India.

Their governments are stable. Their governments are largely running surpluses. Their
governments are opening up. Their economies are vibrant. Their economies and markets will
benefit from the cash flowing out of the sovereign debt markets of Europe, Japan, and the U.S.

Third, a new bull market in equities does not mean the natural resource bull market is over.
Many think that if equities rally, the shine will stay off of commodities.

But as I discussed earlier, showing you how savvy investors are already hoarding tangible assets,
nothing could be further from the truth.

It’s merely a matter of time before us average investors do the same thing, and start
accumulating, even hoarding tangible assets once again.

Remember, in times of rising geopolitical tensions and war, a phase that most analysts and
investors will get dead wrong — capital is going to seek out assets that will outlast governments.
Companies that outlast governments. And tangible assets that outlast the public sector as well.

So commodities will soon end their bear markets and not only do just fine again, but also soar.

Gold will soar right along with the stock market. So will silver.

So will copper. So will food prices, and more.

Some of the rise in natural resource prices will be the inevitable result of rising inflation, which is
coming. But a lot of the rise coming in the next phase of the commodity bull market will be
mostly due to the sheer movement of capital away from the public sector, and into the private
sector.

No matter what happens to Washington or to Europe’s government, or Japan’s — there is always

demand for the basic necessities of life. Even more so when governments are so broke that they
cannot provide their citizens with such security.

What about rising interest rates? Don’t buy into the theory that rising interest rates will kill the
stock market. That’s simply not true. The fact of the matter is that most bull markets in stocks
occur simultaneous to rising interest rates.

When you think about it, that makes sense. Rising interest rates are a sign that demand for
money and credit is increasing; that the velocity, or turnover of money, is also increasing. That
in turn is bullish for the stock market.

Fourth, there will be many outstanding opportunities to add income-based investments to your
portfolio. Solid companies that offer dividends and/or royalties of 4 percent … 5 percent … 7
percent and even more PLUS the potential for solid capital gains.

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After all, why invest in government securities, short- or long-term, when the governments that
are issuing them are paying nothing and are flat broke on top of it all? The time to get started is
now.

In summary, I see …

The outbreak of wars will ultimately cause gold to soar to more than $5,000 an ounce over
the next few years. Silver to more than $125.
Oil to soar to $200 a barrel.
Mining shares, perhaps the most undervalued sector of all, to at least QUINTUPLE.
Food prices, now in the final throes of their bear markets, to suddenly reverse and explode
higher.
And the U.S. stock market? Other than a healthy pullback now and then, it will ironically
explode higher … to well over Dow 31,000.

Not a soul will want to touch U.S. or European sovereign debt. Capital from every corner of the
globe will flood into U.S. equities as the U.S. stock market becomes the last beacon of hope for
capitalism.

It will become the last, confiscatory-free place to invest your capital and get a decent return to
boot.

But that doesn’t mean you can just sit back and enjoy the ride. That’s because, in addition to
seeing numerous investment opportunities, I also see many dangers — to your wealth but also to
your personal quality of life.

In addition to making windfall profits on select investments, you must take steps to protect
yourself and your loved ones.

Should you build a bomb shelter and cabin in the boonies and arm yourself to the max? Stock up
on months’ worth of food and water? That’s not my kind of thing. But if you want to do that,
you should.

I have already taken steps to protect my privacy. I have moved my cloud storage offshore to
secure servers in Switzerland.

I am already positioning my finances to protect and grow my wealth during the turbulent times
ahead.

I am preparing to buy gold, and lots of it, and store it offshore. I am preparing to buy silver,
platinum and palladium as well, and also store it offshore.

I am researching the best banks to hold my cash, custodial banks only, and most likely offshore
as well.

I am also going to back up the truck — when the time is right — to load up on shares in select
multinational and natural-resource companies, because, as I told you, stocks can do extremely
well in times of war, much like the safe haven that gold is.

I’ll take physical possession of my stock certificates where possible, and stash them away in my
vault. That way, I won’t have to worry if a broker goes belly up, or Washington or anyone else
decides to eavesdrop on my account.

You need to take the same steps. I’m dead serious about it.

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Mostly, You Need to Make Some Serious Money.

I shocked my colleagues when they asked me how I was preparing for a new world order of
increased warfare and government crackdowns, and I told them that I thought the best defense of
all “was making money, and lots of it.”

That’s the solution, I said. It’s not running off into the woods and arming yourself with ammo,
food and survival strategies. That is fine for some people, but for others it’s simply not practical.

Instead, in my world, money is the best defense and offense. And since that’s where my skills
lay — in protecting and growing wealth when most investors are losing their shirts — that’s
where I spend most of my time.

For instance, the bear market in gold and commodities is not over yet. So I’m making money on
the short side of those markets as most other investors get caught up in the wrong interpretation
of the current fundamental trends.

Later, when gold and silver bottom, I’ll be buying up all the bargains from the die-hard bulls
who are bleeding all over the place.

My Major Forecasts of What’s Coming

The next five years will go down in the history books as the time when all hell started to break
loose. They will be seen as the years when the world was turned upside down and everything
you thought you knew about the markets was largely proven wrong.

New trends will emerge. Relationships between asset classes will change. Geopolitical turmoil
will ramp up at a feverish pace.

And there will be more money to be made — and lost — than ever before! To reiterate, here is
what I forecast for key markets:

FORECAST #1: The U.S. dollar’s last hurrah. While the U.S. dollar has not yet lost its global
reserve status, it will. It’s etched in stone. There is simply no way the U.S. dollar can remain the
world’s sole global reserve currency when the emerging markets of Asia and Latin America are
rising like zeniths.

There is simply no way that our country’s fiscal and monetary policy can be exported
throughout the world when so many countries are gaining market share and contributing to
global GDP like never before.

In a nutshell, the U.S. dollar as the sole global reserve currency simply isn’t fair to the rest of the
world and it has to go.

But here’s the irony: Even as the dollar is destined to lose its singular reserve status — in a
financial crisis, it’s still the reserve currency by default.

That means that when markets and economic systems go into turmoil, the dollar gets a shot in
the arm as the rest of the world goes into “risk-off” mode, selling assets and parking their money
in cash.

And with the back wall of the financial hurricane about to hit — and the war cycles ramping ever
higher — that means the dollar has one more Hail Mary pass, one more possible giant rally and
last hurrah — before it resumes its long-term bear market.

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Winds of World War III The Impact on Financial Markets How to Protect Your Wealth Where New Fortunes Will Be Larry
Found Edelson

Behind the curtain, the bankrupt, socialist-based Western governments of Europe and the United
States are now beginning to hunt down every penny of their citizens’ wealth that they can find.

That’s disinflationary, plain and simple. People everywhere are starting to hoard their wealth.

That means cash is going to be king for a few more years. And since the dollar is still the world’s
reserve currency, it means a stronger dollar ahead. As you might suspect, strength in the dollar
over the next several years leads me to my next forecast …

FORECAST #2: Gold and silver will hit a major bottom. I don’t know anyone in the world
that’s pegged the moves of gold as accurately as I have over the years. I have beaten the biggest
names in the investment arena to the punch in gold, time and time again.

Had George Soros listened to me, he would have avoided the carnage that hit gold beginning in
2011. Instead of selling his holdings when gold was trading at roughly $1,597, he would have
been out of gold in the high $1,800 range.

Had John Paulson listened to me, he would have dumped his gold holdings at much higher
prices and avoided as much as $1.5 billion in losses.

The bottom in gold is coming, and I see it as a rare chance to double up on the precious metal
and make a true fortune as it inevitably turns around and heads to somewhere north of $5,000 an
ounce in the years ahead.

In the coming months, gold and silver will bottom and begin an awesome new leg to the upside.
And it’s one that most investors will miss, simply because they do not understand the forces at
play.

You will want to take full advantage of the coming bottom. It will be the last major bottom you
will ever see in the precious metals in our lifetimes!

Now, my next area of major concern …

FORECAST #3: The sovereign bond market is headed for disaster. This one is a no-brainer.
The governments of the U.S. and Europe are bankrupt.

There’s simply no way they’ll ever make good on their outstanding bills — not to mention their
promises of Social Security, health care, pension guarantees and more. They won’t be able to
inflate the debts away as so many expect, either.

It’s why they’re starting to hunt down citizens’ wealth. It’s why Washington and Brussels are
now contemplating raising taxes yet again.

It’s why they are tracking money sent overseas and why you now have to report accounts that
you have anywhere in the world. But none of that will matter.

In the end, there is no way the citizens of these countries will put up with it all. And as they are
now finally realizing … yes indeed, their emperors have no clothes.

As a result, no matter how hard central banks work at keeping interest rates low, the sovereign
bond markets of the U.S. and Europe are facing votes of “no confidence” from their investors
and creditors and the values of their sovereign debt instruments are destined to slip and slide
substantially lower!

Of course, that leads us to …

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Winds of World War III The Impact on Financial Markets How to Protect Your Wealth Where New Fortunes Will Be Larry
Found Edelson

FORECAST #4: Europe — and the euro — will collapse. Many think the euro currency will
survive, or because Germany’s economy is hanging in there, that the European sovereign debt
crisis is kaput.

That view is dead wrong according to my models. That’s why the biggest surprise of all for the
coming months will be the crumbling of the EU and a collapse in the value of the euro.

Savvy money will soon begin to leave Europe’s banking system in even greater droves, causing
the euro’s bear market to turn into a tidal wave of money exiting the currency. As it does, the
seeds of the destruction of the EU will grow like weeds.

FORECAST #5: The Dow will explode to 31,000. I’ve already discussed this in detail but allow
me to repeat myself.

If I didn’t know better, I’d throw my hat in the ring with all those pundits out there who say the
economy is not strong enough and interest rates are rising, so the Dow must crash.

But, I do know better: The fact of the matter is,the Dow will lead U.S. equities higher, catapulting
to 31,000 over the next three years.

As I said, if you understand the way capital flows like a powerful undercurrent through the world
— and if you understand the significance of rising interest rates — you will be well positioned to
make a fortune over the next few years as most U.S. stocks soar higher.

What’s more,as Western governments teeter and the banking system crashes again — and it will
— U.S. stocks will be deemed safer than just about anything else. And as you now know, I
consider Dow 31,000 to be my minimum target.

That is the most direct, measurable consequence of the Winds of World War III. And it’s the
biggest single opportunity for investors in the United States and overseas.

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