Everyone here is so focused upon 2012, the war in Iraq and earthquakes
that you are all missing the big picture. You're just not paying
attention.

As I write, oil prices just hit another new high ($60.53/barrel).
People who have been paying attention know that this is only the
beginning. Demand is outstripping supply. Read Matt Simmon's new book,
"Twilight in the Desert", where ample evidence is provided that the
Saudi oil infrastructure is ready to collapse.

Is this news? Apparently not. This weekend all the air time was
dedicated to the missing teen in Aruba, the comments made by Karl Rove
and the Live-8 concert next weekend. Maybe those things really are
more important than an impending economic crash and the second Great
Depression.

No, this isn't a peak oil rant. If that was the only thing the world
was up against, it would be quite formidable on its own. No, it's much,
much worse.

The United States is running record deficits, and our trade deficit has
never been higher. So how is this deficit being funded? By foreign
banks, of course, Asian banks in particular. Foreigners own around US$9
trillion worth of American assets whereas American assets in foreign
countries are valued at US$6 trillion - a negative net-asset balance of
US$3 trillion or roughly 30% of American GDP.

China is the main beneficiary of this trade deficit, of course, and is
using the cash to fuel its red hot economy, build its military, and to
acquire even more assets, particularly those related to oil. Yes, China
will be the USA's primary competitor for the remaining oil supplies.
They know it. Do we?

Speaking of debt, it's not just our government that's in debt, it's our
people. The average American saves less than $0.10 on every $100 they
earn. I've seen it on my street, people are taking home equity loans,
and using the money to put another level on their house, redo their
kitchen, and buy things that they couldn't ordinarily afford.

The Federal Reserve has kept interest rates low and has increased
liquidity to record levels. They're printing money left and right. This
money has gone into the real estate market, which is seeing an
unprecedented boom since 2001.

So In 2001, only about one buyer in 10 needed an ARM to qualify for a
loan. Last year, more than one mortgage out of three was an ARM. In
Washington, D.C., 54% of people this year bought their homes with
interest-only loans!! When interest rates spike up, their monthly
payments are going to soar. A 2% rise could hit them with a 40%
increase in their monthly payment. Their monthly payment will jump like
crazy at the very same time their house goes down in value.

One publication that I read has called this scenario Enron times 1000.
What happens when someone buys a home with an ARM or interest-only loan
and interest rates spike? They can't afford their payment, so they sell
their house. Only everyone starts to sell their house. Now, the prices
start to drop, and they can no longer sell their house for what they
paid for it. So what do they do? Well, they default, of course. Except
everyone starts to default. Banks, who assume control of the homes, try
to dump them for whatever they can get, driving the prices down even
further. See where all of this is heading?

Things could happen sooner if the protectionists in congress decide to
try to force China to float its currency by instituting tariffs on
imports. That wouldn't help the trade deficit at all as American wages
on average are about 30 TIMES higher than those of China. But what it
would do is send American retail prices and interest-rates through the
roof.

So how will all of this play out? This is only one man's opinion, but
it would appear that we are on the verge of economic catastrophe.

The combination of oil prices and our rising deficit will create
inflation (this, by the way, happened in the 1970's to a lesser
degree). Inflation will pop the real estate bubble, triggering
nation-wide defaults and plunging much of the middle class into
poverty. Asian banks will begin to dump dollars - either because of
defaults on debt or once the middle east begins to trade oil in a
currency other than the dollar. This will cause a dollar crash, and
will trigger what will probably be called the Second Great Depression.

Now, look again at Nosty's prophecies in this context and things will
make better sense.

I now return you to your regularly scheduled flame war on APN.