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A Change is Coming – 2013 & Onwards – Part I

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Published : November 16th, 2012
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As we get closer to the end of 2012 we start to look forward to 2013 and beyond. Hopes and dreams must always be tempered by the stark spotlight of today’s realities. Nothing can happen unless it is based on today’s present world structures, events and leaders in politics, and money. The first major point we have to recognize is the structures we see around us, within which everything is bound together, together with the current leaders and their will for the future –these things will shape the years ahead.

Much as we might hunger for reform in so many areas, we must be pragmatic in looking forward. The world is not pure –far from it— so it is realistic to look at what is here today that will shape tomorrow. Looking at the future through these leader’s eyes gives us a clear perspective.

Underlying the developed world society is the state of the family, which underpins the state of the nation. This in turn describes the state of national and global cohesion within world structures. For instance, by contrasting the progress of China’s economy with that of the developed world, we get a focused picture of the economic and monetary capabilities of civilization in the two blocs.

If you doubt what we have said, look back to the start of the credit crunch in 2007 and see that it has been over five years since it began. The problems that exploded on us then –have they been resolved? Has the political system been reformed? Is the developed world showing a clear direction forward or is it a mélange of contradicting power bases, in dispute with one another. Has the financial system been reformed? Or is it reliant on a series of rescue operations attempting to hold together structures that have failed so far to provide what we are looking for in our future? Are the fundamental structures of government and finance working cohesively to provide solutions that will lead the developed world to a growing future? It does seem that political parties keep promising a solution to our problems (with little to no details) and manage to avoid letting us see that the problems we face are a consequence of past actions by the same dominant structures.

Do we have a strong workable monetary system to take us into the future? No we don’t. Are the powerless ordinary people more confident in their future? No they are not. What we see is a growing discontent among the bulk of mankind that their future is so uncertain. That discontent breeds instability and uncertainty, a state that has not lessened in the last seven years. As the developed world points down to more economic underperformance, this rising tide of discontent threatens to worsen substantially. It is against this backdrop that we look at the future.

United States

We still have the political gridlock that has rendered the leaders of the U.S. powerless to lead, let alone reform over the last few years. No attempts to really promote growth and jobs have come out of Washington. The emphasis in the political and financial world has been to save the buckling banking and monetary system from spiralling down into a Depression. Hats off to the Fed because they have succeeded in doing that, but little more! The hopes inside the U.S. have been to see no further decline and to hope that the tenacity and resolve of the consumer will lift the U.S. out of its doldrums. Perhaps one should ask, “Are politicians qualified to provide economic growth or simply lessen the burden government puts on the productive facet of a nation?” The last five years –when growth has been so badly needed—has not seen that happen. What convinces us that next year thing will change for the better? And reality demands specifics, not just vague, hopeful generalities.

The use of quantitative easing has boosted the money supply enormously and will keep on doing so until growth takes off, growth that is not just well-established but sustainable. If this does not happen and growth remains below inflation and population growth, then the bloated money supply will turn back on the system and create monetary inflation while the economy is shrinking. Combine that with shrinking confidence at that time and the mercurial impact of the two factors joining each other, and this may well go beyond a simple recession and lead to a massive drop in the dollar’s buying power. It could easily then swing out of control.

A failure to resolve the ‘debt-ceiling’ crisis and the ‘fiscal cliff’ could ignite that state of affairs. So we enter 2013 with that economic backdrop. Political gridlock, which will last until the election of Congress and the House of Representatives, will continue to render government inadequate to handle the current crises. The consequences could be dire. It’s well-known that the leading institutions of the U.S. are going through planning for a possible dollar collapse, the possible scenario of having to withdraw military personnel from outside the U.S., and the pay of government employees being insufficient to provide for their families. These are very real scenarios for the future that must be addressed ahead of them happening.

So 2013 appears to promise more of the same as the last five years in the U.S. and its economy except that conditions have become more fragile. The economy appears to have a small element of growth and by way of hope, does not seem to be headed into a slump. This is contingent on the politicians not mucking it up at the start of 2013.

But there’s a major change coming in the next four years within the economic structure of the States that could may help it survive and maybe even prosper despite these handicaps. This will be discussed in part II.


The inadequacy of the political structure of the Eurozone has been evident for all to see in the last few years when the ‘credit crunch’ morphed into the Eurozone Sovereign Debt crisis. It has been with us for far longer than anybody expected and has succeeded in highlighting the weakness of the bloc’s diverse national bases. The leadership performance of the Eurozone’s politicians has been underwhelming and continues to place partisan interests over those of the E.U. We see no reason why that should change. But the reinforcing of that failure in 2013 and beyond is against a disenchanted population that is increasingly inclined to social unrest as their financial and employment situation worsens.

We believe that the recession now underway in the Eurozone will feed on itself and worsen in 2013.

The situation in the Mediterranean nations of the south side of the Eurozone seems to be worsening and removing hope in the process:

· We expect Greece will leave the Eurozone in the next 12 months.

· The weaknesses being seen in Spain are not going away and will worsen in line with the ongoing recession there too. Spain is expected to find requests for a further bailout irresistible.

· Italy is beginning to spiral down to potentially need help too. This would bring the entire E.U. into question.

Once this happens the contagion effect will worsen for other members, including Germany, which relies on the Eurozone for 40% of its exports.

How will the euro fare under these conditions? Undoubtedly it will fare poorly. As a currency passing its twelfth year in existence, never has it looked more tenuous as it does now.

Are the Eurozone’s leaders up to the task of turning the Eurozone economies around? A look at their performance over the last few years does not point to this. Expect that as the recession bites, the value of the euro will decline and what faces the U.S. will happen in the Eurozone, only to a greater degree.

But there’s a major change coming in the next five to ten years within the economic structure of the Eurozone that could well let it survive and prosper despite these handicaps. This will be discussed in Part II.

Asia/China & the Arrival of the Global Yuan

The controlled nature of China and its people’s love of regimentation and cooperation has been the prime cause of China’s rapid development. Its reliance on cheap labor to date developed not only its export markets but its own expertise in all facets of economic life. The target of double digit growth remains plausible there, but the threat of social unrest at the uneven distribution of wealth as it develops is a worry to the government. This is particularly true when the financial playing fields were relatively flat two decades ago. Its population of 1.3 billion people in itself is a huge number. Even if 1 billion people do well out of its growth, then that leave 300 million still waiting for an exit from poverty. This is the same as the population of the entire U.S.

But even China must see its economy reach a self-sustainable, internalized dependency level, before it can be confident of its future. To achieve that it has to become less reliant on its export markets and outside investments, unless they support the needs of its structure. The thought that it will contribute to the developed world’s growth is somewhat fatuous when we see it manufacturing goods cheaper, but of the same quality and slowly removing its reliance on imported goods, except of a basic nature. Given time, it will be manufacturing everything as well as and cheaper than the developed world can. This makes the shift of wealth from the West to the East a long-term facet of the global economy.



Data and Statistics for these countries : China | Germany | Greece | Italy | Spain | All
Gold and Silver Prices for these countries : China | Germany | Greece | Italy | Spain | All
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Julian Philips' history in the financial world goes back to 1970, after leaving the British Army having been an Officer in the Light Infantry, serving in Malaya, Mauritius, and Belfast. After a brief period in Timber Management, Julian joined the London Stock Exchange, qualifying as a member. He specialised from the beginning in currencies, gold and the "Dollar Premium". At the time, the gold / currency world exploded into action after the floating of the $ and the Pound Sterling. He wrote on gold and the $ premium in magazines, Accountancy and The International Currency Review. Julian moved to South Africa, where he was appointed a Macro economist for the Electricity Supply Commission, guiding currency decisions on the multi-Billion foreign Loan Portfolio, before joining Chase Manhattan the the U.K. Merchant Bank, Hill Samuel, in Johannesburg, specialising in gold. He moved to Capetown, where establishing the Fund Management department of the Board of Executors. Julian returned to the 'Gold World' over two years ago and established "Gold - Authentic Money" and now contributing to "Global Watch - The Gold Forecaster".
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Billygreenjeans: Sorry my friend but whilst I agree with most of what you state you sound better suited to living in the jungle and clearly have no understanding that human beings are creatures of higher intelligence and compassion. The 'its all mine' belief is a myth perpetuated by those who live a life devoid of human compassion and devoid of the love of God.

I feel so sorry that you are of the opinion that society does not own a nation and that the survival of the group is how we should all live. You are wrong.
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Criminality is the worse form of actions for a society. What could be more charitable than allowing a person the self dignity, happiness and joy of earning their own living independent of others and especially not stolen “help”. To “bailout”, with money stolen from a lot poor or middle class workers, someone or company who has gambled badly is not my idea of compassionate treatment. If we have a society that is so weak that they can not earn their own living then we can look to the source of the cause which is reliance on a government handout. This is the education for many to not have the self confidence to change and pursue a different life. When will a child leave home or the cradle if there is no goal or reason to change? Eventually a twenty five year old in a cradle crying for a change of diaper will become very tiresome for the parents and a change will be made and it will not be a diaper. It is a ridiculous picture but an accurate assessment of teaching self dependency. Nothing could be more compassionate and a correct way of human kindness than to help someone help themselves. Nothing worthwhile has ever been accomplished except by work. We don't “own” anything in this life if we did we could take it with us when we die. All we take is our experiences.
If you feel the need to give all you have to a government perpetuating program do not let me dissuade you; however if you are as “compassionate” as you would lead us to believe I suggests you find a private charity or church to give everything you have. It will be put to a better use.
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Although I agree with much of the text money printing is not the answer to solving anything as it just puts off the day of reckoning and it robs savers (retirees) of the ability to live.

If you want to talk about government workers not having enough money to sustain their families then this is as good a reason as any to tax the rich. But then the wealthy have the perception they they should not contribute to the rest of society and that the poor should work rather than be given help. This sort of strange reasoning, the its all mine mentality, is what is doing the rounds and lowly paid workers will have to wear the coming depression unless the privileged few are forced to realise that society owns a nations, not the 1%.
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The law, governments and societies are all suppose to be moral. Taking anything is a crime and so is forcing someone to do something such as giving up their property for some charitable cause. What is strange is a nation who accepts criminals for their leaders and the taking from one to give to another. Charity of any kind should be a choice made by the giver. The highest and best form of charity is helping someone find a work situation where they can become self reliant. Governments only find ways to perpetuate themselves. Helping people is a hokes setup to continue government self preservation. If governments were really helping people very soon no one would need any help because they all would be self reliant and there would be no reason for a “government program” to help people.
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Mr. Phillips, like myself, is a dreamer. He believers in stories with happy endings as “Part II”, worth reading, may show. It is true that people get over bankruptcies after a while and began again to work on prospering, notwithstanding the stress and mental strains of bankruptcies are life changing. There after, the tendencies to take chances are modify considerably. Now that the dream is over lets get back to reality. As Groucho Marx said “I'm not crazy about reality, but it's still the only place to get a decent meal.”
The central banks and governments know that the situation is hopeless and are doing everything they can to hold things together long enough to pass the inevitable disaster onto the next megalomaniacs. Revolutions, civil unrest and major wars are already underway. All of this to be sorted out by the return of Prince of Peace and by Him alone. Maybe we need to make some personal changes now before that happens.
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when i was a lad growing up in seminole ok. there was a church with a sign "Jesus is coming soon" that was in the 60's. I am 59 years old.
there is no pie in the sky going to descend and wave His majic wand, and bring world peace. Maybe we need to gain wisdom and become a greater person, and lay off this pie in the sky. Check out some old people, now 80 plus years, and look at their respect for their fellow men.
I'm seeing less accountability--less answering the phone, less quality in the way things are made, and much shallowness of people. I'm still waiting. JEsus learned his healing techniques from the Buddists in northern India. it's all gotten changed over time. very much so. save yourself, by living good., and being decent.
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Criminality is the worse form of actions for a society. What could be more charitable than allowing a person the self dignity, happiness and joy of earning their own living independent of others and especially not stolen “help”. To “bailout”, with mone  Read more
billgreenjeans - 11/19/2012 at 4:13 PM GMT
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