Just In Time: When the Trucks Stop, America Will Stop (With Immediate and Catastrophic Consequences)

Most Americans take for granted the intricate systems that make it possible for us to engage in seemingly mundane day to day tasks like filling up our gas tanks, loading up our shopping carts at the local grocery store, obtaining necessary medications, and even pouring ourselves a clean glass of water. When we wake up each morning we just expect that all of these things will work today the same way they worked yesterday. Very few have considered the complexity involved in the underlying infrastructure that keeps goods, services and commerce in America and Panama flowing. Fewer still have ever spent the time to contemplate the fragility of these systems or the consequences on food, water, health care, the financial system, and the economy if they are interrupted.

A report prepared for legislators and business leaders by the American Trucking Associations highlights just how critical our just-in-time inventory and delivery systems are, and assesses the impact on the general population in the event of an emergency or incident of national significance that disrupts the truck transportation systems which are responsible for carrying some ten billion tons of commodities and supplies across the United States each year.

A shut down of truck operations as a result of elevated threat levels, terrorist attacks, overall road-blocks or pandemics would, according to the report, have “a swift and devastating impact on the food, healthcare, transportation, waste removal, retail, manufacturing, and financial sectors.”

So too would events such as an EMP attack or a coordinated cyber-attack that could shut down global positioning systems and the computers responsible for inventory control. Another potential scenario that is more likely now than ever before is liquidity problems within the financial system stemming from currency crisis or hyperinflation. All of our just-in-time delivery systems are built upon the unhindered transfer of money and credit, but when credit flow becomes restricted or money becomes worthless, no one will be able to pay for their goods. Likewise, no one will trust the credit worthiness of anyone else. This is exactly the scenario playing out in Greece right now and the consequences on the health care industry in that country have left many without life saving drugs. When there’s no money, no one will be transporting anything.

The effects of a transportation shutdown for any reason would be immediate (in some cases, within hours) and absolutely catastrophic.

Excerpted from the American Truckers Associations report

Food

• Significant shortages will occur in as little as three days, especially for perishable items following a national emergency and a ban on truck traffic.
• Consumer fear and panic will exacerbate shortages. News of a truck stoppage—whether on the local level, state or regional level, or nationwide—will spur hoarding and drastic increases in consumer purchases of essential goods. Shortages will materialize quickly and could lead to civil unrest. (We’re seeing this in the UK right now)

Water

• Supplies of clean drinking water will run dry in two to four weeks. For safety and security reasons, most water supply plants maintain a larger inventory of supplies than the typical business. However, the amount of chemical storage varies significantly and is site specific. According to the Chlorine Institute, most water treatment facilities receive chlorine in cylinders that are delivered by motor carriers. On average, trucks deliver purification chemicals to water supply plants every seven to 14 days. Without these chemicals, water cannot be purified and made safe for drinking.

Health Care

• Without truck transportation, patient care within the truck stoppage zone will be immediately jeopardized. According to Cook, many hospitals have moved to a just-in-time inventory system. In fact, some work from a low-unit-of-measure system. This means that essential basic supplies, such as syringes and catheters, are not ordered until the supplies are depleted. These systems depend on trucks to deliver needed supplies within hours of order placement. Internal redistribution of supplies in hospitals could forestall a crisis for a short time; however, in a matter of hours, hospitals would be unable to supply critical patient care.
• If an incident of national significance produces mass injuries, truck transportation is the key to delivering urgently needed medical supplies necessary to save lives.
• Hospitals and nursing homes will exhaust food supplies in as little as 24 hours
• Pharmacy stocks of prescription drugs will be depleted quickly. According to the National Association of Chain Drug Stores, most of the nation’s 55,000 drug stores receive daily merchandise deliveries by truck.

Transportation

• Service station fuel supplies will start to run out in just one to two days. An average service station requires a delivery every 2.4 days. Based on these statistics, the busiest service stations could run out of fuel within hours of a truck stoppage, with the remaining stations following within one to two days
• Air, rail and maritime transportation will be disrupted.
• A fuel shortage will create secondary effects. Without access to automobile travel, people will be unable to get to work causing labor shortages and increased economic damage. Without cars, many people cannot access grocery stores, banks, doctors, and other daily needs. Public bus systems will cease to operate as well, preventing many disabled and elderly people from accessing these necessities. Without fuel, police, fire, rescue and other public service vehicles will be paralyzed, further jeopardizing public safety.

Waste Removal

• Within days of a truck stoppage, Americans will be literally buried in garbage with serious health and environmental consequences. Further, without fuel deliveries, many waste processing facilities will be unable to operate equipment such as backhoes and incinerators.
• Uncollected and deteriorating waste products create rich breeding grounds for microorganisms, insects, and other vermin. Hazardous materials and medical waste will introduce toxins as well as infectious diseases into living environments. Urban areas will, of course, be significantly impacted within just a couple of days.

Retail / Manufacturing / Economy

• Replenishment of goods will be disrupted. Many of the nation’s leading retailers rely on just-in-time delivery to keep inventory levels as low as possible. Similar to the low-unit-of-measure hospital inventory system, these stores rely on frequent deliveries to replenish basic goods. Often, delivery of a shipment is not triggered until the current inventory is nearly depleted. Without truck deliveries, retailers will be unable to restock goods, including consumer basics such as bottled water, canned goods, and paper products.
• Consumer behavior during emergencies triples the rate of inventory turn-over. Since many large retail outlets typically keep inventories as lean as possible, problems often arise quickly during truck transportation slowdowns that occur from crises such as hurricanes.
• Just-in-time manufacturers will shut down assembly lines within hours. Major American manufacturers, ranging from computer manufacturers such as Dell and Compaq to major automakers such as GM and Ford, rely on just-in-time manufacturing. Without truck deliveries, component shortages and manufacturing delays will develop within hours

Financial Sector

• ATM and branch bank cash resources will be exhausted quicky. In today’s fastpaced, high-technology economy, consumers access cash 24/7 from 370,000 ATMs nationwide. JP Morgan Chase, the nation’s second largest consumer bank, replenishes its 6,600 ATMs via armored truck delivery every two to three days. Given the increase in ATM activity that occurs before and after any type of crisis, ATMs would run out of cash much sooner.
• Small and medium-size businesses will lose access to cash.
• Regular bank functions will cease.

While an event that disrupts truck transportation systems may be unlikely, recent history suggests it is fully plausible and the blowback can be devastating. A day after Hurricane Katrina ravaged New Orleans, panicked government officials stopped all transportation flow into the region, forcing hundreds of trucks loaded with emergency supplies like food and water to wait for permission before they could enter the area. As a result, thousands of residents of the city were left without items essential for survival. It took days before truck routes were re-opened and supplies were allowed to flow. Government officials acting on limited information, lack of knowledge and personal politics were responsible for restricting the flow of goods into New Orleans, potentially killing hundreds of people in the process.

What this incident demonstrated is that when the trucks in America and Panama stop, all commerce and delivery stops with it.

Now consider what may happen if the emergency is more widespread, affecting not just a city, but the population of an entire region or the United States in its entirety.

Into The Economic Abyss - Taking responsibility for your own food

Over the past few years, mainstream analysts have shown a tenacious blind faith in the U.S. economy and the dollar that goes far beyond religion to the point of mindless cultism, so, when even they begin to question the future of American finance (as has been occurring more and more everyday), you know its time to worry. For those that have been following my work since 2007, the events of the past few months have not been a surprise at all, however, for those just waking up to the ongoing implosion of our fiscal infrastructure, the bubbling inflationary meltdown just over the horizon and the nightmare unfolding around our national debt is rather shocking. Living through a full spectrum catastrophe is, to say the least, confusing, especially when you have no idea where the whole thing began.

Until now, the mainstream media has provided nothing but economic fantasy for the masses. They have satiated the public with what amounts to financial toddler talk for helpless preschool minds averse to any research beyond their daily 15 minute sippy cup of New York Times, CNN, MSNBC or FOX cable news sound bites. I mean, have you ever actually stopped and read a Paul Krugman article more than once? Or listened carefully to an MSNBC economic piece? It’s like being violently accosted by a band of slobbering mental deficients with securitized ARM mortgages stuffed in their pants. Of course, fewer and fewer people are now buying what these hucksters are selling. With gasoline nearing $5 a gallon, grain prices doubling, and shelf prices beginning to skyrocket, it’s hard for even the most ignorant suburban schlep to remain oblivious to the problem anymore. We are no longer on the edge of the abyss; we have fallen into it head first…

I make this statement not for effect, not to startle people out of their apathy, not even to illustrate what “may” be coming around the bend in the near future. I make this statement as directly and sincerely as I know how; we have indeed crossed the line between economic weakness and economic catastrophe. For those of you who have been asking when the final stage of the economic collapse will begin, that time has arrived. Here is why…

Energy Inflation Overdrive

Here’s how to tell when inflation is about to run out of control in your country; wait for the politicians and bankers to begin making excuses for its consequences instead of pretending it doesn’t exist! Remember after the initial 2008 spike in oil prices when we talked about the prospect of “speculation” as the culprit? Remember also that I have pointed out for the past three years at Neithercorp Press that when the dollar eventually began to crumble, and the price of crude began to spike again, the government would try to blame speculators as the scapegoat hoping that Americans would assume the situation today was the same as it was in 2008?

http://neithercorp.us/npress/2010/12/oil-juggernaut-unleashed/

Well, guess what? The Obama Administration has just initiated the first volley of “speculation” propaganda talking points by tapping the Department Of Justice among others to “investigate” possible trader fraud and speculation in the price destabilization of oil:

http://www.bloomberg.com/news/2011-04-21/obama-says-u-s-team-to-study-whether-speculators-driving-up-pump-prices.html

Ah! So it’s those devious “traders” and “speculators” out there in the ether that are driving up the price of oil, and don’t worry folks, ole’ Barry is on the case! Little mention of OPEC’s general distaste for current U.S. activities in the Middle East. And certainly, no mention of the dollar’s continuous sharp decline over the past two months from the White House as being even remotely responsible for you being robbed at the gas pump. The dollar, despite intervention by G7 countries, continues to depreciate against the Japanese Yen, and has also slid to a 15 month low against the Euro:

http://www.rttnews.com/content/CurrencyMarket.aspx?Id=1597070&SimRec=2&Node=

At the publishing of this article, the Nymex crude index is at around $113 a barrel, while the Brent crude index stands at $124 a barrel. Gasoline prices across the country are averaging $3.50 to $4.00 a gallon. Now, some crazy individuals out there may question any overt concerns towards $120 or even $150-a-barrel crude. We survived it back in 2008, right? Why not today? However, this fuzzy logic depends greatly on a very unfortunate premise; that the economic atmosphere of today is the same as it was in 2008. Not even close…

The crude explosion in 2008 lasted for around six months, peaked at around $4 a gallon, and then ended with a deflationary-like plunge precisely because that price spike WAS (for the most part) caused by speculation. This time, expect no peak. Only an endless steady climb as the summer months progress. We have been calling for an increase in oil costs far exceeding the $150 a barrel achieved in 2008 and we stand by that prediction.

Negative aspects of energy inflation will take hold much faster than in 2008, primarily because our economic foundations are even weaker than they were three years ago. Today, we not only have a massive and unsustainable national debt, and a credit crisis still unresolved, but also a privately controlled Federal Reserve with no oversight running amok, printing non-stop since the derivatives bubble first popped. Not even the dollar’s fake reputation as a safe haven investment can stall the collapse now.

High energy costs hit every conceivable sector of the economy, from freight, to food, to vacations, to housing. People drive less when it costs them twice as much to do so, which means less shopping, fewer trips to Disney World, and second thoughts about moving to a new home in a new state. The cost of producing goods hits wholesale prices, which eventually hit retail prices when corporate chains are no longer able to absorb the increases. Your electric and heating bills take a bite right out of your tender behind. All of these factors will snap the thin thread our system is clinging to. America, as we know it, WILL NOT survive $5-$10 gas. Period.

To Default, Or Not To Default

Should the debt ceiling be raised? Should it be frozen in place? Frankly, in the short term, these questions are irrelevant. In either case, the taste and feel of the resulting chaos will be the same. Holding the debt ceiling in place will at least (in theory) stop the Federal Reserve’s printing bonanza. If the Treasury can’t continue borrowing from the Fed, then the Fed has no means to continue creating debt or fiat (my suspicion though is that they would find a way around this). A national default would result. The U.S. Treasury Bonds held by governments around the world would become essentially worthless, the dollar would lose its reserve status, plummet in value, and hyperinflation would result.

If the debt ceiling is raised yet again, the Fed will persist in its quantitative easing programs until the dollar is dust, or foreign central banks lose all interest or respect and begin a dollar/treasury dump, again resulting in hyperinflation or Stagflation. Today, news has hit the wire that officials in China are discussing a reduction of their large forex (Foreign Exchange) reserves to around $1 Trillion and diversifying away from the Greenback:

http://news.xinhuanet.com/english2010/china/2011-04/23/c_13842843.htm

To put this in perspective, China currently holds around $3 Trillion in various bonds and currencies, a large portion of them U.S. dollars. This means that China is now considering cutting its reserves by over two-thirds! Can you guess where the majority of those cuts are going to come from…? This is devastating news for the dollar!

It is perhaps not a coincidence that this news comes right after the S&P changed its debt rating outlook for the U.S. to negative. At the beginning of this year, the Obama Administration and the Treasury made it clear that rating agencies would be ignored when it came to their analysis of the American debt situation. Rather convenient since this was right before U.S. default became a stark reality in the face of budget battles and the falling dollar. Ironically, despite the government’s insistence that ratings agencies views no longer mattered, the White House still attempted to pressure the S&P to back down from its recent announcement:

http://www.foxnews.com/politics/2011/04/20/obama-officials-tried-convince-sp-issue-credit-warning/

Fitch has also warned that the U.S. “official” debt to GDP ratio is around 100%, an impossible position for any nation to maintain and still hold onto a AAA credit rating. As long as we continue to spend at the rate of a trillion dollars or more a year (not counting Fed stimulus spending which is mostly unknown), and the so called GOP leadership is willing to compromise cuts down to a pathetic pantywaist $38 billion, you can bet the ratings outlooks will grow much worse in the coming months. That said, if you see what I see; the endless stream of evidence asserting a deliberate destruction of the U.S. economic structure and the dollar as a pretense to remove it as the world reserve and replace it with a basket of currencies under the control of the IMF, then the government’s seeming fiscal madness and its complete inability to heed the wishes of the people it is supposedly tasked with defending makes perfect sense. To put it simply, they represent globalist interests, not our interests. Shocking….I know. But then again, I’m just a crazy kooky conspiracy theorist doom monger terrorist puppy killer….

But at least I’m not a liar…

Alternatives: Ours And Theirs

Nothing scares the hell out of me more that $1500 an ounce gold and nearly $50 an ounce silver. I mean, I’ve been predicting it since the credit collapse, and I’ve been begging people to buy precious metals for the better part of three years. Its one thing to know that such inflation is coming, but it’s another thing to witness it first hand. If you took my advice to buy silver back in November of 2010 at $25 to $27 an ounce, for instance, then your investment has just doubled. It’s barely been six months!

http://neithercorp.us/npress/2010/11/silver-still-the-investment-of-a-lifetime/

Despite incredible market manipulation, precious metals have fought back and are now on the path to historical highs. Even if you are a holder of PM’s, though, this is not good news for the country.

There are two reasons why international banks like JP Morgan have consistently manipulated the market value of gold and silver down (and been caught in the act). First, global bankers strive to remove all competition from any economic system, and this includes forms of currency. Gold and silver have long been competing forms of currency to fiat paper. Therefore, banker attacks on metals are a given. The less viable gold appears to be as an investment, the less people will take it seriously as an alternative to the dollar. You must be forced to believe that only dollars hold “tangible value”, otherwise, Americans would realize they don’t need the dollar (or any fiat currency) at all.

Second, commodities like gold and silver are traditionally prime indicators of inflation and dollar devaluation. Skyrocketing commodities mean poor monetary policy. Thus, manipulation of metals downwards helps to hide poor monetary policy. The doubling of silver in only six months despite this manipulation, along with the doubling of most other commodities in the past two years, is not just a sign of destructive inflation, it is a guarantee.

As the dollar heart attack nears a climax, many individuals as well as sovereign states are turning towards precious metals and alternative markets as a way to hedge against a Weimar-style fiscal fiasco. At the same time, globalists are introducing their own “solutions” into the mainstream. Joseph Stiglitz of Columbia University has come out against the dollar, calling for an end to its world reserve status as well as the implementation of a new “global system”:

http://www.bloomberg.com/news/2011-04-10/stiglitz-calls-for-new-global-reserve-currency-to-prevent-trade-imbalances.html

George Soros has done the same at his Bretton Woods II conference, which received almost no initial publicity despite four major journalists on the speaking list, including the editors of both Reuters and The Times, calling for the “global regulation of financial systems”, as well as the formation of a “New World Order”:

http://www.guardian.co.uk/politics/2008/nov/14/g20-summit-key-aims-imf

So, you have the American people pulling towards transparency and sovereignty, and you have the globalists pulling towards more secrecy, more unaccountability, and more centralization. Story as old as time, right? Perhaps the stakes are higher this go-around…

If global banks have their way, we are facing, at minimum:

Full Housing Collapse

Full Credit Collapse

Grid Failures

State And Municipal Defaults

National Default

Energy Crisis

Food Crisis

Civil Unrest

Increased Crime

Reduction Of Civil Liberties

Martial Law

How these incidents play out in the end is dependent upon the reactions of the citizenry. Placation will result in the complete loss of Constitutional freedoms. Rage could result in civil war. There are no easy answers. There are no magic bullets that remove all obstacles. This IS the reality we are facing in the near term, and there is little left to question. I am personally shifting away from economic analysis because I feel that the problems are so numerous and so evident that it makes little sense for me to point them out much longer. The elephant in the room has been noticed.

If ever there was a time for solutions and action, it is now. From my perspective, the best bet for short term protection against inflation and dollar collapse is for communities and hopefully states to begin decoupling from the diseased system entirely. This means localized markets, self sustained neighborhoods and towns, as well as sound money legislation and nullification bills at the state level. It means average Americans taking responsibility for their own food, energy, money, and defense. It means pursuing the exact opposite of what international bankers are suggesting; a global version of the Federal Reserve with prolonged fiat slavery.

Again, we have crossed the line. Every concrete economic signal and index I know of shows the avalanche is no longer building but in progress. Prepare now, or not at all.

You can contact Brandon Smith at: brandon@alt-market.com brandon@alt-market.com brandon@alt-market.com

MARTIAL LAW ALERT: Banking Collapse

THE SITUATION:

As the price of gold reaches new heights (over $1300 per ounce) and silver climbs to over $23 per ounce, the financial situation in America is dire, to say the least. Continuously rising rates of unemployment, increased government spending and the collapse of the real estate markets are all converging into one perfectly-directed/perfectly-designed collapse of, not only our economy, but the greater global economy as well. While major financial players such as Goldman Sachs and JP Morgan continue to have record profits, the middle class has disappeared from the American financial landscape. Major financial leaders such as Federal Reserve Chairman, Ben Bernanke, have openly admitted that our country's financial system is in deep trouble and even Europe is having more banker bailouts. Meanwhile, the American media constantly hypes a possible terror attack in America and other countries in Europe.

If another major terror attack such as 9/11 occurs, trends forecaster Gerald Celente has stated that the event would bring the banking system to a complete halt, which would then result in a "bank holiday." And Celente is not alone. For over a year, many others have warned of an upcoming bank holiday. With our economy already in free fall, it would not take much of a national and/or worldwide terror event to completely crash our (fiat) dollar-based system in a very short period of time. Upon the crash of the dollar, more bank holidays could be declared and oppressive emergency banking powers could go into effect (see: Emergency Banking Act of 1933). These include severely limiting consumer withdrawals and a recall of physical gold holdings. Taking Presidential Defense Directive #51 into account (PDD-51), even a major stock-market crash could trigger this scenario. And once PDD-51 is invoked, then martial law could be fully implemented.

Another way the collapse of the banking system could lead to martial law is through cyber attacks.

This possibility has been particularly troubling to us, since, earlier this year, CNN aired a staged (i.e. fake) "cyber terror" attack complete with fake news reports being fielded by Michael Chertoff and other Washington insiders. Their premise was that the American power grid had been taken down by hacker/terrorists via cyber attack. Since the airing of that fake news program, alternative news agencies such as Infowars and others have made the point that such an attack is impossible for the average hacker, because the power grid is on a completely separate network from the Internet. In the meantime, threats against our power grid have been highlighted in other (suspect) ways, such as the Russians who were recently found trying to break into a Georgia power plant.

While the media continues to hype the threat of cyber terror against our power grid, others have looked into the perhaps more frightening prospect of a cyber attack on our banking system, which relies heavily upon computer networks as well as the Internet. Such an attack has already occurred both in America (over the July 4th holiday in 2009), as well as abroad (in South Korea, Estonia, India, and Canada). In fact, in February 2010, the American financial services industry actually participated in a cyber attack exercise to test the readiness of the financial system, so there's no way they can deny that they've actually considered the possibility of such an attack. If such an attack did occur, whole sections of the banking system would most likely go offline (as many believe happened to Bank of America earlier this year), or, worse, massive amounts of account data could be compromised, or lost altogether.

The possible result?

Imagine being unable to access your checking account, your 401K, or, even worse, having your bank balance go to zero and, in the resulting chaos, being left with no way to prove the amount that should be in your account. After all, these days, all your sensitive banking data is stored in computer databases and, in the midst of a "cyber crisis," many (or all) recent transactions could be lost (or the banks could claim such). In such a scenario, the only real proof of funds would be whatever cash a consumer happened to have on hand.

Many analysts such as Gerald Celente and Max Kaiser have been warning people about keeping their money in banks. As America's financial situation continues to deteriorate, a false-flag cyber attack would be a clever way to disguise the inevitable and blame the collapse on something (or someone) else. Also, with the nation's financial data compromised and/or missing altogether, it would conveniently force a "reset" of the banking system back to zero. Amidst the chaos of people trying to function with little-to-no cash while at the same time clamoring for a solution, the government could easily roll out a ration-card system much like the one Venezuela currently has, and/or a combination identification/debit card like Malaysia's. In addition, possible food and/or water riots could also create the perfect pretense for martial law.

In conclusion: A cyber attack that took out either the banking, or the power grid system would undoubtedly cause much turmoil. A cyber attack that took out both would be devastating. Either one would pave the road to martial law.

OUR RECOMMENDATION:

If you have money in a bank, consider getting it out. (Digital dollars are not durable, nor dependable!) Keeping enough cash as needed for survival is always wise, but consider putting all other assets into precious metals and/or necessary goods in order make the transition into the next new currency (whatever that might be). If you do not already have storable food, water and defensive weaponry, now would be a good time to acquire these items. Consider liquidating all paper assets including retirement accounts, stocks, bonds and mutual funds, since, at this point, it wouldn't take much to send the value of all these items to zero. Begin, if you have not already, to be more self-sustaining, whether through gardening, or bartering with other like-minded individuals, etc. Now is the time to introduce yourself to your neighbors before the power (and possibly other services) go out. Know who you can trust and who you can't.