[How I Look When I've Been In A Fight]
Kong Sez

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Be Prepared !

Kong Sez:

    Many of our financial newsletters are predicting hyperinflation, possibly beginning in 2010. Some writers believe the Fed will not allow hyperinflation in the U.S., which would totally destroy the dollar. Others believe the Fed may not have the ability to stop it.

    Whatever happens, we still believe you should be prepared for any possible scenario. Read the following selection from the current (February, 2010) issue of The McAlvaney Intelligence Advisor, and make sure your preparations are up to par.


… Most U.S. Treasury issuance of recent years, through 2007, has been purchased by investors outside the United States. Not only have these investors been taking a hit in terms of the value of the U.S. dollar, but also they face meaningful devaluation risk in the near future.

“As issuance has increased along with rising hesitancy in holding U.S. Treasuries, post-crises, the portion of new issuance covered by foreign investors has started to drop off sharply. Foreigners hold over 10 trillion U.S. dollars which can be dumped in a panicky stampede for the exit. And so, the Fed remains the buyer of last resort for U.S. Treasuries, and it has the ability to operate through surrogates at home and abroad [think Goldman Sachs]....

“Even with the government’s spending, debt and obligations running far beyond the ability of the government to cover with taxes or the political willingness of the government to cut entitlement spending, the inevitable inflationary collapse, based solely on these funding needs, possibly could have been pushed well into the next decade. Yet, the printing presses already are running, and the Fed is working actively to debase the U.S. dollar. Actions already taken to contain the systemic solvency crisis and to stimulate the economy, plus the ongoing devastating impact of a severe economic contraction on tax revenues, have set the stage for a much earlier crisis. Risks are high for the hyperinflation beginning to break in the year ahead (2010); it likely cannot be avoided beyond 2014.

“It is this environment of rapid fiscal deterioration and related massive funding needs, the U.S. dollar remains open to a rapid and massive decline and to the dumping of U.S. Treasuries. The Federal Reserve would be forced to monetize significant sums of Treasury debt, triggering the early phases of a monetary inflation. Under such circumstances multi-trillion dollar deficits rapidly would feed into a vicious, self-feeding cycle of currency debasement and hyperinflation.

1) “LACK OF PHYSICAL CASH – The United States in a hyperinflation would experience the quick disappearance of cash as we know it. In Zimbabwe, there was the back-up of a well-functioning black market in U.S. dollars, but no such back-up exists in the United States. Shy of the rapid introduction of a new currency and/or the highly problematic adaptation of the current electronic commerce system to new pricing realities, a barter system is the most likely circumstance to evolve for regular commerce. Such would make much of the current electronic commerce system useless and add to what would become an ongoing economic implosion. It alsocould take a number of months to become reasonably functional….

“[H]erein lies an early problem for a system headed into hyperinflation: adequate supply of currency. Where the Fed may hold roughly $200 billion in currency outside of roughly $50 billion in commercial bank vault cash, the bulk of roughly $860 billion in currency outside the banksis not in the United States. Back in 2000, the Fed estimated that 50% to 70% of U.S. dollar cash was outside the system. That number probably is higher today, with perhaps as little as $250 billion in physical cash in circulation in the United States, or roughly 1.7% of M3. The rest of the dollars are used elsewhere in the world as a store of wealth, or as an alternate currency free of the woes of unstable domestic financial conditions. Those conditions would change severely in ... a U.S. hyperinflation.

“Given the extremely rapid debasement of the larger denomination notes, with limited physical cash in the system, existing currency would disappear quickly as a hyperinflation broke. For the system to continue functioning in anything close to a normal manner, the government would have to produce rapidly an extraordinary amount of new cash, and electronic commerce would have to be able to adjust to rapidly changing prices.

“In terms of cash, new bills of much higher denominations would be needed, but production lead time is a problem. Conspiracy theories of recent years have suggested the U.S. Government already has printed a new currency of red-colored bills, intended for some dual internal and external U.S. dollar system. If such indeed were the case, then there might be a store of “new dollars” that could be released at a 1-to-1,000,000 ratio, or whatever ratio was needed to make the new currency meaningful, but such would not resolve any long-term problems – as seen in the multiple Zimbabwe devaluations – unless it was part of an overall restructuring of the domestic and global financial and currency systems and unless the U.S. government could put its fiscal house in order.

“From a practical standpoint, however, currency would disappear, at least for a period of time in the early period of a hyperinflation. [ED. NOTE: But this will resolve as the government spews out trillions in new printing press cash.]

“Where the vast bulk of today’s money is not physical, but electronic, however, chances of the system adapting there are virtually nil. Think of the time, work and effort that went into preparing computer systems for Y2K, or even problems with the recent early shift to daylight savings time. Systems would have to be adjusted for variable, rather than fixed pricing, credit card lines would need to be expanded daily, the number of digits used in tallying dollar-denominated transactions would need to be expanded sharply. I have had assurances from some in the computer field that a number of businesses have accounting software than can handle any number of digits.

“From a practical standpoint, though, the electronic quasi-cashless society of today would probably shut down early in a hyperinflation. Unfortunately, this circumstance rapidly would exacerbate an ongoing economic collapse.”

2) THE RAPID EMERGENCE OF A BARTER SYSTEM – “With standard currency and electronic payment systems non-functional, commerce quickly would devolve into black markets for goods and services and a barter system. Gold and silver both are likely to retain real value and would be exchangeable for goods and services.

Silver would help provide smaller change for less costly transactions. One individual I met indicated that he had found airline bottles of scotch to be ideal small change in a hyperinflationary environment.

“Other items that would be highly barterable would include bottles of liquor or wine, or canned goods, for example. Similar items that have a long shelf life can be stocked in advance of the problem, and otherwise would be consumable if the terrible inflation never came. Separately,individuals, such as doctors and carpenters, who provide broadly useable services, already have services to barter.” [ED. NOTE: The above quotations were used with the permission of John Williams’ Shadow Government Statistics.]

ANOTHER SCENARIO: There is another scenario that some very intelligent people believe is a growing possibility. That is: national default, wherein the government defaults on its payments on Treasury paper. There is precedent for U.S. government (and other national government)default: 1) the U.S. government seizure of Americans’ gold in 1933 – the dollar was no longer redeemable in gold for American citizens; 2) the U.S. government reneged (defaulted) on gold redeemability to foreign dollar holders (August 15, 1971); 3) a year or so ago Argentina nationalized all pension/retirement plans; 4) there have been dozens of huge national defaults in the past 100 years – including Russia; 5) there is growing fear (at this writing) of national defaults in Europe and suggestions that the U.S. government/Fed might opt to default on U.S. Treasuries. Unbelievable domestic and global financial chaos would follow. This writer believes the hyperinflation scenario is far more likely, but the national default scenario cannot be entirely ruled out, and will be written about in future issues of MIA.]


  • Three to six months (or more) expenses in cash held at home.

  • 50% (or more) of liquid assets held in physical gold or silver coins. (For some people, a portion stored in Switzerland makes sense.)

  • Up-to-date passports for all members of the family.

  • 25% of liquid assets held outside of U.S. or in foreign currencies such as the Canadian dollar; Australian dollar; or Swiss franc. (This door [or exit] may close soon.)

  • A home in a small town or rural America – away from the social chaos, crime and draconian people control the Obama regime is likely to impose. (We could be very close to a total police state in America.)

  • A small productive farm in rural America where you can raise some or all of your own food. (Even city dwellers can take up gardening. Remember the victory gardens of World War II.) Get gardening tools and seeds now.

  • A supply of barter items (in the event that John Williams is right). That could include: cigarettes, small bottles of liquor, light bulbs, toilet paper, 22 long rifle (or other) ammo, tampons; matches; flashlight batteries – there are hundreds of possibilities. Think of essentials people must have.

  • At least 6 months of food reserves (more if possible) – maybe to share with friends, neighbors, or other family members who are hurting.

  • Low-cost, fuel-efficient alternate forms of transportation (i.e., bicycle, motorbike, or scooter).

  • A backup generator or solar power system.

  • A 1, 2, or 6 gallon (non-electric/non-mechanical gravity powered British Berkefeld water filter.

  • Firearm protection for every home (i.e., rifle, shotgun, handgun). Crime and social unrest in America are likely to skyrocket!

  • Six to 12 months of essential medicines (over-the-counter or prescriptions), vitamins, herbal remedies, essential oils, etc.

  • A good hand-held, portable world band shortwave radio – which could be your only source of nongovernment controlled, accurate, up-to-date information.

  • Develop a small circle (support group) of like-minded people who understand the times, who are survivors, and who are preparing for a period of very hard times.

  • Other Considerations: Avoid stocks, mutual funds, bonds, U.S. Treasury debt instruments, government agency paper, banks with less than a C+ rating (call ICA at 1-800-525-9556 for a free bank rating), commercial real estate, and most stock brokers – unless they really understand the times.

  • Deepen your spiritual life and spend time every day reading your Bible, praying to the God of the Bible and seeking His wisdom for living in these times. [ED. NOTE: Many of these preparations were made by MIA readers during the run-up to Y2K – and make sense in a hyperinflationary great depression – such as envisioned by John Williams. If you can’t afford many of the above preparations (or they just don’t fit for you) do what you can. Your most important preparation is your mental, emotional, and spiritual preparedness!]


    America in early 2010 is headed into the biggest economic/financial/political crisis in its history. MIA would rate a hyperinflationary great depression between 2010 and 2014 as a 50% probability; a government seizure of massive power (i.e., State of Emergency) over the next 12-24 months a 50% probability; foreign exchange controls (i.e., blocking of American funds from leaving the U.S. – thus trapping them in the collapsing dollar) a 65% probability within 12-15 months; a severe deepening of the U.S. depression in 2010 an 85% probability; the rise of gold to $3,000 or higher over the next five years a 90% probability; and a sharp decline in U.S. commercial real estate and common stocks in 2010, a 90% probability.

Kong Sez:

    The above preparations are the same ones we always advise, things that will carry you through personal crises as well as any major outside crisis that will occur.

    However, we do add that the jellies and jams you may have in storage, made with high fructose corn syrup, do not eat unless you are starving—use them for barter! Store Bonne Maman preserves, a produce of France. They are made with real sugar and cane sugar.

Now is the time to review your preparations. We do not think the United States economy can go on as it is very much longer. Either it will collapse under the weight of the deficit, or it will heat up into hyperinflation. The end result of either of these scenarios will be much the same, social chaos. Be ready.

Viva La Revolución !!!

    "Is it a rebellion?" asked Louis XVI of the count who informed him of the fall of the Bastille.

    "No, sire," came the reply. "It is a revolution."

In accordance with Title 17 U.S.C. Section 107, any copyrighted work in this message is distributed under fair use without profit or payment for non-profit research and educational purposes only. [Reference:Cornell Law School]

In An UpComing Issue:

To Be Announced ...

Something You Need To Know For What's Coming

Kong Sez:

    ChemicalBiological.net uses Graphics, Videos, Audios, and other devices to communicate facts. As time nears to Total Chaos in America and the world, ChemBio Updates will be sent out several times a week, either in e-mail format or as a hot link to its WebSite, as information warrants.

    As you use your computer, overtime, it slows down!

    If your computer downloads slowly, you need to daily do the Following:

  • Defrag your machine.

  • Use a Cleaner, such as CCleaner (one can also use their Defragger) to Optimize your computer for better performance. Get them here: http://www.ccleaner.com/. It's Free!

  • If you find a download from email coming down very slowly; simply close your computer and reboot. Then restart the download.

  • Find out from your ISP how much file storage you have, you need at least 20 MB. Also, go there and clean up used files. The ISP does this for you every 30 or so days. If you receive large files, the ISP may bump them back because "no room at the inn."

You Must Defrag Your Computer Regularly
Clean The Registry and Optimize the Machine Regularly
It Will Run Very Erratic and Quite Slowly!

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