DEAD SPARROWS IN THE COAL MINE
Before the invention of gas monitors, miners took cages of sparrows underground to warn them of the
buildup of explosive gases. When the toxic gases overcame the sparrows, the miners fled.

There are a number of things happening in America and the world now that should be understood as
warnings, as surely as a cage of dying sparrows was a warning to the coal miners. It is time to prepare
and begin to execute an exit strategy while you still can.

Here are those dead sparrows. I've put the death of democracy first, because all other ills flow from the
inability of the minority of informed voters to curb the systemic mismanagement of America for the
benefit of the financial elite.

1. Voter fraud, systematic misinformation and candidate pre-selection by the financial elite.

The first dead sparrow is democracy. There has long been a movement to undermine the electoral
process in America. American voter fraud may have been invented in Obama's home town Chicago, but
it has spread everywhere. Dead people vote, illegal immigrants vote, in some states only proof of
residence like a utility bill is required. Currently, the Obama administration is struggling against South
Carolina requiring photo ID from prospective voters. (That fight plus his administration's fight against
the State of Arizona's crackdown on illegal immigrants should insure Obama the illegal immigrant vote.)  

The problem is made worse by the misleading numbers produced by politicians. In a bad economy,
those with less to offer employers stop looking for work. Bill Clinton stopped counting them in order to
make the unemployment rate appear to be less. When these discouraged workers are added to the
workers actively looking for work, the government's December 2011 unemployment rate changes from
8.5% (U.3, those actively seeking work) to 15.2% (U.6, discouraged workers added in). The GDP rates are
also distorted to look better.

In computers, they say, "Garbage in, garbage out." If your input is false, your output will be wrong. If this
were still a democracy, there would be some major media trying to simply and truthfully inform the
voters. Instead, major media is helping to systematically misinform them.

But this is old news, what is different now? Now there is a highly qualified Presidential candidate, a
former Congressman, governor, Harvard MBA, successful business founder, who is good looking and
charming and he has been hidden from the electorate by both the major media and the Republican
Party. His name is Buddy Roemer. Primarily, he has been hidden because he is such a good candidate,
but he's a reformer.

For decades the perversion of democracy has been covert. Now it's out in the open and it's ugly.
Google Buddy Roemer and take a look. Democracy is dead.

2. Loss of the value of the American dollar.

The second dead sparrow is the erosion of the American dollar. The reason gold prices hit a record high
of over $1920 per ounce last year is simple. Investment advisors are telling their clients that the dollar
will continue to rapidly lose value. Some even warn of hyperinflation. Hyperinflation is rapid inflation
that leaves a country's currency virtually worthless. Here's a sample warning from a noted economist.

"The U.S. government and the Federal Reserve have committed the system to its ultimate insolvency,
through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests,
gross mismanagement, and a deliberate and ongoing effort to debase the U.S. currency.  Yet, the
particularly egregious fiscal and monetary responses to economic and solvency crises of the last four
years have exacerbated the government’s solvency issues, bringing the great financial tempest close
enough to making landfall that the hairs on the backs of investors necks should be standing on end...

"Where both private and official demand for U.S. Treasuries had been increasingly unenthusiastic, the
Fed—the U.S. central bank—effectively has been fully funding Treasury needs since December 2010,
with its latest version of “quantitative easing,” a euphemism for Fed monetization of U.S. Treasury
debt.    

"The so-called “QE2” likely will be expanded, or supplemented by “QE3,” in the months ahead, as the
ongoing economic turmoil triggers significant further fiscal deterioration.  Those actions should pummel
heavily the U.S. dollar’s exchange rate against other major currencies...

"The early stages of the hyperinflation would be marked simply by an accelerating upturn in consumer
prices, a pattern that already has begun to unfold in response to QE2." {John Williams,
"HYPERINFLATION SPECIAL REPORT (2011)," www.shadowstats.com, March 15, 2011. Walter J. (John)
Williams, BA Economics, MBA is a private consulting economist with 30 years experience and a
specialist in government economic reporting.}

While it's hard to say exactly, so far QE1 and QE2 have added about $2 Trillion to the US money supply.
Adding money without adding more goods raises prices. Investment analysts are recommending hard
assets as a hedge against inflation. The spiking price of gold indicates that their clients believe them.

3. Loss of American manufacturing.

The third dead sparrow is factories lost to globalization. Between 2000 and 2009, globalization cost
America 5.5 million manufacturing jobs and 42,000 factories. (Richard McCormack, "The Plight of
American Manufacturing," The American Prospect, December 21, 2009). Richard McCormack is editor
and publisher of Manufacturing & Technology News. He is an active journalist covering the problems
and opportunities of American manufacturing.

Every manufacturing job lost causes the loss of other jobs. This explains the empty stores and closed
restaurants in your town.

"People are just starting to realize that as manufacturing goes offshore, high-end jobs in design and
research and development go with it. When a plant closes, the supply chain disappears. This supply
chain includes materials and parts producers, software providers, like CAD (computer-aided design),
ERP (enterprise resource planning) and dozens of other high-tech equipment providers, machine tool
companies, maintenance, accounting, packaging – the list goes on to include such things as the local
restaurants, janitorial services and those dependent on the plant’s tax revenues, like librarians, county
clerks, police officers and teachers. These are service jobs, all of which depend on manufacturing. One
manufacturing job supports 15 other jobs. No other category of job has such a high multiplier. The
United State must do whatever it can to start creating manufacturing jobs." (Leo Gerard, "Q&A with
Manufacturing Business Expert Richard McCormack," Campaign for America's Future, February 26, 2010).

"Americans have lost their country to a few people who make a lot of money off outsourcing, off-shoring
and importing everything Americans used to make and continue to buy. Americans must take their
country back before it is too late." (Ibid). (Sorry, Richard, with the death of democracy it's already too
late!)

4. The Republicans and the Democrats are both proposing failed policies, while ignoring the real
problem.

The fourth dead sparrow is ideological gridlock. The Republicans are proposing to keep taxes low to
stimulate investment and produce new jobs. The Democrats are proposing to keep throwing money at
the unemployment problem with stimulus spending. Neither of these approaches work. (See No. 132,
"Jobs And Failed Policy.")

The reason neither approach works is simple, neither addresses the real problem. Middle class
spending on products made in American is the engine that could pull the American economy out of the
slump it is in, but that engine is broken. Most cheap products are made overseas now and the spending
of the middle class has shrunk through necessity, inflation and fear. Americans are buying cheap.

As Richard McCormack puts it: "Without an industrial base, an increase in consumer spending, which
pulled the country out of past recessions, will not put Americans back to work." (Richard McCormack,
"The Plight of American Manufacturing," The American Prospect, December 21, 2009).

This is a vicious cycle, the more poverty, inflation and fear for their jobs that Americans experience, the
less they spend. The less Americans spend the more desperate the economy becomes. But Congress is
full of millionaires who are gridlocked arguing over solutions that do not even begin to address the real
problem, shortsighted government policies that have badly damaged the middle class willingness and
ability to buy.

5. The high National Debt acts as a brake on the economy.

The fifth dead sparrow is the National Debt surpassing the Gross Domestic Product.

"More debt weighs heavily on GDP, says Carmen Reinhart, a University of Maryland economist. The
coauthor, with Harvard professor Kenneth Rogoff, of This Time It's Different: Eight Centuries of
Financial Folly (Princeton, 2009), Reinhart has found that a 90% ratio of government debt to GDP is a
tipping point in economic growth. Beyond that, developed economies have growth rates two
percentage points lower, on average, than economies that have not yet crossed the line." (Daniel
Fisher, "The Global Debt Bomb," Forbes Magazine, February 08, 2010, see Forbes.com).

The National Debt has passed 100% of the GDP (Gross Domestic Product), so this 2% drag on growth
already applies. Government projections of the growth necessary for economic recovery call for 4%
growth.

"The Congressional Budget Office currently projects the fiscal deficit will decline from 10% of GDP next
year to around 4.4% from 2013 to 2015. But that assumes economic expansion of at least 4%, not the 2%
predicted in the study by Reinhart and Rogoff. You see the vicious cycle here: Debt depresses growth,
and then low growth makes paying down the debt an impossible task." (Ibid).

Real GDP growth for the past year, from the third quarter of 2010 to the third quarter of 2011, was 1.5%.
(US Dept of Commerce, Bureau of Economic Analysis, Full Release and Tables in PDF format, Nov. 22,
2011, Table 8, top line). As of the third quarter of 2011, real GDP has only grown 5.66% since 2005, the
year the index was set at 100. (Ibid, Table 5, top line). See: http://www.bea.
gov/newsreleases/national/gdp/2011/pdf/gdp3q11_2nd.pdf.

To sum up these numbers, due to the Great Recession, real GDP has been growing at less than 1% a
year since 2005. In the last fiscal year real GDP grew 1.5%. But we need real growth in the GDP of
between 3% and 5% or drastic cuts in spending and higher taxes to pay off the National Debt. Instead,
Barack Obama has added well over a trillion dollars to the National Debt each year of his Presidency.

6. The American Government borrows between 35 cents and 40 cents of every dollar it spends, bad
news for the poor.

The sixth dead sparrow in the unbalanced budget and it's consequences for the poor.

These days more Americans than ever are poor. "Nearly half, 48.5%, of the population lived in a
household that received some type of government benefit in the first quarter of 2010, according to
Census data... Some 34.2% of Americans lived in a household that received benefits such as food
stamps, subsidized housing, cash welfare or Medicaid (the federal-state health care program for the
poor). Another 14.5% lived in homes where someone was on Medicare (the health care program for the
elderly). Nearly 16% lived in households receiving Social Security." (Sara Murray, "Nearly Half of U.S.
Lives in Household Receiving Government Benefit," Wall Street Journal, October 5, 2011).

At this time, the US Government is dealing with the National Debt by creating money (QE1, QE2) to buy
back government bonds as they come due. This avoids finding new buyers, which would raise interest
rates above 0%, but it causes severe inflation and reduces the value of government checks. In the
alternative, reissuing the bonds would force the government to offer high interest rates that would
bankrupt the country.

The alternative to this escalating debt is to balance the budget. But the problem has been postponed
for so long that the budget can't be balanced without cutting some of the checks to the old and the
poor. So either the number and amount of these government checks will be deliberately reduced as
part of a plan to balance the budget or their value will be eroded away by the inflation caused by the
production of currency to deal with the National Debt. Either way, a lot of Americans will be desperate
and angry soon.

Despite desperation and rage, revolution is a poor strategy. For one thing, you will be outgunned. The
FBI borrowed tanks and used assault rifles, grenades and tanks against Koresh during the Branch
Davidian Standoff. Armed resistance will be met with extreme force rather than mercy. Far better to just
prepare an exit strategy and leave when your life gets dangerous.

Exit Strategies.

For the prudent, exit strategy, investment strategy and survival strategy are one and the same. Right
now, before the value of your savings is gone, buy a piece of farmland in the country where you have
room to grow food. If you can't afford a down payment, interest a group of friends or your church in
country property.

Don't worry if your land does not have a house. If you look around you can find an old trailer or travel
trailer cheap for temporary shelter. Try trailer parks and junk yards or go visit your neighbors and ask if
they know of any.

Look at flea markets to find a sideline for extra cash. If circumstances force you to flee to your land, you
will need a source of income. Because the current government policies (QE1, QE2, etc) are likely to lead
to hyperinflation, setting up a barter market will probably be necessary as dollars become valueless. I'll
research that opportunity for the next article.

In closing, the final destruction of America's economy is not set in stone. Educate your friends and urge
them to vote. But don't count on success, getting through the coming crisis will take a lot more than
hope. Surviving will take planning and preparation.

Amo Paul Bishop Roden