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Tags: hyman | Economy | recession | Uprisings

Crumbling Economy Will Spark More Angry Uprisings

By    |   Monday, 03 October 2011 08:28 AM EDT

The intensity is heating up in America. It’s not just in Egypt, Tunisia or the United Kingdom anymore. We’re starting to see uproars here in America now too.

Just a couple of months ago we saw the start of “flash mobs.”

This was where young people would collaborate via text, Twitter, etc., to go into a place of business such as a convenience store, take things off the shelves all at once and walk out.

After all, there’s no way the video camera or the one to two workers could catch most of them.

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We’re dealing with a group of young people in America that feel that they are “owed” something and therefore they can take it. They seem to be able to justify it because of the high unemployment rates among the young. After all, the unemployment rate for those 25 and under is much higher than that of the general population overall.

Then there’s the latest group of rioters/protestors: They call themselves “Occupy Wall Street.”

They believe that the country only bows to corporate America and that it cares nothing about the people. This crowd started out with peaceful protests but now they are getting more aggressive.

They recently blocked the Brooklyn Bridge and at least 500 people were arrested as a result. So they feel they can justify their actions because of what is going on in the economy.

(You’ll remember that I recently told you that riots tend to happen when the official unemployment level gets to the 11 percent-13 percent range. We’re almost there!)

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Now let’s look at the latest group of protests: 3,000 people protested outside of the Bank of America building in Boston. Many of them made their way into the lobby and refused to leave.

Unfortunately, we’re going to see much more of that as things continue to worsen in the economy.

Governments know that if you can keep the “peasants” pacified, then you can remain in power. That’s why they hand out welfare debit cards to over 12 percent of the U.S. population.

(But it’s not just the poor they view this way. They view the middle class the same way.)

Governments are going to have the roughest time on their hands that they’ve probably seen since the Civil War. Right now we’re almost at 10 percent unemployment and the next recession is about to begin.

You can see the effects of it already in the steep fall in the price of copper, oil, silver, agriculture prices, etc. It’s a broad-based selloff. That’s a tell-tale sign that things are heading south in the economy yet again.

We’re seeing the “death spiral” that leads to a recession right now: lower sales leading to lower production leading to lower employment and lower income which takes us back around to lower sales once again…and the vicious cycle repeats itself.

I’ve told you we’re heading into another recession months ago. However, as of last Friday, the ECRI (Economic Cycle Research Institute) now agrees with me too.

The ECRI said the deadly combination of non-financial services plunging, manufacturing plunging and exports plunging was tipping the U.S. economy into a new recession.

And it’s not just the United States. Japan is in a recession now. I personally believe that Greece, Portugal and Norway are there too (as shown by their negative GDP readings).

The United Kingdom barely has any growth left in it (at 0.7 percent). Spain and Italy aren’t far behind the United Kingdom, either.

So this recession will be global. And the problem is that China is slowing this time too so they won’t be able to pull the world out of this one like they did last time.

Therefore, viewed through the eyeglasses of the currency trader, what can someone do to protect themselves from the horrible times to come?

You can buy the dollar versus riskier currencies that tend to plunge right along with stock markets and commodities.

Therefore, those that are short currency pairs like AUD/USD, NZD/USD and/or a buyer of USD/CAD are doing just that. They’re buyers of the dollar while short the commodity-currencies which tend to sink right along with commodities themselves and stock markets too.

This is a winning combination for as long as the stock rout and recession lasts. Once that is over though … the dollar will be “toast” once again and continue its long-term decline.

But until then, investors will run to the defense of the world’s reserve currency as economies turn south once again. Buckle up! It’s not going to be pretty economically. But it doesn’t have to be ugly in your own portfolio now that you know how to protect yourself from what’s to come.

About the Author: Sean Hyman
Sean Hyman is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of Money Matrix Insider. Discover more by Clicking Here Now.

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The intensity is heating up in America. It s not just in Egypt, Tunisia or the United Kingdom anymore. We re starting to see uproars here in America now too. Just a couple of months ago we saw the start of flash mobs. This was where young people would collaborate via...
Monday, 03 October 2011 08:28 AM
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