– 04-15-05 –
The next major terrorist attack on the U.S. could plunge our economy
into deep recession from which it may take years to recover.
That's the disturbing, but all too believable conclusion of Robert D.
Hormats, Managing Director of Goldman, Sachs.
Hormats argues that in 2005, the U.S. economy is much more vulnerable
to disruption from a terrorist attack than it was before 9/11. In 2001, the federal budget was running a large
surplus. Today it is running a huge deficit. In addition, the U.S. is spending large amounts of money on war in
Afghanistan and Iraq, homeland defense, and other security-related activities.
As Hormats explains:
"Three years of big government deficits and growing debt provide less
room in the budget to respond to a new disaster. And U.S. dependence on foreign capital has grown to record
levels.
"Overseas investors supply the U.S. with hundreds of billions of dollars
annually; in 2004 the federal government relied on foreign central banks and investors to finance over half of its
enormous deficit – and they now hold over 43 percent of all Treasury bonds. Many foreigners are
becoming skittish about buying more dollar securities – and could become much more so after a new
terrorist strike."
"And far greater sums could be required to respond to the next attack.
Osama Bin Laden has made no secret of his desire to undermine the U.S. economy… He has proclaimed the goal
of 'bleeding America to the point of bankruptcy'…"
"A radiological attack would have an impact measured in years. In an
age of thin inventories and just-in-time deliveries of components and raw materials, such disruptions … would
cause massive and prolonged dislocations throughout the entire U.S. supply chain. Regions dependant on fuel
passing through the affected facility would be left with critical shortages."
The affect on foreign investment in the U.S. – and hence our
entire economy – could be catastrophic. Interest rates could skyrocket overnight to double-digit levels.
Stock prices could plummet. Gold and commodities would also soar. And real estate could sink like a rock.
What are the chances of another major terror attack on the U.S.?
Virtually all experts agree it's not a question of IF such an attack will occur but WHEN.
Five Simple Ways to Protect Yourself
From the Next Terror Attack
#1. Save. Make sure you have enough liquid assets on hand to survive at least six months with no
income or with severely-reduced income.
#2. Buy gold, particularly 1 oz bullion coins, such as Canadian Maple Leafs or South African
Kruggerands.
#3. Get some assets out of the U.S. As explained in our last issue, one excellent way to do this is by
buying gold or foreign-currency denominated Perth Mint Certificates. Another way good way is by opening a
safety-deposit box in Canada where you keep some gold.
#4. Stockpile food, water and prescription medicines. You should have at least a one-month
supply for every member in household
#5. Buy rural property within driving distance. Make sure you know and are on good terms with
the locals. Also make sure you have a good stockpile of water, food, and prescription medicines; as well as an
independent power system, such as solar. To keep your property secure from looting, it's best to have a relative or
close friend who either lives on the property or acts as a caretaker.
Hundreds of more practical suggestions for surviving the next terrorist attack can be found in my book
Surviving Terrorism, available to IIR subscribers for just $69. Call Jim at 707-746-8796 to order.
To view back issues of Jarret Wollstein's Towards Liberty, Click here.
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