When will America's Economy Collapse Revealed (Updated: August 2011)

Just about everyone who seriously follows the world's economy rolling collapse from Iceland to Greece to Ireland know that the United States is the biggest country at risk. With 14 trillion dollars in debt, 50 trillion in un-funded liabilities from Medicare, Social Security and other entitlements, the Earth's largest economy will eventually fail.

But when?

Many investors end up losing a fortune because they are right with their prediction but they are wrong with their timing. In order to protect yourself from the coming collapse of the United States economy, you have to look at the "Load bearing beams" of the country's economy might.

That brings us to California.

California is the eight largest economy in the world. The Golden State makes up 13% of the United States GDP. California is also in one of the worst economy shapes of any state in the country. In fact, if California were its own country, it would have defaulted on its debt a long time ago.

California's Collapse Will Create Havoc on the Western States

Besides the shear size of California, you have several fall-out factors from a collapse in California. There will be a a refugee problem, for one. California has some of the most generous entitlement programs for the poor. Eventually, the state will be unable to handle such charity. You could see millions of transient Californians move to other Western states and spread the social burden. Also, you could see a flight of businesses from the state creating an unexpected surge in unemployment. This will create a rolling effect that will wreck havoc on the West Coast of the U.S.

In 2008, the world faced a real disaster. The Federal Reserve said that if the banks did not get a bailout, that there will be martial law. Congress caved. People were not happy. Flash forward a few years later. Banks are making record profits and the country is still facing crushing debt and unemployment.

Now, California will come to Washington with the same threat. "If you do not bail us out, there will be martial law."

Many people in Congress will want to write the check. But many more will not. And people who live outside of California will certainly not want to pay for their problems. 

And if Washington does decide to bailout California, then they will remove any incentive for any other state to be responsible with their budget. Why should Texas balance their budget? Or Nevada? Or New Jersey?

California will collapse. And the United States will not be able to bail out the eight largest economy in the world. This will prompt the doomsday crash everyone has been fearing. However, if you take the following steps, you will be able to time when this will happen so you will not be able to be caught off guard.

• Create a Google alert for "California Bailout" - When California runs out of money, there will be talks about a bailout from Washington. This will be the first step in the collapse. There will be some debate about what to do. This will give you about a month to prepare.
• Watch for sudden and unexpected resignations in California's cabinet - If you suddenly see the Treasurer of California resign or any other high-ranking member suddenly resign, then that is a clear sign that something is very wrong. It means the state is about to do something stupid. Or that there is no bail out. And the politician wants to distance him or herself to what will happen next. NOTE: Something like this usually happens on a Friday afternoon, during a holiday or on the weekend in order to make the least amount of impact.
• Watch for news on California IOUs - A couple of years ago, California ran out of money and began to pay people in IOUs. The funny thing is, the IOUs were essentially worthless until the state redeemed them. You couldn't pay your California taxes in IOUs. And you could get cash for your IOUs, (from secondary markets), but you would be lucky to get 70% on the dollar. If the state begins to issue IOUs again, especially with a high interest rate (above 8%), then that is a sign that the state is not only broke but, they don't have a plan to pay back the IOUs.

When California looks like it's about to go under, this will create huge problems in financial markets. When talk of of the California bailout start, begin to sell your investment holdings or hedge your positions with puts or inverse ETFs. You should also consider buying junk silver and have cash in your possession incase of a bank holiday.

If you live in California, you need to prepare as though a 9.0 Quake is coming

If you live in California, then the collapse of the state can become a statewide emergency. Consider what may happen.

• Cities have no money - There may not be services like trash pick-up, reliable police, fire and ambulance. Take a look at the what happened in Tuscan for instance. When the congresswoman was shot in the head, it took 30 minutes for an ambulance to arrive because of budget cuts. 
• Local banks may fail - If you have money in a local bank, it may fail. Don't worry, your money is protected up to $250,000, but you may have a hard time accessing that cash for a while. Make sure you have enough cash to hold you for a few weeks.
• Surge in gas and food prices - People may begin to panic. And with that, there may be a run on food, in supermarkets and gas prices may surge. In fact, there may not be any gas if the economy is choked and stations can afford to put gas inventory into their stations. 

The United States' economic situation is unsustainable. It will eventually collapse. And California is the giant load bearing beam that will send the house of cards tumbling down. Stay on top of California's economy situation. When talks of a California bail out start, that means the clock is ticking. Hedge your investments or sell your stocks. If you live in California, prepare as though a 9.0 quake is coming.

With the proper preparation, you will be able to anticipate and protect yourself from the collapse. And you will be able to emerge from the situation very far ahead from just about everyone else who never saw it coming.

As I write this, President Obama has just sign a bill which will raise the debt ceiling by 2 trillion dollars. The United States is heading past the point of no return. The massive baby boomer population will drain most the revenues via Social Security and Medicare.

One of the issues which is holding off American collapse is the collapse of the European Union. If Italy defaults, not even Germany will be able to bail them out. Europe will dissolve into chaos and possibly even wars between Northern Europe and Southern Europe.

The Rise of the Second Holy Roman Empire

I will be preparing an article on this subject matter. If you look at the PIIGS nations, you will notice that Greece, Portugal, Spain, Italy and Ireland are the most Christian and Catholic of a very secular European Union. In times of great tribulation, people turn to religion. And I believe that the PIIGS nation, sick of poverty and exploitation by the stronger European Unions, will form a Second Holy Roman Empire. This Empire will have an extremist element that may turn to terror as retribution against the Northern European nations.

I also believe that this Second Holy Roman Empire may find allies in the United States and Latin America, using Northern Europe and Islamic Nations as a perceived enemy.

California Collapse and the final United States Collapse

California is in deep trouble. They are heavily dependent on the Federal government for aid. And it looks like the state will have to either radically raise taxes or radically cut back on their public pensions/salaries and municipal services. Remember, as goes California, so goes the Nation.