This past Monday I updated my Boom & Bust subscribers about an important new development in the civil war that I see brewing… or at least the possibility that the United States of America won't remain the way we know it for much longer. We're certainly no longer united. In fact, we've not been this polarized and divided since the Civil War.
Unfortunately, the state we find ourselves in today has been painted on the wall for a long time! And my hierarchy of cycles - which includes the Spending Wave Cycle, the Technology Cycle, the Geopolitical Cycle and the Boom/Bust Cycle - have shown me for many years now what we have in store. And now a near 100-year cycle in globalization has peaked, much like the last one did when World War I started.
It's not pretty. In fact, it's downright scary, which is one of the reasons I upped and relocated with my wife to Puerto Rico (which should tell you a hell of a lot).
Fortunately, it's all predictable. (Yes, I intentionally labelled that predictability as unfortunate and fortunate!)
Knowing years in advance what kind of environment we face gives you a powerful advantage. You can prepare. You can build a virtual fortress around your money and literal fortress around your family if that's what you feel is necessary. You can set the traps to snatch up those opportunities as they fly on by. And because you know what kinds of opportunities are likely swarming your way, you know what kind of traps to set!
I'm not saying that the United States is certain to split. But I am saying that the possibility is very real, so today I want to share that email I sent to my paid subscribers on Monday, in their weekly 5 Day Forecast. It's important that you read this because I believe the U.S. has become the third trigger that could topple this mighty bubble (with a southern Europe banking crisis and the China real estate bubble burst). And I believe it now may well be the one to blow first!
I hope you find the information interesting and useful. And I hope it encourages you to try out a subscription. If it does, / If you missed the email on Monday, read on…
The Red/Blue State War Is On: Starting, of Course, in California
The "Yes California" Independence Campaign has set out to collect the 585,407 signatures it needs by July 25 to allow the state to hold a ballot in November 2018 to repeal the constitutional clause that states California is an inseparable state of the United States, and that the U.S. is the supreme law of the land. If they get all those signatures, and if the ballot passes, there would be a second referendum in 2019 to leave the Union!
Will this be the beginning of the end of the United States of America? It very may well be…
At this point, polls show that only one out of three people support this campaign. But The Donald has only been in office for 10 days and already he's had a major tiff with Mexico, China, Muslim immigrants, illegal immigrants and refugees. Whether you agree or disagree with Trump and his actions, whether you're a Trump supporter or not, there's no doubt that he's becoming a wrecking ball. And the traditional "blue states" may not tolerate his "red state" mandate, which he is following as promised.
Besides, the polls have such a poor track record at this point, I don't hold much stock in what they say!
In my November 2016 Leading Edge newsletter, and at our Irrational Economics Summit in October, I forecast that there would be such a red state/blue state split or some level of civil war likely starting by late this year. Our political and social values are more polarized now than any time since the Civil War.
We had very similar levels of income inequality in the Roaring '20s and the Great Depression as we do today. What we didn't have back then was the political polarity we have today, where the right is getting farther right and the left farther left. There's little or no middle ground anymore. No room for compromise.
Here's the map of the red/blue states, from the 2012 presidential election, that I showed in that issue.
The red states are clustered very clearly in the Southeast, Mid-West and Rockies. The blue states are on the West Coast, Northeastern seaboard and upper Mid-West. Colorado, New Mexico and Florida were the outliers for the blue, while some of the blue states in the Mid-West were borderline, like Michigan, Wisconsin, Iowa and Pennsylvania.
After the election, that map changed a bit, as you well know…
But here's the thing…
If California, with a population of 39.5 million (almost the size of Spain) does get serious about secession, why wouldn't Oregon, Washington and Nevada join them? Together, they'd have a combined population of 51 million? And maybe Colorado and New Mexico would join, making that a total of 58.5 million. We could have a new Western U.S. bloc.
Come to think of it, British Columbia actually has little in common with its Alberta neighbor and they could even join this new union, making it a blue heaven of 63 million people. That's the population size of France!
Then the Northeast and New England could consider forming their own Eastern bloc. New York, Massachusetts, Connecticut, Maine, Vermont, New Hampshire, Maryland, Virginia, D.C… and possibly the upper Mid-West.
The rest of the country would remain as Trump America! It could have its capital in Dallas.
This is crazy stuff we're talking about here.
Of course, such a California (or broader) split is far from inevitable at this point, but I think it's more likely than most would think. The world is moving through the isolationist, local-centric turn of the globalization trend. We're deep into the negative arm of the geopolitical cycle. Citizens across the globe, from Britain to Italy, and now the U.S., are revolting.
This will be very interesting to watch, especially after July 25, if the "Yes California" campaign gets enough signatures to go to ballot in 2018. That alone could trigger a major stock crash into the danger zone of late July through late October! Andy Pancholi at markettimingreport.com has his largest turning point for late July… interesting.
This now forms the third potential trigger for the next larger crash, along with the southern Europe banking crisis and the great China bubble bursting. And this could be the first to blow and help trigger the euro crisis again in Europe.
My advice? Don't wait until then to prepare for the financial fallout that could ensue. Take steps now to pay down debt. Find investment strategies that fit your comfort level and that will help you achieve your desired outcome. And gear yourself up to take advantages we'll see arising from this chaos, regardless of the outcome.
At the very least, don't be complacent. You'll regret that!
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.