Posted on 03/31/2009 9:47:30 AM PDT by iThinkBig
This is the point at which the global economy falls the rest of the way off of the cliff. The false hope raised by the illusion of decisive action on the part of the Obama administration is giving way to Democratic party in-fighting and an increasing public perception that Obama and Geithner are out of their league.
A number of events on the macro economic and political fronts threaten to converge simultaneously to force another major contraction in global markets.
They are:
* Auto industry’s impending contraction as a result of imminent bankruptcies and mergers; * Hold-up of stimulus money in the U.S. Congress as squabbling and criticism over the proposed budget and regulatory reforms bog down progress; * Increasing public outrage over the role hedge funds have played in forcing Bear Stearns and Lehman Brothers into bankruptcy, and the apparent collusion between hedge funds and the Securities Exchange Commission is undermining confidence in both the Obama administration and the S.E.C. * China’s growing agitation for an alternative to the U.S. Dollar as default foreign reserve currency will continue to put downward pressure on the U.S. Dollar and help undermine treasury auctions; * Disastrous corporate earnings (7th straight quarter of declines, this time upwards of 35 percent), bankruptcies, and layoffs continue to destroy economic health at the street level; * The upcoming G20 meeting in London, England will likely result in the failure of all nations to agree on anything on a unified basis, which will trigger major market declines in the weeks to follow.
Investors should get out of equities and bonds and into precious metals or cash (not U.S.!) exclusively.
(Excerpt) Read more at theburningplatform.com ...
1) Central Banking and banking elites lobbying engine tied into politicians (Phil Graham and Chris Dodd come to mind)and deregulation of the financial industry. Regulations are safeguards, many put into place during or after the Great Depression.
2) Massive new 'credit' issued to population whom acts on basic human impulse to 'have today, pay tomorrow'
3) While credit is being gobbled up by the public, the public is mislead by Government/Banking collusion (this will be the 4th one in U.S. history and this one is the worst, 1870's depression seemed like a similar era)
4) Government politicians and elite bankers in the know accelerate insiduous theft to more direct and open theft while the currency still retains value. Public begins catching on but the 'wrappers' and controlled media continue to mislead on the specific truth of the thefts/looting of Treasury.
5) The inept politicians napping alongside the public wake up quickly to realize they are also culpable. The conspirators of the global swindle state that massive new bailouts must occur for politically connected groups. Since there is now a legitimate massive crisis in the financial system this gets whizzed through Congress. More theft through hedge funds controlled by the same group of global elite bankers. Inflation will be rampant as we print, but focused on commodities that still must be purchased by the citizenship such as energy and food. This creates a bull market for these commodities and the hedge funds greatly magnify the effect.
Make no mistake, this process of a perverted monetary model (Central Banking/Fractional Reserve lending has the exact same outcome of huge boom and busts in every nation dating back four hundred years. We certainly learned nothing from WWI or WWII about outsourcing money supply. These global bankers are much like parasites. Before the host dies, the money is transferred to other nations where productivity is highest. In our era, we are the dying host and China is the beneficiary. They will receive the international monetary peg prize. Should we hate the Chinese people? No, they have Central Banking. They will unlikely be very poor new stewards as America was for about 50 years. That is because there society does not practice human rights. But looking beyond this next few very dangerous years, it is the monetary model of Central Banking that must change to a bottom-up system of monetary governance including money supply. Each nation should always retain it's own sovereignty and control over it's money supply until mankind has serious understanding of genetic engineering and fixing our genetic code that creates messed up, impulsive human behavior.
The middle men now enslaving the globe know they are on there last legs and will vehemently defend there useless, impulse driven model until global war in the nuclear age drives it into the ground. And it would not surprise me one bit as the world rebuilds from such a tragedy, that some of these people will come out of the woodwork again and attempt this evil model one last time.
ping
Gloomdoom ping.
I’ll make sure and save from dried flowers to put on your grave ping.
Gloomdoom ping.
It’s important to look at the situation from a few different angles.
To start with is the international, national government, and corporate angle. Despite their incredible craftiness and willingness to promise everything to everyone, they face an insurmountable problem: just because they declare (literally) hundreds of trillions of dollars to exist, doesn’t mean they are worth anything. No gimmick can overcome this.
This means that market forces will force them back into a state of order, and all anyone can do is watch. So no real worries, here. They can be as swinish or treacherous as they want and it will change nothing.
However, from the personal point of view, America is well off. We have lots of housing, food, and police and military security. With these three things we may not be happy, but we are not collapsing either.
This gives us a big buffer to reorganize and get our economy working again.
The big obstacle is if we try to keep our enormous debt, or the bad promises of largesse that the government made to the people, that it had no authority to make in the first place. We have to accept that those are both over and done.
This means renouncing the national debt, and canceling Social Security, Medicare and Medicaid. Done cleanly, the individual States can pick up the pieces, and protect the utterly impoverished and helpless. But there has to be a recognition that the federal government should never have tried to do that, and can never do that again.
What you say makes sense: Cancel all of the debt simultaneously and start over. The implementation is another matter entirely. While I appreciate we shared common sentiment, neither of us have a magic wand.
That is interesting. There's one piece you left out in your analysis which is that the U.S. is too big to fail. There will be inflation as we print and monetize debt, but enough of that inflation will be exported overseas that we won't fall into serious inflation. How will that work? The simplest scenario is that if we owe person X in country Y some money, we can just have country Y print up some of their currency and give it to person X. It's one of the privileges of being too big to fail.
“That is interesting. There’s one piece you left out in your analysis which is that the U.S. is too big to fail. There will be inflation as we print and monetize debt, but enough of that inflation will be exported overseas that we won’t fall into serious inflation. How will that work? The simplest scenario is that if we owe person X in country Y some money, we can just have country Y print up some of their currency and give it to person X. It’s one of the privileges of being too big to fail.”
It is also the reason that the Russo-Chinese bloc will inherit the international monetary peg. By 2012 citizenship already dealing with runaway inflation in energy and other commodities will have a new problem that creates hyperinflation: we’ll then have our credit rating stripped (when I said this in 2000, I was called a ‘nut job) and a new international monetary peg in the East. Guess what? When we print at that point you get Weirmar Republic or Zimbabwe. Russo-China stated this was there goal since 1993. In our elected officials hubris, we just figured they were too stupid to beat us at our own game. Such is the way of empires rising and falling.
Importantly, there is a historical precedent. The Panic of 1837.
When the Erie Canal was built, based on a State bond issue, it was a huge success, coming in on time and budget, making a lot of people lots of money. So a handful of other States tried to do the same thing, issuing bonds to make their own, impractical canal systems.
Most of these bonds were paid for with private bank issued currency. After a huge number of bonds had been issued, the whole scheme started to fall apart. Then President Jackson, just before leaving office, issued a decree that all private bank money had to be backed by gold. This wiped out hundreds of banks overnight.
And since the projects were unworkable, the States defaulted on their bonds, resulting in the worst depression the US experienced up until the Great Depression.
The practical result was that these States had no credit for about 30 years, so had to maintain balanced budgets and not engage in speculation of any kind. Only later were they able to rebuild their credit. The bondholders never saw a penny of their investment.
So how can the USG get out of its debts and obligations? Other nations have defaulted on their debts as well, and in recent years. But these countries were obligated to rebuild their credit, so had to abide by the demands of the IMF. The US does not to any great extent need the rest of the world.
But this would entail leaving many international financial organizations, such as the IMF, the World Bank, and many other treaties. Mostly just administrative changes.
As far as Social Security, Medicare and Medicaid, the government would pass a balanced budget amendment and possible a line item veto, then just announce that the constitution no longer permitted them to pay SS or medical costs.
Losing the peg will be the beginning of the end, but the game might still take longer than you think to play out. For example if we know that we are about to be stripped of “AAA”, we can effectively default at that point and start over. The new rating will reflect the fact that we reneged, but so what? Also don’t assume that the Soviets and Chicoms will have their act together. Lots of things could go wrong in that relationship.
I love history as well. Here’s my net out: We restore a Republic but by the time it’s all over with (including global war) we will be called something besides the USA. The trend is not our friend in this regard.
The “so what” part creates quite a bit of misery for a population whom only a scant few years earlier felt rich. I could say I have my back-up plans and “so what” also, but in the absence of a representative government, some of us must not be obtuse in our actions.
In fact the way we retain that feeling of wealth is financial warfare and it is no coincidence that the week after Switzerland was accused of covering for tax evasion they started their own quantitative easing. If countries can not be persuaded that way, then we can simply do it for them. Then we print dollars to our heart's content to maintain our foolish illusion of wealth while knowing that the competitors to the dollar are doing the same. The physical warfare you keep alluding to is much too crude and will only be used as a last resort.
We face something worse than a war.
As far as the health authorities are concerned, it is only a matter of time before the world faces an influenza pandemic. Already by far the most lethal disease, with from 30-50,000 Americans dying of ordinary influenza every year, the H5N1 Avian flu could kill around 30M Americans. World estimates approach 1 billion dead.
It is a truly unique organism, and has consistently maintained a 60% mortality rate, along with many other unusual and dangerous differences from ordinary flu. Even the Spanish flu of 1918 only achieved close to an 18% mortality rate, and it traumatized a generation.
The reason it has not yet become easily transmissible between people is because it tends to reproduce in the lower trachea instead of the upper trachea and sinuses, making it somewhat harder to spread. This is not a major adaptation, and could happen at any moment.
Currently, it is expanding its endemic base in Asia, and it presents a double dilemma. The first is that it becomes a human to human form which will spread so explosively that it will be worldwide within a few weeks.
The other dilemma is because of another characteristic of H5N1, that it has an unusually high number of animal vectors, even those with very different immune systems, like cats and dogs. It has even been found in fish. Because even if it does not mutate to an H2H form, it could wipe out many of the worlds farm and food animals, causing extensive starvation.
The odds of a pandemic of Avian flu have been very high for the last few years, and will almost certainly happen before the end of this depression.
An interesting item about the Spanish Influenza epidemic....it likely started at Camp Funstun area of Fort Riley, Kansas amongst US troops getting ready to ship out for WWI.
It’s taking too long; if what you fear were to happen it would be very difficult to connect the dots.
I am not implying any conspiracy theory, here, just that no matter what else is happening, we are also facing an extraordinarily dangerous health crisis. That it arrives during a depression turns things into a “one-two punch”.
Further information:
http://www.birdflubreakingnews.com/
Sounds like a great plan to me. This is going to be a tough sell politically and we need an organized voice with a clear platform and plan of execution. Where do we start?
Thanks
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