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Worst-case scenarios are something that few of us want to think about.
Personally, I consider myself an optimistic person who tries to live and act consciously in a positive way. I regularly seek to avoid negative and even horrifying thoughts and emotions. Continue Reading »
Jim Rogers is one of the more successful investors in recent years having predicted $1000 gold and $100 oil. It’s hard to know what to do when things get like they are today but Jim offers his insights which make sense to me. I hope they may prove useful to you.
While New Paradigm Digest celebrates the emerging paradigm and the one we see becoming mainstream over time, it is our desire to keep readers alert to what may happen in between now and then so they may consider protecting themselves financially from the possible effects of what lies ahead. After reading this story, we will all appreciate a large dose of good news so for the remainder of the year, you’ll read the usual stories of people and organizations co-creating the new paradigm. May we move through this challenging time together as a community of caring and compassionate souls dedicated to serving our families, communities and the whole in our own unique ways.
Perhaps the top forecaster on the planet, Gerald Celente, of the Trends Research Institute just finished an interview with Terry McNally on KPFK. A few of his thoughts follow. You may want to seriously consider subscribing to his $99 quarterly newsletter to get the big picture of what he believes lies ahead and remain current on his thinking. He called last years economic tsunami and see’s it accelerating quickly over the next few months. Based on his predicted scenario, you may want to consider shorting the dollar, and/or buying gold at least for the short term which, if he is right after Obama takes office on January 20, could bring major economic and dollar volatility. Perhaps he is way off on this, the market has discounted the worst and everything will be fine. However, if he’s right again, this could be an important safety warning.
Looking back on 08
December 07 Celente predicted an “Economic 9-11″ and the only thing that surprised him was how long it took for people to know they were in deep trouble and their continuing denial and wishful thinking.
Top Trends for 09 (To read summaries of the rest, click here)
The good news with Obama’s election is that racial barriers have come down. Unfortunately, he has
brought back the same crew that caused the problem in the first place so expecting a major trend change is unlikely.
The Collapse of 09 will make 08 look tame by comparison.
Holiday sales showed the following declines:
Women’s apparel down 23%
Home Electronics down 27%
Luxury Items down 35%
So this collapse is happening from the top down. People used to think that the wealthy were immune. Not any longer. They were seriously hurt taking 40-70% hits in the value of their investments.
Because of this retail disaster, the International Shopping Center Assn predicts there will be 140,000 store closings which means there will by many malls where vacancy rates exceed occupancy. In 08, it was Wall Street that took the hit. In 09, it will be Main Street.
In the financial sector, commercial real estate vacancy rates will soar because that market is highly leveraged (70-80%) including many hotels. Compared to what we will see in this sector, the sub-prime was peanuts. New malls being built with borrowed money will have no tenants.
Sharper Image, Circuit City and the other bankruptcies of 08 will continue and accelerate and “ghost malls” will become common.
February will mark the start of major retail bankruptcies that will show that consumer spending has dried up and consumers represent the largest part of the economy. The downward spiral is accelerating.
Bernis Madoff’s Ponzi scheme is happening to the US taxpayer with new money replacing old money.
Celente is calling what lies ahead as soon as February, The Greatest Depression, because he believes it will be worse than 30’s. Back then there was virtually no home ownership and associated expenses, no credit card debt, and there were trade and budget surpluses.
Obama recently said that deficits don’t matter. Celente says there are only two things the Government can do which are reduce rates which now stand at 0 or print more money and you can’t print money without anything backing it or you cause hyper-inflation. And the proposed bailout will largely go to the same contractors as it has before unless there is a major policy change which is anything but certain.
According to Celente, Credit swaps are a $353 trillion problem with the commercial real estate market next.
$700 million was supposed to solve problem and its has not even come close.
GMAC is now a bank that is 51% owned by Cerberus, one of the largest private equity investment firms in the United States. Their company website states that “We hold ourselves and all of our portfolio companies and management teams to the highest ethical standards and business practices”. Who are some of its principals? The US Treasury Secretary before Paulson and Board member Dan Quail. Cerberus owns Chrysler so will be a major beneficiary of the automotive bailout. Welcome to more of the same.What’s fascinating to know is the meaning of Cerberus-it’s the name given to the entity which, in Greek and Roman mythology, is a multi-headed dog that guards the gates of Hell.
Celente believes that revolution is a real possibility. He says that many people are one job away from losing everything. With declining incomes and increasing job loss you might think states would be trying to help those in need. In fact, states like New York are adding new taxes at unprecedented rates. New York is considering or implementing over 130 new tax schemes including an 8% tax on sodas which might not be a bad idea if it slows consumption of sugar or chemical laced beverages. Few people are getting raises, yet Congress just voted itself a raise and the only job creation in 08 was new government employees.
As he says “when people lose everything and have nothing to lose, they lose it. And its happened before in history.
He expects a revolt on property taxes as property values have declined, taxes are being increased rather than decreased. He anticipates that people will not pay their mortgages and credit cards. The homeless population will increase and with it, crime will increase at the same time local governments have less income from property and sales taxes and therefore less police on the streets.
Perhaps this is why there is increasing talk about the two hundred detention centers that are reported to have been built around the US. He talked about Arizona police preparing for economically driven riots. He says they know it will happen.
He feels the bottom will fall out in February after the Inauguration and retail numbers are released.
People have been calling Obama the next FDR. Under FDR it may be remembered a bank holiday was declared. Obama is not a progressive or radical but may be forced to act like one.
He calls both parties criminal elements fighting a war that is illegal based on false evidence, robbing us with bailouts, and giving money to their friends. He predicts the future from past trends so doesn’t expect them to do much for the people.
The country he points out was ready to explode during the depression and similar patterns are increasingly present today.
In addition, he sees a possibility that the Middle East could explode any time creating another oil spike like 1973 that could contribute to an even more immediate move toward depression. He says that the slaughter of 800 Palestinians vs 8 casualties in Israel accelerates the possible coming together of the Middle East. And the fact that no Western press is being allowed in and the only news we are receiving is from Palestinian and other Middle Eastern news feeds is not a smart move. A powerful form of retaliation is reducing or holding up oil shipments which would be a catastrophe.
The Future
Celente believes a vacuum has been created and that it’s possible to reverse negative trends if the power structure lets loose which he feels is unlikely. So he believes the seeds of the Renaissance won’t fully blossom until after the after the Depression and that there will be a lot of pain getting there. He believes that creative entrepreneurs will continue to develop innovative ways of constructing a better world.
Listener Comments
Confiscate money that was obtained illegally
Relocalize
Take foreclosures and turn them into Land Trusts
Take money out of banks and deposit into Credit Unions
Use pubic transit and bikes vs cars
Hopefully it never returns to “normal”
I wonder if the roots of the problem is Capitalism and the consumer nation it created. We have gotten away from what was good about us. Allowing government to tell us what will happen next instead of telling govenment what we want and having them carry it out. We need a revolution of the mind-we are all brothers. We must drastically change to think local. All the current trends are pushing us in that direction.
We must bring out the genius in humans.
Take money from car companies health plans and create a single payer system that will be spent.
Tax revolts this year will be driven by the government taking on more debt (printing more money) in an effort to save people from collapse or save their friends before it goes down. What the Federal and local governments project they will collect in taxes this year is fantasy because businesses wont have it and people won’t pay it.
An ironic note: Neel T. Kashkari (Cash Carry), 35, a former Goldman Sachs investment banker is now in charge of distributing the $700 billion bailout money.
And this news report lend further credibility to Celente’s scenario:
Projections by the Congressional Budget Office in Washington suggest that in the fiscal year starting October 08, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance program was introduced in the 1960s.
The US Department of Agriculture says the cost of feeding a low-income family of four has risen 6 per cent in 12 months. “The amount of food stamps per household hasn’t gone up with the food costs,” says Dayna Ballantyne, who runs a food bank in Des Moines, Iowa. “Our clients are finding they aren’t able to purchase food like they used to.”
As I mentioned previously, Robert McHugh has been quite good at predicting what lies ahead and in his current newsletter, he explores the case for hyperinflation and its consequences, a lower dollar and higher commodity and precious metal prices. This is the big picture-a Wall Street rescue at the expense of everyone else.
Does this group look confident or worried?
The Paulson Manifesto Will Fail Because it Fails American Households
By Robert McHugh, Ph.D.
September 21st, 2008
As a trader, I stopped getting disgusted at government manipulation of markets several years ago, didn’t pretend it wasn’t happening, just tried to find when it was coming. I decided to develop an indicator that would tell me when the probability was extremely high that the Master Planners would intervene. That approach has served us well, and that indicator is known as the Plunge Protection Team (PPT) Indicator. It flashed a new “buy” signal Monday, September 15th at the close, rising above positive + 20.00, warning that the decline from August 11th was terminal. The Industrials have risen 565 points since that buy signal. When this measure rises above positive + 20.00, it is usually early, but very right, an early warning indicator telling us to enjoy the decline for a few more trading days but get ready for a spike rally.
The current government market intervention (“manipulation” is probably a more appropriate word) that transpired the past two weeks, reaching crescendo Thursday on a rumor, and Friday on an announcement, is one of the most dramatic since the 1930’s. It really puts into question the notion of U.S. markets being under capitalism, not socialism. The government nationalized Fannie Mae and Freddie Mac last week, announced its intent to nationalize AIG, a component of the Dow 30, this week, and then pulled out all the stops with the Paulson manifesto Friday. Not sure why he didn’t nationalize Lehman Bros, unless it was personal, as he came from competitor Goldman Sachs, and enjoyed watching them declare bankruptcy. Okay, maybe I am a bit cynical – maybe.
Before getting into market performance and the forecast, let’s cover what we know about this historic redefining of the rules of the game that Paulson has placed on the table for Congress to consider next week: Continue Reading »
“It is difficult to get a man to understand something when his salary depends upon his not understanding it”
— Upton Sinclair
It’s extremely challenging to find quality financial advice that is not biased in favor of Wall Street and the U.S. Government, but it’s essential if we want to survive economically in these uncertain times. In my efforts to find alternative voices and present them to subscribers, I have discovered one that seems worth listening to, at least to balance the conversation. Yes, he is over the top but so are the voices telling us all is well. I’ll leave it to you to decide who to believe.
J.
PANIC, CONSOLIDATE, GAME OVER
Jim Willie CB September 18, 2008
home: Golden Jackass website
subscribe: Hat Trick Letter
Jim Willie CB, editor of the “HAT TRICK LETTER”
Use the above link to subscribe to the paid research reports, which include coverage of several smallcap companies positioned to rise during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.
We are in historically unprecedented times. The foundation is being laid for a default of USTreasurys in the wake of the greatest regulatory failure in modern history, and the collapse of the US financial system. Anyone who cannot see that suffers from poor vision, chronic nostalgia, low mental wattage, a paycheck from Wall Street, a post in financial press media, or owning an Economics advanced degree. So many changes come with each passing day, not week, that it boggles the mind. Many of us predicted $100 updays for gold, and we almost saw one. The wheels came off the US financial wagon long ago, but only now that fact is being recognized. The monetization largesse finally has gone beyond the corrupt bailouts of fraud kings on Wall Street. My longstanding forecast has been that when the monetary inflation machinery spits output beyond the sanctimonious walls of the Wall Street whorehouses, INTO THE MAINSTREAM, that the gold price would rise substantially. That process has begun, starting with Fannie Mae & Freddie Mac, and now moving to AIG. Only when phony money floods the system where people live, not where the elite conmen with strangehold control the counterfeit processes, will gold shine. So many unexpected upcoming events will occur, enough to make a forecaster dream. Let”s begin with the most important. Much more details are provided to Hat Trick subscribers.
This is so important a topic, that it deserves top billing!!! Hidden inside the AIG bailout funding package, surely hastily cobbled together, but carefully enough to include a totally corrupt clause, was a handy dandy clause that permits raids. The conglomerate financial firms are permitted at this point to use private individual brokerage account funds to relieve their own liquidity pressures. This represents unauthorized loans of your stock account assets. So next, if the conglomerate fails, your stock account is part of the bankruptcy process. Finally the corrupt USGovt and corrupt Wall Street houses are desperate enough to put into policy, stated by the US Federal Reserve, outlining the authorized raid of your money. Beware. A good route would be to remove your money, start a subscription here, and open a GoldMoney account, then purchase physical gold or preferably silver with my offered discount. That cannot be taken from you, and will rise 5x for gold and 10x for silver in the next two to three years. The actual evidence for legalized stock account raids by the financial firms can be found in recent articles in Financial Times and Wall Street Journal. So this is not a wild claim. The September 14th article on the Wall Street Journal entitled “Wall Street Crisis Hits Stocks” was the first exposure.
The runs on US banks are in progress. See Washington Mutual, where private email messages have been shared by WaMu bank officers. WaMu alone could deplete the entire Federal Deposit Insurance Corp fund for bank deposit coverage. Eventually the FDIC will compete for USGovt federal money for bailouts and nationalizations. Eventually, bank deposits will not receive 100 cents per dollar, in a compromise. Next the bank runs will push banks into failure, at a time when stock accounts are under raids, without broad public knowledge. Continue Reading »
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