Into The Economic Abyss
Brandon Smith – Alt-Market.com
Over the past few years, mainstream analysts have shown a tenacious blind faith in the U.S. economy and the dollar that goes far beyond religion to the point of mindless cultism, so, when even they begin to question the future of American finance (as has been occurring more and more everyday), you know its time to worry. For those that have been following my work since 2007, the events of the past few months have not been a surprise at all, however, for those just waking up to the ongoing implosion of our fiscal infrastructure, the bubbling inflationary meltdown just over the horizon and the nightmare unfolding around our national debt is rather shocking. Living through a full spectrum catastrophe is, to say the least, confusing, especially when you have no idea where the whole thing began.
Until now, the mainstream media has provided nothing but economic fantasy for the masses. They have satiated the public with what amounts to financial toddler talk for helpless preschool minds averse to any research beyond their daily 15 minute sippy cup of New York Times, CNN, MSNBC or FOX cable news sound bites. I mean, have you ever actually stopped and read a Paul Krugman article more than once? Or listened carefully to an MSNBC economic piece? It’s like being violently accosted by a band of slobbering mental deficients with securitized ARM mortgages stuffed in their pants. Of course, fewer and fewer people are now buying what these hucksters are selling. With gasoline nearing $5 a gallon, grain prices doubling, and shelf prices beginning to skyrocket, it’s hard for even the most ignorant suburban schlep to remain oblivious to the problem anymore. We are no longer on the edge of the abyss; we have fallen into it head first…
I make this statement not for effect, not to startle people out of their apathy, not even to illustrate what “may” be coming around the bend in the near future. I make this statement as directly and sincerely as I know how; we have indeed crossed the line between economic weakness and economic catastrophe. For those of you who have been asking when the final stage of the economic collapse will begin, that time has arrived. Here is why…
Energy Inflation Overdrive
Here’s how to tell when inflation is about to run out of control in your country; wait for the politicians and bankers to begin making excuses for its consequences instead of pretending it doesn’t exist! Remember after the initial 2008 spike in oil prices when we talked about the prospect of “speculation” as the culprit? Remember also that I have pointed out for the past three years at Neithercorp Press that when the dollar eventually began to crumble, and the price of crude began to spike again, the government would try to blame speculators as the scapegoat hoping that Americans would assume the situation today was the same as it was in 2008?
http://neithercorp.us/npress/2010/12/oil-juggernaut-unleashed/
Well, guess what? The Obama Administration has just initiated the first volley of “speculation” propaganda talking points by tapping the Department Of Justice among others to “investigate” possible trader fraud and speculation in the price destabilization of oil:
Ah! So it’s those devious “traders” and “speculators” out there in the ether that are driving up the price of oil, and don’t worry folks, ole’ Barry is on the case! Little mention of OPEC’s general distaste for current U.S. activities in the Middle East. And certainly, no mention of the dollar’s continuous sharp decline over the past two months from the White House as being even remotely responsible for you being robbed at the gas pump. The dollar, despite intervention by G7 countries, continues to depreciate against the Japanese Yen, and has also slid to a 15 month low against the Euro:
http://www.rttnews.com/content/CurrencyMarket.aspx?Id=1597070&SimRec=2&Node=
At the publishing of this article, the Nymex crude index is at around $113 a barrel, while the Brent crude index stands at $124 a barrel. Gasoline prices across the country are averaging $3.50 to $4.00 a gallon. Now, some crazy individuals out there may question any overt concerns towards $120 or even $150-a-barrel crude. We survived it back in 2008, right? Why not today? However, this fuzzy logic depends greatly on a very unfortunate premise; that the economic atmosphere of today is the same as it was in 2008. Not even close…
The crude explosion in 2008 lasted for around six months, peaked at around $4 a gallon, and then ended with a deflationary-like plunge precisely because that price spike WAS (for the most part) caused by speculation. This time, expect no peak. Only an endless steady climb as the summer months progress. We have been calling for an increase in oil costs far exceeding the $150 a barrel achieved in 2008 and we stand by that prediction.
Negative aspects of energy inflation will take hold much faster than in 2008, primarily because our economic foundations are even weaker than they were three years ago. Today, we not only have a massive and unsustainable national debt, and a credit crisis still unresolved, but also a privately controlled Federal Reserve with no oversight running amok, printing non-stop since the derivatives bubble first popped. Not even the dollar’s fake reputation as a safe haven investment can stall the collapse now.
High energy costs hit every conceivable sector of the economy, from freight, to food, to vacations, to housing. People drive less when it costs them twice as much to do so, which means less shopping, fewer trips to Disney World, and second thoughts about moving to a new home in a new state. The cost of producing goods hits wholesale prices, which eventually hit retail prices when corporate chains are no longer able to absorb the increases. Your electric and heating bills take a bite right out of your tender behind. All of these factors will snap the thin thread our system is clinging to. America, as we know it, WILL NOT survive $5-$10 gas. Period.
To Default, Or Not To Default
Should the debt ceiling be raised? Should it be frozen in place? Frankly, in the short term, these questions are irrelevant. In either case, the taste and feel of the resulting chaos will be the same. Holding the debt ceiling in place will at least (in theory) stop the Federal Reserve’s printing bonanza. If the Treasury can’t continue borrowing from the Fed, then the Fed has no means to continue creating debt or fiat (my suspicion though is that they would find a way around this). A national default would result. The U.S. Treasury Bonds held by governments around the world would become essentially worthless, the dollar would lose its reserve status, plummet in value, and hyperinflation would result.
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April 25th, 2011 at 11:23 am
Central Banking (Federal Reserve)=Keynesian Malfeasance=Failure=UNCONSTITUTIONAL
Our military, law enforcement, and ELECTED OFFICIALS need to HONOR THEIR OATH TO THE U.S. CONSTITUTION!!!
oathkeepers.org
April 25th, 2011 at 1:58 pm
“They have satiated the public with what amounts to financial toddler talk for helpless preschool minds averse to any research beyond their daily 15 minute sippy cup of New York Times, CNN, MSNBC or FOX cable news sound bites.”
You forgot that globalist Rupert Murdoch, owner and chairman of the Wall Street Journal and a miriad of other news outlets–the Australian who cannot figure out what country he belongs to.
(Americans who buy the Wall Street Jounal should know that they are helping to advance the globalist agenda of the likes of Rupert Murdoch.)
Everytime you look you see some American supporting globalism. The easiet place to find a globalist is to stand in front of a Wall-Mart store. We are completely overrun with globalist Americans who wave the American flag.
Loyalty to America is in short supply, other than sending the American military to foreign lands to support the war making policies of Presidents Bush and Obama, etc. But this is what a lot of Americans seem to perceive that loyalty is all about.
To the American military, bring them home,
To American manufacturing and jobs, bring them home, — Tariffs Now. Buy American.
April 26th, 2011 at 3:25 pm
Americans who buy Volvos are now both helping to economically build up the Chinese Communist “dictatorship” and advance the globalization of the U.S.A. (I thought that the Republican and Democrat PARTY was in the process of trying to rid the world of dictatorships – not build them up – in places like Syria, Bahrain, Egypt, Iran, Libya, Tunisia, et cetera? I am curious why China and North Korea are not on the list?)
To blame corporate America for the globalization of America misses the mark. The globalization of America is a partnership of corporate America, the American consumer, and the American government.
The Chinese government is requiring corporations which site their manufacturing in China to now site their R & D departments as well. I see this as an opportunity for corporate America to offshore their design and engineering at lower labor costs. Maybe the administrative, accounting, and legal departments should be next. Why just pick on American manufacturing workers? It’s time that those who wear white collars to work learn to compete with a dollar per hour labor. And I am sure that the Chinese can produce enough engineers, designers, administrators, lawyers and accountants to do the job. Globalization is great, as long as it is not my job, and is only for those Americans who don’t work hard enough, don’t produce quality goods, and are overpaid.
“March 29, 2010: 12:21
Fortune — For only the second time in recent history, a large, thriving, privately owned Chinese company has stepped up and stepped out — buying a big brand known the world over.
…Zhejiang Geely Holding Co., a rapidly growing Chinese automaker based in Hangzhou, about 100 miles southwest of Shanghai, has bought Volvo from Ford Motor (F, Fortune 500) for $1.8 billion. The Western press, understandably, is full of stories about how, as the Wall Street Journal puts it today, “Geely’s acquisition of the Swedish brand is the latest example of how China’s economic rise is reshaping large swaths of global business…”
TARIFFS or no American economy, unless serfdom is acceptable,
(”Tariffs” doesn’t seem to sell. We need a different word, something like “Globalization Labor Rate Adjustment”. But then the Chinese, etc. would quickly figure out that we are trying to reduce our massive trade deficits and they would have to take the U.S.A. to the WTO. After all the Carter Administration gave China “most-favored-nation” trading status following President Nixon’s efforts in the 1970’s — a truly bipartisan effort of the ONE Party.)
April 27th, 2011 at 12:46 pm
P.S. to posts nos. 2 & 3:
Some would argue that foreign products, and foreign labor (legal and illegal immigration, H-1B visas, and the outsourcing of labor) are cheaper and/or better. To which I reply: SO WHAT!
I just can’t believe this argument(?). We “sell out” “America”, not through war, but for cheaper and/or better foreign goods and labor, in the name of the farce called “free trade”. Our founding fathers must be turning over in their graves with absolute disgust as we brag about our patriotism. It is beyond words.
How do Americans think that the Chinese got a hold of trillions of American dollars to buy American assets and debt? How do Americans think that the Chinese got into a position to “close down” our government if they don’t show up at a Treasury Auction? How do Americans think that the Chinese have built their economy and military into the second biggest in the world? How do Americans think that we have lost 30% plus of all manufacturing jobs and hundreds of thousands of non-manufacturing jobs? It is time that Americans read what is on the signs that the elephants walking around in the living room are carrying: “TARIFFS NOW”, “NO MORE LABOR IMMIGRATION AND OUTSOURCING”, and “DOWN WITH THE FARCE (RELIGION, DOGMA) CALLED ‘FREE TRADE’”. But not many Americans are reading the signs: Maybe the print is too small.
I laugh when I hear all of the talk about the “American” economy doing better by the pseudo intellectuals and other experts and economists. There are statistics, and there are statistics, and there are ? statistics. If anyone thinks that the America economy is going to do better without bringing American jobs home and cutting off foreign labor I have a couple dozen bridges in Brooklyn that I would like to talk to him about. Dream on. Increasing sales of consumer electronic products (toys), etc. is at best putting some truckers (to transport the products from the docks to the store), some longshoremen (to unload the products), and some underpaid sales clerks to sell them to work.
Cheap foreign goods for the consumer, cheap foreign labor for corporate America, and more corporate profits is a combination is almost impossible to beat.
It is time that Americans wake up to the real wars for America. And they are not in North Africa, the Middle East, and Central Asia: They are in America.
P.S.:
Those who want to put the blame on President Obama should remember that President Bush ran up several trillion dollars of trade deficits during his tenure. In his last year in office the trade deficit was over $650,000,000,000. I wonder what the multiplier effect of $650,000,000,000 per year on the American economy would be worth in jobs and production? About a multiplier of just four to five times?
April 28th, 2011 at 10:59 am
CEO Mike Duke of Wal-Mart:
“We’re seeing core consumers under a lot of pressure.”
Where has this guy been for the last decade? He must have been counting all of the Wal-Mart profits, along with Bill Simon, that was made on the importation of Chinese goods and the gutting of American jobs and industry.
Mr. Duke has seen his total compensation drop 2.7% for the FYE Jan. 2011 from FYE Jan. 2010. Unfortunately his total compensation for FYE Jan. 2011 is only $18,700,000. If the average middle class American earns in the neighborhood of $40,000 per year Mr. Duke is making the equivalent of 47
468 years of their wages. This is the man who thinks that clerks at his stores should be paid around $20,000 per year, 1/936 of his. For me to question the equity of $18,700,000 per year has to make me a “socialist”, though it is perfectly alright to question why the waitperson at a restaurant, who is making $10 per hour, does not deserve a tip. (And it is OK for this waitperson to pay a higher percent of their total income to the general fund of the U.S. Treasury than billionaire Bill Gates of Microsoft.)
Foreign trade is a Constitutional issue: It is destroying the economic sovereignty of the U.S.A. and the future of what’s left of our Constitutional form of government.
May 4th, 2011 at 6:42 pm
Let’s be realistic.
No amount of discussion or debate will ever change one done thing upon another by the evil doer’s working in conspiracy while posing as world leaders in government and captains of industry.
If there really are any oathkeepers remaining who honors a handshake to seal a deal, whose words guide and inform their deeds to ensure the honor of their verbal agreements, and who meant what they said when they swore they would if necessary lay down their life in the defense of the Constitution. If such a hero of personal integrity remains in a position of authority with the resource potential to effect world change with violently swift and decisive action at the point in time most needed for the benefit of all mankind, that hero is all that reasonably remains to rescue the world from it’s own stupitidy and greed while it’s teetering at the edge of, “Global Slavery.”
YOU, THAT SINGULARLY QUALIFIED OATHKEEPER, YOU ARE WHAT STANDS BETWEEN THOSE REALITIES, YOU DECIDE THE FATE OF THE WORLD. TIME IS GROWING SHORT NOW.
In reality, there will be no civilian wake up and call to arms which the patriot groups keep crying out in vain. Not as long as there is a paper to read or a newscast to watch or a cartoon to see.
If this, “check” position of America is to be rescued from TRAITORS among us like the Rockefeller’s, Bush’s, Clinton’s, and those of their ilk hard at work to end liberty in America’s New York UNITED NATIONS HEADQUARTERS.
It falls on your sholders to now to solve it all, just as you always knew it would.
We know exactly who they are, and what treasonous crimes they are guilty of. They flock together to sign proofs of their true allegiences in default of their oaths to the people of America and the world.
All that’s left to be done or that can be done short of the return of our Father in Heaven, is for one Oathkeeper to be strong, be smart, and be effective on the day of gathering in which they least expect it and are sure that it’s all done but the crying.
That is what will turn the tide, and return sanity to the world.
Many it’s true don’t deserve your sacrifice, but that distiction was never part of the oath for which you swore you would uphold and take action. God Bless “THE OATH-KEEPER” WHOEVER HE or SHE MAY BE! I wish it could be me who by my oath and my deed restored liberty to the world and banished evil in one fell swoop right off the face of what will return in time to be, God’s green Earth.
Amen.