Friday, January 30, 2015

Birth Pangs...Of The Coming Depression

Birth Pangs Of The Coming Great Depression

The signs of the times are everywhere – all you have to do is open up your eyes and look at them.  When a pregnant woman first goes into labor, the birth pangs are usually fairly moderate and are not that close together.  But as the time for delivery approaches, they become much more frequent and much more intense.
  Economically, what we are experiencing right now are birth pangs of the coming Great Depression.  
As we get closer to the crisis that is looming on the horizon, they will become even more powerful.  This week, we learned that the Baltic Dry Index has fallen to the lowest level that we have seen in 29 years.  The Baltic Dry Index also crashed during the financial collapse of 2008, but right now it is already lower than it was at any point during the last financial crisis.  In addition, “Dr. Copper” and other industrial commodities continue to plunge.  This almost always happens before we enter an economic downturn.  Meanwhile, as I mentioned the other day, orders for durable goods are declining.  This is also a traditional indicator that a recession is approaching.  The warning signs are there – we just have to be open to what they are telling us.

And of course there are so many more parallels between past economic downturns and what is happening right now.
For example, volatility has returned to the markets in a big way.  On Tuesday the Dow was down about 300 points, on Wednesday it was down another couple hundred points, and then on Thursday it was up a couple hundred points.
This is precisely how markets behave just before they crash.  When markets are calm, they tend to go up.  When markets get really choppy and start behaving erratically, that tells us that a big move down is usually coming.
At the same time, almost every major global currency is imploding.  For much more on this, see the amazing charts in this article.
In particular, I am greatly concerned about the collapse of the euro.  The Swiss would not have decoupled their currency from the euro if it was healthy.  And political events in Greece are certainly not going to help things either.  Economic conditions across Europe just continue to get worse, and the future of the eurozone itself is very much in doubt at this point.  And if the eurozone does break up, a European economic depression is almost virtually assured – at least in the short term.
And I haven’t even mentioned the oil crash yet.
There is only one other time in all of history when the price of oil collapsed by more than 60 dollars, and that was just prior to the horrific financial crisis of 2008.
Since the last financial crisis, the oil industry has been a huge source for job growth in this country.  The following is an excerpt from a recent CNN article
But losing good jobs is just the tip of the iceberg of this oil crisis.
At this point, the price of oil has already dropped to a catastrophically low level.  The longer it stays at this level, the more damage that it is going to do.  If the price of oil stays at this level for all of 2015, we are going to have a complete and total financial nightmare on our hands
For the first time in 18 years, oil exporters are pulling liquidity out of world markets rather than putting money in. The world is now fast approaching a world reserve currency shift. If we see 8 to 12 months at these oil prices; U.S. shale industry will be wiped out. The effect on junk bonds will cascade to the rest of the stock market and U.S. economy.
…and this time there will be nothing left to catch the falling knife before it hits the American economy right in the heart. Not the FED nor the U.S. government can stop what’s coming. Liquidity will freeze up, our credit will be downgraded, the stock market will start to collapse, and then we can expect the FED to come in and hyper-inflate the dollar. This will cause the world to finish abandoning the world reserve currency in the last rungs of trade. This will be the end of the petrodollar.

And no article of this nature would be complete without mentioning derivatives.
I could not possibly overemphasize the danger that the 700 trillion dollar derivatives bubble poses to the global financial system.
As we enter the coming Great Depression, derivatives are going to play a starring role.  Wall Street has been pumped full of funny money by global central banks, and our financial markets have been transformed into the greatest casino in the history of the world.  When this house of cards comes crashing down, and it will, it is going to be a financial disaster unlike anything that the planet has ever seen.
And yes, global central banks are very much responsible for setting the stage for what we are about to experience.
I really like the way that David Stockman put it the other day…

The global financial system is literally booby-trapped with accidents waiting to happen owing to six consecutive years of massive money printing by nearly every central bank in the world.
Over that span, the collective balance sheet of the major central banks has soared by nearly $11 trillion, meaning that honest price discovery has been virtually destroyed. This massive “bid” for existing financial assets based on credit confected from thin air drove long-term bond yields to rock bottom levels not seen in 600 years since the Black Plague; and pinned money market costs at zero—-for 73 months running.

Even though most average citizens are completely oblivious to what is happening, many among the elite are heeding the warning signs and are feverishly getting prepared.  As Robert Johnson told a stunned audience at the World Economic Forum the other day, they are “buying airstrips and farms in places like New Zealand“.  They can see the horrifying storm forming on the horizon and they are preparing to get out while the getting is good.
It can be very frustrating to write about economics, because things in the financial world can take an extended period of time to play out.  Sadly, most people these days have extremely short attention spans.  We live in a world of iPhones, iPads, YouTube videos, Facebook updates and 48 hour news cycles.  People no longer are accustomed to thinking in long-term time frames, and if something does not happen right away we tend to get bored with it.
But the economic world is not like a game of “Angry Birds”.  Rather, it is very much like a game of chess.
And unfortunately for us, checkmate is right around the corner.

Just a few years ago, it was all a baseless “conspiracy theory.” Now, promotion of a European Union-style merger between the United States, Mexico, and Canada is being shouted from the rooftops — by U.S. taxpayer-funded globalists writing in the very same media outlet, CNN, that tried to ridicule GOP presidential hopeful Ron Paul over the North American Union issue just a few years ago. Indeed, according to the recent opinion piece by two mid-level operatives for the “New America Foundation,” the future of the United States does not rest with the U.S. Constitution, “We the People,” or even the Supreme Court. Instead, it “lies in North America,” claimed New America’s AndrĂ©s Martinez and Daniel Kurtz-Phelan.

“This is not a geographic truism, but a strategic imperative,” the duo argued. “The United States, Canada and Mexico are bound by a shared economic, environmental, demographic and cultural destiny.” In recognition of what they refer to as North America’s “shared destiny,” Martinez and Kurtz-Phelan propose the establishment of what they call a “North American passport.” The radical passport scheme would eventually facilitate the erasing of U.S. borders in exchange for “North American” borders — a plot that has been underway for years with the “Beyond the Border” initiative and other schemes. “Much like the EU passport,” the tax-funded globalists wrote, the new North American passport would ultimately allow citizens to “travel, work, invest, learn and innovate anywhere in North America.”

Apparently, at least in the minds of globalists paid with Americans’ tax dollars, the economies of the United States, Mexico, and Canada are “far more integrated” than recognized by the current immigration system — or lack thereof, in light of Obama’s imperial decrees purporting to nullify U.S. immigration laws. So, phasing out U.S., Mexican, and Canadian passports and replacing them with a single North American one would merely serve to “align our laws with reality.” Of course, it is true that, thanks largely to the North American Free Trade Agreement (NAFTA), U.S. sovereignty has already suffered a severe blow. Unelected North American “tribunals,” for instance, already purport to overrule state and federal laws enacted by the American people’s elected representatives. North American bureaucracies are proliferating, too.

The fact that the radical anti-sovereignty screed promoting deeper North American integration was published by CNN, though, is especially ironic. During the 2007 GOP presidential debates, CNN selected a question for Ron Paul asking him if he really believed in the “conspiracy theory” about ongoing efforts to build a North American Union. The effort to ridicule Paul backfired, big time, after he offered an excellent answer making the questioner look foolish. But the attempt did not go unnoticed. Some years later, official U.S. government documents from the embassy in Canada leaked by WikiLeaks revealed that long before that debate, top federal officials were working hard with their counterparts in Canada on plots to create a regional currency, subvert national constitutions, and eventually create a North American regime.   

More recently, after spending years dishonestly dismissing criticism of their machinations as “conspiracy theories,” top globalists have been much more open about the potentially treasonous plot. “After America comes North America,” disgraced former General and CIA boss David Petraeus said confidently last year in answering a question about what comes “after” the United States. “Are we on the threshold of the North American decade, question mark? I threw that away — threw away the question mark — and boldly proclaimed the coming North American decade, says the title now.” He also boasted about how the three economies have been put “together” over the last 20 years as part of the “implementation” of NAFTA. Globalist mouthpiece Henry Kissinger, meanwhile, recently outlined his vision of a “New World Order” that would first have to divide the globe up into regional regimes.

While much of the scheming has come from the global government-promoting Council on Foreign Relations, the taxpayer-funded New America Foundation appears to be playing a growing role in pushing the outlandish plot. Google boss Eric Schmidt, whose search engine stands accused of increasingly working to hide alternative media voices that oppose “North America” scheming, serves as chairman of the foundation’s board of directors. The outfit’s top funding sources included unwitting American taxpayers, forced to contribute more than $1 million — potentially much more, the foundation does not say — in 2013 alone through the U.S. State Department. Various other federal agencies also contributed taxpayer dollars. Another top source of funding was the Bill and Melinda Gates Foundation, infamous for promoting abortion, population reduction, globalized and federalized education standards, and more. Bailed-out megabanks, globalist tax-exempt foundations (Rockefeller, Ford, Carnegie, and more), billionaire extremist George Soros,  the World Bank, Big Media, various tax-funded universities, and other sources also finance the outfit.           

And as the name suggests, a “New America” is indeed what they are pushing for — a new America without self-government, individual rights, national sovereignty, or the principles upon which the old America was founded. 

Now, globalists are pushing not just for “permanent alliances,” but the outright surrender of U.S. independence to merge with “North America” and eventually, the world. The scheming has been underway for generations, mostly in the shadows. But, as the final phases approach, much of the agenda is now being touted openly in establishment media organs such as CNN and beyond.     

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George said...

I just read a real nice blog on comments made.

Editorial: Be vigilant about your comment section

Good verses to back her up.

Sandra said...

Hi George,

Great Editorial...thanks for posting and will agree now with Scott, it is better to monitor the comment section.
Thanks again Scott for time and energy spent on this site...I am very sure you will receive a great reward!


Scott said...

Yea i meant to get back to this. I agree with that commentary. It it truly smazing how some people use the comments section