The Collapse of the U.S. Economy

Obama’s Summer of Misery and Hardship Tour Hits the Road

July 10, 2010

Infowars.com - ... “Putting true numbers to the economic crisis is difficult because the government issues more flattering numbers than what the real America experiences,” writes Bill Sardi. “The Bureau of Labor Statistics says unemployment is around 15 million, or 9.7% of the workforce, but in reality, government numbers only reflect the short time period when people have recently been laid off of work and are seeking jobs or applying for unemployment.”

In fact, the real unemployment rate is around 21.7%, only a couple points off the level during the last engineered Great Depression. Add to this the sharpest decline in the M3 money supply since the 1930s banking crisis and you have all the ingredients for compounded misery and hardship, not only for the unemployed but for most of us.

Oh, and we should not ignore the fact the Dow Jones Industrial Average is repeating a pattern that appeared just before markets fell during the first scientifically created Great Depression.

“Those who don’t remember history are doomed to repeat it,” Daryl Guppy, CEO at Guppytraders.com, told CNBC earlier this week.

“There was a head and shoulders pattern that developed before the Depression in 1929, then with the recovery in 1930 we had another head and shoulders pattern that preceded a fall in the market, and in the current Dow situation we see an exact repeat of that environment.”

“Ee-gads! By two measures the economy is sinking, not growing. The stock market could tumble downward beyond belief, and all the pension plans, mutual funds and 401(k) plans with it,” warns Sardi.

The first measure is a complete lack of economic growth as reflected by the GDP. If the GDP declines significantly two quarters in a row says Peter Morici of The Street, it will be gone for good.

“Unemployment would rise into the teens, and the economy would sink into a depression — a deep and painful slump from which it cannot soon recover,” he writes.

Fraudulent banking, lending and hedging schemes brought us to where we are now, confronting the abyss. The corporate media likes to say it was the fault of greedy investment bankers and a destructive Me Generation ethos running wild on Wall Street. Joe Bite Me and the Obamaites blame the Bush administration. It’s all a distraction. Or willful stupidity.

The Obama Road Show will not be able to paper over the obvious facts with feel-goodism propped up by cooked stats. A second bail-out is not in the works.

“Governments may not be able to repeat such a bailout in the event of a second crisis,” warns Businessweek.

The bankster bank — the Nazi-founded Bank of International Settlements in Basel, Switzerland — has warned the Bank of England that repeating a bailout in the UK may very well be impossible.

So, what to expect? Austerity. That’s why we are seeing a ramping up of the police state around the country and, indeed, around the world. It has nothing to do with al-CA-duh or homegrown patsies or even hurricanes and the disaster in the Gulf of Mexico. It has to do with pushing back the coming food riots. It’s about stopping angry mobs from burning down the banks and lynching the criminal banksters. There is a reason the partners at Goldman Sachs are packing heat.

The NSA is not vacuuming up phone calls, emails, and web destinations at an unprecedented rate in order to monitor feeble protests against the forever war in Afghanistan. The government is drawing up digital profiles on the real threat — those of us opposed to one world government and the impending police state slave grid. The DHS does not give a hoot about a foundation-funded Code Pink or even Anarchists on bikes. It is worried about “rightwing extremists;” that is to say, folks who are determined to return the nation to a constitutional republic, dismantle the Federal Reserve, and arrest and put on trial the criminal banksters and their minions.

The three ring circus featuring Lindsay Lohan and LeBron James will lose its ability to distract as more people are thrown out of work and off the government unemployment “insurance” teat. Obama’s Road Show may placate a few Democrats in the short run and provide fodder for the talking head teleprompter readers on MSNBC and CNN, but it will not hide the 800 pound gorilla in the room — a massive, unprecedented economic depression of the likes never witnessed before.

Could the Dow Plunge to 1,000?

July 8, 2010

The Week - Market forecaster Robert Prechter says we’re on the verge of the biggest market crash since the 1720 collapse of Britain’s South Sea Bubble, with the Dow nosediving to below 1,000 in the next five to six years, from around 10,000 now. Prechter, regarded as a powerful market “guru” in the late 1980s, relies on an esoteric technical-analysis tool that uses past market movements to predict future ones.

A Market Forecast That Says ‘Take Cover’ (New York Times, July 2, 2010)

Mr. Prechter is convinced that we have entered a market decline of staggering proportions — perhaps the biggest of the last 300 years.

In a series of phone conversations and e-mail exchanges last week, he said that no other forecaster was likely to accept his reasoning, which is based on his version of the Elliott Wave theory — a technical approach to market analysis that he embraces with evangelical fervor.

Originating in the writings of Ralph Nelson Elliott, an obscure accountant who found repetitive patterns, or “fractals,” in the stock market of the 1930s and ’40s, the theory suggests that an epic downswing is under way, Mr. Prechter said. But he argued that even skeptical investors should take his advice seriously.

“I’m saying: ‘Winter is coming. Buy a coat,’ ” he said. “Other people are advising people to stay naked. If I’m wrong, you’re not hurt. If they’re wrong, you’re dead. It’s pretty benign advice to opt for safety for a while.”

His advice: Individual investors should move completely out of the market and hold cash and cash equivalents, like Treasury bills, for years to come. (For traders with a fair amount of skill and willingness to embrace risk, he suggests other alternatives, like shorting the market or making bets on volatility.) But ultimately, “the decline will lead to one of the best investment opportunities ever,” he said.

Buy-and-hold stock investors will be devastated in a crash much worse than the declines of 2008 and early 2009 or the worst years of the Great Depression or the Panic of 1873, he predicted.

For a rough parallel, he said, go all the way back to England and the collapse of the South Sea Bubble in 1720, a crash that deterred people “from buying stocks for 100 years,” he said.

This time, he said, “If I’m right, it will be such a shock that people will be telling their grandkids many years from now, ‘Don’t touch stocks.’ ”

“The Dow, which now stands at 9,686.48, is likely to fall well below 1,000 over perhaps five or six years as a grand market cycle comes to an end.”

“That unraveling, combined with a depression and deflation, will make anyone holding cash “extremely grateful for their prudence.”