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Many ECONOMISTS AND MARKET ANALYSTS ARE
PREDICTING AN END OF THE RECESSION AND GROWTH GOING FORWARD. MY
RESPONSE IS THE NUMBERS HAVEN’T ADDED UP FOR YEARS, AND REGARDLESS OF
WHAT THEY CLAIM, WE ARE ABOUT TO COMMENCE THE NEXT LEG DOWN INTO WHAT WILL
become known as the GREATEST DEPRESSION in history. The numbers they
point to are POLITICALLY-CORRECT measurements, but practically incorrect; any
insights you may glean from them are HEADLINE illusions for the sheep that
are being FLEECED and who have misplaced their faith in the government to
PROVIDE for them.
The canaries in the coal mines are
singing in more markets than you can count. Just to name a few, the
Baltic Dry Index of shippers is off 40% since June. The S&P 500 is
trading at 5 times its highest valuation in history. Gold has broken
out higher in every currency in the world (the beginnings of a CRACK UP BOOM
as paper reverts to intrinsic value) and is attempting to do so in dollars -
to the consternation of Barrick gold ($3 to 5 billion of losses on hedges)
and all the big banks who are short the metal for POLITICAL purposes.
Gold now has an ACTIVE head and
shoulders bottom pattern in place which TARGETS $1,350. A flight to
REAL money has begun. The Chinese government is ACTIVELY pushing their
citizens to buy gold and silver and they have the ability to STAND up to the
manipulators and protect their people. THEY WILL DO SO and defend the
value of their peoples’ gold and silver. Call it a BEIJING
Put. The manipulators have never had to deal with someone holding over
2 TRILLION dollars on the bid and would be more than happy to TAKE DELIVERY.
Think of all the bullion banks that have
leased gold from central banks at 1%, sold it into the markets to fund the
carry trade and now must cover and suffer catastrophic losses. Can you say
“gold and silver to the moon?” This is such delicious irony
for these partners in crime, with the central banks and their gold
suppression schemes. In the short end of the treasury markets, yields
have been cut in half in 6 weeks and are approaching zero yield and the long
end has rallied aggressively as well. The Zimbabwization of paper
assets has begun, as you shall see.
Note: Before you proceed, please
understand that this IS NOT doom and gloom, it is reality and must be dealt
with or you will be financially harmed. In fact, it is the greatest
opportunity in history for prepared investors as these REALITIES will drive
expanding volatility. “Volatility is opportunity” for the
prepared investor. I will be doing a series of live webinars in several
weeks where I will cover the economics you must deal with, and how to
potentially turn it to your favor. I will then have Q & A sessions
afterwards. Details to follow in the next edition of this
newsletter.
Public Serpents, er…servants have
steered, and are deliberately steering, the US economy off a cliff to gather
power and set the stage for the next crisis in our economy. All the while,
income creation has begun its next leg down under the Jack boot of higher
regulations, taxes, quantitative easing (MONEY PRINTING) and government
borrowing (diverting money to government from the private sector), which they
will use to solidify their almost complete evisceration of the constitution,
our economy and our freedom.
Private property has now become a myth.
Between taxes, regulations and the Fiat currency and credit creation, there
is nowhere to hide from our masters on all levels of G7 government. The
US Government has now been growing 4 times faster than the economy and
it has KILLED the host private sector as we can see from this chart going
back to the end of World War II:
This picture is no different in the rest
of the G7. I have always said a dollar into government and a dime
out. Now we have a chart from the Office of Management and Budget to
illustrate how little productive results we get when sending money into the
federal government:
As the Ob@ma administration and the GANG
of 535 (also known as the US Congress) DOUBLE the size of government, you can
now understand how much MALINVESTMENTS and misapplied capital will be
mushrooming and consequently destroying the private sector where ALL WEALTH
AND RISING INCOMES originate.
DOZENS of unconstitutional CZ@RS are
operating in direct contradiction to their oaths to defend the constitution,
which MANDATES they exercise oversight of the EXECUTIVE branch of
government. Our public servants, er…servants are betraying their
oaths of office and constituents in favor of their special interest
supporters who are feeding on the public purse. OBSCENE! The parasites
of PUBLIC, government and crony capitalists feeding off the private sector
are about to KILL IT. The parasites are killing the host.
OUCH….
Virtually ALL of the CZ@RS come from
RADICAL socialist and communist party affiliations and
backgrounds. They are BUSY recommending redistributive policies,
costly and stifling regulations and creating opportunities for government
bribery and rent- seeking public servants, like we now see at the banks and
brokers. To make it worse, they are working to CENSOR opponents.
The CZ@RS are DISABLING broad sectors of
the economy, such as manufacturing, health care, energy production, and
minerals and mining. They are silencing TALK radio and soon the
internet, so it cannot REPORT what the MAINSTREAM MEDIA fails to do. In
general, we are seeing GANGSTER politics, fascism (crony capitalism) and
socialism, which is MISERY SPREAD IN EVER-WIDENING CIRCLES as wealth creation
is destroyed. The solution that public servant propose to a collapsing
economy and incomes: More of the same.
Their INSATIABLE thirst for power over
the economy, politically-extracted rents (CHICAGO POLITICS WRIT LARGE) and
its citizens has now reached the point where there is no escape from the
final debacle. So much of the country has FORGOTTEN how to produce more
than they consume, save money (useless when purchasing power can be stolen
with a government-mandated debasement) and start new businesses.
Would-be entrepreneurs are FROZEN as the future is unknowable, with the
government expanding at a 90% ANNUAL rate.
Government has written so many blank
checks in the past and made promises for the future that the path of the
future is INESCAPABLE. The US and G7 welfare states are headed to an
apocryphal collapse because the debts are un-payable and inextinguishable.
In July alone, the US budget deficit was $180 billion (180,000 million
or 4 million per minute). CAN YOU SAY ABSURD? This is supposedly to fix
the economy but it is the ruin of it. The same can be said for the broad
public. The G7 publics are Debt slaves of their own purchases and the
debts incurred by their corrupt leaders and their crony capitalist
supporters.
One need look no further than the HEALTH
CARE reform which is nothing less than the final step into socialism.
It is a political solution rather than a practical one. It is not
reform, it is a takeover of almost 20% of the economy and the final ownership
of you and your body. Nowhere to be found is any talk of TORT reform, a
primary cause of runaway costs, as defensive medicine (generally unnecessary
medical tests that are performed to protect from lawsuits and the outrageous
rewards in the courtroom drive costs through the roof. No mention of
the tens of billions of waste fraud and abuse of Medicare and
Medicaid. Listen to this short speech by Ronald Reagan explaining how
socialized medicine is the path to socialism:
http://www.youtube.com/watch?v=fRdLpem-AAs . It is profound.
The Cap and Tax bill is as bad as the
Health Care bill; 1300 pages of filth written with RADICAL environmentalists
and Crony capitalists such as Al Gore who owns the rights to the trading
platforms for carbon credits in Chicago and London in partnership with who
else? Government Sachs and JPMorgan chase. It is every bit as big
a takeover of the energy industry as the Health care Ob@mination.
Between the two bills these weasels on Capitol Hill are nationalizing 30 to
40% of the US economy so they can sell favors and regulatory forbearance to
the highest bidder. If passed it will destroy the competitiveness of
the US economy in relation to its competitors around the world. It
actually is worse than that as they will impose it UNILATERALLY if it does
not pass through the EPA who has decided the air you EXHALE is a pollutant
(Plants breath carbon dioxide and exhale oxygen). Nature way of
balancing things. It’s another looming disaster.
Next up is FINANCE reform, probably
written by the big banks and brokers which caused the present crisis, and who
use their control of the beltway to escape culpability for their reckless,
casino-Ponzi finance. Conveniently left out of the bill is reform of
Fannie Mae and Freddie Mac, and the primary culprits in the NSRO’s
(national statistical ratings organizations) which were paid for ratings by
the issuers of the toxic securities. Then, the fraudulent ratings were
used to distribute these products to unsuspecting investors around the
world. They are now becoming more worthless by the day and unsellable,
because to do so would EXPOSE the complete and total bankruptcy of the
biggest banks and brokerages (see ‘Roach Motels’ in TedBits
archives, August 2007.)
We can now clearly see what is happening
in the commodity markets (the canaries in the coal mine exposing serial money
printers.) They are imposing position limits on the public to accomplish two
things: Drive the public away from the LAST refuge from money printing (as
commodities re-price to reflect the debasement of whatever currency in which
they are priced) and debasement, and to drive commodity trading from
the clean futures markets and into the hands of the over-the-counter ripoff
factories (the bankrupt big banks and brokers, like Government,
er…Goldman Sachs and JPMORGAN Chase) where counter-party solvency is
UNKNOWABLE for the buyer. What else would you expect from commodity
regulators headed by ex-Goldman Sachs PARTNERS and morally and fiscally
corrupt public servants, er…serpents?
Unfortunately for them, Commodities are
in SECULAR BULL markets after a 20-year SECULAR BEAR market. Combined
with the money printing, it provides a powerful challenge for the governing
and CENTRAL bank elites who believe they can challenge MOTHER NATURE and the
repeal laws of supply and demand. THEY CAN’T.
Years of neglect to plan for future
energy and commodities needs cannot be met or created with the stroke of a
pen. Men are not gods, although our leaders believe themselves to be
gods. They will never catch Mother Nature and put a bullet in her head,
but their hubris will be a bullet to your head as they PRINT US INTO
BANKRUPTCY. Obviously, they have not learned the lessons of King
Canute.
The stress tests were used to cover up
the fraud and losses from the public, head off runs on the banks and keep the
con game going, rather than be properly used to identify the threat to the
public and deal with it through nationalization and breaking up of these
systemically-threatening behemoths. The losses are MUSHROOMING like a NUCLEAR
BLAST, but covered up by ROTTEN regulators, the US Treasury and Federal
Reserve - partners in crime with the “TOO BIG TO FAIL”
institutions. Chris Whalen and the fabulous crew at
www.institutionalriskanalytics.com outline the MUSHROOMING calamity in a
recent Q2 update:
Thank you, Chris. The threat of
bankruptcy is what makes banks behave prudently. The 19 biggest banks
have now been removed from that consideration, so the recklessness we have
had up to this time is exploding higher. This is called “moral
hazard” (the “Bernanke Put”) and is an epidemic of
recklessness condoned and SPONSORED by the Central Bank, Treasury and US government,
aka public servants and crony capitalists.
Thousands of banks stand in the waiting
line at the FDIC to RESOLVE their bankruptcies, but they cannot be resolved,
because neither the personnel nor the money are available to do
so – as the FDIC has no clothes and no money as we can see below,
courtesy of www.agorafinancial.com :
Unbelievable. trillions of dollars of
NEW losses yet to be REALIZED, and NO ABILITY to cover them except through
NEW BORROWING or the PRINTING PRESS. The government has ¼ of 1
percent to cover losses of trillions of dollars!
The US government is implicitly
GUARANTEEING the 19 largest banks, which, if their assets were marked to
their true value, are FUNCTIONALLY insolvent (this is a multi-trillion dollar
liability). Take a look at an excerpt from a recent report from
Bloomberg about the ACTUAL balance sheets of major national and regional
banks:
Recognizing Loan Losses
The biggest change would be to the
treatment of loans. The FASB’s current rules let lenders carry most of
the loans on their books at historical cost, by labeling them as held-to-
maturity or held-for-investment. Generally, this means loan losses get
recognized only when management deems them probable, which may be long after
they are foreseeable. Using fair-value accounting would speed up the
recognition of loan losses, resulting in lower earnings and reduced book
values.
While Regions may be an extreme example
of inflated loan values, it’s not unique. Bank of America Corp. said
its loans as of June 30 were worth $64.4 billion less than its balance sheet
said. The difference represented 58 percent of the company’s Tier 1
common equity, a measure of capital used by regulators that excludes
preferred stock and many intangible assets, such as goodwill accumulated
through acquisitions of other companies.
Wells Fargo & Co. said the fair value
of its loans was $34.3 billion less than their book value as of June 30. The
bank’s Tier 1 common equity, by comparison, was $47.1 billion.
Widening Gaps
The disparities in those banks’
loan values grew as the year progressed. Bank of America said the fair-value
gap in its loans was $44.6 billion as of Dec. 31. Wells Fargo’s was
just $14.2 billion at the end of 2008, less than half what it was six months
later. At Regions, it had been $13.2 billion.
Other lenders with large divergences in
their loan values included SunTrust Banks Inc. It showed a $13.6 billion gap
as of June 30, which exceeded its $11.1 billion of Tier 1 common equity.
KeyCorp said its loans were worth $8.6 billion less than their book value;
its Tier 1 common was just $7.1 billion.
These banks and the government agencies
which REGULATE them are morally and FISCALLY BANKRUPT. For the complete
article, click here:
http://www.bloomberg.com/apps/news?pid=20601039&sid=a04oVutXQybk , but
when you do, please be prepared with a fresh pair of underwear.
Remember, in March, your elected representatives pressured the Financial
Accounting Standards Board to SUSPEND the mark-to-market rules shortly after
receiving MILLIONS in campaign contributions. Furthermore, the losses
continue to climb, unaccounted for and unfunded, but earmarked for the
PUBLIC. They obviously DON’T work for you…
Not only that, but their assets are
PLUMMETING. It was announced on CNBS that mortgage delinquencies in all
home categories are now over 13% of all homes:
There have been approximately 1.5
million defaults to date; another 4 million are at the doorstep, and over
600,000 homes have been held out of the market by the banks waiting for
markets to recover. Soon they will be FORCED TO CAPITULATE and then it
will be WATCH OUT BELOW.
And delinquencies are soaring in all
loan categories:
The Mortgage Debt market has closed for
business except for Uncle Sam and the Federal Reserve purchases:
This QE will NEVER end. The
federal government, public servants and the Federal Reserve are virtually the
ONLY groups providing finance to this sector of the economy. They are the
ONLY FOOLS who will stand in front of the growing wave of foreclosures which
will threaten millions of existing homebuyers, as well as every new home
buyer because values are obviously going to begin a next leg DOWN as
supply multiplies in the near future.
TALK ABOUT FOOLISH BEHAVIOR! They
are not preventing the meltdown; they are POSTPONING and ENLARGING it.
Who are the guarantors of these poor decisions of the fed, treasury and
public servants? YOU, the public and future generations.
The housing credit for
first-time home buyers expires in November, at which time we will see sales
PLUMMET as these buyers comprised future demand that was brought forward by
the FREE MONEY, just as we are witnessing with the Cash for Clunkers
BOONDOGGLE. No doubt, the weasels in Washington will try to extend it
as a kiss to constituents for the 2010 elections.
The monetizing of the mortgage markets
will extend forever until the private sector finances them.
Additionally, it is clear that the stealth monetizing “QE” of
treasury debt is indirectly being practiced
with foreign central banks which are
trading in their agency and mortgage-backed securities to the Fed, then
turning around and buying the record US treasury issuance.
A housing bottom as the touts are
claiming? DON’T BET ON IT! You have to wonder how
they get away with these outright lies. The answer: The regulators
encourage it to keep the panic from MAIN STREET. Who are they
protecting, the banks and elites, or you?
Now let’s look at the commercial
REAL ESTATE values since January 2000, of which over $1 trillion
of refinancing MUST take place by the end of 2010:
Stunning, an approximate 68% loss since
the highs in 2007, these are just beginning to hit the books in all the
CDO’s, CMB’S, bank loan books, etc. This quarter will BE
THE LAST where the cover-ups can continue as their CORE revenues PLUMMET,
losses skyrocket, and now they MUST rely on trading revenues. This is
problematic and we know why: no new Glass-Steagall Acts will be reinstituted,
because ZOMBIE banks have now completed the transformation to HEDGE FUNDS in
disguise. They don’t know HOW to make money from core banking
activities
Anti-trust and the FDIC laws are meant
to deal with this and break them up like AT&T in the early
1980’s. Now these BANKSTERS ARE ABOVE THE LAW, and you are on the hook
for their GAMBLING activities today.
The banks - also known as credit card issuers
- are charging 25 to 40% with the full knowledge of our elected officials
(bought and paid for). On the approximate $2.5 trillion of debt,
this is almost $750 billion per year in loan shark type revenues,
before overdraft fees and gotcha clauses, all this, combined with weasel-word
agreements which generate tens of billions of dollars per year of extra
income through various fees. This is making consumers DEBT SLAVES
of the banks and government creditors who hold interest rates low so savers
are CHEATED out of their income and it is transferred to the banks!!!
In the last newsletter, I detailed the
insane valuation of stocks today, and the LIES being distributed by
CNBS, WALL STREET BROKERS and the TOO-BIG-TO-FAIL banks which say that stocks
are great values. Look at this chart of ACTUAL earnings going back to
1935, brought to us by Jim Willie of the www.goldenjackass.com and
www.chartoftheday.com :
Earnings are the lowest in
history. How will they pay their lenders in the corporate bond
markets? How will the government fund its gargantuan deficits and
spending? Look at the S&P 500 price with a P/E ratio going back to
1992, from the St. Louis Fed in their Money Trends Report outlining a gentler
version of the insanity we see above:
David Rosenberg at
http://www.gluskinsheff.com/ notes:
“All we know is we have a trailing
P/E multiple operating earnings on the S&P 500 of 25.5x – a record
eight multiple point expansion from the low over a six-month span. Take
note that this is the highest P/E multiple since March 2002, which is right
around the time that the bear market at that time (also premised on
post-crisis V-shaped recovery hopes) began to roll over. It took a good
year for the fundamental bottom in the market to be put in, and that was
heresy back then too. The P/E multiple on non-scrubbed reported
earnings has scored 60 points since March to 184x – not only a record
but five times more expensive than what we saw during the peak of the dotcom
bubble a decade ago (Oh! But we forgot – write-downs don’t
matter.)”
Thank you, David, and Gluskin
Sheff. In any event, we would CAUTION you to avoid the hype from CNBS
and the mainstream financial media. Meanwhile, BULLISH sentiment is at
RECORD HIGHS as detailed by www.elliotwave.com and Investors Intelligence.
Let’s look at the charts:
Notice how sentiment has now EXCEEDED
the all-time high in October 2007.
Now on to newsletter writers at
Investors Intelligence:
NEAR-record divergences between bulls and
bears. Previous highs have been poor places to invest, that much is
certain. Look closely at both of the previous illustrations. Now look
at another chart from David Rosenberg and Gluskin Sheff, outlining the
NEVER-BEFORE-SEEN rally from the March lows, in terms of both TIME and price,
as we supposedly EMERGE from recession:
As I said, this is a move never before
seen in HISTORY and it smells fishy to me. Take a look at insider
selling, courtesy of www.thegartmanletter.com and www.trimtabs.com :
What is driving the rises in the stock
and bond markets? It is our friends at the central banks who are
PRINTING toilet paper, er…money out of thin air. Take a look at
this chart outlining QE (quantitative easing) and the S&P 500, courtesy
of www.zerohedge.com :
Can you say a “correlation of ONE
to ONE on money printing versus WALL STREET asset prices?” You
can see it everywhere; stocks, short, intermediate and long-term treasuries,
corporate and junk bonds. ZIMBABWE has arrived in the G20.
Let’s take a look at our old friends, the charts of the S&P 500 and
Ten-Year Notes priced in real money, also known as gold:
Wow, back to 1990 values. Most
investors have no clue about the amount of losses they have sustained through
monetary debasement. Notice how the rally from 2003 DISAPPEARS when
measured in real money. That rally in nominal terms was a GREAT ILLUSION!!
Now let’s look at supposedly the safest investment in the world:
a US Ten-Year Note, but priced in GOLD to unmask the fallacy of this BELIEF:
It shows a decline in VALUE of 50% BELOW
its value in 1995 in REAL terms; hardly risk free. In fact, few
investments have fallen as far over this period. With the recent
breakouts in gold and silver indicating an approximate 40% RISE in dollar
terms, it would signal a 40% FALL in real values from here. Notice how
it is BREAKING down from the triangle and the top of the TREND channel going
back to 1990? BOMBS, er…BONDS away, as the next drop in REAL
terms has now begun.
So let’s take a shorter-term look
at the S&P 500 chart in gold, courtesy of www.chartoftheday.com :
Whoopsee, we are now at a logical
stopping point of the rally in PAPER and a resumption of the trend in
TANGIBLE assets and commodities. Notice how the market rallied the
bottom of the previous trend channel from the real top in the DOW in 2000,
and it stopped in its tracks both at the longer-term trend line and the top
of the trend line since October 2007. This is called a FAILURE.
These pictures can be seen in all paper
assets, stocks and corporate, public and junk bonds, etc. The money
they are creating is not going to Main Street, it is going to WALL
STREET. INSANE OVERVALUATIONS in all asset classes and the public is
getting in AT THE TOP!! Anybody who buys FINANCIAL assets at these
levels is insane. The BIG BANKS and BROKERS are unloading their trash
on them with GOVERNMENT forbearance, and thus, TACIT APPROVAL. Make no
mistake; stock prices WILL REVERT to reflect these realities.
This is a recipe for a collapsing
private sector (the REAL ECONOMY) and stock market. I predict a 60 to
80% decline in stock market values from wherever this INSANE bear market
rally ends over the next several years…
Debt-to-GDP ratios are fully 50% HIGHER
and headed to 100% greater than the peaks of the Great Depression:
Notice how the debt-to-GDP ratio climbed
into 1935-36. I project that this will happen again, and project it to
skyrocket higher to 500% of GDP, as INSANE public servants try to borrow and
spend their way to prosperity and BIGGER GOVERNMENT. It took 15
years to resolve that deleveraging; why would you expect it to end now in a
year or two? Additionally, credit is contracting in all sectors, except
government, at UNPRECEDENTED rates in the REAL economy as outlined in
these next two charts:
This is the most important chart in this
missive, as growth CANNOT resume until this chart turns positive. It tells
you that TARP and all Federal Reserve programs have FAILED, and that the
stimulus program is bogus. The $2-3 trillion that has been spent was
sent to Wall Street, the banks, and the politically connected; none of it is
getting to MAIN STREET.
This is the worst contraction in 40
years, and if you review the period between 1936 and 1953 on the debt-to-GDP
chart you see that this can go on for up to 15 years, it is in all categories
and it is just getting started:
Broad measures of credit growth have
rolled over and are PLUMMETING and the narrowest measures are rising as money
seeks safety.
Check out this chart from
www.shadowstats.com:
At the same time, Federal Reserve
presidents Bullard, Dudley and Fisher are saying publicly that the Federal
Reserve’s balance sheet is about to expand to over $3 trillion by
early 2010, so we can expect MZM (money of zero maturity):
So, you can expect this to expand by 50%
in the next six months, as the Federal Reserve takes toxic assets and
exchanges them for freshly-printed CASH to slow down the unfolding and
deepening insolvency of the banks.
The hoi polloi at the central banks
claim they can print with impunity, as the output gap and CPI and PPI remain
low. But the REAL numbers say LIAR! Take a look at the basket of
commodities since the beginning of 2009 through the middle of August:
Talk about a squeeze on consumers and
the private sectors as they pay more for EVERYTHING, contrary to every
government report. Prices paid in the PPI are up almost 20% just since
JULY.
But the bankruptcies emerging in the
private and corporate sectors just keep on RISING. Household net worth
has tumbled the greatest amount since WWII, as outlined by the chart above
from www.shadowstats.com (I urge you to subscribe.)
And household income has now declined to
pre-1997 levels, as the above chart shows:
Furthermore, debt has doubled since
then, as we saw in the DEBT-to-GDP chart with INCOMES below levels of 12
years ago. Double the amount of debt to service and income at 12 year
lows! Think about it. Are employment and income set to
advance at this point? Don’t bet on it, as these two charts from
David Rosenberg and www.gluskinsheff.com illustrate:
As you can see, the private sector is
flat on its back, and if you look at charts of declining inventories, you
will quickly see they are still almost DOUBLE the lows we saw at the bottom
of the 2002-03 recession valleys, so a lot of reductions REMAIN to be
made.
In conclusion: These are the
pictures of BLACK SWAN events. Dominoes of the next leg
down in the global economy. Statistically, the economy may grow in the
next several quarters, but in real terms, it will be an illusion, courtesy of
PRINTING MONEY and politically-correct economic statistics which are outright
FALSEHOODS and illusions for PUBLIC consumption. This period is right
out of George
Orwell’s Animal Farm and the Ministry
of TRUTH.
Buy and hold is DEAD as these realities
must now be priced into every market you know. This volatility is an
OPPORTUNITY for you! Learn how to CAPTURE it (click here). It will
be a trading market for 15 years, just as it was between 1929 and 1950.
The dollar is becoming the funding currency for the carry trade.
Public and private debt are at record
highs, and income is at record lows for the same. Real median household
income is below 1973 in the private sector, and at all-time lows in the
corporate sector. Widespread destruction of bomb, er…BOND markets
looms, as the incomes to service them DOES NOT exist, and the ASSETS which
underpin them no longer have the NOMINAL values they once did.
Refinancing will become increasingly IMPOSSIBLE. The greatest transfer
of wealth from those that hold it in paper to those that don’t has
commenced.
NO entrepreneur or corporate manager
would dare step onto the field as long as the blind, fascist, socialist
IDEALOGUES on capital hill are driving the economy. Why start a
business or take a risk hiring someone, when the federal and state governments
are poised to take your money through spiraling taxes, regulations, energy
costs (Cap and tax will triple the cost of energy minimum), new health
mandates or who knows what. It would be capital suicide….
Oh, the irony. The people behind Ob@manomics
and the Gang of 535 are a reflection of their representatives.
Ob@manomics may have just started a trade war with China.Amerika is doomed
because they have forgotten honesty, loyalty, the work ethic and producing
more than you consume, also known as producing REAL wealth, not nominal
wealth. What used to be the economic powerhouse of the world knows
nothing but how to print a bunch of money to paper over systemic fraud,
falling crony capitalists and scams, and what do you expect? Money is
being pumped into a society that, at the business/political leadership
levels, knows how to do nothing besides fraud to make money.
What is frightening is that the plans of
the Gang of 535, aka the US Congress and the Ob@ma administration, have been
finalized but not implemented. As the implementation unfolds, so will
the deepening depression and collapse in income generation. Ob@manomics
has just started a trade war with China over low-cost tires that the US NO
LONGER MANUFACTURES, at the behest of UNION masters. It is only the
first shot of blind ideologues and socialists which are creating the crisis
for personal and political goals. This is a deliberate destruction of
the economy in order to seize power and the private sectors they don’t
already have. Saul Alinsky and Carl Marx must be smiling.
The crony capitalists are having a field
day preying on people and businesses outside the government-guaranteed
sectors., People and business that are CUT off from credit while the
predators still have access to the FRESHLY-PRINTED cash. As Thomas Jefferson
once said:
"If the American people ever allow
private banks to control the issue of their money, first by inflation and
then by deflation, the banks and corporations that will grow up around them
(around the banks), will deprive the people of their property until their
children will wake up homeless on the continent their fathers
conquered."
This time has now arrived, but it has a
twist as fiat currencies and irresponsible public serpents will usher in a
hyperinflationary end game. Jefferson did not consider fiat currencies
since they were prohibited by the constitution…
Capital flight from the US is
intensifying, but running into the G7 currencies is like jumping from the
frying pan into the fire. Why would any sane investor invest in America
with these recipes coming from our fascist, socialist masters in
Washington who are totally oblivious to history and who are presiding
over a country which cannot generate its own energy needs (we are completely
able to supply our own needs, but it is POLITICALLY incorrect, and so
practical solutions are OUTLAWED?)
The Fed and G7 have succeeded in
PROPPING UP PAPER ASSET VALUES through unbelievable money printing. But
valuations are absurd and this excess liquidity is driving up the price of
everyday goods and the raw materials businesses use.
The FED and G7 are dedicated to
keeping the liquidity spigots open and point to the “output gap”
and POLITICALLY-CORRECT, cosmetic CPI and PPI data. They will be the
instigators of the coming hyperinflation as the central banks and G7
treasuries are pulling out every stop to SAVE their banking masters.
Runaway budget deficits will do the rest
as we head into an inflationary depression. In the past 50 years,
federal government outlays have averaged 20 to 22%. The Fiscal 2010
budget raises this figure to 27.2%, and when health care reforms are fully
implemented, the federal outlays as a percentage of GDP will rise to almost 43.2%.
When the last bull market began, interest rates were beginning a 28-secular
bull market (declining interest rates), regulations were cut in half over an
8 year Reagan presidency, and taxes were being slashed as well.
Now we face a nascent-secular BEAR
market (rising rates to compensate for debasement, runaway deficits and
government risk) in bonds, a DOUBLING in regulations, and massive tax hikes
of all kinds to pay for NEW and EXISTING programs, which are the FAIRY
GODMOTHER COME TO LIFE, but serve no productive purpose.
The plunge protection team is OUT of
CONTROL. Worthless stocks such as AIG, Fannie Mae and Freddie Mac, CIT,
Citigroup, and Bank of Amerika have been almost 25 to 40% of the total volume
traded for almost 6 weeks. These stocks all have NEGATIVE book values
if properly accounted for.
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Theodore “Ty” Andros
www.traderview.com
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articles by Ty Andros
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Thank you for reading Tedbits if you
enjoyed it send it to a friend and subscribe its free at www.TraderView.com don't miss the next edition of Tedbits.
If you enjoyed this edition of Tedbits
then subscribe - it's free, and we ask you to send it to a friend and visit our archives for additional insights from previous
editions, lively thoughts, and our guest commentaries. Tedbits is a weekly
publication.
Click here and I will prepare a complimentary,
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Tedbits
is authored by Theodore "Ty" Andros, and is registered with TraderView,
a registered CTA (Commodity Trading Advisor) and Global Asset Advisors
(Introducing Broker). TraderView is a managed futures and alternative
investment boutique. Mr. Andros began his commodity career in the early
1980's and became a managed futures and forex specialist beginning in 1985.
Mr. Andros duties include marketing, sales, and portfolio selection and
monitoring, customer relations and all aspects required in building a
successful managed futures and alternative investment brokerage service. Mr.
Andros attended the University of San Diego, and the University of Miami,
majoring in Marketing, Economics and Business Administration. He began his
career as a broker in 1983, and has worked his way to the creation of
TraderView. Mr. Andros is active in Economic analysis and brings this
information and analysis to his clients on a regular basis, creating
investment portfolios designed to capture these unfolding opportunities as
the emerge. Ty prides himself on his personal preparation for the markets as
they unfold and his ability to take this information and build innovative
professionally managed portfolios. Developing a loyal clientele.
This report may
include information obtained from sources believed to be reliable and
accurate as of the date of this publication, but no independent verification
has been made to ensure its accuracy or completeness. Opinions expressed are
subject to change without notice. This report is not a request to engage in
any transaction involving the purchase or sale of futures contracts or
options on futures. There is a substantial risk of loss associated with
trading futures and options on futures.
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