|
|
As Euroland Comes Apart
What Do We See In America?
Americas leaders in corporations
and most specifically in the global banks, Congress and the Executive have a
dug a bottomless pit over past years since the inception of the Great society
instigated by Lynden Johnson in the middle 1960’s. Guns & Butter
policies have proven way too expensive even for a massive economy like the
United States. The bond markets are enormous and glacial in their movements.
However, we can see events gathering into a volatility storm where any tiny
mistake creates an implosion of global economies and births a flock of hidden
Black Swans. We can see a world on the edge of disaster.
Our current administration and previous ones have
attempted to buy-print their way out of this dilemma. This can work for years
as Japan has demonstrated. However, Japan, while in a bond hole twice as deep
as the USA’s, sells its paper internally. Also, their striving for
perfection in all that they do has produced a massive and deep jobs program
for their nations’ citizens. This can last, as they have proven, as
long as confidence continues in those piles of bonds and other credit
instruments.
Some Of The Potential Black Swan Events
Flying Toward America In 2012.
Unemployment is the largest social problem. Bad debts are the
largest government, business, and personal problem. These, for the most part
remain as un-payable and must be eradicated, re-paid, written-down in
discounts or, eliminated through defaults.
Authorities of all kinds, who are allegedly in
charge of this monster mess continue with their
denials, arrogance, and an assertive no compromise attitude. Their primary
goal is to maintain the status quo, a paradigm that is now smashed and
irretrievably broken.
Their idea is to continue to control global
currencies, bond markets and a hold an iron grip on the Herd-Sheeple of the world; containing them within the
system. This has worked for decades, but is now breaking apart as we can see
in the Arab Spring revolutions in the Middle East, and with other jobless
citizens challenging the ability of formerly solid assets to continue their
very existence.
In our view, American urban life has unraveled to
the extent the streets are going hot with demonstrations, violence and a
larger pushback by the unemployed. Those without USA jobs now number in the
millions with a preponderance centered in younger groups 18-26 years of age.
Those people are prone to engage in pushback more than their elders.
We Have A Laundry List Of Negatives Piling Against
Us In 2012 …
Including Debts , Deficits And Defaults. Beyond
those, We Are Watching Spreading Social Breakdowns Expanding Throughout The
World.
Big banks are broke and facing hundreds of lawsuits
from regulators and abused customers and citizens. The nasty mortgage
left-overs in real estate have not been addressed but merely hidden in the
dusty back rooms of banks and other lenders. Some have been thrust into the
open like Countrywide, but as large as that one was, it is nothing compared
to current outstanding balances. In New York state recently, banks were
straining to exit MERS lawsuits and the massive frauds they committed on
behalf of these affiliated lenders.
Bankers and banks who created the mortgage and
derivative messes are sitting in a poisonous atmosphere. Again, we are
strongly against violence but this can and is spreading. I would not want to
be a global or real estate banker.
Cycles and the calendar are propping-up several
markets enabling, in our view, the old paradigm to continue-last until later
spring. This was recently proven when the PPT manipulated the S&P’s
and fund managers followed with buying when it was not technically correct to
do so. Against all reason, as we reported February 3, the primary movers
including the S&P’s, Nasdaq, and bonds
behaved irrationally to the buy side. We expected this and did forecast it, as otherwise, a larger selling event was imminent.
And, of course, this is an election year. This event created a short-term
reprieve but those “Kicking the Can” days are just about
over.
Europe can crack-up first and with major American
banker and corporation investments at risk, we could get nailed second; and
not far thereafter, Europe must face the music. It is difficult to measure
the depth of USA risk in Europe but I would not be surprised to see the total
lending liability exceed the entire capitalization of New York’s big
banks. The immediate follow-on report could be: First as Euroland crashes, it creates a lemming-like rush to the
safety of US investments and bonds. This will prop the US Dollar and bond
markets instilling a short-term feeling of well-being and security. However,
it won’t be long, until the after-effects from Europe expand and crush
American markets.
European elections will add to disruptions as voters
demand change from messy problems. We can see new faces in many Euro-land capitals
especially in Greece, Portugal, Spain, and of course France. Ireland and
Iceland have already been through the wringer, and in the aftermath, a new
settling process has begun under an umbrella of severe austerity. Iceland is
actually improving since they stiffed the Euro-Bankers.
It was reported again recently on Bloomberg
that educated Irish youngsters with the funds to emigrate are doing so.
Ireland’s parents are encouraging adult children to leave Ireland for
greener pastures. Some of those places are Canada and Australia. With the
better educated group permanently leaving, what is the future for those left
behind in Ireland?
The Middle East is on fire from conflicts in Iraq,
Afghanistan, Libya, Syria, Yemen, and other related nations. The unemployed
have no future so they begin to fight. Watch for this to spread over the
entire Middle East, Africa and into Europe.
Dissent in the USA has been mild compared to other
nations. The OWS or, Occupy Wall Street, folks had an objective
when it began. Later on, the OWS thing was just an excuse to go into the
streets and fight with police for no apparent reasons. These are adult kids
with no work, no life purpose, and no future. Idle hands get busy doing bad
things.
In the long hot urban summer of 2012, with
increasing hopelessness among the young, demonstrations and street violence
expands. We are against this kind of mayhem as it solves nothing; people can
get hurt and the taxpayers have to pay police overtime and cover the
extensive damage to public places. It won’t matter. This problem is
only the beginning in a chain reaction to the “Situations.”
This is a normal historical response.
A decade of unruly weather produced numerous
problems. Most importantly, grain, meat animals and other kinds of
agricultural products are more costly and still increasing in price. Coupled
with growing inflation on money and bond printing, the dollar sinks in value
depleting assets. More droughts, earthquakes, food shortages, famine, high
winds, and blackouts are front and center. Newer weather forcasts
are actually predicting a new Ice Age beginning in 2040.
In America, the larger event (at least known at this
time) is going to be the election. The Obama administration is well
positioned for re-election as the president has an alleged $1 Billion dollar
war-chest, and his ruling party still maintains enough congressional control
to pass bills or, stymie the GOP’s. The GOP’s appear to be in
disarray without a leading candidate. One will emerge in a brokered convention
in our view, and that person loses the election at the hands of the Obama
political machine.
The GOP is no bed of roses either. They have gone
along with wasteful spending and onerous laws and rules now chafing the
American public. This is why, in our view, we saw the rise of the Tea
Party and Ron Paul. Would there be a tax revolt if new and higher taxes
are demanded in a depression? What if Obama, under severe strain of the job,
decides at the convention to resign? What if an independent candidate for
president appeared and was appreciated by the general voter group at large?
We see stuff on the edges signaling that is a trend. Trends can move quickly
and unexpectedly. Investors and traders had better be very wary of risk in
the 4th quarter of 2012 in our opinion.
What if Obama wins the election and there is
widespread voter fraud in the process? Remember the hanging chads event with
Bush and Gore? We think Harry Reid lost his election to his lady opponent,
but got re-elected on fixed electronic voting machines. If Obama is
re-elected and voter fraud lawsuits are filed, what happens next? Is the
election a do-over? If Obama loses, I am expecting race riots, particularly
if the election is very close. What happens if class warfare comes to the
fore if Obama is re-elected, higher taxes go into effect, and
worker-taxpayers feel they have been impugned and picked-upon to pay for the
growing jobless?
While we have a strong record on our forecasts, we
are not mind-readers. Yet, as an observer of politics, we see several items
that might have a major out-come from this November election. Some of
those would be:
The president is stubborn and not prone to
compromise with the opposition. This makes it tough to get major bills or,
budgets passed. The result is not good for the USA economy, national treasury
or, the American citizens.
In our view, the primaries and pre-election mayhem
will be going wild. The accusations and name-calling could reach new and very
nasty heights. Pressures on the administration have not been fairly strong
considering Obama’s record, but we think what’s happened so far
is child’s play. With budgets demanding to be resolved, Middle Eastern
conflicts, citizen dissention and fragile markets, and with the Middle East
on edge, it would be very easy for the administration to step on a trip wire.
The news and rhetoric are reaching new accusatory levels and feelings are
running very hot. As Russia continues to add fuel to the Middle Eastern
political mess, we can envision some very disruptive and unusual events such
as:
(A) A delay in the USA election for emergency
reasons (B) The outbreak of a new war (C) More stringent capital controls on
moving money due to numerous market problems (D) An outright taking or,
conversion of private pension funds to treasury bonds (E) And, if the streets
go nasty enough, we might even see the national guard called out with
imposition of martial law. (F) Bank holidays and bank closures are certainly
not out of the question. They have already happened in the UK with Northern
Rock and all over Greece. (G) Calls for impeachment are not limited to
Europe. Obama is at risk too with three major supreme court lawsuits underway
posing severe challenges.
There are 3-4 states within the USA on the cusp of
major default including a potential Chapter 9 bankruptcy. Those would be
California, Illinois, and others. Further, major cities within those states
are also candidates for a Chapter 9 as well. If you think that is not
possible, think about what the failure of a major bond payment can do to a
state or, city. We already had one in an Alabama county.
The world at large has always been fighting among
certain cultures, tribes and nations. However, in a review of history over
the last 200 years, I cannot remember when situations were so fraught with so
much anomosity and anger.
The Middle East is in a slow-motion dissolve. They
hold the keys to a larger chunk of the world’s energy. Instability in
the region is higher than ever and observers are wondering, which country
explodes into riots next? Leaders are failing, falling and resigning. Others
are fighting with a new ferocity against their own people in unspeakable
violence.
Israel, Iran and the USA are on the edge of a
shooting war. Once again the world is exposed to nuclear threats, and loss of
energy reserves, while facing Iran’s major league army. Unless there is
a Black Swan accident, we think an open shooting war here does not
happen. All sides have too much to lose. But, what about an unforseen accident; something that sets-off wild out of control
shooting?
In Europe, the entire continent is in danger of an
economic crack-up. Germany is the alleged villan as
they won’t hand over their hard-earned taxpayer cash to weaker, lazy,
jobless nations. The slide down the hill has begun with Greece, Portugal,
Ireland, Iceland and others. The UK and France are much weaker than openly
discussed in the press. Unemployed minority immigrants pose a huge problem
for both France and England. A passive political stance toward law-breakers
in these groups has encourged them to expand crime
and spread wider mayhem.
In our view America is very resiliant
despite all her problems. We can sink into depression and we can always
recover and work our way back. This is history and the way things work.
However, if there is a national and brutal clampdown on the citizenry and a
naked loss of liberty, we are headed toward a whole different venue. That
could be the point in time when the good ‘ol
boy USA squirrel shooters and patriots present a weapons display of
500,000,000 guns.
Also, if politcal
repression becomes the norm, where does the U.S. Military stand? At first,
they would obey commands, but I would find it hard to believe the U.S. Army
would shoot American citizens. That would be where they would draw the line.
That line then becomes anarchy and revolution. Let us all hope and pray our
beautiful nation, my America, never ever goes there again.
This calendar, or cycle of time in the markets and
within the social aspects of societies at large, reminds me of a period in
the USA between 1842 and 1876. That cycle had recessions, depressions, a
national Civil War, and mass movements for equality, In our view, the current climate is potentially as bad as any we
have seen since the inception and birth of our nation in 1776. America is
about to face a supreme test. I think she will pass the test but not before
some unthinkable events visit our shores disrupting the daily lives of all
Americans.
As the following quotation expresses quite
succinctly, “If you don’t change direction, you end-up where you
are going.” –Philosfacts- Farmers Almanac 2012
Too many ego-manic, power hungry psychopaths remain
in control and they have no clue where they are going. We think a rude
awakening is the final response, creating a howl of dismay, as they place all
blame on others. That is the way of the world. Many would say, let ‘em go burn. Problem is we are sitting in the middle of
their fire.
Roger Wiegand
www.webeatthestreet.com
Contact Claudio Bassi, at Trader Track’s New York City publishing
offices for a trial subscription. Call
718-457-1426 Monday through Friday, 9:30am to 5pm or,
e-mail cbassi@miningstocks.com
Recommendations made in “Trader Tracks”
are exclusively those of Roger Wiegand and the
publication is also exclusively the editorial content provided by Roger Wiegand. TAYLOR HARD MONEY ADVISORS, INC. (THMA)
LOCATED AT 33-42 61ST STREET, WOODSIDE, N.Y. 11377, ASSISTS IN THE MARKETING
OF “TRADER TRACKS.” However, the views expressed in Trader
Tracks do not necessarily reflect those of THMA (Website:
www.miningstocks.com). Because individual investment objectives vary, this
summary of investments should not be construed as advice to meet the needs of
any particular reader or subscriber. Opinions expressed in Trader Tracks are
statements of judgment expressed at the date and time they were written, and
as such, are subject to change without notice. Roger Wiegand
is not a CFA nor an investment advisor, but a private individual who studies
the markets extensively and offers summary opinions. Before any type of
investment is made, you should always seek advice from your attorney, CPA, registered
broker, or financial advisor. There is considerable risk in market
speculation and investing. There are no guarantees regarding performance and
past performance provides no guarantee of future performance. Your trading
accounts are always subject to the potential for severe or total losses. This
service will involve SPECIAL EMAIL ALERT TRADING RECOMMENDATIONS PROVIDED
AT ANY TIME Roger Wiegand believes it is
opportune to trade either in or out of the market in question. AS SUCH,
THIS SERVICE WILL BE CONSIDERED A PREMIUM SERVICE. The management of
THMA, Inc. does not anticipate trading in the securities recommended in
Trader Tracks. No statement or expression of any opinion expressed herein
constitutes an offer to buy or sell the securities mentioned herein. Trading
futures contracts may not be suitable for all investors. You may lose a
substantial amount of money in a very short period of time. The amount you
may lose is potentially unlimited and can exceed the amount you originally
deposit with your broker. This is because trading futures is highly
leveraged, with a relatively small amount of money used to establish a
position in assets having a much greater value. If you are uncomfortable with
this level of risk, you should not trade futures contracts. If you need a
broker, contact mine, Ryan Olson, Managing Partner, Jackson-Olson commodities
at 800-352-5228 or by e-mail rolson@jacksonolson.com Contact Jackson-Olson
Commodities, LLC, 5510 Abrams Road, Suite# 101, Dallas, Texas 75214. Local
Telephone is 214-691-8600. Fax is 214-691-8614. Jackson-Olson clears trades
through R. J. O’Brien founded 1914. They provide clearing and execution
services in virtually all markets around the globe. To subscribe to Trader
Tracks stocks & bonds, futures & commodities, contact Claudio Bassi with e-mail CBASSI@MININGSTOCKS.COM
|
|
