The United States Is Being Overthrown By Our Politicians
Mon Sep 22, 2008 8:30 am » by Lowmank
http://www.americanchronicle.com/articles/74930
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A silent but all-reaching coup has been taking place within the United States. This coup is not being directed by bomb-laden terrorists, nor will it ever be meaningfully covered by the mainstream media. The seditious act is being carried out by our very own elected officials, with President Bush leading the insurrection. We the American people, will not become fully aware of this revolution until Bush's globalist agenda has been achieved and the United States disappears completely.
While many Americans have probably forgotten reporter Jerome Corsi´s revelations into the proposed North American Union, or the merger of the U.S. A., Mexico, and Canada, former Mexican President Vicente Fox recently spoke about the plan publicly. However, his comments received very little coverage from the mainstream press.
On September 12, 2008, Vicente Fox gave a speech at Wayne State University´s forum entitled "Globalization and Immigration." During the speech, he chastised Americans for not embracing a globalist view, as well as those who enter this country illegally from Mexico.
Fox also pushed his goal for the North American Union. He told the crowd: "What would be better for this nation then having a successful neighbor?…Why don´t we work together to make that dream happen? That dream happened in Europe. Today, Europe is what it is because of that Marshall Plan. They decided to work together. On a destroyed Europe right after the Second World war, the leaders came and had a vision to build up the union. The European Union. They started step by step-by-step. It´s been a 60-year progress.
After the speech, the former Mexican leader sat down for an interview with a local Fox affiliate. The reporter brought up the fact that Americans have become angry over the loss of their jobs due to NAFTA. Fox then informed the reporter in no-uncertain terms, that American workers should simply "get over it!" He seemed to take great pleasure in the knowledge that American manufacturing jobs are not returning. He also talked about the need for a common currency, known as the Amero.
In June 2006, Jerome Corsi writing for Human Events reported on the NAFTA super highway. The proposed road would bring Mexican trucks over the border without a customs inspection until those trucks reach Kansas City. Corsi correctly characterized the border becoming simply a "speed bump" once the highway is finished. The road will cross the heartland of the U.S., eventually ending in Canada. Amazingly, not one network news cast (not even Fox) has mentioned this incredible but true threat to U.S. sovereignty.
In 2007, that became a reality. Mexican trucks are now coming into this country every day, without being inspected at the border. The potential for large shipments of drugs, illegal aliens, and even terrorists being carried in those trucks is tremendous. The NAFTA super highway is in fact a smuggler´s dream come true.
To add insult to injury, the customs complex (known as Smart Port) in Kansas City will be a Mexican customs station. However, it is being built with funds collected from the taxpaying citizens of Kansas City. The station will reportedly cost $3 million. A description on the Smart Port website reads: "For those who live in Kansas City, the idea of receiving containers nonstop from the Far East by way of Mexico may sound unlikely, but later this month that seemingly far-fetched notion will become a reality."
NASCO (North American Super Corridor Coalition) is building the NAFTA ten- lane highway. NASCO is a collection of government agencies and private business organizations. NASCO has officially been given $2.5 million by the U.S. Department of Transportation.
So how can private groups pay for a public highway?...On April 30, 1992 President George H.W. Bush issued Executive Order #12803, which allows private investment in U.S. infrastructure…That´s how.
While only $2.5 million in federal dollars is reported to have been spent on this venture, considering the more than 6,000 earmarks in infamous 2006 $300 billion Highway Bill, it is really impossible to know the exact amount of taxpayer money being used on the project. The culture of corruption and lies in Washington makes a true accounting on any matter nearly impossible.
The alliance between Mexican, Canadian, and American government officials and big business is the very definition of a shadow government. One no longer need tune into late night radio host Art Bell, nor order back issues of Fate magazine to examine outrageous conspiracy plots. Though incredible, the pending construction of the NAFTA super highway and the merger of all three North American nations is real and is being directed by our own politicians.
While the idea that a road will be constructed connecting Mexico, the United States, and Canada without the consent of the American people is disgusting. The goal that this road will help support is as frightening as any doomsday scenario one can imagine.
On March 23, 2005, a meeting was held at Baylor University in Waco, TX. The meeting saw President Bush, Vicente Fox of Mexico, and Canadian Prime Minister Paul Martin sign the SPP (Security and Prosperity Partnership)agreement which will effect all three nations. Two stated goals of the SPP are: 1) Securing North America from external threats. 2) Preventing and responding to threats within North America...One must wonder if the "threats within North America" are actually well informed American citizens!
Bush entered into this treaty by calling it a "partnership" or "agreement," even though it really is a treaty. U.S. law requires approval by two thirds of the Senate before any treaty with another nation can be signed. However, Bush simply skirts the law by calling any bi-lateral or tri-lateral treaties "agreements." The SPP was signed with an Executive Order which is how Bush will achieve his globalist agenda and merge the three nations, all without ever consulting Congress.
An SPP office now exists within the U.S. Department of Commerce.
A very troubling report is the Council on Foreign Relations´ call for a North American Union. The CFR proposes the creation of a North American Union Tribunal whose rulings would take precedence over the U.S. Supreme Court, the borders between Mexico, the U.S., and Canada to be erased by 2010, as well as the creation of the North American Parliamentary Group to supersede the U.S. Congress.
Speculation that President Bush plans on merging the U.S. with our neighbors to the North and South is really the only way to explain his lack of action in response to the ongoing tidal wave of illegal aliens flowing over our border with Mexico.
Bush and his surrogates made a great deal of noise over his decision to send 6,000 National Guard troops to the border. However, the troops were not allowed to stop anyone seen crossing the border illegally, they could only report the incidents to the Border Patrol. The troops were under orders to only work in a support role. The guardsmen spent their time digging latrines, answering phones, making repairs to infrastructure, and performing office duties.
Though the National Guard contingent was supposed to have reached 2,500 along the border by the first of July 2006, the actual number was far lower. At the time, National Guard spokesman Daniel Donohue admitted that there were only 483 troops actually on duty at the U.S.-Mexican border. In reality, only a few hundred troops were sent to the border at a time.
The 2006 Amnesty bill would have not only given amnesty to millions of illegal aliens currently inside the U.S., but also allowed another 100 million new legal immigrants to enter the country over the next 20 years. The bill called for a guest-worker plan for millions more from Mexico. The bill was exactly what President Bush wanted.
Picture for a moment another 100 million mostly Latino American immigrants in this country, as well as the offspring from the illegal aliens already here. Under that plan, the U.S. will become another very crowded and very poor Third World nation.
Of course, John McCain and Barack Obama both support so-called "comprehensive immigration reform," which is simply code for granting amnesty to millions of illegal aliens. Both of these presidential candidates have expressed the desire the extend Social security benefits to those working in this country illegally.
Who would benefit from the U.S. devolving into a mostly poor, mostly uneducated nation?...Big business seeking cheap labor and an ever-growing dictatorial federal government.
Inundated with the children of so many new immigrants in such a short period of time(both legal and illegal) who cannot speak English, our public education system will collapse. Overwhelmed with millions of uninsured patients, hospital emergency rooms will be forced to close. Violent crime will become a daily occurrence in all but the most exclusive neighborhoods, as turf wars erupt between extremely brutal Latin American gangs. Wages for Americans will decrease with the influx of so many Third World laborers. The middle class will disappear and democracy will become irrelevant.
It is obvious that the most dangerous threat to this nation does not emanate from the Muslim world, nor from a former Cold War enemy, our most dangerous threat exists within those who are sworn to protect us.
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A silent but all-reaching coup has been taking place within the United States. This coup is not being directed by bomb-laden terrorists, nor will it ever be meaningfully covered by the mainstream media. The seditious act is being carried out by our very own elected officials, with President Bush leading the insurrection. We the American people, will not become fully aware of this revolution until Bush's globalist agenda has been achieved and the United States disappears completely.
While many Americans have probably forgotten reporter Jerome Corsi´s revelations into the proposed North American Union, or the merger of the U.S. A., Mexico, and Canada, former Mexican President Vicente Fox recently spoke about the plan publicly. However, his comments received very little coverage from the mainstream press.
On September 12, 2008, Vicente Fox gave a speech at Wayne State University´s forum entitled "Globalization and Immigration." During the speech, he chastised Americans for not embracing a globalist view, as well as those who enter this country illegally from Mexico.
Fox also pushed his goal for the North American Union. He told the crowd: "What would be better for this nation then having a successful neighbor?…Why don´t we work together to make that dream happen? That dream happened in Europe. Today, Europe is what it is because of that Marshall Plan. They decided to work together. On a destroyed Europe right after the Second World war, the leaders came and had a vision to build up the union. The European Union. They started step by step-by-step. It´s been a 60-year progress.
After the speech, the former Mexican leader sat down for an interview with a local Fox affiliate. The reporter brought up the fact that Americans have become angry over the loss of their jobs due to NAFTA. Fox then informed the reporter in no-uncertain terms, that American workers should simply "get over it!" He seemed to take great pleasure in the knowledge that American manufacturing jobs are not returning. He also talked about the need for a common currency, known as the Amero.
In June 2006, Jerome Corsi writing for Human Events reported on the NAFTA super highway. The proposed road would bring Mexican trucks over the border without a customs inspection until those trucks reach Kansas City. Corsi correctly characterized the border becoming simply a "speed bump" once the highway is finished. The road will cross the heartland of the U.S., eventually ending in Canada. Amazingly, not one network news cast (not even Fox) has mentioned this incredible but true threat to U.S. sovereignty.
In 2007, that became a reality. Mexican trucks are now coming into this country every day, without being inspected at the border. The potential for large shipments of drugs, illegal aliens, and even terrorists being carried in those trucks is tremendous. The NAFTA super highway is in fact a smuggler´s dream come true.
To add insult to injury, the customs complex (known as Smart Port) in Kansas City will be a Mexican customs station. However, it is being built with funds collected from the taxpaying citizens of Kansas City. The station will reportedly cost $3 million. A description on the Smart Port website reads: "For those who live in Kansas City, the idea of receiving containers nonstop from the Far East by way of Mexico may sound unlikely, but later this month that seemingly far-fetched notion will become a reality."
NASCO (North American Super Corridor Coalition) is building the NAFTA ten- lane highway. NASCO is a collection of government agencies and private business organizations. NASCO has officially been given $2.5 million by the U.S. Department of Transportation.
So how can private groups pay for a public highway?...On April 30, 1992 President George H.W. Bush issued Executive Order #12803, which allows private investment in U.S. infrastructure…That´s how.
While only $2.5 million in federal dollars is reported to have been spent on this venture, considering the more than 6,000 earmarks in infamous 2006 $300 billion Highway Bill, it is really impossible to know the exact amount of taxpayer money being used on the project. The culture of corruption and lies in Washington makes a true accounting on any matter nearly impossible.
The alliance between Mexican, Canadian, and American government officials and big business is the very definition of a shadow government. One no longer need tune into late night radio host Art Bell, nor order back issues of Fate magazine to examine outrageous conspiracy plots. Though incredible, the pending construction of the NAFTA super highway and the merger of all three North American nations is real and is being directed by our own politicians.
While the idea that a road will be constructed connecting Mexico, the United States, and Canada without the consent of the American people is disgusting. The goal that this road will help support is as frightening as any doomsday scenario one can imagine.
On March 23, 2005, a meeting was held at Baylor University in Waco, TX. The meeting saw President Bush, Vicente Fox of Mexico, and Canadian Prime Minister Paul Martin sign the SPP (Security and Prosperity Partnership)agreement which will effect all three nations. Two stated goals of the SPP are: 1) Securing North America from external threats. 2) Preventing and responding to threats within North America...One must wonder if the "threats within North America" are actually well informed American citizens!
Bush entered into this treaty by calling it a "partnership" or "agreement," even though it really is a treaty. U.S. law requires approval by two thirds of the Senate before any treaty with another nation can be signed. However, Bush simply skirts the law by calling any bi-lateral or tri-lateral treaties "agreements." The SPP was signed with an Executive Order which is how Bush will achieve his globalist agenda and merge the three nations, all without ever consulting Congress.
An SPP office now exists within the U.S. Department of Commerce.
A very troubling report is the Council on Foreign Relations´ call for a North American Union. The CFR proposes the creation of a North American Union Tribunal whose rulings would take precedence over the U.S. Supreme Court, the borders between Mexico, the U.S., and Canada to be erased by 2010, as well as the creation of the North American Parliamentary Group to supersede the U.S. Congress.
Speculation that President Bush plans on merging the U.S. with our neighbors to the North and South is really the only way to explain his lack of action in response to the ongoing tidal wave of illegal aliens flowing over our border with Mexico.
Bush and his surrogates made a great deal of noise over his decision to send 6,000 National Guard troops to the border. However, the troops were not allowed to stop anyone seen crossing the border illegally, they could only report the incidents to the Border Patrol. The troops were under orders to only work in a support role. The guardsmen spent their time digging latrines, answering phones, making repairs to infrastructure, and performing office duties.
Though the National Guard contingent was supposed to have reached 2,500 along the border by the first of July 2006, the actual number was far lower. At the time, National Guard spokesman Daniel Donohue admitted that there were only 483 troops actually on duty at the U.S.-Mexican border. In reality, only a few hundred troops were sent to the border at a time.
The 2006 Amnesty bill would have not only given amnesty to millions of illegal aliens currently inside the U.S., but also allowed another 100 million new legal immigrants to enter the country over the next 20 years. The bill called for a guest-worker plan for millions more from Mexico. The bill was exactly what President Bush wanted.
Picture for a moment another 100 million mostly Latino American immigrants in this country, as well as the offspring from the illegal aliens already here. Under that plan, the U.S. will become another very crowded and very poor Third World nation.
Of course, John McCain and Barack Obama both support so-called "comprehensive immigration reform," which is simply code for granting amnesty to millions of illegal aliens. Both of these presidential candidates have expressed the desire the extend Social security benefits to those working in this country illegally.
Who would benefit from the U.S. devolving into a mostly poor, mostly uneducated nation?...Big business seeking cheap labor and an ever-growing dictatorial federal government.
Inundated with the children of so many new immigrants in such a short period of time(both legal and illegal) who cannot speak English, our public education system will collapse. Overwhelmed with millions of uninsured patients, hospital emergency rooms will be forced to close. Violent crime will become a daily occurrence in all but the most exclusive neighborhoods, as turf wars erupt between extremely brutal Latin American gangs. Wages for Americans will decrease with the influx of so many Third World laborers. The middle class will disappear and democracy will become irrelevant.
It is obvious that the most dangerous threat to this nation does not emanate from the Muslim world, nor from a former Cold War enemy, our most dangerous threat exists within those who are sworn to protect us.
- Truthseeker
- Posts: 1544
- Joined: Sat Apr 05, 2008 1:36 pm
Mon Sep 22, 2008 10:33 pm » by Truthseeker
Despite attempts made by Greenspan and Bernanke, there is no way to avert the payback period that has been building for over two decades. Over this stretch, America has consumed much more than it has produced. As a result, both consumer and federal debt have ballooned to record levels. And now, the payback period is upon us. The bailout buffet won't end with Fannie and Freddie. There's a lot more where that came from because the “Fed's food court” remains open, as does that of the U.S. Treasury. In fact, the autos are in the process of being bailed out with $50 billion in “loans.” I expect the airlines to also receive some form of a bailout as well.
Washington 's Three Stooges
But Greenspan and Bernanke have not been alone in what will surely be remembered as America 's Financial Apocalypse - the eventful period ushering in a decade-long depression, as predicted in my 2006 book by the same title. Certainly, President Bush did not create these trends. But his financial irresponsibility has accelerated their magnitude. In less than eight years, he has managed to increase the national debt by 90%. As the data shows, not only has he led the worst recovery since the post-WWII era, he has also positioned his successor with budget shortfalls for many years to come due to Part D Medicare, the Iraq War, and his tax cuts for the wealthy.
Combined with the staggering deficits for Medicare and Social Security , America 's economy will be in the gutter for many years to come even after the banking and real estate troubles cool down. No one else is talking about these issues because they're wrapped up in the daily drama. But save this article and others I've written because I've been mentioning the longer-term problems ever since writing my book. In a few years, more people will begin to address these issues once they are transformed into daily drama.
President Bush's attempts at a recovery have been so horrendous they've actually led to the current recession, which will turn out to be the worst in decades. I would venture to guess he is desperately pleading with officials to come up with even more gimmicks to hide the full realities of the economy so the worst will be reported only after he leaves office. But I will guarantee you if Washington and the Fed continue this reckless game of applying band aids instead of letting things play out, we will see a much bigger crisis down the road, similar to what happened after Greenspan tried to mitigate the dotcom collapse. You can bet this is going to happen because Washington does not understand the meaning of preemption.
Altogether, we have had eight years of no gains in real median wages, flat stock market returns, and minimal net new jobs. Despite what you have heard, after adjusting for debt spending, population growth and realistic adjustments to the GDP deflator, there have only been 3 or 4 quarters of GDP growth since 2005. If you adjust for military, government and minimum wage positions – i.e. jobs funded by tax payers and jobs that don't pay anything - there have been absolutely no net new jobs. Bush's largest gains have been with inflation, oil and food prices, debt, trade deficits, bankruptcies, foreclosures, and healthcare costs. If an assembly of the world's leading economic strategists were to design the most destructive economic disaster possible, they could not match the results of Bush's tenure. Even the most loyal Bush supporters will admit he has been an absolute disaster – that is if they're being honest. America is now more dependent on foreign nations than ever – not only for oil, but also credit and manufactured goods.
America 's “Resilient” Economy
Many of the pundits flood the propaganda networks with repeated denials of the problems, boasting how resilient the U.S. economy is. You know who they are. I'm not quite sure what they've been smoking. But it appears to be some sort of hallucinogen because they seem to expect Superman to bend the economy back into shape. Ladies and Gentlemen, in case mommy never told you, there is no Santa Claus and there is no Superman. And if you think Bernanke's printing presses have an endless supply of ink and paper, just wait until the real crisis appears. So you had better get ready because it's coming. It is virtually inescapable. And it's going to cause devastation around the globe. Of course I'm taking about the likely implosion of the CDS market.
Let's take a look at America 's “resilient economy.” Let's see…the entire financial system is in the process of blowing up. Already there have been over $500 billion in bank losses, with over $1 trillion more to come. Over one dozen banks have failed, with hundreds on deck. A handful of large hedge funds have blown up, with hundreds more on the way. Already, over $1 trillion has been transferred from the Fed to the banking cartel. But I estimate another $1.5 trillion will be needed to maintain liquidity as banks de-leverage over the next few years. Unemployment is now over 6% and inflation is over 5%, even with Washington 's manipulation of the data. Virtually every metric in the housing market is at multi-decade lows, except for foreclosures which are hitting new highs.
Taxpayers are now on the hook for billions of dollars of potentially worthless debt held by Fannie and Freddie. It's now official. America 's free market economy is really a socialist system for corporations. One could argue this to be a form of Fascism. My best estimate for losses due to the Fannie and Freddie taxpayer bailout are between $200 to $500 billion. The worst case scenario would be $800 billion. If this economy is resilient, I can't wait to see how it magically bounces back. When Superman fails to show up, Washington might consider giving David Copperfield a call. But this would be one illusion he won't be able to pull off. Get the popcorn ready.
The Economy Under a Microscope
Let's take a closer look at the economy. America imports oil, credit, and manufactured goods, while exporting jobs, junk bonds and inflation (via the dollar-oil link – see http://www.marketoracle.co.uk/Article5414.html for an explanation). That doesn't sound like the type of trade policy that would support claims of a superpower, unless you're only counting the number of nukes. Surely Washington is beginning to wonder how much longer Asia and Europe will continue fueling America 's credit bubble. They've already faced massive losses from sub-prime securities with much more carnage to come.
China holds about $1.4 trillion in U.S. Treasuries, but only due to their its surplus with the U.S. It can't dump Treasuries yet because the Yuan remains greatly undervalued. China pegged it to the dollar back in 2001, knowing the dollar would plummet so they'd lure dollars from U.S. consumers looking for bargains. What most people don't realize is that China 's support for U.S. Treasuries helps finance Bush's irresponsible spending sprees. By financing up to 90% of each annual deficit, China helps keep interest rates low in the U.S., which facilitates credit expansion for consumers to buy more imports - mainly from China (due to the low cost items created by China's currency peg).
Hidden Imports
Keep in mind when you buy that Dell computer or Fossil watch, you're really buying imports. Dell and Fossil actually resemble distributors more than manufacturers because virtually all of their products originate overseas. The same is true for most U.S. companies that sell branded goods. In many cases, the same is also true for the service segment of the economy. Many American IT and software development firms outsource projects to India , Canada , and other nations so they can escape the costly retirement and healthcare benefits Americans expect.
By no means does it end there. For several years, U.S. banks, tax providers, telecommunications and several other industries have outsourced to Asia - so much for the “strength” of America 's service economy. If this service economy is so “strong” someone explain to me how Asia has been able to increase its living standard by leaps and bounds in such a short period. Before you answer, keep in mind that income and wealth are finite over short periods since they are limited by human and natural resources. Make sense? If not, let me know and I'll do a write-up explaining it next time.
Corporate America 's new trend is to outsource even lower on the food chain to nations like Argentina , as a way to find more desperate workers to enslave at a lower cost. While these jobs seem like a Godsend, foreign workers will soon see the longer-term effects of corporate globalization. Already, many U.S. corporations have finessed themselves into the hip-pocket of foreign politicians and other officials to discourage unions, ensuring wages remain low and benefits never materialize.
?? (See Ya' Later) Yankee
As the economy continues its downward spiral, it remains to be seen how much longer China keeps its currency undervalued once it realizes U.S. consumers have no more money to buy their goods. Once the verdict is out, China could begin to focus on internal growth as the recession spreads globally. The global effects are already surfacing, with inflation soaring, real estate plummeting and foreign banks scrambling as they wait for the next Bear Stearns. The Chinese government could encourage its consumers to spend domestically. This would prove as a great strategy to buoy its economy since Chinese have amble savings (they save 25% of household income). Thus, once China is convinced U.S. consumers are finished, there is a good chance it will begin a gradual sell-off of U.S. Treasury securities. And this is going to be a huge problem.
The Middle East also has a huge trade surplus with the U.S. But unlike China , it has no incentive to hold U.S. Treasuries. Instead, Middle Eastern investors use their petrodollars to buy hard assets – commercial real estate like the Chrysler building, businesses and other critical U.S. assets. Yet, they still can't seem to find enough things to buy, so many Middle Eastern cities are being gutted and turned into modern architectural wonders. In the recent past when U.S. banks have begged for mercy, Dubai , Kuwait and Saudi Arabia have handed over billions from their sovereign “oil extortion” funds. But they've learned their lesson, so I wouldn't expect anymore bailout money anytime soon. Never fear! The Fed and the U.S. Treasury are here!
The Federal Reserve Disaster
The Fed needs to let a real recession run its course to clear out the trash so the economy can begin a real recovery and expansion. They've been playing this boom-bust game for several years now. And all we have seen are illusions of growth followed by the realities of mismanagement and excess consumption. Running the printing presses in overdrive won't get America out of this mess. It hasn't helped in the past and it's not going to now. In fact, using the money supply to hold off a recession and prevent bank failures ensures there will an even more devastating crisis down the road . Greenspan tried the same move in response to the Internet meltdown. And as we all know, this led to the current real estate bubble and banking crisis.
But even shutting down the Fed's printing presses is insufficient for a lasting and real recovery. Washington absolutely must restructure free trade so that the playing field is level for all participant nations. This implies that America structure a universal healthcare system. And America 's badly broken free market system must be repaired, because as it stands today, it represents socialism for the wealthy.
As a result of the combined actions of Washington 's Three Stooges, the harsh effects of this corrective period will send America into its worst recession in several decades. Thereafter, a silent depression will persist for many years as Americans struggle to keep pace with inflation, job quality continues to decline and opportunities for the working class vanish into thin air. While U.S. living standards have been in decline for over two decades, the silent depression will accelerate and make these declines more permanent.
It's highly unlikely the rest of the world will be able to escape the pain caused by Washington 's Three Stooges because the dollar-oil link is used to hold every nation financial hostage. China will feel the effects as will India ; and yes, even Brazil . Unlike America 's fate, these developing nations will mount a full recovery. And the lessons learned could strengthen the pressure to dethrone the dollar as the universal currency. But don't expect Washington to take this lying down. In fact, it might eventually lead to a major war.
Perhaps the only region that will have some insulation from the meltdown will be select oil-rich nations in the Middle East . But they aren't likely to walk out of this completely unscathed due to contained oil demand. But let's not forget that OPEC has control over pricing. The payback period is going to affect virtually everyone. And for those who think they will avert the payback – namely those most responsible for this mess - like Washington 's Three Stooges and bank CEOs - their payback will last eternity because their role in America 's Financial Apocalypse will be recorded in history books.
By Mike Stathis
mike@apexva.com
Copyright © 2008. All Rights Reserved. Mike Stathis.
Mike Stathis is the Managing Principal of Apex Venture Advisors , a business and investment intelligence firm serving the needs of venture firms, corporations and hedge funds on a variety of projects. Mike's work in the private markets includes valuation analysis, deal structuring, and business strategy. In the public markets he has assisted hedge funds with investment strategy, valuation analysis, market forecasting, risk management, and distressed securities analysis. Prior to Apex Advisors, Mike worked at UBS and Bear Stearns, focusing on asset management and merchant banking.
The accuracy of his predictions and insights detailed in the 2006 release of America's Financial Apocalypse and Cashing in on the Real Estate Bubble have positioned him as one of America's most insightful and creative financial minds. These books serve as proof that he remains well ahead of the curve, as he continues to position his clients with a unique competitive advantage. His first book, The Startup Company Bible for Entrepreneurs has become required reading for high-tech entrepreneurs, and is used in several business schools as a required text for completion of the MBA program.
Washington 's Three Stooges
But Greenspan and Bernanke have not been alone in what will surely be remembered as America 's Financial Apocalypse - the eventful period ushering in a decade-long depression, as predicted in my 2006 book by the same title. Certainly, President Bush did not create these trends. But his financial irresponsibility has accelerated their magnitude. In less than eight years, he has managed to increase the national debt by 90%. As the data shows, not only has he led the worst recovery since the post-WWII era, he has also positioned his successor with budget shortfalls for many years to come due to Part D Medicare, the Iraq War, and his tax cuts for the wealthy.
Combined with the staggering deficits for Medicare and Social Security , America 's economy will be in the gutter for many years to come even after the banking and real estate troubles cool down. No one else is talking about these issues because they're wrapped up in the daily drama. But save this article and others I've written because I've been mentioning the longer-term problems ever since writing my book. In a few years, more people will begin to address these issues once they are transformed into daily drama.
President Bush's attempts at a recovery have been so horrendous they've actually led to the current recession, which will turn out to be the worst in decades. I would venture to guess he is desperately pleading with officials to come up with even more gimmicks to hide the full realities of the economy so the worst will be reported only after he leaves office. But I will guarantee you if Washington and the Fed continue this reckless game of applying band aids instead of letting things play out, we will see a much bigger crisis down the road, similar to what happened after Greenspan tried to mitigate the dotcom collapse. You can bet this is going to happen because Washington does not understand the meaning of preemption.
Altogether, we have had eight years of no gains in real median wages, flat stock market returns, and minimal net new jobs. Despite what you have heard, after adjusting for debt spending, population growth and realistic adjustments to the GDP deflator, there have only been 3 or 4 quarters of GDP growth since 2005. If you adjust for military, government and minimum wage positions – i.e. jobs funded by tax payers and jobs that don't pay anything - there have been absolutely no net new jobs. Bush's largest gains have been with inflation, oil and food prices, debt, trade deficits, bankruptcies, foreclosures, and healthcare costs. If an assembly of the world's leading economic strategists were to design the most destructive economic disaster possible, they could not match the results of Bush's tenure. Even the most loyal Bush supporters will admit he has been an absolute disaster – that is if they're being honest. America is now more dependent on foreign nations than ever – not only for oil, but also credit and manufactured goods.
America 's “Resilient” Economy
Many of the pundits flood the propaganda networks with repeated denials of the problems, boasting how resilient the U.S. economy is. You know who they are. I'm not quite sure what they've been smoking. But it appears to be some sort of hallucinogen because they seem to expect Superman to bend the economy back into shape. Ladies and Gentlemen, in case mommy never told you, there is no Santa Claus and there is no Superman. And if you think Bernanke's printing presses have an endless supply of ink and paper, just wait until the real crisis appears. So you had better get ready because it's coming. It is virtually inescapable. And it's going to cause devastation around the globe. Of course I'm taking about the likely implosion of the CDS market.
Let's take a look at America 's “resilient economy.” Let's see…the entire financial system is in the process of blowing up. Already there have been over $500 billion in bank losses, with over $1 trillion more to come. Over one dozen banks have failed, with hundreds on deck. A handful of large hedge funds have blown up, with hundreds more on the way. Already, over $1 trillion has been transferred from the Fed to the banking cartel. But I estimate another $1.5 trillion will be needed to maintain liquidity as banks de-leverage over the next few years. Unemployment is now over 6% and inflation is over 5%, even with Washington 's manipulation of the data. Virtually every metric in the housing market is at multi-decade lows, except for foreclosures which are hitting new highs.
Taxpayers are now on the hook for billions of dollars of potentially worthless debt held by Fannie and Freddie. It's now official. America 's free market economy is really a socialist system for corporations. One could argue this to be a form of Fascism. My best estimate for losses due to the Fannie and Freddie taxpayer bailout are between $200 to $500 billion. The worst case scenario would be $800 billion. If this economy is resilient, I can't wait to see how it magically bounces back. When Superman fails to show up, Washington might consider giving David Copperfield a call. But this would be one illusion he won't be able to pull off. Get the popcorn ready.
The Economy Under a Microscope
Let's take a closer look at the economy. America imports oil, credit, and manufactured goods, while exporting jobs, junk bonds and inflation (via the dollar-oil link – see http://www.marketoracle.co.uk/Article5414.html for an explanation). That doesn't sound like the type of trade policy that would support claims of a superpower, unless you're only counting the number of nukes. Surely Washington is beginning to wonder how much longer Asia and Europe will continue fueling America 's credit bubble. They've already faced massive losses from sub-prime securities with much more carnage to come.
China holds about $1.4 trillion in U.S. Treasuries, but only due to their its surplus with the U.S. It can't dump Treasuries yet because the Yuan remains greatly undervalued. China pegged it to the dollar back in 2001, knowing the dollar would plummet so they'd lure dollars from U.S. consumers looking for bargains. What most people don't realize is that China 's support for U.S. Treasuries helps finance Bush's irresponsible spending sprees. By financing up to 90% of each annual deficit, China helps keep interest rates low in the U.S., which facilitates credit expansion for consumers to buy more imports - mainly from China (due to the low cost items created by China's currency peg).
Hidden Imports
Keep in mind when you buy that Dell computer or Fossil watch, you're really buying imports. Dell and Fossil actually resemble distributors more than manufacturers because virtually all of their products originate overseas. The same is true for most U.S. companies that sell branded goods. In many cases, the same is also true for the service segment of the economy. Many American IT and software development firms outsource projects to India , Canada , and other nations so they can escape the costly retirement and healthcare benefits Americans expect.
By no means does it end there. For several years, U.S. banks, tax providers, telecommunications and several other industries have outsourced to Asia - so much for the “strength” of America 's service economy. If this service economy is so “strong” someone explain to me how Asia has been able to increase its living standard by leaps and bounds in such a short period. Before you answer, keep in mind that income and wealth are finite over short periods since they are limited by human and natural resources. Make sense? If not, let me know and I'll do a write-up explaining it next time.
Corporate America 's new trend is to outsource even lower on the food chain to nations like Argentina , as a way to find more desperate workers to enslave at a lower cost. While these jobs seem like a Godsend, foreign workers will soon see the longer-term effects of corporate globalization. Already, many U.S. corporations have finessed themselves into the hip-pocket of foreign politicians and other officials to discourage unions, ensuring wages remain low and benefits never materialize.
?? (See Ya' Later) Yankee
As the economy continues its downward spiral, it remains to be seen how much longer China keeps its currency undervalued once it realizes U.S. consumers have no more money to buy their goods. Once the verdict is out, China could begin to focus on internal growth as the recession spreads globally. The global effects are already surfacing, with inflation soaring, real estate plummeting and foreign banks scrambling as they wait for the next Bear Stearns. The Chinese government could encourage its consumers to spend domestically. This would prove as a great strategy to buoy its economy since Chinese have amble savings (they save 25% of household income). Thus, once China is convinced U.S. consumers are finished, there is a good chance it will begin a gradual sell-off of U.S. Treasury securities. And this is going to be a huge problem.
The Middle East also has a huge trade surplus with the U.S. But unlike China , it has no incentive to hold U.S. Treasuries. Instead, Middle Eastern investors use their petrodollars to buy hard assets – commercial real estate like the Chrysler building, businesses and other critical U.S. assets. Yet, they still can't seem to find enough things to buy, so many Middle Eastern cities are being gutted and turned into modern architectural wonders. In the recent past when U.S. banks have begged for mercy, Dubai , Kuwait and Saudi Arabia have handed over billions from their sovereign “oil extortion” funds. But they've learned their lesson, so I wouldn't expect anymore bailout money anytime soon. Never fear! The Fed and the U.S. Treasury are here!
The Federal Reserve Disaster
The Fed needs to let a real recession run its course to clear out the trash so the economy can begin a real recovery and expansion. They've been playing this boom-bust game for several years now. And all we have seen are illusions of growth followed by the realities of mismanagement and excess consumption. Running the printing presses in overdrive won't get America out of this mess. It hasn't helped in the past and it's not going to now. In fact, using the money supply to hold off a recession and prevent bank failures ensures there will an even more devastating crisis down the road . Greenspan tried the same move in response to the Internet meltdown. And as we all know, this led to the current real estate bubble and banking crisis.
But even shutting down the Fed's printing presses is insufficient for a lasting and real recovery. Washington absolutely must restructure free trade so that the playing field is level for all participant nations. This implies that America structure a universal healthcare system. And America 's badly broken free market system must be repaired, because as it stands today, it represents socialism for the wealthy.
As a result of the combined actions of Washington 's Three Stooges, the harsh effects of this corrective period will send America into its worst recession in several decades. Thereafter, a silent depression will persist for many years as Americans struggle to keep pace with inflation, job quality continues to decline and opportunities for the working class vanish into thin air. While U.S. living standards have been in decline for over two decades, the silent depression will accelerate and make these declines more permanent.
It's highly unlikely the rest of the world will be able to escape the pain caused by Washington 's Three Stooges because the dollar-oil link is used to hold every nation financial hostage. China will feel the effects as will India ; and yes, even Brazil . Unlike America 's fate, these developing nations will mount a full recovery. And the lessons learned could strengthen the pressure to dethrone the dollar as the universal currency. But don't expect Washington to take this lying down. In fact, it might eventually lead to a major war.
Perhaps the only region that will have some insulation from the meltdown will be select oil-rich nations in the Middle East . But they aren't likely to walk out of this completely unscathed due to contained oil demand. But let's not forget that OPEC has control over pricing. The payback period is going to affect virtually everyone. And for those who think they will avert the payback – namely those most responsible for this mess - like Washington 's Three Stooges and bank CEOs - their payback will last eternity because their role in America 's Financial Apocalypse will be recorded in history books.
By Mike Stathis
mike@apexva.com
Copyright © 2008. All Rights Reserved. Mike Stathis.
Mike Stathis is the Managing Principal of Apex Venture Advisors , a business and investment intelligence firm serving the needs of venture firms, corporations and hedge funds on a variety of projects. Mike's work in the private markets includes valuation analysis, deal structuring, and business strategy. In the public markets he has assisted hedge funds with investment strategy, valuation analysis, market forecasting, risk management, and distressed securities analysis. Prior to Apex Advisors, Mike worked at UBS and Bear Stearns, focusing on asset management and merchant banking.
The accuracy of his predictions and insights detailed in the 2006 release of America's Financial Apocalypse and Cashing in on the Real Estate Bubble have positioned him as one of America's most insightful and creative financial minds. These books serve as proof that he remains well ahead of the curve, as he continues to position his clients with a unique competitive advantage. His first book, The Startup Company Bible for Entrepreneurs has become required reading for high-tech entrepreneurs, and is used in several business schools as a required text for completion of the MBA program.
- Truthseeker
- Posts: 1544
- Joined: Sat Apr 05, 2008 1:36 pm
Mon Sep 22, 2008 10:34 pm » by Truthseeker
Despite attempts made by Greenspan and Bernanke, there is no way to avert the payback period that has been building for over two decades. Over this stretch, America has consumed much more than it has produced. As a result, both consumer and federal debt have ballooned to record levels. And now, the payback period is upon us. The bailout buffet won't end with Fannie and Freddie. There's a lot more where that came from because the “Fed's food court” remains open, as does that of the U.S. Treasury. In fact, the autos are in the process of being bailed out with $50 billion in “loans.” I expect the airlines to also receive some form of a bailout as well.
Washington 's Three Stooges
But Greenspan and Bernanke have not been alone in what will surely be remembered as America 's Financial Apocalypse - the eventful period ushering in a decade-long depression, as predicted in my 2006 book by the same title. Certainly, President Bush did not create these trends. But his financial irresponsibility has accelerated their magnitude. In less than eight years, he has managed to increase the national debt by 90%. As the data shows, not only has he led the worst recovery since the post-WWII era, he has also positioned his successor with budget shortfalls for many years to come due to Part D Medicare, the Iraq War, and his tax cuts for the wealthy.
Combined with the staggering deficits for Medicare and Social Security , America 's economy will be in the gutter for many years to come even after the banking and real estate troubles cool down. No one else is talking about these issues because they're wrapped up in the daily drama. But save this article and others I've written because I've been mentioning the longer-term problems ever since writing my book. In a few years, more people will begin to address these issues once they are transformed into daily drama.
President Bush's attempts at a recovery have been so horrendous they've actually led to the current recession, which will turn out to be the worst in decades. I would venture to guess he is desperately pleading with officials to come up with even more gimmicks to hide the full realities of the economy so the worst will be reported only after he leaves office. But I will guarantee you if Washington and the Fed continue this reckless game of applying band aids instead of letting things play out, we will see a much bigger crisis down the road, similar to what happened after Greenspan tried to mitigate the dotcom collapse. You can bet this is going to happen because Washington does not understand the meaning of preemption.
Altogether, we have had eight years of no gains in real median wages, flat stock market returns, and minimal net new jobs. Despite what you have heard, after adjusting for debt spending, population growth and realistic adjustments to the GDP deflator, there have only been 3 or 4 quarters of GDP growth since 2005. If you adjust for military, government and minimum wage positions – i.e. jobs funded by tax payers and jobs that don't pay anything - there have been absolutely no net new jobs. Bush's largest gains have been with inflation, oil and food prices, debt, trade deficits, bankruptcies, foreclosures, and healthcare costs. If an assembly of the world's leading economic strategists were to design the most destructive economic disaster possible, they could not match the results of Bush's tenure. Even the most loyal Bush supporters will admit he has been an absolute disaster – that is if they're being honest. America is now more dependent on foreign nations than ever – not only for oil, but also credit and manufactured goods.
America 's “Resilient” Economy
Many of the pundits flood the propaganda networks with repeated denials of the problems, boasting how resilient the U.S. economy is. You know who they are. I'm not quite sure what they've been smoking. But it appears to be some sort of hallucinogen because they seem to expect Superman to bend the economy back into shape. Ladies and Gentlemen, in case mommy never told you, there is no Santa Claus and there is no Superman. And if you think Bernanke's printing presses have an endless supply of ink and paper, just wait until the real crisis appears. So you had better get ready because it's coming. It is virtually inescapable. And it's going to cause devastation around the globe. Of course I'm taking about the likely implosion of the CDS market.
Let's take a look at America 's “resilient economy.” Let's see…the entire financial system is in the process of blowing up. Already there have been over $500 billion in bank losses, with over $1 trillion more to come. Over one dozen banks have failed, with hundreds on deck. A handful of large hedge funds have blown up, with hundreds more on the way. Already, over $1 trillion has been transferred from the Fed to the banking cartel. But I estimate another $1.5 trillion will be needed to maintain liquidity as banks de-leverage over the next few years. Unemployment is now over 6% and inflation is over 5%, even with Washington 's manipulation of the data. Virtually every metric in the housing market is at multi-decade lows, except for foreclosures which are hitting new highs.
Taxpayers are now on the hook for billions of dollars of potentially worthless debt held by Fannie and Freddie. It's now official. America 's free market economy is really a socialist system for corporations. One could argue this to be a form of Fascism. My best estimate for losses due to the Fannie and Freddie taxpayer bailout are between $200 to $500 billion. The worst case scenario would be $800 billion. If this economy is resilient, I can't wait to see how it magically bounces back. When Superman fails to show up, Washington might consider giving David Copperfield a call. But this would be one illusion he won't be able to pull off. Get the popcorn ready.
The Economy Under a Microscope
Let's take a closer look at the economy. America imports oil, credit, and manufactured goods, while exporting jobs, junk bonds and inflation (via the dollar-oil link – see http://www.marketoracle.co.uk/Article5414.html for an explanation). That doesn't sound like the type of trade policy that would support claims of a superpower, unless you're only counting the number of nukes. Surely Washington is beginning to wonder how much longer Asia and Europe will continue fueling America 's credit bubble. They've already faced massive losses from sub-prime securities with much more carnage to come.
China holds about $1.4 trillion in U.S. Treasuries, but only due to their its surplus with the U.S. It can't dump Treasuries yet because the Yuan remains greatly undervalued. China pegged it to the dollar back in 2001, knowing the dollar would plummet so they'd lure dollars from U.S. consumers looking for bargains. What most people don't realize is that China 's support for U.S. Treasuries helps finance Bush's irresponsible spending sprees. By financing up to 90% of each annual deficit, China helps keep interest rates low in the U.S., which facilitates credit expansion for consumers to buy more imports - mainly from China (due to the low cost items created by China's currency peg).
Hidden Imports
Keep in mind when you buy that Dell computer or Fossil watch, you're really buying imports. Dell and Fossil actually resemble distributors more than manufacturers because virtually all of their products originate overseas. The same is true for most U.S. companies that sell branded goods. In many cases, the same is also true for the service segment of the economy. Many American IT and software development firms outsource projects to India , Canada , and other nations so they can escape the costly retirement and healthcare benefits Americans expect.
By no means does it end there. For several years, U.S. banks, tax providers, telecommunications and several other industries have outsourced to Asia - so much for the “strength” of America 's service economy. If this service economy is so “strong” someone explain to me how Asia has been able to increase its living standard by leaps and bounds in such a short period. Before you answer, keep in mind that income and wealth are finite over short periods since they are limited by human and natural resources. Make sense? If not, let me know and I'll do a write-up explaining it next time.
Corporate America 's new trend is to outsource even lower on the food chain to nations like Argentina , as a way to find more desperate workers to enslave at a lower cost. While these jobs seem like a Godsend, foreign workers will soon see the longer-term effects of corporate globalization. Already, many U.S. corporations have finessed themselves into the hip-pocket of foreign politicians and other officials to discourage unions, ensuring wages remain low and benefits never materialize.
?? (See Ya' Later) Yankee
As the economy continues its downward spiral, it remains to be seen how much longer China keeps its currency undervalued once it realizes U.S. consumers have no more money to buy their goods. Once the verdict is out, China could begin to focus on internal growth as the recession spreads globally. The global effects are already surfacing, with inflation soaring, real estate plummeting and foreign banks scrambling as they wait for the next Bear Stearns. The Chinese government could encourage its consumers to spend domestically. This would prove as a great strategy to buoy its economy since Chinese have amble savings (they save 25% of household income). Thus, once China is convinced U.S. consumers are finished, there is a good chance it will begin a gradual sell-off of U.S. Treasury securities. And this is going to be a huge problem.
The Middle East also has a huge trade surplus with the U.S. But unlike China , it has no incentive to hold U.S. Treasuries. Instead, Middle Eastern investors use their petrodollars to buy hard assets – commercial real estate like the Chrysler building, businesses and other critical U.S. assets. Yet, they still can't seem to find enough things to buy, so many Middle Eastern cities are being gutted and turned into modern architectural wonders. In the recent past when U.S. banks have begged for mercy, Dubai , Kuwait and Saudi Arabia have handed over billions from their sovereign “oil extortion” funds. But they've learned their lesson, so I wouldn't expect anymore bailout money anytime soon. Never fear! The Fed and the U.S. Treasury are here!
The Federal Reserve Disaster
The Fed needs to let a real recession run its course to clear out the trash so the economy can begin a real recovery and expansion. They've been playing this boom-bust game for several years now. And all we have seen are illusions of growth followed by the realities of mismanagement and excess consumption. Running the printing presses in overdrive won't get America out of this mess. It hasn't helped in the past and it's not going to now. In fact, using the money supply to hold off a recession and prevent bank failures ensures there will an even more devastating crisis down the road . Greenspan tried the same move in response to the Internet meltdown. And as we all know, this led to the current real estate bubble and banking crisis.
But even shutting down the Fed's printing presses is insufficient for a lasting and real recovery. Washington absolutely must restructure free trade so that the playing field is level for all participant nations. This implies that America structure a universal healthcare system. And America 's badly broken free market system must be repaired, because as it stands today, it represents socialism for the wealthy.
As a result of the combined actions of Washington 's Three Stooges, the harsh effects of this corrective period will send America into its worst recession in several decades. Thereafter, a silent depression will persist for many years as Americans struggle to keep pace with inflation, job quality continues to decline and opportunities for the working class vanish into thin air. While U.S. living standards have been in decline for over two decades, the silent depression will accelerate and make these declines more permanent.
It's highly unlikely the rest of the world will be able to escape the pain caused by Washington 's Three Stooges because the dollar-oil link is used to hold every nation financial hostage. China will feel the effects as will India ; and yes, even Brazil . Unlike America 's fate, these developing nations will mount a full recovery. And the lessons learned could strengthen the pressure to dethrone the dollar as the universal currency. But don't expect Washington to take this lying down. In fact, it might eventually lead to a major war.
Perhaps the only region that will have some insulation from the meltdown will be select oil-rich nations in the Middle East . But they aren't likely to walk out of this completely unscathed due to contained oil demand. But let's not forget that OPEC has control over pricing. The payback period is going to affect virtually everyone. And for those who think they will avert the payback – namely those most responsible for this mess - like Washington 's Three Stooges and bank CEOs - their payback will last eternity because their role in America 's Financial Apocalypse will be recorded in history books.
By Mike Stathis
mike@apexva.com
Copyright © 2008. All Rights Reserved. Mike Stathis.
Mike Stathis is the Managing Principal of Apex Venture Advisors , a business and investment intelligence firm serving the needs of venture firms, corporations and hedge funds on a variety of projects. Mike's work in the private markets includes valuation analysis, deal structuring, and business strategy. In the public markets he has assisted hedge funds with investment strategy, valuation analysis, market forecasting, risk management, and distressed securities analysis. Prior to Apex Advisors, Mike worked at UBS and Bear Stearns, focusing on asset management and merchant banking.
The accuracy of his predictions and insights detailed in the 2006 release of America's Financial Apocalypse and Cashing in on the Real Estate Bubble have positioned him as one of America's most insightful and creative financial minds. These books serve as proof that he remains well ahead of the curve, as he continues to position his clients with a unique competitive advantage. His first book, The Startup Company Bible for Entrepreneurs has become required reading for high-tech entrepreneurs, and is used in several business schools as a required text for completion of the MBA program.
Washington 's Three Stooges
But Greenspan and Bernanke have not been alone in what will surely be remembered as America 's Financial Apocalypse - the eventful period ushering in a decade-long depression, as predicted in my 2006 book by the same title. Certainly, President Bush did not create these trends. But his financial irresponsibility has accelerated their magnitude. In less than eight years, he has managed to increase the national debt by 90%. As the data shows, not only has he led the worst recovery since the post-WWII era, he has also positioned his successor with budget shortfalls for many years to come due to Part D Medicare, the Iraq War, and his tax cuts for the wealthy.
Combined with the staggering deficits for Medicare and Social Security , America 's economy will be in the gutter for many years to come even after the banking and real estate troubles cool down. No one else is talking about these issues because they're wrapped up in the daily drama. But save this article and others I've written because I've been mentioning the longer-term problems ever since writing my book. In a few years, more people will begin to address these issues once they are transformed into daily drama.
President Bush's attempts at a recovery have been so horrendous they've actually led to the current recession, which will turn out to be the worst in decades. I would venture to guess he is desperately pleading with officials to come up with even more gimmicks to hide the full realities of the economy so the worst will be reported only after he leaves office. But I will guarantee you if Washington and the Fed continue this reckless game of applying band aids instead of letting things play out, we will see a much bigger crisis down the road, similar to what happened after Greenspan tried to mitigate the dotcom collapse. You can bet this is going to happen because Washington does not understand the meaning of preemption.
Altogether, we have had eight years of no gains in real median wages, flat stock market returns, and minimal net new jobs. Despite what you have heard, after adjusting for debt spending, population growth and realistic adjustments to the GDP deflator, there have only been 3 or 4 quarters of GDP growth since 2005. If you adjust for military, government and minimum wage positions – i.e. jobs funded by tax payers and jobs that don't pay anything - there have been absolutely no net new jobs. Bush's largest gains have been with inflation, oil and food prices, debt, trade deficits, bankruptcies, foreclosures, and healthcare costs. If an assembly of the world's leading economic strategists were to design the most destructive economic disaster possible, they could not match the results of Bush's tenure. Even the most loyal Bush supporters will admit he has been an absolute disaster – that is if they're being honest. America is now more dependent on foreign nations than ever – not only for oil, but also credit and manufactured goods.
America 's “Resilient” Economy
Many of the pundits flood the propaganda networks with repeated denials of the problems, boasting how resilient the U.S. economy is. You know who they are. I'm not quite sure what they've been smoking. But it appears to be some sort of hallucinogen because they seem to expect Superman to bend the economy back into shape. Ladies and Gentlemen, in case mommy never told you, there is no Santa Claus and there is no Superman. And if you think Bernanke's printing presses have an endless supply of ink and paper, just wait until the real crisis appears. So you had better get ready because it's coming. It is virtually inescapable. And it's going to cause devastation around the globe. Of course I'm taking about the likely implosion of the CDS market.
Let's take a look at America 's “resilient economy.” Let's see…the entire financial system is in the process of blowing up. Already there have been over $500 billion in bank losses, with over $1 trillion more to come. Over one dozen banks have failed, with hundreds on deck. A handful of large hedge funds have blown up, with hundreds more on the way. Already, over $1 trillion has been transferred from the Fed to the banking cartel. But I estimate another $1.5 trillion will be needed to maintain liquidity as banks de-leverage over the next few years. Unemployment is now over 6% and inflation is over 5%, even with Washington 's manipulation of the data. Virtually every metric in the housing market is at multi-decade lows, except for foreclosures which are hitting new highs.
Taxpayers are now on the hook for billions of dollars of potentially worthless debt held by Fannie and Freddie. It's now official. America 's free market economy is really a socialist system for corporations. One could argue this to be a form of Fascism. My best estimate for losses due to the Fannie and Freddie taxpayer bailout are between $200 to $500 billion. The worst case scenario would be $800 billion. If this economy is resilient, I can't wait to see how it magically bounces back. When Superman fails to show up, Washington might consider giving David Copperfield a call. But this would be one illusion he won't be able to pull off. Get the popcorn ready.
The Economy Under a Microscope
Let's take a closer look at the economy. America imports oil, credit, and manufactured goods, while exporting jobs, junk bonds and inflation (via the dollar-oil link – see http://www.marketoracle.co.uk/Article5414.html for an explanation). That doesn't sound like the type of trade policy that would support claims of a superpower, unless you're only counting the number of nukes. Surely Washington is beginning to wonder how much longer Asia and Europe will continue fueling America 's credit bubble. They've already faced massive losses from sub-prime securities with much more carnage to come.
China holds about $1.4 trillion in U.S. Treasuries, but only due to their its surplus with the U.S. It can't dump Treasuries yet because the Yuan remains greatly undervalued. China pegged it to the dollar back in 2001, knowing the dollar would plummet so they'd lure dollars from U.S. consumers looking for bargains. What most people don't realize is that China 's support for U.S. Treasuries helps finance Bush's irresponsible spending sprees. By financing up to 90% of each annual deficit, China helps keep interest rates low in the U.S., which facilitates credit expansion for consumers to buy more imports - mainly from China (due to the low cost items created by China's currency peg).
Hidden Imports
Keep in mind when you buy that Dell computer or Fossil watch, you're really buying imports. Dell and Fossil actually resemble distributors more than manufacturers because virtually all of their products originate overseas. The same is true for most U.S. companies that sell branded goods. In many cases, the same is also true for the service segment of the economy. Many American IT and software development firms outsource projects to India , Canada , and other nations so they can escape the costly retirement and healthcare benefits Americans expect.
By no means does it end there. For several years, U.S. banks, tax providers, telecommunications and several other industries have outsourced to Asia - so much for the “strength” of America 's service economy. If this service economy is so “strong” someone explain to me how Asia has been able to increase its living standard by leaps and bounds in such a short period. Before you answer, keep in mind that income and wealth are finite over short periods since they are limited by human and natural resources. Make sense? If not, let me know and I'll do a write-up explaining it next time.
Corporate America 's new trend is to outsource even lower on the food chain to nations like Argentina , as a way to find more desperate workers to enslave at a lower cost. While these jobs seem like a Godsend, foreign workers will soon see the longer-term effects of corporate globalization. Already, many U.S. corporations have finessed themselves into the hip-pocket of foreign politicians and other officials to discourage unions, ensuring wages remain low and benefits never materialize.
?? (See Ya' Later) Yankee
As the economy continues its downward spiral, it remains to be seen how much longer China keeps its currency undervalued once it realizes U.S. consumers have no more money to buy their goods. Once the verdict is out, China could begin to focus on internal growth as the recession spreads globally. The global effects are already surfacing, with inflation soaring, real estate plummeting and foreign banks scrambling as they wait for the next Bear Stearns. The Chinese government could encourage its consumers to spend domestically. This would prove as a great strategy to buoy its economy since Chinese have amble savings (they save 25% of household income). Thus, once China is convinced U.S. consumers are finished, there is a good chance it will begin a gradual sell-off of U.S. Treasury securities. And this is going to be a huge problem.
The Middle East also has a huge trade surplus with the U.S. But unlike China , it has no incentive to hold U.S. Treasuries. Instead, Middle Eastern investors use their petrodollars to buy hard assets – commercial real estate like the Chrysler building, businesses and other critical U.S. assets. Yet, they still can't seem to find enough things to buy, so many Middle Eastern cities are being gutted and turned into modern architectural wonders. In the recent past when U.S. banks have begged for mercy, Dubai , Kuwait and Saudi Arabia have handed over billions from their sovereign “oil extortion” funds. But they've learned their lesson, so I wouldn't expect anymore bailout money anytime soon. Never fear! The Fed and the U.S. Treasury are here!
The Federal Reserve Disaster
The Fed needs to let a real recession run its course to clear out the trash so the economy can begin a real recovery and expansion. They've been playing this boom-bust game for several years now. And all we have seen are illusions of growth followed by the realities of mismanagement and excess consumption. Running the printing presses in overdrive won't get America out of this mess. It hasn't helped in the past and it's not going to now. In fact, using the money supply to hold off a recession and prevent bank failures ensures there will an even more devastating crisis down the road . Greenspan tried the same move in response to the Internet meltdown. And as we all know, this led to the current real estate bubble and banking crisis.
But even shutting down the Fed's printing presses is insufficient for a lasting and real recovery. Washington absolutely must restructure free trade so that the playing field is level for all participant nations. This implies that America structure a universal healthcare system. And America 's badly broken free market system must be repaired, because as it stands today, it represents socialism for the wealthy.
As a result of the combined actions of Washington 's Three Stooges, the harsh effects of this corrective period will send America into its worst recession in several decades. Thereafter, a silent depression will persist for many years as Americans struggle to keep pace with inflation, job quality continues to decline and opportunities for the working class vanish into thin air. While U.S. living standards have been in decline for over two decades, the silent depression will accelerate and make these declines more permanent.
It's highly unlikely the rest of the world will be able to escape the pain caused by Washington 's Three Stooges because the dollar-oil link is used to hold every nation financial hostage. China will feel the effects as will India ; and yes, even Brazil . Unlike America 's fate, these developing nations will mount a full recovery. And the lessons learned could strengthen the pressure to dethrone the dollar as the universal currency. But don't expect Washington to take this lying down. In fact, it might eventually lead to a major war.
Perhaps the only region that will have some insulation from the meltdown will be select oil-rich nations in the Middle East . But they aren't likely to walk out of this completely unscathed due to contained oil demand. But let's not forget that OPEC has control over pricing. The payback period is going to affect virtually everyone. And for those who think they will avert the payback – namely those most responsible for this mess - like Washington 's Three Stooges and bank CEOs - their payback will last eternity because their role in America 's Financial Apocalypse will be recorded in history books.
By Mike Stathis
mike@apexva.com
Copyright © 2008. All Rights Reserved. Mike Stathis.
Mike Stathis is the Managing Principal of Apex Venture Advisors , a business and investment intelligence firm serving the needs of venture firms, corporations and hedge funds on a variety of projects. Mike's work in the private markets includes valuation analysis, deal structuring, and business strategy. In the public markets he has assisted hedge funds with investment strategy, valuation analysis, market forecasting, risk management, and distressed securities analysis. Prior to Apex Advisors, Mike worked at UBS and Bear Stearns, focusing on asset management and merchant banking.
The accuracy of his predictions and insights detailed in the 2006 release of America's Financial Apocalypse and Cashing in on the Real Estate Bubble have positioned him as one of America's most insightful and creative financial minds. These books serve as proof that he remains well ahead of the curve, as he continues to position his clients with a unique competitive advantage. His first book, The Startup Company Bible for Entrepreneurs has become required reading for high-tech entrepreneurs, and is used in several business schools as a required text for completion of the MBA program.
Tue Sep 23, 2008 12:11 am » by Iwgmac8
Same old same old. Oh no the immigrants. Doing the jobsthat are 'beneath' the remit of a good working american. A job where you can say , well i do this or i do that. I'm not in service , I don't pump gas. I am a someone, Its the same all over. Those forejgners re takin all our jobs .Goddamit.A culture where the first introductory question is , "What do you do?"
Who cares.If you think a job is beneath you then anyone doing that job becomes a second class citizen. In an ideal world ,ideals are just fine. Nowadays, needs must..I wish for the day that America is once more a beAcon for LIBERTY and INDIVIDUAL FREEDOM which it once was. Roundabout 232 years ago.
Who cares.If you think a job is beneath you then anyone doing that job becomes a second class citizen. In an ideal world ,ideals are just fine. Nowadays, needs must..I wish for the day that America is once more a beAcon for LIBERTY and INDIVIDUAL FREEDOM which it once was. Roundabout 232 years ago.
The only true wisdom is knowing you know nothing
Socrates
Socrates
Tue Sep 23, 2008 12:22 am » by Iwgmac8
Watching the second video.Who gives that baldy headed reporter guy the right to call Aztlan 'mythical'. ? Who was there first? Does American h istory begin somewhere around the end of the 15th c.? you yanks are newbies, Is that so hard to swallow.
The only true wisdom is knowing you know nothing
Socrates
Socrates
- maleman
Tue Sep 23, 2008 3:21 am » by maleman
I recall from my history classes that initially, the United States offered Mexico a sum of money to purchase the southwestern lands. The Mexican government refused and after the military conflicts which led to the Marines capturing Mexico city, the United States then offered an amount of money which was ten times the original offer to not occupy Mexico and to purchase the southwest territories.
The Mexican government took the money. They did not have to take the money, but they took it. Contractually, this means that the territory is the property of the United States.
Now, many people claim that this is "their land" however in fact it is the land of the people who first lived there, native Americans. If Mexican citizens wish to cry "foul", they first must admit to the fact that the Mexican government is as much to blame for the illegal seizure of lands from native American peoples. They do not do that. Under color of the Mexican flag, these people insist that this is their property and would have the world believe that it was always Mexican territory. It is not. The Mexican people are a mixture of native and European races, much in the same way that Americans are a mixture of races from Europe, Africa and Asia.
So, what's to be done about this. Subversion and armed conflict will never resolve this situation and the United States will never willingly relinquish this property....
How about this...
If the Mexican people feel so inclined, they can petition the government of Mexico to purchase the property back from the United States at a price adjusted for inflation.
Oh my....that would be tens of trillions of dollars.
Remember... The Mexican government TOOK THE MONEY. They didn't have to, but they did. Legally, this property belongs to the United States, period.
Honestly, if these folks would be willing to buy back the property, a serious and rational discussion could take place. However, what is proposed right now is actually illegal and outright theft. The people who complain that something was stolen from them are the folks who don't even live in Mexico, why?
If you have ever lived in Mexico, you would know why.
The Mexican government took the money. They did not have to take the money, but they took it. Contractually, this means that the territory is the property of the United States.
Now, many people claim that this is "their land" however in fact it is the land of the people who first lived there, native Americans. If Mexican citizens wish to cry "foul", they first must admit to the fact that the Mexican government is as much to blame for the illegal seizure of lands from native American peoples. They do not do that. Under color of the Mexican flag, these people insist that this is their property and would have the world believe that it was always Mexican territory. It is not. The Mexican people are a mixture of native and European races, much in the same way that Americans are a mixture of races from Europe, Africa and Asia.
So, what's to be done about this. Subversion and armed conflict will never resolve this situation and the United States will never willingly relinquish this property....
How about this...
If the Mexican people feel so inclined, they can petition the government of Mexico to purchase the property back from the United States at a price adjusted for inflation.
Oh my....that would be tens of trillions of dollars.
Remember... The Mexican government TOOK THE MONEY. They didn't have to, but they did. Legally, this property belongs to the United States, period.
Honestly, if these folks would be willing to buy back the property, a serious and rational discussion could take place. However, what is proposed right now is actually illegal and outright theft. The people who complain that something was stolen from them are the folks who don't even live in Mexico, why?
If you have ever lived in Mexico, you would know why.
Tue Sep 23, 2008 11:29 pm » by Lowmank
Aztlan was never here.
I live not three miles from Mexico. I grew up doing those jobs no one else wants to do. Most people are sick and tired of illegals immigration here that includes most of the Hispanic citizens that live in El Paso. This town has dramatically changed in the last ten years or so and it's not for the better.
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