A Dire Warning for the U.S. Economy 37 comments
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Perhaps the U.K.'s leading economic commentator is The Telegraph's Ambrose Evans-Pritchard. Somewhat schizophrenic, Evans-Pritchard vacillates between pandering to the banksters of London and New York (along with their servants in government) and condemning them.
His July 4th commentary is an example of the latter. Evans-Pritchard supplies some alarming data (and astute research) which totally repudiates the noise from the U.S. propaganda-machine that an “economic recovery” is imminent.
Evans-Pritchard focuses on alarming unemployment data, and the efforts of governments (particularly the Obama regime) to hide the truth about this jobs-catastrophe. Regular readers will note that this has long been one of my own regular themes.
Evans-Pritchard begins by noting recent data which was totally ignored by other, media talking-heads: the number of hours worked by Americans has plunged by 6.9% over the last year – to an average of only 33 hours/week. Thus, in addition to massive job-losses, those Americans who still have jobs are rapidly being transformed into a part-time workforce.
Like many other commentators (including myself), he rejects the absurd, “official” U.S. unemployment figure of 9.5%, quoting the Center for Labor Market Studies (in Boston) which calculates current U.S. unemployment at 18.2%. Those attempting to provide a realistic number for U.S. unemployment range in their estimates from slightly over 15% to slightly over 20%.
Meanwhile, several of the smaller European nations which also allowed their economies to spawn large (and dangerous) asset-bubbles have unemployment problems of similar severity. Evans-Pritchard notes that Spain is reporting unemployment at 18.7%, while Latvia suffers from unemployment at 16.3%. What separates these European economies from the U.S., however, is that none of them are experiencing the exponential growth in both national debt, and out-of-control deficits.
As someone who has openly stated that the U.S. economy is already in a Greater Depression, I took particular note of Evans-Pritchard's comparison of the U.S. housing market between the Great Depression of the 1930's and the Greater Depression of today. In 1932, during the worst of the Great Depression, only 273,000 families suffered foreclosure during the entire year. Meanwhile, in April of this year (i.e. just one month) there were 342,000 foreclosures.
In my own commentaries, I have pointed out on numerous occasions that U.S. house prices have been falling more than three times as fast as during the Great Depression - based on data compiled by Robert Shiller. Sadly, Shiller himself has caved-in to Wall Street group-think – and just called a “bottom” in the U.S. housing market.
Such a “bottom” isn't even possible until the middle of next decade, with the stronger probability being that the U.S. housing market will remain depressed for an entire generation. Thus, in any and every respect, the current collapse in the U.S. housing market is several times as bad as what occurred during the Great Depression.
Evans-Pritchard then suggests to the bankster-oligarchs of New York and London that they “take a teacher's salary for a few years, until the storm passes.” This comes only weeks after Goldman Sachs (GS) arrogantly boasted that it expects “record bonuses” this year. In one of the most self-evident predictions in history, he states that should the banksters once again plunder tens of billions of dollars from their corporate coffers (after having TRILLIONS of taxpayer dollars stuffed into those coffers) that this would lead to a “ferocious backlash”.
Unfortunately, Evans-Pritchard ends an otherwise commendable commentary by suggesting that the U.S. is “fortunate” to have Barack Obama as president. As the man who gave Wall Street lackey, Tim Geithner the “keys” to the U.S. Treasury, who is poised to reappoint Ben Bernanke as chairman of the Fed, and who plans on giving that same cabal of private bankers even greater authority over the U.S. economy, Obama has clearly established himself as part of the problem.
In a final note, Evans-Pritchard notes the dramatic rise of U.S. militia groups, as a response to the much milder recession of the early 1990's. In a nation with far more guns and far more suffering than during the Great Depression, this is clearly a recipe for violent unrest.
The U.S. government has recently violated one of its most-cherished laws – and officially deployed a unit of the U.S. Army inside the United States. It has also encouraged the explosion in the number of private prisons all across the U.S. (the new, favorite investment of Dick Cheney and Alberto Gonzales).
It's quite obvious how the U.S. government plans to “cope” with the Greater Depression – and those plans do not involve providing jobs for Americans.
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And Evans-Prichard was right to say that Obama is the best man, given the looney choice of a running mate by McCain. Sometimes I dont think that he is the best man, but when he told those people in Moscow that the US and Russia can work together he made sure that he will get my vote.
About the US deploying a unit of the army in the US. That's where they should be deployed. I spent 6 years in the US infantry and artillery training for a war with Russia that never was going to be started by us or the Russians. Those were wonderful years, but they could have found something more productive for us to do. For instance, I remember a man in my platoon saying that we were wasting our time, and Banks should be teaching him calculus.
Our government has made it clear that they believe we are in a "crisis of confidence". So what's the solution to a lot of pessimistic people??? Flood them with bogus positive data points that make them optimists. Green Shoots baby, drink the kool aid!
Collapsing housing prices, rising unemployment, a bulging expansion in government debt, a serious deterioration in economic output and sagging equity prices all characterize the aftermath of a financial crisis. We are experiencing is an aftermath of global proportions.
Various studies have documented financial crises and ensuing destruction; what we are experiencing should come as no surprise to anyone who has read one or more of these studies including this one: tinyurl.com/cp5hn7 . Because this is global in nature, it would be easy to reason that it might be more protracted and inflict more pain than the median financial crisis.
I won't repeat what is available in the study but I will say housing prices are on track to collapse 40% from their peak, slightly more than the median decline of 35%. As the author suggets, we have another four years or so until housing is resolved.........assuming we follow the path of history.
With respect to unemployment, we could be looking at 11% ( as reported by BLS ) or more for an extended period........something we should have been braced for. Instead, the administration underestimated the severity of the likley decline in employment and then, to make matters worse, assumed we would have a V shaped recovery in the face of historical parallels suggesting a protracted recovery.
tinyurl.com/cp5hn7
Don't be proud of it. These boards are becoming populated with more and more extremists like most other comment boards. At least the articles on this site are still informative and for the most part written by sane, reasonable people unlike the majority of commenters here.
On Jul 08 08:25 AM socrateazz wrote:
> I disagree that we are in a greater depression now but I think Obama's
> policies will lead us to that point. I expect his leadership will
> turn more totalitarian once people realize they have an ignorant
> idiot as president. Of course he will try to convince and probably
> succeed at convincing a good share of the populance the problem is
> somewhere else. Never ever ever again means: until the current populance
> becomes too old for the leaders to listen too. Self interest is wonderful
> when directed toward rewards for production. Is it even reasonable
> when directed toward getting what one thinks he deserves? The attitude
> of the nation has moved from "create so I can have" to "I deserve
> to have what other people have". Seemingly a minor shift in attitude.
> But a shift which creates a population who really believe others
> are responsible for what happens to them. Blame is then easy to put
> on the other group. Have no fear. Obama's power will depend on placing
> blame on others (racism, sexism or what ever groupism he can lay
> blame on). Worked for Hitler, and scared brainwashed people will
> follow. You do know many of the mandates placed on schools in the
> last 50 years were designed to make the population believe what they
> were supposed to believe ( state sponsered brainwashing). I do agree
> with some of it. But when truth is overwhelmed by beliefsm there
> is a problem.
a. Use of any army against its-own people is a very dangerous. It is a road to a civil war when nobody can predict loyalty of its-own army. Army can join mob at any moment with no "return" back.
The USA has no SS or "brown shorts" as Hitler had or "Red Guard" and NKVD as Lenin and Stalin had. Furthermore, these leaders were capable of delivering very fast and visible economic gains.
b. Obama presides over a disintegrating economy. Consequently, regardless of any propaganda and PRs, Obama will have very little political capital and following. Obama has an "excellent" chance becoming American Gorbachev.
Obama inherited an economy that had expanded to its maximum, and had begun to contract. I'm quite sure throwing money into the contraction will do no good except put us in deeper debt. But if the republicans had won the last election, McCain would probably be doing the same thing. Bush did. No president can risk being seen as the man who sat on his hands as banks and corporations failed, doing nothing.
Expansion is the Day-Cycle; Contraction is the Night-Cycle. Obama and the democrats, like they did with FDR, have to preside over the Night-Cycle. Not much gets done during the Night. It is a time of rest. A time of irrationality (dreams).
The republicans are best at cheerleading Daylight principles of discipline, hard work, logic, reason. During the Day-Cycle, the world expands and the Republicans cheer the expansion. During the Night-Cycle, the world doesn't expand. I think the real attraction the Republicans have for Sara Palin is that she most closely, of all possible candidates, resembles in every way the head-cheerleader of our dreams.
> These boards are becoming populated with more and more extremists like most other comment boards.<
It is correct the US society becomes more and more polarized and extreme due to
* Intellectual bankruptcy and corruption of US political & economic elite.
* Continuous deterioration of American economy and a sharp drop in American standards of living.
* The yesterdays Obama friends like UAW unions will find in a very near future that Obama regime has nothing left to offer except more suffering.
This is a very explosive situation that will lead to an inevitable confrontation.
The U.S. has a two-party dictatorship where BOTH parties serve the bankers - exclusively. Choosing Tweedle-dum over Tweedle-dee, or Tweedle-dee over Tweedle-dum CHANGES NOTHING.
If Americans ever wanted to be liberated from their banker-created slavery, the ONLY hope is to abolish the SYSTEM which produced this two-party dictatorship AND dissolve the two, thoroughly corrupt parties who have ALMOST completed the destruction of your nation.
In reality we should be asking " why does this guy have so much power" and " should we have a Fed", not " are they doing a good job.
$
Comparing 273,000 foreclosures in 1932 to 342,000 in April 2009 seem staggering, but a comparison to the 1932 should include additional statistical data such as the number of housing units back then and today, the population growth, etc. Without a true and fair comparison, I see this as nothing but a fear mongering article.
Look at the collectivist response last autumn when the banking system was paretially acquired by the government, which had allowed banks to get too big in the first place.
When George Green, a Republican, was unsuccessfully recruited to be Jimmy Carter's campaign finance chairman for the 1976 campiaign, then Fed Chairman Paul Volcker told Green his party affiliation was irrelevant becaue "we control both political parties."
However, I wonder why the British "commentator" Abrose Evan-Pritchard cites the rise in U. S. militia groups. The U. S. government has always been paranoid that the armed force it uses to install totalitarian governments in other countries might be attempted here. But that is clearly just psychological warfare to make the general public fearful of patriots who love the country more than a world government.
Ambrose-Pritchard and the U. S. public should know by now that Russia and the czar did not fall at the hands of a public militia or even a revolution. The czar was really betrayed by his own Masonic palace guard, such betrayers as General Witte, who later tried to mount a counter revolution and was killed.
While the government tries to stir up the public to fear "militia", which is essentially just a bunch of independent unorganized deer hunters, true American patriots and a few retired generals see the real threat is infiltration and overthrow of a representative government from within the government itself.
It is the increasing realization that the top most levels of the U. S. government seem to reflect values and actions that are un-American that really has the government paranoid. The occupied government fears it has been found out.
Originally, the American people fought against British tyranny. Now, the U. S. government is accused of killing maybe a million women and children in Iraq, a country that never attacked the U. S. and could not if it wanted to. Suddenly the U. S. is kicking around the weak in a country it has no logical reason to be in.
.
Creating a scenario so the government can impose martial control here is always a possibility. The Lusitania, the Gulf of Tonkin, Pearl Harbor, the attack on Fort Sumter are widely acknowledged to have been invited or perhaps even promulgated to create a change in mass consciousness that would support war.
The riots in Seattle during the world trade meet were clearly staged by provocateurs, not the compliant initial protesters.
Which gets us back to the assertion that the two parties are like one party anyway. They are not so much fighting over issues as they are fighting over control of the march toward what George Soros calls "communitarianism." Having made his billions he thinks the rest of us should live under socialist control.
Mexico would appear to be the model. A high per capital ratio of millionaires and an even higher ratio of powerless peasants that can be easily controlled - so long as the American one party system allows the potential extremists in Mexico to be deported to the U. S. to be kept busy and subsidized by the U. S. failing middle class.
Ambrose Evan-Pritchard should be educated enough to know that the overthrow of the Russian czar was implemented from within by the palace guard and elements of the military, the funding and direction of this overthrow came from outside the government, including England and the Fabian socialists.
If a militia ever does really rise up in the U. S., it would not be proactive but simply an attempt to defend the U. S. homeland from a foreign directed takeover. To defend the U. S. from a government that implements control directed from outside this country.
This is such a simple obervation of the true forces that could come into play.
The best solution would be for the federal government to start acting like it represents all the people and is here to serve all the people. Not just repreent the money class, elements of which, are known to have financed the Russian overthrow.
To know history is to understand.
President Obama is financing affordable health care with debt, alternative energy projects with debt, infrastructure improvements with debt, and the list goes on.
President Obama’s financing will produce a return, it will generate revenues that can be used to pay down the debt. President Bush’s debt financing is not producing a return, meaning that our tax dollars will have to be diverted from productive activities to paying down this debt.
The United States became fat and sassy during the cold war as we were one of the few openly capitalistic countries in the world. The cold war is over and we are now functioning in a global, capitalistic economy. Our former enemies are now our competitors and they are giving us a run for our money.
Our unemployment rates will go much higher in the future because the lack of productive investment of tax dollars, our high cost structure, and the rise of new competitors who are doing a much better job of making and marketing quality products.
Will the unemployed riot? Our unemployed people are more enterprising, crime will go up as our economy stagnates, and the value of our assets decline. Our underground economy will thrive and we will work our way through our problems and come out the better for it.
Many investors think that because of America’s huge debt load, high cost structure, and ineffective policy making, its economic power will diminish and other nations will replace it on the world stage.
Maybe so in the short term, but long term, I think we will come back strong.
Conditions are worse is some way and not in others in this Great Recession.
After World War I. The United States had emerged from the war as the major creditor and financier of postwar Europe. This is not the case today. We are completely on the opposite end of the scale as the biggest Debtor. In the GD1 we had wealth to combat the Financial Meltdown now we have The biggest Debt to combat the same issues. The wealth is gone...this will have to be reality checked by everyone sooner or later.
The causes and results therefore in my opinion have to be very different. The leveraging was not as pronounced as it is today, this is another major difference. The outcome of this can be catastrophic.
The world is a different place in 1929 but the Financial warlords were the cause then as they are today. That is the same. We have spent the generational wealth of the nation, that is true, we are all to blame for that. The system is obviously flawed, a needs a complete overhaul, this I am afraid is not on the table. That is why I am concerned for the outcome of a nation.