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“Second-half recovery” to become second-half disappointment

On the second day of the second half of 2009, the U.S.'s largest state began to officially “pay” its bills with IOU's, and seven U.S. banks collapsed simultaneously. To say that this is an omen for what lies ahead in the U.S. economy is a clear understatement.


With the second-half having officially started, this means we are only weeks (or perhaps days) away from Ben Bernanke officially abandoning the most recent in a long list of semi-annual predictions for a “U.S. economic recovery”. If “Helicopter” Ben remains true to form, he will soon regretfully announce that his latest prediction for a “U.S. economic recovery” had no more substance to it than all of his previous predictions.


Then Bernanke will lie low for a few weeks, the time necessary for market sheep to completely forget everything he has said in the past. After that, some time in August, Bernanke will “predict” a “recovery” for the U.S. economy in the 1st half of 2010 – with absolutely no mention of any of his fraudulent, previous “predictions”. Most likely, this will be backed-up by either some appendices being added to the 1st Obama “stimulus package” or perhaps the preliminary announcement of Obama's second “stimulus package”.


If “the boy who cried wolf” had the same audience of mindless lemmings who tune-in to every one of Bernanke's words and gestures, he would have never needed to mend his ways. He could go gleefully through life shouting “wolf” on a regular basis, with never a worry that anyone would catch on to his simple game.


Personally, I have progressed beyond my “amazement”phase: amazement that Bernanke would continue this endless series of hollow “predictions” like clock-work – and amazement that anyone still listens to this broken-record. I'm now up to my arm-pits in disgust – at a world where the only thing shorter than memories are attention-spans.


Perhaps even more deserving of disgust are the media-parrots. For those capable of remembering events more than a few weeks old, every time one of these clueless talking-heads regurgitates the phrase “green shoots” should be enough to set off a bout of laughing (or nausea).


Recall that these same stalwarts of “journalism” had spent the latter part of 2006 and early 2007 parroting Bernanke's fantasy of a “Goldilocks economy”: where the U.S. economy (and U.S. markets) could only soar higher and higher, and never go lower – an economic version of the “perpetual-motion machine”, except far less plausible.


Only a few months after that, the same stooges were parroting Bernanke's next ridiculous slogan: the “soft landing”. As the old saying goes, “Fool me once, shame on you. Fool me twice, shame on me.” If nothing else, today's generation of pseudo-journalists have clearly established they have absolutely no sense of shame.


How else could we possibly explain these same mouthpieces now spouting the words “green shoots” in every second sentence – without blushing even once?


For those who are capable of independent thought, it is Bernanke's earlier fraudulent predictions which make his more recent fraudulent predictions even less realistic. As I pointed out roughly two months ago (see “U.S. states crippled by Bernanke's lies”), it was Bernanke's first reckless promises of a “Goldilocks economy” and a “soft landing” which did the most damage.


At a time when state and local governments should have been beginning the most severe austerity programs in generations – to rein-in the grossly excessive U.S. government spending which characterized the first part of this decade – those other governments were lulled into a false sense of security.


Now, more than ¾ of all U.S. states are simultaneously experiencing “budget crises”. Obviously, the same situation exists with local governments – except they typically have even less flexibility in their own budgeting. This means one thing: layoffs, layoffs, and more layoffs.


Of course, it was not only state and local government leaders who faithfully swallowed Berananke's lies (one after another). U.S. consumers also allowed themselves to be duped by “Helicpoter” Ben. Thus, instead of beginning their own “belt-tightening” in 2006, or 2007 at the latest, most American households did not begin serious cuts in their own budgets until the “crash” occurred in markets in mid-2008.


Again, we will see the consequences of all those earlier lies. Americans have now simultaneously begun a (modest) savings campaign, to begin to make up for decades of under-saving (with savings rates having actually turned negative in the U.S. at the peak of the U.S. Ponzi-scheme bubble).


In an economy which is more than ¾ dependent on consumer spending, and losing jobs at the greatest rate in history (see “U.S. economy to lose 20 MILLION jobs this year”), a savings spree is nothing short of economic suicide (see “The Death of the U.S. Consumer Economy”). It also highlights the shamelessness of Bernanke, himself.


Assuming that Bernanke did actually study economics, then he must know how massive spending cuts by all states, local governments, and consumers simultaneously would affect the U.S.'s consumer-economy – and yet despite that supposed knowledge, he was predicting a “second half recovery” which was never possible.


It goes without saying that there is zero possibility of a U.S. “economic recovery” in the first half of 2010. So when Bernanke makes his next “prediction” in a few weeks time, hopefully at least a few people will have learned their lesson – and will simply tune-out this malicious propagandist.