While the markets are rising
While the markets are rising, we want to prepare you for a new outlook. It is possible, even probable, that economic growth statistics will point to “recovery” and keep the markets up. Many economies around the world have been growing. If you have been in a “recession” mindset for the last couple of years, now is a good time to consider the possibility of recovery.
By “recovery” we mean that profits can increase for the big global corporations and tax revenue can meet debt service levels necessary for socialists to remain in power, continue to rob you, and increase their control over you. We didn’t mean that you would actually get a job or get wealthier.
Recovery isn’t a good thing, although the people on TV say it is. Listen to us, not to them. The only opportunity for the world to escape from New World Order slavery is if their corporations flounder and their governments go bankrupt, resulting in the permanent disgrace of socialism. Recovery means the criminal enterprise can continue to progress.
We don’t give investment advice, and we usually write about the markets from a great distance. We like to report on the behind-the-scenes stuff they don’t report on TV, the size of the derivatives market, why debt is outstripping the ability of the economy to produce enough to pay it off, politicians’ manipulations in secret conferences, how the markets are manipulated by big players to steal from the small investor. But we are not in the perma-bear camp. The controllers might be able to finesse their way out of crisis, stay in power, and continue to build their global financial system.
Today’s post is full of mixed messages because we are at a point where trends may crystallize one way or another or, who knows, even cancel each other out. We are not predicting one way or the other, we are trying to loosen up your convictions to consider both possibilities.
The conventional wisdom on TV is that we are in a Republican rally. The tension will be, will you miss the rally or get suckered in to a bear trap? We don’t know. Watch out. At this moment, any prediction can be misleading.
We don’t know about his DOW 2000 prediction, but we love Prechter’s economic analysis because his analysis agrees with ours and he writes it blunt. The odds may be greatly against, but consider the possibility of a downside move that destroys wealth, due either to hyperinflation, currency devaluations, or bond defaults. This is not a great time to take a lot of risk.
Prechter is a difficult master because he doesn’t advocate following trends. Trend-following seems to be the logical way to make money in the markets, but you can run into trouble at tops. Trend-following in the real estate market would have led you into disaster.
ZeroHedge thinks the rally is the result of the Fed’s massive purchase of Treasuries.
Faber: A correction is overdue.
Whitney warns about Wall Street layoffs, systemic crisis at the state level.
See, it’s a banking crisis, the rate of bank failures is accelerating and the big banks are getting bigger, so how could there be an economic “recovery”? Answer: China is growing, and the rest of the world is making money in the China market. Big corporations can show profit increases even as the unemployment rate stays high and the debt load spirals out of control.
Europe
The euro has recovered from its lows thanks to faith in the Greece bailout, and the falling euro helped European exports. The question is whether sovereign debt defaults lie ahead, or serious deterioration in Europe’s bond markets. The EU is planning ahead with regulation of bank reserves and the threat of sanctions against socialist governments that spend too much.
Basel III was too easy on failing banks, leading to speculation that another banking crisis lies ahead.
Prechter on Basel III: Prechter characterizes Basel as pure spin. We think the New World Order is in a financial bind and can’t find an easy way out of the debt overhang. Both the bankers and the socialists squeal if anybody tries to curtail their excesses.
How the IMF contributes to the debt problem. No surprise there.
Secret Committee to Save the Euro. Notice the characterization of the Greece debt default as having the potential to cause a worldwide financial catastrophe. That is how they keep all the finance ministers in line. The EU could always break apart and default to a free-trade region without any negative consequences. The socialists want to keep the euro so they can keep their special perks and elite status and keep their takeover game going. Nice behind-the-scenes reporting.
A quick look at European sovereign debt ratios and austerity measures. Europe’s policies have a better chance of working than Obama’s.
The European debt crisis is complicated by the fact that many large U.S. banks hold European debt. Linking all the banks together in a global financial system aids the corporate elites in making more obscene profits, but it holds the potential for debt defaults to ripple around the world once one weak hand goes under.
Speculating from Europe about government debt defaults. We haven’t figured out what happens after sovereign debt defaults. Do all the credit markets freeze up? Maybe not. It depends on how much the markets are linked by the New World Order they are building.
Despite maneuvering in the globalist councils regarding financial regulation, the socialists remain committed to keeping their populations in slavery.
No end to European immigration despite high unemployment.
Britain set to raise green taxes. Socialists never learn. You have to eliminate them.
Germany faces double-dip as economic sentiment turns south. But such stories can be negated any moment by new economic reports.
Merkel states globalist policy, tax all financial transactions. They need to raise taxes to keep their game going. Obama supports global tax plans, you see, he isn’t really president of the United States, he’s part of a globalist cabal that is planning to…
France isolated, Sarkozy’s star is falling. We’re a little bit cheerful about upcoming elections.
Comparing Ireland and Canada. Barclays puts Ireland on credit watch. There is an argument to be made for investing in Europe and the euro, but stories like this remind us that there is still too much socialist sovereign debt.
Good election outcome in Sweden. The Social Democrat base is cracking.
Remember, socialism is unsustainable, and the present economic policies are unsustainable.
Spanish Communists call general strike, Brussels unions organize Europe-wide protest.
Coverage from Europe at Saxon North.
Let’s review. The Left supports the EU takeover and free trade agreements. Workers lose their jobs. Unions support massive immigration. Workers lose their jobs. Tax revenues decline, debt piles up, governments cut their budgets. Bureaucrats lose their jobs. Left protests government spending cuts. What’s wrong with this logic? It doesn’t address the problem, free trade agreements and immigration.
Meanwhile, in the United States, the tea party forms to protest banker bailouts and government debt levels. The tea party opposes immigration, favors government spending cuts to preserve the economy. At least they are targeting a big part of the problem.
The United States is now so weak that is is negotiating to transfer global power to the better-off nations.
How Reuters is spinning the story. Please, the U.S. doesn’t have any muscles to flex. Obama has no foreign allies, global financial decisions are made at regional councils (sometimes secret regional councils), and the U.S. players of interest are Goldman Sachs and the Federal Reserve Bank, not Obama.
More on the Europe-U.S. squabble.
Of interest:
Chang is bearish, thinks QE2 will fail. Things should be very interesting to the downside in about six months if he’s right. Many economists are pointing out that more stimulus won’t stimulate. ZeroHedge has it right, more Fed stimulus provides liquidity and lets the big boys hold the markets up. However, we want to float the idea that QE2 may never happen, especially if the economic statistics look better in October.
Professor calculates real U.S. debt at $202 trillion. What will make them stop spending? Possibly, election results. That is why we are having a Republican rally, the promise of legislative gridlock.
Harry Dent on how demographics drives consumer spending. Why Dent is bullish on the dollar. Interesting, because Dent’s prediction is counterintuitive. Prechter is also a dollar bull right now and advises caution on gold.
Keep your eye on the Japanese model: Forget stimulus and currency intervention, watch the long-term trendlines, debt growth combined with an aging population.
Satiyajit Das: Everything you ever wanted to know about derivatives.
Individual investor beware: The Low-Interest-Rate Trap.
Dent looks at the currency wars and warns about emerging market debt.
Jeffrey Harding offers a general overview of post-crash Neo-Keynesian economic policies and explains why they destroy capital. Why globalism makes everything more dangerous:
“There is no refuge from the world’s plunge into massive capital destruction. At one time in history you could flee to countries with freedom and free markets, such as America. With the globalization of Neo-Keynesian economics, there is no refuge.”
That’s the idea behind the New World Order, no escape. If there was such a thing as a free country, by now it would have been overwhelmed by immigrants fleeing from the United States and Europe.
The smart money is going to Asia and counting on the BRICs to decouple from U.S. debt problems.
China’s energy policies will set tone for world economy.
Actually we think the bank debt crisis is more important, currency devaluations will lead to trade wars, and elections can check the power of the socialists to run up more debt. Speculating on future trends is always problematic, but more so now because the present economic policies are unsustainable. Even the Democrats realize they can’t keep running up debt, that is why they are running for reelection talking like Republicans. Recently Obama even went to church and started talking like a Christian! The Left knows it is a con, they won’t abandon him because of his Christian pose.
Bottom line:
Through all the noise, news, and contrary trends, watch for the devaluation of the dollar. That’s the trend that can really hurt U.S. citizens. The fact that Prechter and Dent are dollar bulls keeps us neutral because the trendlines appear to favor dollar devaluation and the socialist politicians desperately want dollar devaluation. Time will tell.
Most likely scenario:
The Fed announces QE early in November, and we get a big Republican/QE rally in the markets. When the Fed eases, the liquidity doesn’t stimulate growth or jobs, it goes into the markets.
Sobering reality:
The deindistrialization of America. Wonderful reporting at FedUp, kudos.
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