Economic snapshot
The world economy is still operating under the master paradigm we outlined in our October post, How to interpret trends. The global economists and speculators on TV talk happy talk about how the Depression scenario was avoided by massive infusion of central bank stimulus, and they are predicting that the world economy is on the road to recovery. If they said anything else they would lose their jobs. A few mavericks such as Peter Schiff and Tyler Durden warn that trouble lies ahead, with debt defaults and hyperinflation.
Predictions about the world economy don’t mean much. The world is dividing into recovering economies and economies with too much debt to service.
We expect the rich to get richer and the not-so-well-off to get poorer. The least-indebted nations and U.S. states are recovering and should do well, and the most-indebted nations and states could slide into insolvency. We’ll keep our eye on the shakiest economies.
Understand that, in the United States, the macro economic statistics are manipulated favorably, the real economy of ordinary people is deteriorating, and the socialist policies of the globalists choke out the real economy in favor of the funny money socialist bubble. This means, don’t take those unemployment, GDP, and trade reports so seriously. The bigger trends that matter are mortgage defaults, bank lending, and government spending. Until the present trends reverse, there is no meaningful recovery.
Several factors are competing in “races against time.” One race is the establishment of a “green economy” to replace the traditional energy sources. We expect the green economy to come on strong under massive propaganda and government subsidies but amount to little or nothing. Another race is big bank solvency vs. bankruptcy. Another race is price inflation vs. deflation. Another race is massive debt service vs. debt default.
We don’t forecast. Many scenarios are still possible. The paradigm threatens to change when the Federal Reserve stops purchasing Treasury debt. This act should send interest rates higher and threaten devaluation in stock and bond markets. But big events could happen before the central banks change policy, including debt defaults by sovereign funds (nations). This latter scenario is most interesting because it threatens the global socialist takeover. Already there is talk that the European Union could break apart if individual countries are forced to repudiate the Euro and reestablish national currencies. This is the scenario we are hoping for, that integrated regional socialism implodes and collapses from its own internal contradictions and corruption. The New World Order itself is in a race against time to collectivize identities and economies under “one size fits all” policies that ignore local conditions and destroy democracy and culture.
Despite talk of hyperinflation, rising interest rates, and debt repudiation, we are a long way from these realities. Today’s posts are about today’s conditions and interesting trends within the paradigm of “building global socialism on the back of the global financial crisis while keeping the same criminal class in power.” This trend cannot be broken by individuals, even masses of individuals in the streets demanding policy changes. The most interesting aspect going forward will be the actions of leaders of states and nations facing bankruptcy. Only they can present a challenge to the global financial system by repudiating central bank control and turning to economic nationalism and localism based on sound money and repudiation of socialism.
We favor the scenario of angry mobs urging local leaders to repudiate federally mandated socialist programs and banker bailouts, leading to debt repudiation. Nothing but white-hot anger and local government resistance can break the planned New World Order slavery and population reduction.
We also favor massive migration of good people out of the socialist states and nations. As the productive people leave, these socialist states get poorer and dumber and will implode into bankruptcy faster.
Now on to our snapshot:
The New York Times reports that four states have hit record high unemployment, California, Delaware, South Carolina, and Florida.
24 states have run out of unemployment benefit funds and are borrowing to pay unemployment.
Texas is in pretty good shape, but it still has a high foreclosure rate and late-payment rate.
The number of problematic mortgages is rising due to rising unemployment. Makes sense. If unemployment peaks in the summer of next year, the number of problematic mortgages may peak at the end of next year. Or maybe not. Forbes on the coming mortgage debt defaults.
Is a commercial real estate markdown due soon? Reuters has a report.
Why housing prices have to fall further.
Lending to small business and mortgage lending are declining. These are not signs of recovery.
How the Fed’s monetization of Obama’s debt may keep the U.S. in a permanent Depression.
Wall Street bonuses are now running in the $50 million to $100 million range. Debunking the big bank propaganda.
J.P. Morgan’s response to the tax on banks’ bonuses.
Australia is trying to prepare for massive U.S. debt default.
China warns, it can’t continue to buy U.S. Treasury bills.
Projecting future debt levels under the scenario, “the U.S. becomes Japan.”
England’s debt is the highest since the end of World War II, and growing at 20 billion pounds per month.
Britain’s standard of living regresses to 2005 levels. The “new age of austerity.” Thanks, New World Order.
Britain’s debt spiral and its future implications.
Could Britain default on its sovereign debt? A survey of the biggest nations with the most debt.
Fitch’s warns England, France, and Spain that their debt will be downgraded if they don’t exert discipline on deficit spending.
Laundered drug money has been the major source of bank funds since the crisis developed.
A survey of the underground economy at CATO.
Usually we’re not thinking much about the underground economy, but it must enlarge as more people fall on hard times. Finding freedom involves creating an alternative underground economy when the corrupt socialists take over and ruin the legalized economy. In Russia under Communism, the underground economy flourished. We are in that position today.
Retail theft increases among middle class shoppers.
The Democrats’ overspending is endangering the U.S. credit rating.
Most big banks around the world lack sufficient capital reserves. The riskiest banks.
That’s why banks aren’t lending.
A map of underwater mortgages, and why real estate prices won’t bottom until 2011.
Why unemployment rates will rise. California’s outlook is very grim.
Nearly half of America’s children will go on food stamps.
The growing gap between the ultra-rich and the collapsing middle class.
The IMF warns the Democrats not to pass a second stimulus bill.
Germany warns of dangerous U.S. bubble.
Wolfgang Munchau figures out that every nation can’t ramp up its exports during financial crisis. Europe is condemned to a low-growth model.
American International Group, Fannie Mae, Freddie Mac and GMAC require further bailouts. As long as the criminals remain unprosecuted, the daily debt deterioration can continue to implode. Why the stock and bond markets must crash. International Forecaster.
Unlimited bailout now legislated for Fannie Mae and Freddie Mac.
Coming: cashless banking.
U.S. banks resist further inquiries into their criminal activities.
Japan’s huge new budget will increase indebtedness to nearly 200 percent of GDP.
How higher taxes and budget cuts could lead to riots around the world as the middle class implodes into poverty.
The mortgage market from the point of view of a small banker.
A simple rationale for coming inflation.
Tyler Durden on increasing debt levels in a world of low demand for debt. The commodity inflation and stock market crash scenario.
John Williams on the extreme debt levels as compared with economic productivity. The hyperinflation scenario, the riot in the streets scenario. On leaving the U.S.
“Either debt markets or currencies blow up next.”
Morgan Stanley forecasts rise in interest rates.
Why the Fed has to inflate away the debt.
Why talk of the Fed withdrawing liquidity from the system is false.
Personal debt in Australia is higher than in the U.S. This is a sign of poverty, not wealth.
How dying strip malls could be converted into community-oriented business, educational, and cultural centers. First you have to drive the big bankers out of town and take over your city council from the socialists. Localism can’t work until you drive the banker, corporate, and socialist parasites out. That’s why building an honest local economy is so difficult. People would rather flee from the worst socialist nightmares or wait for elections to “fix things for the better.” The age of heroes is long since past. The masses are waiting for their government handout, the patriots are waiting for someone to pass a new law, and the people in the know are heading out of the failed socialist states, toward jobs or for the backwoods. Which future are you waiting for?
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