TROOPS AND RECESSION, PART TWO

Forgot to include this info in the post below. The London Telegraph quotes a leaked internal memo from Tom Fitzpatrick, the chief technical strategist for Citigroup in which he validates the "Troops + Recession=Mayday" scenario:

The bank said the damage caused by the financial excesses of the last quarter century was forcing the world's authorities to take steps that had never been tried before.

This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.

"They are throwing the kitchen sink at this," said Tom Fitzpatrick, the bank's chief technical strategist.

"The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock.

"Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration, with the risk of a feedback loop. We don't think this is the more likely outcome, but as each week and month passes, there is a growing danger of vicious circle as confidence erodes," he said.

"This will lead to political instability. We are already seeing countries on the periphery of Europe under severe stress. Some leaders are now at record levels of unpopularity. There is a risk of domestic unrest, starting with strikes because people are feeling disenfranchised."

"What happens if there is a meltdown in a country like Pakistan, which is a nuclear power. People react when they have their backs to the wall. We're already seeing doubts emerge about the sovereign debts of developed AAA-rated countries, which is not something you can ignore," he said.

Collapse of 2009

Gerald Celente has been in the news lately, mostly because he makes accurate predictions. I'll let the article take it from there:

The country’s top trends forecaster, who accurately predicted the “panic” of 2008 nearly a year before it unfolded, is now ominously suggesting that next year will come to be known as “the collapse of 2009″.

Gerald Celente, CEO of Trends Research Institute, sent out a letter to his subscribers announcing that he had purchased a domain name called “Collapseof09.com”.

Around this time last year, Celente sent the following message to his subscribers:

"In 2008, Americans will wake up to the worst economic times that anyone alive has ever seen. And they won’t know what hit them. Just as they were in a state of shock on 9/11, they’ll be frozen in fear when the Economic 9/11 strikes at the heart of Wall Street.

Dismiss this trend forecast at your own peril. If you believe everything will be all right, and that the ship of state is sailing along just fine, toss this out and go about your business."

Having correctly forecast the “Economic 9/11″, Celente is warning that people should prepare for something much worse in 2009.

As we reported last month, Celente recently told Fox News that by 2012 America will become an undeveloped nation, that there will be a revolution marked by food riots, squatter rebellions, tax revolts and job marches, and that holidays will be more about obtaining food, not gifts.

Celente’s accuracy is widely heralded since he correctly predicted the 1997 Asian Currency Crisis, the subprime mortgage collapse and the massive devaluation of the U.S. dollar.

In 2007, Celente forewarned that “giants (would) tumble to their deaths,” which is exactly what we have witnessed with the collapse of Lehman Brothers, Bear Stearns and others.

Celente has stated that the current financial downturn will ultimately lead to nothing less than revolution.

“There will be a revolution in this country,” he said. “It’s not going to come yet, but it’s going to come down the line and we’re going to see a third party and this was the catalyst for it: the takeover of Washington, D. C., in broad daylight by Wall Street in this bloodless coup. And it will happen as conditions continue to worsen.”

20,000 MORE TROOPS + "RECESSION"=MAYDAY! MAYDAY!

And so the police state approacheth...

The Washington Post says that 20,000 more U.S. troops will be stationed in the U.S. to "bolster domestic security."

"The U.S. military expects to have 20,000 uniformed troops inside the United States by 2011 trained to help state and local officials respond to a nuclear terrorist attack or other domestic catastrophe, according to Pentagon officials.

The long-planned shift in the Defense Department's role in homeland security was recently backed with funding and troop commitments after years of prodding by Congress and outside experts, defense analysts said. "

This is on top of the brigade that began its tour of the "homeland" over two months ago. I cartooned about that here:
http://eggsistense.com/EggsIsTense16Large.jpg

Didn't Bush "keep us safe?"

But why is this happening now? What happened to the argument that "Bush kept us safe" from a terror attack for the last 7+ years? We didn't have the U.S. military stationed here for "domestic security" or "civil unrest" and "crowd control" during that time. I thought it was all the warrantless spying and the Patriot Act and all that other crapola that kept us safe, not troops in the streets.

"Recession" is the key

The reason they're moving the troops in at this juncture, then, is obviously because the economy is collapsing. Even though it was completely unnecessary, it was officially declared yesterday that we've been in a recession since December 2007.

People are starting to freak out. The cost of literally everything is going up, and people are already in debt beyond all semblance of their ability to pay. They have no savings, me included. The unemployment rate continues to climb. Even those who did have investments, i.e., real estate and stocks, have seen the value of those investments simply disappear into thin air.

Eventually people are going to do something about it. Hopefully it will be peaceful--my personal favorite option--but it may not be. Well, not to worry, says the Federal Reserve (the main culprit of all these shenanigans), we've got U.S. troops right here in America to enforce "domestic security." But the security being enforced will be for the bankers, not for the people.

The people are trained to think they're "safe" and "secure" as long as there are no ghastly terror attacks. Meanwhile, the security and safety of our finances, our civil liberties, our health--literally everything else--is being attacked and eroded.

God help us.

SOCIALISM FOR THE RICH, FREE MARKET FOR THE POOR

Oh, you have got to looooooovvvve this. The headlines tell the story pretty well:

"New GDP Numbers Strongest Signal Yet The Country Has 'Hurtled Into Recession'"

No shit, Sherlock. However, some of us aren't really affected by that, to wit:

"Exxon Mobil Profits Set a Record in Third Quarter"

"Shell announces huge rise in profits"

"AIG Already Running Through Government Loans"

And so on...

Mmmm...Interesting

The recession article makes this interesting point:

"Americans stopped buying everything from cars to corn flakes in the July-September quarter, ratcheting back spending by the largest amount in 28 years and jolting the national economy into what could be the most painful recession in decades."

So spending dropped more than it has in 28 years yet ExxonMobil continues to make record profits. Why is that, one might ask? Well, simple--they charged us more for the gas.

Why are they suddenly charging us less? I have a relative who is a man of wisdom on many topics, and he had this to say about falling gas prices: "It's curious that the demand for gasoline would drop off so suddenly." You know, because as we all were conditioned to believe from grade school, prices are naturally a product of the magic of supply and demand.

Oh brother...what poppycock. The reason gas prices are low is because it's right before an election--it's rigged.

Recession?? Duh!

It's interesting that there has been a debate for some time now about whether or not we are in a recession. More specifically, there's been some discussion about whether or not the government will officially declare that we have been or currently are in a recession.

My hunch is that there won't be official government confirmation that we are or have been in a recession until after the election or even after the inauguration. That way, those at the top can decide which president it's best to put the blame on for the recession: Bush or Obama/McCain.

ECONOMY "DOING WELL": TAX REVENUE DOWN, BUT BUSINESS IS BOOMING?

Another post from the HA forum that involved a bit of research...

Mississippi IS a recession...

OK, wait a second.

Yesterday, we were informed that:
"Hattiesburg residents haven't been spending as much money as they once did..."

And today, we're informed that:
"...representatives at most Hattiesburg businesses that rely on disposable income say it is too early to see a drastic change in the habits of consumers."

Something isn't adding up.

For one thing, today's story has one caveat, which is that businesses "that rely on disposable income" supposedly aren't hurting. That could be taken as an implication that businesses that don't rely on disposable income are seeing "a drastic change in the habits of consumers." This flies in the face of generally accepted notions of economic behavior, i.e., that when people have less money (which we know is true across the country), they have to cut back spending on the types of goods and services mentioned in today's article in order to be able to cover the expenses they must pay, such as rent, mortgage, insurance, daycare, health care, etc.

I'm not sure that the statement of the headline of today's story--"Hub City economy doing well so far"--can be validated on the basis of comments from five representatives of small businesses in Hattiesburg. After all, it is in the best interests of those representatives to put a positive spin on their supposed success and resilience even if in reality, they are not especially successful or resilient. In fact, the comment from McLelland along with the copy in the story regarding his business comes off like an advertisement rather than as an actual inquest regarding the strength of his sales.

In other words, to accurately say "Hub City economy doing well so far," one would not ask for an assessment of the how good or bad sales are from a representative of any given business (who will almost invariably feel obligated to paint as rosy a picture of the situation as possible), one would have to view current sales numbers versus sales numbers from a comparable period of time. And that data is surely not going to made available to a reporter for analysis.

On the other hand, it may be true that "businesses that rely on disposable income" might not be experiencing hard times despite the negative savings rate and decline in wages that plagues the entire country--we also know that a majority of the country is in massive credit card debt. So it could very well be that the businesses mentioned in this piece are doing just fine, but that does not necessarily mean that the economy of the Hub City is doing well, because people are racking up even more credit card debt.

Whatever the case may be, these two stories seem to paint completely different pictures of the state of the economy in Hattiesburg.

SOURCES:

Negative personal savings (2006 figures):

"People are saving at the lowest level since the Great Depression, and that could be a problem for the millions of baby boomers getting ready to retire. In fact, the Commerce Department reported Thursday that the nation’s personal savings rate for all of 2006 was a negative 1 percent, the worst showing in 73 years."


Decline in wages (inflation-adjusted):

"Average weekly earnings, after adjusting for inflation, dropped by 0.9 percent in 2007, the fourth decline in the past five years. The lagging wage gains are cited as a chief reason many workers have growing anxiety about their economic futures."


Record credit card debt ($915 billion):

"While the fallout of the subprime loan industry collapse continues to play out, momentum is gaining on another potential economic calamity: Americans now owe a record $915 billion in credit card debt, according to a new report by Moody's Investors Service.
Credit card companies wrote off 4.58 percent in payments between January and May, almost a third more than in the same period in 2006, Moody's said.
As a result, lenders such as Citigroup, Bank of America, and American Express, already reeling from the subprime mortgage collapse, are being further weakened, according to a new report at MoneyNews.com."