Jun 6, 2009
China Corners Over 90% of Market for Rare-Earth Metals and is is 'furiously stockpiling base metals'
More: Russia, China should dump dollar in trade - Medvedev (Reuters - 06.06.2009)
Russia: New world currency a decade away
Human Events had the opportunity to interview forecaster extraordinaire Gerald Celente, President of Trends Research Institute, several days ago -- and the future he predicts looks bleak indeed. In fact, as Mr. Celente sees it, the Great Depression will seem like a mild recession as what waits for us in 2011 hits with the force of a Katrina financial hurricane.
In case you’re wondering who Mr. Celente is (if this is still possible), he’s appeared -- along with his predictions -- on Oprah, CNBC, Reuters, NBC, PBS, BBC, the Glenn Beck Show -- the list goes on an on. His Trends Report has been successfully predicting the major future trends impacting our lives for 3 decades, including calling the dot com crash back in the 1990's.
Quite a claim. And God help us if he is right -- again.
“We’re sounding the alarm about the ongoing downward economic cycle”, Gerald told Human Events. “In 2002, we predicted that the collapse of the American empire would fall like the World Trade Center in a thunderous crash -- in slow motion before our eyes. And now it’s happening.”
Mr. Celente follows over 300 trends: family, crime, war, education, consumer & business patterns which TRI synthesizes to predict the future.
“The US is becoming a shadow of what it used to be. Take education for example. The OECD group of developed countries ranks quality of life, education, health care of its member nations. The US is now falling down the table as one piece of data after another shows America is in decline. We’re no longer Win, Place or Show in quality of life, education, longevity… all the essentials where we used to be #1. And our economic underpinnings are failing.”
Mr. Celente puts part of the blame squarely on the federal government, and especially FED Chairman Bernanke and Treasury Secretary Geithner, and warns us not to believe a word they say “They’re the same people who didn't see it coming - are now telling us the worst is over, that ‘green shoots are spouting upwards’. But they were wrong before. They’re wrong on this too”.
“When you pump out tons of money manure into this system based on nothing – printing press paper, it’s like giving a patient with a chronic disease a pain killer -- it won’t cure the patient.”
“But let’s go beyond the economics. Our whole Constitution has been abrogated. The president simply writes an Executive Order to do whatever he wants. Nationalize the banks, take over the insurance industry, automobile industry, health care industry…None of it is constitutional.”
[...] "Our society is now based on consumption -- 70% of the GDP. This is more than we produce. So to pay our bills, we use funny money invented in 1913 with the creation of the Federal Reserve and the fiat dollar based on credit (debt) -- the fractional reserve system. In 1930's you bought what you could afford. You saved up to buy your home. The easy credit of the 90's has destroyed the country. Now you borrow what you can’t afford - and the nation’s done the same."
Mr. Celente predicts the use of printing press money will cause the "greater depression".
"I predict continuing deflation of real estate, followed by extreme currency inflation -- ultimately becoming worthless. This is why gold is the only honest money -- the government can't counterfeit it. Look for it to top at least $2000 an ounce"
"Our unemployment numbers are also bogus. For example, the construction industry is really above 20% , and the government is creating low-level jobs, not real jobs. The US total real unemployment is more like 16%. Before the crisis is over, it will reach 25% - great depression numbers."
"When people have lost everything they have nothing to lose. Violence and crime will explode. Look at the OECD figures. The number of people not graduating from high school is exploding -- they're wacked out on drugs. New York City will look like Mexico City in a few years. The collapse of morality from top down -- and especially in the government -- makes it inevitable."
"What can we expect in the coming future", we asked.
"Washington has declared 'Economic Martial Law'. Wall Street is putting Main Street out of business. The key to watch is Christmas sales. They’ll fail. Christmas will be when reality sets in."
"Another trend we wrote about over 2 years ago was the tax revolt. What’s happened? Tax revenues have collapsed by 33%. And the wealthy people are leaving."
"We predict state secessionist movements will rival the breakup of the Soviet Union."
"The only way we can ever recover is to return to individual community, personal responsibility, local government. Next, average will disappear, Quality will return. Look at GM. Junk cars financed by junk bonds. Now owned by a junk government. As a consumer, don’t consume quantity -- consume quality."
"How will it all end?", we queried. Will the dollar survive?
"The dot com bubble should have burst and gone away in a short sharp recession. But the boys at the Fed re-inflated the economy by lowering interest rates to a 46 year low -- and in turn created the real estate bubble -- much bigger than the dot com bubble. "
"Now they’re creating the bailout bubble -- which will ultimately dwarf the real estate bubble. It will cause the implosion of the global economy world wide -- which will not be able to be repaired by creating yet another bubble. Every time the government fails, it tells a bigger lie and then a still bigger lie."
"These previous bubbles were not allowed to pop -- but they didn’t destroy the infrastructure of the country. This bailout bubble will."
"But this bubble will be the last one. After the final blowout of the bailout bubble, we are concerned that the government will take the nation into war. This is a historical precedent that’s been done over and over again."
"So, it’s not that the dollar that will survive. We may not even survive. Look at the German mess after WWI. It gave rise to Fascism and WWII. The next war will be fought with weapons of mass destruction.
American 'Liberal Fascism' ? Is it possible? Jonah Goldberg's bestseller raised the alarm two years ago.
Thanks to the Internet and low fee online brokerage accounts, it only took seven more years for stock ownership to double AGAIN. Put another way, the rate at which new participants entered the market accelerated four fold between 1990 and 1999. At the end of the 20th century, 48% of US households owned stocks.
This is the one bubble no one talks about. The bubble in “investing in stocks.” Never before have so many Americans done this. It gave us one of the biggest bull markets in stock history: a mega-18 years run from 1982 to 2001. And it also means that stocks have got a long ways to fall to get back in line with their historic relationships to other asset classes.
A lot of commentators talk about how gold is near an all-time high and that stocks have fallen 50% making them cheap again. However from a long-term perspective, gold and stocks are nowhere near their normal relationship.
According to Dr Marc Faber, editor of the Gloom Boom Doom report, gold and stocks move in distinctive long-term trends. Over the last 110 years, these trends has staged six major phases:
- 1900-1929: stocks outperform gold
- 1929-1932: gold outperforms stocks
- 1932-1966: stocks outperform gold
- 1966-1980: gold outperforms stocks
- 1980-2000: stocks outperform gold
- 2000-???: gold outperforms stocks
Overall, the median stock to gold ratio for the last 106 years was 5.4. In other words, throughout the 20th century, on average 5.4 ounces of gold would buy one unit of the DJIA.
Today, gold trades at $980. The DJIA trades at 8,500. This puts the ratio of gold to stocks at 8.6. Thus, the DJIA needs to fall to 5,292 (a 37% drop from today’s level), gold needs to rally to $1,574 (a 60% rally from today’s level), or some combination of the two, in order for gold to be appropriately priced relative to stocks.
When exactly this will happen is anyone’s guess. The gold vs. stocks trends over the last 106 years have ranged in length from three years to 29 years. However, judging from the Fed’s money printing and the recent action in gold, it’s quite possible we’ll see a mammoth run in the precious metal sometime in the next 18 months.
You should prepare your portfolio accordingly.
Graham Summers - http://gainspainscapital.com
More: The Bear Market is Not Nearly Over - by Bill Bonner - Fri 05 Jun, 2009. Excerpt: "Either cuts in spending or increases in taxes will be necessary to stabilize the fiscal situation," said Ben Bernanke in response to a question posed by a Member of Congress. Then, he added...
"The Federal Reserve will not monetize the debt."
That last sentence has a ring to it. It reminds us of Richard Nixon’s "I am not a crook." Surely, it is destined to make its way into the history books, alongside Bill Clinton’s "I did not have sex with that woman" and the builder of the Titanic’s "even God himself couldn’t sink this ship."
Monetizing the debt is precisely what the Fed will do. But it will not do so precisely. Instead, it will act clumsily... reluctantly... incompetently... accidentally... and finally, catastrophically.
That’s our prediction, here at the Daily Reckoning. Prove us wrong!
In today’s reckoning, we describe why you don’t have to be an astrologer or an economist (the two are similar... except astrologers have more professional credibility) to see what is coming. ..." Read all here
and more: "Gold Will Be Fine in 2009" "Sources like Peter Schiff and Citigroup have suggested that gold may reach $2,000 per ounce in 2009. Legendary investor Jim Rogers recently declared his intention to exit all dollar holdings." "Until the fundamental outlook for the U.S. dollar reverses course, I maintain that gold and silver investments offer the best safe-haven characteristics available anywhere." fool.com/investing/general/2008/1/31/gold-will-be-fine-in-2009.aspx
and more: "Gold prices have made substantial gains in the last month after the sharp fall in the dollar amid concerns over U.S. debt levels. And now there is a large-scale potential bullish pattern developing on the SPDR Gold Trust (GLD) that merits watching."
Against al-Qaeda, whose "actions are irreconcilable with the rights of human beings," Obama invokes the Koran's prohibition against killing an innocent. Does Obama not realize that the stricture applies to the US and its "coalition of forty-six countries" in spades?
The hubris is extraordinary. A bankrupt government that has to send its Treasury Secretary begging to China thinks it can spend limitless amounts in a futile effort to control the culture, mores, and political system of distant Afghanistan.
[delusional liberals are defending this speech as somehow brave, or taking on a new "tone," or some such nonsense]
"Fellow conservatives, admit it: Obama gave a great speech
In front of the whole Muslim world, he defended Israel and the Iraq and Afghanistan wars. What's not to like?"
By David Horowitz Jun. 05, 2009
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