Global Economic Collapse
This morning I waited for the U.S. unemployment report before naming my RANT. Thus, you can see it was another horror show, a net gain of just 80,000 jobs, well below the 95,000 estimate (not to mention much higher “whisper numbers”), and including, of course, 102,000 PHANTOM JOBS from the birth/death model. In other words, just two days after Helicopter Ben told us he saw “economic improvement”, it turns out he was proven to be, yet again, a LIAR. The only reason the Fed did not OVERTLY announce QE3 this week was because it is scared of GOLD and SILVER exploding to all-time highs, damaging its ability to turn on the printing presses and, in turn, Bernanke’s goal of reappointment in 2014. But don’t worry, QE3 is coming, as is QE4, and QE5…until the dollar eventually collapses.
I could have started this RANT with the DISASTROUS results of the G-20 meeting, released this morning, but before that I want to focus on the GLOBAL ECONOMIC COLLAPSE.
No matter how much money is printed to “extend and pretend” the façade of solvency, zombie banks, municipalities, and sovereign nations will NEVER climb out of the respective holes they’ve dug, per my FARGO RANT from last week. Even if political leaders had the WILL to reduce debt (risking massive social unrest in the process), they don’t have the ABILITY to survive the exercise due to the strengthening headwind of a COLLAPSING global economy.
Today’s employment data PROVES that last week’s GDP report was a sham, literally the ONLY positive piece of economic data I’ve seen, and not un-coincidentally the most politically important. I’ve discussed at length the many flaws, and in some cases outright lies, in the GDP data, and the employment report accentuates those lies to anyone doing just a modicum of simple math.
As noted in RANTS earlier this week, U.S. consumer sentiment and expectations indices are plunging to all-time lows, akin to levels at the BOTTOM of GLOBAL MELTDOWN I in early 2009, amid RECORD unemployment and rising PPI and CPI inflation (anyone notice gasoline prices are approaching this year’s highs?). Just yesterday, Bloomberg’s Consumer Comfort Index (NOT published by the lying government) hit a new all-time low…
…while municipal bond downgrades surged to levels last seen at…yep, the BOTTOM of GLOBAL MELTDOWN I. Helicopter Ben sure is right about one thing – future growth (there won’t be any, by the way) will be “frustratingly slow.”
And let’s hear it for America’s crony capitalistic system! Yesterday, Freddie Mac reported a record $6 billion loss in its role of co-cesspool manager for the U.S. mortgage industry, upping cumulative losses since its CEO, Ed Haldeman took over two years ago, to $21 billion. Haldeman announced his resignation yesterday, but don’t worry he will receive a $4 million BONUS!
Speaking of cesspools, how about AIG, global cesspool manager for the derivatives industry, and yet another nationalized ward of the state? Yesterday it reported a whopping $4.1 billion loss, which it blamed on “volatile markets”, and then had the GALL, as a state-run, taxpayer-funded industry, to announce a STOCK BUYBACK program! How on earth can an insurance company lose money due to “volatile markets”, and how can a money-hemorrhaging, insolvent, nationalized company be buying back stock?
At least Jon Corzine, who I hope and pray goes to prison but probably won’t (heck, he might be the next Treasury Secretary), was smart enough to listen to his lawyers and back off the $12 million golden parachute clause he wrote into his contract.
By the way, does anyone remember how Lehman Brothers and Bear Stearns were able to hide their insolvency from the public for so long? Probably not, but I DO. They utilized an illegal financing scheme to hide debt levels on the last day of each quarter through reverse repo transactions, which brought debt back on the balance sheet the very next day. Take a guess what MF Global was doing…
And don’t think for a second that the impact of MF Global’s demise has passed, as clearly bank liquidity has been significantly impacted, per the below chart, as the Dead Sea of global finance just became a lot deader…
As for the GLOBAL nature of the economic collapse, I need not discuss the plight of the PIFIGS, which are in such disarray that striking laborers may soon exceed “laboring” laborers. Irrespective, too much ECB MONEY-PRINTING has caused INFLATION to accelerate, as we see in the below Italian CPI chart. Readers, Europeans have a long, long history of understanding the benefits of GOLD and SILVER, and you can be sure Italians, Greeks, and countless others will rush into gold like a raging river during a hurricane.
Let’s end this section of my RANT with the coup de grace, today’s announcement that German manufacturing activity PLUMMETED by 4.3% last month alone. Anyone believe Europe, or the Euro currency for that matter, has even a slight chance of survival?
Now back to the European debt crisis, where EACH DAY, EACH HOUR the situation deteriorates. We are living through a KEY INFLECTION POINT IN HISTORY, in which EVERYONE born in the post-War era realizes that no amount of technology, or so-called “modern ingenuity,” can prevent inevitable business cycles, or, for that matter, LONGER-TERM cycles such as the Kondratieff Winter, currently setting over the Western world.
First, we get the so-called “great news” yesterday that the Greek referendum has been scrapped, prompting the PPT to goose the market and start yet another bank stock rally. Combine the expected $1.4 trillion, PRINTED MONEY bailout with the ECB’s surprise rate cut to 1.25% from 1.50% (again, achieved with PRINTED MONEY), and surely Greece is saved, the world is saved, and it’s time to start borrowing and spending again!
But what’s this? Just a day later, it appears that, once and for all, NO ONE will participate in “leveraging” the EFSF bailout fund. Perhaps the hint should have been taken yesterday when a measly $3 billion EFSF bond offering was pulled due to lack of demand, or the day before when the Chinese said they wouldn’t participate AT ALL. But now, THIS MORNING, head Keystone Kop Angela Merkel (soon to be ex-PM of Germany) announced there was essentially ZERO support for the EFSF fund from the ENTIRE G-20, so they will need further time to figure new strategies, possibly not announcing any new initiatives until the NEXT G-20 MEETING, in FEBRUARY 2012!
And yet there are STILL people believing Europe can be saved, particularly Greece, which will run out of cash in a matter of WEEKS?
Readers, the “G-20” is nothing more than a multi-million dollar, taxpayer-funded boondoggle of “politicians” with not the slightest understanding of economics, seeking nothing more than the most expedient, vote-gathering method of “extending and pretending.”
In recent years, this strategy worked well, as the PRINTING PRESSES were available carte blanche, with no material ramifications on global equity, credit, commodity, or currency markets. Unfortunately, that is not the case today, as DEBT SATURATION has been reached, while global financial markets are in their death throes, succumbing to the fact that increased MONEY PRINTING not only does not help, but only makes things worse. Add the GLOBAL ECONOMIC COLLAPSE to the mix, and you can see why the situation is HOPELESS. The European contagion WILL play out to the bitter end, and it WILL spread throughout the world, eventually destroying the nation with the most debt in global history, and thus the furthest to fall.
I’ll let you guess who that is…
PROTECT YOURSELF, and do it NOW!