HothSnake 
The Don
Posts: 189
(8/17/05 15:26)
Reply
|
 The Coming Economic Disaster!
The Coming Economic Disaster
Depressions are an extremely rare occurrence. A sustained deflationary depression has not happened for 70 years, and in the past two centuries there have been only two periods unanimously referred to by economists as depressions. The markets seem to follow basic commonsensical trends that most economists tend to ignore: demographic trends. Essentially, these significant but infrequent periods of economic contraction follow a generational pattern. As certain generations are born, develop, and retire, the economy will expand and contract in reflection of these generational patterns. Thus, you could conclude that an economic downturn would occur at least once every century, and certainly the historical economic data confirms this hypothesis. As we begin a new century, the economic data appears to be falling inline with all of the economic patterns of past centuries, i.e., it would appear that we are due for an economic depression sometime very soon. Just like the deflationary depression of the 19th century (1830’s) and the 20th century (1930’s), you should expect this depressed economy to occur around the first third of this century. The height and breadth of this economic collapse will depend on the volume of fiat currency and credit that has been artificially pumped into the economy by the moneychangers of the Federal Reserve.
Yesterday it was announced that Alan Greenspan was raising interest rates for the tenth consecutive time in an orgied panic to belay any fears of inflation. Apparently, the American people are getting too wealthy, and the economy is doing too well for the comfort of the Fed Chairman, so that now he has to slow things down a bit… throw a few wrenches in the motor. At least that is what economists would be saying. In actuality it is a signal of a very weak and unhealthy economy. Such is the stupidity of a system predicated on theft and fraud, such as that of the Federal Reserve System. Imagine that you lived in a communist dictatorship, where the government puts limits on how much you can earn by forcing you to assume their debt (Federal Reserve Notes). Now picture yourself an American, and you are not too far off from that reality. While the Fed Chairman plays God with all of our financial futures, he is contemplating his own cushy retirement before the end of the year. He may be older than dirt, and worshipped as a demigod on Wall Street, but make no mistake; he is making a run for it, while he still can. A coming economic collapse is imminent, and it appears that the old Chairman doesn’t want to get caught holding the bag.
“What collapse,” you say? “Things have never been better, and all of the economic indicators are pointing up,” you say. Yes, the economy does appear to be humming along, which is to be expected. “But you are foretelling doom and gloom,” you say. Yes, it is true that I point out the inevitable… The inevitable fact that every ponzi scam ends in ruin, and that the great Federal Reserve fraud shall not break from this precedent. The current decent economic data is not a surprise to me or any other economist that understands the data, but make no mistake; the current economic trend is an illusion that will not last. The economy has been pumped up with every trick in the Federal Reserve playbook, but the megalomaniacs at the Fed cannot lay claim to the current uptrend. It is a natural consequence of demographic trends that have defied all the actions of the Fed.
The baby-boom generation (America’s largest) is at its earning peak, and this trend will continue up until their retirement years, which is not far off. Once this giant generation starts to retire, their earning and spending potential will be severely diminished, passing the baton to the considerably smaller generation X, which will not be able to meet the increased demands placed on them by the massive debt left by their retired parents. Once this happens, the economy will come to a screeching halt, which could lead to an economic down turn the likes of which may rival the Great Depression-- all demographic data points toward this trend, which will begin to manifest itself sometime in the next ten years or sooner.
We have been extremely spoiled over the past twenty years, witnessing a booming economy, and the “irrational exuberance” of the 90’s stock market bubble. So much so that we expect it to never end. We fail to notice what most economists have failed to notice over the centuries: economics is about people and demographics and not about inanimate objects, for the only real economic resources are the ingenuity and toil of human beings. Fail to consider demographic trends, and you might as well be playing darts with your eyes closed, or relying on the good graces of the Fed. These trends are shifting considerably, and with them the economy.
Idiots on Wall Street love to give “the God of their idolatry” (Alan Greenspan) all of the credit, but the real movers of the economy are the people that make up the economy. That being said, it takes millions of participants to make the economy go, though it takes the actions of a few to wreck it. A few dishonest individuals given the reigns of absolute power, counterfeiting their way to billions, can flood the market with their bloated currency, enslaving all of us, and destroying the efforts of millions (Federal Reserve). This whole-scale fraud is the same basic premise of a pyramid scheme. The millions go scurrying about the base, while those at the capstone reap all of the rewards. Eventually, the whole thing comes crashing down on all of our heads when it is realized that the schemer is bankrupt. The Fed is certainly bankrupt, and the country along with it. The intensity at which the Fed has inflated the economy with credit and debt over the past thirty years is astounding, and this whole-scale inflation will result in the largest deflationary depression of all time. It's just a matter of time.
More millionaires have been made on Wall Street than any other place on earth. Some of the richest men in the world have made their vast fortunes there by fleecing the public and taking advantage of its fraud-laden atmosphere. You can’t entirely blame them, after all, not all of them were in on creating this insidious system, and most others were born into it. Warren Buffet can’t be blamed for taking advantage of the massive fluctuations created in the market, through the unnatural machinations of the Fed and her Wall Street cohorts. “Wait a minute… Warren Buffet is the classic buy and hold investor,” you say. True, he does buy and hold, but his vast fortune was made possible by buying devalued large cap stocks at the bottom of market crashes (1974), and then waiting for their values to rise in the hyper inflated market created by the Fed that followed. A few, such as J.P. Morgan, certainly share a lot of the blame for the current corrupt system. No one profited more by the Federal Reserve Act of 1913 than J.P. Morgan and his money barons of Wall Street. Truly, they defined the term “inside trader”, as mass fortunes were amassed by the Kennedy family, the Chases, and others. A corrupt fiat money system will create opportunities for the acquisition of unearned wealth by those that are in the “know” by increasing the volatility of the markets. These broad swings and fluctuations are like candy to an investor that understands the system. Just ask Warren Buffet.
Today, we have giant moneyed institutions that survey the market to and fro, seeking to reap mighty rewards and call to themselves an unnatural influence over the markets. Day traders refer to these financial institutions (usually large banks) as the “hammer”, seeking to clean up any scraps that they might leave behind. These huge institutions can swing the balance in their favor for short periods, leaving small-time investors in their wake. Most common investors are unaware of this undue influence and they pay the consequence. Is it any wonder that the money barons of Wall Street “capos” worship their own “Tony Soprano” in Alan Greenspan?
What is a dollar? Today a dollar (Federal Reserve Note) is nothing more than a credit instrument. It is tantamount to a credit card that the Federal Reserve charges us all interest to use. Technically, the national debt is the accumulated interest that we owe the Fed for using its credit money-- a debt that can never be paid. Have you ever wondered why the debt only gets larger, and never seemingly gets paid off? How can you pay a debt with money that doesn't exist? There isn't enough money in circulation to pay one quarter of the national debt, and that is the nasty secret of national deficits. They aren't meant to be paid off, only to enslave. Essentially, the Federal Reserve is the largest credit card company in the world. In fact, that has become the sole job of the Fed, pumping the economy with ever increasing amounts of credit, credit that is artificially inflating the economy, leading toward a major deflation.
Mr. Greenspan does hold the economic purse strings of the nation in his hands in that he can influence the short-term aggregate supply of money and credit, but his power over the economy is relatively small, considering that in the long-term aggregate the economy will do whatever the demographic, psychological, and technological dynamics dictate. He can mainly read and react, increasing the intensity of the general trend, but control the economy he cannot. He is a sitting duck that falls victim to natural market forces, and then reacts appropriately. He can no more control the economy than a weatherman can control the weather. His only concern and signpost is inflation. What is inflation? To put it concisely, it is the debauchery of currency. This is basic supply and demand economics here. Whenever the supply of fiat money (money not backed by any tangible asset or service) is increased within an economy, it will cause an increase in the demand for real tangible goods or services, thus causing the price of those goods and services to rise, e.g. price is directly related to demand. Thus, the new fiat money pumped into the economy chases its own tail and cheapens its own value in the long-term aggregate. That is why we are told not to save our money, but to invest it, because money just sitting in a bank account some place is losing value daily. This is a natural consequence of using monopoly money, such as Federal Reserve Notes as your national currency. In order to counter inflation, the Federal Reserve must make their fake currency, increasingly more difficult to get a hold of. That is where raising interest rates, the buying up of bonds, and the increasing of discount rates come in. This is also the birthplace of the income tax, which was born almost to the date. The four go hand in hand. Take more money out of the pockets of middle class Americans (those that make up most of the economy) and you can stave off inflation for a time. But, should the economic floor fall out from under the Fed’s feet, and nothing that the Fed can do will save things. What do I mean by “economic floor”? Simple, I mean a change in demographics, i.e., the people that have been propping up the economy by their spending behavior, technological innovations, and production. Once the floor has dropped out (economic production slows), the apparent debauchery of our money shall be exposed, and a deflationary depression will result.
Those that contend, which is almost everyone, that all the Fed needs to do in order to stave off high inflation followed by deflation is adjust the discount rates or print more money, are sorely mistaken. Japan, whose economic conditions since the early 90’s have been severely depressed, has used every monetary trick in the book in an effort to get its economy going again. Its own baby boom generation fueled an unprecedented economic boom in the mid 80’s, and when this generation started to retire (90’s) the economy, which was bloated with too much credit like ours, went south and has stayed there despite all the posturing of its own central bank. The IMF similarly tried to manipulate the South Asian economy in the 90’s, resulting in the collapse of that economy, despite using every modern monetary device to prevent it. When demographic and psychological trends point downward, nothing that the moneychangers can do will reverse the trend. In fact, it will only make it far worse, as is indicative of what happened during the Great Depression when it was made manifestly worse by the actions of the Fed and FDR.
Most all economists contend that central banking is necessary in order to maximize economic growth. Unfortunately, for them, the historical economic data does not support their conclusions. Commonsense tells us that a debauched currency cannot sustain economic growth, but in fact destroys it. As a glaring example there is Hong Kong, whose real economic growth in the 20th century out paced every country in the world, yet they had no central bank. Also, the period of the 19th century in American history before the Federal Reserve out paced the period in American history of the 20th century after the Federal Reserve in Real economic growth. The present love affair with central banking by modern economists is without historical merit. The debauchery of money throughout history has led to economic ruin every time, and this time will be no exception.
Greenspan has been very fortunate for his tenure as Fed Chairman, which started in the 80’s just before the market crash of 87’. He has ridden the coattails of America’s largest generation for all that it is worth, and now that this train is about to halt, he is getting off before it is derailed. All that is keeping the current economy afloat are the millions of baby boomers, spending themselves into a frenzy as they reach their peak years in life. Remove this major prop, and the house of cards that Greenspan’s worshippers think that he has built will come crashing down. Greenspan cannot stop these baby boomers from earning money and spending it anymore than he can stop the rain; but he can increase and decrease the intensity, and point them in unnatural directions. For instance, the current housing boom is indicative of another great market boom: the 90’s stock market bubble. This housing boom is a natural consequence of the aging baby boom generation’s nesting phase, but its intensity was increased greatly and unnaturally by Greenspan’s monkeying with interest rates in order to infuse the economy with some life after the downturn of the late 90’s. This caused unnatural speculation and a refinancing frenzy that helped prop up the ailing economy, but as a consequence it has caused a significant bubble, i.e. the same “irrational exuberance” that Greenspan created in the 90’s stock market bubble by virtually lowering bank reserves to zero is now evidenced in the real-estate market by lowering interest rates to virtually zero. Thus, Greenspan came out the other day and expressed his concern with the over bought housing market, and its imminent collapse. The current housing trend is pointing downward, and some are forecasting a major demise. Of course, those on Wall Street will point to Greenspan as an economic genius for seeing it coming, but this is akin to king Henry VIII debauching the gold coin of his realm, and then playing himself an economic genius by foretelling the resultant economic disaster.
Now he is increasing interest rates for the tenth time running in order to keep inflationary forces at bay. He is properly worried, because long-term inflationary periods are always followed by a deflationary period, which results in recession or depression, which result in the collapse of currency (hyperinflation). The Fed game will be up, and the man behind the curtain will be exposed. Such is the massive instability created by such an unnatural system. The market has been in an inflationary state for the past twenty years (don’t be fooled by CPI reports, which mainly measure the price of perishable and usable items, but do not account the inflationary pressures of the market as a whole over time). Inflationary periods have been manifest in varying sections of the economy, not just the areas relegated to consumers. For instance, the inflation of the 70’s was mainly evidenced in the commodity markets, while the inflation of the 80’s and 90’s was indicated by booming stock markets. The markets as a whole have been steadily climbing since the mid 70’s, and even with a few recessions in between, the market is still way overbought. Don’t get me wrong, all markets go up and down, but the wide fluctuations that have been exhibited by the US markets are not natural. Left to natural devices the market will suffer a few small corrections here and there, but the intensity will be low, and the after shocks are hardly felt. The intensity of the economic upturns and downturns in a Fed run economy are increased exponentially, and as in all things: what goes up must come down. Make no mistake; we are due for a major deflationary depression. The Fed has dummied up this freak show of an economy for long enough, and the wind (the baby-boom generation) is about to leave the sail.
Another foreboding sign of things to come is something called ERISA (Employee Retirement Income Securities Act of 1974). This Act, among other things, established the 401K plan, which ushered in a new era of stock market investing. Part of the “irrational exuberance” of the 90’s stock market was due to the increased use of 401K plans by the burgeoning baby boomers. The idea of millions of inexperienced investors, suddenly jumping head long into the stock market is enough to scare any seasoned market veteran. Such extreme volatility in the market was enough to make Warren Buffet shy away from stock splits and dividends in his Brookshire Hathaway Company stock. Implicit as a provision of this Act is the forced removal of shares from the baby boom generation’s 401K plans, starting around age 72, a provision that will allow Uncle Sam to take his share of the stake at that time. This is a perfect example of government sticking its big nose where it does not belong. Can you imagine millions of people all taking money out of the stock market at the same time? This ridiculous law has made almost every American dependant on the stock market for his or her future retirement, creating a market that has proven as volatile as it is large. Just ask ex employees of Enron or Worldcom if this is a good idea. The parents of the baby boom generation retired in relative prosperity and ease thanks to their defined benefit (pension) plans that they were afforded. This same generation has turned Florida into a retirement village for retirees, seeking to play golf and tennis all day. I doubt that the retirement of the baby-boom generation, and certainly my generation X will be as cushy. When the baby boom generation starts retiring, and all of that money is sucked out of the stock market, many baby-boomers and gen-Xers will find that the retirement money that they thought they had on paper is not there. I don’t think that you need me to tell you that making Americans’ retirement dependant on something as volatile as the stock market is simply asinine. This bill was passed for one reason alone, and that was to absolve American companies from having to take care of their employees’ retirement, and to artificially inflate their stock prices. Otherwise these companies would have never let it see the light of day.
Those of you who trade the markets regularly may be familiar with something called the Elliot Wave Principle. Without getting too complicated here, this principle was developed by R. N. Elliot, and is based on the nature and patterns associated with what is referred to as fractals. Fractals are naturally repeating patterns that can be observed in decreasing scale throughout an object. For instance, if you were to observe the seacoast from an airplane, you would notice certain repeating patterns throughout, and even as you got closer, you would notice smaller degrees of this same repeating pattern throughout the entire shoreline, even when you are looking at a particular small section of it. R.N. Elliot identified fractal patterns within the markets, and was able to predict with a high degree of accuracy the ebb and flow of the stock market by learning to read these fractal patterns. According to Elliot, each wave of a stock market line graph subdivides into various other waves that make up an eight-wave fractal pattern. If the wave is moving in the same direction as the wave of one larger degree, then it subdivides into five waves. If the wave is heading in the opposite direction as the wave of one larger degree, then it subdivides into three waves (denoted by the letters A, B, and C in the figure below). Each of these waves adheres to specific traits and construction, as described in Elliot Wave Principle (197 . Figure 1.2 below is an example of this pattern. (Conquer the Crash, Prechter p. 23)
After a Fifth wave, denoted above by “5”, in a cycle that is heading in the same direction of a wave that is one larger degree, there will be a retracement three wave pattern in the opposite direction, i.e., a correction if the trend is upward. We are currently sitting near the crest of a "V" grand super cycle wave, which would portend a major three-wave (A,B, and C) retracement in the opposite direction (depression). What is most interesting here is that the graph of the market since the Great Depression up until the present almost echoes the graph of the market preceding and up until the Great Depression exactly. My how these patterns love to repeat themselves!
The impending retirement of the vaunted baby-boom generation, ERISA, the fractal analysis of the last 70-year’s market trend, and the increased fraudulent activities of the Federal Reserve all point toward a coming economic disaster. Current demographic trends indicate that we will see a significant period of market enthusiasm for the next four years, but after 2009 trends will begin to decrease. By 2012 I would run with my money for the hills because anything is possible, but most likely we will see a significant downturn in the markets and the economy. Like Joseph in the Bible, I would make preparations for the inflationary trend of the stock market until 2009 or 2010, so that you can survive the lean times that follow. We may see a few recessions and booms before the big one, which is likely to happen in the mid to late 20’s into the 30’s, but the general trend will be down after 2012. When the Big Bust does hit, it should be far larger than the so called "Great Depression". I would start preparing yourselves for this now. For a great resource that will help you plan ahead for the Great Bust to come, I recommend Conquer the Crash by Robert R. Prechter Jr.
by Ryan Bradfield
www.givemeliberty.50megs.com/Disaster.htm
Sources cited:
Prechter, Robert (2002). Conquer the Crash, Hoboken, NJ: John Wiley & Sons Inc.
------------------
www.givemeliberty.50megs.com/
---------
President Andrew Jackson stated in reference to the bankers at the state of his administration: "You are a den of vipers and thieves. I intend to rout you out, and by the Eternal God, I will rout you out."
"Our Founding Fathers believed that it was self-evident that the God of Nature is the sovereign of the universe and everything in it (as well as mankind) and that He had endowed all mankind with "certain unalienable rights" making them self-directing sovereigns, which means that any governments instituted among men derive their just powers (only) from the consent of the governed, who are the source of earthly power and authority. Hence any attempt to exercise any powers NOT conveyed by the People is unjust and unauthorized, and any act done pursuant to such usurpation of power is void."
"If one understands that socialism is not a share-the-wealth program, but is in reality a method to consolidate and control the wealth, then the seeming paradox of super-rich men promoting socialism becomes no paradox at all. Instead, it becomes logical, even the perfect tool of power-seeking megalomaniacs. Communism or more accurately, socialism, is not a movement of the downtrodden masses, but of the economic elite." Gary Allen, Author
Edited by: HothSnake at: 8/17/05 15:32
|
Email This To a Friend
Topic Commands
Click to receive email notification of replies 
Click to stop receiving email notification of replies 