-- Posted Wednesday, 25 March 2009 | | Source: GoldSeek.com
By: R. D. Bradshaw
For some time now, some readers have come to believe that the Goldsmiths series is the most pessimistic of all in terms of the US economy and future. But I discovered another source recently which also seems similarly pessimistic; but in a considerably different way than the Goldsmiths. This one is the Market Ticker. Its article of Mar 5, 2009 on “What’s Dead (Short Answer: All of It)” offered some predictions worth noting.
Here are the words
Market Ticker says: “Just so you have a short list of what's at stake if Washington DC doesn't change policy here and now (which means before the collapse in equities comes, which could start as soon as today, if the indicators I watch have any validity at all… For what its worth, those indicators are painting a picture of the Apocalypse that I simply can't believe, and they're showing it as an imminent event - like perhaps today imminent.
- “All pension funds, private and public, are done. If you are receiving one, you won't be. If you think you will in the future, you won't be…
- “All annuities will be defaulted to the state insurance protection (if any) on them. The state insurance funds will be bankrupted and unable to be replenished. Essentially, all annuities are toast. Expect zero, be ecstatic if you do better. All insurance companies with material exposure to these obligations will go bankrupt, without exception…
- “The FDIC will be unable to cover bank failure obligations. They will attempt to do more of what they're doing now (raising insurance rates and doing special assessments) but will fail; the current path has no chance of success. Congress will backstop them (because they must lest shotguns come out) with disastrous results. In short, FDIC backstops will take precedence even over Social Security and Medicare.
- “Government debt costs will ramp. This warning has already been issued and is being ignored by President Obama. When (not if) it happens debt-based Federal Funding will disappear…
- “Tax receipts are cratering and will continue to. I expect total tax receipts to fall to under $1 trillion within the next 12 months. Combined with the impossibility of continued debt issue (rollover will only remain possible at the short duration Treasury has committed to over the last ten years if they cease new issue) a 66% cut in the Federal Budget will become necessary. This will require a complete repudiation of Social Security, Medicare and Medicaid, a 50% cut in the military budget and a 50% across-the-board cut in all other federal programs…
- “Tax-deferred accounts will be seized to fund rollovers of Treasury debt at essentially zero coupon (interest). If you have a 401k, or what's left of it, or an IRA, consider it locked up in Treasuries; it's not yours any more…
- “Any firm with debt outstanding is currently presumed dead as the street presumption is that they have lied in some way. Expect at least 20% of the S&P 500 to fail within 12 months as a consequence of the complete and total lockup of all credit markets which The Fed will be unable to unlock or backstop…
- “The unemployed will have 5-10 million in direct layoffs added within the next 12 months. Collateral damage (suppliers, customers, etc) will add at least another 5-10 million workers to that, perhaps double that many. U-3 (official unemployment rate) will go beyond 15%, U-6 (broad form) will reach 30%.
- “Civil unrest will break out before the end of the year. The Military and Guard will be called up to try to stop it. They won't be able to. Big cities are at risk of becoming a free-fire death zone…”
Market Ticker adds that the good news is that this process will clear The Bezzle out of the system. But the bad news is that you won't have a job, pension, annuity, Social Security, Medicare, Medicaid and, quite possibly, your life. Presumably, appropriate and prompt action from Washington might save the system.
Some Follow-up
I checked the Market Ticker website (www.market-ticker.denninger.net) and found some follow-up material to the above, dated March 19, 2009. This report offered some backdrop on the above remarks, as suggesting that the problem is not one of hyperinflation but rather a collapse of the US money and economic systems in an out of control deflation scenario. This source doesn’t see a collapsing dollar, but instead collapsing foreign currencies. Specifically, it says: “the DX, or dollar index, will skyrocket - not go through the floor…”
Going on, the Market Ticker adds that the “death spiral” ends in the destruction of our monetary base. This will not be due to hyperinflation but, per Market Ticker, it will be due to the inability to borrow any more funds, the reduction of the currency's base to a giant circle jerk, asset fire sales in a mad liquidation dash and ultimately, the collapse of both the monetary and political systems in the United States as tax revenues collapse to very close to zero.
Market Ticker concludes “This is a national security emergency that quite literally can take down our government and way of life within months or even days… By refusing to confront the bankrupt nature of institutions under Bernanke's supervision and by choosing instead to continue to bail them out and take their trash onto his (our) balance sheet, Bernanke is risking something much worse than a Depression. He is literally risking the end of America as a political and economic power.”
What this Might Mean
If much or all of the above scenario plays out in the next 12 months (starting immediately as the words suggest), it will mean the greatest and worst case of recorded deflation, perhaps in all of history. It will mean that the dollar will be the greatest currency in the world all the while that the United States economy and nation is utterly destroyed along side many other foreign countries whose own currencies will collapse.
While I certainly expect many of the above predictions to take place in a hyperinflationary collapse, I would also anticipate a mass printing and distribution of dollars trying to stave off the end of the US and the governing politicians and political system. While the plutocrats might not want to see the end of the dollar in hyperinflation, caused by massive printing of dollars, my guess is that the politicians will ultimately turn to it.
Of course, the Goldsmiths’ articles and indeed commentary from some financial analysts expect a future bout with hyperinflation. Very few writers expect a deflationary collapse—at least not in the immediate future or even in the next 12 months. But I think all of us, whoever we are and whatever our beliefs or expectations might be, should consider the possibility of a total deflationary collapse as the above remarks communicate.
Right or wrong on deflation, hyperinflation or whatever, many people believe gold is the only answer for survival in these coming days—although it is clear that gold and indeed many other things will be in a short term sell mode the next few days to perhaps lay the groundwork for the G20 meeting on Apr 2d.
Thus, if the above scenario materializes, is it logical to look to gold as the best case option to survive in the catastrophe envisioned? Frankly, for my part, I am certain that I would like to own some gold in preference to a bankrupt US dollar or any other fiat money now used in the world.
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Back issues of the Goldsmiths, by the editor of the Analysis of News, can be accessed from a Google or Yahoo search engine by typing in “R. D. Bradshaw” Goldsmiths. Several hundred web sites can be found with the back issues and with translations to Spanish, Italian, German, Chinese and other foreign languages. Goldseek.com has most of the back issues of the Goldsmiths. Finally, the “Archives-Goldsmiths” of this website (www.analysis-news.com ) has all of the Goldsmith articles issued to date.
Besides the revelations contained in the Goldsmiths’ articles, the work of the plutocratic financial market manipulators to conspiratorially manipulate and control the financial markets (to make more profits and install a world government under their management) is also addressed at length in the periodic analysis of the news and in other articles produced at www.analysis-news.com. This website has an article of interest to any person interested in understanding the market Manipulators. It is the Hidden Secret of the Manipulators, why they succeed and how to follow their manipulations.
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-- Posted Wednesday, 25 March 2009 | Digg This Article
| Source: GoldSeek.com
