Prime Minister Vladimir Putin’s speech at the opening ceremony of the World Economic Forum in Davos, Switzerland said what we all need to hear. “The world is now facing the first truly global economic crisis, which is continuing to develop at an unprecedented pace. The current situation is often compared to the Great Depression of the late 1920s and the early 1930s. True, there are some similarities.”
“However, there are also some basic differences. The crisis has affected everyone at this time of globalization. Regardless of their political or economic system, all nations have found themselves in the same boat. There is a certain concept, called the perfect storm, which denotes a situation when Nature’s forces converge in one point of the ocean and increase their destructive potential many times over. It appears that the present-day crisis resembles such a perfect storm. Responsible and knowledgeable people must prepare for it.”1
Since the advent of television the powers that be have had the perfect tool to lobotomize the public who no longer have much capacity to understand what is happening to them and what is about to happen so en mass people are sitting back and watching and still hoping for someone, namely Obama, to save the day. But the situation is becoming like the fall of the World Trade Towers; then there was no time to wish the collapsing buildings would somehow resurrect themselves. Starting this past month the brick and mortar are falling everywhere, economic walls and financial steel beams are falling in on us and all the wishful thinking will not change reality.
The amount of money flowing to the financial
sector is insane and in no time in our history has so
much money gone to the crooks and swindlers on Wall Street.
Anyone following the economic news in recent months has to be stunned at the declining economic activity. What current events are beginning to teach us is that we have had a completely nonsensical way of viewing the world. Our constructs of security and our faith in institutions and government have been badly misplaced and the price and level of suffering for being wrong about this will be stupendous.
Waking up in the modern world with no money and no job is a torment that is striking millions more each and every month now as the real world economy contracts forcibly. Those with jobs and money can hardly feel the pain and what the ruckus is all about and for many it’s like being in the ancient Roman coliseum watching the gladiators from a cold distance. Thus some call this a silent depression. And as long as it is happening to others we can asleep in peace.
The Boston Globe recently published a long essay on what a next depression would look like insisting that a depression today would not look like the last one because it would not look like much at all. “The New Depression would be largely invisible because people would experience loss privately, not publicly.”2
The drop in spending was so fast, so rapid,
that production could not be cut fast enough.
Nigel Gault
Chief economist at HIS Global Insight.
Events are moving fast in Europe. The worst riots since the fall of Communism have swept the Baltics and the south Balkans. Certain parts of the system are going under before other parts and that goes for countries as well as individuals. The angel of financial death is not opening every door but it is visiting millions more each and every month. Every month in America alone more than 100,000 families are losing their homes to bankrupt banks with the numbers and trends steadily worsening.
We are fast approaching an epic debt disaster that is approaching faster and faster as the whole spectrum of borrowers, ranging from homebuilders to commercial building and landowners are being cut off from new debt. The contraction is accelerating and now lenders are calling in existing loans on some properties where borrowers haven’t even missed a payment. Or they are demanding that property owners pony up with cash to keep their present loans from being called in.
A lot of people are telling us they are losing
everything. They’re losing their homes, they’re
going into foreclosure, they’ve lost their jobs.
Virginia Cervasio
Suicide resource center, Florida
Losing everything happens to include having nothing to eat, no where to sleep, no feeling of security and a life faced with fear especially when it happens to families. True many of the people who are losing everything are probably still being absorbed by their families but many of them also are living in tents and in their cars. As we have lived with the growing homeless for two decades; nothing to get excited about – right?
Rising unemployment and widespread foreclosures have left many homeless and
living in tents and makeshift huts in cities around the nation.
It’s a scene not seen since the “Hoovervilles” of the Great Depression.3
Each day a small percentage of the human herd is being cut out and laid out to pasture in the fields of nothingness. We are still in the earliest stages of an economic and financial collapse yet the pain is most outrageous for the ones where the ax has fallen first. They have been trying to control the collapse and put it into slow motion but things are starting to move more like at warp speed. Expect something to break and break soon.
Each day from July through September, more than 2,700 Americans lost their homes in foreclosure. That number, up from 1,200 a day a year ago, is the most direct sign of the greatest financial disaster to ever hit any part of the human race except in war. The number of personal bankruptcy filings jumped nearly 8 percent in October from September, after marching steadily upward for the last two years. Many millions of Americans are one pay check away from hunger. If jobless, with no income whatsoever, people will spend their government-supplied checks on their starving or malnourished children/infants - they aren’t going to pay off debt or hoard it.
Economic forces beyond our control are changing the
calculus of who can ride out the tough times and who cannot.
Iceland is giving us an early view as are parts of the United States where newer subdivisions in certain areas are beginning to look like ghost towns of foreclosed properties. Now we are going to see cities and towns and even states under the same kinds of pressure that brought Iceland down. Certainly California, one of the wealthiest areas in the world is on the brink as well as many other states and when local governments are forced to start firing we will really understand the gravity of current events.
“You see a heightened sense of desperation. People are just grasping for anything,“ said Jessica Horsely, a case manager in Colombia South Carolina where a government panel is predicting that the state’s unemployment rate could reach 14 percent by the middle of next year.
“Exports and industrial production are falling so extraordinarily
quickly that it almost defies analysis,” said Richard Jerram,
chief economist at Macquarie Securities in Tokyo.
Dr. Edward Charlesworth, a clinical psychologist in Houston, said the current crisis is breeding a sense of chronic anxiety among people who feel helpless and panic-stricken, as well as angry that their government has let them down.
Don Lee / Los Angeles Times
Equipment is moved last month at the shuttered Jianglong Group factory in Shaoxing, China. The textile dye firm was abandoned by the owner. Government officials said recently that he and his wife had been caught.
Reporting from Shaoxing, China — First, Tao Shoulong burned his company’s financial books. He then sold his private golf club memberships and disposed of his Mercedes S-600 sedan. And then he was gone. And just like that, China’s biggest textile dye operation — with four factories, a campus the size of 31 football fields, 4,000 workers and debts of at least $200 million — was history.4
Reports are flooding in that thousands of factories have already closed especially in the toy industry in China. What most of us forget is to factor in the velocity of money and how that velocity slows terribly with massive layoffs and contracting investment and credit creation. When one person loses their job, that person’s salary does not get spent, meaning it’s not put into other peoples hands for them to turn around and spend. The layoffs we are seeing in the thousands every day are just the tip of the downwind effects. For every big corporate job lost several service jobs are lost for money is not being spent and circulated around.
The Angel of Financial Death does not kill outright
but neither do most pharmaceutical drugs and vaccines.
In Iceland we have an example where a whole country goes under as the rest of the world continues stumbling but not quit drowning yet. Mr. Danielsson, an economist, visited the country recently and found the situation grave. “Salaries are frozen, food prices are shooting up and they are laying off people left, right and center,” he said. “Companies are going bankrupt all over the place. It’s unimaginable how bad it is.” It is almost impossible to live in many parts of the world now without money and people better begin to imagine how much worse things are going to be. This winter in the northern colder climates a lot of people are going to be cold, very cold.
Only by rolling its debt forward and borrowing is the US still able to pay its debts—and its ability to do so has now worsened considerably; and the recent growth in US loan guarantees has made US repayment of its debt even more questionable. Now that the government itself is so deeply in debt it has made the inevitable decision, “Let’s get even more deeply into debt, lets max out our cards, lets push the envelope and take the game to the end.” What’s the point in trying to leash in a herd of raging elephants? One might as well as run with the madness until the end when one has no choice but to let things crash and burn.
The only people who want to borrow significant sums of money now
are the very people banks and foreigners should not want to lend to.
The inability of the US to pay its debt has grave implications for those who loan the US the trillions of dollars the US borrows. With the US debt levels growing even as the US economy weakens, creditors may choose to not loan the US the vast sums of money the US is now committed to spending, a sum Goldman Sachs estimates to be $2 trillion in 2009 alone.
Have you seen the balance sheet of the Federal Reserve lately? If nothing else makes you fearful, that should. Don’t take my word for it – Richard Fisher, President of the Federal Reserve Bank of Dallas, projects that the Fed’s balance sheet will balloon to $3 trillion over the coming years with assets of admittedly dubious quality.
Hank Paulson is gone.
The world’s lender of last resort is itself going bankrupt, the world economy is in danger of collapse, and the end game approaches as the biggest money dealer in the world gets caught without new funds that come from abroad. The IMF has now been asked to bail out Iceland, Pakistan, Hungary and Ukraine. The US may very well be the next IMF client. Certainly Michigan and Detroit could use IMF support as well as California and a host of other states, which Washington doesn’t seem interesting in helping.
Abandon all hope once you enter deflation.5
Ambrose Evans-Pritchard
“We are now witnessing precisely what happens when the greater masses determine in unison that “the system” can no longer be trusted and they all head for the exits at once. As history has shown, it may ultimately take generations to regain the confidence of the people or it may never happen” writes David Haas.6 Actually Hass is still in front of the ball so to speak, we have not seen what could be called anything close to a full panic yet. Perhaps next month or the month after it will come.
According to the FBI statistics on background
checks 1,029,691 guns were sold in October of 2008.7
“As little time is left, it is best to be explicit. There is something in the Western mentality that denies the approach of danger. We are so accustomed to convenience we no longer believe in the necessity of inconveniencing ourselves,” writes Jeffrey R. Nyquist.
The Angel of Financial Death is a most cruel beast
and he does not care even when children starve.
Mass starvation is the fate depressions have on children.
We unfortunately all have a front row seat to a horror flick without realizing that in this show we are being forced to participate in it. One of the problems we are facing has to do with the title of the film. We were led to believe it was a happy film (unending growth) with benevolent actors. We have been suckered in without too much complaint from us but now its time to meet the beast of deflation and economic collapse. Fears of inflation are still around and rightfully so for the future of the dollar is in doubt but right now the world system is a hot balloon deflating quickly.
Even those of us lucky enough not to be in debt and who will be able to earn sufficient income will suffer for the masses around us will be suffering. Even if nuclear weapons and world wars are avoided it still is going to feel like living in a war zone in many places around the world.
The Cruel Suffering of Families in Gaza
Across the country, authorities are becoming concerned that
the nation’s financial woes could turn increasingly violent.
A St. Louis city leader frustrated with the police response to rising crime called on residents to arm themselves to protect their lives and property. Alderman Charles Quincy Troupe said police are ineffective, outnumbered or don’t care about the increase in crime in his north St. Louis ward. St. Louis has had 157 homicides in 2008, 33 more than last year at this time.” The community has to be ready to defend itself, because it’s clear the economy is going to get worse, and criminals are getting bolder,” Troupe, 72, said Tuesday. Troupe said that when he and residents approached a district police commander last year, they were told “there was nothing he could do to protect us and the community … that he didn’t have the manpower.”8
So where will it all end? Perhaps it should end with the repudiation of all debt everywhere in the world. Though this might mean a temporary collapse of everything a new world could be born. The Phoenix could rise from the ashes. Creditors who are owed clearly would not wish for the end of hundreds of years of debt being cleared away like a bunch of dead wood. Many more would cry out for the unfairness of Americans getting let off the hook after borrowing so many trillions and trillions of dollars. The old banking interests of Europe would lose the most but is anyone going to cry for them?
What would be the cost to the world of an ending of all debt? With no one even imagining such a thing it is hard to comprehend such a massive shift in human affairs. I was told by my mentor Christopher Hills many years ago to only lend money if you can afford to not expect it back. Certainly lending money to family and friends with the expectation of payback can kill our relationships and heart connection with these people. To bad God cannot come down to earth and press the restart button. Because that will not happen millions and millions more will have to face The Angel of Financial Death.
Personally I think the top one percent of the elite of humanity should have the rug pulled out from under them with the full scale debt repudiation. It is happening anyway but not in a way that hurts them, only the bottom 90 to 95 percent of humanity. This step by step fall of the system preserves only the power and comfort of the people at the top who will try to reorganize things for us people at the bottom.
In this crisis, nothing is unimaginable anymore.9
Actually it’s the people in the middle and upper middle classes that are being destroyed and you even hear of former millionaires and billionaires cutting their throats. Stories of people earning 80,000 dollars a year yesterday facing financial oblivion today are becoming common as the corporate world downsizes as rapidly as possible. But now at least we can understand the lack of fear of the American government which thinks nothing of going a few more trillion into debt. Some people have mastered the debt game when they realized early on there is no way of paying their debts back.
At some point it’s like pushing the stick forward to break the sound barrier, just keep spending and spending and borrowing and borrowing knowing there is a final day when it all just stops and one starts over. It would be fairer though if that happened everywhere at once then the pain is shared equally and everywhere at once a new day could be born without any central power lording over the human race. Oh what wishful thinking! A perfect storm crashing everywhere on everyone lessening the burden any one individual or collections of individuals would have to face.
Putin says we have the perfect storm but his image of it happening only at certain points is like an old World War Two story of a naval ship going down in the pacific putting hundreds in the open water. They enclosed themselves in a square as the sharks began to attack with the out rings of men being chewed to ribbons but on and on the sharks ate until all were consumed. Why not push the button and take out the loan sharks and bring everyone down to earth and let there never be loan sharks again. If Christ thought it fitting to upend all of the tables of the money lenders in the Great temple in Jerusalem, why shouldn’t we do the same?
Man the Life Boats – Voice from the Mainstream
http://economicrot.blogspot.com/2009/01/gerald-celente-greatest-depression-in.html
Gerald Celente, the world’s #1 Trends forecaster states that we’re moving
into the Greatest Depression in history - starting in 2009!
President Obama of course is going the other way looking for trillions more in debt. We should remember once in a while that there are only 100 billion stars in the Milky Way, in our galaxy. Humans, with bankers at the helm have already created more debt and financial obligations then there are stars in the known universe but obviously that is not enough. Don’t be surprised one day if our hundred dollar bills are printed 10010 meaning 1,000,000,000,000. Zimbabwe reached that level of absurdity only recently with toilet paper instantly became more valuable.11 Yes deflation is gripping the world but watch out for the boomerang in the other direction so stock up on your toilet paper.12
Yes first a great part of humanity is going to be kicked in the teeth with huge deflationary losses and then the survivors will be back-ended, whiplashed with runaway inflation. The deflation will take us to somewhere near the bottom and then a new rip in the floor of the economy will open up taking us to inflationary ruin.
As much as we want things to change and improve it seems that things on a certain level stay the same as on other levels things get worse. Isn’t it nice that in 2009, the year we will remember for a long time, that Codex comes more into force putting more guns and cannons in the hands of the medical police who are going to protect pharmaceutical and general orthodox medical interests. Survival instincts will have many baring their teeth ready to tear others apart and everywhere will be the riot trained police.
One has to be crazy not to let oneself feel the full gravity of the situation and most evasive action if not already taken will be tardy. Though as I write these final words to this chapter I feel all that I am saying we have to look to the light of hope, which is the original light of the world. And that is the hope, not in any external being or power, but in our inner light and our courage to carry on no matter what....
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