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Thread: weekend commentary - Gerald Celente on 'Obamageddon'

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    Default weekend commentary - Gerald Celente on 'Obamageddon'

    (snip)"Since 1980, Celente has made at least 40 accurate predictions about major world events. In 1986, he forewarned of a major global stock market crash, which occurred the very next year, and is now commonly known as Black Monday. Throughout the 1990’s, many other forecasts came true, including the collapse of the Soviet Union, surges in global terrorism, the popularity of spiritual and new age philosophies, public backlash against globalization, upsurges in online shopping, and the 1997 Asian financial crisis, to name a select few. In the new millennium, predictions-turned-real are the correction of the dot-com bubble, the 2001 recession, emerging bull markets for gold, the rise of alternative energy, the collapse of the heavily-inflated real estate bubble, and unsurprisingly, the ‘Economic 9/11’ that we are currently witnessing.

    After thoroughly reviewing the recent summer edition of Trends Journal, I learned that Gerald is now forecasting “the greatest depression” for the rest of the world, while in the US, he believes we may experience “Obamageddon.” As the definition of this witty concoction is easily apparent, its implications are thoroughly conveyed within the opening paragraph:

    Here we are in 2012. Food riots, tax protests, farmer rebellions, student revolts, squatter diggins, homeless uprisings, tent cities, ghost malls, general strikes, bossnappings, kidnappings, industrial saboteurs, gang warfare, mob rule, terror.


    In late July, I spoke exclusively with Gerald, whose research I have been following for several years. My personal interest in his work materialized when I was serving as a publicist for a boutique securities brokerage. In that role, I often read niche financial publications, and discovered the Trends Journal, which inspired me – a former intern to the CEO of a multibillion-dollar credit union, for whom I collected intelligence on the banking industry – to further research the interconnected world of finance and politics.

    Never one to mince words, Gerald kicked off our conversation in his no-nonsense, tell-it-like-it-is approach, which millions have warmed up to over the years. A team player, he answers on behalf of his colleagues at The Trends Research Institute.

    “We want to make it very clear that the policies leading to the decline of ‘Empire America’ have been long in the making,” he said. “What has happened in the Obama Administration is that they have taken policies far beyond even what Bush took with the TARP program; for example, with his stimulus package, with the buyouts, with the bailouts, the rescue packages, these are unprecedented in American history.”

    "Never before has so much phantom money been printed out of thin air, backed by nothing, producing practically nothing,” Celente continues. “You don’t even have to be a student of history to know the outcome of this. All you have to do is have your eyes open, and start thinking for yourself.”

    Like many, Gerald is disturbed by our government’s record-breaking creation of new fiat dollars – Federal Reserve Notes – that are literally produced “out of thin air” on behalf of a quasi-public corporation known as the Federal Reserve. These worthless pieces of paper are not backed by any commodity, such as gold or silver, even though the US Constitution mandates their use as tender in the payment of debts. As this happens, a bailout bubble is being created, and when the “monster explodes” there will be dire consequences for all of humanity.

    “When this bubble bursts, unlike the financial/real estate bubble that burst, the dot-com bubble before that, and the ’87 stock market bubble before that” US taxpayers will now be on the hook for trillions in losses as our “government is [a major] equity holder in private corporations. That never existed before.”

    What will cause the bailout bubble to burst? “There are a lot of wild cards that can change the game, but what I will say is that you can’t keep printing phantom money – produced out of thin air, based on nothing, producing practically nothing – without destroying the currency.”"(snip)

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    Default Re: weekend commentary - Gerald Celente on 'Obamageddon'

    technical follow-up from John Maudlin ...

    (snip)""Western democracies, communistic capitalists, and Japanese deflationists are concurrently engaging in what may be the largest, global financial experiment in history. Everywhere you turn, governments are running enormous fiscal deficits financed by printing money. The greatest risk of these policies is that the quantitative easing will persist until the value of the currency equals the actual cost of printing the currency (which is just slightly above zero).

    "There have been 28 episodes of hyperinflation of national economies in the 20th century, with 20 occurring after 1980. Peter Bernholz (Professor Emeritus of Economics in the Center for Economics and Business (WWZ) at the University of Basel, Switzerland) has spent his career examining the intertwined worlds of politics and economics with special attention given to money. In his most recent book, Monetary Regimes and Inflation: History, Economic and Political Relationships, Bernholz analyzes the 12 largest episodes of hyperinflations - all of which were caused by financing huge public budget deficits through money creation. His conclusion: the tipping point for hyperinflation occurs when the government's deficit exceed 40% of its expenditures.

    "According to the current Office of Management and Budget (OMB) projections, US federal expenditures are projected to be $3.653 trillion in FY 2009 and $3.766 trillion in FY 2010, with unified deficits of $1.580 trillion and $1.502 trillion, respectively. These projections imply that the US will run deficits equal to 43.3% and 39.9% of expenditures in 2009 and 2010, respectively. To put it simply, roughly 40% of what our government is spending has to be borrowed.

    "One has to ask whether the US reached the critical tipping point. Beyond the quantitative measurements associated with government deficits and money creation, there exists a qualitative aspect to such a scenario that may be far more important. The qualitative perceptions of fiscal and monetary policies are impossible to control once confidence is lost. In fact, recent price action in metals, the dollar and commodities suggests that the market is already anticipating the future."

    Let me point out that the deficits for 2010 assume a rather robust recovery, and so they could turn out to be much worse, especially if unemployment continues to rise and Congress decides (rightly) to extend unemployment benefits.

    The interest on the national debt in fiscal 2008 was $451 billion. Even though the debt has exploded, the interest for fiscal 2009 is down to "only" $383 billion. My back-of-the-napkin estimate says that is over 20% of total 2009 tax receipts. I guess when you take interest rates to zero and really load up on short-term debt, it helps lower interest costs. (More on that future problem later.)

    The fiscal deficits are projected to be about 11% of nominal GDP, which is now roughly $14.3 trillion. The Congressional Budget Office currently projects that deficits will still be $1 trillion in ten years."(snip)

    (snip)"Let's assume that all of our trade deficit comes back to the US and is invested in US government bonds. Today we found out that the latest monthly trade deficit was just over $30 billion, or $370 billion annualized (which is half what it was a few years ago). That still leaves $1.13 trillion that needs to be found to be invested in US government debt (forget about business and consumer loans and mortgages).

    Killing the Goose

    $1.13 trillion is roughly 8% of total US GDP. That is a staggering amount. And again, that assumes that foreigners continue to put 100% of their fresh reserves into dollar-denominated assets. That is not a safe assumption, given the recent news stories about how governments are thinking about whether to create an alternative to the dollar as a reserve currency. (And if I was watching the US run $1.5 trillion deficits with no realistic plans to cut back, I would be having private talks too. They would be idiots not to do so.)

    There are only three sources for the needed funds: either an increase in taxes or people increasing savings and putting them into government bonds or the Fed monetizing the debt, or some combination of all three.

    Now the Fed is in fact monetizing a portion of the debt as part of its quantitative easing program, and US consumers are saving more. Tax receipts are way down. I can tell you there is a great deal of angst in New Orleans tonight about the Fed monetization. This is traditionally a "gold bug" conference, and many of the participants and speakers see only inflation in our future.

    Long-time readers know that I think the Fed has been able to get away with its rather large monetization program because of the massive deflationary forces let loose in the world by the credit crisis, which is forcing a monster deleveraging regime all over the world. Where has all the money gone that the Fed has printed? Right back onto the Fed's balance sheet as bank reserves. The banks are not lending, so this money does not get into the system in the usual manner associated with fractional reserve banking. Until that happens, and is accompanied by increasing wages and employment, inflation is not in our immediate future.

    And this brings us to our conundrum. You cannot continue to run deficits significantly larger than nominal GDP for too long without risking the demise of the economic system. Ask Argentina or any of the other nations where hyperinflation occurred, as detailed in the study mentioned above. But we are in a deflationary environment, so the Fed can monetize the debt far more than any of us suppose without risking immediate and spiraling inflation.

    But there is a limit to the Fed's ability to do so without causing real inflation"(snip)

    (snip)"At some point, if we do not get the government deficit under control, the bond market is once again going to react. Seemingly overnight, real (inflation-adjusted) rates are going to rise, and will do so rapidly. And I am not talking about 1 or 2%. You just cannot have 8% of a $14-trillion GDP go into US government debt every year, forever, at today's low real rates.

    Let's play a thought game. If you take 8% of US consumer spending and save it, and it finds its way into government bonds, you have reduced consumer spending and therefore the actual GDP. But how about those who want to invest in stocks? Foreign bonds and currencies? New businesses? Loans of all types? How much are we going to have to save to get the necessary capital? How high will the saving rate have to be to finance all those other activities in a world where debt securitization is still anemic?

    Some will point to Japan and their government debt-to-GDP ratio, which will soon be over 200%, a far cry from where we are today. Why can't we grow our debt to 200%? Because the Japanese have long had a culture of saving and investing in government bonds. It's what you do to support the country. But even they will run into a wall as their savings rate continues to drop, because so many of their citizens are retired and are now selling bonds to finance retirement. They too are running massive fiscal deficits, on the order of the size of the US deficits. And does anyone really want to have two lost decades, like Japan?

    How long can we go before there is an upheaval? I don't know. The markets can remain irrational or complacent for a lot longer than most of us think. It could be years. Or not. Suddenly, it will be July 2008 and the bond vigilantes stampede.

    But now, we seemingly can borrow with no consequences. The deflation that is in the air, plus the lack of bank lending holds, down the normal inflation impulses. We as a nation are leveraging ourselves up. We're partying like it's still 2005. The music is playing and we are dancing. Our Congress is trying to figure out how to run even higher deficits.

    At some point, the consequences will be significant. There are two paths, and it is not clear which one we will take. First, we might see inflation kick in and actual rates rise. Since so much of our national debt is short-term debt, that means yet another rise in the deficit as rates rise. Mortgage rates rise, putting pressure on the housing market. There will be even more pressure on commercial mortgages. Consumer debt will be harder to get and cost more. It will mean funding costs for businesses will rise, and that hurts employment. It would be a return to the 1970s of high interest rates and stagnant growth in a very slow-growth environment.

    Second, we could see deflation kick in and, even though rates stay more or less where they are, real (after-deflation) rates could rise as they did in the '30s and in Japan.

    Some of my most knowledgeable friends argue for the inflation side, and others take the deflation side. I tend to think the Fed will fight deflation until we get inflation, but the consequences will not be pleasant. There is no benign path."(snip)

    (snip)"First, we must acknowledge the deficit is out of control, and spending must be cut. If we raise taxes by as much as the Obama administration now wants to, we will most assuredly put the country back into a deep recession in 2011. Think what raising taxes in 1937 did to a nascent recovery. A $3-trillion-dollar budget is 20% of the US economy. That is just simply too much.

    Quick fact. The most credible studies show that government expenditures exert no multiplier effect on the economy. Actually, they show them to be very slightly negative. This is not just in the US. However, the tax effect has a multiplier of 3! If we raise taxes by $300 billion in 2011, that will slam the economy in the face. Further, we will collect less taxes than projected, as economic activity will fall.

    You cannot cure a too much debt problem with more debt. We cannot borrow our way into prosperity. Every crisis of the past decades has been a result of too much debt and leverage and we seem to want to repeat the past mistakes, hoping that this time it will be different. It won't."(snip)

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    Default Re: weekend commentary - Gerald Celente on 'Obamageddon'

    and a much more elaborate 'prediction' in Gerald Cilente's autumn newsletter at

    (snip)"Episode V Autumn 2012, the “Greatest Depression” has spread worldwide. Billions are unemployed, homeless and desperate. Countries bankrupt, trade pacts broken, tariffs rise, borders close. Protectionist, nationalist and anti-globalization movements have moved out of the margins and into the mainstream. Immigrants brought in during boom times — blamed for bringing down wages, stealing jobs and rising crime — are being rounded up and deported.

    Despite differences between the 1930’s Great Depression and today’s “Greatest Depression,” unsettling similarities conjure up memories of pre-World War II. From the United Kingdom to Russia, war drums eerily beat. China, Vietnam, Indonesia, Singapore — all countries that ramped up production to meet insatiable business and consumer demands of the prior decade — fight for survival. Japan, Taiwan and South Korea, long industrialized and export driven, blame China for their mounting trade imbalances, internal strife and Southeast Asian instability. Mexico, once the US resort/retirement retreat, is as dangerous as the Congo, and its government — what’s left of it — is equally ruthless. Across much of South America, depression, coups and wars prevail; few nations have been spared.

    In Afghanistan, Iraq and Pakistan it’s the same news, different year, different body count: “Five US troops killed in Afghanistan.” “US drone attack kills 60 civilians in Pakistan.” “Car bomb blast kills 47 in Iraq.”

    In the eleven years since President George W. Bush promised to bring Osama bin Laden back “dead or alive,” there have been more Elvis sightings than traces of bin Laden. The US military asks for more troops, more money and more time. The President and Congress plunder the treasury and sacrifice more lives all under the pretext of keeping America Al Qaeda-free.

    The Israeli-Palestinian peace process remains permanently and violently stalemated. Iran, having forged a business/military alliance with China and Russia, is now a Nuclear Club member, and the world is forced to deal with it.

    Oil-rich nations, having sunk trillions and lost trillions in high stakes investments, are trying to cope with internal rebellion and decreased demand for their only cash crop.India’s miracle economy has run out of miracle, pushing it back into Third World conditions. Incessant flare-ups with Pakistan carry nuclear implications.

    Canada, Australia and New Zealand are not in great shape, but compared to most other nations, they seem like paradise. Africa is Africa. Not much has changed. Corruption, poverty and conflict prevail. Despots and dictators vie for control.

    Newly emerging colonial powers outmaneuver old colonial powers to commandeer rich lodes of natural resources. A few countries flourish, some even in the middle of regional hotspots. Smart citizenry, good leadership, a little luck, energy and resource self-sufficient — they saw the trends coming and made proactive decisions.

    Trendpost: Although SHCs (Safe Haven Countries) was not part of the lexicon in 2009, the concept was on the minds of the very rich and the very tuned-in. Aware of the mounting fury of the millions who had lost jobs, homes and futures, and the many other millions who blamed their government for taking their taxes to cover the trillions in financial sector losses, the smart money had already moved to safety or had escape plans in place. If it meant leaving mansions and businesses behind, that was a small price to pay for saving their necks. The on-trend, even with limited resources, had plans in place to escape before things turned ugly and it was too late to leave.

    Businesses specializing in safe haven relocation services — opening foreign accounts, arranging for dual citizenship and/or multi-nation passports — will be in high demand. It was a worldwide trend. From Israel to Argentina, Russia to the USA, nations big and small, each with their own problems, were unraveling. By 2012, with borders tightly sealed and money flows restricted, choice havens were no longer admitting foreigners, but there would still be other options for the determined.

    Trendpost: “Survivalism,” a trend building in 2009, will be bigger business in 2012. There would be escape routes, safe harbors and satisfying futures for those with the nerve and wit to take their lives into their own hands. Survival was more than guns and freeze-dried food. It also meant getting prepared emotionally, spiritually and physically … “Holistic Survival” was a profession waiting for professionals to practice and teach."(snip)

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    Default Re: weekend commentary - Gerald Celente on 'Obamageddon'

    Quote Originally Posted by Melonie View Post
    (snip)"Since 1980, Celente has made at least 40 accurate predictions about major world events. In 1986, he forewarned of a major global stock market crash, which occurred the very next year, and is now commonly known as Black Monday. Throughout the 1990’s, many other forecasts came true, including the collapse of the Soviet Union, surges in global terrorism, the popularity of spiritual and new age philosophies, public backlash against globalization, upsurges in online shopping, and the 1997 Asian financial crisis, to name a select few. In the new millennium, predictions-turned-real are the correction of the dot-com bubble, the 2001 recession, emerging bull markets for gold, the rise of alternative energy, the collapse of the heavily-inflated real estate bubble, and unsurprisingly, the ‘Economic 9/11’ that we are currently witnessing.
    Gerald Celente is just another fraud touted by the doom and gloom prophets.

    http://www.edrants.com/gerald-celente-futurist-fraud/

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