Welcome To The New Banana Republic
Of The United States
May 28 2009 4:09PM
Government Outlaws
Welcome To The New Banana Republic Of The United States of America and
Black Markets.
We would not, under any circumstances, believe our government would make
decisions flying in the face of sacred United States contract law. What
they have done to auto company bondholders is to favor unions for political
votes forcing bondholders into a lower, non-preferred payment order. This
says corporate contracts in the United States are now meaningless.Auto
union people were moved to the head of the bankruptcy line while
bondholders with a preferred first lien position by CONTRACT LAW, are now
forced to the end of the line.
If your government will do this to auto bondholders, what will they do to
the Sheeple?
News this morning told of GM bondholders finally reaching a settlement
providing $.17 on the dollar in two parts as GM shares trading was halted.
Further news stated GM shareholders are receiving 1% of the deal. Watch for
a following clarification as to what all this might mean.
In Our View It’s All Just Grave Dancing
We expect Chrysler for sure and GM being a strong maybe, to enter their
final resting places in the automobile manufacturing graveyard. For these
companies to survive, they have to build and sell cars. We project years of
falling vehicle sales with more lean years afterward. We think they have
zero chance to continue in business in the longer view. Ford has a long
shot chance to survive IF they can downsize the company another 35-50%. We
would suggest their chances are one in three to get through it all and
expect their bankruptcy as well. If Ford makes it, Chapter 11 comes
first.
I just saw a report that FDR taxes in the 1930’s were temporarily as high
as 80-90%. I have not confirmed this but pass it along for what it’s
worth. Destruction of wealth by the Obama administration is moving
breathtakingly faster in escalation mode reinforcing Marc Faber’s
prediction of certain hyperinflation.
Should the Federal Reserve stop their reliquification-reflation program,
the whole system could cave-in overnight. So far, they’ve tossed roughly
$2 Trillion of taxpayer cash at all these problems but Bill Gross at Pimco
says they must inject a total of $6 Trillion to begin to cover the messes
creating a recovery market reaction.
We would expect a world-wide systemic crack-up at around $4 Trillion as key
components of the global credit and bond markets in Europe, Asia and the
U.S. will simply not be able to take it. Our expectations for the next 90
days are for convoluted choppy markets with a mild stocks’ selling event
in the shorter term.
After Labor Day, this fall, we forecast a false stock market rise followed
by most professional traders selling into strength with ferocity.
September, 2009 30-year bond futures are trading this morning at 115.12.
Next support is 112.50, 110.00, 108.00 and then 106.00. Our longer range
forecast is 80.00 with larger potential for something much worse. We told
our readers it gets scary when the 30’s sink under 120.00. Well folks we
have arrived.
Our new forecast for later September, 2009 through early October would be a
62% crash from the early fall high. This means a selling event of at least
4-6,000 points lower on the Dow Jones.
Numerous Reasons For System Failure
The big U.S. investment banks wrote crooked deals (derivatives) destroying
our financial system. Our Federal Reserve (not federal at all but composed
of these same crooked bankers) along with the U.S. Treasury have stolen
nearly a trillion to replenish the banks’ capital and financial
footing.
Those banks were supposed to lend the money to make the economy find
support and rally. Most of these funds have been bank-held to meet
capital-to-loan ratios. No loans; no help for businesses.
A further expansion of (TARP), The Troubled Asset Relief Program, will be
expanded to cover U.S. states’ budgets shortfalls. The worst example of
this problem is California. Obama when asked if he would bailout California
said, “No.” This means they get bailed out along with several others
crying and pleading for help after recklessly spending their individual
states into the fiscal ground.
Many of these idiotic state governments have still not made any serious
moves to cut spending. They keep expecting the gravy train to continue on
forever. It won’t as the tax revenue crashes.
The administrations’ policies cover funding of two current wars in Iraq
and Afghanistan with a new expansion into a third in Pakistan. Potentially,
additional wars will open with North Korea and increased action relative to
the forthcoming Israeli-Iranian nuclear conflict. We not only cannot afford
all these war costs, but do not have the men, women and equipment to manage
all of this war-mongering simultaneously.
In our view, enemies of the US are determined to pull us into several wars,
and drain the US Treasury destroying America and turning its residents into
rural serfs and economic slaves. They seem to be getting a good head
start.
We suspect the increased aggression from North Korea is a test to see how
Obama manages foreign policy. Since he has no foreign policy except to
waffle and hide under the covers and wish it would all go away, these
conflicts and new international tensions shall escalate. In our view, this
is a lot worse than our economic problems.
Our country is at risk floating in an ocean of disasters with no captain at
the helm. Neighborhood organization as a vocation is quite different in
scale than leading the engagement of international conflicts going
potentially nuclear. Mr. Obama giving the visiting U.K. Prime Minister
Gordon Brown some plastic gift K-Mart DVD’s was a strong and meaningful
signal this kid is way out of his league.
U.S. housing mortgages of several toxic varieties began their final descent
in June, 2005 when we predicted the housing crash. At that date lumber
futures tipped-over and the handwriting was on the wall. With skidding
lumber prices and Mr. Greenspan’s cash giveaway on the table, the only
final solution was a housing meltdown. We were correct in our predictions
and the worst is yet to come.
Contrary to current Pollyannish opinions, housing cannot see a new base
until 2012 at the earliest, in our view. In recent days we were wondering
out loud thinking this might be too optimistic. Our latest forecast is for
housing to fall another 30% nationwide on the national averages.
Obviously, some false green shoots appear randomly as bottom feeders
bargain hunt, but 95% of America is dead housing hay turning rotten and
moldy. This summer in some down-trodden urban areas, housing hay catches
fire in an escalation of riots and violence. This is not the preferred
method of urban renewal.
Builders are currently operating at 25% of normal capacity. Our new
forecast says this number sinks to 10% of the formerly 1.7mm new homes per
year; building 170,000 homes annually if they are lucky.
Automobile sales for North American cars and trucks sank from 17mm to
roughly 9mm. Our new forecast is a further skid to 5mm. This is why
Chrysler, GM and probably Ford cannot survive.
National US unemployment is now officially posted between 8% and 10%
depending upon the poll- takers. In our view, current national unemployment
is 20%. In Michigan, the rate is 24% and will soon be 30% after the auto
manufacturer bankruptcies take hold later this year. In the 1930’s, 25%
unemployed was the worst number posted and it was probably accurate.
For a Greater Depression low, national US unemployment could hit 35% with
Michigan at 40-45% before World War III provides military employment for
millions more.
War is the usual path to finally escape the trauma of depression. This was
true in the pre-US Civil War depressions of 1840-1843 and in the early
1850’s. Preceding WW I we had the Panic of 1907 and its previous US
depression of the early 1890’s. We had a preceding 1930’s depression in
1920-1921. This was followed by the 1930’s depression and then World War
II finally taking us out of it.
On the K-Wave cycle timeline, our current depression was to begin in 2000.
And, in fact it did with the crash of the Nasdaq but was artificially
delayed by Mr. Greenspan’s billions of free cash and low interest rate
pump-priming. His market interference helped delay the inevitable and cause
worse conditions to last much longer. While there is open debate that 2000
repeats 1930 or, in fact it was delayed ten years to 2010, smart analysts
compare the chart overlays of 2000-2010 with the 1930’s and they are
scarily identical.
Consumers are busted and broken. Unemployment is rampant and escalating
daily. Wages are stagnant to down. Homes, cars and other property are being
repossessed. Hundreds of thousands of homeless people are living in cars,
tent cities and on the beaches of warmer states. Consumer credit is shot.
Families are doubling and tripling up to survive. Some households have only
one person with a job feeding several. Consumers have lost most of their
buying power. They represented 70% of the economy. There is no engine of
growth to produce any economic rebound that we can see.
Welfare caseloads are skyrocketing and some states’ funds are nearly
empty. Elderly are eating dog food to afford utility bills. Many will die
in this forthcoming hot summer and freezing post-crash winter. Meanwhile
governments are not equipped to help as they are disorganized. They all
have food and money but no logical organization or distribution means. This
suggests millions go hungry while stacks of food reside in warehouses as
beltway idiots say things are better and do nothing.
The Sheeple are girding for economic and potentially civil war. Gun and
ammunition sales are off-the-charts. Tea parties are growing. The next
stage will be street violence confrontations and more civil disobedience.
Governmental pushback will only incite more riots and escalate troubles.
States are releasing inmates from over-crowded prisons to save money. Crime
shall soon go to the moon.
Meanwhile, our president is flying to Las Vegas (where he told others not
to visit), to politic and raise funds for the party. He supposes his
current Supreme Court nominee will ethnically encourage large Nevada
donations to his party. Maybe it will but we also heard news reports of
widespread suspicion of this move in the Latin community. More of the
voters are catching onto these political games; from both parties. Politics
exists to hold power, control the Sheeple and take their money for vote
promotion. That is all it is pure and simple. Will we see a new and more
voter responsive third party?
In the forthcoming mid-term elections, we would suggest administration
powerbrokers get a hard lesson at the 2010 polls followed by something
infinitely most harsh on the streets. People vote with their pocketbooks
and today and into the longer range future, those wallets are empty.
Beware!
This is not a game nor is it a passing bump in the road. This dire
situation presents very big trouble with a potential for bank runs, seizure
of pension plans to be converted for government usage (theft) and higher
taxes. The newly proposed VAT tax could take an additional 25% more of your
spendable income. Most will think this is outrageous. We suspect political
criminals give it a testing try.
Now is the calm before the storm. This is the eye of the hurricane. This is
not a Saturday evening warm gentle rain; this is a systemic fiscal tornado
and many will be economically maimed, or destroyed. You cannot imagine how
swiftly events could disrupt our system. Picture the arrival of ten
simultaneous Katrinas, or even worse with no warning whatsoever. You get
the idea.
We are normally, easy-going and not prone to these kinds of discussions.
Our view is one of optimism. I am always seeking the brighter side with
ideas to protect our homes, families and retirements. However, the
quickening deterioration of current events has sincerely frightened me
during the past few weeks.
This is not a simple changing of the political guard but perhaps
Armageddon. If you think the government is in control and has a handle on
these emergencies you are only kidding yourself. They are careening from
one disaster to another. More new ones seem to come each day.
Bad news arrived with a rush and its becoming nastier with each passing
day. We’ve seen so much scary stuff we are reluctant to report most of
it lest we upset the trading teacart. Batten down the family hatches and
count on nothing from anyone to help you. Plan for the worst and hope for
the best.
Those who mostly drop out of our phony system and take care of themselves
should be winners. We heard similar advice from a premier lady analyst on
Jay Taylor’s VoiceAmerica radio show last week.
Markets are nearing a peak in precious metals shares that generally follow
primary stock indexes. When the current stock market peaking descends into
the Sell in May, PM shares normally follow. With each cycle we think gold
and silver shares might sell less posting higher lows. This could be
decided on the shorter term by how low S&P’s trade. We expect 800 to 850
with 800 being more probable.
Do not get tangled-up in daily noise. Keep studying the larger view and buy
precious metals after each profit-taking correction. Headwinds are building
into an economic hurricane. Take care of business right now. My dire fall
prediction might surprise us and arrive earlier. Time is short.
Personally, I can see unbelievable opportunities to trade that we would
never see again for many years. Turn these problems into opportunities.
Those on the right side of the trade might get rich. Those on the other
side are just victims. Stay Alert. –Traderrog
Roger Wiegand
Editor Trader Tracks Newsletter
The Jay & Rog Blog at webeatthestreet.com
*****
Roger Wiegand is Editor of Trader Tracks Newsletter for gold, silver and
energy traders. Roger provides recommendations for short and longer term
traditional stock shares, futures and commodities trading with specifics
for individual trades. See webeatthestreet.com for more information
DISCLAIMER: All of the provided information is believed to be accurate, however errors are possible. The opinions in the Commentary section do not necessarily reflect the opinions of GoldIRAS.com. Past performance of any investment is no guarantee of future performance. All investments have risk.
TOLL FREE - 877-703-2193
Copyright 2007.GoldIRAS.com and Gold IRA's & Rarities, LLC. All Rights Reserved
![[Most Recent USD from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_usd_en_2.gif)
Google 
Facebook 
Twitter 
MySpace 
Rss Feed