Gerald Celente, trendsresearch.com
Trend forecaster Gerald Celente has been getting a lot of attention lately. He has a pretty good track record, having predicted the crash of '87, the rise of Starbucks, the bail out frenzy, among others. Now he's forecasting a super-depression come 2012. I first came across Mr. Celente's doomsday predictions a few months back. In November I did a post that challenged his predictions. I agreed that we had serious problems, but I was much more confident that we would recognize and reverse the situation before it got ridiculous. Now, I'm beginning to think Mr. Celente's predictions of total financial breakdown by 2012 might be overly optimistic. Given the events of the last 3 months, I don't know if we can continue to fake it for three more years.
The speed with which the federal government has ballooned the deficit and the debt has been mind-boggling. As Mr. Celente points out, the Fed is now between a rock and a hard place. They're buying up Treasuries to keep rates low, which is essentially like printing your own money and loaning it to yourself. The consequence is that the value of the dollar around the world is falling. It's similar to a publicly traded company issuing more stock. The more stock you put on the market, the less each share is worth. This will likely lead to inflation, which one would normally combat by raising interest rates. However, that would be a body-blow to an already ailing economy and would lead to the government having to roll over its own record debt at much higher rates. They've gotten themselves into a pickle for which there is no fix. Hyper-inflation seems inevitable.
As Mr. Celente correctly points out, during the Great Depression of the '30's we didn't have anything like the level of consumer or government debt we're dealing with today. Also, we had the strongest manufacturing base in the world. Today, not only do we not have that capacity, we've regulated away our ability to create it anytime soon.
The question is, how will we react to a total economic meltdown? Celente predicts tax revolts, food riots and a level of criminal activity like we've never seen. Maybe I'm naive when it comes to human nature, but I still don't think poverty and hardship will necessarily lead to the population in general totally losing their minds. I remain hopeful that even in the face of fiscal disaster, we can take what's coming and clean up after ourselves. After all, you can rail at our leaders for creating this situation, but we're the ones who hired them. We are not blameless. Perhaps the bi-partisan nature of the runaway spending spree put a damper on any public outcry, or maybe we just all wanted to believe that one can solve a debt problem by borrowing and spending more.
We may not be able to avoid the inevitable fiscal crisis, but we still have the ability to clean house as far as our government. It will take more than replacing one party with another. We actually have to seek out and support people who have some common sense and competence in the field of money management and free market economics. We'll have to accept that some serious short-term pain will have to be experienced. We can't continue to try to kick it down the road for our kids to deal with. Fiscal collapse doesn't have to be the end of the world. It can be a new beginning, if we have the wisdom to identify and acknowledge our mistakes, take our medicine, and start again.
Comments
Great article - the word needs to get out.
I have to side with Celente on this one. We've had it very good but now it going to get very bad. The last depression ended in WWII. The question is how will this one end. I don't think it's going to pretty.
Joe R.
The Beggin' Mutt
Gerald is always right!
And He said the commercial Real Estate market is next... Just look places are going empty fast.
Right now alot of people are frozen in fear that they are going to lose everything, the ones who have lost everything are finding little help. Gerald is right on when he says "when people have nothing to lose, they lose it."
I watched a free video online on this subject. When you understand the realities of the financial system, interest and the actions the led the the great depression, planning is easier.
zeitgeistmovie dot com
Americans need to consider moving into survival mode and purchase essential items and goods.Food and a 'non-electric'means to prepare it,medicine,vitamins,portable radio,flashlight,and batteries.Can you cash out some of your IRA or 401K ? Money spent on cable TV,cell phones,movie rentals,and luxury items will dry up quickly if you lose your job.Many Americans are losing everything after losing their job because they have nothing or very little to fall back on.Some might suggest this type of thinking could cause panic.I believe the modest gains in the economy suggest some people are preparing.Political leaders from both parties can be equally blamed for the economic scathing the American people are faced with.Our elected officials swore an oath to protect and defend the Constitution and the American people and yet both are in peril.The wealthy political elite will not have to worry about basic needs like food, shelter, and medicine.Prepare while you have the chance, if you can.
If you feel the main stream media may not be providing complete coverage of the very possible economic calamity to come, consider a google search on these subjects:...tent cities in america...gerald celente...economy in crisis.com...IMF chief warns of riots in response to economic crisis...military prepares for civil unrest in america...get out of lost vegas...glenn beck worst case senarios on youtube...actual unemployment numbers...one in ten taxpayers delinquent...martial law...california considers ending welfare... Could things get worst in this country ? President Obama stated the night he won the election that it would.Try to purchase essential items and goods that might be difficult to acquire if you lose your job.
I think Gerald is on the money for a number of reasons: he rightly points out the profound social weaknesses of modern western societies. The myth of multiculturalism has not strengthened countries to handle profound stress, but actually have weakened them. Just minor episodes of economic hardship send armies of hoodies kids on to the streets mugging and raping (just ask the police). Imagine if really bad things start to happen. Katrina was a foretaste of that scenario: it went ape sh$*. Our societies are only stitched together by easy credit and the illusion of material wealth. Take that away, and there is nothing there. Ask yourself this: would a feral kid raised in the ghetto, during a time of strife and hardship, help an old white lady across the road, or would he mug her? I think you know the answer.
Frank,
I'm not quite as pessimistic. Here's an excerpt from one of my other blogs, from last 4th of July. I'll re-post the whole thing here this year.
"So what can we point to and say “That’s what being an American is all about.” I would submit that America’s greatest asset is not its capacity to induce conformity to a common way of thinking, but its capacity to enable hundreds of millions of individuals with a wide variety of opinions, viewpoints, perspectives and values to live, work and play together in relative peace. Our uniquely American common value is the recognition that so long as we agree to a few fundamentals rules of engagement among individuals, we don’t need to all have the same values."
If we can hold on to that, we'll get it right eventually.
Cah in your 401k's and buy gold!The depression in the housing market is going to spread to the broader economy.Soon the whole economy will be in a depression.Gerald Celente is brilliant.I think he should replace Ben Bernanke.
Gerald has always been spot on with his analyses to my mind. Regardless of the media reporting (or more correctly misreporting) and government PR spin and lies, you need only look at one thing to see the truth of it all, and that's the fundamental basis of the economy (or any other for that matter). The basis is illusion. ie the money simply doesn't exist and there is no hard asset backing for all the trillions being printed. Ludicrous credit issuances, abyssmal credit control, fractional banking and derivatives to name just a few key components on the economy demonstrate this. Every economy has its foundations in worthless printed paper and speculative agreements, and now in 2010, the stupidity of it all is hitting home as the economic castles built on paper all sink into the swamp. There's a time of awakening for all things, and the time has now come for the western world economies.
Time's up - get out of stocks and shares and get into gold.
Survivalist time is here !
Ultimately, this is all an opportunity to make long-term changes that are overdue. We need the civil unrest to unleash the military and close the borders, along with the deportation of over ten million illegals. At some point, the US could easily decide not to pay foreign debt holders, and use the military to fend off collections attempts. This would free up vast amounts of cash for infrastructure expansion and energy independence projects like the Pickens plan and more. Additionally, we currently occupy the worlds major supplies of oil and this obviously why we have not left Iraq, and Kuwait. We can seize the oil anytime we want. Our 3,000 ship navy can secure the trade routes and sink every other navy on Earth within 5 days. If the Russians and the Chinese do not go nuclear, then we can easily re-isolate ourselves and live in a bubble of wealth, while the rest of the world economically implodes. We have vast resources, coal, iron, wheat, water, land, timber, every kind of ore imaginable. This economic crisis is just created on paper. Take away the paper and in reality we have vast resources and a huge infrastructure. We may need to just say treasury bills are null and void and social security will be phased out starting with those at age 40. The debt really means nothing. There have been plans in the work to dump it for over a decade. The reasone we are borrowing so much, is because we now do plan on dumping it. When we do, we will keep our resources here.
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