World Press Network

Jobs offshoring, financial deregulation, and ten years of wars have severely damaged the US economy and the economic prospects of 90% of the American population. The signs are everywhere in front of our eyes. They are in the income distribution data, the BLS jobs data, the Census data, the poverty figures, and the high number of food stamp recipients.

The signs are in the foreclosed and boarded up homes and the accompanying homelessness. They are in closed strip malls, in office building, warehouse, and shopping mall vacancies, and in the huge population losses of America’s manufacturing cities.

The New Economy was a hoax

The economic “recovery” that Washington and the financial press hype is all talk and no reality. The “recovery” is produced by understating the inflation rate, which overstates GDP growth, and by dropping the long-term unemployed out of the measurement of unemployment. An economy, the driving engine of which has been moved offshore, cannot recover unless the economy is brought back home, and that requires the repeal of Globalism.

Overstatement is common in order to produce good news, but eventually it catches up with the spinmeisters. Last month the National Association of Realtors reported that it had overstated home sales by 3.5 million. Statistician John Williams (shadowstats.com) reports that the “birth/death” model, which the Bureau of Labor Statistics uses to estimate the net affect on jobs data of unreported business closures and new start-ups, overstates the annual number of new jobs during troubled economic times by approximately one million jobs annually. Each year the accumulated monthly overstatements are quietly revised away by BLS.

US unemployment declined to the lowest level in almost three years last month, lifting hopes that 2012 may herald a stronger recovery in the world's biggest economy.

"So far, so evil - but here come the really troubling part: It is an open secret that there are more paper-assets than there are actual assets. The markets are essentially playing musical chairs - and praying that the music never stops. Because if it ever does - that is, if there is ever a panic, where everyone decides that they want their actual asset instead of just a slip of paper - the system could crash.

"And unlike with fiat currency, where a central bank can print all the liquidity it wants, you can’t print up gold bullion. You can’t print up a silo of grain. You can’t print up a tankerful of oil....

"When is there ever a run on a financial system?

"When enough participants no longer trust the system....

Like all governments, the new American government was just a legal fiction with believers

If so, we’ll get the worst of all worlds in sequence, a tour of miseries.

As my friend Richard Russell has said, in a depression nobody wins; the winner is the guy who loses the least. And the truth of that is only compounded when you add war into the equation.

What are the options? First, make sure you’ve got a considerable percentage of your assets in physical gold and silver. Second, make sure you have a considerable percentage of your assets diversified in one or (preferably) more foreign jurisdictions and that those foreign assets include real estate. Third, plan on future bubbles being inflated. Including one in gold mining stocks, which now offer excellent value.

That’s advice you’ve read here many times before, but it bears repeating because it’s so important. You are, however, likely asking yourself what might be done to profit from war. Defense contractors are an obvious play, and we’re going to take a close look at them - especially the small, obscure ones. That will be in a future issue; there’s no urgency to get into stocks right now that I can see. Rare earths, since they’re high-tech metals, are of interest - but they’re not bargains, and the stocks of companies that explore for them are very overpriced.

I’d love to be a war profiteer. But it’s much more important to ensure you don’t become a casualty.

It will take more than a few demonstrations in sub-freezing weather in Moscow and St. Petersburg by a gaggle of corrupt or shady opposition figures such as Nemtsov or Kasparov to derail Russia. What is clear is that Washington is pushing on all fronts—Iran and Syria, where Russia has a vital naval port, on China, now on Russia, and on the Eurozone countries led by Germany. It has the smell of an end-game attempt by a declining superpower.

The United States today is a de facto bankrupt nuclear superpower. The reserve currency role of the dollar is being challenged as never since Bretton Woods in 1944. That role along with maintaining the United States as the world’s unchallenged military power have been the basis of the American Century hegemony since 1945.

Weakening the role of the dollar in international trade and ultimately as reserve currency, China is now settling trade with Japan in bilateral currencies, side-stepping the dollar. Russia is implementing similar steps with her major trade partners. The primary reason Washington launched a full-scale currency war against the Euro in late 2009 was to preempt a growing threat that China and others would turn away from the dollar to the Euro as reserve currency. That is no small matter. In effect Washington finances its foreign wars in Iraq, Afghanistan, Syria, Libya and elsewhere through the fact that China and other trade surplus nations invest their surplus trade dollars in US government Treasury debt. Were that to shift significantly, US interest rates would rise substantially and the financial pressures on Washington would become immense.

Faced with growing erosion of her unchallenged global status as sole superpower, Washington appears now to be turning increasingly to raw military force to hold that. For that to succeed Russia must be neutralized along with China and Iran. This will be the prime agenda of whoever is next US President.

Less than 400 years ago the penalty for counterfeiting was death. Considered an act of high treason, people caught producing their own money in England were hung, disembowelled, and quartered (not one or the other, but all of the above!). This was the fate of Thomas and Anne Rogers, who were busted in 1690 for clipping 40 pieces of silver. Thomas’s “quarters” were put on display as a deterrent while Anne was burned alive at the stake.

Yesterday I released an article, “Lack of Critical Thinking is Key to the Corrupt Status Quo Maintaining Their Power”, on my blog and at ZeroHedge and it generated a lot of comments including those that stated they don’t believe in conspiracies or the existence of a “big bad wolf” that deliberately is “out to get us”.

This is the 3rd installment of my controversial rant against the American education system - this time in video.

Americans have been conditioned for three generations to expect the Savior State to "do something" during downturns to "make it right." The idea that systemic problems are now beyond the reach of the Federal government does not compute; there must be something the government can do to "fix" everything.

To date, I and every other economic commentator have failed dismally in our efforts to communicate the insane manner in which all Western economies have been mismanaged (and effectively bankrupted). Specifically, we have failed to convey to the average person the inherent fraud of the Western (and now global) monetary system.

The reason for this failure is obvious. Decades of saturation-brainwashing have programmed the ordinary person to regard our current monetary system as "normal", or even "proper". Thus any efforts to explain this fraud have been doomed to failure. What is needed is a real-world analogy to pierce this brainwashing, and fortunately such a perfect analogy already exists: "kiting" cheques.

Of course, circumstances have changed quite a bit since the bubble burst, and current economic conditions may well be be having the opposite effect. In fact, according to Dr. Robinson,

the recession and the slow recovery is “especially affecting...blue-collar male workers,” she said, “and I think a lot of discretionary food expenditures are declining.”

The report reads that Castle then gripped the hand of Kucik, and then began “squeezing and twisting” his fingers, “and only stopped when Mr. Kucik freed himself from the tight grip.”

What if Democrats and Republicans were two wings of the same bird of prey?

What if elections were actually useful tools of social control?

So, Wall Street’s financial geniuses got back into the MBS-biz (for a second time) and got whacked again? That’s right; and now they want John Q. Public to pay for it with another bailout.

And, there’s more to this story, too. European banks own roughly $100 billion of these mortgage-backed turkeys which they’re presently shedding like crazy in order to meet new capital requirements. That means US bank balance sheets are dripping red as the value of their financial asset-stockpile continues to plunge. That’s why Sugar Daddy Bernanke has stepped in, because it’s time for another multi-billion dollar bank rescue.

Look, the Fed has already purchased over $1.25 trillion of these toxic MBS which represents humongous long-term losses for the taxpayer. Do we really need more of this sludge?

Bingo. The banks are not only sitting on 1.7 million shadow inventory of homes they’ve stockpiled to keep prices artificially high. They also have millions more in the pipeline when a settlement is finally reached on the robo-signing scandal. So, what are they going to do with all that backlog?

That’s easy. They’ll schluff it off on the taxpayer by creating a foreclosure-to-rental swindle where the government provides lavish incentives for banks and private equity scavengers to buy the homes (in bulk) for pennies on the dollar with loans provided by–you guessed it–Uncle Sam.

I wrote about this two years ago: the banks would be saved but the nations would be destroyed. Instead of trying to understand that nations are far more important than banks, the reverse was imposed on us. So, the banks are going great, the rich gnomes which run them are richer than ever before. They have lots and lots of power and are insuring that they, at least, survive. But they are sacrificing the rest of us.

This is a very bad thing. History is extremely clear about this

As I predicted several years ago, when economic depressive forces emerge in global economies, all nations MUST go into protection mode or die. We see, instead, more pushes for more trade even though this is destroying major populations in the first world. This will continue until people demand a stop to free trade.

I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.

Romney should have zero chance of getting anywhere near the White House if we had a sane society. But there is still room for fantasy and bribes

There is a relative silence in the international financial press when it comes to Britain. The economic situation of continental Europe gets almost all the attention. Every now and then someone in France or Germany states that Britain, too, should be downgraded, like when S&P cut the ratings of 9 European countries, but such statements attract hardly any interest at all. This might not be overly wise, though.

That's all it takes to create, out of thin air, a whole new generation of suckers and greater fools.

This creates a tremendous cognitive dissonance, a picture of the world that is entirely delusional. And that, of course, can and will not last. Even if a majority of people still wishes to think that it can. What do they know about what's going on behind the curtain? Hardly anything at all.

And then they wake up.

The trouble the elite families have is that in the context of the Internet they are dealing with a process not an episode. The Internet Reformation has yet to play itself out, in our view, and the results have yet to be fully explored.

Alternatively, it could be that by exposing the Fed to yet more opprobrium via this limited hangout, the powers-that-be intend to destabilize the system of central banking in order to generate a true, international gold standard controlled by some government entity, perhaps the UN.

Conclusion:

This seems far-fetched to us as well, given the troubles the elites are having creating a current monetary consensus. If they do have this in mind, it seems to us they may end up outsmarting themselves. It's happened before.