Misery Index

This commentary comes from a “We Beat the Street” commentary, an Investment Strategy company, via KITCO.   The author is Roger Wiegand, who I’ve also never heard of before and don’t know too much about, other than his biography on We Beat the Street and a bio on IIC.  But , lets take a gander into his crystal ball, shall we? [Hat Tip to Nightblogger]

Our new president is determined to hand out $860 Billion to One Trillion dollars in a Herculean effort to literally buy a new economic recovery.  While some of his ideas are noble indeed the overall plan will have little effect and Great Depression II shall take hold in 2009 with crashing stock markets in May and September-October 2009.  We think the worst of the worst hits in late September 2009.

Hey, what do you know, the one year anniversary of when millions lost nearly all of their 401(k)s when the market dropped out.  What a time to choose!  But I’m getting ahead of myself… lets hear about spring.  A time of green, fresh air, and everything coming back to life.  But the death of the stock market according to Wiegand.

During the spring of next year we see:

(1)  A second larger wave of residential housing mortgage failures; [Now, to be honest, I heard about this about two months ago.  Its a different kind of mortgage than the ARMs but it’s more “deadly” to the market  and banks.  Good thing we don’t have to pay a mortgage!]

(2)  The first big wave of auto loan failures and repossessions; [I heard about this one too about two months ago.  But if people can’t pay their mortgages, the next big ticket item is their car.  Good thing we don’t have to pay a car loan or lease!]

(3)  Over $40 billion in credit card defaults, smashing the bank lenders; [This is already happening, and again, another “big ticket” item are peoples credit cards.  Good thing we’ve never EVER used them.  If you can’t pay for it in cash, you don’t need it.]

(4)  The first wave of commercial mortgage failures and foreclosures on shopping malls, office buildings and other commercials; [This too is inevitable.  It is estimated that over 16,000 businesses will fail in the next year, leaving a lot of empty space in malls, strip malls, and business complexes.  Already, Circuit City has left quite a few leases up in the air, due to them filing bankruptcy.  Whose next?]

(5)  And finally, the grand smashing finale of CDS Credit Default Swaps originated with No margin money or down payments!  We heard today the total is 500 trillion!  I cannot even fathom that number.  These five converging train wrecks could take the Dow from a dead cat bounce of 10400-10800 back to 7250, or even 6600, or 5600.  [My other half and I have said, the Dow will crash out around 5000 in 2009.  So much for our stocks.]

But if you think the Dow at 5000-6000 is bad, you haven’t heard it all yet.  The above is just in the spring of 2009.  There’s how many months in the year, and how many seasons?

Then, in late September and early October, the New York, London, Tokyo and Asian markets take a monster crash.  how low is low and how bad can it get?  We think the Dow could end-up on November 1st, 2009 anywhere from 5,600 to a low of 3,000 or even 1,500. 

Ouch…. and how interesting that it’s just about the same time that the stock market crashed in 1929.  But the best.. err.. worst is yet to come.  And the capitalization isn’t my emphasis, it’s Wiegand’s.

Unemployment nationally in the USA is now touching 16%.  The officially posted number is somewhere near half of that.  By the fall of 2009, American REAL UNEMPLOYMENT WILL BE NEAR THE ALL TIME 1930’S DEPRESSION HIGH OF 25% UNEMPLOYED.  SADLY, THAT IS NOT THE WORST AS IT GETS MORE DIRE.  WE PREDICT, USA UNEMPLOYMENT REACHES 30-40%.  IN THE RUST BELT STATES OF MICHIGAN AND OHIO, WHILE 40% IS NOT UNREALISTIC.

Great… wonderful.  Buy your tents, Coleman stoves and sleeping bags now.  And maybe a nice little 9mm and shotgun.  Aww heck, splurge for a Desert Eagle.  Size is intimidating!  Make sure to not forget the ammo!  And begin to stockpile food, you might need it.  This might be the “new” money and a good bartering tool, as long as people don’t kill ya for it.  And LOTS of stocking up on toilet paper and um.. ah… guys look away on this one… feminine items.  And don’t forget things like cold medicine, aspirin, and topical antibiotics!But more realistically, stockpiling at least two months of food is a good way to make sure you have a food supply and “other” items if you lose your job or have to choose between food and a house payment.

The American federal government departments for food stamps and the job of providing welfare provisions will be overwhelmed.  This will be a Katrina event for the hungry citizens of the United States.  Urban areas will see skyrocketing crime and in parts of some cities, life could become totally uninhabitable.

The last report we’ve seen on those receiving food handouts and related welfare amounted to 11 million USA citizens with 700,000 children going hungry each day.  We suspect the true amount of those needing food help will rise to 35 million with an untold tragic number of them being little, defenseless children.  Governments remain in denial and are not prepared for this national emergency whatsoever.  As things worsen, food riots and others with violence aimed at the “have” are common.

Did I happen to say that I am also professionally trained in sword fighting?  And raised by a Father who taught me to shoot a .38 & .45 around the age of 8 and a shotgun at the age of around 10?  Who would have ever thunk it that I would need those skills in my personal life!  And a chick to boot!

And as for that stockpiled food, didn’t I just say it was going to be the new “money”?  Dollars will be worthless. 

The number of bank failures over the next three years will be in the thousands.   In addition, the US Dollar’s valuation could break recent lows near 70.00 on the index, dropping to 46.00 by 2011 or 2012.  Inflation or potentially hyperinflation is quite real as the Federal Reserve and US Treasury strain to print and circulate cash to prod our stalled economy.  It is simply not working even with the dramatically lower interest rates of late.

But to continue, Wiegand says just like in the Great Depression, families are “renting” out rooms, or “bunking” up to pool their money.

Consumers are broke and going broker.  Households of interrelated families are doubling and tripling up even with several employed members being under one roof.  Basic costs of rent, mortgage payments, health care, food, utilities and taxes are too much to bear on stagnant and in some cases falling wages.  In some areas of America, there are entire subdivisions of homes totally abandoned or existing with only a hand full of occupants.  The millions thrown at lenders for new mortgages are not getting through to buyers, as there are fewer of them.  We are witnessing a system breakdown.

Isn’t this already happening?  I recently blogged about Detroit and how many of the homes are already empty, and have been gutted for their copper and such.  And additionally, many who are behind on their mortgages, and said bank gets a bailout, refinances the mortgage, only to increase the payment by $300 to $500 a month, and also demands several thousand dollars just to stop the foreclosure within 30 days!

And states and cities will be broke also, so forget about getting any help from them, which is already happening.  Say bye bye to welfare and to schools.

Municipalities and states are sinking into a spending, debt-ridden morass.  It was reported today that 22 of 50 USA states are in serious budgetary trouble.  California is one of those in terrible condition and Michigan is already technically broke as many of her cities. [Don’t forget Ohio as the governor called Rahm and said he needed $5 billion!]  Detroit will file bankruptcy in 2009 and there will [be] many other surprises as well.  There will be a cascade of bond defaults and the outcome will cap the ability of these cities, states and countries to borrow ever more.

Hey, at least we are all in this together….. *smirk*  True worldwide Socialism!  YIPPIE!

The shining light through all of this is the faster we find the bottom the faster we can recover.  Sadly, the recovery process will take years.  Futures and commodities traders should continue to earn steady profits as the stock markets slide into oblivion for years.  We see no recovery until 2015.

Let see… Obama Jan 2009 – Jan 2013.  I wonder if he will run for re-election?

I find it interesting that there is no mention of the Big 3, or of a company such as Wal-Mart still being in business.  If Wal-Mart collapses, we are in trouble.

But wait.. according to the Russian nutjob, by 2010 we will be in a civil war and the United States will be split between Canada, China/Japan, Mexico and the EU with Alaska going back to Russia and Hawaii going to China/Japan so all of this won’t happen!

Of course there’s always Gerald Celente’s prediction of a total collapse of the economy and a revolution by 2012.

So well.. there’s my first post of the new year…… oh and… um… might be a little late… but have a happy and prosperous  New Year, while you still can? *shrug* *nervous smile*

He based the forecast on classified data supplied to him by FAPSI analysis, he says.  He predicts that economic, financial and demographic trends will provoke a political and social crisis in the U.S.  When the going gets tough, he says, wealthier states will withhold funds from the federal government and effectively secede from the union.  Social unrest up to and including a civil war will follow.  The U.S. will then split along ethnic lines, and foreign powers will move in.

And since 1998, he has said that the United States will fall in 2010 splitting into six independent pieces.  Renewed interest in his theory as come into the spotlight due to a recent interview with Izvestia, one of Russia’s biggest national dailies.  And those in Russia are listening.

So why does he think this will happen?  “The dollar is not secured by anything.  The country’s foreign debt has grown like an avalanche, even though in the early 1980s there was no debt.  By 1998, when I first made my prediction, it had exceeded $2 trillion.  Now it is more than 11 trillion.  This is a pyramid that can only collapse.”  Panarin calls U.S. foreign debt “ a pyramid scheme,” and predicts China and Russia would usurp Washington’s role as a global finance regulator.

Panarin posits, in brief, that mass immigration, economic decline, and moral degradation will trigger a civil war next fall and the collapse of the dollar.  Around the end of June 2010, or early July, he says, the U.S. will break into six pieces.

The White House’s reaction to Panarin’s forecast at a December news conference was a “I am perplexed and therefore I think I will have to decline to comment,” from Dana Perino, which received laughter from the press.

From the November, 2008 interview: [Video, in English/Russian from Russia Today]

Q[Izvestia]:  Will the entire American economy collapse?

A [Panarin]:  It is collapsing now.  Three out of the five largest and oldest banks on Wall Street ceased to exist because of the financial crisis; and the other two are on the verge of surviving.  Their losses are the largest in history.  Now we are talking about replacing the regulation system in the world:  America will no longer be the world regulator.

Q:  Which country will replace it?

A:  Two countries are making a claim for this role:  China with its large reserves, and Russia as a country which could play the role of a regulator on the Eurasian territory. … The gold reserves of Chian come to more than 2 trillion dollars.  It is the largest creditor to the USA.

Q:  What makes you believe in the possible division of the country?

A:  There are a number of reasons.  First, the financial problem of the USA will increase.  Millions of citizens have already lost their savings.  Prices and unemployment keep growing.  General Motors and Ford are on the verge of collapse which means that entire town will end up unemployed.  The governors are not harshly demanding money from the federal center.  Complaints are growing.  They’ve been restrained so far by the presidential election and by hope that Obama could perform a miracle.   However, by spring it will become clear that a miracle will not happen.

The second factor is the vulnerability of the political mechanism in the USA.  There is uniform legislation on the territory of the country.  There aren’t even general uniform traffic rules.  The skeleton which keeps the USA together is fragile.  Event eh armed forces in Iraq are represented by the non-citizens of the United States to a large extent.  They fight for the promise of American citizenship.  Thus the army, as a melting pot has stopped fulfilling a consolidating function for the American state.  And finally, the split of the elite has made itself especially clear under the conditions of the crisis.

Q:  How will the country be divided?  Mexico is obviously in the south.  What else?

A:  There are six part altogether.  The first one is the Pacific Ocean coast of the USA.  I can give you an example: 53% of San Francisco’s population is Chinese.  The Governor of Washington state was an ethnic Chinese; its capital, Seattle, is called the gate of the Chinese emigration to the USA>  It is obvious that the Pacific Ocean coast has been gradually influenced by China.  The second part in the south is definitely the Mexicans.  In some areas, Spanish has become the official language already.  Then comes Texas which has been openly fighting for independence.  The Atlantic coast has a totally different ethnos and mentality.  It could be split into two parts as well.  And then we are left with two central depressed areas.  May I remind you that five central states where the Indians live had announced their independence.  It was perceived as a joke or a kind of a political show.  But the fact remains the same.  Canada is making a strong influence in the North.  By the way, Russia may require returning Alaska, as it had been rented out… [And Hawaii goes to Japan or China.]

[…]

Q:  Could you tell us about the division of the elite.  Are these democrats and the republicans?

A:  No, that is not right.  There are two groups in the US authorities.  The first one may be called the globalists, or the Trotskyites.  Leon Trotsky had already formulated their idea in the past:  it’s not Russia that we need, but a world revolution.  Soviet Russia was viewed by them as a base for control over the world.  The second group is the statists which want prosperity for their country.  Representatives of these two clans are present in both Democratic and Republican Parties.  Take voting for the anti-crisis plan of Paulson, which was suggested by the Republican administration, for example.  It was voted down in the Congress by the Republicans first of all.

Q:  Who is in charge of the clans?

A:  The key persons of the globalists are Secretary of State Condoleezza Rice and Vice President Dick Cheney.  The key persons of the statists are Robert Gates, Defense Secretary; Michael Hayden, CIA Director; and Admiral Mike McConnell, director of national intelligence.  Globalists are mainly the financial elite, and statists are the armed forces, special services and military and industrial complex.  Recently the confrontation between these two clans have become open.  In December last year the statists presented a reported which completely denied the existence of the nuclear program in Iran.  It directly contradicted conclusions made by Condoleezza Rice and Dick Cheney.  The second important event took place at the hearings of the US Congress concerning the 5-day war in the Caucasus.  The globalists represented by Condoleezza Rice insisted that Russia had started the war an d that it would be punished for it.  Georgia was the project of Condoleezza.  And representatives of the intelligence community presented a diametrically opposite statement:  that Georgia had started the war.  We see an open confrontation between very outstanding political figures.

Q:  And who’s Obama company?

A:  The statists with Gates in charge were the key players who had enabled Obama to win.  They are demanding that he change the general line in return.  IN this light, a very interesting factor is that Gates the Republican is viewed as the most important candidate as to whether he remains the US Defense Secretary or becomes the Secretary of State.  This is the influence of the statists on the President.  By the way, the first session which Obama held was with the American Intelligence community.

NOT THE FIRST TIME RUSSIA PREDICTS DEMISE OF THE US

Perhaps the most famous was when Soviet Premier Nikita Khrushchev promising before the United Nations to “bury” the United States and again in his famous “kitchen debates” telling Richard Nixon that the superiority of the Soviet Union would overtake the U.S. and the Soviets would say “Dasvidania” to the U.S.

In the “Kitchen Debate”, which took place in 1955, then Vice-President Nixon and Khrushchev discussed the merits of each of their respective economic systems, capitalism and communism.  While Nixon focused on American technology such as supermarkets filled with foods, dishwashers, lawnmowers, makeup, cake mixes, TV dinners, Pepsi and the washing machine, Khurshchev  stressed that the focus on “things that matter” rather than luxury was more important.

ANOTHER PREDICTION FOR THE US FROM THE US

Back in November, I blogged about Gerald Celente Predicts Total Collapse of Economy and Revolution by 2012.

RANT ON

This guy is really clueless about many parts of the United States and is nothing more than Communist propaganda.  He obviously doesn’t realize that here in the US, states are allowed to make their own laws, but you as a regular civilian don’t need “papers” to cross the border to enter another state.

Kentucky, Tennessee, South Carolina and North Carolina in the same country as New York or Maine and them being part of the European Union?  Yea, as IF.  Obviously he doesn’t know much about that little thing called the Mason-Dixon line and the south believes it will “Rise Again” versus the North.

And Idaho and Utah, with the Mormons being a part of the same country as California, under Chinese influence.  Forgive me with a valley girl expression but, “As If!  Like, I am SO sure, ya know?”

And Georgia, Alabama and Louisiana becoming part of Mexico….. umm.. yea.. okay.  I can just see it now, deep in the heart of Dixie, Mexicans in the bayou, drinking Budweiser, and four-by-fourin in the mud listening to Alan Jackson singing “Chattahoochee”.

And Mexico not taking California?  Heck, hasn’t that pretty much already happened?  Or will the Pacific and the “South TX region”  “sell” California, along with Arizona, and New Mexico back to Mexico.  Or would Mexico just say it’s theirs, and we stole it.  Wait.. that’s already happened too….

And then there’s Texas.  As IF they would even become part of Mexico, remember they have been screaming about their own independence for years.  To expect Texas to submit to Mexico?  Talk about the start of a new MX-TX war….

And Ohio being part of the same “country” as Montana?  Sha… right!  Maybe part of the NE but not the Midwest.

I wonder what Sarah Palin would have to say about Russia taking back Alaska.  NYET?

Perhaps Panarin got hold of some bootlegged Vodka, and is suffering from a permanent case of the DTs….. and his years with the KGB and communist ways are showing.  And he’s trying to shed light on the US failing, while trying to minimize the fact that Russia’s own economy is in failure with his “Nothing to see here, move along and look at the US falling apart” story.  Sorry, no “Red Dawn” fantasy here.

But ultimately, I think Panarian has been watching reruns of Jericho lately, where nuclear detonations around the US spirals the country into division, with one country based in Cheyenne, WY and the other in TX.

ADDITIONAL SOURCES:

• “As if Things Weren’t Bad Enough, Russian Professor Predicts End of U.S.”, WSJ, 29DEC08
• “A new Canadian province, eh?”, Star Tribune, 29DEC08
• “Cyr:  Sudden celebrity of Panarin troubling”, ScrippsNews, 30DEC08