30 'leading edge'
indicators of the coming Great Depression 2
by Paul B. Farrell
Every day there is more breaking news, proof Wall Street's greed is
already back to "business as usual" and in denial, grabbing more and more
from the new "Bailouts-R-Us" bonanza of free taxpayer cash and credits,
like two-year-olds in a toy store at Christmas -- anything to boost
earnings, profits and stock prices, and keep those bonuses and salaries
flowing, anything to blow a new bubble.
Scan these 30 "leading indicators." Each problem has one or more possible
solutions, but lacks unified political support. Time's running out. We're
already at the edge. Add up the trillions in debt: Any collective solution
will only compound our problems, because the cumulative debt will
overwhelm us, make matters worse:
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America's credit rating may soon be downgraded below AAA
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Fed
refusal to disclose $2 trillion loans, now the new "shadow banking system"
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Congress has no oversight of $700 billion, and Paulson's Wall
Street Trojan Horse
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King Henry Paulson flip-flops on plan to buy toxic bank assets,
confusing markets
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Goldman, Morgan lost tens of billions, but planning over $13
billion in bonuses this year
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AIG bails big banks out of $150 billion in credit swaps, protects
shareholders before taxpayers
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American Express joins Goldman, Morgan as bank holding firms,
looking for Fed money
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Treasury sneaks corporate tax credits into bailout giveaway,
shifts costs to states
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State revenues down, taxes and debt up; hiring, spending,
borrowing add even more debt
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State, municipal, corporate pensions lost hundreds of billions on
derivative swaps
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Hedge funds: 610 in 1990, almost 10,000 now. Returns down 15%,
liquidations up
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Consumer debt way up, now at $2.5 trillion; next area for credit meltdowns
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Fed also plans to provide billions to $3.6 trillion money-market
fund industry
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Freddie Mac and Fannie Mae are bleeding cash, want to tap
taxpayer dollars
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Washington manipulating data: War not $600 billion but estimates
actually $3 trillion
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Hidden costs of $700 billion bailout are likely $5 trillion; plus
$1 trillion Street write-offs
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Commodities down, resource exporters and currencies dropping,
triggering a global meltdown
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Big three automakers near bankruptcy; unions, workers, retirees
will suffer
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Corporate bond market, both junk and top-rated, slumps more than
25%
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Retailers bankrupt: Circuit City, Sharper Image, Mervyns; mall
sales in free fall
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Unemployment heading toward 8% plus; more 1930's photos of soup
lines
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Government policy is dictated by 42,000 myopic, highly paid,
greedy lobbyists
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China's sees GDP growth drop, crates $586 billion stimulus;
deflation is now global, hitting even Dubai
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Despite global recession, U.S. trade deficit continues, now at
$650 billion
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The 800-pound gorillas: Social Security, Medicare with $60
trillion in unfunded liabilities
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Now 46 million uninsured as medical, drug costs explode
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New-New Deal: U.S. planning billions for infrastructure, adding
to unsustainable debt
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Outgoing leaders handicapping new administration with huge
liabilities
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The "anti taxes" message is a new bubble, a new version of the
American
dream offering a free lunch, no sacrifices, exposing us to more false
promises
Will
the next meltdown, the third of the 21st Century, trigger a second Great
Depression? Or will the 2007-08 crisis simply morph into a painful
extension of today's mess to 2011 and beyond, with no new bull market, no
economic recovery as our new president hopes?
Perhaps some of the first 29 problems may be solved separately, but
collectively, after building on a failed ideology, they spell disaster. So
listen closely to "leading indicator" No. 30:
At a
recent Reuters Global Finance Summit former Goldman Sachs chairman John
Whitehead was interviewed. He was also Ronald Reagan's Deputy Secretary of
State and a former chairman of the N.Y. Fed. He says America's problems
will take years and will burn trillions.
He sees
"nothing but large increases in the deficit ... I think it would be worse
than the depression. ... Before I go to sleep at night, I wonder if
tomorrow is the day Moody's and S&P will announce a downgrade of U.S.
government bonds." It'll get worse because "the public is not prepared to
increase taxes. Both parties were for reducing taxes, reducing income to
government, and both parties favored a number of new programs, all very
costly and all done by the government."
Reuters
concludes: "Whitehead said he is speaking out on this topic because he is
concerned no lawmakers are against these new spending programs and none
will stand up and call for higher taxes. 'I just want to get people
thinking about this, and to realize this is a road to disaster,' said
Whitehead. 'I've always been a positive person and optimistic, but I don't
see a solution here.'"
We see
the Great Depression 2. Why? Wall Street's self-interested greed. They are
their own worst enemy ... and America's too.
These
problems, of course, also apply to the EU and they will - in due time -
also affect all of the member states of the EU.
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