American Economic Collapse Not Far Away

Discussion in 'Politics' started by WAKE-UP, Feb 17, 2007.

  1. WAKE-UP


    Impact phase of the Global Systemic Crisis:
    Six aspects of America’s « Very Great Depression »
    - Public announcement GEAB N°11 (January 16, 2007) -

    According to the LEAP/E2020 team, the year 2007 will witness the sliding of the US into the « Very Great Depression », i.e., the rare historical conjunction of a severe economic depression, a strategic collapse and a major political and social internal crisis, at the centre of the phase of impact of the global systemic crisis. Housing crisis, financial crisis, economic crisis, trade war, military escalation and political crisis are the six aspects described in GEAB N°11, along the following lines:

    1- Negative personal saving rates and declining home prices on a national scale: Two major US economic indicators hit lowest level since the 1930 crisis

    2- « Roller coaster » US interest rates in 2007: Up in spring and down in fall

    3- The US financial sector has already entered bankruptcy: Today Ownit, Mortgage USA Lenders,… tomorrow Ameriquest, Wells Fargo, HSBC Finances?

    4- Middle East: To conceal its failure in Iraq, the Bush administration is preparing a Shiite-Sunni intra-Muslim war, while Israel gets ready to launch tactical nuclear weapons on Iran’s nuclear programme

    5- China and Russia’s move to drive the US out of central Asia and to accelerate the dollar fall

    6- Emerging markets, mortgage risk: In 2007, risk is back on financial markets… and it will be a heavy bill after many careless years

    In this announcement, LEAP/E2020 chose to make public abstracts of the aspects 1 and 4 for our readers to get a glimpse of the scope of the unfolding depression. But before we enter into the detail of these aspects, we must explain the reasons why uncertainty as to the future prevails throughout financial analyses in this beginning year. According to the LEAP/E2020 researchers, the main reason relates to the concept of “Fog of Statistics”.

    The slide into recession provokes a « Fog of Statistics » used to raise doubts about whether or not the Titanic is sinking

    crise The passage from 2006 to 2007 perfectly has illustrated the global systemic crisis’ stepping into a phase of impact, as anticipated by LEAP/E2020. Just like in any change, the passage by zero is characterized by a « fog of statistics » where indicators point in opposite directions and measurements provide contradictory results, with margins of error sometimes wider than the measurement itself [1] .
    It is a typical situation in wrecks that the ship gets flooded while the engines are still running. Feelings get muddled, information becomes contradictory. For instance, the Titanic is already doomed to sink but first-class passengers are still dancing, convinced by the officers that a disaster is impossible.

    Regarding our planet in 2007, the on-going wreck is that of the US, that LEAP/E2020 has decided to call the « Very Great Depression », firstly because the « Great Depression » already refers to the 1929 crisis and the years after; and secondly because, according to our researchers, the nature and scope of the upcoming events are very different (more in GEAB N°11).

    And the authorities’ soothing declarations of this beginning year will not change much to the course of events. Let’s just remember the announcements made at the beginning of 2006 and compare them with the current ones…

    Negative personal saving rates and declining home prices on a national scale: Two major US economic indicators hit lowest level since the 1930 crisis
    When at the beginning of 2006 the US Federal Reserve and the whole of the financial and economic players and media were negating the existence of a real estate bubble (and formally rejected any risk of crisis in this sector), the collapse of prices had in fact already begun leading the US housing market to its most severe crisis since the 1930s (analysts now refer to the « 2007 housing depression »[2])characterized by a yearly decline in home prices throughout the entire US territory [3]. And the downturn in the US housing is not over, though official statements try to conceal the truth. Even CNN is aware of it and denounces the disconnection between figures describing a mitigated reality and a real housing market sliding into depression [4]. In a very interesting study published by Merrill Lynch at the end of December, the home buying index in University of Michigan’s survey fell down to 41 (from a previous 45) [5] . The market is doomed to decline further by lack of buyers[6] .

    - Home equity loans in the US - Source The Economist

    After the negative personal saving rates, the yearly drop in home sales is the second key economic data hitting the lowest level since the Great Depression in the 30s, over less than a year (more in GEAB N°11)

    Middle East: To conceal its failure in Iraq, the Bush administration is preparing a Shiite-Sunni intra-Muslim war, while Israel gets ready to launch tactical nuclear weapons on Iran’s nuclear programme

    Less than a year ago, the US government praised the election in Iraq and the new Iraqi government, and denied risks of conflagration in the country. Meanwhile civil war had already started, leading to today’s escalation of the US military in the region and to the premises of a major political crisis in the US itself.

    The confrontation between a Democratic-led Congress and the Bush administration started as soon as the newly elected Congress took office in January, as anticipated by LEAP/E2020 in the September issue of GEAB (GEAB N°7). And it is only the beginning: the approaching 2008 presidential election will radicalize the two camps starting in spring 2007. Pro-Israeli Democrats on the one hand and a pro-Zionist Bush administration on the other hand will result in placing the Israelo-Iranian crisis on Washington’s agenda sometimes in the next three months. Once G. W. Bush has realized that sending 20,000 more troops to Iraq does not prevent civil war from extending (on the contrary), and in a context of growing economic depression and political conflict at home, he will find that engaging into a new military adventure in the Middle-East is the only “political solution”. As his Israeli counterpart, Ehud Olmert, is also in great need of « revamping » his image of strong leader, all conditions are gathered for an escalation against Iran.

    According to the LEAP/E2020 team, it is clear that if the US accepts the idea of a military confrontation with Iran, it will take place in spring 2007 in the form of: 1°/ a tactical nuclear attack by Israel on Iran’s nuclear facilities, and 2°/ a ground conflict on the Iraqi soil disguised as a new Shiite-Sunni intra-Muslim war [7] . This scenario is consistent with the war-monger decisions of G. W. Bush who disregards completely the diplomatic advices of the Baker-Hamilton Commission and the wishes of the newly-elected Democratic Congress (as anticipated by LEAP/E2020 in GEAB N°9 and GEAB N°10). It is also consistent with the incestuous relation between this Administration and the big financial and oil lobbies, as not only is it a military, Général Jack Keane, who conceived the « new » plan for Iraq, but he invented it in cooperation with an academic from the American Enterprise Institute, Frederik W. Kagan [8]; But above all, this retired Army General heads a consulting firm, is senior consultant to KKR and sits at the board of various major US groups such as the Insurance company Metllife, the armament group General Dynamics or the security company Allied Security Holdings [9] Allied Security Holdings is one the largest private security firms in the US; General Dynamics is the sixth largest armament company in the world; and KKR, Kohlberg, Kravis Roberts & co,is one of the largest investment funds in the world, which for instance paid the highest fees (837 millions US$) to large private banks they take advice from (such as Goldman Sachs, which we know maintains tight relations with the Bush Administration – see previous issues of GEAB) (more in GEAB N°11).

    Article with footnotes:
  2. Hmmm?

    3% Growth on the largest Econ known to man.

    Every year.

  3. RedDuke


    The funny part about this doom scenario that it is being repeated since 70s under slightly changing falavors.

    The bet against American consumer was a wrong one for many decades. I am sure that at some point of time, it will be a good one.

    Anyone willing to bet when this happens?