The END of the WORLD ~ As We Knew It

Sunday, March 8, 2009 [link to realestateandhousing2.blogspot.com]
The End of the World . . . As We Knew It


For the last four and a half years, I have been writing, speaking and warning about the consequences of the housing bubble, commercial real estate bubble and the toxic paper that fueled both bubbles. I took a lot of heat for my comments.

I was not shy when I said we were headed for the worst Recession since the Depression. I was not shy when I then began referring to the coming tsunami as a Decession . . . and then in January of 2008, I took the next step and called it what it is . . . a Depression.

Deep VIOLENT Depression - I cannot emphasize this enough . . . and I have already taken heat for using the "V" word. But today I am prepared to kick it up a notch, and urge you to prepare for what is unfolding. Did we think we would have seen the extent of the violence during the Civil War, when we killed each other on our own land? Did we ever think we would have seen the violence that came out of the Depression? Hitler came to power when people lost hope in the government and financial markets. Can it happen again? We said it could never happen then, so now that we are in far worse shape than 1930, why couldn’t something much worse come out of this crisis?

100,000 Protesters - Does the government have any idea how angry people are, how betrayed they feel? It will be years before our economy recovers from the devastation wreaked by bankers. In the meantime, the possibility of something awful happening is very real. We’re one swing of a garda baton, one cracked head, away from chaos. - Gene Kerrigan

This statement could have been written about the United States, England, France, China or just about any country in the world. But for now, it comes straight from The Irish Independent. You didn’t see it on CNN, CNBC or even in any of the American papers. You had better prepare for it, because it will shut down banks, supermarkets and the very fabric of what we are. If you have not built up a food pantry, stored cash and gold, and armed yourself, you might want to consider doing it now.

White House Vegetable Garden - Tom Vilsack, our Secretary of Agriculture, proposed just that. He wants to call it "The People’s Garden," and he wants to establish community gardens at each of the department’s offices around the world. Why? It’s probably not because things are going well. It’s actually in response to a grassroots movement that has been rumbling about the need for us to grow our own food! By the way, vegetable seed sales at Burpee, Gurneys, Park Seed, etc. have been skyrocketing.

How To Avert Disaster - That was the title of a subhead in an article appearing in The Economist. The title was . . . The Bill That Could Break Up Europe. And the article dealt with ways of "stopping the rot" and "the meltdown of the EU." Let me note, there were no solutions and there was no mention of going after the men that created the problems . . . and clawing back the trillions of dollars they have stolen.

CIA Bracing for Global Economic Fallout - The CIA’s primary concern now is the security of the United States in terms of the global economic crisis and its geopolitical implications. Dennis Blair, Obama’s "intelligence czar," told his staff that concerns about the recession were now at the top of his annual worldwide threat assessment to Congress. Leon Panetta, our comical CIA directors, just announced that the CIA was now producing a secret daily bulletin, called the Economic Intelligence Brief.

Hitler Only Won 2.6% of the Vote - In 1929 Hitler was still considered a joke, and he only won 2.6% of the vote and 12 seats in the Reichstag. But just a year later, as the Depression took on steam, Hitler’s Nazi Party won 107 seats in the Reichstag. At that point Hitler’s only promises were to restore prosperity and jobs . . . and to purge the system of profiteers. I am NOT analogizing Obama to Hitler, but I am analogizing the promises of prosperity without paying the consequences for our past action or planning for the future.

Frank and Moose - After the previous paragraph, I think we need this quote. "There are names floating around, and they’re bad. Frank was one of them. Frank! Moose was another one." - Michelle Obama on her veto of the names her daughters suggested for the hypothetical family dog.

Bankruptcy for Vallejo, Phoenix, Dallas, Philadelphia - Vallejo, California has already submitted to bankruptcy. Phoenix is facing a $250M deficit. Dallas $100M. Philadelphia $300M. And New York could be facing a $900M-1.2T deficit next year. Ask yourself this question. If they are facing these deficits now, how bad does it get as tax receipts plunge due to the crushing unemployment numbers? And then ask what happens when receipts plunge, but services to the unemployed in the form of police, fire, medical, food, schools, etc. . . . skyrocket out of control? Instead of going to the doctor, the unemployed/uninsured will go to Emergency Rooms. Instead of going to the grocery store, the unemployed will go to food banks and soup kitchens . . . or worse, they will loot grocery stores. And that, my dear friends, is just the beginning of something too dark to write about.

Banks Rationing Withdrawals - It happened last week in the Ukraine, when banks not only limited withdrawals, but closed their doors altogether. But it can’t happen here, right? Wrong.

$2 Trillion to AIG - We’ve already given them $180 billion with a big B. We received an 80% stake in the company for the first $85B, but we got zippity-doo-da for the next $95B. Moreover, we have no idea what they did with the money, but I hear Goldman Sachs got billions of it from AIG, as well as JP Morgan and other banks that seem to understand the rules on sucking cash out of the system and pumping to guys like King Henry, Lord Blankfein and Prince Jamie. But the real kicker is what AIG is not telling us. As the financial crisis deepens, so does the money AIG needs to pay out. My low estimate is $2T. Unfortunately, if we continue to allow things to melt down, AIG will be on the hook for more than $5T. Strike that. WE, the taxpayers, will be on the hook for $5 trillion . . . or more.

Chinese and Saudi Ties - Last week Chas Freeman was appointed to head the National Intelligence Council. This is a guy that not only has some very strange ties to the Chinese and Saudi’s, but he still has family members and close friends on the payrolls of these countries. If not directly, indirectly. But really now, what’s the difference. Here’s a guy that worked for companies owned by the People’s Republic of China that was investing in the Islamic Republic of Iran. Even though Republicans asked for an investigation into Freeman’s ties to the Kingdom of Saudi Arabia, China and Iran . . . the Obama Administration ignored the warning signals. As if this was not enough, Freeman has been a supporter of how Hamas has handled things, while denouncing Israel for protecting herself. If you think Obama to the Rescue . . . you’d better start looking at the people he is surrounding himself with.

Obama’s Making It Worse - Maria Bartiromo interviewed Jim Rogers, and when she asked, "What do you think of the government’s response to the economic crisis?" he said . . . "Terrible. They’re making it worse. It’s pretty embarrassing for President Obama, who doesn’t seem to have a clue what’s going on - which would make sense from his background."

Jim classically continued . . . "And he had hired people who are part of the problem. Geithner was head of the New York Fed, which was supposedly in charge of Wall Street and the banks more than anybody else. And as you remember, Summers helped bail out Long Term Capital Management years ago. These are people who think the solution si to save their friends on Wall street rather than to save 300 million Americans.

I will close with this quote from Jim Rogers . . . "We’re going to have social unrest in much of the world. America won’t be immune."