Monday, June 21, 2010

There Is No Bridge Over These Troubled Waters

The informal Shanky Pole conducted on the cruise and at the ports concludes that about 1 in 20 actually have a clue as to the troubled waters we're sailing in. The swales may only be 5 to 10 feet now, but the 30 to 40 footers are coming. Without injecting my venom in most, I simply left the conversations with a simple "watch out" warning.

Yes, the moronic, lazy, self-absorbed American public will be in for a rude awakening sooner than later. The MSM they all trust has promoted government lies and falsehoods about the "V shaped recovery" to the point that most are going about business as usual totally blind to the facts that surround the impending disaster. The fact that you are here reading my blog (or reading anything educational or involving current events other than puts you light years ahead of the rest of the populace.

The multitude of problems are real and they are expanding at an exponential rate. As pointed out by many every financial catastrophe of this magnitude has ended in some sort of war. With us sending 11 U.S. warships through Suez Canal en route to Red Sea... and with the troops already in place in the middle east all we have to do now is wait (for what I presume will be) for Israel to make the first move. Apparently control of the oil is and was what these wars were all about from the beginning many years ago. Given BP's power over Washington as exhibited in the last 60+ days, you can't question the power of big oil anymore. Is it an oxymoron for the most powerful man on the planet being a muslim to be Israel's greatest protector? (just another of the many conflicts of interest that exist in DC)

Those that have been reading here know that the reflation trade was doomed from the beginning. The great consumer is dead, cause they were defrauded and robbed of all of their assets and savings all while borrowing insane amounts of money they can never pay back. Without the great consumer, global trade dies. Economies then dry up and as global expansion becomes contraction job losses mount and the welfare states become even more prevalent. 

Denninger posts some good stuff, but this one I really liked Spend Now, Save Never.In his pummeling of Krugman there is this nugget, "There is no hope for rising revenues until the excessive debt is defaulted or paid down.  Since it can't be paid down with a depressed economy, it has to be defaulted.  There is no other option." Hello, what has your Shanky been saying all along? Massive global default will be the only way out of this mess. The hole the global financial system has dug is deeper and wider than an oil slick in the Gulf (separate massive post coming on that topic soon)..

We can't borrow anymore to fund our excesses and to hide the mismanagement and fraudulent investment scams of the banksters and Wall St. They have sucked everything out of the turnip. Of the trillions they have thrown at the wall nothing has suck, even the government sponsored refinancing programs are failing as the banks aren't making ninja loans anymore Borrowers face foreclosure after Obama loan assistance program fails to provide help and Obama's Home Affordable "HAMP" Program a Failure; Another Huge Wave of Foreclosures Coming The housing double dip is going to be a total disaster as there is nothing they can do to stop the next fall. Sure, they can take the shadow inventory to even loftier levels, but if the consumer is dead and the banks are not lending it is game over.

Mish has been the king at covering everything from the State angle. If you have not, please read States Take Aim at Pension Costs; Public Employee Unions on the Defensive; Chris Christie's Freight Train; No One Wants to be Christie's Next PiƱata (and browse his other posts while there). Don't let the global meltdown distract you from the contagion that is spreading from state to state. They can't borrow anymore to fund pension or state budget deficits like they became so accustomed to doing. Sure, about half of the states appear they will be just fine this year as they raid the last of the rainy day stashes to make budget ends meet, but next year will be the real storm and where the real cuts will have to be made. A good friend of mine is a state rep here and he said next year is going to be really tough to get the budget balanced without severe cuts. Anyone out there have a clue as to what effect state government budget cuts will have on the overall economy? You wait till the muni-bond market starts to have more defaults. The discrepancy in price between the better and bad bonds is just now starting to get a little out of hand.

To those of you looking for an EXIT sign that still have money invested in stocks, bonds, mutual funds or retirement plans, this top will be the last and best exit for a long, long, long time. Odds of your private pension funds or benefits being controlled by the state within the next few years are very high. To those of you still thinking about a V shaped recovery or that America will recover and be better than before cause "that's what American's do" better wake the hell up.

America is TOAST. The American way is gone possibly forever barring a massive revolt of the people to retake our government. America as a socialist state "cause that is better for everyone" is here. The times of entitlement that led us here will become the norm except for us providing for ourselves (well, over borrowing and using up every ounce of credit on the planet) all will now be provided by The State. Being an entrepreneur is no longer a personal benefit, but a benefit to The State.

The State will own everything. Your Constitution resembles the late Michael Jackson now. It has had so many face lifts it no longer represents the people. It has been rewritten to protect those in power, and the hand placed Supreme Court is there to protect those in power and the special interests - not you. Those that wrote that once great document knew these troubles would come and warned us against them.

Thomas Jefferson said it best, "If the American people ever allow private banks to control the issue of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers conquered." —Thomas Jefferson, letter to Albert Gallatin, 1802.

Or this one, "I am one of those who do not believe the national debt is a national is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country." —Andrew Jackson, letter, April 26, 1824.

Possibly my favorite - "Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they better not speak above their breath when they speak in condemnation of it."
—Woodrow Wilson, 1913

I guess FDR got Woodrow's message and confirms Jackson's fears - "The real truth of the matter is...that a financial element in the large centers has owned the government ever since the days of Andrew Jackson..."
—Franklin Delano Roosevelt, 1933

Any questions? Are the words of former Presidents enough to convince you of the history behind the corruption and power that control our government?
And one that may be most useful today - "What this country needs — what every country needs occasionally — is a good hard bloody war to revive the vice of patriotism on which its existence as a nation depends." —Ambrose Bierce, letter, February 15, 1911

GL and thanks for the views. Glad to be back!