Published on Global Researcch.ca, by Bob Chapman, January 19, 2010.
(picked in the midst of a long text): … Americans want to blame everyone else for their problems when the culprit is their government and those who control that government, the wealthy on Wall Street, in banking and corporate America.
The ruling class is now so arrogant that they ignore our constitution, ruled by Executive Order or by a bought and paid for congress. As a consequence our country is insolvent and the rich have most of the wealth. That is why we forecast an official devaluation and default on debt and the failure of the FDICA over the next 1-1/2 years. The financial sector can make the economy do anything it wants, it owns Washington. America is the victim of a coup, a financial coup, that we have been writing and talking about for 50 years.
We knew it was coming, because we saw the Federal Reserve for what it is, a monstrous, cancerous, criminal money devouring machine. Politically it divided us into apposing political parties and played us off against each other, while at the same time exercising power over both parties. That separation in part led to great control being exercised over both parties. That separation in part led to great control over the people. Over the past 30 years financial profits have doubled to 30% of our GDP. Americans cannot understand because they don’t understand psycho political warfare. They don’t understand there will be no recovery; it is planned that way. The coming collapse of the stock and bond markets will take away more of their wealth and in most cases wipe out their financial wealth. Most Americans never had a bad day in their lives and they will have great trouble with coping with such a disaster. They sense or see the corruption, but as long as it doesn’t touch them they turn away.
Knowing these things you can understand we are working against time, which is our enemy. That is why we publish the IF twice a week and do 30 hours of radio a week. We are trying to wake people up and to get those awakened to teach the world populace why they must wake up now. We have the elitists on the run and expediting their programs. When that happens people make mistakes, sometimes big mistakes. If you do your part we can win. Spread the word and try to inform every representative and senator what you want them to do. If you do not you end up in slavery. The financial Illuminist oligarchy that controls our country, finances and economy has to be stopped and if necessary destroyed. Any success short of that will bring on our demise.
This past week a proposal, not picked up by the media, from the White House proposes the commandeering of retirement plans to fund government debt. We have been talking about this for a year and a half and now it may become reality.
One of the President’s Czars, who hopes to be appointed to the Supreme Court, believes all personal weapons should be confiscated and they will be within three years. He also says anyone who disagrees with government should be removed from society and that the Internet and talk radio should be banned. He says they are being too effective and threaten the elitist moves to One world Government.
We have our markets pricing in a bigger probability of default among industrialized countries with top investment grade bonds. Insurance for default is now higher for France and England then top investment grade companies. Even the best countries are not considered risk free. This is a result of faulty monetary and fiscal policies deliberately foisted on all these countries.
These same countries, and countries worldwide, are still subject to rising unemployment, something that in a normal recession should have ended long ago. This starkly points out this hasn’t been a recession. We have been in a depression for a year and it is not going to go away anytime soon.
The bogus employment figures worldwide are an insult to our intelligence. The difference between private and government figures in the US for the year is 650,000 and they both use similar statistical structures. In addition, the BLS says the February birth/death adjustment will be a downward 850,000, when it should be 1.7 million.
2010 profits could grow 10%, not the 36% that has already been factored into the market. We do not believe that kind of growth is in store and there will be many disruptive forces happening during the year. Employment fostered by growth in census takers will be short lived and we expect a presidential plea for another stimulus package to avoid the inevitable. Analysts are expecting $77 of earnings per share, when reality should be $62. That means presently the market is trading 30% higher than it should be. That would put the 10,700 Dow at 7,500.
In spite of stimulus, November pending home sales fell 16%, but yoy they were up 15.5%. Cash for clunkers was disruptive and all it did was lump sales into September and October. Residential housing is facing another 15% to 20% decline this year. Such a decline would take the houses under water from 15 to 30 million, or from 25% to 50%.
The International Council of shopping Centers showed December same store sales up 2.5% yoy. The November-December number was plus 1% versus a minus 5.6% in 2008.
Mortgage rates are around 5.14%, up ½% recently, which disqualifies many buyers.
Congress continues to evaluate an initiative to reinstitute the Glass Steagall Act, which was enacted in the early 1930s to eliminate fraud by splitting brokerage and insurance from banking. It was passed to keep banks from going under again. It was eliminated in 1999 and has since been a cause for failure again, for having been eliminated.
President Obama plans Thursday to propose a sharp increase in the taxes paid by the nation’s largest financial institutions designed to raise $90 billion over the next decade while constraining the industry’s ability to take large risks and reap outsize rewards, a senior administration official said.
The tax proposal, which would require congressional approval, is meant to make a splash, demonstrating to the public that the administration is now focused on reforming the financial industry after more than a year of bailout efforts. The official, who spoke with reporters before the president’s announcement on condition of anonymity, said that large firms were reaping renewed profit from a rescue intended to help the broader economy and that the public deserved a larger share of the money.
Ray Stone, chief economist at Stone & McCarthy Research, said the U.S. Federal Reserve’s balance sheet, bloated by asset purchases, could become a major liability if inflationary pressure surges. “They’ve created a monster that they don’t fully appreciate,” Stone said. “They have a portfolio-management problem.”
Yet some economists, including the beauties at the Fed, still think that inflation will remain constrained because of excess US capacity. These economic alchemists still labor under the delusion that the US is a closed economic system that is immune from global inflationary factors … (full long text).