Everyone; raise your hands in the air and say; oh Yeah!

Andrew Gavin Marshall
Global Research
Friday, August 7, 2009
Introduction

While there is much talk of a recovery on the horizon, commentators are forgetting some crucial aspects of the financial crisis. The crisis is not simply composed of one bubble, the housing real estate bubble, which has already burst. The crisis has many bubbles, all of which dwarf the housing bubble burst of 2008. Indicators show that the next possible burst is the commercial real estate bubble. However, the main event on the horizon is the “bailout bubble” and the general world debt bubble, which will plunge the world into a Great Depression the likes of which have never before been seen.

Housing Crash Still Not Over
The housing real estate market, despite numbers indicating an upward trend, is still in trouble, as, “Houses are taking months to sell. Many buyers are having trouble getting financing as lenders and appraisers struggle to figure out what houses are really worth in the wake of the collapse.” Further, “the overall market remains very soft [...] aside from speculators and first-time buyers.” Dean Baker, co-director of the Center for Economic and Policy Research in Washington said, “It would be wrong to imagine that we have hit a turning point in the market,” as “There is still an enormous oversupply of housing, which means that the direction of house prices will almost certainly continue to be downward.” Foreclosures are still rising in many states “such as Nevada, Georgia and Utah, and economists say rising unemployment may push foreclosures higher into next year.” Clearly, the housing crisis is still not at an end.[1]

The Commercial Real Estate Bubble
In May, Bloomberg quoted Deutsche Bank CEO Josef Ackermann as saying, “It’s either the beginning of the end or the end of the beginning.” Bloomberg further pointed out that, “A piece of the puzzle that must be calculated into any determination of the depth of our economic doldrums is the condition of commercial real estate — the shopping malls, hotels, and office buildings that tend to go along with real- estate expansions.” Residential investment went down 28.9 % from 2006 to 2007, and at the same time, nonresidential investment grew 24.9%, thus, commercial real estate was “serving as a buffer against the declining housing market.”

Commercial real estate lags behind housing trends, and so too, will the crisis, as “commercial construction projects are losing their appeal.” Further, “there are lots of reasons to suspect that commercial real estate was subject to some of the loose lending practices that afflicted the residential market. The Office of the Comptroller of the Currency’s Survey of Credit Underwriting Practices found that whereas in 2003 just 2 percent of banks were easing their underwriting standards on commercial construction loans, by 2006 almost a third of them were relaxing.” In May it was reported that, “Almost 80 percent of domestic banks are tightening their lending standards for commercial real-estate loans,” and that, “we may face double-bubble trouble for real estate and the economy.”[2]

In late July of 2009, it was reported that, “Commercial real estate’s decline is a significant issue facing the economy because it may result in more losses for the financial industry than residential real estate. This category includes apartment buildings, hotels, office towers, and shopping malls.” Worth noting is that, “As the economy has struggled, developers and landlords have had to rely on a helping hand from the US Federal Reserve in order to try to get credit flowing so that they can refinance existing buildings or even to complete partially constructed projects.” So again, the Fed is delaying the inevitable by providing more liquidity to an already inflated bubble. As the Financial Post pointed out, “From Vancouver to Manhattan, we are seeing rising office vacancies and declines in office rents.”[3]
In April of 2009, it was reported that, “Office vacancies in U.S. downtowns increased to 12.5 percent in the first quarter, the highest in three years, as companies cut jobs and new buildings came onto the market,” and, “Downtown office vacancies nationwide could come close to 15 percent by the end of this year, approaching the 10-year high of 15.5 percent in 2003.”[4]

In the same month it was reported that, “Strip malls, neighborhood centers and regional malls are losing stores at the fastest pace in at least a decade, as a spending slump forces retailers to trim down to stay afloat.” In the first quarter of 2009, retail tenants “have vacated 8.7 million square feet of commercial space,” which “exceeds the 8.6 million square feet of retail space that was vacated in all of 2008.” Further, as CNN reported, “vacancy rates at malls rose 9.5% in the first quarter, outpacing the 8.9% vacancy rate registered in all of 2008.” Of significance for those that think and claim the crisis will be over by 2010, “mall vacancies [are expected] to exceed historical levels through 2011,” as for retailers, “it’s only going to get worse.”[5] Two days after the previous report, “General Growth Properties Inc, the second-largest U.S. mall owner, declared bankruptcy on [April 16] in the biggest real estate failure in U.S. history.”[6]

In April, the Financial Times reported that, “Property prices in China are likely to halve over the next two years, a top government researcher has predicted in a powerful signal that the country’s economic downturn faces further challenges despite recent positive data.” This is of enormous significance, as “The property market, along with exports, were leading drivers of the booming Chinese economy over the past decade.” Further, “an apparent rebound in the property market was unsustainable over the medium term and being driven by a flood of liquidity and fraudulent activity rather than real demand.” A researcher at a leading Chinese government think tank reported that, “he expected average urban residential property prices to fall by 40 to 50 per cent over the next two years from their levels at the end of 2008.”[7]

In April, it was reported that, “The Federal Reserve is considering offering longer loans to investors in commercial mortgage-backed securities as part of a plan to help jump-start the market for commercial real estate debt.” Since February the Fed “has been analyzing appropriate terms and conditions for accepting commercial mortgage-backed securities (CMBS) and other mortgage assets as collateral for its Term Asset-Backed Securities Lending Facility (TALF).”[8]
In late July, the Financial Times reported that, “Two of America’s biggest banks, Morgan Stanley and Wells Fargo …threw into sharp relief the mounting woes of the US commercial property market when they reported large losses and surging bad loan,” as “The disappointing second-quarter results for two of the largest lenders and investors in office, retail and industrial property across the US confirmed investors’ fears that commercial real estate would be the next front in the financial crisis after the collapse of the housing market.” The commercial property market, worth $6.7 trillion, “which accounts for more than 10 per cent of US gross domestic product, could be a significant hurdle on the road to recovery.”[9]

The Bailout Bubble
While the bailout, or the “stimulus package” as it is often referred to, is getting good coverage in terms of being portrayed as having revived the economy and is leading the way to the light at the end of the tunnel, key factors are again misrepresented in this situation.

At the end of March of 2009, Bloomberg reported that, “The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year.” This amount “works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008.”[10]

Gerald Celente, the head of the Trends Research Institute, the major trend-forecasting agency in the world, wrote in May of 2009 of the “bailout bubble.” Celente’s forecasts are not to be taken lightly, as he accurately predicted the 1987 stock market crash, the fall of the Soviet Union, the 1998 Russian economic collapse, the 1997 East Asian economic crisis, the 2000 Dot-Com bubble burst, the 2001 recession, the start of a recession in 2007 and the housing market collapse of 2008, among other things.

On May 13, 2009, Celente released a Trend Alert, reporting that, “The biggest financial bubble in history is being inflated in plain sight,” and that, “This is the Mother of All Bubbles, and when it explodes [...] it will signal the end to the boom/bust cycle that has characterized economic activity throughout the developed world.” Further, “This is much bigger than the Dot-com and Real Estate bubbles which hit speculators, investors and financiers the hardest. However destructive the effects of these busts on employment, savings and productivity, the Free Market Capitalist framework was left intact. But when the ‘Bailout Bubble’ explodes, the system goes with it.”
Celente further explained that, “Phantom dollars, printed out of thin air, backed by nothing… and producing next to nothing… defines the ‘Bailout Bubble.’ Just as with the other bubbles, so too will this one burst. But unlike Dot-com and Real Estate, when the “Bailout Bubble” pops, neither the President nor the Federal Reserve will have the fiscal fixes or monetary policies available to inflate another.” Celente elaborated, “Given the pattern of governments to parlay egregious failures into mega-failures, the classic trend they follow, when all else fails, is to take their nation to war,” and that, “While we cannot pinpoint precisely when the ‘Bailout Bubble’ will burst, we are certain it will. When it does, it should be understood that a major war could follow.”[11]
However, this “bailout bubble” that Celente was referring to at the time was the $12.8 trillion reported by Bloomberg. As of July, estimates put this bubble at nearly double the previous estimate.

As the Financial Times reported in late July of 2009, while the Fed and Treasury hail the efforts and impact of the bailouts, “Neil Barofsky, special inspector-general for the troubled asset relief programme, [TARP] said that the various US schemes to shore up banks and restart lending exposed federal agencies to a risk of $23,700bn [$23.7 trillion] – a vast estimate that was immediately dismissed by the Treasury.” The inspector-general of the TARP program stated that there were “fundamental vulnerabilities...relating to conflicts of interest and collusion, transparency, performance measures, and anti-money laundering.”
Barofsky also reports on the “considerable stress” in commercial real estate, as “The Fed has begun to open up Talf to commercial mortgage-backed securities to try to influence credit conditions in the commercial real estate market. The report draws attention to a new potential credit crunch when $500bn worth of real estate mortgages need to be refinanced by the end of the year.” Ben Bernanke, the Chairman of the Fed, and Timothy Geithner, the Treasury Secretary and former President of the New York Fed, are seriously discussing extending TALF (Term Asset-Backed Securities Lending Facility) into “CMBS [Commercial Mortgage-Backed Securities] and other assets such as small business loans and whether to increase the size of the programme.” It is the “expansion of the various programmes into new and riskier asset classes is one of the main bones of contention between the Treasury and Mr Barofsky.”[12]

Testifying before Congress, Barofsky said, “From programs involving large capital infusions into hundreds of banks and other financial institutions, to a mortgage modification program designed to modify millions of mortgages, to public-private partnerships using tens of billions of taxpayer dollars to purchase ‘toxic’ assets from banks, TARP has evolved into a program of unprecedented scope, scale, and complexity.” He explained that, “The total potential federal government support could reach up to 23.7 trillion dollars.”[13]

Is a Future Bailout Possible?
In early July of 2009, billionaire investor Warren Buffet said that, “unemployment could hit 11 percent and a second stimulus package might be needed as the economy struggles to recover from recession,” and he further stated that, “we’re not in a recovery.”[14] Also in early July, an economic adviser to President Obama stated that, “The United States should be planning for a possible second round of fiscal stimulus to further prop up the economy.”[15]

In August of 2009, it was reported that, “THE Obama administration will consider dishing out more money to rein in unemployment despite signs the recession is ending,” and that, “Treasury secretary Tim Geithner also conceded tax hikes could be on the agenda as the government worked to bring its huge recovery-related deficits under control.” Geithner said, “we will do what it takes,” and that, “more federal cash could be tipped into the recovery as unemployment benefits amid projections the benefits extended to 1.5 million jobless Americans will expire without Congress’ intervention.” However, any future injection of money could be viewed as “a second stimulus package.”[16]
The Washington Post reported in early July of a Treasury Department initiative known as “Plan C.” The Plan C team was assembled “to examine what could yet bring [the economy] down and has identified several trouble spots that could threaten the still-fragile lending industry,” and “the internal project is focused on vexing problems such as the distressed commercial real estate markets, the high rate of delinquencies among homeowners, and the struggles of community and regional banks.”
Further, “The team is also responsible for considering potential government responses, but top officials within the Obama administration are wary of rolling out initiatives that would commit massive amounts of federal resources.” The article elaborated in saying that, “The creation of Plan C is a sign that the government has moved into a new phase of its response, acting preemptively rather than reacting to emerging crises.” In particular, the near-term challenge they are facing is commercial real estate lending, as “Banks and other firms that provided such loans in the past have sharply curtailed lending,” leaving “many developers and construction companies out in the cold.” Within the next couple years, “these groups face a tidal wave of commercial real estate debt — some estimates peg the total at more than $3 trillion — that they will need to refinance. These loans were issued during this decade’s construction boom with the mistaken expectation that they would be refinanced on the same generous terms after a few years.”

However, as a result of the credit crisis, “few developers can find anyone to refinance their debt, endangering healthy and distressed properties.” Kim Diamond, a managing director at Standard & Poor’s, stated that, “It’s not a degree to which people are willing to lend,” but rather, “The question is whether a loan can be made at all.” Important to note is that, “Financial analysts said losses on commercial real estate loans are now the single largest cause of bank failures,” and that none of the bailout efforts enacted “is big enough to address the size of the problem.”[17]

So the question must be asked: what is Plan C contemplating in terms of a possible government “solution”? Another bailout? The effect that this would have would be to further inflate the already monumental bailout bubble.

The Great European Bubble
In October of 2008, Germany and France led a European Union bailout of 1 trillion Euros, and “World markets initially soared as European governments pumped billions into crippled banks. Central banks in Europe also mounted a new offensive to restart lending by supplying unlimited amounts of dollars to commercial banks in a joint operation.”[18]

The American bailouts even went to European banks, as it was reported in March of 2009 that, “European banks declined to discuss a report that they were beneficiaries of the $173 billion bail-out of insurer AIG,” as “Goldman Sachs, Morgan Stanley and a host of other U.S. and European banks had been paid roughly $50 billion since the Federal Reserve first extended aid to AIG.” Among the European banks, “French banks Societe Generale and Calyon on Sunday declined to comment on the story, as did Deutsche Bank, Britain’s Barclays and unlisted Dutch group Rabobank.” Other banks that got money from the US bailout include HSBC, Wachovia, Merrill Lynch, Banco Santander and Royal Bank of Scotland. Because AIG was essentially insolvent, “the bailout enabled AIG to pay its counterparty banks for extra collateral,” with “Goldman Sachs and Deutsche bank each receiving $6 billion in payments between mid-September and December.”[19]

In April of 2009, it was reported that, “EU governments have committed 3 trillion Euros[or $4 trillion dollars] to bail out banks with guarantees or cash injections in the wake of the global financial crisis, the European Commission.”[20]
In early February of 2009, the Telegraph published a story with a startling headline, “European banks may need 16.3 trillionpoundbail-out, EC document warns.” Type this headline into google, and the link to the Telegraph appears. However, click on the link, and the title has changed to “European bank bail-out could push EU into crisis.” Further, they removed any mention of the amount of money that may be required for a bank bailout. The amount in dollars, however, nears $25 trillion. The amount is the cumulative total of the troubled assets on bank balance sheets, a staggering number derived from the derivatives trade.

The Telegraph reported that, “National leaders and EU officials share fears that a second bank bail-out in Europe will raise government borrowing at a time when investors – particularly those who lend money to European governments – have growing doubts over the ability of countries such as Spain, Greece, Portugal, Ireland, Italy and Britain to pay it back.”[21]

When Eastern European countries were in desperate need of financial aid, and discussion was heated on the possibility of an EU bailout of Eastern Europe, the EU, at the behest of Angela Merkel of Germany, denied the East European bailout. However, this was more a public relations stunt than an actual policy position.
While the EU refused money to Eastern Europe in the form of a bailout, in late March European leaders “doubled the emergency funding for the fragile economies of central and eastern Europe and pledged to deliver another doubling of International Monetary Fund lending facilities by putting up 75bn Euros (70bn pounds).” EU leaders “agreed to increase funding for balance of payments support available for mainly eastern European member states from 25bn Eurosto 50bn Euros.”[22]

As explained in a Times article in June of 2009, Germany has been deceitful in its public stance versus its actual policy decisions. The article, worth quoting in large part, first explained that:
Europe is now in the middle of a perfect storm – a confluence of three separate, but interconnected economic crises which threaten far greater devastation than Britain or America have suffered from the credit crunch: the collapse of German industry and employment, the impending bankruptcy of Central European homeowners and businesses; and the threat of government debt defaults from loss of monetary control by the Irish Republic, Greece and Portugal, for instance on the eurozone periphery.
Taking the case of Latvia, the author asks, “If the crisis expands, other EU governments – and especially Germany’s – will face an existential question. Do they commit hundreds of billions of euros to guarantee the debts of fellow EU countries? Or do they allow government defaults and devaluations that may ultimately break up the single currency and further cripple German industry, as well as the country’s domestic banks?” While addressing that, “Publicly, German politicians have insisted that any bailouts or guarantees are out of the question,” however, “the pass has been quietly sold in Brussels, while politicians loudly protested their unshakeable commitment to defend it.”

The author addressed how in October of 2008:
[...] a previously unused regulation was discovered, allowing the creation of a 25 billion Euros“balance of payments facility” and authorising the EU to borrow substantial sums under its own “legal personality” for the first time. This facility was doubled again to 50 billion Eurosin March. If Latvia’s financial problems turn into a full-scale crisis, these guarantees and cross-subsidies between EU governments will increase to hundreds of billions in the months ahead and will certainly mutate into large-scale centralised EU borrowing, jointly guaranteed by all the taxpayers of the EU.

[...] The new EU borrowing, for example, is legally an ‘off-budget’ and ‘back-to-back’ arrangement, which allows Germany to maintain the legal fiction that it is not guaranteeing the debts of Latvia et al. The EU’s bond prospectus to investors, however, makes quite clear where the financial burden truly lies: “From an investor’s point of view the bond is fully guaranteed by the EU budget and, ultimately, by the EU Member States.”[23]

So Eastern Europe is getting, or presumably will get bailed out. Whether this is in the form of EU federalism, providing loans of its own accord, paid for by European taxpayers, or through the IMF, which will attach any loans with its stringent Structural Adjustment Program (SAP) conditionalities, or both. It turned out that the joint partnership of the IMF and EU is what provided the loans and continues to provide such loans.

As the Financial Times pointed out in August of 2009, “Bank failures or plunging currencies in the three Baltic nations – Latvia, Lithuania and Estonia – could threaten the fragile prospect of recovery in the rest of Europe. These countries also sit on one of the world’s most sensitive political fault-lines. They are the European Union’s frontier states, bordering Russia.” In July, Latvia “agreed its second loan in eight months from the IMF and the EU,” following the first one in December. Lithuania is reported to be following suit. However, as the Financial Times noted, the loans came with the IMF conditionalities: “The injection of cash is the good news. The bad news is that, in return for shoring up state finances, the new IMF deal will require the Latvian government to impose yet more pain on its suffering population. Public-sector wages have already been cut by about a third this year. Pensions have been sliced. Now the IMF requires Latvia to cut another 10 per cent from the state budget this autumn.”[24]

If we are to believe the brief Telegraph report pertaining to nearly $25 trillion in bad bank assets, which was removed from the original article for undisclosed reasons, not citing a factual retraction, the question is, does this potential bailout still stand? These banks haven’t been rescued financially from the EU, so, presumably, these bad assets are still sitting on the bank balance sheets. This bubble has yet to blow. Combine this with the $23.7 trillion US bailout bubble, and there is nearly $50 trillion between the EU and the US waiting to burst.

An Oil Bubble
In early July of 2009, the New York Times reported that, “The extreme volatility that has gripped oil markets for the last 18 months has shown no signs of slowing down, with oil prices more than doubling since the beginning of the year despite an exceptionally weak economy.” Instability in the oil and gas prices has led many to “fear it could jeopardize a global recovery.” Further, “It is also hobbling businesses and consumers,” as “A wild run on the oil markets has occurred in the last 12 months.” Oil prices reached a record high last summer at $145/barrel, and with the economic crisis they fell to $33/barrel in December. However, since the start of 2009, oil has risen 55% to $70/barrel.
As the Times article points out, “the recent rise in oil prices is reprising the debate from last year over the role of investors — or speculators — in the commodity markets.” Energy officials from the EU and OPEC met in June and concluded that, “the speculation issue had not been resolved yet and that the 2008 bubble could be repeated.”[25]

In June of 2009, Hedge Fund manager Michael Masters told the US Senate that, “Congress has not done enough to curb excessive speculation in the oil markets, leaving the country vulnerable to another price run-up in 2009.” He explained that, “oil prices are largely not determined by supply and demand but the trading desks of large Wall Street firms.” Because “Nothing was actually done by Congress to put an end to the problem of excessive speculation” in 2008, Masters explained, “there is nothing to prevent another bubble in oil prices in 2009. In fact, signs of another possible bubble are already beginning to appear.”[26]

In May of 2008, Goldman Sachs warned that oil could reach as much as $200/barrel within the next 12-24 months [up to May 2010]. Interestingly, “Goldman Sachs is one of the largest Wall Street investment banks trading oil and it could profit from an increase in prices.”[27] However, this is missing the key point. Not only would Goldman Sachs profit, but Goldman Sachs plays a major role in sending oil prices up in the first place.

As Ed Wallace pointed out in an article in Business Week in May of 2008, Goldman Sachs’ report placed the blame for such price hikes on “soaring demand” from China and the Middle East, combined with the contention that the Middle East has or would soon peak in its oil reserves. Wallace pointed out that:
Goldman Sachs was one of the founding partners of online commodities and futures marketplace Intercontinental Exchange (ICE). And ICE has been a primary focus of recent congressional investigations; it was named both in the Senate’s Permanent Subcommittee on Investigations’ June 27, 2006, Staff Report and in the House Committee on Energy & Commerce’s hearing last December. Those investigations looked into the unregulated trading in energy futures, and both concluded that energy prices’ climb to stratospheric heights has been driven by the billions of dollars’ worth of oil and natural gas futures contracts being placed on the ICE—which is not regulated by the Commodities Futures Trading Commission.[28]
Essentially, Goldman Sachs is one of the key speculators in the oil market, and thus, plays a major role in driving oil prices up on speculation. This must be reconsidered in light of the resurgent rise in oil prices in 2009. In July of 2009, “Goldman Sachs Group Inc. posted record earnings as revenue from trading and stock underwriting reached all-time highs less than a year after the firm took $10 billion in U.S. rescue funds.”[29] Could one be related to the other?

Bailouts Used in Speculation
In November of 2008, the Chinese government injected an “$849 billion stimulus package aimed at keeping the emerging economic superpower growing.”[30] China then recorded a rebound in the growth rate of the economy, and underwent a stock market boom. However, as the Wall Street Journal pointed out in July of 2009, “Its growth is now fuelled by cheap debt rather than corporate profits and retained earnings, and this shift in the medium term threatens to undermine China’s economic decoupling from the global slump.” Further, “overseas money has been piling into China, inflating foreign exchange reserves and domestic liquidity. So perhaps it is not surprising that outstanding bank loans have doubled in the last few years, or that there is much talk of a shadow banking system. Then there is China’s reputation for building overcapacity in its industrial sector, a notoriety it won even before the crash in global demand. This showed a disregard for returns that is always a tell-tale sign of cheap money.”

China’s economy primarily relies upon the United States as a consumption market for its cheap products. However, “The slowdown in U.S. consumption amid a credit crunch has exposed the weaknesses in this export-led financing model. So now China is turning instead to cheap debt for funding, a shift suggested by this year’s 35% or so rise in bank loans.”[31]

In August of 2009, it was reported that China is experiencing a “stimulus-fueled stock market boom.” However, this has caused many leaders to “worry that too much of the $1-trillion lending binge by state banks that paid for China’s nascent revival was diverted into stocks and real estate, raising the danger of a boom and bust cycle and higher inflation less than two years after an earlier stock market bubble burst.”[32]

The same reasoning needs to be applied to the US stock market surge. Something is inherently and structurally wrong with a financial system in which nothing is being produced, 600,000 jobs are lost monthly, and yet, the stock market goes up. Why is the stock market going up?

The Troubled Asset Relief Program (TARP), which provided $700 billion in bank bailouts, started under Bush and expanded under Obama, entails that the US Treasury purchases $700 billion worth of “troubled assets” from banks, and in turn, “that banks cannot be asked to account for their use of taxpayer money.”[33]
So if banks don’t have to account for where the money goes, where did it go? They claim it went back into lending. However, bank lending continues to go down.[34] Stock market speculation is the likely answer. Why else would stocks go up, lending continue downwards, and the bailout money be unaccounted for?

What Does the Bank for International Settlements (BIS) Have to Say?
In late June, the Bank for International Settlements (BIS), the central bank of the world’s central banks, the most prestigious and powerful financial organization in the world, delivered an important warning. It stated that, “fiscal stimulus packages may provide no more than a temporary boost to growth, and be followed by an extended period of economic stagnation.”

The BIS, “The only international body to correctly predict the financial crisis… has warned the biggest risk is that governments might be forced by world bond investors to abandon their stimulus packages, and instead slash spending while lifting taxes and interest rates,” as the annual report of the BIS “has for the past three years been warning of the dangers of a repeat of the depression.” Further, “Its latest annual report warned that countries such as Australia faced the possibility of a run on the currency, which would force interest rates to rise.” The BIS warned that, “a temporary respite may make it more difficult for authorities to take the actions that are necessary, if unpopular, to restore the health of the financial system, and may thus ultimately prolong the period of slow growth.”

Of immense import is the BIS warning that, “At the same time, government guarantees and asset insurance have exposed taxpayers to potentially large losses,” and explaining how fiscal packages posed significant risks, it said that, “There is a danger that fiscal policy-makers will exhaust their debt capacity before finishing the costly job of repairing the financial system,” and that, “There is the definite possibility that stimulus programs will drive up real interest rates and inflation expectations.” Inflation “would intensify as the downturn abated,” and the BIS “expressed doubt about the bank rescue package adopted in the US.”[35]
The BIS further warned of inflation, saying that, “The big and justifiable worry is that, before it can be reversed, the dramatic easing in monetary policy will translate into growth in the broader monetary and credit aggregates,” the BIS said. That will “lead to inflation that feeds inflation expectations or it may fuel yet another asset-price bubble, sowing the seeds of the next financial boom-bust cycle.”[36]

Major investors have also been warning about the dangers of inflation. Legendary investor Jim Rogers has warned of “a massive inflation holocaust.”[37] Investor Marc Faber has warned that, “The U.S. economy will enter ‘hyperinflation’ approaching the levels in Zimbabwe,” and he stated that he is “100 percent sure that the U.S. will go into hyperinflation.” Further, “The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate.”[38]

Are We Entering A New Great Depression?
In 2007, it was reported that, “The Bank for International Settlements, the world’s most prestigious financial body, has warned that years of loose monetary policy has fuelled a dangerous credit bubble, leaving the global economy more vulnerable to another 1930s-style slump than generally understood.” Further:
The BIS, the ultimate bank of central bankers, pointed to a confluence a worrying signs, citing mass issuance of new-fangled credit instruments, soaring levels of household debt, extreme appetite for risk shown by investors, and entrenched imbalances in the world currency system.
[...] In a thinly-veiled rebuke to the US Federal Reserve, the BIS said central banks were starting to doubt the wisdom of letting asset bubbles build up on the assumption that they could safely be “cleaned up” afterwards – which was more or less the strategy pursued by former Fed chief Alan Greenspan after the dotcom bust.[39]

In 2008, the BIS again warned of the potential of another Great Depression, as “complex credit instruments, a strong appetite for risk, rising levels of household debt and long-term imbalances in the world currency system, all form part of the loose monetarist policy that could result in another Great Depression.”[40]
In 2008, the BIS also said that, “The current market turmoil is without precedent in the postwar period. With a significant risk of recession in the US, compounded by sharply rising inflation in many countries, fears are building that the global economy might be at some kind of tipping point,” and that all central banks have done “has been to put off the day of reckoning.”[41]
In late June of 2009, the BIS reported that as a result of stimulus packages, it has only seen “limited progress” and that, “the prospects for growth are at risk,” and further “stimulus measures won’t be able to gain traction, and may only lead to a temporary pickup in growth.” Ultimately, “A fleeting recovery could well make matters worse.”[42]
The BIS has said, in softened language, that the stimulus packages are ultimately going to cause more damage than they prevented, simply delaying the inevitable and making the inevitable that much worse. Given the previous BIS warnings of a Great Depression, the stimulus packages around the world have simply delayed the coming depression, and by adding significant numbers to the massive debt bubbles of the world’s nations, will ultimately make the depression worse than had governments not injected massive amounts of money into the economy.
After the last Great Depression, Keynesian economists emerged victorious in proposing that a nation must spend its way out of crisis. This time around, they will be proven wrong. The world is a very different place now. Loose credit, easy spending and massive debt is what has led the world to the current economic crisis, spending is not the way out. The world has been functioning on a debt based global economy. This debt based monetary system, controlled and operated by the global central banking system, of which the apex is the Bank for International Settlements, is unsustainable. This is the real bubble, the debt bubble. When it bursts, and it will burst, the world will enter into the Greatest Depression in world history.


Notes
[1] Barrie McKenna, End of housing slump? Try telling that to buyers, sellers and the unemployed. The Globe and Mail: August 6, 2009:
http://www.theglobeandmail.com/report-on-business/end-of-housing-slump-try-telling-that-to-buyers-sellers-and-the-unemployed/article1240418/
[2] Gene Sperling, Double-Bubble Trouble in Commercial Real Estate: Gene Sperling. Bloomberg: May 9, 2009:
http://www.bloomberg.com/apps/news?pid=20601110&sid=a.X91SkgOd8g
[3] AL Sull, Commercial Real Estate – The Other Real Estate Bubble. Financial Post: July 23, 2009:
http://network.nationalpost.com/np/blogs/fpmagazinedaily/archive/2009/07/23/commercial-real-estate-the-other-real-estate-bubble.aspx
[4] Hui-yong Yu, U.S. Office Vacancies Rise to Three-Year High, Cushman Says. Bloomberg: April 16, 2009:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aegH6dXG8H8U
[5] Parija B. Kavilanz, Malls shedding stores at record pace. CNN Money: April 14, 2009:
http://money.cnn.com/2009/04/10/news/economy/retail_malls/index.htm
[6] Ilaina Jonas and Emily Chasan, General Growth files largest U.S. real estate bankruptcy. Reuters: April 16, 2009:
http://www.reuters.com/article/businessNews/idUSTRE53F68P20090417
[7] Jamil Anderlini, China property prices ‘likely to halve’. The Financial Times: April 13, 2009:
http://www.ft.com/cms/s/0/9a36b342-280e-11de-8dbf-00144feabdc0.html
[8] Reuters, Fed Might Extend TALF Support to Five Years. Money News: April 17, 2009:
http://moneynews.newsmax.com/financenews/talf/2009/04/17/204120.html?utm_medium=RSS
[9] Francesco Guerrera and Greg Farrell, US banks warn on commercial property. The Financial Times: July 22, 2009:
http://www.ft.com/cms/s/0/3a1e9d86-76eb-11de-b23c-00144feabdc0.html
[10] Mark Pittman and Bob Ivry, Financial Rescue Nears GDP as Pledges Top $12.8 Trillion. Bloomberg: March 31, 2009:
http://www.bloomberg.com/apps/news?pid=20601087&sid=armOzfkwtCA4
[11] Gerald Celente, The “Bailout Bubble” – The Bubble to End All Bubbles. Trends Research Institute: May 13, 2009:
http://geraldcelentechannel.blogspot.com/2009/05/gerald-celente-bubble-to-end-all.html
[12] Tom Braithwaite, Treasury clashes with Tarp watchdog on data. The Financial Times: July 20, 2009:
http://www.ft.com/cms/s/0/ab533a38-757a-11de-9ed5-00144feabdc0.html
[13] AFP, US could spend 23.7 trillion dollars on crisis: report. Agence-France Presse: July 20, 2009:
http://www.google.com/hostednews/afp/article/ALeqM5iuL1HParBuO4WyHJIxw6rlOKdz-A
[14] John Whitesides, Warren Buffett says second stimulus might be needed. Reuters: July 9, 2009:
http://www.reuters.com/article/pressReleasesMolt/idUSTRE5683MZ20090709
[15] Vidya Ranganathan, U.S. should plan 2nd fiscal stimulus: economic adviser. Reuters: July 7, 2009:
http://www.reuters.com/article/newsOne/idUSTRE56611D20090707
[16] Carly Crawford, US may increase stimulus payments to rein in unemployment. The Herald Sun: August 3, 2009:
http://www.news.com.au/heraldsun/story/0,21985,25873672-664,00.html
[17] David Cho and Binyamin Appelbaum, Treasury Works on ‘Plan C’ To Fend Off Lingering Threats. The Washington Post: July 8, 2009:
http://www.washingtonpost.com/wp-dyn/content/article/2009/07/07/AR2009070702631.html?hpid=topnews
[18] Charles Bremner and David Charter, Germany and France lead €1 trillion European bailout. Times Online: October 13, 2009:
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4937516.ece
[19] Douwe Miedema, Europe banks silent on reported AIG bailout gains. Reuters: March 8, 2009:
http://www.reuters.com/article/topNews/idUSTRE5270YD20090308
[20] Elitsa Vucheva, European Bank Bailout Total: $4 Trillion. Business Week: April 10, 2009:
http://www.businessweek.com/globalbiz/content/apr2009/gb20090410_254738.htm?chan=globalbiz_europe+index+page_top+stories
[21] Bruno Waterfield, European bank bail-out could push EU into crisis. The Telegraph: February 11, 2009:
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4590512/European-banks-may-need-16.3-trillion-bail-out-EC-dcoument-warns.html
[22] Ian Traynor, EU doubles funding for fragile eastern European economies. The Guardian: March 20, 2009:
http://www.guardian.co.uk/world/2009/mar/20/eu-imf-emergency-funding
[23] Anatole Kaletsky, The great bailout – Europe’s best-kept secret. The Times Online: June 4, 2009:
http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article6426565.ece
[24] Gideon Rachman, Europe prepares for a Baltic blast. The Financial Times: August 3, 2009:
http://www.ft.com/cms/s/0/b497f5b6-8060-11de-bf04-00144feabdc0.html
[25] JAD MOUAWAD, Swings in Price of Oil Hobble Forecasting. The New York Times: July 5, 2009:
http://www.nytimes.com/2009/07/06/business/06oil.html
[26] Christopher Doering, Masters says signs of oil bubble starting to appear. Reuters: June 4, 2009:
http://www.reuters.com/article/Inspiration/idUSTRE55355620090604
[27] Javier Blas and Chris Flood, Analyst warns of oil at $200 a barrel. The Financial Times: May 6, 2008:
http://us.ft.com/ftgateway/superpage.ft?news_id=fto050620081414392593
[28] Ed Wallace, The Reason for High Oil Prices. Business Week: May 13, 2009:
http://www.businessweek.com/lifestyle/content/may2008/bw20080513_720178.htm
[29] Christine Harper, Goldman Sachs Posts Record Profit, Beating Estimates. Bloomberg: July 14, 2009:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a2jo3RK2_Aps
[30] Peter Martin and John Garnaut, The great China bailout. The Age: November 11, 2008:
http://business.theage.com.au/business/the-great-china-bailout-20081110-5lpe.html
[31] Paul Cavey, Now China Has a Credit Boom. The Wall Street Journal: July 30, 2009:
http://online.wsj.com/article/SB10001424052970204619004574319261337617196.html
[32] Joe McDonald, China’s stimulus-fueled stock boom alarms Beijing. The Globe and Mail: August 2, 2009:
http://www.globeinvestor.com/servlet/story/RTGAM.20090802.wchina02/GIStory/
[33] Matt Jaffe, Watchdog Refutes Treasury Claim Banks Cannot Be Asked to Account for Bailout Cash. ABC News: July 19, 2009:
http://abcnews.go.com/Business/Politics/story?id=8121045&page=1
[34] The China Post, Bank lending slows down in U.S.: report. The China Post: July 28, 2009:
http://www.chinapost.com.tw/business/americas/2009/07/28/218141/Bank-lending.htm
[35] David Uren. Bank for International Settlements warning over stimulus benefits. The Australian: June 30, 2009:
http://www.theaustralian.news.com.au/story/0,,25710566-601,00.html
[36] Simone Meier, BIS Sees Risk Central Banks Will Raise Interest Rates Too Late. Bloomberg: June 29, 2009:
http://www.bloomberg.com/apps/news?pid=20601068&sid=aOnSy9jXFKaY
[37] CNBC.com, We Are Facing an ‘Inflation Holocaust’: Jim Rogers. CNBC: October 10, 2008:
http://www.cnbc.com/id/27097823
[38] Chen Shiyin and Bernard Lo, U.S. Inflation to Approach Zimbabwe Level, Faber Says. Bloomberg: May 27, 2009:
http://www.bloomberg.com/apps/news?pid=20601110&sid=avgZDYM6mTFA
[39] Ambrose Evans-Pritchard, BIS warns of Great Depression dangers from credit spree. The Telegraph: June 27, 2009:
http://www.telegraph.co.uk/finance/economics/2811081/BIS-warns-of-Great-Depression-dangers-from-credit-spree.html
[40] Gill Montia, Central bank body warns of Great Depression. Banking Times: June 9, 2008:
http://www.bankingtimes.co.uk/09062008-central-bank-body-warns-of-great-depression/
[41] Ambrose Evans-Pritchard, BIS slams central banks, warns of worse crunch to come. The Telegraph: June 30, 2008:
http://www.telegraph.co.uk/finance/markets/2792450/BIS-slams-central-banks-warns-of-worse-crunch-to-come.html
[42] HEATHER SCOFFIELD, Financial repairs must continue: central banks. The Globe and Mail: June 29, 2009:
http://v1.theglobeandmail.com/servlet/story/RTGAM.20090629.wcentralbanks0629/BNStory/HEATHER+SCOFFIELD/
Andrew Gavin Marshall is a Research Associate with the Centre for Research on Globalization (CRG). He is currently studying Political Economy and History at Simon Fraser University.

One sign of lovable humans

At my work we have a sign above the urinals that reads: “Please refrain from throwing chewing gum in the urinal since this tend to block the piping”. And every time I go and use the facilities there are at least 3 or 4 discarded chewing gums in each urinal. To me this is a good sense of humour and a healthy sign that people won’t always comply within the “rules”. It might seem silly and juvenile, but I like it.

The violence is getting started

As I have written before there is a very strong movement of resentment growing in America. There are many different groups, everything from white supremacy clowns to black people marching to fascist tunes. Libertarians, tax protestors, and very conservative are complaining from the right while the government labels them as potential terrorists. Gun right people and NWO-freaks have started armed militia groups and so on and so on. All the while unemployment is growing, over 40% now in several towns in the US, the budget deficit is growing exponentially and people are loosing more and more trust in both the government and the Obamination. This will turn ugly sooner or later. If it’s going to manifest into in-house “terrorists”-attacks or demonstrations getting out of hand, it is hard to tell, but this cork is about to burst and I cannot wait for it. I really hope the American people take to arms and overthrow their government, and with “government” I mean the entire system, not just the racist president and his fascist policies, no, the republicans should also get their asses kicked. Back to basics and back to the constitution.

This link takes you to another form of violence, this time from the lefties fighting for the Obamination health-care stupidity. Please watch the movie and remember, these are the guys in power and we are just getting started…

Violence Erupts At Rep. Castor's Town Hall In TampaGo Here!

The evil that is Paul Krugman

to RTVE: "We have the money to invest in another bubble, and sincerely, a bubble right now would help us a lot even though we would have to pay the price later. This would be a good time to invest in another bubble, and I think we have the resources to do so, and because there is a massive unemployment right now."

RTVE

This may very well be one of the most evil men alive. And he has won a nobel prize, like the complete fraud Al Gore and the terrorist Yasser Arafat. Time to end that nobel stupidity...

Another Paul

I think I like this guy more then his father...

Soup ‘em up

We humans do take things to the extreme. The U.S. army is apparently expanding their training operations at Ft. Irwin in the Mojave Desert and in doing so wants to “relocate” around 1,100 threatened California desert tortoises. The obvious question is: why? Firstly, the dessert is kind of a big place; can’t they find another area or part of it to play bang-u-r-dead? Don’t get me wrong, I’m no fan of any reptilia roaming around in slow speed just being in the way, but if it is not really necessary moving them and getting those pesky environmentalists and tree huggers after ya, why make all the trouble? And if this particular area of the dessert is sooooo damn important, fuck the bloody tortoises. Make soup of them, have the soldiers learn how to survive on slow moving stupid animals. Why spend all the time, money and effort moving them? Just kill 'em and be done with it.

Apparently they have moved these thingies before, with less flattering results. Moving desert tortoises is not always successful. The Army relocated more than 600 of the animals last year but suspended the $8.7-million program after the first phase when officials noted high mortality rates among the tortoises, chiefly because of coyotes. Reports LA Times today.

But one quote from LA times you really need to read because this says it all, it’s about tortoises attracting respiratory disease: “Everly said the Army is blood testing every tortoise and will quarantine any found to have the disease.”

Blood testing? Quarantine? $8,7 million? Wtf!? How about give me half that money and I fly over, kill all those buggers, open up a restaurant where I serve ‘em with cold beer. This is completely insane and so unnecessary. And aren’t the US military supposed to help out during this recession, saving some money? If they really need to stay in Afghanistan and waste tax money, can’t they at lest NOT move tortoises for a living? These guys are supposed to be killers! Not cuddling with stupid animals.

Economy for economists?

I was going to name this post ”economy for dummies” but that would be offensive towards dummies. Instead I choose to offer a bit of a guide to people that do not work at central banks, do not have an MBA in finance or has any kind of education in economy. This is mainly from a lecture I held a couple of years ago that I found on an old disc but it still holds its ground since nothing has changed. It is very basic in order for finance ministers and such to understand.

I do not mention M1, M2, M3 and I do not count or show mathematical conclusion, because it is not necessary. The basic rules are what they are and reality does not change. And please remember, almost all of this, except for some comments and the final part, was written and said about 6 years ago. No one predicted this crisis eh..?

---

There are really only 3 things you need to know about economy, the first two is very easy, the third one a bit trickier. These three things lead to a conclusion about a fourth one and that in turn leads to a 100% accurate prediction about the future.

First: Borrowing and interest rates
This has a very simple ground structure. Low interest rates equals more loans taken since it is cheaper to borrow. High interest rates mean less borrowing because it is more expensive to loan money. This also affects savings in the way that high interest rates mean you earn more money having money saved. Low interest rates mean you won’t save money because you do not earn anything from it. Also; higher rates and consequently savings mean that money is available for investments i.e. future gains. In turn; lower interest rates means more spending right now.

High interest rates = High savings, less borrowing = Higher investment rate

Low Interest rates = Low savings, much borrowing = Higher spending rate


Secondly: 1+1=2
Some economists say: “There is no such thing as a free lunch” or something like: “You cannot get something for nothing”. But even if most economists do agree on sentences like these, almost none of them truly understand the ramifications. Or to put it in other words; in the world of economists 1+1=4,9

Since 1+1=2 and $1=$1 it means that there is actually very little one can do outside the specific monetary circle you live in. Borrowing aside you can only spend the amount that you make. But most people and companies do not spend everything, they save some as a buffer. You know this yourself. If you only have $100 you will probably spend around $95 and save $5 to buy milk and bread later if necessary. If you have a bit more income or many hundreds, you might even put away some money so you can afford to buy a new TV or save to buy a new car in the future. Of course this behaviour partially change when we factor in borrowing, but the basic principle is clear, you cannot spend more than you have earned. This goes for you as an individual, it is true for every company and it is also true for the state.

Thirdly: Money
This is a long one, but size does matter so please read…

What is the difference between a $100 note and a piece of paper? The answer is; hardly anything. The piece of paper might be easier to write on and the dollar note might be shinier, otherwise, nothing. So why do we accept the dollar note as “value” hence can buy stuff for it? And why can’t we use any ordinary piece of paper? The answer is that the government put its muscles and its good word behind the dollar bill and back it up as “their” paper (at the same time outlawing any competitor). It does not matter what the notes are called or even what numbers and such there is on ‘em. What matters is how good the word of the particular government really is. The richer a country is and sounder the financial structure is, the more reliable a government is and the bigger and better a particular country is, the more power is backing a particular note.

Money is used as an exchange good so instead of us going around exchanging chairs for books or hand in our virgin daughter in exchange for a car, we use money. Money makes trade easier and it is easier to transport then people or construction material. This is the main reason for people to except money; we know it is necessary for any form of economy.

But since money doesn’t hold any real value it has to be correlated to something. As mentioned above, “the good word of the state” hangs on the wealth and soundness within the economy i.e. the amount of value being produced. The more value a certain economy produce, the more power you can put behind the money. However, if the number of notes in the economy shrinks in correlation to what we produced i.e. when there isn’t enough money in the system to buy “all” products; it leads to an overabundant of goods on the market and since we have produced more than the number of dollar notes each note grows in value and this means lower prices or/and deflation. Today’s economists claim this is the worst thing that can happen since, as they claim, the economy will dip down repeatedly until we either produce less or print more money.
The other thing that we can do with the money supply is that we print more money than the actual value. This means we get more money in correlation to what we produce and when this happens money looses in value and prices goes up. This is what is known as inflation. Most economist, again, agree upon that a little bit of inflation is better then deflation and consequently they mean that if the inflation rate is about between 1,5-4.5% it is a good thing. Hence they argue for, and the government agrees, that we should print more money than the actual value of what we produce just to keep the shopping spree going and keeping the economy from contracting.

Are u with me so far? Because now the first fun thing about this story comes:

The combination of the only 3 things you need to know about the economy
Government need to abide the same absolute laws as anyone else, hence cannot spend more then they have. BUT; politicians want to get re-elected and they want to behave like and be remembered by their constituencies as “heroes of the people” and as; “a good progressive champion for everyone’s equal rights” or their favourite one: “Saviour of the poor” and this they accomplished mainly by making everyone happy. And how do you make people happy? You give them stuff!

The government, however, is also limited by taxation and their income. They cannot tax us to much, even week feeble pussies like Britons or Swedes will rebel when pushed over the limit so there is a maximum income for the government. How can they fix that? By borrowing! The government goes to a neighbouring state, some companies or even their own people and says: “hey, here is some bonds, wanna buy?”. And normally this is not a problem; governments can sell many bonds since there is an abundant of tax-payer money backing it up. But what are they really selling? They are selling debt and in reality debt in money. The government promise to repay the lender with their money (not the value, please remember this). But also, even here there is a limit. Partly because there is just so much actual value that is shown by the amount of money and governments need to show - as any loan taker do - that they actually can, and will, pay the loans back. Partly they cannot borrow as much as they want because the repayments eventually get higher then the actual loans. So here we have dilemma, but as with any dilemma, the government has a solution: The printing machine!

In older times the printing machine was an actual physical printing machine with ink, paper and the whole enchilada. Today, they press some keys on a computer. In older times, they needed to transport the money and the whole process took time, today they press some keys on their computer and whoosh, the money magically appears in the system. A monkey can print money today; actually a monkey would probably do a much better job...


The three fun things about printing money:

First one: When the government cannot borrow anymore, they print more money. This devalues the debt because more money means that each note is worth less, but it also means higher tax revenues. Yes, that’s right, by some strokes of a keyboard they will increase your tax and you will never notice it. This is a super secret that they do not want anyone to know about. Think about it. Your money is worth less and the prices has gone up but the taxes stays the same or even go down a bit in percentage, but the actual tax is higher. When you understand this first fun thing about printing money you also understand why no government will ever give up this power.

Second one: More money in the system means (as you know from above) a higher level of spending - especially when the government combines printing with very low interest rates. People will go out and spend since they have more money (actual money “value” is, however, less) and people can borrow very cheaply. In effect this means that people indebt themselves in order to buy things they in reality cannot afford. This is what’s being done to us now from governments all over the world in a scheme to keep things rolling along, and it is partly “working”…

The Third one: All of these debts – the governments and the individual debts – in combination with more money in the system and the fact that this extra money reach different markets on different times, means that bubbles are created. Fictive values are created for certain companies, certain stocks or certain areas of the economy. The entire market gets distorted and the longer and the more money the worse it gets. In other words, the more trillions of dollars that is thrown into the system, the bigger the distortion and the bigger the bubbles get. And in our current situation they have thrown more money, in affect; done more harm then anyone ever have done in the entire history of mankind.


The conclusion – what you need to know

If you have read everything above and understand it, we can draw a fun little conclusion about GDP (gross domestic product (Swedish:BNP)). If we print money and borrow lots of money and throw those into the system it will increase GDP, just as economists and politicians are hoping for and as we can see today we can see “green shoots” and some “positive” things… Of course we do, especially within certain areas or, as we can see today, on the stock-markets.

But have we increased the value or the amount of what we produce? No! In fact, “forcing” us to spend more and indebt us more have, at least over time, decreased our ability to produce. Have we stopped the crisis? No! In fact we have seriously worsen it because now there is not only the initial problem, we have also a higher level of inflation, more debts and distortions on the market with one or several bubbles that will burst sooner or later.

To a certain extent, some economists know of some of these dangers so they know they need to - sooner or later - increase interest rates. The further down this path we go, the higher the interest rates will be. About now the actual interest rates are around 7-8% looking at Sweden and a couple of % higher when looking at US and UK. This will, of course, lead to more foreclosures and much less money available to the public since more of their income goes to pay back loans they have taken in order to spend spend and spend, and what will this do to the enemy class precious GDP? But the main problem is the bubbles that will burst one after the other, creating downturns or even trigger that depression that will hit us with full force at any moment. And since our situation is even worse, what will the economists and politicians do? They will do the same thing again! They will print more money, borrow more money and go even further down the road towards total and utter destruction. They will never admit defeat, say they were wrong or change curse. This is why I have predicted there are more stimuli’s to come, even with these “green shoots” because unemployment is so high and keeps rising. With the distortion more companies will fall, hence more bail-outs. And please remember, they have been doing this for a long while now. This is not the first couple of stupidities; it’s the biggest ones, but not the first ones.

So where do this leave us? Yes, you guessed; we are so fucked the word fucked does not measure up. We are fucked way beyond the “great depression” and way beyond anything anyone has ever seen. This is an epic failure of giant proportions that will change the world completely and I would even go so far to say that most of you will not survive. That’s how horrifying this is going to be and you, the mindless drones, you are really to blame. You voted for it, you wanted it, you live with it. Idiots.

Blow out the candle please

Speaking of pigs and things that go bump in the night - the Obamination apparently had a birthday the other day. Smiling that fake smile, hugging some of his cronies, increasing his private army, destroying what’s left of the economy, you know whatever. While the budget deficit is now close to 2 trillion dollars this year and the government budget has shrunk 18% this smug fascist is having a party celebrating his own fabulousness.

This world have never been in more peril than it is today and the main reason for this is that we have a socialist moron at the white house helping the rest of this worlds maniacs destroying what little decency there is left.

Hell just got a bit colder

To no surprise Chavez is claiming that the rocket launchers Sweden sold to Venezuela was stolen from him. He does not know how they got into the hands of his friends in the communist FARC guerrilla. On a related note; another flying pig was spotted over Greenland this morning making the total count 23 since Tuesday.

The dictator has now convinced us that he’s completely innocent and next he will turn water into wine. A very farfetched guess is that he will show "proof" of this... all the while, those pigs keep flying by...

Chavez is also refusing to import Colombian trucks. How will the world be able to go on? Maybe this fatty dictator will start a war after all. I thought he didn't have the guts, but now I'm hoping he actually does. A war would be great entertainment and it would increase oil prices. Go Hugo, Go!

Honduras won’t bow down

In a press release the temporarly Honduran president Micheletti have declared that Zelaya isn’t welcome back. At least not as long as there is threat about violence and he hangs out with his dictatorial buddies Ortega and Chavez in addition to taking support from FARC. The release also states that the mentioned criminals are breaking the UN-charter, OAS charter and many other international treaties. This is, of course, obvious for anyone knowing what is really going on in Honduras. Hugo Chavez is probably a bit pissed at the moment. He’s getting heat from my fellow countrymen about handing over rocket launchers to the communist guerrilla FARC, fierce critic over some incriminating documents found by Colombian authorities and, of course, the brave and democratic loving Honduras that refuse to do as they are told. The Venezuelan economy is starting to deteriorate and - for the first time - western media is complaining over Chavez tyrant ways because he closed down and threatened several radio-stations in his country. In other words the plump obese dictator in Caracas is sweating over more than his bodily mass.

But the question still remains when EU’s member states, the US and other countries will start to support the Honduran democratic system? Come on people! Why won’t our politicians support democracy and freedom? This is a serious situation and I urge you all out there to really put it to your representative and ask why the hell he/she does not want democracy in Honduras.

When people lose everything...

Another shooting has occurred in the US where a man walked into a Fitness Center in Bridgeville, Pittsburgh, and entered an all-female dance class and then started shooting people. According to reports several people appeared to be wounded, including the dance-instructor, and four people, so far, has been reported dead and, apparently, the gunman had killed himself.

As I have written before and will say again, this is only the beginning. I have no idea why this stupid thing happened; maybe he heard voices, had just got fired or didn’t like people dancing. Whatever the reason there are two things you can be absolute sure of. Firstly lots of people will call for more gun restrictions and the government with the Obamination as figurehead will take advantage of this and similar events to impose more and more laws, everything arranged to control the populace. Secondly, this is not the first and it most definitely won’t be the last shooting. Or, in other words: “When people lose everything, have nothing left to lose, they loose it”. If you think this is an isolated incident or that it won’t happen in your country or your town, think again. With skyrocketing unemployment, a deep depression and no hope in sight, this will happen many times yet and it do not matter if you have liberal or fascist laws when it comes to guns, people can always get hold of guns no matter what.

Muslim idiots again

Apparently some brainless Muslims with nothing to do other than complain and find faults where there are none have reacted towards a football song. Schalke 04 in the German bundesliga has fans singing a song with text that goes like this:

Mohammed war ein Prophet
Der vom Fußballspielen nichts versteht
Doch aus all der schönen Farbenpracht [der Farbenprahacht...]
Hat er sich das Blau und Weiße ausgedacht

I have news for you stupid people with nothing else to do; Mohammed lived 1400 years ago, there was no football back then so he didn’t know anything about the game. Or do you people think he went like: “Oh, let’s do a Hijra, fast, and go to Medina so we get there before half-time...”
So what’s offensive? Get a life, idiots.

The Grey matter matters...

Had a bit boring time by my lonesome in front of my PC. Well, I did make the best use of my webcam, as usual, however still kind of bored I started to look for some movie I haven’t seen and I happened to come across a movie called; The Girlfriend Experience. Apparently it was about some girl being a high end prostitute (or “girlfriend” rather). Apparently directed by Steven Soderbergh which I normally detest and if I see that idiot name on a cover of a movie I know it is horrible (yes, even the ocean crappies). And what’s with the freaking surname? Soderbergh? It is spelled Söderbergh or Søderbergh you freak.

Anyhow… I noticed it stared a porn actress; Sasha Grey, so I thought, hey, this might be fun. Most of the porn actresses that goes over to “regular movies” are very horrible and cannot even pull off playing a stupid girl that gets massacred by a 9ft monster. So at least some entertainment with my most hated director and a porno actress playing a prostitute. I should also mention I’m a big connoisseur of porn, I really love porn, but I have never really taken a liking to Sasha other then in a couple of fetish pieces where she is getting spanked and tortured and consequently is very lovable.

Firstly the movie that’s a so so experience, it is watchable and has good acting in general, but hardly more, probably because of that idiot director. However, Sasha is actually great. I got very impressed by her and she is a beautiful and sexy woman. After 10min into the movie I’m not thinking of her getting gangbanged anymore and that says it all. Good stuff and I hope to see her act opposite Brad Pit in the future while Angelina is sitting at home with the kids…

Young, blushing and ready?

I will probably be blamed for being a bigot just by putting this link out there, but this is funny shit. First I thought it was horrific, and it is, but then thinking about it I draw the conclusion this is freaking hilarious. Didn't we leave practises like this behind us, oh say, 1000 years ago?

Please visit Counting Cats in Zanzibar and read the story behind this picture:



I have checked this and it seems to be true... Have not been able to confirm it 100% yet though, but it seems to be...

Update: Several people are claiming those girls not being the ones being wed, however I have not seen any proof of this and when you watch the movie it seams very clear to me. It might be a cultural thing but I hardly see how... But I do pull down the accuracy to around 85% at this time. Check the net and see what you find and please prove me wrong...

Dirty socks will cause economic downfall

There is no stopping our enemies from conjuring up excuses for their inapt thinking. Everything goes. Anyone that have read this blog or kept up with what really goes on in the world and knows how bad the economy really is; you know things are going straight to hell. The only questions are; how bad will it be? And; how long will it last? I think the ruling elite, if not before, are also starting to realize the same. Have you seen, read or heard what they are blaming? Firstly, the Swine flu - that is supposed to hinder trade, slow down the economy and make people be sick and consequently cannot contribute to the squirrel wheel of stupidity. I have also seen “weather” being blamed and, of course, it is the scam of man-made global warming they blame as the culprit. Several articles have also spoken about Israel attacking Iran as something that can stop the economy from recuperating. But the most normal scapegoat is that “we have not done enough”. Several cornflake economists, and some politicians to the far left, wants to borrow and print and wastefully spent trillions upon trillions more than we already have. Such a move is, of course, the absolute worst thing that we can do and when those additional stimulus packages and bail-outs comes our way this autumn and winter; then that’s it. I see decades of economic, political and military upheaval ahead of us and you only need to go back and read about Weimar, the Great Depression and all that happened during and after those events to realize how bad it’s going to be. This time, however, we are in much worse shape than back then. Our debts are much much larger, our production capacity per person is horrifically low and there is no incentive left in any economy anywhere around the world to take us towards any kind of recovery. And this time it is not going to be one or two bubbles bursting, it’s going to be multiple ones, and they are still inflating those bubbles at the very moment you read this!

There is no “green shoots”, there are no lights coming at us in the tunnel - all we are seeing is temporally shifts in money from the printing press and massive governmental debts towards certain areas of the economy. This mixed with some very bad decisions from individuals borrowing on artificially low interest rates, and some positivism, and some false numbers is the things we are seeing. Banks, financial institutes and stock-markets is getting those inflationary trillions first and, lord and behold, where do we see one of those “green shoots”? All they are doing as "best case scenario" is to halter or postpone the depression and in doing so making a horrid situation much worse.

So our enemies need that scapegoat, they need someone(s) or something to blame. We do not really know who or what yet. The last time around it was Jews, greed and democracy that got blamed, a good guess is that it’s going to be Muslims, greed and capitalism this time around. But until we know for sure, as said, everything goes. They want to keep the option open so the latest illusion they are selling is that there might be an oil crisis lurking. Although this notion is completely correct for several reasons - among other things the tie between oil and USD - it is not something that can be blamed for our current dilemma. But you can be damn sure they will try it. And again they are throwing out pseudo scientists claiming that oil will run out someday. Ever heard that one before?

This is getting ridiculous and soon, maybe even you, the stupid baboons, will start seeing through this charade. Or will you?

Swine flu parties!

The headline says it all. Apparently some people both have the humour and good sense of trying to infect themselves at social gatherings with several infected in the room.

‘Swine flu parties’ or, as a poster in Central London called it: “H1N1 party” are gatherings where people come into contact with someone(s) who has H1N1 flu to get infected with it on purpose.The idea is an extension of chicken pox and measles parties that were once a popular way of exposing children to those diseases so that they might acquire resistance to subsequent infections.

The expectation is the flu episode will be mild and the body will develop a natural immunity to the virus and, perhaps, down the line, have a natural immunity if the virus develop and mutate into something worse. Canada’s chief public health officer, Dr. David Butler-Jones, have warned against H1N1 ‘flu parties’ in a published report and authorities in several countries is now advising against these events. Me, I’m wondering why. It is a fantastic idea!! I’m thinking of starting one or several of these events myself and I’m beating myself for not thinking about before. Of course one should throw such a party.

Flu epidemics often come in waves and there are some fears that a more virulent form of H1N1 may strike in the fall. That happened with the Spanish flu pandemic in 1918. Researchers at George Washington University in Washington DC have studied the 1918 pandemic and have found that in areas where there were more cases during the first wave of Spanish flu, there were fewer deaths during its second wave, in the fall of that year. So, I must ask, why are not more people throwing Swine Flu parties?

In an interview with BBC news the public health expert Dr Richard Jarvis is admitting that the Swine flu is a mild variation but it still holds risks. He is clearly against such parties (probably need to get laid) but speaking in his BMA capacity at the union's conference in Liverpool, admitted getting the virus now was likely to give people immunity even if it mutated slightly to become more virulent. So my question is, again, why is he or any authority against it? It makes no sense to be against something that clearly is a great idea. Instead of waiting for some stupid anti-virus that may or may not help and in the end will create a resistance, this is a much better solution and I will make damn sure to either visit or create one of these parties myself.

And to all you people out there, do the same! It is a fantastic way for students to get to know each other and families to form new bounds with neighbors and such. Although it is never fun getting sick and if you have some problems with other illnesses, this might not be the very best idea, but to all the rest of you, go get it! Yeah!

A defining moment

If you want to know if your politicians truly believe in and support democracy, now is the chance to find out. Ask him/her about the situation in Honduras and ask which side he/she supports. Does the politician in question support the legal current constitutional government that follows the law and democratic policies or does he/she support a warmongering criminal that wants to be left-wing dictator?

I do not ask you to take my word for it, check it for yourself. Don’t trust me, the media or anyone else, roam the net, read what you can find and draw your own conclusions. This is a perfect example for what the internet and the free airwaves can be used for. Find the necessary information, and then send an email to your politician, call your local newspaper. Take action. A people are suffering, completely unnecessary, because our western politicians do not understand, take the time or want to know the truth.

In Iran many people are fighting for democracy against a relentless dictatorial regime. In Honduras, for people finally have got a government that believes in and supports democracy, this can change rapidly if we do not support them.

This is a defining moment, don’t you wanna know if the ones representing you really believe in and support democracy? Time to find out. At the same time you can also find out which side journalists and people in power are on. Now is a good chance to know who your enemies are and who your friends are.

Amo Honduras!

Socialism again

The liberal party in Sweden wants to waste taxpayer’s money and throw them at badly kept local councils. Apparently this masterful move is meant to save some useless political projects that, of course, should be eliminated completely. This is, of course, a way of attracting attention and picking up some votes from the center-left mass of people. But it is also the complete opposite of what the Swedish government should be doing. They should cut back completely, not sending anything out locally and let them handle their own mess. This would make people be aware of who are the ones that mismanage their money and it would mean less wastefulness since this depression will continue for many years yet. Jan Björklund is the name of the socialist making this suggestion and he is the leader of this party. Jan can now be added to the list of our enemies.

The statistics game

I thought this swiney flu would cool down a bit before loathsome reporters started beating on that scare mongering drum again. Apparently it seem like I was at least partially wrong.

110.000 people infected last week in England?

Is it 29, 30, 31 or some other number of dead from Swine Flu in UK?

The statistics lie and journalists writes crap as usual! Check the facts for yourselves, don't trust media.

We already know that media have and will come up with daunting headlines, conjure up stories riddled with large holes. Since the start I have only seen a couple of articles with so so reporting, the rest is pure trash, or even worse; pure lies. But in the beginning this was very fun, I mean, come on; Swine flu!? It doesn’t get better than that, well it could (and still can in the future) have been cute little puppy flu or Tyrannosaurus flu, but swine’s open up an unprecedented flood of jokes, pictures and such. Fantastic stuff. But now it is getting old, boring really.

Well, the journalists are still making it worthwhile, very hilarious media coverage in a tragic sort of a way. Reading the news in Sweden they are very focused on UK at the moment since, seemingly, people on the British Isles are dying and suffering more than during the Nazi bombings.

Me, I live and work in the UK, in fact the first two victims of this pink Hog Flu passed away just a couple of kilometers from my house. Like most victims of any flu they had "underlying health conditions". At my work a bunch of people have had this flu (at least that was what they were told), all with very minor symptoms and all recuperated quickly. Also; one of those “crisis centers” set up by the government is working at the same office as me, all those call-takers earlier unemployed and now, with no training or knowledge in healthcare or virology whatsoever, they are paid a couple of pounds to give advice to the general public.... Just the other day an elderly woman called one of these “health-line people” and was told she had swine flu and was told to stay at home instead of looking up a doctor. Now she is in a dreadful condition with pneumonia, not any bloody fucking flu! Another woman, pregnant, also got the wrong set of advice. They are still counted in the statistic though… oh… can that have something to do with the massive increase in infected lately? Noooo? Can it?

I don’t believe the dead and infected numbers for one second. Something is seriously wrong with those. I have been following the news here in the UK and the numbers change all the time - for some reason.

This morning I read: 'Yesterday the deaths of an eight-year- old girl and three adults in London were announced, bringing the total deaths in England to 27. (Daily Mail: August 1)'There have been 27 swine flu related deaths in England to date. With the four in Scotland, the UK total is 31' (NHS online: July 31) these seems to be confirmed by The Department of Health. But - and now it gets interesting - The Department of Health said there have been 26 deaths in England and three in Scotland.' (Yahoo news: July 16). Can you see it? If the number of deaths, with the 4 new ones confirmed is 31 as of today, 1st of August, how come it was 29 dead already July 16th? Doesn’t this seem strange? The European CDC is still, when I’m writing this, claiming it is 30 dead. A quick check with WHO’s latest report (27 July 2009 09:00 GMT) the number of laboratory-confirmed cases of H1N1 (a.k.a. Swine Flu) is said to be 134503 and the number of dead 816 (remember these numbers). The number of dead in UK the same date is 30. So what is correct here? And look at the WHO number of infected and compare that with the numbers the UK department is claiming in this report using HPA modelling (Don’t get me started on that crap). And checking with the European Centre for Disease Prevention and Control (ECDC), by 29 July, 175,785 laboratory confirmed cases of pandemic (haha... "pandemic", that one is so funny) influenza (H1N1) had been reported globally with 1012 deaths. Those two days between WHO’s report and ECDC’s report can hardly have resulted in that big of a difference, or?

So, which one of these stupidities have got it correct? Is it WHO? ECDC? UK health department? It is like playing cluedo – I take colonel Swine doing it with an injection of anti-virus at the hospital killing 2 people from West End that actually had cancer…

Okay, I get that there is some problems coordinating everything and these are bureaucratic organizations after all, and I need to admit, I’m no doctor or expert and perhaps I have misread these numbers somehow, especially since I’m very tired when writing this, but this smells like very rotten fish to me.

How about some media people got up from their fat asses and do something to earn that extremely high salary they get for eating donughts and translating other peoples work…

Lazy stupid idiots.

There must be a maximum limit of not having over your shoe size in IQ to be hired by the biggest media firms. I hope this is the mother swine of all swine flues and that it mutates into a flesh-eating super virus that target journalists.

How do I send money to the Honduran Army?

I’m looking for a way to support the Honduran armed forces and could use some pointers. Where do I send the money? The warmongering psycho Zelaya is threatening with war, most likely backed by his dictator pal Hugo Chávez (that’s not even trying to hide his dictatorship anymore) and other leftie extremists. So the democratic government of Honduras and their defenses might need a bit of support. My small contribution will not help that much, but it is a start and it’s a hell of a lot more than the US and the representatives of the European Reich does. I still cannot believe how the collective forces of the enemy class can get away with supporting a complete loony and dictator wannabe like Zelaya. And journalists, useless as ever, do nothing to really check the facts and put pressure on politicians to do something and help Honduras.

We need to stand up for democracy and the Honduran people against tyranny, so please let me know if any of you out there knows how and where to send some support, and if you know; send some yourself. It does not need to be money, it can be guns, blankets, food or others similar items that probably will be most welcome.

Apocalyptica

I really like these guys and they have a cool name...

Waking Life - Refuse to Submit

Apparently kind of old, but I like it

Illegal imprisonments

Today in Swedish newspapers we can read about how one man have been convicted for pimping prostitutes and another one, one of Sweden’s most notorious criminals, has been found guilty of smuggling drugs. In other words, not actual crimes. (In the prostitution case, however, the man in question had, also, molested a minor, but that is something different.)Drugs as well as prostitution should, of course, be legal since those things are something we do to ourselves and our own bodies. If you have been convicted for real crimes like rape, burglary or robbery is one thing, buying a commodity to sell it to others, crow your own crops or sell parts of you to others is something else.

There is no rational reason for such laws since all they do is force people underground, makes drugs/prostitution more expensive and more profitably which consequently leads to mafia organizations emerging.

There is no humanitarian reason for such laws because the illegality makes drugs more dangerous to buy. Instead of buying drugs at the supermarket people need to buy it from a shabby man in the alley and the information of what you are buying isn’t always available hence more overdoses.

Instead of going to a clean, healthy whore-house where everyone is tested for AIDS, hepatitis and such, people need to get blow jobs in basements or anal penetrations in some crappy apartment.

In addition, there is no economic reason for it. Because of all the additional danger, thanks to the law, people get hurt more often and end up, more frequently, at hospitals. Because of higher prices people do more crimes to found their habits, and because of prostitution being illegal it means higher risks for both seller and buyer. The government also “must” throw billions of tax payer money to stop these “crimes” in addition to having police officers and lawyers, which could chase after real criminals like murderers and bankers, instead need to focus their attention to “crimes” that have no victim. All this, and much more, means that the cost is extremely high in comparison with the humanitarian and moral alternative.

We should legalize all drugs which would empty most prisons, save hundreds of lives each year in Sweden alone, and it would free much needed founds for hunting real criminals and it would eliminate every criminal organizations that thrive upon this madness. But, most important of all; it would make us, the individuals, kings over our own bodies. If I want to inject, eat, nibble on or smoke any kind of drug, that is my problem, not yours and certainly not the governments. Why should anyone have the “right” of telling me what to do with my own body?

We should legalize prostitution which also would save lives, make the trade healthier and everyday life much easier. This would also be a staggering blow to many criminal organisations since prostitution also is a big revenue source. Sure there are abnormalities on the fringes of the sex-trade, like slaves being smuggled or child molestations. But those irregularities would be much easier to handle and come to grips with if the mafia got a staggering blow and legal prostitutes were available to the law instead of hiding from it. Most whore-houses would, for competitive purposes, see to it that their business is clean.

Prostitution and doing drugs has always been mankind’s favourite past times and this will never change, but hopefully the law will change so less people get hurt and we can spend time worrying about some real problems, like the economy.