With no compelling vision; Let's try some more fear

I am not a doctor nor am I an economist. However, in the blogosphere, I play both. However, God gifted me with the uncanny ability to synthesize and conclude ["Connecting the Dots"].

Also, for full disclosure, I took steps to prepare my family for the FLU outbreak 2 weeks ago, well before it was fashionable. I am ready, are you?

Now, let me tell you why I wasted my money and what this has to do with a "one global currency". You see, for currency collapse/replacement to occur, you must have rampant protectionism between countries to magnify the monetary problem. Nothing like a pandemic to enable countries to "close their borders".

World governments trying to solve a debt induced economic crisis with more debt and more printing money are coming to the harsh reality that this is probably not going to correct the problem within the next year or so, if at all. Iceland is bankrupt. More that 15 countries are now considered or labelled "near insolvent" including the UK, Greece, Spain, Ukraine, and some other smaller countries." China is swapping out of US dollars for natural resources. And the US Federal Reserve bank is forced to buy US Treasuries because their isn't enough buyers of US Debt.

The new problem is-- governments began to leak information that things were starting to look better. Their comments were based on second derivative thinking. And sadly, once you tell citizens that things are improving, you really own the problem if things get worse. Not good for continued employment as a politician.

But what if we could blame the next leg downward on a pandemic? No one could blame our governments if we suffer further economic contraction or at least failed recovery because of an "act of god".

Here are some facts which suggest the public may be being played for a fool again to ensure that if economic woes continue or worsen we won't blame the government.

(1) Actual SWINE FLU deaths in Mexico according to WHO is only 7.

(2) US government launches a media blitz to concern and scare its citizens (I've spared you a link to the inane comments of the US Vice Presidet).

(3) Average annual deaths in the US related to FLU: 36,000 per year

(4) Last FLU epidemic in the US? February/March 2008

(5) Percent specimens resistant to targeted H1N1 antiviral? 0.4%

Don't believe me? Go to the Centers for Disease Control.


Interesting isn't it? What do you think?

A Decoupling Double Bottom

So I countinue to stand behind my China recovery strategy and suggest you watch FXI, DBB, and UDN. Part of this outlook includes the devaluation of the US Dollar and its subsequent replacement as the global reserve currency. Think of this post as part 3 of the emergence of a new global currency- the previous two posts are:

(1) http://tedbits.blogspot.com/2009/04/secret-societies-are-your-friend.html

(2) http://tedbits.blogspot.com/2009/04/worlds-8th-largest-economy-seeks-us.html

Perhaps you are familiar with a chart pattern called a double bottom. It looks like this and is quite common.

Well, we are setting up for another major double bottom as was seen in the US during the late 1920's and early 1930's.

As we are right at where the red line is pointing. The next leg down is all set up because the fundamentals that caused the downturn have not been remediated. [click on chart to enlarge]

The first leg down which occured during late 2007 and followed through until today, was the typical pattern where the US "gets a cold" and everyone else "gets the flu". However, now that the top of the "W" has formed the next leg down will show a decoupling between the US and China. The US will go down due to fiscal and monetary policy while China will minimally softland and recover (ie: No "W" formation).

Why will decoupling occur? (1) because China is creating its own "consumer class" to be less dependent upon the US consumer and (2) China is trading its US "paper" for raw materials from Russia, Africa and Latin America-- better to own hard assets at the time of currency collapse.

World's 8th Largest Economy Seeks US Government Help

So far taxpayers in the United States have channeled trillions of dollars into failing institutions such as General Motors, Chrysler, Freddie Mac, Fannie Mae, Deutsche Bank, Société Générale, Barclays, AIG, Citigroup, Goldman Sachs, the International Monetary Fund, etc. etc. etc.

Now the 8th largest economy in the world is asking the US Government to underwrite its debt which means they are asking the US Taxpayer to insure their debt.

News reports indicate that the People's Republic of California:

1. Needs to float $13B to $15B in debt to stay afloat,
2. The interest rate they are offering is not attractive to investors,
3. The return they would have to offer to generate interested buyers they cannot afford,
4. They need the money,
5. They want to offer the lower interest rate and have the US Government guarantee the bonds in case they default,
6. Such US guarantees are the burden of the US Tax Payers in the event of default,
7. California says they won't default because they are going to tax their citiziens to pay for the bonds,
8. Californians love to pay taxes and will not take any action (like leave the state) so with this in mind plus US taxpayer guarantees, investors (like insolvent Citigroup) will buy the bonds,
9. And, just like Freddie, Fannie, GM, AIG, and so on, if this works out they will be back next quarter for more money because nothing is going to change in the short term to fix their underlying problems....

Your humble oracle blogger predicted this would happen back on October 26th, 2008.

What does all of this have to do with my long awaited treatise on why we will have a global currency to replace the US dollar? Here is a clue: It is not considered debt if you never plan to pay it back.

Secret Societies Are Your Friend

Blogs must be crisp and my posting on a global currency to displace the US Dollar is turning into a novel. Below is prelude to the full story. And, if it isn't true, it should be.

The following groups are working tirelessly on behalf of Europeans, Japanese, and those living in the Americas:

1. Bilderberg Group
2. Trilateral Commission
3. Council On Foreign Relations

Conspiracy theorists call these groups "secret societies" and assign to them all manner of frightening objectives including, but not limited to, enslaving the world. In fact, these groups are made up of the elite of the elite and the common person shouldn't flatter themselves to think this "Overclass" is the least bit interested in controlling the masses. They already have all the power and money. Their mission? - To Look Forward, Taking Action to Protect Our Way of Life.

By the middle of the 20th century, it became abundantly clear to small group of intelligent, experienced, rich and powerful people, that the elected, self-interested, self-absorbed leaders of the "free world" each seeking to advance themselves and act in their own country's self-interest would be incapable of maintaining our way of life. An Overclass that could effectively scenario plan the future and guide free world leaders without the appearance of "control" was needed. An thus, these 3 groups, many of which share members emerged.

With access to information, the power to control economic outcomes, broad minded independence coupled with uncanny abilities in scenario planning and "game theory", these groups effectively:

1. Halted the spread of Russian catalyzed Communism,
2. Prevented thermonuclear war,
3. Ensured ample supplies of money and cheap energy to generally advance society.

Point 3 is very important. Energy is nearly free-- even at $150 a barrel for oil! Could you image how much the last 60 years would have cost us if were to make all these technological and economic strides still using horses, oxen and steam power? Could you imagine how constrained our economies would be if we still based our currencies on some selected precious metal rather than using a debt based system that allowed for sustained, expansive growth?

No one country, no one person could have accomplished point 3. It required the Overclass, with a patient yet comprehensive blueprint, to guide the cacophony of nation states to get us where we are today.

As I said, if this story isn't true, it should be.

US Unemployment Reaches 16%

This statistic is largely under-reported but easily found at the US Bureau of Labor Statistics. Go here and access U6 to see the data. The point being, that the rise of the US Consumer requires confidence. And if you are marginally attached, discouraged, or under-employed you are less like to take consumer risk. Unless of course, you are borrowing just to survive. Then consumer risk becomes credit risk.

Chart was originally posted here. Click on graph to enlarge.

Easy Go; Easy Come

If you are an investor, how long before 2008 did it take for your investment holdings to double? It is something important to know because if you have lost 50% of your net portfolio in the last 12 to 15 months, you will need a 100% gain (or doubling) just to get back to where you were before this all began. Did it take 5 years to gain 100%? Eight? Ten? Twelve? Never?

Will you ever be as wealthy again as you were at the begining of 2008?

Here's some hope.

There are about 250 trading days in the New York stock market each year. International markets vary but they are all around 250 or so. If your current holdings simply increase 3/10 of 1 Percent (0.30%) every day for a year, you will double you money.

You're back baby!!!!

Does this give you hope? If so, then you need to read This posting from 2005.