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Political, Economic and Spiritual Review (Excerpt)By Mark S. Watson, Watson's Web
America: here is where the crisis is centered; here is where the financial 'mafia' have their stranglehold; and here is where the most pain will be felt for the longest period of time.
There is little that has dissuaded me from this view, even in light of a new, different and engaging new President. None of his economic polices have been directed at the source of the problems; rather; they have only exacerbated some of the major structural problems in the US economy.
Trillions are being lent to banks, either via the Federal Reserve or the Treasury, in ways that only complicates matters by attempting to 'reflate' the bubble that was popped in October of 2007.
The problems in the US economy are systemic and cannot be solved via bailouts, stimulus packages (however well meaning), or inspirational speeches. They cannot be solved by overburdening an already maxed-out national credit card.
It was exactly the kind of decisions that Presidents Bush and Obama are making now that put America in her current predicament. Borrow and spend, put the banks interests before the national interest, and do not seriously investigate or prosecute serious and systemic financial crimes. This is the pattern we have seen for decades, and now the chickens are here, and they are ready to roost.
I will not go into the gory details of the actions of Obama and Bush. Rather, I will look at the effects these polices likely will have on the America, its standard of living, and its internal stability.
I advise my readers to take these views with a grain of salt. First, such a look is fraught with unknowns and surprises that cannot be accurately foretold. Second, my views here are no 'wish list.' The things that I think will happen are based simply on the facts and national tendencies as I see them. This, probably more than anything, separates the analysis that I do from 99% of the work done by others (who are often paid to spin things) and Christians who are too busy trying to make prophecy 'fit' events rather than a healthy re-examination of dearly-held beliefs that, a more thorough examination demonstrates, are not based on sound doctrine.
So with that in mind, and with a little wry humor interspersed throughout, here goes.
America will change significantly by the time this crisis is all said and done. She will be less affluent, less militaristic, and less cohesive when the dust finally settles.
I see serious tensions ahead for America and her policymakers. Major political conflict will come to pass in the areas of defense spending and entitlements. Some may turn to 'unconventional means' in order to maintain America's military empire. The same can be said of her banking empires.
The pillars of American power have really been under assault since 9/11, and many of the elements who benefited from those attacks are part of the problem today. They hail from what can only be called the 'imperial' side of America's establishment. Their primary goal is to maintain America's empire as long as possible. They can and have used ruthless methods in the past, and will do so again should they feel it necessary to maintain and even expand that empire.
This is not to say that these forces of the Military Industrial Complex (MID) are monolithic or have total control over the government. They do not. But they do have enough influence to see to it that budgets as well as key National Intelligence assessments reflect their interests first and the nation's second.
Also, it is important to note that all of the tools of political repression are present in America and have been for several decades, while they rarely have been openly displayed in a full-force method. More clandestine methods of repression have been noted throughout US history, most notably in the 1960s and during the Bush administration.
Deadly political repression and Americanism are viewed synonymously by many of the world's poorest. All of this is said to get some perspective on the kinds of things America can expect as 2009 rolls on, and as 2010 comes in and things are not better, but are worse and worsening.
This is something I see coming soon. I will not put a time frame on it, as America's printing factory may be able to mask a great deal of if for a considerable time. This money will be printed to pay for bailouts of the banks, stimulus packages, universal health care, and a host of things the nation cannot afford, but Washington's lobbyists will demand of the new administration.
This will end the dollar's reign as the world reserve currency.
Now I know that the first thing the 'dollar fundamentalists' will say is that this is impossible. They will point out that the dollar cannot fall from grace: too many others have too many dollars in their reserves and cannot let it fall, they say. This is true; they cannot do it all at once, and will not. Nor will we see the euro emerge as that new reserve currency.
What I think is most likely to happen is that the dollar will cease to be a currency in which trade is conducted; bilateral trade will more commonly use a currency of their own or another one of choice. This is not going to happen all at once, but the old order of trade (based in the US reserve currency model) is clearly breaking down.
Global trade is falling and will continue to fall. This may assist America's trade deficit, but not its overall fiscal health, which President Obama promises to burden with another $1.75 trillion in the 2010 fiscal year, keeping the longstanding Bush tradition of record breaking budgets.
This kind of fiscal madness is incongruent with the rhetoric of change that Obama preached when he ran. This is really the gospel of fiscal disaster being preached by 'pastor' Obama. The effects of his economic policies are much like his campaign: lots of promises to lots of different and often opposing interests, often spoken with as great of eloquence as mendacity.
Health care for ordinary Americans; bombs for the War Machine; stimulus packages for businesses, states and mortgage holders; new troop buildups--all to be paid for with astronomical new borrowings. It also means that US debt is being viewed as toxic by investors and that it is getting more expensive to insure US bonds.
Bets that the safest countries, even the United States, may default on their bonds have soared in recent days as governments have issued unprecedented amounts of debt to avert long and deep recessions. In the United States and Europe, the costs of insuring government bonds against default have risen to record levels as countries roll out additional big programs to buy up battered housing-related assets and underpin tottering financial institutions. All these rescues require huge increases in debt issuance over the next year or two. At some point, bond analysts fear, supply will overwhelm demand, degrading the perceived quality of these sovereign bonds and causing investors to demand much higher yields in return for the risk of holding even AAA-rated government debt. - IHT
To the layman this is rather esoteric, but in layman's terms it means that investors are not keen on US or EU sovereign debt. It means that all of these bailouts, stimulus packages, and reckless spending are viewed with suspicion; and when that happens, people don't buy your debt. This is of enormous concern to the US because a $1.75 trillion budget is going to have a hefty amount of borrowing in it.
I put forward to you, the reader, these facts to show you why I will say the things I will, so you can understand that the Obama economic policy is really the Bush economic policy with a few more crumbs than usual thrown out to folks like you and me.
The US government, in order to stave off fiscal collapse and placate competing political-economic interests, will be insolvent in a matter of months and will resort to even more currency creation to pay its bills. This will lead to inflation; and once it is clearly identified as happening in the economy, any attempt at pulling back will be met with catcalls and howls of derision by the same interests that are in control of the Obama administration.
In short, everyone demands a piece of a pie that no longer really exists. When this happens, you will see serious inflation in food, fuel, and other items that you have no choice but to buy. It remains to be seen if the inflationary trends we see today will remain in big ticket (credit dependent) items. I suspect that they will remain to a large degree.
But rampant inflation coupled with a large body of unemployed and underemployed people is a recipe for unrest. Even as docile and controllable as the American population is, they will not sit still and watch harsh realities hit them at home. It is OK if it is just 'those folks on TV,' but when it really hits home, they will be angry.
There is a chance of a soft landing; and this may be one of the reasons why America's establishment is allowing President Obama to make real overtures to America's working class. They saw a real potential for unrest and decided to allow him to move in the domestic arena to quell dissatisfaction with a few budgetary crumbs. The plan may work, but given the scope of deficits and the condition of America's banking sector, I think this highly unlikely.
So who is going to pay for this new massive spending?
You are probably aware by now that Obama’s new spending plan is entirely deficit spending. Does everyone understand what this means? It means that the United States government is broke--they have no money--yet they want to spend one trillion dollars more! Does this make sense to anyone--that they want to spend all this money when they have to BORROW it? Where is the common sense?Now first and foremost, we must understand that you cannot borrow your way to prosperity. It cannot be done. The debt always come due. And while Obama's plan does contain tax increases on those most able to pay for them (those making over $250,000 per year), the majority will be done on the government’s already maxed-out credit card.
Why not let fail what is going to fail, and let the economy reset? This is the inevitable ending to this story no matter how long Obama wants to put it off.
I get a kick out of all these people who vehemently support and protect Obama and his policies--they act as if his decisions will not affect them--only other people. They act as if they are immune to the coming Socialism and the devastating effect it will have on our country.
What does it mean when they say that they “want Obama to succeed?” Does that mean that his supporters just want him to “personally” succeed at passing through all of his programs? This is the sense I get. His supporters seem to be only focused on this man and his own “personal” success RATHER than focusing on the outcome and ramifications of his decisions. - Americans for the Constitution
Through more borrowings, the Federal Reserve will buy US Treasuries, thus monetizing America's debt. This is a way of paying for it. It comes with reduced purchasing power overseas when goods become less available or more pricey (in dollar terms). When the ships from China are less frequent and half full, you will understand what that means to you and me when you go into some of your shopping stores and the shelves are empty, except for those chains that will be able to make secret deals.
America's indebtedness will be dealt with to some degree in this fashion (behind the veils of secrecy and darkness), but the numbers are so large that nothing can come close to filling the enormous and ever-growing gaps between what America makes and what she consumes; what she spends and what she collects in taxes, fiscal realities, and economic pipe-dreams.
In short, no one is going to pay for them, at least not the lion’s share of them. Sure China will pick up some, but EU states, China, those hedge funds in the Caribbean--well, they have their own problems right now, and shipping money to a government that is nigh unto defaulting on its sovereign debt obligations is probably not very high on their list of things to do today.
Which brings us to some very sobering questions.
Given the fact that it is becoming much more difficult to insure US treasuries, when will the US default on its sovereign debt? This ought to tell you a lot about how 'safe' investors really feel about treasuries. So the next thing I usually hear is, ‘Well the dollar is doing well against the (you name your currency here).’ This is true, as far as it goes, which is not very far.
First, measuring the dollar's value in this crisis against other currencies is a good idea if (and only if) you are a currency trader, but if one wants to understand the underlying dynamic of why the dollar is rising, one of the main reasons is that the settlement of much of these debt obligations (and derivatives) require dollars. Often these must be converted from other currencies, and this naturally increases demand, which of course causes the price to rise.
Given the hundreds of billions that need to be settled, this translates into strong demand. This is why the dollar has not done too badly. Yet, given the astronomical amount of money needed for these transactions, the dollar has been able to etch out only very modest gains. That should tell you something about where the dollar is heading.
Remember this: after all of the toxic waste is settled in the financial system, America is still going to be saddled with $10.8 trillion plus $1.2 trillion (this years deficit spending) and all of these other bailouts that have not been put onto the books, totaling about $9 trillion.
This does not bode well for the dollar, and any economist who says that we can deal with these deficits without gut wrenching economic pain is of the same variety that did not warn you that this crisis was coming in the first place. They are of the economically worthless variety. But today economists are not paid to study economics; they are paid to lie for those who fund their think tanks.
So if I can see this is not going to work, and just about anyone who called this economic crisis before it happened can see it, why can't Obama? I do not have any insight into this man's mind, but I will give you some of my thoughts.
I think Obama knows full well his plan is not going to work. In fact, I think he has come to terms that nothing is going to work with the current political dynamics in place in Washington.
If things go on as they have, America will implode economically, followed quickly by social chaos and political upheaval.
So what is Obama's plan? Well, before I go there, let me tell you what one of my sources said to me, not very long ago. He said that there were forces inside the Obama camp that are so appalled by the level of criminality going on inside DC that he is strongly considering doing something that will seem downright nuts, but makes perfect sense when you understand why.
Some have suggested that he formally declare war. This will require a Congressional war declaration, but once that happens, many things can be done that cannot be done now.
One of the major reasons Bush did not declare war was because of the enormous legal responsibility that goes with what he and his administration did. You see, once you declare war, the crimes of the Bush administration are no longer crimes--they are treason. I am here to tell you that what was going on under Bush can be described in no other terms.
If Obama declares war, the crimes that went on and are still going on (and he has little say about) can be dealt with quickly and permanently via military courts, which are little more than the reading of the charges, a pronouncement of guilt, and a prompt leading off to the firing squad. No appeal.
Have you wondered why suddenly those media tools of the far right are going into overdrive about Obama, now spewing the worst kind of hate against him, saying publicly that they 'hope he fails'? I am of the opinion (just opinion here) that some of this information in one form or another has filtered down to them. They are afraid it would mean the exposing of the mechanics of the right-wing slime machine that runs through Big Oil, Big Banking, and the Military Industrial Complex. You will see the worst crimes exposed and the forces behind them.
What is stopping him now, I do not know, but I will tell you what I think based on what I have heard: Obama is very isolated, politically speaking. What do I mean? He has no 'power base' that he can fully rely upon. The power behind him now is Clinton, and the two have a very uneasy relationship: he pretty much can only get the things done that the Clinton machine allows. This is why watching which of those cabinet level appointments went through and which ones failed was so very instructive.
He cannot rely upon the Democratic Party either, as they too are very dependent on the Clinton money machine. Barak Obama, in many ways, was something that they really did not expect, did not want, and had to come to terms with--or it would have been President John McCain right now and a Democratic Party that would never have recovered from preventing Obama from entering the White House, because Obama's money was such that he could have run ‘third party’ and been a potent spoiler and opened up third-party politics to a new level--and nobody wanted to see that.
But Obama made a choice to stick with the Democrats and make the appropriate back-room deals. But now he is so dependent on the political machines of others that he has found his hands are tied. Sure, they will let him make promises to America's working class: it keeps them quiet and fills them with hope so that they do not begin to get really pissed off as the President shovels out yet more hundreds of billions in bailouts to the banks and refuses to prosecute serious financial crime. It is a kind of economic placebo, if you will.
Obama is going to play it for all it is worth because, in the days ahead, he is going to need a bully pulpit to deal with the criminal elements that are deeply imbedded in both political parties, which are preventing the real change that I think he wants to bring in. This does not mean that I personally agree with some of those changes.
Thus, I think Obama's economic policies (while seeming rather insane to those who have not been mesmerized by the theatrics) can be seen perhaps in this light as part of a larger stratagem to deal with the American criminal enterprise.
But it must be stressed here that Obama is isolated, truly and almost totally isolated. One friend of mine who works in the government put it like this: he is like one of those maiden's from the middle ages, trapped in a high tower waiting for someone to save him. Folks are trying to reach out to him, but he has not taken any help yet.
This is my 'two cents' based on what I know and sources who have talked to me about what is going on. I do not have all the answers and ask you to be very suspicious of (as in stop listening to) those who think they do.
The Specter of Martial Law
I think sooner or later, in one form or another, this President will have no choice but to call for some kind of state of emergency: the economic situation will demand it. What that will mean for us has many facets, but primarily it will mean the end of the high standard of living Americans are used to. Second, it will be a signal to criminal gangs in America, and those located in Mexico as well as sleeper cells of foreign agents (who are here in the US), to go to work; they are waiting for America to fall before they really move in.
This does not mean that there will be a formal declaration of martial law. Nor does it necessarily mean that it will be a panic-in-the-streets kind of event. It does mean that on some level nationwide emergency measures will have to be taken.
This is going to be a greater threat than I think most 'policy wonks' believe. As people lose their jobs and cannot find another, and find that it is no longer possible to stay in their homes or even find the basics that make life livable, the inevitable choice of crime will appeal to more and more people. Those that cannot make a legitimate living will turn to making an illegitimate one. (This you can bet on, and you will come out the winner in 7 cases out of 10.) Hungry people will do what it takes to survive; and if surviving means dealing drugs, transporting human cargo, stealing cars, breaking into homes, selling illegal movies or music, or organizing 'for hire' assassination squads, then that is what they will do.
This is once again where I see the real threat over the longer term. You see, there will be no magic bullet saving the US economy. As laudable as our new President’s goals of using alternative fuels and new technology to drive our recovery may be, the reality is that these technologies are not here yet; and even if they come into being, will take years to develop--and even then cannot possibly bring in the kinds of economic prosperity that can fill the gap between America's standard of living and her deficits.
Obama is giving us pipe dreams because he knows the enormous forces that would come against what really needs to be done. Folks, I hate to burst your bubble but these dreams “ain’t gonna happen.”
The reality is this: America's economy will continue to implode so that unemployment rates coupled with serious underemployment rates rise to over 30 percent. Thus there will be no 'recovery' in the sense that most people expect; i.e., things going back to pretty much the way they were.
Whatever recovery we have that is not based on sound economics and production will not succeed. Thus this large cadre of newly-impoverished Americans will turn to whatever means they can to feed their families, keep a roof over their heads, and purchase necessities.
Now, I must confess that my views may be a little too pessimistic for many of you. Your skepticism is understandable. Most Americans have no frame of reference as to what real poverty is. They just don't.
Second, I confess, I just don't have much respect for most of my fellow Americans. I have far less for the culture of greed, selfishness, lust and ignorance which have been glorified for many years by America's entertainment industry and encouraged by some of our elite.
I know this is a far cry from the optimism of what many say about American culture and “America’s indomitable spirit,” but I am old enough, worldly-wise enough, and have lived in enough different countries (as an adult) to see things very differently than most of my fellow Americans. Nor am I encumbered with the arrogance and “sense-of-entitlement” thinking that is so prevalent in so many of my countrymen.
In short, American’s thinking patterns, for the most part, are not rooted in anything other than personal comfort, 'getting ahead of the next guy' in consuming and, in many cases, developing a cold arrogance that I personally see everyday as I move about my local area from my jaunts to Target, Best Buy, Giant, the mall or the local park.
A great many people are just not very nice. You know, when I was growing up, it was polite to speak to people when you passed by them. Today, it is often viewed as a threat. I cannot tell you how many times I have gone places and had people turn their heads away when I offered a friendly greeting--when I (or they) had to invade personal space, sometimes their heads turned so quickly that I thought they were going to hurt themselves and need a neck-brace and medical attention! Usually, they simply do not even acknowledge any greeting; they feel they are too good to speak to ordinary folks.
I tell you a whole different spirit has taken over the American psyche, and it is not a good one. Older folks can see it; younger ones do not have any real frame of reference--they think unkindness is normal and OK.
I tell my readers that sometimes more can be ascertained by noticing the little things rather than the great big things, watching patterns of behavior rather that listening to what people claim to be.
But the root of that spirit of arrogance, which is a way of saying 'me first, screw you' (that is the root of this kind of behavior), is going to give way to crime, which is merely a different way of expressing the same spirit of 'me first, screw you.' That is what the thief says when he steals a car, breaks into a home, or picks a pocket.
In the past I relayed some reasons why I thought a serious challenge to central authority of the federal government was likely. Fortunately, with Obama in office, much of that threat is reduced for the near term. Obama has shown great sympathy with the plight of the states, counties and cities, and he has opened up the Treasury in assistance to them as well as to ordinary Americans.
However, the other threats that are being ignored or papered over with bailouts are likely to cause a crisis (or series of crises) that spirals out of all control. That frankly is what I see happening, much sooner than later. There is no easy way out of this crisis, and our enemies know it. And I strongly suspect, based on the evidence I have seen and the sources I know, that they have long prepared for a day such as this.