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Gerald Celente: The Second Greatest Story

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Gerald Celente: The Second Greatest Story

Post  TBQ on Sat Jul 17, 2010 7:40 am

Submitted by "Von Bama"

By 2012, no amount of confidence, hope and optimism could cover up the crash. No country has escaped unscathed; the economic carnage was global. Double-digit unemployment, real estate worth less than half its 2006 peak value, trade flows reduced to a trickle, manufacturing stagnant, retail decimated … how could it not happen?

The injection of tens of trillions of stimulus and bailout dollars (euros, pounds, yen, yuan, etc.) into failing nations, banks, brokerages, and businesses to resuscitate the world economy following the “Panic of ‘08” was a bankrupt policy that would bankrupt the world. Back in 2010, with the money fixes kicking in, the economic jolt was widely interpreted as a remedy, rather than just temporary symptom relief. Yet, at the most basic level it should have been self-evident that governments could not endlessly monetize debts, endlessly print money backed by nothing, loan it out for next to nothing, and expect the result to be a productive growth cycle.

Taking on new debt on top of old debt only created more debt. The government ploy was transparently unfeasible; it was the equivalent of a distressed homeowner, unable to make payments on a second mortgage, taking on a third mortgage … which in the real world was next to impossible.

But in the fantasy world of high finance, when it came to failing big banks and broken big brokerages, what was irresponsible and unthinkable in the real world was deemed necessary economic policy. Lauded as “Titans of Industry” by President Obama and celebrated as “the Best and the Brightest” by the business media, the rescued financiers were, in reality, no more than bookies in Brooks Brothers clothing.

Titans of what industry? What railroads did they build? What steel did they manufacture? What oil did they drill? What autos did they produce?

HARRY THE HORSE

They were bookies. They placed bets for people gambling their money in the hope of picking winners. In the back alleys it used to be called “playing the numbers” or “playing the horses.” On Wall Street it was called “investment strategy. But unlike the common bookie who only took and placed bets, these “Titans of Industry” were also racetrack touts, suckering clients into betting on a field of “exotic financial instruments.”

Paraded as thoroughbreds, they were little more than nags in silks: Credit Default Swap, Esoteric Derivative, Auction Rate Security, Synthetic Collaterized Debt Obligation, Enhanced Special Investment Vehicle — a stable of fancy frauds in full gallop in the Wall Street Derby, “The Race that Would Wreck the World.” With the Wall Street bookies making mega-billions in bonuses and bettors with an inside track winning billions more, the entire world wanted a piece of the easy money action. From playing interest rate spreads in Iceland, flipping buildings in Ireland and buying condos in Spain, to safer bets on Greek bonds and US Treasuries — everything was promoted with an implied guarantee of profit. The underlying assumption motivating the investor was that you could make money by doing nothing … all you had to do was put it in the right place.

Regardless of how it is played or pitched — high risk orlow — investing is no more than speculation. By definition: gambling. And when gamblers don’t win, they lose. If the game is big enough, the losses can bring down countries. The Iceland meltdown is an example. Bettors from other nations deposited money in Icelandic banks because Iceland offered higher interest rates than they could get in their own countries.

While the interest rate was guaranteed, the Institution wasn’t. Although deposits were insured, when the banks failed as a result of high-risk speculations of their own, the Icelandic government lacked the funds to cover the deposits. When the government then tried to rescue the foreign gamblers by forcing Icelandic citizens to make good on the losses, the public refused and rebelled. The foreign investors (gamblers) looking to cash in on the high interest rates had made what they considered a safe bet. Nonetheless, it was a bet! Levels of risk vary, but no matter how it’s rated, no bet is a sure thing. Long or
short, there are always risks. Moreover, recent history has shown that the rating agencies themselves are in collusion
with the bookies.

The game is rigged.

Introduction from the latest trend report of Trends Research Institute

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