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Friday, June 10, 2011

Three Macro Trends You Need to Watch

By Staff Report
45

The world is seemingly under stress from almost all sides. Lets take a look at a couple of the cross currents in the world, some of which no one is talking about yet. While the US has real problems, we forget that the rest of the world is actively faking it, or worse is starting to break apart at the edges. – Business Insider

Dominant Social Theme: Flying under the radar ... Three trends we don't want you to notice.

Free-Market Analysis: Business Insider's Jack H. Barnes, a former trader and hedge fund manager, has written an article entitled "3 Cross Currents in the Global Macro World." We thought we ought to examine it because we've mentioned these "cross currents" ourselves within the context of elite dominant social themes. Barnes bills himself as a macro-contrarian, whatever that means, but his three currents are easy to understand and defined clearly.

Begin with China. That huge country has now launched a US$400 billion program to fund its shaky municipal governments. Barnes is bemused by the lack of reporting. "Almost no one seems to have noticed or commented on the size of their own internal TARP program," he writes. "The fact that China is bailing out their city governments, should be indication of what is happening below the news fold, as it were. The reality is that even China is feeling the global slowdown pain."

Barnes is somewhat admiring of the actions the actions the Chinese have taken. He suggests that unlike Western governments, "they don't spend a lot of time in public wringing their hands. They knew they had an issue and took action." It is in fact a huge bailout when one considers that the Chinese economy is only about one third the size of America's. This means relatively speaking that the money amounts to US$1.2 trillion, almost double the size of the US TARP.

Barnes concludes that Chinese municipalities (where most of the bailout funds are directed) are now in a better position to weather the "coming storm." We're not so sure about this. Municipal indebtedness is related to another under-reported phenomenon in China, which is a real estate crash.

Of course, we began to write about Chinese inflation about two years ago, and at the time we figured the Chinese would raise interest rates significantly. Guess what – they have. And what's the result? Well, just like in the US a while back, higher rates have popped the real-estate bubble and caused Chinese municipalities to crash as well. What's next on the agenda? A "landing" of some sort. Wanna bet it will be a soft one? We'll take offers. We're wagering on the hard kind.

Trend two according to Barnes is an upcoming war with Iran in the Middle East. We've actually been writing about this quite a bit (see other Staff Report today). Barnes has a twist, though, and it's an interesting one. "You only have to look at the latest OPEC meeting to see between the lines," he writes. "Iran and Saudi Arabia have drawn lines in the sand, and sides are being taken."

This is a novel interpretation of what's going on. Barnes has the idea that Saudi Arabia may act as a military proxy for Israel and the US. Interesting. He thinks the war has already begun from a military standpoint. Here's how he puts it: "It is my expectation that Saudi will now try to flood the world with oil, to drive down the Iranian revenue available to fight a war with Saudi Arabia. This will be a rerun of the end of the Soviet Union, when Saudi Arabia helped to drive prices of oil down to $10 per barrel."

Barnes sees a tremendous level of animosity between Israel and Iran, but he would add in Saudi Arabia as well. "[The lack of agreement] makes me wonder if a joint Israel/Saudi war on Iran isn't in the making." That's not a scenario we ever envisioned, but it is perfectly possible that the Saudis would end up on the side of Israel in a large Middle Eastern conflict (even in an unstated way). The Saudi Sunnis and Iranian Shias have no great love for one another and Saudi Arabia could not exist as the theocratic dictatorship that it is without Western support.

What's his third big trend? The EU of course and sovereign risk. Here again, he takes an interesting angle, pointing out that the IMF has gone on record with the statement "that it does not plan on releasing new funds until there is a major change in the Greece asset to capital loan mix." The next tranche is due in July, and Barnes points out that Greece's government will again be all but bankrupt by then – "without working capital" is how he puts it.

What are the ramifications? "A hard and fast deadline for reality to break out." Greek officials were supposed to raise some funds on their own in addition to the IMF tranches. But because the markets have generally shunned Greece, the gap between what the IMF has provided and what Greece needs has continued to grow. Either additional capital is made available or Greece goes broke, and sooner rather than later.

It gets still worse. The European Central Bank itself is the lender of last resort, but there is no way the ECB can handle a Greek default because it will inevitably entangle the rest of the PIGS. Now who or what does the ECB call on when it needs cash? Why the entirety of its national membership!

Here's our question (and Barnes'): When the ECB goes cap-in-hand to Germany (and Chancellor Angela Merkel) for a large capital infusion, what will the answer be? The Germans are very obviously unhappy now; we cannot envision the grief (and rage) if the Germans are asked to refinance the entire Union. Barnes puts it this way: "The ECB is in a game of blind man's bluff, with no exit strategy and a ticking clock."

We like this article! It touches on three great dominant social themes that we've covered in the past. (China as the navel of the world; Middle East as flashpoint of World War III; and the EU as the second-and-necessary-coming of the Holy Roman Empire.) Barnes updates them with what we would term "insightful brevity."

Let's summarize. China is the engine of the world, but we've long predicted that inflation would be that economy's undoing. If China is beginning its long (or short) collapse into a hard-landing, what does that mean for the rest of the world? We've also begun tracking the Middle East far more closely because of these phony (Western influenced) color revolutions. We think the Western elites have hit a wall insofar as their efforts to create near-term global governance. With the world spinning out of their control, the answer may be a larger war. The Middle East is a good place to start it.

Finally, there is the issue of the European Union. The Anglosphere elites are fighting desperately to save the euro and the EU in our opinion. We do believe the power elite has wanted to create a financial crisis not only in the West but around the world. They DO want chaos – but they also don't want their regional fiefdoms to fall apart. These are the stepping stones to a One World Order after all.

The world economy is bad enough, and a China crash will make it worse. We don't think Western elites are in favor of a crash at this point in time, given the breadth and depth of the current "recession" (which is actually a depression). As we've pointed out in today's other article, a war may be the only way to distract restive Western citizens from what's already taken place. The question becomes how to start one and who's going to be involved. The elites continue trying to bail out the leaky EU boat, but we're not sure that's going to be effective.

Taken together, a China crash, a regional war (perhaps nuclear) and the imminent, potential breakup of the EU presage what the Chinese like to call "interesting times." Are we imagining any of this? The near-term deadline appears to be the EU. But a EU collapse could place further pressure on the Chinese economy, leading to a "landing" of some sort sooner rather than later. And as further financial chaos sweeps the globe, Western elites might well turn to the tried and true tool of military engagement to keep control of the internationalist institutions they've already built.

This is a variant of the scenario that we think took place during and after the Great Depression. The difference is that people are much more informed now due to the Internet. We've been banging this drum for years, but we don't see any need to stop now. There is plenty going on – much more than Barnes mentions – and a good deal of it bodes ill for elite control.

Conclusion: The 20th century was a kind of Dark Age so far as we are concerned, when the elites were pretty much in charge of the levers of control. The 21st century, despite these three grim trends, portends, perhaps, a potential Renaissance and Internet Reformation. This is a "current" too.




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  Posted by Danny B on 06/11/11 11:09 AM

DB, back from food and sleep. The "weather events" that you speak of are a natural occurrence. We are in climate change, driven by the sun. Jennifer Lawsom predicted all of this. She wrote a book and was also published in Nexus. Piers Corbyn also has a good understanding of these events. Multiple tornadoes in Ca. NY Az. Ks, etc can not be explained by simple "heat". These places never had tornadoes in history. Karachi never had snow.

HAARP is like a wolf, wandering with a pack of coyotes. The sun is kicking up and causing a lot of destruction. HAARP is causing destruction in a more targeted way. It is used to induce "cyclonic" movements of air masses. The target is food-production. Sun Tzu would have been happy to have a weapon that could destroy a country's food supply from a distance.

  Posted by clark on 06/11/11 01:52 AM

running the world's only post-war undamaged economy - with all the world's resources to choose from - if a country taxed and regulated the heck out of it, it wouldn't matter how much resources were available, things would still be bad.

It wasn't being king of the hill or the amount of loot that made the difference. The U.S. could have had 100% of the world's manufacturing capacity, but if it was regulated and taxed heavily enough, there would be no prosperity.

It seems clear that Prof. Higgs (and Prof. Bob Murphy elsewhere) demonstrated why WWII did not end the Great Depression.

"What is there to say about HAARP right now? Can one prove anything?"

There's a lot to say about it, but nothing new for those who know.

Click to view link

As to proof, there is preponderance of the evidence, but that is not enough for most. There is no smoking gun.

Was there ever a smoking gun for Agent Orange, or are they still arguing about that?

There are many subjects that lack a smoking gun,... and yet. Gulf of Tolkin, J.F.K. R.F.K. Pearl Harbor, etc... etc.. etc...

I hope that reads smoothly, allergies kickin in, at least I hope it's just allergies and not some killer fungus blown in the wind from Mo.

Click to view link

Yeash, that all sounds crazy, no wonder the masses dismiss it all.

  Posted by Danny B on 06/11/11 12:34 AM

Oh Great Bell, there is proof but, not as direct as you might like. Fission and Fusion bombs were old news when; "In January, 1960 (43 years ago!) Nikita Khrushchev announced to the Presidium:

"We have a new weapon, just within the portfolio of our scientists, so to speak, which is so powerful that, if unrestrainedly used, it could wipe out all life on earth. It is a fantastic weapon."

Followed later by;

In 1997, 37 years after Khrushchev had announced the new (scalar electromagnetic) weapon U.S. Defense Secretary William Cohen gave a warning, suggesting that the U.S. had finally understood the nature and power of the weapon. He warned about eco-terrorism using scalar electromagnetic weapons

"Others [terrorists] are engaging even in an eco-type of terrorism whereby they can alter the climate, set off earthquakes, volcanoes remotely through the use of electromagnetic waves.."

Click to view link

There are plenty of references concerning Bearden, et al.

The work of Tesla is intriguing. I've copied a bit.

Tesla told Admiral Byrd that he would try to send him a signal when he was on his polar expedition. During that short time period, there was a tremendous explosion in Tunguska that wasn't easily explained.

These weapons are often incorrectly referred to as "electromagnetic weapons" The scalar field effect is not part of the Hertzian spectrum. There are other weapons that don't necessarily involve scalar fields. Good old Hertzian energies will do the job. In the paper that I referenced, it mentioned a "surplus of electrons".

Click to view link

As all of you know, you can squeeze a crystal and get a spark. The piezoelectric effect. Suppose you supply the electrons? Instead of a contraction/pressure freeing electrons,,, you supply electrons and get an,,,, expansion.

The Indonesian earthquake was a bit suspicious also. It was a movement / resonance that appeared to be very "Regular". It didn't show a normal rise and fall in amplitude. I have the Vassilatos books and will try to get some references together.

I'm sure that you're aware of the Air Force report;

Click to view link.af.mil/2025/volume3/vol3ch15.pdf

It's ridiculous to think that cloud-seeding alone could accomplish this objective.

Must EAT,,, sleep,,, bye

Reply from The Daily Bell

Hm-mm, thanks for the links. We'll have to cover it at some point. It is perfectly possible, if HAARP exists, that the idea was to reinforce global warming with actual "weather events."

  Posted by Wayne on 06/10/11 11:51 PM

"China is going to have a BIG problem avoiding damage from our "energetic" weapons. Read Col. Tom Bearden. There is much speculation about HAARP. It has long been superseded. The books of Gerry Vassilatos lay it ALL out with the patent numbers and all the rest."

The question is how far along are the Russians on their Telsa research?

Russia has a low population, but it it gets hot with the US, China can put boots on the ground in more than sufficent numbers to deal with the US Military. And the Chinese have just announced their first Aircraft Carrier.

The Anglo American Elite just might be in check now, as the Sino/Russian relaity has always been to get ready to deal with us. And China is very patient. This will either end in stalemate, or this is going to get real ugly!

  Posted by Wayne on 06/10/11 11:41 PM

"Before WW II, Germany was enormously productive,,, especially after they threw off the Bankers. Evidently, this didn't sit well with City of London. GB was losing market-share. GB wasn't up to the task of thrashing Germany. They manipulated and maneuvered until their heavyweight cousin finally entered the war."

You have no idea how true this is!

  Posted by Wayne on 06/10/11 11:39 PM

"You must consider China as a business-model, NOT as a country"

Aren't they all these days?

  Posted by Wayne on 06/10/11 11:39 PM

"You must consider China as a business-model, NOT as a country"

Aren't they all these days?

  Posted by Danny B on 06/10/11 11:15 PM

Re; the end of the Great Depression.

Before WW II, Germany was enormously productive,,, especially after they threw off the Bankers. Evidently, this didn't sit well with City of London. GB was losing market-share. GB wasn't up to the task of thrashing Germany. They manipulated and maneuvered until their heavyweight cousin finally entered the war.

After the war, America had 3% of the world's population and 50 % of the world's manufacturing capacity. Do you question why the depression ended?

Consider the world of today. China is enormously productive. I do not believe that China is yet under the control of London. The wiley Chinese will play along until they have the necessary non-US export markets well sewn up.
You must consider China as a business-model, NOT as a country. Martin Armstrong describes the U.S. as a welfare-warfare state. If China can avoid the pitfalls of various failed empires, they have a good chance of prevailing. The greatest empires were based on trade, not warfare. The Eastern Roman Empire being the best example

China is going to have a BIG problem avoiding damage from our "energetic" weapons. Read Col. Tom Bearden. There is much speculation about HAARP. It has long been superseded. The books of Gerry Vassilatos lay it ALL out with the patent numbers and all the rest.

Click to view link

Here is a very curious article about occurrences preceding the earthquake in japan.

Click to view link Radon gas,, my butt.

Strangely enough, the quake in japan occurred exactly one year after japan signed a doc condemning settlements in Jerusalem. Also a strange coincidence; The earthquake in Haiti occurred 2 weeks after Haiti was the first country to walk out on the global warming conference. Also strange that it wasn't felt outside Port au prince. John Bedini detected the STRONG scalar fields at the time of the earthquake. All very interesting

Reply from The Daily Bell

"I do not believe that China is yet under the control of London."

This is a very important question!

What is there to say about HAARP right now? Can one prove anything?

  Posted by Wayne on 06/10/11 10:11 PM

Very Good Critique.

And now we are in are real Catch 22, in that it would financially impossible to begin to escalate current military payroll to remove a massive number of people from civilian database.

They precluded that option when they went to the Voluntary (Mercenary) model.

The TSE fraud is the real substitute, and that's not working either.

And China may not put up with further military adventures on our part.

Trapped in a Box Canyon!

  Posted by isalcordo on 06/10/11 09:26 PM

You should not be surprised. All religionists are by the God-Father doctrine must be Socialists (Marxst). The difference is that Political Communists worship the STATE as God, whereas the Religionist are Socialist, for the sake of God, by desiring to use his wealth and power in the service of his less fortunate fellowmen in the name of God.

  Posted by clark on 06/10/11 09:02 PM

DB said, "But to suggest that "winning the world" did not have a stimulative effect on the US economy is in our view naive."

I guess it depends on what you mean by, stimulative.

From the second link:

"The fly in this ointment, however, is that the lesson almost everyone has drawn from the events of the 1940s is false; the common belief is a myth. When we take apart the simplistic Keynesian analysis of the war's effect on the economy and look carefully at what actually happened to the various components of the labor force, the capital stock, and the gross domestic product, we see that the economic events of the war years represent a classic case of a command economy's sacrificing butter - not to mention life, liberty, and property - for the sake of producing and deploying more guns.

A single graph suffices to give us a more accurate portrayal of the economy's performance in the 1930s and 1940s (for a complete analysis, see the first five chapters of my 2006 book Depression, War, and Cold War)."

[Did you read the book?]

"As the graph shows, real GDP dropped sharply in the early 1930s, then recovered rapidly after 1933, but it did not reach its high-employment growth trend until 1941, when the nature of the economy's output (shifting rapidly into war production) was beginning to obscure the meaning of data that purport to measure "real output." If we accept the standard data, a huge war boom appears to have occurred during the war years, followed by a sharp downturn, concentrated in 1946, after which the economy moved closely along its high-employment growth trend (shown in the figure by the straight line connecting the [logarithms of the] values for 1929 and 1948).

Looking at the private part of GDP - the part with a much clearer meaning, owing to its derivation from freely-made consumer and investor choices about the use of privately owned funds - we see a similar pattern during the 1930s, but a completely different pattern during the 1940s. After 1941, private output of both consumer and investor goods fell to much lower levels and remained submerged far below the high-employment growth trend throughout the war years. Private real output did not exceed its 1941 rate until 1946, when it shot up by about 30 percent in a single year. Afterward, the private economy moved closely along its high-employment growth trend. Real prosperity had been achieved at last, for the first time since 1929.

But wait, the critics protest: didn't the war wipe out mass unemployment? Of course, it did. However, this elimination of mass unemployment had nothing to do with Keynesian fiscal policy (or, for that matter, with the concurrent, highly expansive monetary policy) and everything to do with the military draft, which pulled the equivalent of 22 percent of the prewar labor force into the armed forces. If the economy has 5-7 million persons unemployed, then drafting 10 million prime-age workers (and thereby inducing millions of others to enlist "voluntarily") will "solve" the unemployment problem every time. To use the same policy today, the U.S. authorities need only to conscript about 30 million men - not, I daresay, a political idea whose time has come.

Indeed, the idea is preposterous, and so, more generally, is looking to the government's alleged "large public works program, otherwise known as World War II" as a model of how to deal with today's economic crisis. Rather than allow ourselves to be mesmerized by a statistically spurious bulge of real GDP during World War II, we are better advised to recall the wartime rationing of many ordinary consumer goods, the shortages or complete production closures of many consumer goods (e.g., automobiles, most consumer durables), the preemption of public transport by the military authorities, and the wage, price, and rent controls that caused, among many other undesirable consequences, drastic deterioration in the quality of many goods and services. Whatever else the war might have accomplished, it certainly did not produce conditions that we may properly describe as genuine prosperity."

Reply from The Daily Bell

We are aware of the arguments. And we did not argue that the war had a stimulative effect. if your post is aimed at DB, you have misfired. We made a statement on this thread that the POST-WAR period that saw the US dominate the world (as it had the only large, un-bombed economy) was probably conducive to prosperity. At one point, post war, the US's world market share of goods and services was up in the area of 50 percent, or so we recall. Again, to maintain that running the world's only post-war undamaged economy - with all the world's resources to choose from - did not have a certain stimulative effect is naive from our humble point of view. This was when the dollar came into its own as well ...

  Posted by Wayne on 06/10/11 07:50 PM

Well, where else on the planet is there a group that will always pay, pay, pay, just for the illusion thet they are "Making the World safe of Democracy"

To even entertain the thought that they, as Americans, are being had is just too negative a concept to handle.


After all, we are a "People Of Exceptionalism"

I'm suspicious that this may really mean that we are exceptionally stupid, but that's not a popular theme with the volk at this time.

  Posted by United on 06/10/11 07:32 PM

The PTB can't start a major war before the countries that have said they will close their nuclear power plants have done so. Then a war in the ME will have the required impact of depriving the developed, largely northernly countries of fuel. Bad at any time and worse of course in the winter

  Posted by Lowell L Morse on 06/10/11 07:19 PM

The Sads, know which side the bread is buttered. They will work with the US and the US will send them billions of dollars like Isreal.

This has nothing more to do then money. Tribes no. Peak oil, no oil....the Sads will be richly repaid by the American taxpayer.

Right or wrong?

  Posted by Wayne on 06/10/11 06:06 PM

This may relate to the big picture ... Rremember all the drama about Tibet, and the Communist Chinese takeover? Well, it turns out that the story wss a little distorted. The Dalai Lama turns out to be a Marxist, in his own words.

Click to view link

Imagine that! A nice monk like that turns out to be a Commie! Go Figure! So Tibet was Communist!

  Posted by Wayne on 06/10/11 05:53 PM

True.

It'd getting interesting now, or very weird, depending upon your point of view.

But there is no doubt the the Sleeping Dragon is now awake, and hungry.

  Posted by freedomroad on 06/10/11 05:24 PM

Hi;

Just like to point out that Iran was admitted to the China/Russia mutual defense pact Shanghai Treaty a while back, which means that any attack on Iran would be taken by China/Russia as an attack on them and they would need to retaliate. Bottom line on this is that attack on Iran extremely unlikely without triggering a very Major war.

Reply from The Daily Bell

Neither of these countries have come to the aid of allies such as Libya or Syria among others. And America does not rule out an attack on Iran ...

General Dagan is worried about attacking Iran, but not because of an Treaty ...

Dagan: ‘We better not attack Iran’ ... Posted on January 9, 2011

Israeli Mossad’s top assassin, Gen. Meir Dagan in a briefing on his retirement has warned the Zionist regime that attacking the Islamic Republic, before Israel is under attack, would be a fatal mistake (especially without the active participation of the US forces). “Israel should not hasten to attack Iran, doing so only when the sword is upon its neck,” said Dagan. ....


General Dagan doesn't seem to believe the Treaty is an obstacle.


  Posted by Wayne on 06/10/11 03:22 PM

"This all makes sense, a new war is needed and a big one is in the works. I like it when the DBl make it opinions crystal clear and I believe the nail was hit squarely on the head in the piece."

It's called Demand Management.

Remove/reduce a lot of unemployment/underemployment via killing off some through war, and increasing the demand for new construction (blow 1/2 of everything that exists up), and employment for the survivors.

Works everytime, if you don't mind a chance of winding up a "casualty", or liked where you were living!

But these are only petty personal hangups. Don't want to get selfish here, now do we?

But wait, there's more.

Your family then gets a free flag, a few pieices of metal (Medals), an lovely military funeral to attend, and some mention in the local newspapers.

Maybe even a parade, and some speeches from the local politicos.

Talk about Sound and Fury Signifying nothing.

  Posted by Wayne on 06/10/11 03:08 PM

"I beleive that although dominant in many areas, the anglosphere PE are only a subset of the global PE, with the same power crimes abounding despite the differing packaging or style, so the real war is between those who would seek dominion over another and healthy folk."

This is the scary part.

Just who is the real power?

"Who is Number ONE?"

The Prisioner!

Has anyone in all history ever known the answer to this?

  Posted by free on 06/10/11 03:06 PM

This all makes sense, a new war is needed and a big one is in the works. I like it when the DBl make it opinions crystal clear and I believe the nail was hit squarely on the head in the piece.

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