The Perfect Storm

November 13, 2000

Recent events are lining up for an economic and political crisis of global proportions. Anyone not living in a permanent stupor must be nervous about the current situation. The $%^#$ has hit the fan and boy, it's flying everywhere.

The title of this essay comes from the book "The Perfect Storm" by a Mr. Junger. I recently found the book on a park bench and read it. It's a hell of a read. I then saw the movie version and was suitably impressed with the storm special effects. Briefly, the story is about a sword fishing boat, the Andrea Gail out of Glouchester, Mass, that through of combination of greed, stupidity, macho illusions, bad luck, fate and bad timing finds itself in the middle of the Perfect Storm in 1991. The Perfect Storm is a convergence of three weather fronts that unify into one huge storm. One of them is a hurricane coming north from the Bahamas; the other a cold front coming south down from Canada and the final one, a cold front coming east from the Great Lakes. The result is the Andrea Gail, with its six men, is completely destroyed. All that has ever been found is some debris.

As I go about my routines of life in these increasingly bizarre days, I'm struck by just how much chaos lurks beneath the surface of this so called goldilocks economy. For instance, Mr. Daley, Al Bore's campaign manager, merely opens his mouth about lawsuits and the stock market goes down 200 points within ten minutes. Mr. Daley, he's the one who fainted during his Commerce Secretary appointment news conference, doesn't seem to understand our current economy is all based on psychology. No positive psychology; no positive economy.

The first great weather front heading our way is the general economic condition. We have an economic hurricane of high debt, poor quality borrowers; massive leverage smothering all sectors of the global economy, and the American economy in particular. Many GOLD-EAGLE.com pundits have commented on various aspects of excessive credit creation, especially from the Austrian angle. In plain English, everyone and every institution is up to their necks in debt. The general, widespread condition of people, corporations, government, stock markets and anything else I can think of is that of a person trying to tread water in a quicksand pit. Credit and debt does not of itself cause the kind of economic chaos we are going to see shortly. It merely allows human greed and stupidity free rein to cause the kind of economic chaos we are going to see shortly. Clear?

The second storm front headed our way is the immediate political and economic situations in the United States of America. While the United States is not currently in a Constitutional crisis, we are on the verge of one. Assuming Mr. Bore refuses to accept the Florida recount on Friday, November 17th, 2000, the prospects of economic and political chaos in the USA rise markedly. Refusal to concede, by either candidate depending on the final tally, will lead the country into a several week, or even month, period of political uncertainty. Will there be a new President on January 20th or not? Will the Child King use the chaos to declare martial law and extend his reign? If he does so, will a disgruntled military overthrow him? Will the stock markets and economy collapse? Will our enemies attack a distracted, divided and weakened United States? Will a bitterly divided country tear itself apart?

I don't know the answers to these questions. I do know that after November 17th, everything is in play if the politics doesn't stop. Half of the American people didn't even vote. The other half split 24% for Gore, 24% for Bush and the rest for Nader and Buchanan. Unless we find a civil and rational way to settle this, we are looking to the destruction of the stock markets at the very least. In the worst case, we are looking at civil war and military dictatorship. Yeah, this stuff has real consequences out there in the real world. In a lot of other places on the globe, the shooting already would have started.

The third storm headed our way is the MidEast. I know, you forgot all about it during the election hysteria this week. Too bad! There is no likely way for any kind of a cease fire, peace deal or even a slowing down of the momentum to happen now. The cycle is locked on the auto pilot mode. Aside from our general economic conditions; the specific political insanity we are going through right now-there is still the looming prospect of regional war in the MidEast. Here's why. Iraq and Syria are warming up to each other and the junior Assad is inexperienced. He's quite willing to respond to Israel attacking Lebanon. Iraq has over 60,000 troops on the eastern Jordanian border, close enough to liberate Jordan if an attempt is made by the PLO to overthrow King Abdullah. Iran is moving to increase support for Hamas and Hezbollah in southern Lebanon. Hamas and Hezbollah are threatening a war on Israel. Libya is destabilizing Egypt. Saudi Arabia and the Gulf States are terrified things will get out of control.

It gets worse. Israel has three German submarines now armed with nuclear tipped cruise missiles. They are now willing to use their helicopters to target PLO leadership. Israel is tired of the killing and intends to make the PLO pay for the uprising. Who knows what will happen on November 15th? The violence is increasing week by week, slowly dragging in all other Arab governments. The prospect of a war to liberate Jerusalem is becoming ever more probable as the violence continues. Look for two key things before a war. The first is Turkey abandoning its mutual defense pact with Israel. This will free up Syrian troops on the Turkish-Syrian border. The other is for Egypt to deploy combat troops onto the Gaza Strip-Sinai border and cancel the Camp David treaty. If either, or both of these things happen, then war will not long be delayed.

The stock markets should have an interesting Monday the 13th. No doubt the oligarchic cabal will have met all weekend. Maybe they want the stock market chaos to further their goals of total control? Or maybe Mr. Gore has discredited the system and made them look like fools? My fictional Ma and Pa Kettle must be reaching for the Prozac this weekend. The NASDAQ is hovering above the 3000 level, with the NASDAQ 100 at the abysmal 2900 level. For the record, the NASDAQ high was around 4200 in March. The subsequent drop has been over 40% in value. In other words, technology, Internet and the New Economy mumbo jumbo have been gutted this Y2K year. Now aren't you glad Y2K turned out to be nothing? I mean if it had, the NASDAQ might have lost 40% of its value. OOPS! The NASDAQ did lose 40% of its value!

Will the elite be able to hold the rabble in line next week? Will the rabble panic and view the looming prospect of political chaos as the cue for a stock market crash? Will Bill and Hillary sleep together in the Lincoln bedroom? Will Al Bore and Bush Leaguer act even more like spoiled, rich brats than they have since Tuesday? Will the world stop laughing at the United States long enough to dump their dollars? Will some other completely unexpected, off the wall event happen that will cause even more lunacy? Stay tuned. Same Bat channel. Same Bat station.

Gold is still being mined and refined at the rate of almost 2,600 tonnes per year.

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