Recession, What Recession?

July 18, 2001

The American economy will have collapsed before the powers that be admit there is even a problem. You have to admire Mr. Magoo and his comic relief team in their fetish like refusal to say the R word. Mr. Magoo may be old and in my opinion exhibiting early stages of what I call Mad Economist Disease, but the man is going to play his cards until he falls into the abyss. Unlike Wily Coyote of Roadrunner cartoon fame, when the American economy and Mr. Magoo go over the Grand Canyon ledge it will hurt. No cartoon like puff of dirt when the economy smashes into the ground. No Wily Coyote getting up out of a six foot crater and dusting himself off. Nope, this time Wily will need a Medevac helicopter and swift access to a trauma center.

You would never know the American economy is even struggling by reading the mainline New World Order media. Oh sure, if you have the time and willingness, like I do on your behalf, to actually read the whole article you find out the truth. Or at least the rumors behind the news as Firesign Theater used to say back in my youth. You will find out things like American manufacturing jobs now equal the level of 1965 for instance. Things like manufacturing capacity is around 77%, or the index is way below 50%, or manufacturing has been in technical recession for the last eight months. The economic reality expressed by these facts is usually glossed over with a thin veneer of optimism that things will soon get better. Now that the mythical second half recovery has failed to appear we are being told we need to wait till 2002. After the 2002 first half recovery doesn't appear we will dutifully be told to wait for the second half. By that time we should all be living in debtor's prisons and eating Top Ramen Noodles over our dog food.

The summer travel season hasn't turned out quite as planned either. It seems airlines are not selling tickets, hotels and motels are not selling rooms and people are actually cutting back spending on travel and tourism. Not to worry say the bulls because none of this objective economic reality will show up in reduced earnings for the companies providing these services. And certainly, the bulls assure us, not in their stocks. I guess you have to be a doom and gloomer to realize reduced corporate earnings lead to a reduced stock price.

Life is strange and mysterious in many ways. One of the ways it's strange is the sudden ethical purity of Wall Street stock researchers. How many television ads have I seen touting the honesty and integrity of stock researchers in the last few weeks? My personal favorite is the one where the guy looks straight in the camera and says "buy means buy and sell means sell." Not exactly. Buy means whatever stock the Wall Street Firm is pushing and sell means whatever stock they have already gotten out of so they don't care. Interesting that a wave a lawsuits is now heading towards Wall Street brokerage firms charging investors were manipulated and conned. Not that I think Wall Street and the stock market is corrupt or rigged or anything mind you. If it were corrupt and rigged it would be like the precious metals market, and we know the government would never allow that.

It must be a character defect of mine that I actually think qualities like honor, integrity and truthfulness actually matter out here in the real world. So it's with a sense of morbid fascination I watch the circling of the wagons on Wall Street. The Lords of Wall Street and corporate America are starting to get nervous at the prospect of a post bubble society. The corrupt status quo has been very good to them and they are worried the rabble will get roused once the economy gets really bad. The elite control the politicians, judges, media and the rest of the system now. What they are worried about is a genuine Great Depression that shakes people out of their apathy and reawakens their lust for placing blame. It's an historical fact that the elite in charge at the time of the 1929 stock market crash and ensuing Great Depression didn't fare too well. Once the unemployment rate goes over 10% even the dazed and confused American populace will start to get restless. The American people will tolerate almost anything as long as the economy is good, but when the economy is bad, they will tolerate nothing.

The Great Economic Withering is what I've decided to call it. It's been going on for nearly thirty years in terms of declining fiat money purchasing power. In August 1971 President Nixon committed economic treason by repudiating the gold standard. The 30th shameful anniversary is soon upon us. In that 30 years the purchasing value of the fiat dollar has declined nearly 700% by my feeble reckoning for the things that actual people really use. Not the fantasy figures released by the economic jesters in the Labor Department, but the cars, houses, food and entertainment people buy. For instance, in 1972 we bought a Ford 1 ton truck for $4000; anybody think you could get it for under $30,000 now? By my reckoning, the American people have been sodomized by the Federal Reserve and the hack politicians and are too stupid to even notice.

People are starting to notice even crap jobs are getting harder to find. They are noticing their 401k plans are losing money and stocks have lost big money. At what point the debt fueled economic fantasy comes to a grinding halt is unclear. But it will all come crashing down around our debt bound heads one of these days. Charles Dickens once said that "to own a man's debt is to own the man." Words to the wise in these days of political squalor, economic debauchery and a looming MidEast war. Look to your defenses, economic, physical and spiritual and then enjoy life as best you can.

A medical study in France during the early twentieth century suggests that gold is an effective treatment for rheumatoid arthritis.

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