BLAME GAME BEGINS AS NEW AUSTERITY MEASURES HIT AMERICAN SHORES

As I predicted some six months ago, the train wreck called sequestration had finally derailed and with it, the American economy. Hold on tight folks because things could get scary fast. We are facing multiple crisises, almost all of which were our own undoing. We have failed and miserably at that because we decided to do nothing to fix the problem, while Idiot America bought into the Kool Aid the Tea Party was selling. We have no one to blame but ourselves for the Depression that may be fast approaching.

That so called "recovery," of which I heard yet again twice on the news last night, is not coming. I heard yesterday that housing sales were up, the stock market is reaching record highs, unemployment was dropping and consumer confidence was going up. None of that is true.

According to the government, consumer spending rose a whopping .1% last month and everyone started celebrating. This strikes me as odd as almost every major company reported horrific sales over the last two quarters. My guess would be the elites are buying things just fine, like houses which they are flipping or renting causing this illusionary housing boom. Car sales are indeed up, but if you look at the figures, it's the high end cars selling while the middle class has all but stopped their purchases of new vehicles. So rich people are doing great. The rest of us are starving.

Wal-Mart is having trouble stocking shelves because the products are not moving. Perishable items are rotting and the stores are lacking the capital to replace them as they are a total loss. Lately, according to insiders, it is taking weeks, months, even years to pass off some items. If this continues, and every indication is that it will, some stores may look like they are going out of business. The sales for the last two months have been just awful. This trend is expected to continue.

The IMF is warning the US that of these cuts go through as planned, growth will fall by at least half a percentage point and we may face similar problems as Europe. I find this funny because the Republicans are constantly bitching about the health care system throughout Europe, which works better then here by the way, yet wish to implement the same austerity measures that never work.

If we look at places like Ecuador, Venezuela or even Iceland, we see that if we DO NOT use austerity but instead tax the rich and corporations to a fair standard, arrest the people involved with defrauding the country, seize ALL of their assets and give people a much needed raise, the economy will rebound just fine. One of the reasons we demonize Hugo Chavez isn't because he's a dictator (he isn't as their elections were less fraud filled than ours have been), but because he nationalized the oil and banking industry and shut the US out of billions of dollars that they would have stolen from the country instead. There is also the rumor that the US tried to assassinate him at one point, which wouldn't surprise me in the least.

Latin America may have the smartest people on the Earth as they are the only group of people to demand respect from their politicians and get it. Ecuador went through a Depression so severe that one in ten left the country. Since then, the country has rebounded tremendously by a "Citizen's Revolution" that made the politicians cut poverty by a third and extreme poverty by 45%. Unemployment has been reduced, while social programs like health care, Social Security and education, which now provides free college, have been expanded. Outsourcing is illegal.

All that was achieved with a country with limited resources by making the elites and corporations pay their taxes, regulating banks and oil companies severely and doing other things that the "free market" does not allow. Incidentally "free market" is just a re-imagined word for fascism as it allows control by the corporations over all aspects of life. As we can see here, by getting rid of such bull, society can flourish.

 

But the Tea Party and the GOP are demanding things like tax cuts for the rich and severe austerity measures that have all but bankrupted Europe. But countries that have rallied against these idiotic measures have flourished. So which should we go with, the plan that fails 100% of the time or the one the actually works?

Because of this nonsense, many are saying the stock market is likely to crater soon, and I also think that that is exactly what is going to happen. Walter Zimmerman, of United-ICAP and an expert on global energy markets, issued a stern warning yesterday about up upcoming stock crash he says is inevitable. Here is what he had to say:

 

“Every reliable technical tool is warning of major peaking action. This includes sentiment, momentum, classical chart patterns, and Elliott wave analysis."

 

“Most of the rally in the stock market since 2009 can be chalked up to the Federal Reserve’s attempt to create a ‘wealth effect’ through higher stock market prices. This only exacerbates the downside risk. Why? The stock market no is longer a lead indicator for the economy. It is instead reflecting Fed manipulation. Pushing the stock market higher while the real economy languishes has resulted in another bubble.

“The next leg down will not be a partial correction of the advance since the 2009 lows. It will be another major financial crisis. The worst is yet to come.”

So here we have a guy whose job it is is to predict market fluctuations noticing what many of us already knew: the stock market is rigged. It is being manipulated to create a false positive in the economy and misdirect everyone from the problems at hand. It's like a really bad magic act where you can see the pigeons in the magician's sleeve. Only here we are the pigeons being stuffed into places we don't belong.

Another noted economist Chris Martenson, who holds a PhD in neurotoxicology from Duke and a MBA from Cornell, is saying much the same doom and gloom scenario echoed by Nouriel Rubini and Zimmerman. Here are his own words:

 

"I don’t relish the job of constantly pointing out the risks to the equity markets. But since few on Wall Street seem willing (or able) to do this, I’m “making the call” for a market correction, as enough variables have aligned to indicate a high likelihood of stocks heading downwards from here.
I’ve only given one other such warning about equities before, and that was in March of 2008, when I warned of the possibility of a 40% to 60% decline in stock prices by Fall. I am making a similar call today, with the understanding that I am usually a bit early to the game with my views.

Before I get into the details, the broad outline is that I see a case where speculative fevers, propelled by the Fed’s $85 billion thin-air money printing program, have more or less run their course, with the Dow and S&P indexes stalled near their all-time highs. That is, $85 billion a month is what it takes to merely keep the Dow near 14,000 and the S&P 500 near 1,500.

Technically stocks are overbought. Fundamentally, the picture is even worse: they are facing a litany of economic drags (including weakening GDP growth, higher taxes, the impact of Obamacare, sequester cuts, high gasoline prices, chronic unemployment, etc.) and robust insider selling.
  
For all of these reasons, equity markets face a very high chance of falling over 40% between now and fall of 2013. (Yes, I’m aware of how extreme a price prediction this is.)"

We know that billionaires are dumping stock at a fifty to one ratio. What does that tell you about the future of the market? When those that know start selling, maybe you should follow. If you sell soon and buy low when the market craters, you could make a fortune which is exactly what the elites will do.

With sequestration and a looming government shut down at the end of the month, things could not look worse. Make sure your idiot friends who still think the Republicans are worth electing know this as well.