Monday, October 17, 2005

Signs of the Economic Apocalypse 10-17-05

From Signs of the Times 10-17-05:

Gold closed at 472.20 dollars an ounce on Friday, down 1.3% from $478.30 a week earlier. Oil closed at $63.76 a barrel, up 3.1% from $61.84 a week earlier. The euro closed at 1.2079 dollars on Friday, down 0.4% from $1.2124 at the previous Friday’s close. The dollar, then, would be worth 0.8279 euros, compared to 0.8248 the week before. Gold in Euros then, would be 390.93 euros an ounce, down 0.9% from 394.50 a week ago. Oil would be 52.79 euros a barrel, up 4.2% from 50.64 a week earlier. The gold/oil ratio ended at 7.41 down 4.3% from 7.73 the Friday before. In the U.S. stock market, the Dow Jones Industrial Average closed at 10,287.34 down .05% from 10,292.31 at the previous Friday’s close. The NASDAQ closed at 2,064.83, down 1.2% from 2,090.35 the Friday before. The yield on the ten-year U.S. Treasury note closed at 4.48%, up 13 basis points from 4.35 the week before.

If you haven’t listened to the Signs of the Times podcast this past weekend, where a eurozone banker is interviewed on the coming crash, click here. It really says all that needs to be said about the situation we find ourselves in. The banker points to the complete lack of any value in any of the usual kinds of assets. The collapse, when it comes, will be no mere "downturn." It will be the complete collapse of a world economic system centuries in the making, and one which will be impossible to for individual families to avoid or survive using any of the usual means of financial prudence. What is worse, he argues, the people who do have enough knowledge and power to prevent such an event, are actually pushing the pedal to the floor of the economic bus so that, when it goes off the cliff, there is no hope of saving it. That is the reason why the economy keeps chugging along far past the point where any analysis of the fundamentals would indicate a crash. Like that bus, we may have already left the road at the cliff but we may still be traveling forward for that brief moment before the drop.

What we can do is keep our wits about us, hold our space and not be deceived. Since we are entering times for which there is little precedent, our normal instincts and reactions cannot be trusted; we need to stay open to different possibilities that may appear if we can maintain our discernment.

This past week, Gold lost the ground it gained the week before, due in part to the release of some dubious "good news" on Friday:

Budget gap narrows to $318.62 billion

WASHINGTON (Reuters) - The U.S. budget deficit narrowed to $318.62 billion in the 2005 fiscal year on a big rise in revenues, the Treasury Department and the White House budget office said on Friday.

The budget deficit was 2.6 percent of gross domestic product, a Treasury Department official told reporters.

The deficit was the third-largest on record, smaller than the record $412.85 billion shortfall in fiscal 2004 and the $377.58 billion gap in fiscal 2003.

September's budget surplus rose roughly in line with expectations to $35.76 billion after a surplus of $24.61 billion in September 2004, Treasury said.

Revenues climbed to $2.154 trillion in the fiscal year on a surge in corporate tax collections, up from $1.880 trillion in fiscal 2004. The 14.6 percent gain in receipts was the biggest increase in 20 years, the Treasury and the White House budget office said in a joint statement.

Outlays rose to $2.473 trillion from $2.293 trillion.

Spending on reconstruction and aid after havoc-wreaking hurricanes on the Gulf Coast added an estimated $4 billion to spending in September, a Treasury official said.

"While the effects of Hurricanes Katrina and Rita will be felt in the short term, we remain on a path to meet the president's goal of cutting the deficit in half by 2009," Treasury Secretary John Snow said in a statement.

Stronger-than-expected revenues improved the budget picture considerably. The administration had originally forecast a deficit of $427 billion, and in a mid-year report put the likely shortfall at $333 billion.

U.S. deficits have averaged 2.1 pct of GDP since fiscal year 1960, the Congressional Budget Office said on Thursday.

It’s hard to take such numbers seriously, but they did provide an excuse for a small drop in gold and rise in the dollar last week as people wait to see whether the Bush Cheney regime in the United States can survive the fierce behind-the-scenes struggle going on now within the kleptocracy, that is coming to the surface with the Plamegate investigation and the collapse in Bush’s popularity, with large percentages of United States citizens favoring impeachment. There are even rumors of a split between Bush and Cheney as the political class speculates about which figure’s chief assistant will be indicted first. We seem to be in a poker game in which most of the cards are wild.

Here’s Steven Lagavulin:

My money says what we're watching are the symptoms of a developing civil war within the corporatocracy as the globalist-empire agenda begins to falter. On one side is the committed-and-cornered Neo-Con faction, which pridefully thrust itself to the forefront and now has to find a way to salvage a project that's coming apart at the seams. On the other side of this same coin are the corporatists who didn't expose themselves quite so blatantly. They see the desperation of the situation and are now trying to backpeddle, blamestorm, and cover their butts so they can continue with business as usual. But of course retreat is never that simple. So in the process they need to jettison the Neo-Cons as a scapegoat for the public sacrifice....and the Neo-Cons undoubtedly have no intention to playing that patsy.

Now how the insurgencies within the various intelligence agencies and military departments play into all this is anybody's guess. But one thing is for sure: the break-away move, one way or the other, will happen in the Middle East.

…And the pressures don't stop with the White House, either. Other imminent deadlines and tipping-points that are coming soon include:Winter Fuel prices are already up over 50% and won't stop there. Gasoline prices have destroyed Bush's approval-ratings and consumer-confidence levels. Further disruptions from Katrina and Rita are working their way down the pipeline, notably in industrial producers like the chemical and plastics industries.

Much of world is already dumping U.S. dollar-denominated assets, and the next leg down for the dollar is widely expected to begin soon.

Iran is...well, Iran is Iran.... They're fundamentalist-ically opposed to the U.S., they won't stop their nuclear program, and they've got an oil-exchange waiting to be bombed before March.

The internet may begin to be split apart next month - the world doesn't think the U.S. can be trusted with it any longer. It turns out the ultimate symbol of distributed architecture and redundant processing was actually just a centralized monopoly all along. Hmm. Go figure.

All in all, many analysts including myself remarked late last year that 2005 was shaping up to be a fundamental turning point for human society. Well, those suspicions are certainly bearing out. And the many significant "shocks" we've experienced so far have really done nothing at all to halt the increasing pressures. So for instance, if we look at the major story for 2005--the destruction of New Orleans by Hurricane Katrina--we see that the over-arching social "lesson learned" might have been "Together as Americans, we can overcome great tragedy". But it wasn't. The over-riding lesson was something more along the lines of "Oh my God, there's No One at the helm!". Thus the shock to our system didn't serve to lessen or resolve any of the societal anxieties or pressures. It actually increased them.


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