Wednesday, October 26, 2005

Oncoming Economic Collapse?

It never ceases to amaze me how many armchair experts will prattle away at how healthy the economy is, without taking a look at the bigger picture. Massive foreign trade deficits seem to be the signature of Western economies, yet this is somehow taken as a "good thing". Take Australia for instance. From ABC Radio:
STEPHEN LONG: The mines are working round the clock. The terms of trade are the best in decades. Yet Australian is in hock to the world, big time. Our net foreign liabilities now equal to two-thirds of the economy's yearly output. [...]

ALEX MILLMOW: Fifty per cent of our mining sector's now overseas owned and it would have been higher if Costello hadn't rejected the Woodside Petroleum takeover.

STEPHEN LONG: So far servicing the foreign debt hasn't proved a problem, but economists are warning that could change if sentiment shifts and those foreign investors take their money elsewhere.
For some reason, most people in Australia don't seem worried about this. A few don't care, and the most just see a Federal budget surplus and postive GDP growth as being the be all and end all. Never mind our decimated manufacturing sector:
"Clearly, something different is going on in manufacturing," Mr Pensabene said. "In the 12 months to August, the overall economy added 352,000 jobs. In the same period, manufacturing lost 46,800 jobs."
"So what?" the blind optimists cry, "Construction and housing are bigger than ever". So where exactly is the money coming from that's fuelling the construction/housing boom? The Reserve Bank of Australia says:
The growth in housing debt is, however, also partly explained by an increase in the number of households with housing debt. Although comprehensive time-series data are not available, the number of households with owner-occupier housing debt appears to have increased by over 40 per cent since 1996, considerably faster than growth in the total number of households. With the share of households that are owner-occupiers remaining relatively stable over this period, the result has been an increase in the share of owner-occupier households with housing debt. [...]

The upward trend in the share of owner-occupier households with housing debt reflects a number of factors. One is that households now have larger debts relative to their income than was the case previously, and therefore the average time taken to pay off the debt is likely to have increased. This is particularly the case where households draw down home-equity loans, or refinance and take on a larger loan when the value of their property rises. A second reason is that there has been an increase in the share of households owning investment properties, with investors – who are typically (but not universally) owner-occupiers – often having some debt secured on their primary residence.
Ie - Australians are borrowing bigger loans on their existing houses so they can buy more houses, hoping to make a killing in the real-estate market. This surge in demand artificially drives up the prices far beyond what the houses are actually worth. And the RBA policy of low interest rates only fuels demand, as the credit to purchase these houses with is easily available. So where are the major banks getting their money from?

They aren't getting it from anyone - they create it. Yes, you heard me correctly. Banks in Australia have a license from the government to "print money". Of course, that money is nothing but numbers in a computer system - the issuing of coins and paper notes is a different matter - but the net effect on the economy is the same. Essentially, banks are giving people an illusory mandate to buy houses (based on their 'future income' as specified by risk-managed employment profiling). So any so-called "economic growth" based on housing construction is likely just hot air from a bunch of bankers!

How does this relate to any economic collapse though? Well, a similar system is in place in the USA, only it's waaaay bigger. No real "wealth" (ie. valuable stuff) is being created, only "money" (the medium of exchange), thus it's all just a big fat bunch of lies. Yet the system has worked so far because real economic principles (basic stuff like supply and demand etc) are extrapolated out into a gigantic system of lies, which people believe. However, the real principles can only be stretched so far, and when enough cracks appear in the illusion, more people suddenly start acting in accordance with reality. This then causes the entire system to collapse into chaos, with a sustainable system aggressively reasserting itself to the detriment of people's lives and living standards.

Are such cracks appearing in the US economy? I think so. Recently a major US real estate investor began methodically selling off his portfolio. Alan Greenspan is retiring after umpteen years as Federal Reserve chairman, and Bush has just made his new appointment to the position. Plenty of other indicators are summarised quite well IMO by "Fractal economist" Gary Lammert (quoted from
The stress point of credit deceleration and contraction in a house of cards financial system dependent on continuous credit expansion has resulted in the tremors and shaking of the US composite equity valuation since 3 August 2005. These rumblings have been the warning quakes of the deluge soon to come.

In several months, the probable valuation decline will, retrospectively, be seen to fit perfectly well with the emanating economic data that is now occurring and is so very apparent to those with eyes wide open: the bankruptcy of venerable smokestack and airline industries; the inflationary energy cost pressure placed on America's new bell weather distribution industry, Walmart; the outsourcing pressure on America's higher paying manufacturing and technological jobs; the saturation and overvaluation and higher property taxes associated with the Real Estate South Sea Tulip industry; the narrowing of long and short term interest rate spreads decreasing lenders' profitability; the recent bolus of bankruptcy filings; the massive current account deficits whose continuation is wholly dependent on the cash strapped American consumer and his now cresting housing valuation debit card; the sharply falling consumer sentiment and general confidence in the future; the empty sales rooms of American automobile distributors; the mass of hopelessly insolvent corporate and city pension plans; the overly generous entitlement programs whose sustainability are squarely based on continued consumer borrowing and spending and a lower paying service economy to maintain future GDP growth; the recent ongoing derivative dealer debacle which is but the tip of the iceberg, and the historically low cash reserves in mutual funds. How could anyone miss the ongoing macroeconomic data occurring in our ENRON nation?
If the US economy goes, so will Australia's (and probably most of the globe's) because it is based in the same flawed system of fantasy that believes creating wealth out of thin air is both possible, and commendable policy!

Myself, I'll be looking to buy up a bit of gold. The next few months promise to be very interesting indeed.

Sunday, October 23, 2005

Bird Flu Blues

If you asked me what the MSM's favourite topic was during the month of October to date, "bird flu" would have to be a major contender. Check out Sunday's website offerings from Fairfax and News Limited respectively:

And some people claim the media are sensationalist! Surely not! I particularly like the subheadlines in the Australian - "NSW considers flu lockdown plan" and "Bird flu risk here 'almost non-existent'". Seriously, WTF? An "almost non-existent" threat that the state of New South Wales needs a "lockdown plan" for? Sounds almost like another subject - terrorism.

Perhaps they could combine the two for a real double-whammy! How about:

  • "Al Qaeda target free range farms in bird flu terror strike"

  • "New Bin Laden tape surfaces - garbled references to 'feathered friends' hides sinister bird flu plot"

  • "Saddam's Bird Flu labs: 'Powerpoint' Powell claims 'the napkin proves it'!"

  • Seriously, why the focus on bird flu all of a sudden? Is the public being prepared for something in the near future?

    Saturday, October 22, 2005

    Caught Red-Handed

    Yesterday I posted about news from the last two months, and one of the most striking articles IMO was the British being caught faking terror attacks. Well, guess what? Iran is now claiming it has proof that the poms are doing it in Iran, too. Of course, the Blair government completely rejected these claims.

    But then, we also have this report from a Russian site which claims that two Americans dressed as Arabs were trying to detonate a car bomb in a residential area of west Baghdad. So what exactly is the deal here? According to some commentators this is merely the latest, most obvious incident in a string of false flag attacks by British and American intelligence.

    The idea that most Westerners have that their governments are the "good guys" is clearly put to pasture with this information. There can be no "moral high ground" (if there even is such a thing) claimed by the West if their special forces are blowing up civilians just like the terrorists they say they are pursuing! Of course, many people would say that Iran is putting this information out there as propaganda in order to try and garner international support against any "pre-emptive" military action by the Coalition. But if this is the case, why would Iran (already in disfavour with the Coalition governments) only risk provoking them further with untrue claims?

    Then, there is a story in the Guardian about US soldiers in Afghanistan desecrating the bodies of Taliban. It seems that US forces are determined not to rest until every single one of the Geneva conventions is violated. Of course, when you're "fighting evil" because your boss has a hotline to the almighty, little things like international law can go get stuffed, right? Sheesh....

    With all this war, it's good to see that some countries are taking steps towards stronger friendships.

    Tuesday, October 18, 2005

    Stormy Weather Ahead

    Well, I'm back in Australia after a two-month backpacking trip around Europe, and it seems that Howard, Bush and the usual suspects have all been very busy indeed. It also looks like other, more "planetary", events are gathering steam as well. I was actually kind of alarmed to see just how much stuff was going on when I put it together. Let's take the period 01 Aug - 01 October.

    To begin with, there was the news of Uzbekistan cutting ties with the USA after a blood-drenched "alliance" of sorts. This was (and probably is) only to be the beginning of the USA's woes however. Their supposedly good buddies Israel were caught spying yet again; the old saying comes to mind about not needing enemies when one has "friends" such as this. Yet apparently Israel are the good guys... they claimed to be holding out the olive branch of peace via their pullout of settlers from Gaza. So how about the West Bank? Is it just a case of giving with one hand and taking with the other?

    Moving on, in a string of VIP deaths we had a former head of the European Central Bank "dying" in his swimming pool, followed not long afterward by the death of Saudi King Fahd and also the terminal heart attack of outspoken UK anti-war politician Robin Cook.

    Speaking of the UK, it appears some people are falling on hard times there, with record bankruptcies being reported. Maybe some new UK Anti-Terror legislation will boost the economy (despite opposition), creating job opportunities in the law-enforcement area. With the exposure of the lies surrounding the shooting of Jean Charles De Menezes, one would think there would at least be a few vacant job positions up for grabs. Unfortunately the Blair government appears to prefer to arrest whistleblowers over the leak rather than seek justice for Mr De Menezes.

    With all this focus on the UK, Bush had ducked off for yet another vacation at his Crawford ranch but didn't wind up getting much peace there (poor Dubya), with grieving mother Cindy Sheehan trying to get an explanation from Bush about the death of her son in Iraq and getting only minor white house PR lackeys. Still he got a little reading done, choosing one unusual holiday title about the 1918 flu pandemic.

    With increasing media coverage of the "bird flu" phenomenon, could mysterious mass seabird deaths be related? It seems that governments around the world are definitely taking the issue seriously: The US bought $100 million worth of bird flu vaccine, China launched its own flu pandemic contingency plan, and a top UN health official claimed a new flu pandemic could kill up to 150 million people. The real question is - are they taking it seriously for reasons which could have sinister implications for the average person? After all, the US government just spent a lot of money to recreate the 1918 strain of "killer flu". For "study purposes", apparently.

    With all this tinkering with deadly virii, the USA's neighbours must be feeling a little nervous. Or perhaps they are feeling nervous for different reasons? It must have come as a shock to Venezuelan President Hugo Chavez to hear influential christian fanatics such as Pat Robertson calling for his assassination. No wonder Hugo Chavez and Fidel Castro are good mates - they've got plenty in common when it comes to their northerly neighbour, with the US even accused of protecting a Cuban militant! Well anyway, good 'ole Hugo wasn't too happy about this (understandably!) and had his intelligence guys do a bit of sniffing around. Apparently they uncovered a dastardly plot of the USA to invade Venezuela. Truth or melodrama? Well, given America's track record, I'd probably be taking it pretty seriously if I was in Mr. Chavez' shoes. It's been a busy time for him - he also made a very interesting speech to the United Nations, and offered cheap oil to the poor living in the United States.

    Well, Bush sure needed all the cheap oil he could get after prices skyrocketed following the big tragedy of August/September: Category 1 hurricane Katrina devastating New Orleans. Where does one begin when trying to summarise such a horrific event? Well, this video clip does a pretty good job in my opinion. What happened to the poor of New Orleans was nothing short of criminal behaviour by the Bush administration. The Mayor of New Orleans blasted the Federal aid response while the administration were doing everything they could to blame the State and Local governments. The official place of the refuge, the New Orleans' Superdome was compared to a "Concentration Camp", with food, water and medical aid being deliberately withheld under the plausible excuse of "bureaucracy" and "mismanagement". It seems that the best chance that victims of the catastrophe had was to ignore the government and help each other with the resources available. This page lists some of the stories of resourceful groups of people networking and helping each other, despite the antagonistic forces of the US government and other criminal elements.

    The fury of Hurricane Katrina was but one of the many recent incidents showing the changing behaviour of Mother Nature. There were also quake swarms in California, a 7.3 earthquake in Papua New Guinea plus many smaller ones elsewhere, and solar activity exploded during the period in question. Then there was also the increasing media coverage of global warming related topics such as: Retreating Glaciers Worrying Greenlanders, Global warming passes 'point of no return', and Increase in Major Hurricanes linked to warmer seas. Back on the subject of hurricanes, we also had Hurricane Rita making landfall after (reportedly) causing much damage to oil rigs in the Gulf of Mexico. This apparent problem in the supply of oil was reinforced in the public mind when Bush urged gas conservation.

    The rising price of gas might not be the only economic problem Western nations have to face, with US Federal Reserve chairman Alan Greenspan warning of a housing price crash and US Airlines Delta and Northwest filing for Chapter 11 bankruptcy. Some commentators even speculated that America itself is bankrupt. Is it any wonder that gold reached a new 17-year peak, being a more tangible form of wealth preservation?

    Meanwhile, in Iraq (remember Iraq?), we had news of hundreds of Iraqis killed in a mass stampede trying to escape an alleged suicide bomber. But who exactly are these bombers causing all these civilian deaths? The "Coalition" forces claim they are the work of "insurgents", terrorists and foreign fighters. Yet we had one massive story that should have been headlines for weeks: British Goverment Agent Provocateurs Exposed. Where was the mainstream media coverage of this? British SAS are busted trying to blow up Iraqi civilians, the army breaks them out of jail, and it's a non-event?!?!? I mean, seriously, WTF?

    To distract anyone who might be paying attention, the RAND corporation warns of a new US terror attack. Yet it seems the tactics of fear are becoming less effective and the Coalition governments are having to become increasingly more obvious in their mission to exercise total control over their populations. Cindy Sheehan was arrested during a protest at the White House. The US military is also chiming in with its own ideas for maintaining order during any national emergencies. Any interesting theory doing the rounds on the 'net is that these emergencies are the excuse that will be used to implement a martial law takeover of the United States. At this stage, it's starting to look less unlikely than even a few short years ago...

    Moving the focus back home, it appears that Howard is jumping on the fascist bandwagon with gusto, deporting peace activists, proposing draconian new Anti-Terror laws, and biometrically screening Australian visitors. Alexander Downer even jumped in with the comment that David Hicks would be escaping "justice" if he used a potential British citizenship to escape Guantanamo bay. I find it reassuring that we have a Foreign Minister who can magically peer into the future and determine the guilt of suspects before they've even gone to trial...... not. Way to stick up for your own citizens, Al. Isn't that what you were elected to do?

    Well, that's a news wrap, but there was also some very interesting blogging and commentary taking place during all of this. It seems that many bloggers are quite prescient in their observations. For instance there is this article on Internet lockdown, followed not long afterwards by the news story US insists on controlling WWW. Then this weather blogger predicted the scale of the Katrina disaster before the "experts".

    Kurt Nimmo has been in his usual fine form; take the entry Turkish Intelligence speculating on the identity of Al Qaeda for example. Another perceptive article asks why Pat Robertson isn't treated as a terrorist for threatening Hugo Chavez. There are also some interesting historical summaries about Israeli "Art Students", US democratic "interventions", and the Nazi takeover before WWII. Plus, a good writeup on the heat 'ole Shrubby must be feeling at the moment is expressed well in its title, "George Bush in Hell".

    Aussie-wise, Margo Kingston has been dishing up the goods on after splitting with Fairfax; this commentary on the proposed new Australian workplace legislation and Julian Burnside's comments on the Scott Parkin case being two good recent pieces. Antony Loewenstein has also been hard at work, detailing what you can't say about Israel in Australia.

    Just for fun, there is also this odd story of a man building up 30,000 volts of static electricity.

    Whew! And that's just two months!

    And if the events of October to date are anything to go by, the pressure is only being turned up. If we don't get our act together, it appears that humanity will be in for some seriously stormy weather soon.