Our “Silent Great Depression”

I made a post a few days back regarding Mike Stathis and summarized some of his views, but I think the below short excerpt from a three-part article he wrote at the end of 2010 should be shared.  I provide the links to the three-part post below at the end of the excerpt for those that want to better understand what transpired during the collapse and what may happen in the near future to most of us ordinary American citizens.  Although Mike is a financial advisor and expert in his field, he writes in a manner such that the non-financial expert can comprehend his points.

Mike accurately predicted the economic collapse in great detail via a book he published in 1996 called America’s Financial Apocalypse.  In my opinion, and based on personal experience and intuition, I think he has and is hitting the nail on the head.  I am interested to know your thoughts on the below excerpt and if you have time also your thoughts on the three-part detailed post provided via the links after the excerpt.

Excerpt from “America’s Second Great Depression Year-end Update 2010 Part 1”, by Mike Stathis:

….”Instead of the severity of unemployment seen during the first depression, this depression will be characterized by chronically high unemployment combined with massive underemployment. Thus, full devastation of the real unemployment picture will be masked.

We won’t see bread lines as we did during the previous depression because Washington issues food stamps ( Tincup comment:46 million Americans currently on food stamps). But unless Washington decides to provide housing to the homeless, we will see tent cities similar to the Hoovervilles from the previous depression. We are already seeing this today.

As well, we won’t see banks close their doors because we have the FDIC which was created in response to the previous depression. But what good is money if its being printed continuously?

The inflationary forces building up will certainly create severe problems for the U.S. and the rest of the world since the dollar is the universal currency. All of this will put further downward pressure on U.S. living standards for many years to come.

The most harmful effects of America’s current depression won’t be due to a crisis. It will be only heightened by a crisis. The real devastation will be due to an accelerated transfer of wealth and jobs overseas. It will be a silent depression.

In a few years, the real estate and banking crisis will have cooled off and Washington will start reporting much improved numbers; numbers that will continue to be manipulated and boosted by deficit spending.

In reality, things will only get worse. Real wages won’t budge, inflation for basic necessities will continue to rise, and job quality will continue to decline. We are already seeing this now. It will be a silent depression because there will be no crisis. But the effects of this depression are likely to be more severe because they will persist for decades.

You won’t feel the full effects on any given day. If you’re in the lucky majority, you will go to work and carry out your life as usual. But you just won’t be able to make ends meet like in the past. Each year things will get worse so you’ll spend more on credit.

It will be more difficult for your children to move up in socioeconomic status because higher education is becoming an unaffordable luxury for the wealthy. Many younger Americans who are willing to take on the enormous debt burden required for higher education won’t be able to find jobs in their field. This will be true even for the most secure of majors like engineering, math and science.

Some Americans with math and science degrees will seek employment as high school teachers, due to lack of options. This will be an ironic fate, as America’s educational system has been designed to keep the people stupid, all while brainwashing them to accept America’s fascist philosophy. Some won’t have the skills of their counterparts in Asia.

Others will be pushed out of a career they prepared for due to the effects of unfair trade. Some will opt for a 1 or 2-year program in healthcare by one of the hundreds of for-profit colleges that understand America’s healthcare system is a gravy train. Others will work for Wall Street criminals and banking vultures; some naively, others not caring that they will be selling their souls to the Devil.

Millions will be stuck in slave labor, working for low wages and no benefits. But they won’t be working in factories churning out goods for the global economy. They will be working in service jobs, tailoring to the needs of America’s wealthy.

In fact, I predict in coming years we will see an ironic trend in the U.S. Instead of U.S. consumers speaking with Indians in Bombay for customer support from U.S. corporations, Indians will be speaking with U.S. citizens who will provide them with phone support.

Many Americans will never realize they lived through America’s Second Great Depression, because the effects will be spread gradually for many, many years. Most Americans will never be able to fully retire. They simply won’t have enough money to live on. Many will end up selling their home to pay for medical bills, even though they have health insurance. Others will have a much worse fate.

What the “experts” don’t get is that this depression will be much more difficult to reverse because it will be gradual. There will be no urgency. But the effects will be cumulative.

Many will wake up one day and realize that they just can’t make ends meet; they’ll have very little if any retirement assets. It will be a continuation of declining living standards to a point that could lead to some major permanent societal problems.

Economists have claimed that the depression in the 1930s was caused by the failure of the Federal Reserve to open up the currency printing presses. This is not at all true. You cannot print your way out of a recession and you cannot print your way out of a depression.

Although there were certainly numerous causes, America’s Second Great Depression was caused by use of a fiat currency, unfair trade policy, cronyism and years of mismanagement by Washington.

Today, the criminal Federal Reserve Bank continues to kick the can forward by printing trillions of dollars. This is having significant adverse effects, not only in the U.S. but throughout the globe. Instead of deleveraging, the global bubble has been reflated as discussed several months ago. We are now seeing global inflation begin to take off. [55]

Washington, Wall Street and their many hacks have even made preposterous claims that the recession ended in June 2009. Of course this is a complete fabrication.

I want to remind you that a recession is caused by an oscillation of the business cycle from peak to the trough. In contrast, a depression is a long period of social, economic and financial decline. Within a depression you are likely to see two or more recessions. But this merely accounts for the economic consequences of a depression.

The social consequences found within a depressive period are a reflection of the devastating effects of chronic economic catastrophe. But the useless media has used the term “Great Recession” in order to downplay the true severity of this period.

Haven’t you had enough lies, deception and hype from the media?

Despite what some of you may think, there is NO ONE in the media, not a single person that truly understands what is going on AND is committed to helping you. That includes all of the perma-bears and gold bugs who have been preaching doom for decades. If you think otherwise, then you haven’t been documenting their track records.

The contrarian crowd is trying to scare people so they will buy gold so as to pump up the price. At the end of the day when these delusions of gold $10,000/ounce and hyperinflation have NOT materialized as salesmen and hacks like Peter Schiff, Marc Faber and others have insisted, the media knows that its audience will run back into the arms of Wall Street.

You will never win if you embrace extremes. Neither the perma-bear or perma-bull market extremists offer you anything other than a chance to lose more money. Never forget that. So if you are unable to navigate an up and down market, you might be best to remain on the sidelines because even many of the big boys have gotten thrashed over the past two years.

If you pay attention to the media, you are sending them money because they sell ads based on the size of their audience. And because Wall Street buys the ads, the media serves their interests by flooding you with extremists and other hacks. Thus, by paying attention to the media, you are serving as an accomplice in your own exploitation.

I leave you with my best piece of investment advice. It’s one of the rare exceptions of investment advice that never changes.

BAN THE MEDIA.

DON’T READ THEIR NEWSPAPERS AND MAGAZINES, AND DON’T TUNE INTO THEIR TV AND RADIO SHOWS.

If you don’t follow this advice you will be just as responsible for your demise as the media and Wall Street.”

Americas-Second-Great-Depression-2010-Year-end-Update-Part-1.html

Americas-Second-Great-Depression-2010-Year-end-Update-Part-2.html

Americas-Second-Great-Depression-2010-Year-end-Update-Part-3.html

 

America’s Financial Apocalypse — Mike Stathis

Have you ever stumbled upon an author or thinker that confirms your intuition and broad thoughts, but due to their higher expertise or intelligence refines or improves your understanding of those instincts?  Well, last night I stumbled upon just such a person – Mike Stathis.  Usually I find people of interest in Penguin Classics and the author has been dead for hundreds or thousands of years.  Normally, these authors I connect with are philosophers or poets.  My most recent discovery was Robinson Jeffers (poet), but he has been dead for a few decades.  I always connect with or admire authors that attempt to portray or explore the truth.  I don’t think many can know the truth in full, but very special individuals can attempt to be as objective as possible to at least seek the truth to the best of their ability.

I stumbled upon Mike Stathis as a result of my previous post (Inflation – Fuse to the Debt Bomb).  I wanted to read expert opinion of the risk of future inflation.  Based on my intuition and experience at the grocery store, bars, restaurants, and the gas pump, we are already experiencing higher than usual inflation despite what the government and the media report.  But I wanted to get some expert views on how bad inflation might get in the next few years.  I found an article by John William’s who argues we are going to experience hyperinflation, which would essentially make the dollar worthless.  I liked this article because it sided with my intuition that inflation is going to get worse and expose the financial Ponzi scheme created by Wall Street, the Federal Reserve, huge corporations, investment banks and banks, the government, and the media.  I also found that Ron Paul, the only presidential candidate I somewhat like sides with the argument that we are going to experience hyperinflation.

Hyperinflation is an extreme case of inflation so I also wanted to get some opposing views.  I then stumbled upon Mike Stathis who actually took John William’s argument head on piece by piece.   I was so impressed by his objectivity, knowledge, insight and the fact that he took the time to address the issue in such a methodical and logical manner.   I decided to do further research on who this guy was and suddenly realized I had found a gem.  I never expected to find a great philosophical mind that was also a finance/investor expert that attempts to portray the truth despite the consequences or loss of financial gain or media influence.

Mike puts forward a very interesting argument against hyperinflation and I am not going to recap that argument here, but I will provide the link. Dismantling-John-Williams-Hyperinflation-Predictions.html  I do want to make a few broad comments about his point of view regarding inflation and the economic future of America.  Although he doesn’t predict hyperinflation, he does believe we will experience inflation or massive inflation.  And I tend to align more with his argument than those that predict hyperinflation.  Those that predict hyperinflation claim that because the Federal Reserve keeps printing enormous amounts of money combined with no link to an asset like gold means the dollar will eventually become a worthless piece of toilet paper.

Mike makes a few key arguments that I never thought about.  He says the dollar is heavily linked to oil since oil is traded in U.S. dollars.  He also makes the same argument about commodities.  Therefore, as long as the dollar is the currency involved with these important transactions it will maintain worth.  I have probably over-simplified his argument, but it makes sense.  He also makes the argument that since the dollar is the key currency used in international trade that we actually export inflation and reduce the potential inflationary impacts on the United States when we print more money.  He also makes another important point.  Given oil is a key ingredient to supporting the value of the dollar, the U.S. will not hesitate from using its superior military power to prevent any attempt to begin trading oil in another currency.  Guess what?  Iran trades oil in a different currency than the U.S. dollar.  Where do you think World War III might ignite?  Look at the media focusing on the nuclear threat as opposed to Iran’s attempt to undermine the U.S. dollar as a means to trade oil.  Guess what other middle east country was attempting to create a mechanism to trade oil without the mighty U.S. dollar?  Yep, it was Iraq.

The other excellent point Mike argues is that the powers that be (Wall-Street, large corporations, the Federal Reserve, investment banks and banks, the government, and the media) will do everything in their power to prevent a major collapse or something like hyperinflation.  This argument challenges my previous post in which I stated the upcoming higher inflation will blow up the debt bomb and awaken American citizens to the Ponzi scheme.  But his argument makes much more logical sense.  Rather than allow a total collapse, the powers that be will continue to push-off dooms day well into the future.  As a result, what we will experience as normal U.S. citizens is a “Silent Great Depression”.  We will be put through a long and extended period of pain, but not the type of pain that erupts into a revolution.  In other words, the powers that be will continue to take all our assets and quality of life but ensure we can still limp along nibbling on bread crumbs to keep us relatively content.  This is a much more intelligent strategy.  In reality, the good American citizens should stand up and start a revolution and demand a complete overhaul of our country.  But the forces and powers will employ all their influence to subdue the masses of normal American citizens as to further draw milk from the cow.

Here is a link to Mike’s firm and website that has many interesting articles that you may wish to read.  AVA Investment Analytics

I must warn you that some of the articles are very controversial, but he attempts to express the truth based on his real life experience in the investment community.   He has also published several books.  The book on the above image (America’s Financial Apocalypse) was written before the recent economic collapse.  He has correctly predicted many economic events that we have experienced in the last decade.  I am going to purchase and read his books to learn more about his thoughts and predictions, but based on what I have read thus far, he is a voice to be taken seriously.  But, as with any author or great mind, one must always further probe and question their thoughts and points of view.