By Giordano Bruno

Neithercorp Press – 03/10/2010

Herbert West: Re-Animator

Winter is slowly melting away here in the U.S., and Spring will soon be upon us.  Wall Street is currently flush with delight at the year long run of the stock market (driven by fiat bailouts), which at first glance appears to be doing quite well, though international incidences such as those in Dubai and Greece have revealed how shaky the market actually is in the face of any unhealthy news.  In the meantime, the dollar, recently on the edge of detrimental value loss, has made a semi-miraculous recovery in the span of a few months, especially as the Euro suffers.  Official employment numbers, despite the continuous loss of jobs monthly, have somehow fallen and are for the moment stabilized.  Is it time for America to dust off the old credit cards and return to the wild and rollicking carefree spending days of pre-2007?  Perhaps not…

While the mainstream media puts on the recovery song and dance, the fundamental problems of the collapse remain the same, and in some cases are growing ever more precarious.  Subsections of the public, unaware of the real issues at hand, are holding a misguided jubilee in the tranquil eye of a hurricane, wrongly assuming that the storm has passed.

The world is breathing a hasty sigh of relief at the beginning of 2010, but what are the facts behind the current “peaceful” economic moment?  In this article, we will examine whether or not the good news is legitimate, or, if are we being lulled into a false sense of security…

Job Market Statistics Manipulated

At the beginning of the year, official unemployment stood at around 10%.  This number of course does not include those people who are off unemployment benefits and still have not found jobs, or those people who are underemployed.  The Labor Department then announced their intention to revise their “birth/death ratio” method of calculating job loss, which would supposedly add a whopping 800,000 lost jobs to their books that were hidden before:

http://money.cnn.com/2010/02/04/news/economy/jobs_outlook/

Directly after this news was released, markets braced for a substantial increase in the unemployment percentage.  Yet, by some act of magic, the unemployment percentage fell to 9.7%!

http://www.epi.org/publications/entry/jobs_picture_20100205/

How is this possible?  Well, those of us who were hoping for greater Labor Department transparency (including myself) should have known better.  With the Labor Department, two-plus-two NEVER equals four…

As the EPI article above indicates, while the government has reportedly changed their dubious “birth/death ratio” method, they also at the same time changed their “home survey” method.  This survey is meant to give the Labor Department an overall view of unemployment percentages, but now the government has sharply reduced the number of households they actually survey, making the results more volatile and easier to manipulate.  This why even though nearly a million jobless people were added to the unemployment rolls, the government was still able to report a drop in unemployment percentages.  Sound like a dirty trick?  Yes, it is…

According to the EPI’s estimates, which are probably still conservative, over 11 million jobs would need to be created in order to bring employment rates to pre-2007 levels.  This is called the “jobs gap.”  To fill the jobs gap by 2013 (which is about the time frame that the government has suggested it would take for a full recovery) the U.S. would need to generate over 400,000 jobs a month for the next three years!  As I think most of you can see, this is not going to happen.  Last month according to official numbers the U.S. lost another 36,000 jobs.  Jobs are not being created, and will not be created anywhere near the 400,000 a month mark required for a three year recovery.

Also not often reported is the span of weeks at which those who are unemployed have to wait until they find another job.  This “lag time” in-between jobs has grown markedly higher in recent months as the chart below shows:

In January of this year alone, 6.3 million people (over half of those unemployed) had been without a job for more than 6 months.  This is an astonishing number, and it shows just how out of touch MSM reports of recovery are.  Anyone who has been unemployed for more than just one month knows how tense and uncertain such a situation makes life.  Imagine the misery of a 6 month hiatus from steady work, not able to fully support ones self and not knowing when you’ll be able to again.  The Labor Department, nor the media, seems to take the factor of ‘duration’ into account when considering whether employment is actually in recovery.  Nor do they take into account the fact that most of the jobs lost over the past two years were high paying and specialized, while most of the scant few jobs created have been low paying service sector positions.

What is most frightening about this information is that it reveals deliberate mishandling of statistics.  Instead of being more open about unemployment numbers, the government is moving to hide them further.  But why would they escalate secrecy on the economy?

The Day The Dollar Died

Last week, Li Ruogu, chairman of Export-Import Bank of China, a lender tasked with supporting the country’s foreign investments, stated that China would continue to support the dollar and that reports of a break from U.S. treasuries were “absolute nonsense.”  Investors in treasuries this week seemed to take the comment as a good sign that the dollar’s place as world reserve currency is assured.  However, one might ask why it was suddenly so important for China to comfort treasury markets?

Interestingly, statements of China’s “affection” for the dollar have come right after their central bank decided to dump $34 billion in U.S. treasuries.  Along with other nations, the U.S. suffered the worst one month treasury dump on record so far at $53 billion:

http://finance.yahoo.com/news/Foreigners-cut-Treasury-apf-1402391707.html?x=0

This follows a treasury dump last year by China of $25 billion, after which we predicted that such dumps would occur more frequently and in larger amounts.  Apparently, we were right:

http://neithercorp.us/npress/?p=105

http://english.people.com.cn/90001/90780/91421/6734461.html

Initially, it was reported after their latest dumping of U.S. bonds that China had lost its position as the number one investor in U.S. debt, placing Japan in the top spot.  Strangely, only days later this report was rescinded after the Treasury released a statement claiming that China did indeed dump $34 billion in bonds, but, they were still the number one investor in T-bills:

http://sg.news.yahoo.com/afp/20100217/tbs-us-economy-finance-bonds-china-japan-ec2362a.html

How is this possible?  According to the Treasury, they “forgot” to include Chinese treasury holdings in third markets such as Hong Kong and Britain.  This is very strange.  Who holds these extra bonds and what are they doing sitting in foreign venues?  Is it not convenient that these bonds appeared from thin air just as news of China’s treasury dump was hitting the bond market?  And now we suddenly have a Chinese finance official attempting to reassure the world that China still wants T-bonds while at the same time they are trying to get rid of them?  If this behavior seems confusing it is because this is what occurs when governments lie big; no matter how good they are at it, they can’t make the facts add up.

If one examines Treasury Auctions month-to-month, they would find that “Primary Buyers” of treasuries (who have to buy treasuries when no one else is buying) now dominate auction sales.  Indirect buyers, who cannot be tracked, also make up a large portion of competitive bids on treasury bonds.  It is suspected that most of these indirect buys are made by the Federal Reserve itself in order to prop up the dollar.  The article below explains the process succinctly:

http://community.nasdaq.com/News/2010-02/Something-Very-Strange-Is-Happening-With-Treasuries.aspx

The bottom line is that foreign governments are NOT buying treasuries at volumes necessary to keep the U.S. afloat amidst its ever climbing national debt, and in some cases, they are now trying to quietly and gradually dump what they have so as to not arouse immediate suspicion from the markets.  In fact, the Treasury and the Federal Reserve seem to be helping them do this!

The dollar is, in effect, dead, but disinformation and market manipulation, mainly by the private Federal Reserve, is being used to reanimate it for appearances.  The result is the conjuring of a kind of “zombie currency,” a Weekend at Bernie’s currency that the Fed props up with strings and pulleys to fool everyone at the party.

The most obvious question here is, why go through so much trouble to keep the dollar around at all?

World Government And The SDR

Since the “Great Recession” began, economic forums and conferences such as the G20, and the annual World Economic Forum (WEF) in Davos, Switzerland have spoken of little else except the formation of a centralized world economy and the establishment of a legal body that has the power to run it.  At the Davos “workshops,” economists and others present ideas for world governance as if they were the originators of the concept.  It may not be surprising to most of us that there is rarely if ever anyone who participates in the WEF meetings that supports the restoration of national sovereignty.  In fact, nearly all the participants seem to assume that a world government is the solution to all our ills.  It is also important that like the G20, government officials from all over the world attend, including those from the U.S., and that very often the policies developed at these forums end up in legislation and mass media here at home.  Meaning, the laws and propaganda supporting forced globalization and world government are fine tuned at the meetings and then brought to America for mass consumption.  Below are a couple video examples of Davos workshops:

It is important to recognize what exactly is being presented in these two videos because they reveal much about our current economic circumstances.  The goal of the G20 and the WEF, as they have stated on numerous occasions, is to dissolve national sovereignty.  If they had their way, America as we know it would not exist, along with the Constitutional framework that is meant to protect our liberties.  To achieve this end, a carefully engineered breakdown of the U.S. dollar is being enacted.

As we have shown, U.S. treasuries auctions have tanked and those long term treasuries already held by foreign nations are being slowly cast off.  So far, the Federal Reserve has propped up the dollar by purchasing T-bonds in the place of foreign banks who no longer want them.  By continually monetizing this debt, the Fed will inflate an incredible bubble in the treasury market.  When will this bubble burst?  The key lay in the rules governing Special Drawing Rights.

Special Drawing Rights (SDRs) are securities much like treasury bonds.  Their value is determined by a basket of international currencies including the Dollar, the Euro, the Yen, and the Pound Sterling.  The IMF claims that SDRs are not technically considered currency, but SDRs serve nearly all the functions of a currency except that they are not available to the general public (yet).  It walks like a duck, and quacks like a duck, but the IMF would rather not call it a duck.  In the end, the SDR is a world reserve currency, and its purpose is to topple the dollar.

Not long after the economic meltdown began, the IMF announced that they would begin the unlimited printing of SDRs.  In 2009, within the span of a few months, SDR circulation went from $21 billion, to nearly $204 billion, and this is only the amount they have admitted to:

http://www.imf.org/external/np/fin/tad/extsdr1.aspx

Governments across the world have purchased SDRs, while at the same time dropping U.S. treasuries.  China in particular has shown sharp interest in the SDR as a replacement for the U.S. dollar:

http://www.chinaeconomicreview.com/dailybriefing/2009_09_03/China_buys__50_billion_in_first-ever_IMF_bonds.html

It may be prudent to mention that China’s heightened dumping of U.S. treasuries began right around the time that the IMF began mass printing SDRs.  And, even more disconcerting, the U.S. Treasury also quintupled its supply of SDRs in August of 2009:

http://www.zerohedge.com/sites/default/files/images/US%20INTL%20RESERVES.jpg

Being that the U.S. dollar is supposedly the undisputed world reserve currency, why would the U.S. Treasury have any need to buy SDRs at all?  Would this not be redundant?  Unless, the Treasury knows that the dollar will not remain the world reserve currency for much longer….

Now we get to the tricky part…

The IMF has instituted new rules governing the SDR and those countries who trade it (called “member countries”).  Drafting the “Fourth Amendment” governing SDR allocation, the IMF now requires member nations to retain a “special allocation” of the currency much higher than previous allocations.  Countries who keep their SDR supply above the required level receive interest payment on their excess.  Countries that fall below the required level have to PAY interest on the shortfall.  That is to say, if the U.S. were to allow its SDR reserves to fall below the level demanded by the IMF, we would be punished monetarily.  Also, under current rules, the interest rates of the currencies that make up the SDR help to determine the interest rates of the SDR.

The IMF claims it only acts as an “intermediary” between countries wishing to trade in SDRs, but since the IMF is the creator and printer of SDR’s, this would ultimately make them the controller of the SDR market, not some outside intermediary.

Participation in the SDR market for now is voluntary.  However, what we are witnessing here is the subtle positioning of the SDR as the only alternative in the event that the U.S. dollar fails, and once again, China is the key.

China’s Slow Dollar Dive

The argument is constantly made by mainstream economists that China could never drop its large supply of U.S. T-bills because if they tried, the dollar would collapse, virtually erasing the value of their dollar holdings.  The suggestion that “they are as dependent on us as we are on them” is rampant in the MSM, but, if we throw in the wild card factor of the SDR, this all changes.

If the Chinese central bank along with certain others amass enough SDRs over an extended period of time while gradually selling off their T-bonds, the SDR’s could act as a cushion to prevent foreign central banks from losing a large portion of their wealth while the dollar sinks.  In fact, in the event that the Federal Reserve raises interest rates on the dollar (perhaps in response to the heightened risk of a mass treasury dump) those holding SDR’s actually benefit, because the interest they receive on their SDR reserves will also go up:

http://www.imf.org/external/np/exr/faq/sdrallocfaqs.htm

This would not absorb all of China’s losses in the event of a dollar collapse, but it would be a very effective stop gap, and ample incentive for them to continue dumping treasuries.  I believe that this is the exact reason why the dollar and the Dow have been held up by the Federal Reserve for so long.  They cannot allow a major dollar depreciation until the SDR is established on the world market as a ready substitute.

A good sign that this process might accelerate would be in the event that China de-pegs the Yuan from the Dollar and allows it to appreciate in value.  This would signal that China is moving away from the traditional export arrangement with the U.S.  Talks of a Yuan appreciation are already hitting the MSM:

http://www.telegraph.co.uk/finance/7386391/China-ready-to-end-dollar-peg.html

Investors in the U.S. will foolishly cheer a rise in the value of the Yuan, thinking that this will increase American exports to China.  In reality, China will be preparing to dump the last of its U.S. bonds, and begin exports and imports with the new ASEAN trading bloc:

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201002280656dowjonesdjonline000247&title=asean-exports-to-grow-7-to-85-in-2010–indonesia-trade-min

This new bloc has the potential to surpass profit margins in U.S. markets, especially in the face of extremely weak consumer activity in America.  As the U.S. falters under sovereign debt pressure, China will be in prime standing with a ready supply of SDRs and an organized trading bloc to take up the slack of falling exports to the West.

Shock And Awe

The illusion of U.S. recovery seems to be paramount in the plan for Globalist centralization.  Every scam imaginable has been fashioned to lure the public into a sense of false comfort.  In my original observations on the economic collapse, I believed that we would likely see a “trigger” event in 2010, which would set off a “rolling breakdown” that would not fully climax for a few years.  Now, I am not so sure.  After examining the facts behind the implementation of SDRs as well as the potentially explosive situation in the treasury market, I believe that a “shock and awe” scenario is becoming more probable.  The behavior of the Fed, along with that of the IMF seems to suggest that they are preparing for a focused collapse, peaking within weeks or months instead of years, and the most certain fall of the dollar.

As I think of it now, the advantages of a sudden financial flash flood are numerous.  In a drawn out collapse, the Liberty Movement is given a tremendous time advantage, allowing us to double and redouble our membership while the public opinion of the Federal Reserve and the government in general would deteriorate.  In a sudden breakdown, our time will be cut short, and the public will be distracted and fearful, desperate for an organized authority to offer any semblance of “order.”  A slow collapse allows for the Liberty Movement to work peacefully within the system to build a third party capable of dethroning the current two party farce.  A sudden collapse erases all political activity and opens the door to martial law and illegitimate government.  And finally, a fast moving meltdown leaves a much stronger psychological impression; a catastrophic waking nightmare, instead of a slow grinding depression.  A world government could never be brought about due to the “monotony” of a long slow economic burnout.  Too many factors could present themselves in such an extended period that might interfere with the desired end result.  Too many variables to calculate.  In an abrupt collapse, the Globalists would need only to gage and influence the amount of fear in the populace to a sufficient boiling point then leap in with their intended solution to the problem; centralized global governance.

I feel that in either method, the Central Bankers will fail to reach their ultimate goal, but the prospect of a direct monetary break with limited warning does make the atmosphere much heavier.  One can only prepare as much as possible mentally and emotionally, and keep his eyes wide open…

“I do not eat corporate food and I do not buy Made in China ” says Gerald Celente …If Israel and The US attack Iran it is the start of World War III , Iran is not Iraq… the top trends for 2010 are the crash of 2010 and terrorism 2010 , the anti Americanism is sweeping the glob is a big concern says Gerald Celente

Trends Expert Gerald Celente is also known as Dr Doom and the Nostradamus of Modern Times  , Gerald Celente is regarded as one of the foremost trend predictors in the world. This author of Trends 2000 and Trend Tracking, and publisher of The Trends Journal, is frequently a guest on television news and talk show programs. The New York Post said “if Nostradamus were alive today, he’d have a hard time keeping up with Gerald Celente.” Subscribe to the Trends Journal >>>

Following are Gerald Celente’s Forecasts for 2010: · The Crash of 2010: The Bailout Bubble is about to burst. Be prepared for the onset of the Greatest Depression.  · Depression Uplift: The pursuit of elegance and affordable sophistication will raise spirits and profits.  · Terrorism 2010: Years of war in Afghanistan and Iraq  and now Pakistan  have intensified anti-American sentiment. 2010 will be the year of the lone-wolf, self-radicalized gunman.   · Neo-Survivalism: A new breed of survivalist is devising ingenious stratagems to beat the crumbling system. And, they’re not all heading for the hills with AK-47’s and pork & beans.   · Not Welcome Here: Fueled by fear and resentment, a global anti-immigration trend will gather force and serve as a major plank in building a new political party in the US.  · TB or Not TB: With two-thirds of Americans Too Big (TB) for their own good (and everyone else’s), 2010 will mark the outbreak of a “War on Fat,” providing a ton of business opportunities.   · Mothers of Invention: Taking off with the speed of the Internet revolution, “Technology for the Poor” will be a major trend in 2010, providing products and services for newly downscaled Western consumers and impoverished consumers everywhere.   · Not Made In China: A “Buy Local,” “My Country First” protectionist backlash will deliver a big “No” to unrestrained globalism and open solid niches for local and domestic manufacturers.  · The Next Big Thing: Just as the traditional print media (newspapers/magazines) were scooped by Internet competition, so too will new communication technologies herald the end of the TV networks as we know them.

Video Interview with Gerald Celente

There is no precedence for the panic and chaos will occur next year. The global food supply/demand picture has NEVER been so out of balance. The 2010 food crisis will rearrange economic, financial, and political order of the world, and those who aren’t prepared will suffer terrible losses…

by Eric deCarbonnel | marketskeptics.com

If you read any economic, financial, or political analysis for 2010 that doesn’t mention the food shortage looming next year, throw it in the trash, as it is worthless. There is overwhelming, undeniable evidence that the world will run out of food next year. When this happens, the resulting triple digit food inflation will lead panicking central banks around the world to dump their foreign reserves to appreciate their currencies and lower the cost of food imports, causing the collapse of the dollar, the treasury market, derivative markets, and the global financial system. The US will experience economic disintegration.

The 2010 Food Crisis Means Financial Armageddon

Over the last two years, the world has faced a series of unprecedented financial crises: the collapse of the housing market, the freezing of the credit markets, the failure of Wall Street brokerage firms (Bear Stearns/Lehman Brothers), the failure of Freddie Mac and Fannie Mae, the failure of AIG, Iceland’s economic collapse, the bankruptcy of the major auto manufacturers (General Motors, Ford, and Chrysler), etc… In the face of all these challenges, the demise of the dollar, derivative markets, and the modern international system of credit has been repeatedly forecasted and feared. However, all these doomsday scenarios have so far been proved false, and, despite tremendous chaos and losses, the global financial system has held together.

The 2010 Food Crisis is different. It is 

Financial crisis will kick into high gear

So far the crisis has been driven by the slow and steady increase in defaults on mortgages and other loans. This is about to change. What will drive the financial crisis in 2010 will be panic about food supplies and the dollar’s plunging value. Things will start moving 

Dynamics Behind 2010 Food Crisis

Early in 2009, the supply and demand in agricultural markets went badly out of balance. The world experienced a catastrophic fall in food production as a result of the financial crisis (low commodity prices and lack of credit) and adverse weather on a global scale. Meanwhile, China and other Asian exporters, in an effort to preserve their economic growth, were unleashing domestic consumption long constrained by inflation fears, and demand for raw materials, especially food staples, exploded as Chinese consumers worked their way towards American-style overconsumption, prodded on by a flood of cheap credit and easy loans from the government.

Normally food prices should have already shot higher months ago, leading to lower food consumption and bringing the global food supply/demand situation back into balance. This never happened because the United States Department of Agriculture (USDA), instead of adjusting production estimates down to reflect decreased production, adjusted estimates upwards to match increasing demand from china. In this way, the USDA has brought supply and demand back into balance (on paper) and temporarily delayed a rise in food prices by ensuring a catastrophe in 2010.

Overconsumption is leading to disaster

It is absolutely key to understand that the production of agricultural goods is a fixed, once a year cycle (or twice a year in the case of double crops). The wheat, corn, soybeans and other food staples are harvested in the fall/spring and then that is it for production. It doesn’t matter how high prices go or how desperate people get, no new supply can be brought online until the next harvest at the earliest. The supply must last until the next harvest, which is why it is critical that food is correctly priced to avoid overconsumption, otherwise food shortages occur.

The USDA—by manufacturing the data needed to keep supply and demand in balance—has ensured that agricultural commodities are incorrectly priced, which has lead to overconsumption and has guaranteed disaster next year when supplies run out.

An astounding lack of awareness

The world is blissful unaware that the greatest economic/financial/political crisis ever is a few months away. While it is understandable that general public has no knowledge of what is headed their way, that same ignorance on the part of professional analysts, economists, and other highly paid financial “experts” is mind boggling, as it takes only the tiniest bit of research to realize something is going critically wrong in agricultural market. 

USDA estimates for 2009/10 make no sense

Read the full article.

KINGSTON, NY — The first decade of the 21st century is going out the same way it came in with a bust and a bang.

The dot-com bubble burst in 2000, and the Bailout Bubble will bust in 2010.

9/11 terror ushered America into the decade, and terror will strike again before the decade ends.

The decade long wars waged by US and NATO against Afghanistan and Iraq are leading the world to the first Great War of the 21st Century.

The 20th century belonged to America, in 2010 Empire America will be breaking apart. The signs are there for all to see.

World leaders and most economists see a very different future unfolding. They insist the financial crisis is over and recovery is on the way.

On the military front, America’s new Commander in Chief, Congress and the generals promised their war strategy will bring victory abroad and keep the homeland terror free.

Fed a steady diet of junk news du jour by the Cartoon News Networks, the general public remains largely oblivious or at best, grossly misinformed. As 2009 ends, the misadventures of Tiger Woods and the White House party crashers top the media menu.

Increased terror, escalating wars, economic calamity these are just a few of the 2010 Top Trends featured and analyzed at length in our Winter Trends Journal ® that you will receive by early January.

In the meantime, to keep you alert, focused, and above all, prepared, within two weeks we will send you an overview of our 2010 Trend forecasts. It is important to have plans and strategies in place for the holidays, a time when so many are caught up in the spirit and paying little attention to the headlines.

Our high alert is not alarmism. Last year, just two days after Christmas, with most people in a holiday state of mind, Israel launched a major war against the Palestinians. There were a number of factors that could have led either to an instant economic meltdown or an escalation of the war beyond the Palestinian borders.

http://www.trendsresearch.com/TrendAlert_Israel.htm

The worst was averted. Had it happened, only those who’d taken proactive measures at the first signs of major hostilities would have gone through the crisis unscathed. The trend lesson? War, terror and calamity are not set to time clocks. Anything can happen, anywhere, at anytime. Prepare for the unexpected. It is the close-combat state of mind.

In addition to the ominous forecasts, we also foresee a variety of social, health, environmental, entertainment, cultural, business and consumer trends that will be both profitable and transformational.

Publisher’s Note: If you have friends, family or acquaintances who still cling to “hope” and hope for “change”, you may consider giving them a holiday gift of hard facts, penetrating analyses and prescient forecasts a subscription to the Trends Journal ® and PakAlertPress

Regards,

Gerald Celente