- Wall Street predicts blue skies. Economic recovery will
continue. Stocks will deliver double-digit gains. On January 14, the Wall
Street Journal's Economic Forecast Survey headlined, "Economists Optimistic
on Growth," expecting in 2011:
- -- 3.3% GDP growth;
- -- unemployment declining to 8.8%;
- -- inflation contained at 1.9%;
- -- crude oil at around $90 a barrel;
- -- improved housing starts in a depressed market;
- -- on average, 180,000 monthly jobs created;
- -- no Fed interest rate hike until 2012 at the earliest;
- -- continued QE II buying of $600 - $900 billion in government
- -- an overall upbeat sentiment for economic recovery
- Others disagree, including long-time insider/market analyst
Bob Chapman, calling current economic policy destabilizing enough to have
profound future social costs. Sometime in 2011, he says conditions are
"going to be nasty. The handwriting is on the wall," but no one's
- On January 20, the Financial Times headlined," US
States Face a Fiscal Crunch," saying:
- "Undue budget tightening will jeopardize recovery
whether applied at the federal level or lower down....The squeeze is not
upon them; the federal stimulus is fading away, and the gimmicks are all
used up. For state finances, the year of reckoning has arrived, and the
timing could hardly be worse."
- Global European Anticipation Bulletin (GEAB) analysts
are also expect hard times. On January 16, their latest economic assessment
headlined, "Systemic global crisis - 2011: The ruthless year, at the
crossroads of three roads of global chaos," predicting "entry
into the terminal phase of the world before the crisis."
- Since 2008, policies undertaken hid economic deterioration
instead of resolving it. The present year "will mark the crucial moment
when....palliative measures" no longer work, and "the consequences
of systemic dislocation....dramatically surge(s) to the forefront."
- In 2011, "violent shocks....will explode the faulty
safety devices put in place since 2008" and will erode the "pillars"
on which the "Dollar Wall" rested for decades until gold no longer
backed it. Overall, 2011 will be chaotic. All bets are off. "The crisis
ball rolls and everyone holds their breath so it doesn't fall" squarely
- Soaring food, energy and other commodity prices will
continue. Inflation will rise. It's higher than reported. Tunisia is instructive.
Impacted by high food and energy prices as well as unemployment, American
and other "godfathers" couldn't prevent street protests collapsing
a friendly regime, now struggling to reinvent itself.
- America's leadership is eroding. Europe is weak, and
BRIC countries (Brazil, Russia, India and China) are not ready to control
the global economy so can only "quietly undermine what remains of
the foundations of pre-crisis order."
- Fragility defines 2011 with many nations "on the
verge of socio-economic break-up," especially America and Europe where
real unemployment and poverty are rising, social benefits are disappearing,
and angry people are beginning to react. The incendiary mix "ha(s)
the making of political time bombs."
- History often signals warnings "before sweeping
away the past." It came in 2008, 2011 to "do the sweeping."
Only nations that have "adapt(ed) to the new conditions" will
weather them. "(F)or the others, chaos is at the end of the road."
- Trends forecaster Gerald Celente says 2011 will be a
"wake-up call (for) how grave economic conditions have become"
because of ineffective, self-serving, counterproductive solutions. As a
result, he sees "crack-up" ahead based on reliable indicators
like unemployment, housing, currencies and sovereign debt problems, "all
border(ing) between crisis and disaster."
- Teetering economies will collapse. Currency wars will
continue. Trade barriers will be erected. Economic unions will splinter,
and "the onset of the 'Greatest Depression' (will be) recognized by
everyone." As governments "extract funds to meet fiscal obligations,"
working populations will be hurt most, and they'll react publicly, including
by hardship-driven crimes, whatever it takes to survive. A "war on
crime" will follow, everyone guilty unless proved innocent.
- "The closer we get to 2012, the louder the calls
will be that the 'End is Near!' " For many, it'll feel that way because
of harder than ever hard times.
- Economist Michael Hudson's latest article headlined,
"The Specter Haunting Europe: Debt Defaults, Austerity, and Death
of the 'Social Europe' Model," saying:
- "EU policy seems to be for wage earners and pension
savers to bail out banks for their legacy of bad mortgages and other loans
that cannot be paid - except by plunging their economies into poverty."
- If wages decline, high debt burdens "become even
heavier....Aside from the misery and human tragedies that will multiply
in (their) wake, fiscal and wage austerity is economically self-destructive."
- Eventually demand is crushed, turning recessions into
depressions. Instead of creditors getting hurt, however, imposed "post-modern
neoserfdom....threatens to return Europe to its pre-modern state."
Working Americans face the same plight under bipartisan planned austerity,
heading a once prosperous country toward third world status, complete with
militarized enforcement once anger erupts.
- It's the debt and bad government policy stupid, a pig
no amount of lipstick can hide, and when it explodes, reverberations more
than ever will be felt globally. It's coming, but no one knows when, despite
the above forecasts.
- The tougher things become, the more deceptive MSM assessments
get saying crisis has passed. Claiming better economic times ahead doesn't
wash in the face of a global debt crisis, accelerating, not abating. Strapped
US states are teetering on insolvency, failing to contain their own debt
burdens through draconian austerity budgets on the backs of American workers,
people least able to cope.
- Obama's solution is less, not more regulation. His January
18 Executive Order (EO) headlined, "Improving Regulation and Regulatory
Review" proposed "Flexible Approaches," requiring review
of all existing regulations to ease them for powerful corporate interests.
It requires federal agencies "adopt (them) only upon a reasoned determination
that" benefits justify costs.
- After decades of regulatory implosion, Obama plans more,
no matter how destructive freewheeling freedom became, especially after
global economic crisis took hold, heading for worse hard times, not resolution
lifting all boats.
- Stephen Lendman lives in Chicago and can be reached at
email@example.com. Also visit his blog site at sjlendman.blogspot.com
and listen to cutting-edge discussions with distinguished guests on the
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