THE CRASH OF TODAY’S REAL ESTATE
AND STOCK MARKETS AND WHAT IT
WILL INEVITABLY MEAN POLITICALLY
By: S.R. Shearer
October 28, 2008
[This article follows closely an article I wrote back in the mid-1990s;
it has been re-written to conform to what’s been occurring today with
regard to the country’s economic meltdown and what appears to be the
coming victory of Barack Obama in the 2008 election.]
"For every action there is an equal
and opposite reaction.”
Newton’s Third Law of Motion
"Obama is like that new big dark spot on your arm that finally
sends you to the doctor for some real medicine … Obama is the pain that
let’s your body know that something is dreadfully wrong. Obama will
let the American people know that there is a real cancer eating away
at the heart of our country and Republican aspirin [of the John McCain
variety] will not only not cure it, but only masks the pain and makes
you think you don’t need radical surgery … My bet is that whether Obama
wins or loses in November, millions of European Americans will inevitably
react with new awareness of their heritage and the need for them to
defend and advance it."
- David Duke
Past Grand Master of the KKK
MR. PONZI OF NEW YORK
In December 1919 a certain Mr. Charles Ponzi of New York initiated
an "investment" scheme in which he put up $150 dollars and got ten
friends to do the same. He promised his friends a 50% return on their "investment"
in 90 days. He then got a second set of friends, many times larger than the
first, to put up similar amounts and promised them the same "return on
investment" that he had promised the original group of "investors."
With the money he collected from the second set of "investors,"
he paid the first set back their $150 dollars plus the promised 50% "return"
($75 dollars). Naturally, the original investors were thrilled and enthusiastically
began promoting the scheme. The process was quickly repeated with a third
set of "investors" - and rapidly mushroomed from there.
The intrigue was simplicity itself: give Ponzi money and in 90 days
(and usually much sooner than that) he would give you your money back plus
50%, plus 10% to the recruiter. There was only one problem with the scheme:
while the originators and early participants were handsomely paid off from
the cash flow of those they recruited, the last ones who were brought into
the scheme found that there was no one left to be recruited, and the cash
flow stopped - leaving them "holding the bag." Before the scheme
broke down, however (in May of 1920 - six months after it began), Ponzi had
made more than a million dollars. Whether Ponzi knew it or not, what he had
done was formulate or give expression - so to speak - to much of the thinking
which lies behind today’s New World Economic Order.
The driving motivation behind the scheme, from top to bottom, was
greed. Everyone - from Ponzi on down to the last "investor" recruited
- knew that in the end someone would be left "holding the bag;"
that people would get hurt; and that some would be hurt very badly. They didn’t
care! - just so long as it wasn’t them. Most who
involved themselves in the scheme felt that they could get "in and out"
of the pyramid before it collapsed - and "to hell" with those who
were "dumb" enough to get caught.
Needless to say, it took very coldhearted people to push the scheme,
and very greedy and selfish-minded ones to participate. The scheme Ponzi devised
is today called a "Ponzi Pyramid." It’s called this because if one
were to chart out the scheme on a piece of paper it would resemble a pyramid
with the originator(s) perched atop the pyramid and the losers sitting at
the bottom. Money flows from the bottom of the pyramid to the top.
Originally, most pyramid schemes involved the use of "chain
letters." The originator would send out a letter to ten friends asking
for a certain amount of money, say $10 dollars (for a total of $100 dollars).
They were then told to make ten copies of the letter and send one each to
ten of their friends. A second circle of "investors" was thus produced,
creating a second step in the pyramid that consisted of 100 people. These
100 were told to "buy into" the scheme by producing $10 dollars
each and "sending it up the pyramid" (total amount, $1,000 dollars)
and then to recruit ten more "investors," making a third circle
of "investors" consisting of 1000 people. The process was then repeated,
with the new circle of "investors" contributing $10 dollars each
($10,000 total) to be "sent up" the pyramid making the new total
"invested" in the pyramid $11,100 dollars ($10,000 dollars contributed
by the third circle of investors plus the $1,000 dollars contributed by the
second set of "investors" plus the $100 dollars contributed by the
first set of "investors"). As the money is passed up the pyramid,
each step (circle of "investors") takes out a portion of the "investment"
according to a prearranged schedule as a "return" on his or her
"investment." By the time the fifth step of the pyramid is reached
(100,000 people, each contributing their $10 dollars ($1 million dollars)
the total amount of money has become astronomical considering the small amount
of money with which the scheme was initiated.
In 1923 the Supreme Court determined that this was fraud (Cunningham
v Brown 44 SCt 424) - and since then such pyramid schemes have been known
colloquially as "Ponzi Schemes." According to the Supreme Court,
what made the scheme illegal was that there was no "product" involved
in the scheme. Nothing was "bought and sold."
INTRODUCING "PRODUCT" TO THE SCHEME
What to do? - introduce a product around which the scheme could be reorganized.
The product could be anything; that wasn’t important - what was important
was the scheme remained the same.
The real money didn’t involve the product, it involved the scheme;
that is to say, the creation of an "investment pyramid." The product
was at best a contrivance - a subterfuge. At worst, it was a fiction. Recruits
(i.e., "investors") were not sold on the hope of making money off
legitimate sales of the product; rather they were sold on the hope of making
money by speculating on the pyramid. Speculation was the name of the game;
the product was only a device around which the speculation was organized.
The most well-known (but by far not the
most widespread) form of such speculation in today’s world is multilevel marketing
(MLM). Recruits to MLM schemes are enlisted in the hope of huge profits to
be made on their "downline commissions," not on the sales of the
product per se. They anticipate recruiting others to build "legs,"
thus creating a pyramid, with a pyramid’s law of averages. But like the original
Ponzi Pyramid, success for everyone is impossible. There aren’t enough human
beings in the world to recruit. Once new recruits stop coming into the multilevel
pyramid, the scheme inevitably collapses. Ami Chen Mills writes concerning
her experience with an MLM:
"My experience with multilevel marketing began with Mark, the classified
sales rep in a small newspaper office where I once worked. After an unremarkable
stint at an ad desk, Mark announced that he had struck gold - and was leaving
us to make a fortune in his own business. He would work for the Boss Man no
more, and we who stayed behind would regret our miserable lives when, in a
few years, Mark tore himself away from the country club to visit, and paid
for lunch with a tiny fraction of his $50,000-a-month salary.
"‘You’ll be sorry’, he said on strolls to and from the taqueria for
our usual low-budget burritos. ‘You’ll see’. Mark was suffering from an acute
case of the American Dream; it first surfaced, as he now tells it, at a recruiting
meeting in Santa Cruz for Equinox distributors. For two months, the only language
Mark could speak was the language of Equinox International, an ostensible
environmental and health company which produces herbal supplements, water
filters and other sucking and sifting gadgets to ward off air and water-borne
toxins. Yet the miraculous Equinox products were not the main event for Mark.
Rather, Equinox and its executive progeny had convinced Mark that if he did
not sign up to become an Equinox distributor right away, he would be squashed
flat by the thundering steam train they call the Opportunity of a Lifetime.
"When we coworkers learned that Mark had already maxed out two credit
cards to fly to Equinox "training seminars" in Portland, Denver
and Hawaii and when we further learned Mark was preparing to take out a $5,000
loan to buy into the company as a ‘manager’, we each decided to take our turn
with Mark, to talk some sense into the boy.
"My own conversation with Mark took place in the office after hours,
and went something along the lines of, ‘So, are you sure you can make all
that money’? ‘Oh yeah, no problems’. Mark looked at me askance, considering
something, then retrieved a magazine from his desk. ‘Look at this’, he said,
flipping through pages filled with pictures of Equinox founder Bill Gouldd.
(The extra "d" was added by Gouldd according to the advice of a
‘spiritual adviser’. Mark told me it stood for ‘dollars’.) There was Bill
Gouldd next to his sports car collection. There was Bill Gouldd at his expansive
mansion on a hill. There was Bill Gouldd with a buxom blonde at his side.
According to the magazine, there was no doubt that Bill Gouldd was making
"My next approach was to question the fundamental premise of multilevel
marketing, the sketchy business of selling not a product, but a dream. The
conversation was making Mark uncomfortable. I saw a flash of panic in his
eyes before they glazed over. Then he said this: ‘They told us there’d be
ripe apples who are ready - who see it. They told us there’d be green apples
that weren’t ripe yet. And they told us there’d be rotten apples ... You’re
a rotten apple’, he said. There was an uncomfortable silence. I smiled thinly
and suggested we both go home.
"‘What about the product? Does anyone pay attention to what the distributors
are selling’? I wondered."
No, Ami! - no one pays attention to the product; it’s the scheme that
counts! The pyramid!
You say, of course, that you’re too sophisticated to be caught up
in a Ponzi or multilevel pyramid scheme. That’s for the common folk. You invest
in real estate and the stock market. That’s different. No! - not
really! - at least, not anymore! And those who bought real estate as
an "investment" up until a few years ago, and are now trying to
sell it for a profit have found out that it’s not.
THE REAL ESTATE MARKET
Now to be sure, the real estate boom (and inevitable bust) of recent
years was not an organized Ponzi scheme. No one fiendishly devised it and
pushed it on an "unsuspecting" public. There was no single "mastermind"
behind the scheme; no lone Svengali planned and promoted it; no Bill Gouldd.
But it was a Ponzi Pyramid nonetheless, at least in the sense that people
bought and sold homes not to live in them, but to speculate on them.
Like all those who "invest" in Ponzi schemes, greed was
what motivated them. "Easy money" was what enlivened and excited
them. People came to expect that housing values would rise endlessly. No one
really knew how or why - they just seemed to sense that they would, and that
there was money to be made in all this. People could buy a house one year,
hold it for a few years without putting any real cash into it to fix it up,
and then sell it for a twenty or thirty percent profit. The house wasn’t what
was important in the scheme. It was the speculation that was important! Like
Equinox’s herbal supplements, water filters and "other sucking and sifting
gadgets," houses were merely the "product" around which the
speculation was organized. Speculation was the name of the game; building
or rehabilitating homes had nothing really to do with what was going on.
As the speculation boom took off, houses which
had sold for $100,000 dollars at the beginning of the 1990s were selling
for $450,000 dollars by the end of 2006 - a run up of over 450 percent in
less than fifteen years. The run-up in these values had nothing to do with
the "real" value of the home - i.e., what it cost to originally
build it (plus the costs of inflation and improvements). It resulted in speculation.
Houses were incidental to the speculation. It was the "paper" (i.e.,
the mortgage) that was being "bought and sold." People
were buying paper, they weren’t buying houses.
People bought real estate sight unseen. So long as people could be found to
buy the same house (i.e., the "paper" on the house) every two or
three years at a twenty to thirty percent markup, the pyramid held and the
speculation continued. Eventually, however, there were no more buyers. The
price of the “paper” (i.e., the mortgage) had reached a point where it no
longer had any real connection to the value of the house. Buyers quit coming
into the market.
Those who had bought at the height of the speculation craze,
found they couldn’t unload their purchases. The mortgage (i.e., the "paper"
on the house) was technically worth more than the house itself. People found
that when they sold their homes, they couldn’t get enough money to pay off
the banks (i.e., liquidate the "paper"). The pyramid broke down,
foreclosures ensued, and bankruptcies followed shortly thereafter. Today,
thousands – even millions - of people have lost everything they have. And
who has been at fault? - everybody! Both the big investors and the
small investors. Greed - not a desire to find a place to live - had
brought them into the market; and their own corruption and depravity had "sold
them down the river."
And were there any innocent victims? You bet there were! - but
they weren’t the investors who got left "holding the bag" when the
pyramid collapsed; they deserved what they got! They speculated on the market
and lost! The real victims were instead the families who legitimately needed
a home to live in; "blue collar" families who needed a roof over their
heads, not a device to speculate with. These people were left out in the cold
through no fault of their own - and for the most part, they’re still there,
left having to rent houses in run down neighborhoods from landlords that could
"give a damn."
THE STOCK MARKET
And what about the stock market? More specifically, what about today’s
stock market? It’s the same. The bull market that ended in October of last
year was nothing more than a colossal Ponzi scheme - the same kind of scheme
that undergirded and drove the real estate market that just ended. And the
same kind of greed and avarice that animated and energized Ponzi in 1919 and
the real estate "investors" of the 1990s and early to mid-2000s
is the same avarice and greed that was energizing the bull market that ended
on October 9, 2007, when the DOW reached an astounding 14,164 points.
It had reached this point from a low of 776 in August of 1982 (the
beginning of the “Reagan Bull Market”) – reaching a high of a little less
than 20 times its valuation in 1982 after a short-lived dive from 11723 to
7702 in July of 2002.
What’s that mean? – it means that if someone had invested $100,000 in a DOW stock
in 1982 and sold that same stock in late September of 2007, he would have
made $2,000,000. But the “gains” he would have realized from his investment
would have resulted almost exclusively from speculation rather than a genuine
rise in the value of the company itself, just as was the case in the real
WHAT STOCK IS REALLY ALL ABOUT
Stock represents ownership (usually partial ownership) in a business
corporation. It gives the owner of the stock the right to participate in the
profits (supposedly the legitimate profits) of the company. When the stock
market is functioning properly, people buy stock (ownership) in a company
in order to participate in its growth and reap the bona fide profits
that are derived from the sale of the corporation’s product. Money is invested
into the company in order to increase the corporation’s ability to produce
The value of the company (and, ipso facto, its stock) rests
in the value of the product the company produces. When the value of the aggregate
product rises, the stock (or value of the company) rises in accordance. When
the aggregate value of the company’s product falls, the value of the stock
(or company) falls. The price of the company’s stock is supposed to be in
equilibrium with the dividend (or profit) that investors can expect as a return
on their investment. This is called the price / earnings ratio, a ratio which
measures the value of a stock against the profits one can expect to derive
from the sale of the company’s product.
THE PRICE / EARNINGS RATIO
When the price / earnings ratio favors the investor, the investor
can expect to recover the price he originally paid for the stock within a
relatively short period of time and from that point on live off the company’s
profits (i.e., derive an income from the company’s quarterly dividends). When
it doesn’t favor the investor, it takes a relatively larger amount of time
for the investor to recover the money he originally paid for the stock. When
the amount of time increases to an unreasonable length before an investor
can expect to recover his original investment, the price / earnings ratio
is said to be "out of equilibrium." If the price of the company’s
stock continues to rise after that point is reached, then it is being speculated
Before the collapse of yesterdays’ bull market, the price / earnings
ratio of most of the stocks on the world’s exchanges had long ago reached
the point where it could be said that what was driving the market was "speculation"
rather than any legitimate form of real "investment."
Indeed, the price of most stocks on the New York Exchange prior to
October 2007 was more out of equilibrium than it was just prior to the collapse
of the market in 1929 which brought on the Great
Depression. What that means is that the price of the stock on the world’s exchanges
had no meaningful relationship to the profits that could have been expected
from holding the stock (i.e., from the income that can be expected from the
company’s quarterly dividends). People were buying stock not to derive an
income from the stock’s dividends (which is the only real legitimate reason
for buying stock); rather they were buying stock to speculate with it.
STOCK SPECULATION AND THE
CREATION OF A "STOCK PYRAMID"
Like those who had been “investing” in the real estate market, people
were buying stock not to participate as owners in the company, but to hold
the stock for a few years and sell it down the road. Like the participants
in the real estate market who bought and sold "paper" (i.e., mortgages)
without ever having seen the houses (or real estate) the mortgages were drawn
upon, today’s stock market "investors" were buying and selling "paper"
(in this case, stocks) without having any real idea about the company they
were "buying into." Their "buy" and "sell" orders
were based more on various bizarre mathematical models (and in some cases
astrological charts) than on any real knowledge of the business activity of
the companies the stocks were supposed to represent.
This is speculation - there’s no other word for it. And it makes
no difference whether the stock is bought through one’s 401k account or through
a mutual fund (the ultimate in speculation devices) and held "responsibly"
to be sold in ten or twenty years in order to send one’s children to college,
or whether it’s held for two or three months in order to finance a riotous
drinking and sex binge in the Bahamas. If the stock is being held so that
it can later be sold for a profit, this is speculation. It’s the same as owning
a house not to live in it, but to sell it later for a profit. There’s no difference.
The truth of the matter is, people who were buying stock in yesterday’s
bull market were not that much different from Mark who bought herbal supplements,
water filters and "other sucking and sifting gadgets" from his MLM,
Equinox. Stock market investors and holders of 401k accounts - in all their
pompous arrogance and pride - would, of course, object to being compared with
Mark. Still, there’s little difference. It’s the speculation that counts,
not the product - i.e., not the company, not the real estate, and not the
herbal supplements, water filters and "other sucking and sifting gadgets."
It’s the speculation! It’s the investment pyramid! It’s the gamble of getting
into and out of the market before it collapses - and damn those who do get
caught and the innocent victims of the speculation – i.e., the countless numbers
of employees who depend on employment from the companies whose stock is being
speculated on (and manipulated) in the world’s exchanges.
THE STAGGERING AMOUNT
OF TODAY'S SPECULATION
And just how much speculation has there been in the stock market?
It has been colossal – and the run-up of the stock market from 776 points
in August of 1982 to 14,164 points in October of 2007 gives some idea of the
amount of speculation that’s been going on. Think about it! - does
anyone actually believe that the real value of American corporations has increased
by this amount, especially when the GNP has only been increasing by a fraction
of that figure? If one thinks so, he’s very, very naive or just a plain fool.
Even if one were to say that the nation’s GNP (GDP) has increased
by an average of 5% a year over the last twenty-five years [which is way beyond
the reality of the situation when the entire twenty-five year period is taken
into account, even when one factors in inflation (the real figure is more
like 2.3 percent a year)], that would only account for a rise of about 350%
in the value of these corporations.
What’s to account for the other 1,650% (2,000 minus 350)? In other
words, if the rise in GDP accounts for only seventeen and one-half percent
of the surge in the so-called value of these stocks from 1982 to 2007, what’s
to account for the other eighty-two and one-half per cent?
Consider for a moment: A 2,000 percent rise in the stock market!
Think about what that means. Twenty times the money
that was in the stock market in 1982 was in it in October 2007. If the rise
in GNP (i.e., the normal growth of the economy) can account for only 17.5
percent of the funds that have flowed into the market since the Reagan Administration,
where did the other 82.5 percent come from? We're taking about trillions and
trillions and trillions of dollars here. And be clear! - the
money didn’t materialize out of nowhere. The greatest amount of this growth
came during a period of low inflation (during the Reagan, Bush I & II,
and Clinton presidencies), so the government printing office didn’t "create"
the money. We’re talking about REAL dollars.
WHERE DID THE MONEY COME FROM?
Obviously, the money has been diverted from elsewhere. Essentially,
it came from two sources: one source was internal to the U.S. economy, and
the other source was external to the U.S. economy,
Internally, the money was derived from -
Lowering the wages of average American workers and diverting the money
thus saved into the market.
Opening up sources of funds which used to be "off-limits" for
investment into the stock market [i.e., pension and retirement funds, public
funds, funds held in trust (both public and private), etc.] and pouring
this money into the market.
The creation of mutual funds and 401k accounts to expand the amount of
people capable of participating in the market.
By creating a sub-prime real estate market and linking it to the stock
market through the fabrication of new “investment instruments” such as CMOs
(Collateralized Mortgage Obligations), CDOs (Collateralized Debt Obligations),
and so forth.
Externally, the money was derived from “TRIBUTE”
from America’s system of “client-states” (e.g., the E.U., Japan,
Australia, Canada, New Zealand, Korea, etc.) and “slave-states”
(e.g., Guatemala, Honduras, Nigeria, the Congo, Malaysia, Indonesia,
etc.). [Please see Part 3 of XII, “U.S.
Economic Supremacy,” for a description of how this tribute
THE STOCK MARKET VORTEX
As money poured into the stock market, the sheer volume of it pushed
stock prices up. As stock prices soared, others joined in the stampede to
"get in" on the "easy money," creating an upwardly spiraling
vortex which, as it grew in size and strength, sucked in ever greater amounts
of money which in turn pushed stocks that much higher reaching eventually
into the absurd.
What kind of absurdity? - take, for example, the stock of one company with annual revenues
of only $14-million which was bid up to the point where $52-billion had been
dumped into it - and not just by wild-eyed crazies, but by "reputable"
mutual fund managers of some of the most well-known mutual funds in the country.
And this was an American company doing business in the American market where
reporting procedures were considered to be quite strict in comparison to stocks
offered on foreign exchanges - for instance, in Latin America and the so-called
Pacific Rim where more and more American investment money was being dumped.
God only knows the absurdities that were reached in those overheated exchanges.
In the end, the stock market became nothing more than a mammoth Ponzi
Pyramid, and like all such pyramids, greater and greater amounts of money
had to be found to feed into it in order to prevent its collapse. And the
money that was fed into it came from the diverted wages of American workers,
the pension and retirement funds of our senior citizens, trust funds, and
the "savings" of ordinary Americans who had been persuaded to divert
their savings from their bank accounts to mutual funds and 401k accounts –
ALL THIS PLUS THE MASSIVE AMOUNT OF TRIBUTE MONEY THAT WAS POURING INTO
THE PONZI PYRAMID FROM “LEVIES” MADE ON THE CLIENT-STATES AND SLAVE-STATES
OF AMERICA’S OVERSEAS EMPIRE.
One would think, of course, that the "game" couldn’t go
on forever; that eventually the funds that were required to feed into the
pyramid would dry up. AND THAT’S EXACTLY WHAT’S BEEN HAPPENING NOW FOR
THE LAST YEAR AND A HALF – AND IT’S BEEN A “DOUBLE WHAMMY,” because just
as the Ponzi Pyramid in the stock market began to totter, the Ponzi Pyramid
in the real estate market crashed as well. As we indicated above, both Ponzi
Pyramids had been linked together – so that the collapse of one would precipitate
the collapse of the other.
DR. ROBERT SHILLER OF YALE UNIVERSITY
Seven years ago, Dr. Robert Shiller, a
professor of economics at Yale University, explained what the political consequences
would probably be when the collapse finally occurred, as it is doing today.
"... We are in the longest business expansion ever, with generally good
news for years about inflation and unemployment rates ... But the U.S. stock
market has soared ... to truly stratospheric levels ... [and] ... the gap
between stock prices and their actual worth (i.e., the "price to earnings
ratio") by any standard measure has never been greater.
"... Some retirees have sunk all of their savings into stocks. Investors
have mortgaged houses to invest more deeply; after a major market correction,
they risk losing not only their investments but their homes ... Those on Wall
Street, and in the media, persist in talking about 'bull markets' and 'bear
markets'. This perpetuates the mistaken notion that the market is either hot
or it's not. If that were true, the question 'when will the bubble burst'?
Would be not only rational, but crucial. It is neither. A gradual decline
is a slow disaster; it can be just as devastating as a sudden shock. Either
way, investors lose a lot of money. And a longtime erosion in market confidence
reverberates throughout the economy.
“Consider the 'crash' of October 1929, which - contrary to popular perception
- played out for several years. After the Standard & Poor's (S&P)
Composite peaked on September 7 of that year, there were some spectacular
one-day drops, but there were also spectacular one-day increases [just
as is occurring today]. The drops of October 28-29  are widely remembered,
but these big drops were almost entirely reversed by April 10, 1930. Then
the decline resumed. The S&P Composite fell 86 percent between its top
on September 7, 1929, and its bottom on June 1, 1932, and this cumulative
decline was the result of 365 up days and 431 down days.”
NOTE: A similar drop in today’s
stock market would mean a drop from 14,164 (the DOW’s high
in October of 2007) to 1,983 in November of 2011 (assuming
a similar time frame of about three years).
"Some investors aren't the least bit concerned about an end to the bubble.
They see the recent 'false storms' and rebounds from market drops as proof
that the bubble is here to stay. [Shiller was talking here of the temporary
drop in the DOW in 2000] I couldn't disagree more. Sure, that's been the
case in recent years. Surging investor confidence has helped the market rebound
quickly as investors buy after each dip. But such unnatural confidence is
itself evidence of the speculative bubble.
NOTE: In other words, Shiller
was saying that the rebound that occurred in the DOW during
the Bush II Administration could not possibly go on forever
– and, naturally enough, he was right.
"... The tendency of bubbles to deflate through a long series of ups
and downs, and not burst suddenly, is apparently connected to the persistence
of the public's confidence in markets. That confidence is unlikely to change
suddenly. But in reaction to a protracted period of market volatility, the
feeling of confidence can begin to erode. [As it is beginning to do today
– Antipas Editor.]
"Today's high investor confidence ... is not a natural, steady state.
It is a sign that the market is likely to decline in coming years. The signal
does not identify a sudden turning point. But there may never be a better
THE COLLAPSE OF THE INVESTMENT PYRAMID
& WHAT IT PORTENDS FOR AMERICA
Obviously, the public’s confidence in the economy has now reached
the breaking point – just as Shiller predicted it would seven years ago. It
took a little longer than he thought it would, but it’s surely here now –
and the wreckage of the collapse is beginning to accumulate all over the place
on a massive basis.
Shiller predicted that when the collapse begins, it would play
itself out in fourteen different steps pretty much in the following manner:
The First Nine Steps of the Collapse as Predicted by
Shiller; Steps That Have Occurred or Are Occurring Now
The volatility of the market will increase, with more "down"
days than "up" days. The market begins to drop, drying up as
a financing source for job-creating new companies. [This is already
happening – editor.]
Consumer confidence begins to plummet; paper profits vaporize - say
good-bye to the "wealth effect" high stock markets engender
in the overall economy. Consumers begin to put off making major purchases.
[This is already happening as well; consumer spending is plummeting
Remember downsizing? As sales drop, big employers, from PC makers to
car companies to retailers, are forced to make sweeping layoffs to cut
costs. [Again, this is already happening; layoffs are beginning to
occur on a truly massive basis.]
Retirees wake up to find that their pensions are essentially worthless;
their 401k accounts not worth the paper they're written on. All that's
left to them is cash in the bank, and there is not much of that because
most of it had been "invested" in the stock market. Now there's
nothing to pay the bills with. [Again, this is already happening as
well – editor.]
Real-estate crashes: Houses go unsold and offices remain vacant. [This
is happening now on a colossal basis – editor.]
As the economic slump spreads outward to encompass America's trading
partners, these countries try to ameliorate their situation by "exporting
their way out of the slump" - with most of their exports aimed at
the American market - the so-called "market of last resort."
[Once again, this is already beginning to occur; Europe, China and
Japan are all trying to export their way out of the crisis threatening
to bankrupt some of the best-known American companies, as this process
is now threatening to do with General Motors and Chrysler – editor.]
The resulting flood of foreign imports into the United States - at levels
never before seen or even contemplated - causes American workers to go
"ballistic" and to begin demanding a stop to the flood of imports
which is destroying what few jobs they have left. [Again, this is beginning
to occur on a huge level – one has only to tune into the Lou Dobbs show
on CNN to appreciate the vitriol that has been reached against “Free Trade”
A new labor militancy takes hold with a vengeful "I-told-you-so"
attitude from people on both the extreme right and the extreme left. Most
of the militancy is aimed at elite institutions like the WTO, the IMF,
the World Bank, NAFTA, etc. which both the Left and the Right blame for
the depression. [Same as above – editor.]
The Next Two Steps – Steps #9 and #10
All eight of these steps have been reached and have been “passed by.” We
have now reached the 9th and 10th steps of Shiller’s
description of America’s descent into madness. These steps are occurring now,
and they will be greatly catalyzed by an Obama win in the November election,
failing the materialization of the so-called “Bradley Effect.”
NOTE: The Bradley Effect is
a reference to the failed candidacy of a black candidate
for the governorship of California: The polls had predicted
the black candidate’s victory; instead the white candidate
won. It is assumed that many of the white respondents
who had said they would vote for the black candidate failed
to do so; when they got in to the voting booth, they found
that they just couldn’t do it, and instead voted for the
Still, Obama’s victory next Tuesday seems assured; but Obama and the Left
may very well rue the day they won because in the end what it may very well
mean is that the Right has successfully shifted the blame for the collapse
onto Obama and the Left. The fact is, there is simply no way that Obama can
stave off the continuing collapse of the Ponzi Pyramid on which the wealth
of America has been based – and, according to the evidence that Shiller
has amassed - we are only about 50 percent into this decline; there’s still
a long way to go.
How an Obama Victory Will
“Play Out” in the Developing Crisis
Now it’s very important at this point to consider exactly how an Obama victory
would “play out” in Shiller’s scheme.
First, as the crisis deepens, Obama will undoubtedly be forced to move to
the Left in order to satiate the “leftist” appetite of his constituencies
in answer to the growing crisis – which will mean more and more government
intervention in the market place – just as FDR was forced to move left in
answer to his constituencies during the Great Depression.
Second, as Obama moves to the Left economically, he will also be forced to
make a parallel jump to the Left insofar as the social and cultural concerns
of his left-wing alliance is concerned – a move to the Left that could very
well threaten to tear down America’s Euro-centric, Christian culture and “RECONSTRUCTING”
the nation on a more multi-ethnic, multi-cultural basis.
In addition – and this is very important – given Obama’s stated reluctance
to use military force and the predilection against the use of such by some
of his most important constituencies, THE AMERICAN EMPIRE, WHICH IS BASED
ON THE UNRESERVED AND BRUTISH USE OF AMERICA’S MILITARY POWER, WILL BEGIN
TO CRUMBLE, OR AT LEAST FRACTURE ON THE EDGES, threatening America’s investments
ALL THIS WILL HAVE THE CUMULATIVE EFFECT OF ENRAGING THE BUSINESS COMMUNITY
AND THE COUNTRY’S RELIGIOUS AND POLITICAL RIGHT CONSTITUENCIES.
According to Shiller, this will precipitate steps #9 and #10 in America’s
descent into economic and cultural madness:
A flood of illegal immigrants fleeing from the disorder in the outside
world will begin swamping the country - flooding over the Mexican border;
arriving by ships from overseas; washing ashore on rafts from Cuba, Haiti,
the Dominican Republic; and arriving from Africa, India, Pakistan, etc.
through the nation's airports.
NOTE: There is every reason
to believe that – given Obama’s already stated position
on admitting “illegal” residents into the country
and giving them “legal” status – this flood of new
immigrants will unfold on a truly massive basis under
an Obama presidency.
Most of the new immigrants will be "people of color," which will
provoke majority whites into a red-hot fury against the country's minorities.
This in turn will, according to Shiller, most likely lead to an unprecedented
outbreak of racial rioting at levels the elites (and the police) may not be
able to contain – given the very real fact that there will not be enough jobs
to go around for everyone. During the Great Depression, millions of illegal
(and even some legal) Mexican residents were rounded up and deported by an
enraged white population who saw them “stealing” their jobs.
As a result, the elites, fearing (1) the loss of their overseas “investments,”
(2) rioting in the streets of the “homeland” and (3) dreading the rise
of left-wing radicalism far more than right-wing radicalism, will turn
to the Right for help in surviving the debacle, and will begin to pour
money into the populist right in order to insure its victory over the
Left and secure their own survival.
Racial Chaos: This Is Exactly What the Liberals
Fear May Occur as the Result of an Obama Victory
The chaos that all this will produce – especially the ethnic and racial chaos
- is EXACTLY what concerns Mark Potok of the liberal Southern Poverty
Law Center; Potok worries that a "failed" Obama presidency - one
that white racists could successfully portray to average whites as "ruining
the America they love," (e.g., the "John Wayne," "Gary
Cooper," "Father Knows Best," "Leave It to Beaver,"
"Mayberry" America of their mythology) - could ignite a colossal
wave of white racism against blacks and Latinos in the country; Potok writes:
"With the nomination of Barack Obama as the Democratic presidential
candidate clinched, large sections of the white supremacist movement are
adopting a surprising attitude: Electing America’s first black president
would be a very good thing.
"It’s not that the assortment of neo-Nazis, Klansmen, anti-Semites
and others who make up this country’s radical right have suddenly discovered
that a man should be judged based on the content of his character, not his
skin. On the contrary. A GROWING NUMBER OF WHITE SUPREMACISTS … THINK
THAT A BLACK MAN IN THE OVAL OFFICE WOULD SHOCK WHITE AMERICA, AND POSSIBLY
DRIVE MILLIONS TO THEIR CAUSE, AND PERHAPS EVEN SET OFF A RACE WAR THAT,
THEY HOPE, WOULD ULTIMATELY END IN AN ARYAN VICTORY."
And the attitude of white racists seems to confirm the fears of liberals
like Potok. For example, Ron Doggett, a Virginian who has been a key activist
in the Klan, the paramilitary White People’s Party and the neo-Nazi National
"He [i.e., Obama] will make things so bad for white people that hopefully
they will finally realize how stupid they were for admiring these jigaboos
[sic] all these years.”
"I hope Obama wins because in four years, white people just might
be pissed off enough to actually do something … White people aren’t going
to do a thing until their toys are taken away from them. So things have
to be worse for things to be better."
Another racist, "Darthvader," writes on the neo-Nazi Vanguard News
Network web forum:
"I believe in the motto ‘Worse is Better’ and Obama certainly fits
"Centimanus" writes on the white nationalist Stormfront website:
"Oh man, I am gleefully, sadistically looking forward to Obama as
president. … It will be a beautiful day when the masses look at the paper
and truly realize they have lost their own country."
"Fulimnata" writes on the same website:
"To the average white man and woman, they could look at Obama and
see plain as day that whites are not in control."
Another writes on "TheLastOfMyKind" website:
"Could it be that the nomination of Obama finally sparks a sense of
unity in white voters? I would propose that this threat of black, Muslim
rule may very well be the thing that finally scares some sense back into
complacent whites throughout the nation."
Finally, there's David Duke, America's leading white racist; he writes:
"Obama is like that new big dark spot on your arm that finally sends
you to the doctor for some real medicine … Obama is the pain that let’s
your body know that something is dreadfully wrong. Obama will let the American
people know that there is a real cancer eating away at the heart of our
country and Republican aspirin [of the John McCain variety] will not only
not cure it, but only masks the pain and makes you think you don’t need
radical surgery … My bet is that whether Obama wins or loses in November,
millions of European Americans will inevitably react with new awareness
of their heritage and the need for them to defend and advance it."
The Final Descent into Madness
Steps #11 through #14 in Shiller’s scenario will then inevitably follow:
As a result, a right-wing, populist-based government ensues.
The churches join themselves to the new government and use their alliance
with the Right to suppress their cultural enemies on the Left (i.e., the
gay and lesbian community, social liberals of every stripe, radical feminists,
The Left fights back with all the strength it has left, but is crushed.
A dictatorship emerges to finally put an end to the civil strife! The
nation embraces the new ruler! The world also prepares to embrace him
and restore prosperity to the trading system and people in general - their
souls for a little money and a renewed sense of security: that's the bargain.
DOES ALL THIS SOUND FAMILIAR?
Does all this sound familiar? Well,
it's happened before; this is exactly the scenario that played out with regard
to the rise of fascism and Hitler in Germany in 1933.
We may well be in for a very rough ride over the next few years!
– and you had better get ready. WE URGE YOU TO
DO SO BY INVOLVING YOURSELF IN OUR TRAINING (see below).
God bless you all!
Those of you who continue to reside WITHIN the borders of
the United States and who want to involve themselves in ALIYA
Brothers and sisters - all those who live OUTSIDE the borders
of the United States - God is raising up a TESTIMONY to His
holy Name in these “last days.” If you want to be a part of this great work,
NOTE: Please take the time to read the attached
article; then, if you wish, sign up at the place designated at the end of
In addition, we continue to need your financial help. We will, of course,
continue on whether we receive help or not, but if you can help and take
some of the pressure off of us, please -
Remember the Word of God:
"IF WE HAVE SOWN UNTO YOU SPIRITUAL
THINGS, IS IT A GREAT THING IF WE SHALL REAP YOUR CARNAL (MATERIAL) THINGS?"
(1 Cor. 9:11)
Finally, if you have not as yet ordered your FREE DVD, "Greed
Is Good," we encourage you to do so now -
We need your help to spread the word concerning Antipas Ministries and the
eschatological viewpoint it represents; WE NEED YOUR
HELP BECAUSE WE DO NOT "LINK" WITH OTHER SO-CALLED "CHRISTIAN"
WEBSITES which are, for the most part, "in the tank"
insofar as their loyalty to the United States is concerned
- a loyalty that has made them partners in the BLOODY
trail the American military has left in its TERROR-RIDDEN
rampage throughout the world, as well as making them partners
in the abject poverty that American corporations have
imposed on the peoples and nations the American military
machine has ravaged - A BLOODY, TERROR-RIDDEN RAMPAGE
THAT HAS TO A LARGE DEGREE BEEN CARRIED OUT IN THE NAME
OF THE "PRINCE OF PEACE." [Please see our articles,
"The Third World
as a Model for the New World Order," Inside
the American New World Order System" and "The
American Empire: The Corporate / Pentagon / CIA / Missionary
YOU CAN HELP BY EMAILING
THIS ARTICLE TO
YOUR FRIENDS AND