The historical significance
[Please see our article, "Precipitating a Cascade of Prophetic Events."]
The OECD slashed 0.8 percentage points from its growth forecast of six months ago—from 2.2 percent to 1.4 percent in 2013—and warned of the possibility of "deep recession and deflation, with large additional rises in unemployment."
Noting that the "greatest threats to the world economy" continue to emanate from the euro zone, it stated that fiscal conditions in some countries "risk sparking a chain of events that could considerably harm activity in the monetary union and push the global economy into recession."
In a clear indication of the intractable character of the problems besetting the global economy, it noted that "signs of emergence from the crisis have more than once given way to a renewed slowdown or even a double-dip recession in some countries," and that "the risk of a new major contraction cannot be ruled out."
Following the downward revisions by the International Monetary Fund in its forecasts for global growth, the significance of the OECD data lies in the fact that they concern the major capitalist economies, once the engine of global expansion.
The OECD forecast that the euro zone would contract by 0.1 percent in 2013, following a fall of 0.4 percent this year. Growth in the US was predicted to be just 2 percent—below the level required to expand employment—down from the previous forecast of 2.6 percent. Growth in Japan was revised downward from 1.5 percent to 0.7 percent. But this figure may come down even further, given that the Japanese economy is expected to experience negative growth for the last two quarters of this year.
Apart from the figures on the global economy as a whole, a range of data from individual countries and regions points in the same direction.
China's collapse 'will bring
A hard-landing in the Chinese economy this year will bring five years of economic crisis to a climax, a leading analyst has warned. A looming hard landing in China will bring the financial and economic crisis of the past five years to a climax in 2012, one of the City of London's leading analysts has warned. Albert Edwards, head of strategy at Société Générale and one of the UK's leading "bears", said the next 12 months would be the "final year of pain and disappointment". Although China emerged rapidly from the downturn of 2008-09, Edwards said the recovery had been the result of a massive reflationary package by the Chinese government. Beijing, he added, could not afford another big stimulus to offset a weakening of the economy. Falling imports have led to a widening of China's trade surplus, but Edwards said exports were set to slow and a trade deficit was looming. He added that despite the recent run of more upbeat economic news from the United States, the risk of another recession in the world's biggest economy was "very high". Growth had slowed to an annual rate of 1.5% in the second and third quarters of 2011, below the "stall speed" that historically led to recession. It was unlikely that the economy would muddle through, Edwards said. China has grown by around 10% a year on average over the past two decades, making it the world's second-biggest economy, but the threat of a double-dip recession in the west, coupled with signs of over-heating in the Chinese property market, have caused some analysts to predict severe problems ahead.
Edwards's view was supported by the historian Edward Chancellor, who said China's recent economic performance conformed to the pattern of previous manias and bubbles in history. These included an uncritically assumed growth story, easy money and credit expansion, investment booms and the misallocation of capital, and conspicuous consumption. The warning of fresh trouble ahead came as the World Economic Forum said rising youth unemployment, pressure on pensions and a growing gulf between rich and poor were sowing the "seeds of dystopia."
[Please see our article, "American Dystopia."]
NOTE: Like unemployment figures in the United States, the unemployment figures emanating out of Europe should be doubled to show the REAL rate of unemployment: hence when an 11.7% figure is given for unemployment in the eurozone, the REAL figure is 23.4% - ONE OUT OF FOUR WORKERS UNEMPLOYED. When a 25% unemployment rate is given for Spain and Greece, the REAL figure should read 50% - ONE OUT OF EVERY TWO WORKERS UNEMPLOYED.
Now the stronger economies are being impacted. Consumer spending in France was down in October, while in Germany retail sales fell unexpectedly in the same month.
NOTE: The German unemployment rate is currently fixed at 6.5%, which indicates a 13% REAL unemployment rate – ONE OUT OF EVERY SEVEN PERSONS (an unheard of rate for Germany); the unemployment rate for France is 10.2%, which translates into a REAL unemployment rate of 20.4% - ONE OUT OF EVERY FIVE WORKERS.
Claims that high growth in the so-called emerging economies would provide a boost to the world economy as a whole have already been called into question by the slowdown in the Chinese economy. [Please see sidebar above.]
They have now been dealt a further blow by new data from Brazil and India. Brazil's gross domestic product grew by only 0.6 percent in the third quarter, indicating that its economy is on track to record the lowest annual growth rate in a decade. Likewise, India's annual growth rate for the September quarter fell from 5.5 percent to 5.3 percent, with predictions that it will record its lowest growth for a decade.
These figures demonstrate that far from an economy recovery being "around the corner", the world economy is moving deeper into recession.
Moreover, they have a profound historical significance. They underscore the analysis that the financial crisis that erupted in 2008 was not of a conjunctural character, but signified a breakdown in the global capitalist economy, with far-reaching economic, social and political consequences ...
Gangster capitalism perpetrated on average people by the mavens of Wall Street.
The breakdown of 2008 was prepared by increasingly feverish financial speculation that saw the emergence of parasitism and outright criminality as the chief mode of the accumulation of wealth. But the collapse of the financial house of cards did not signify the return to the previous "normal" conditions.
On the contrary, it marked the opening of a new period of history characterized, by "the greatest convulsions in the relationships between workers and between states." International relations are marked by the descent into outright gangsters on a scale not seen since the actions of the Nazis in the 1930s, as the United States seeks to extricate itself from the crisis at the expense of its rivals.
Four years into the breakdown, the latest data show that Wall Street has no economic policies to overcome its historic crisis.
It has only one answer: to pump new supplies of wealth into the sclerotic arteries of the profit system by destroying all the social gains won by the working class in the post-war period and driving it back to the conditions of the 1930s and beyond, through the series of austerity programs now being implemented around the world.
Driving it back to the conditions of the 1930s and beyond, through the series of austerity programs now being implemented around the world
When mainstream media tell us that we are in the middle of an economic recovery, is that supposed to be some kind of sick joke? According to newly released numbers, over 44 million Americans are now on food stamps. That is a new all-time record and that number is 13.1% higher than it was just one year ago. So how many Americans have to go on food stamps before we can all finally agree that the U.S. economy is dying? 50 million? 60 million? All of us? The food stamp program is the modern equivalent of the old bread lines. More than one out of every seven Americans now depends on the federal government for food.
Oh, but haven't you heard? The economy is showing dramatic improvement. Corporate profits are up. The stock market is soaring. Happy days are here again.
It just seems inconceivable that anyone can claim that the economy is improving when the number of Americans on food stamps continues to set a brand new record every single month. But the food stamp program is not the only indicator that the economy is still having massive problems. The following are 10 more reasons why the U.S. economy is simply not getting any better....
Boarded-up home in Chicago
Once upon a time, Detroit was one of the greatest cities in the entire world. Today, it has become a desolate wasteland where the lawless reign. Once upon a time, Detroit was a teeming metropolis of about 2 million people. Today, it has become a rot-ting war zone with a population that is down to about 700,000. Once upon a time, Detroit was known for good paying manufacturing jobs and it was packed with middle class homes. Today, nearly all of the good paying manufacturing jobs are gone (many of which has been shipped overseas), and there are more than 30,000 vacant homes in Detroit. The city was once a shining example for the rest of the world, but now it is a laughingstock for the rest of the world. If you can believe it, more than 50 percent of all children in Detroit are living in poverty, and close to 50 percent of all adults living in the city are functionally illiterate. The high school graduation rate in Detroit is down to about 25 percent, and the city has become a breeding ground for gangs and violence. The number of murders in Detroit is already higher than last year, and recently groups of young men toting AK-47s have been running around robbing gas stations. How much worse can things possibly get for Detroit?
So in light of the statistics above, can anyone really claim that we are in the middle of an economic recovery? The truth is that there is no sign that any of the long-term trends that are destroying the U.S. economy are even slowing down.
The U.S. economy is dying a very painful death and there is no hope on the horizon. Things are not going to be getting better. Well, they may get a bit better for the boys down on Wall Street, but for the rest of us our standards of living are going to continue to decline.
Following a dismal report last week on retail sales for November , the first month of the holiday shopping season, manufacturing data released Monday confirmed that the US economy is weakening.
The Institute for Supply Management (ISM) issued its purchasing managers' index (PMI) for November, showing an unexpected contraction in manufacturing to the lowest level in three years (since July, 2009). The index fell to 49.5 from 51.7 in October. Any number below 50 indicates a contraction of factory output. Most analysts had predicted a figure well above 51.
The report registered a return to negative growth after two months of tepid expansion. The PMI has been below 50 for four of the last six months. The scale of the decline is indicated by the fact that the ISM's factory index averaged 55.2 in 2011 and 57.3 in 2010.
The fall in manufacturing coincides with slumping consumer spending. On Friday, the Commerce Department reported that consumer spending fell in October for the first time in five months and income growth stalled, with wages and salaries actually dropping 0.2 percent.
Last Thursday, Thomson Reuters reported that four major US retail chains—Kohl's, Target, Macy's and Nordstrom—reported declines in November sales, including the post-Thanksgiving "Black Friday" super-sales events, as compared to November of 2011. Overall, the 16 retailers tracked by Thomson Reuters recorded an overall increase of 1.6 percent, less than half the 3.3 percent jump predicted by analysts.
The statistics on both consumption and production give the lie to the illusion being promoted by the government and the media that economic conditions in the United States are steadily improving, even if the "recovery" is proceeding slowly.
One component of the PMI, the employment index, showed a sharp drop in factory employment. That index came in at 48.4 for November, a decline of 3.7 percentage points and the lowest reading in more than three years (since September 2009).
The Institute for Supply Management's report was consistent with the business survey released last week by the Federal Reserve Board. The Fed's Beige Book report said that seven of the central bank's districts reported "either slowing or outright contraction in manufacturing."
Ironically, a positive report on construction spending issued Monday by the Commerce Department suggests the degree to which the US economy is on life support, dependent on massive injections of cheap credit from the Federal Reserve. Commerce said US builders increased spending on construction projects in October by the biggest amount in five months, led by a surge in housing.
Construction spending rose 1.4 percent in October from the previous month, rising to the highest annual rate in more than three years. Housing construction jumped 3 percent. Even with the gain, however, the level of construction spending remained at about half of what is considered healthy.
The rise in housing construction is largely due to extremely low mortgage interest rates, by historical standards. These, in turn, are the result of the Fed's policy of keeping benchmark interest rates near zero and pumping billions of dollars a month into the financial system through a new round of so-called "quantitative easing"—a euphemism for printing dollars.
The resulting fragile and halting recovery in housing is a major factor keeping the US economy from plunging into a new recession. Meanwhile, the policies of the Fed and the government, designed to inflate stocks and other financial assets while driving wages ever lower, benefit the financial-corporate elite and the wealthiest social layers at the expense of the working class majority of the population.
The slump in US manufacturing is directly related to the worsening global economic situation, particularly the mounting crisis in Europe, which is impacting US export markets. Along with its measure of employment, the ISM's gauge of export orders for November showed a contraction, the sixth straight month of negative growth.
The data firm Markit released its purchasing managers' index for the 17-nation euro zone Monday, showing that manufacturing activity in the region contracted in November for the ninth consecutive month. Every country using the euro, with the exception of Ireland, showed a decline in factory output. This includes Germany, Europe's largest and most powerful economy. [Please see our article, "The Coming Collapse of Europe."]
Every country using the euro, with the exception of Ireland, showed a decline in factory output. This includes Germany, Europe's largest and most powerful economy.
Has the Wall Street Journal had a come-to-Jesus moment?
Then why are they suddenly telling the truth about housing prices?
Up to now we've heard nothing but rubbish about pent up demand, shrinking inventory and a bottom in prices, but nothing even remotely resembling the truth.
And, what is the truth?
The truth is that the recent uptick in prices is the result of the banks manipulating their mountainous stockpile of delinquent homes. Sure, investor groups have moved into the market and are scarfing up the cheap low-end homes. And, sure, historic low interest rates have (slightly) stimulated demand. But what's really pushing prices higher is manipulation, the deliberate withholding of distressed inventory from the market. This is central planning writ large by the Wall Street Banking Politburo with Washington's implicit blessing. Now get a load of this clip from an article in the WSJ:
"Prices have risen this summer for a simple reason: more buyers have chased fewer properties. But the drop in supply and the boost in demand isn't the only reason that Case-Shiller is now turning positive. Another related factor is that the share of non-distressed home sales is rising and the share of distressed sales -- foreclosures and short sales, mostly -- is falling....
"The decline in the distressed share is important for the housing market, and especially for home-price indexes like Case-Shiller. Because banks are faster to cut prices to unload inventory than are mom-and-pop sellers, home values can fall further as the share of distressed sales rises." ("Why Home Prices Are Rising: The 'Distressed Share'," Wall Street Journal)
Are we supposed to believe that WSJ journalist Nick Timiraos just figured this out in the last day or so? Give me a break! There's at least a half dozen bloggers who've been writing about this for months, including Mark Hanson, Michael Olenick, Lawrence Roberts, Dr. Housing Bubble and even CNBC's Diana Olick. None of these analysts had the wool pulled over their eyes. Here's more from the WSJ:
"The share of distressed sales is still high by any historical comparison. But importantly, it is falling when compared with one year ago, which is a big reason why home prices, as measured by the Case-Shiller index, are rising again. In June, the share of non-distressed sales, meanwhile, was at its highest level since August 2008, according to CoreLogic Inc."
There are over 6,000,000 (yes 6 MILLION) homeowners in the pipeline to be foreclosed upon. Sadly, that number is actually increasing daily!!!!
NOTE: An REO (see chart above) or Real Estate Owned property is a home that's been through the foreclosure process and is now held by the lending institution. When borrowers default on their monthly mortgage payments, lenders will start foreclosure proceedings beginning with the notice of default, through the pre-foreclosure stage and into the final foreclosure step of the bank taking possession of the home, or REO. REO homes are often sold by banks at below market values in order to sell quickly. REO homes are expensive for banks to hold because they require maintenance and the bank may have to repay any liens against the property.
Wrong again. It's not a "big reason" why home prices are rising. IT IS THE MAIN REASON why prices are rising. If it wasn't, then the banks would just dump their distressed inventory onto the market today and be done with it. But they're not going to do that because the millions of delinquent homes in the pipeline would flood the market SENDING PRICES DOWN ANOTHER 20 or 30 PERCENT like they did in Ireland. That would blow up the balance sheets of the nation's biggest banks, forcing them to grovel back to the Fed for another handout. None of the big boys want that to happen, which is why they're fiddling their inventory.
Here's more from the WSJ:
"Home prices have risen most sharply in Phoenix, where foreclosures accounted for 27% of home re-sales in May, down from 50% one year ago and 66% three years earlier."
Naturally, if there's half as many discounted homes on the market, then prices go up, right? How long did it take the geniuses at the WSJ to figure that one out? And do you really think the banks are running out of distressed homes in Phoenix? Not bloody likely. This whole inventory scam is being engineered.
Look, the sale of distressed properties (foreclosures, short sales, etc) dramatically pushes down prices. Why? Because bank-owned properties are usually discounted by 30 or 40 percent which drags down the average. For example, let's say you have five houses in the Seattle area all going for $1,000 each. So, the average price is $1,000. Now imagine that two of those homes are foreclosures discounted by 40%. ($600 each) That would pull the average price down to $840. So, what happens to prices if you remove one of those distressed homes from the market? Viola! The average magically rises to $900.
While this analysis may sound absurdly simple, it helps to explain what's actually going on in the housing market. Prices are not going up as much as distressed properties are being removed from the listings. That creates the illusion of rising prices.
So, what's really going on -- is housing getting better or worse?
It's impossible to answer that question without accurate data on the basics. (The number of homes in the shadow inventory is hotly contested) We know that demand has returned to pre-bubble trend, which means that the only way that sales can pick up is if the banks manage to lure people back into the market with lax lending standards and more low-interest inducements. But what about supply?
LURING SUCKERS BACK INTO THE HOUSING MARKET
Spring of 2012 saw a chorus of housing bulls loudly proclaim the arrival of the recovery. All dissent was squelched as the conversation of housing evolved from debating whether or not the market had bottomed to what form the recovery would take. I've never seen such a coordinated effort among journalists to influence public opinion and bolster consumer confidence. Perhaps they think they have a duty to the market.
Ahhh, supply; now there's the rub, because -- while existing inventory is below normal -- shadow inventory is a matter of ferocious debate. The WSJ uses Barclay's estimates of shadow inventory -- "The total number of properties that could be repossessed and resold by banks at around 3.25 million mortgages" -- but that's way too low. Amherst Securities analyst, Laurie Goodman, for example, puts the number "between 8.2 million to 10.3 million loans."
That's a pretty significant difference, don't you think? Whatever the number, there are enough distressed homes to put the banks back in ICU, pronto. So, inventory is a gigantic problem that will continue to be a headwind for housing for the foreseeable future. That much is certain.
Of course, what most prospective home buyers want to know is whether prices are going to go up or not. No one wants to plunk down $300,000 on a home that will only be worth $240,000 by 2013. That's the nightmare scenario that everyone wants to avoid at all cost. But how does one decide whether it's safe to dip their feet back in the water again, especially when data is sending such mixed messages? (Case-Shiller just reported in June that housing prices increased 0.5% year-over-year, and many reputable analysts are saying we've reached a "bottom" in prices.)
Sure it's confusing, but just think of how much effort and maneuvering it took to cause that slight uptick in prices. First, as we already said, the banks are withholding distressed inventory (which makes it look like prices are rising). Second, as Mark Hanson points out, the historic low interest rates represent a "15% year-over-year increase in purchasing power," which means that the average buyer can get 15% more home for his dough. And, STILL -- with all that extra stimulus -- prices only went up a measly 0.5%. That means that -- without the fake interest rates and inventory fiddling -- there's zero interest in housing. The market is a morgue.
So, how does this end?
It all depends on how the banks manage the flow of their distressed properties. There's a terrific article on OC Housing News on this very topic. Here's an excerpt:
"Prices may go up or they may go down depending on how well bank asset managers control the flow. The bottom callers are all placing their faith in the skills of these asset managers rather than in the forces of the market.... However, this also means lenders aren't clearing out the existing shadow inventory and are actually adding to it. This will likely prompt lenders to increase foreclosure processing rates to take advantage of the higher prices....
"In a normal market, millions of individual owners control the supply, and they don't act with any coordinated effort. Today, a cartel of a few major banks control the bulk of our housing inventory. These banks openly collude on prices with the blessing of our government. Since cartel arrangements are inherently unstable, there is no telling how this plays out." ("Liquidating shadow inventory requires managing absorption rates" OC Housing News)
So, supply is huge, demand is weak, and the banks are gaming the system. That says it all, doesn't it? IT ALSO SAYS THAT NAÏVE "AVERAGE AMERICANS" THAT "BUY INTO" THIS MARKET HAD BETTER BE PREPARED TO GO "UNDER WATER" QUITE QUICKLY, AND SEE THEIR LIQUID ASSETS DRY UP ALMOST OVERNIGHT – and that's especially so in light of the new bankruptcy laws which for all practical purposes are increasingly circumventing the Bankruptcy Clause of the U.S. Constitution. - U.S. Const. art. 1, section 8, and Titles 7 and 11 of the U.S. Code.[Please see our article, "The Reformation of the Bankruptcy Laws;" please also see our article, "College: the Way to Succeed in America." These are all devices constructed by the elites to make serfs of average Americans – "Reducing Average Americans to Serfs in Their Own Country."]
NOTE: This section of the U.S. Constitution and the U.S. Code were created by the founders of our country to end the practice of "indenturedservitude" and "Debtor Prisons" under which so many early immigrants to the country had suffered. By creating this wholly new set of laws – entirely unknown in Europe - the country sought to place the ultimate risk of borrowing (under any circumstances – public or private) on the lender and NOT on the borrower; hence the importance of today's credit agencies which is the way that lenders attempt to protect themselves from scofflaws. [Please see our article, "Guilty of Being Poor."]
Please see our articles,
Again, we remind you that in connection with our renewed decision to "get out" of the country, we are contemplating one last swing around the country, God willing, to explain ourselves to our readers and supporters on a PERSONAL, FACE-TO-FACE basis. If you would like us to visit with you, please let us know by emailing us at:
And we will provide you with additional details.
Finally, we want you to bear in mind that -
WE ARE UNDER ATTACK - LARGELY BECAUSE OF OUR LAST TWO ARTICLES
WE NEED YOUR FINANCIAL HELP
We have come under considerable pressure because of our last two articles, "Seven Days in May" and "There Are Seven Kings." While I am restrained from going into too much detail, I can tell you that the stress we have been under has been intense and very extreme.
These attacks have drained down to nothing our financial resources, and we desperately need your help so that we can continue the work to which the Lord has called us.
God bless you all!
IN ADDITION, WE URGE YOU TO DOWNLOAD THE NEW ANTIPAS PAPERS, PRINT THEM OUT YOURSELF, AND STUDY THEM CAREFULLY; SHARE THEM WITH YOUR FRIENDS.
FINALLY, WE URGE YOU TO DOWNLOAD AND PRINT OUT THE FLYER WE SENT TO YOU RECENTLY.
Then make copies and take these copies out to the campuses where you live; pass them out; OR if that seems too "daring" for you right now, post them on telephone poles, the sides of buildings, on campus bulletin boards; post them in union halls, in the neighborhoods of the poor and downtrodden, near employment offices, wherever you can.
Once again, we URGE you to read (or re-read):
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 Archipelago."]
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