Sep 8, 2009

Orlandini: We're heading into a long, cold and grim winter...

What follows is taken from Enrico Orlandini's latest weekly missive: The Next Shoe to Fall ( in Dow Theory Analysis) and although it doesn't paint quite a very pretty picture of things to come, it just hopefully might nudge some of you out there from your slumber into a sober awakening!..
Funny thing is, it also ties in rather nicelly with the latest Mises.org daily article called The Trouble with Democracy (which you can read HERE)



"... So that’s the long and the short of it. We are heading into a long, cold winter and we are all naked in the sun. As long as it’s warm we feel great and life goes on, but once the temperature drops we’re all in trouble. The problem is that no one sees, or wants to see, what’s coming and that is a real shame. Everyone says the US will enter a long period of sideways movement like Japan, but I wouldn’t hold my breath. Japan had reserves! All the US has is mountains of debt and poor leadership. I am old enough to remember the Kennedy inauguration, which means that I also remember Eisenhower and I experienced Johnson and Nixon first hand. I liked Nixon and couldn’t stand Johnson, but at least he took a stand and stuck to it. In today’s world I can’t see one decent politician in the United States and let me qualify that by saying that there isn’t anyone with a good message and great communication skills the people will listen to.

Back in the 1960’s we had some really great public speakers like the Kennedy brothers, Martin Luther King, and Medgar Evers and they all died a violent death. In particular Robert Kennedy had the communication skills and a message that played well to the American public. Is it an accident they were all shot? I don’t know but I think it served as a message to the next generation of politicians that you don’t mess with the system. On November 15, 1963 John F Kennedy gave a speech in Pittsburg saying he wanted to close down the Federal Reserve and he was dead two weeks later. I don’t know if that was just a coincidence or not, but I personally don’t think so. In any event it produced a system that punished original thought and anyone who wanted to challenge the status quo. Fast forward to the present and you see the fruits of that labor, a system bloated on debt and pork that violates its own constitution almost on a daily basis.

So many paid such a high price so Americans could enjoy the freedoms they so easily cede to the Bushes and Obama that it’s scary. Fortunately there is a mechanism called a market that is so big and so powerful that no one individual, group, or government can manipulate it for very long. The current manipulation has been going on for more than seventy years and involves the biggest transfer of wealth the world has even known. In 1913 the US was the richest nation in the world and most of that wealth belonged to the American people as a whole. Then along can a very small and select group of men, under the guise of the Federal Reserve and began to transfer that wealth to themselves and a few others. The result is the largest debtor nation in the world and an uneducated population that can’t compete. Along with the wealth went the entire production base of the US and now we are service oriented, meaning we sell each other insurance.

The greed has been so extreme that it overflowed the shores of the US and permeated the rest of the world in the form of over-the-counter derivatives. Almost US $700 trillion worth of them! Those chickens will come home to roost this fall and it will be very messy indeed. The market will have its day and no amount of bad legislation will change that, and neither will the printing press. The only salvation will be gold, silver, and maybe the Swiss Franc. A couple acres of vegetables in a backyard surrounded by an electric fence won’t hurt either. While you’re at it don’t forget your own well and power source since most public utilities are antiquated and their employees may not get paid. Civil disobedience will be a real problem and I wonder just how far it will go. The Viet Nam demonstrations aside, Americans haven’t been really worked up over anything since the days of “Hooverville” and will react negatively once they figure out that they’ve been taken to the cleaners. Like all distortions, the repercussions are likely to be extreme and I suspect will lead to a new form of government.
Whether it’s framed after the US Constitution or not remains to be seen."

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