Thursday, May 14, 2009

Gerald Celente – The Bubble to End all Bubbles…

Here, Celente is touching upon what I like to call, “the events that tend to follow economic events,” especially collapsing credit bubbles (ht Yabs)…
The Bailout Bubble - The Bubble To End All Bubbles…

By Gerald Celente
5-14-9

KINGSTON, NY -- The biggest financial bubble in history is being inflated in plain sight, said Gerald Celente, Director of The Trends Research Institute. "This is the Mother of All Bubbles, and when it explodes," Celente warns, "it will signal the end to the boom/bust cycle that has characterized economic activity throughout the developed world."

Either unwilling or unable to call the bubble by its proper name, the media, Washington and Wall Street describe the stupendous government expenditures on rescue packages, stimulus plans, buyouts and takeovers as emergency measures needed to salvage the severely damaged economy.

"All of this terminology is econo-jargon," said Celente. "It's like calling torture 'enhanced interrogation techniques.' Washington is inflating the biggest bubble ever: the 'Bailout Bubble.' "This is much bigger than the Dot-com and Real Estate bubbles which hit speculators, investors and financiers the hardest. However destructive the effects of these busts on employment, savings and productivity, the Free Market Capitalist framework was left intact. But when the 'Bailout Bubble' explodes, the system goes with it."

The economic framework of the United States has been restructured. Federal interventionist policies have given the government equity stakes, executive powers and management control of what was once private enterprise. To finance these buyouts, rescue and stimulus packages -- instead of letting failed businesses fail and bankrupt banks and bandit brokerages go bankrupt -- trillions of dollars are being injected into the stricken economy.

Phantom dollars, printed out of thin air, backed by nothing ... and producing next to nothing ... defines the "Bailout Bubble." Just as with the other bubbles, so too will this one burst. But unlike Dot-com and Real Estate, when the "Bailout Bubble" pops, neither the President nor the Federal Reserve will have the fiscal fixes or monetary policies available to inflate another.

With no more massive economic bubbles left to blow up, they'll set their sights on bigger targets. "Given the pattern of governments to parlay egregious failures into mega-failures, the classic trend they follow, when all else fails, is to take their nation to war," observed Celente.

Since the "Bailout Bubble" is neither called nor recognized as a bubble, its sudden and spectacular explosion will create chaos. A panicked public will readily accept any Washington/Wall Street/Main Stream Media alibi that shifts the blame for the catastrophe away from the policy makers and onto some scapegoat.

"At this time we are not forecasting a war. However, the trends in play are ominous," Celente concluded. "While we cannot pinpoint precisely when the 'Bailout Bubble' will burst, we are certain it will. When it does, it should be understood that a major war could follow."

I think Celente is correct in that the government stimulus, when it fails, will signal the end of the “stimulus bubble” that has been blown really ever since Bretton Woods and since Keynesian deficit spending became vogue.

Regarding the possibility of war, on this point he has a high probability of being correct. If you look back in history, approximately one decade following major economic collapses you will repeatedly find a major conflict. Are we smarter this time? Better informed with information moving at light speed?

I would sure like to think so, but the truth is that if anything we are displaying more of a herd mentality now than ever before! The vast majority of people are tuning into their televisions for their propaganda, and yes, the internet and the truth is out there, but very few are willing to seek it out. If you are reading this, you are a very slim, but well informed, minority.

I hope Celente is wrong – I don’t think he is. This talk is so far out there for the mainstream that he may sound radical. He is simply telling the truth about people and about history and extrapolating that into possible future outcomes. This is something we need way worse than the lies and manipulation that are brought to you by your own government, the latest example being the “stress test.” Now there’s RADICAL and INSANITY. This article is far more lucid than that!