PREDICTIONS FOR THE 2003 YEAR – JACKASS BEAR CLAWS (draft)
USDollar decline emerges, picking up downhill speed, as the vicious circle becomes more evident in capital markets and import prices, leading to foreign abandonment and rising price inflation… the US economy and financial markets experience the increased amplitude of the dollar decline vicious circle, as foreign investments are repatriated, stock equity levels shrink, commodity supply costs rise across a wide spectrum, especially energy, leading to another cause for not just pricing pressures, but further profit erosion
the new (tinted) USDollar is born, ushering in debate on firewall issues, as the world openly discusses eventual USTrez default and serious writedowns in USTBond reserves, while gold collateral has dwindled
by end of year, USTBond concerns focus on world bank reserve holdings and the consequence to the world economy if bond values worsen, which results in greater motivation for foreigners to diversify their dollar-based reserve holdings
Fed monetization breeds surprising results on trade gap, with new money supply only feeding the consumer bubble, while longterm bonds show opposite of intended response, making more clear over time the indirect result that the Fed is actually building the Chinese economy and resupplying its new Central Bank
leading economists openly discuss how the USA economy is inexorably slipping into a liquidity trap, just like Japan, despite preventive efforts, as debt liquidation continues and Chinese deflationary pressures mount
energy prices rise broadly, as supply shortages become critical, delivery routes become threatened, and terrorists target pipelines, with the first events centered on natural gas and heating costs
George W. Bush sees performance ratings slip while the economy stagnates, as Middle East tensions remain at pitch, and stimulus fails (just like Japan), with cries for our leaders to pay closer attention to domestic issues as they worsen
Middle East and Iraqi tensions simply will not go away, and a constant state of no resolution persists, as Saddam Hussein continues to sit defiantly in power, American leaders lack the will to initiate broad conclusive attacks on any recognized terrorist states, and European support for US efforts against terrorism and terrorist states dissipates
The House of Saud shows evidence of some preliminary cracks, offering first evidence of potential regime shift and revolutionary change, as symptoms explode onto the scene with local violence within the Saudi Arabia, attacks on certain royal princes, official crackdowns of terrorist funding, revelation of extortion by religious front organizations, demonstrations against “US Occupation”, sponsored raids by US Troops against internal Al Qaeda hideouts near the Yemen border… i.e signs will emerge that all hell will break loose
Democratic party remains leaderless, vapid, devoid of ideas, desperate to capture political gains during the current economic duress, as the libertarian third-party grows at grass roots, calling for abolition of the Federal Reserve and an end to the steady beat of warmongering
USGovt economic reporting is deemed no different from corporate deception, as actual Treasury debt levels are scrutinized, numerous data series are doubted since the aggregates reported fail in consistency with the union of the component evidence, and grand reform is demanded
Alan Greenspan retirement sets off emotional debate over his legacy, his responsibility in the greatest investment mania and collapse in modern history, the role of the Federal Reserve, and of the ineffectiveness of Keynesian monetarism generally, as comparisons to Japan grow more stark
foreign criticism reaches peak on US economic policy, corruption, dollar hegemony, and war efforts, as competing currency mayhem is blamed on the dollar “problem”, with Asian leaders feeling helpless to the competition and its harmful effects
gold price will accelerate as dollar, euro, yen are simultaneously debased, but by the end of year the new story will become silver’s rise, as actual defaults on delivery occur on a scattered basis, raising big questions and attracting attention like blood in the water, with silver actually enjoying benefits from the next gold correction and catching up to gold, while gold and the dollar regularly swap roles leading each other as indicators
risk control programs for gold miners and bullion bankers progressively ratchet to higher “lines in sand”, begetting less volatility than expected, while outsized short positions simply will not go away, which result in a steady unrelenting ascent of gold in a much more stable fashion than envisioned
the Blanchard lawsuit reveals some surprising gold contracts and interconnected contracts, all coming as a result of discovery process, as nothing is resolved but much is revealed, with the battle itself attracting more attention that gold cartel members would like
the foundation is laid for a Grand Gold Scandal, upon disclosure of the depleted nation gold reserves, whereby vast quantities of our gold supply was sold at the cycle low prices, and the collusion with JPMorgan and other gold cartel members is clarified during lawsuits and criminal prosecutions
Asia and the Middle East make strides toward becoming more gold-centric in commerce and banking, with petrodollars converting more to gold, and talk becoming action in forming gold-based central banks, gradually coalescing into a concerted pan-Islamic financial position against the USDollar
calls rise from govts and corporations for China to devalue its yuan and reduce its worldwide deflationary pressure on prices, on wide class of products going beyond technology, leading to geopolitical confrontations
unemployment rises in non-China Asia, as Chinese competition deals blows to their economies, and bank problems worsen across Asia beyond Japan, as exporting companies feel the pain from reduced exports to the USA
conflict escalates between China and its neighbors, most notably with South Korea and Taiwan, as China makes preliminary political gambits toward absorbing Taiwan into the People’s Republic of China in the same staged manner as Hong Kong, eventually leading to financial concessions on the yuan currency in exchange for political sacrifice of the Taipei govt
car industry and its vertically integrated sectors lead into economic recession, as mounting layoffs undermine the consumer spending extravaganza, brought to a head by renegotiation of the United Auto Worker labor contract set to expire in summer 2003, breeding calls for nationalization of the industry, since the sheer number of jobs involved is monumental, but not before calls by labor unions and Congressmen alike urge for protection from the world juggernaut in Toyota, which has made giant inroads within the US with numerous non-union car mfg plants
airline industry bankruptcies continue beyond United and USAir, leading to calls to nationalize it also, and create a vast network under the dept of transportation to manage both the car and airline industries, as large-scale job and pensions issues are hotly debated
residential real estate market begins its slow decline from the weight of job insecurity, but with such slow rate of decline that it raises little concern, but REFI movement dies, and consumer spending feels effects, leading to broad economic consequences
numerous mortgage finance companies go belly up, led by the infamous subprimes, followed by smaller home financiers, as mortgage application and appraisal processes are called into deep question, and parallels are more vividly established between the real estate mortgage bubble and the 1999 tech stock bubble
rumors swirl around Fanny Mae and other GSE’s, as default rates rise and questions surface as to the actual govt guarantee levels for its operations, leaving critics to charge that the govt has aided in creating a new credit bubble akin to the tech bubble from recent years
warnings abound concerning growing specter of negative home equity, which leads to popular urgings for the govt to attempt to provide special tax breaks for home losses, and even to guarantee residential real estate prices, to no avail
labor wage deflation becomes a national issue, as indirect methods to reduce monetary benefits constrict on bonuses, club memberships, sports & entertainment tickets, discounts on store purchases, while individual responsibilities extend to covering duties of laid-off workers, in addition to outright reductions in salary as a result of taking lesser positions in different companies
notable press pundits offer scary previews of an economy beset by both the car and housing sectors in decline, since these are typical beneficiaries of federal stimulus, thus highlighting its failure, as early evidence is unmistakable in the unemployment data
recessionary ripple effects are seen in advertisement revenues, which begin to hit the press/media, with a strange dual effect of layoffs and a shift in editorial direction toward independent thought
deflation and default enter the world of sports & entertainment, as franchise closings hit hockey and baseball, but not football or basketball, while financial strain is felt in restaurant chains and amusement parks, but not movie theatres
the longstanding presidential third-year upcycle fails to materialize, as debt liquidation and dollar decline overwhelm the typically observed benefits from the fiscal stimulus (vote buying) during election campaigns
stock market sees occasional gains, punctuated by sharp declines, as foreigners watch and react to the dollar and domestics watch and react to longterm bond rates, each concluding the wisdom of exiting the equity markets, and executing on that wisdom
the mutual fund industry follows the brokerage industry in issuing vast job layoffs, while investors yank remaining funds from their stock accounts, leaving fund portfolio sizes a fraction of their peak levels, thus marking an end to a manic era for retail investing
pension funding reaches national debate levels, as corporations plot to circumvent obligations, and govts conspire to enable their efforts, leading to huge national controversies and a grander debate on social security, as Americans feel the deep threat of retirement insecurity
federal stimulus package will again be watered down by bipartisan squabbling and ineffective leadership, but also be thwarted by offsetting scattered state tax increases, while entire concept of intervention is slowly perceived as obstructing the economic recovery process itself
longterm interest rates rise, as import prices inch upward, commodity prices see fitful jumps, while Treasury debt oversupply echoes the stress of continued corporate and personal defaults & bankruptcies, resulting in frustration to the Federal Reserve, who is targeting longterm rates in their unsuccessful monetization efforts
next debt defaults are govt (state, city, municipal), with taxes rising on many fronts (sales, property, usage), services reduced, worsening local economies, rising liability insurance premium costs, which culminates in California inexorably inching toward bankruptcy
California fiscal distress becomes the topic of national attention, as its debt falls to junk status, while urgently levied tax hikes exacerbate the economic decline and layoffs grow markedly… following the 2004 presidential election where the state votes against Bush, the state appeals for federal aid, is refused, and declares bankruptcy
insurance industry joins the distressed financial sector, with both severely reduced portfolios and payoffs gone out of control, as asbestos, medical malpractice, and personal injury awards rise to unrestrained levels, resulting in shutdown of scattered doctor clinics and municipal building services, amidst public outcries
personal bankruptcies not only continue to rise but accelerate to the upside, creating a national stir, with broad new advertising in the media (newspapers, journals, television, radio) about debt counseling and legal alternatives, while warning against drawing equity recklessly from homes
Brazil defaults on their US/German/UK sovereign bank loans, leading to tumultuous debate over the IMF role in damaging fringe economies, as major money center banks finally feel the consequences to their balance sheets
chaos in Venezuela spreads to neighboring Columbia, as both the drug cartel and terrorist groups carve the nation into a feudal state, with communist popularist leaders gaining more control in the northern rim of the continent
South American economic failure slowly becomes comprehensive, total, and complete among the non-Andean nations, which is accompanied by increasingly radical political movements, producing leaders openly defiant to western influence, the IMF, our leaders, and our big bankers
Terrorist groups consolidate their organization (Al Qaeda, Hez Bollah, Islamic Jihad) and align more closely with Arab govts, carrying out clear plans for attacks on the dollar, as clandestine groups attack critical energy pipelines left vulnerable
a serious mysterious disease outbreak occurs within a major American city, whose origin cannot be traced, but whose effects linger, as blame is placed vaguely but viscerally upon Islamic sources
a western world leader will be assassinated, probably in Europe, a consequence of support for American anti-terrorist (aka anti-Islamic) efforts, as attacks on G7 nations resume, and Christian religious centers are targeted
social unrest escalates inside the USA, leading to class strife, rising crime rates, as depressed jobless join those whose life savings have disappeared, and enmity is directed toward the wealthy whose luxury homes, cars, and possessions are threatened
George W. Bush is re-elected in a landslide, as Democrats offer up weak retread candidates that include Lieberman, Gore, and even Hillary, with women’s groups urging Gore and Hillary to combine forces, but a serious obstacle develops as her past association with the Rose Law firm and widespread fraud in Arkansas resurfaces
the Kondratieff winter grinds colder and darker, as debt liquidation continues, stimulus fails, and the world monetary standard (USDollar) endures one serious blow after another until a crisis unfolds |
