Heavy rainy days in 2011

[The Lawspeaker]

Heavy rainy days in 2011 (http://oystercove.wordpress.com/2009/04/11/heavy-rainy-days-in-2011/)

April 11, 2009 ·

Santiago Niño Becerra, professor of Economic Structure in Barcelona had predicted already by July 2007 that was going to happen was that by mid 2010 there is going to be a crisis only comparable to the one in 1929. 2010 is not yet here, but we are seeing the crisis already in the stock market. Or maybe we are not. To Niño Becerra what is happening since september 2007 to date, even the huge losses of the past month, is just a prelude to the much bigger crisis that is coming by mid 2010, and that according to his predictions it might last 10 years, with the period of 2010-2012 being the worst of all. He describes year by year how the crisis is going to happen (even giving exact months for certain events), here is a quick summary of his predictions.


September 2007 to October 2009: Prelude to the crisis. Governments would take measures to avoid “things going worse”.
October 2009 to May 2010: The believe that “things are not working the way they should” starts to spread out.
May 2010: The Crisis starts with all its force.
2011: The worst and hardest year of the crisis.
2012-2015: Governments regulate the economy and people accept it because they are in shock after what happened.
2015-2018: Slowly and not without problems the economy starts to pick up and improve slightly.
End of 2018: End of the crisis.
It is of course only a prediction of what might happen, but for some reason seems to be based on solid ground.


Looking at the positive side, the world economy will start to slowly recover in year 2015. However, we must save enough for the heavy rainy days to come in 2011.


Be prepared!!!

[The Lawspeaker]

America By 2012: 10 Dire Predictions (http://meltdown2011.com/2009/05/10/america-by-2012-10-dire-predictions/)


Posted on May 10, 2009 by Scott Gallup
If this doesn’t make you think–make you want to prepare–I don’t know what will. From “Big Jake” on SeekingAlpha, “The Worst Case Scenario (Someone Has to Say It) (http://seekingalpha.com/article/134820-the-worst-case-scenario-someone-has-to-say-it)” [edited for length]

Since the economy began sliding downhill in late 2007, mainstream economic and market experts have consistently erred on the sunny side.
As late as June 2008, mainstream consensus held that the U.S. was heading for a “soft landing” and would avoid recession.
Several months later, the slump was acknowledged to have started in January 2008, but we were supposed to see renewed growth by mid-2009, with unemployment peaking in the eight-to-nine percent range. A quick “shovel-ready” stimulus bag was supposed to set us back on the road to prosperity.
In January, recovery projections were pushed forward to late 2009. Today, the consensus is for a mid-2010 recovery, with unemployment peaking at just over 10 percent. Clearly, the mainstream has struggled to catch up to reality for well over one year. What are the chances that they finally have it right this time?
In the interests of providing you with an alternate vision—something outside the mainstream—below are ten predictions for America through the year 2012. This is not boilerplate doom-saying. Rather, I am laying out in highly specific terms what will happen over the next three-odd years. Others have thrown around the term “Depression”, but I am going to tell you precisely what it means for you, your investments, and your community.

Prediction one.
The twenty-five-year equities bubble pops in 2009: the S&P 500 will sink below 500. In a bid to stem the panic, the government will enforce periodic “stock market holidays”, and will vastly expand the scope of its short-selling prohibitions—eventually banning short-selling altogether.

Prediction two.
With public pension systems and tens of millions of 401k holders virtually wiped out—and with the Baby Boomers retiring en masse—there will be tremendous pressure on the government to get into the stock market in order to bid up prices.
Therefore, sometime in 2010, the Federal Reserve will create and loan out hundreds of billions of fresh dollars to the usual well-connected suspects, instructing them to buy up stocks on the public’s behalf. This scheme will have a fancy but meaningless name—something like the “Taxpayer Assurance Equities Facility”. It will have no effect other than to serve as buyer of last resort for capitulating smart-money types who want to get out of stocks entirely.

Prediction three.
Millions of new retirees—including white-collar people with high expectations for a Golden Retirement—will be left virtually penniless. Thousands will starve or freeze to death in their own homes. Hundreds of thousands will find themselves evicted and homeless, or will have to move in with their less-than-enthusiastic children. Already strained by the rising tide of the working-age unemployed, state and local welfare services will be overwhelmed, and by 2012 will have largely collapsed and ceased to function in many parts of the country.

Prediction four.
“Quantitative easing” will fail to restart previous patterns of lending and consumption. As the government sends out additional “rebate” checks and takes ever-more drastic measures to force banks to lend, hyperinflation could take hold. However, comprehensive debt relief via a devaluation of the dollar is even more likely. This would entail the government issuing one “new” dollar for some greater number of “old” dollars—thus reducing both debts and savings simultaneously.

Prediction five.
The government will stop pretending that it can finance continuous multi-trillion-dollar deficits on the private market. By late 2010, the sole buyers of new U.S. Treasury and agency bonds will be the Federal Reserve and a few derelict financial institutions under government control. This may or may not lead to hyperinflation. (See prediction four).

Prediction six.
The government’s narrow unemployment figure (U3) will rise into the high teens by late 2010. The government’s broader unemployment figure (U6) will cease to be reported when it reaches 25 percent—it will simply be too embarrassing. Ultimately, one in three work-eligible Americans will be unemployed, underemployed, or never-employed (e.g. college grads permanently unable to find suitable work).

Prediction seven.
With their pension dreams squashed, and their salaries frozen or cut, police and other local government workers will turn to wholesale corruption in order to survive. America’s ideal of honest, courteous, and impartial cops, teachers, and small-time local functionaries will have come to an end.

Prediction eight.
Commercial overcapacity will strike with a vengeance. By 2012, thousands of enclosed malls, strip malls, unfinished residential developments, motels, truck stops, distribution centers, middle-of-nowhere resorts and casinos, and small-city airports across America will turn into dilapidated, unwanted, and dangerous ghost towns. With no economic incentive for their maintenance or repair, they will crumble into overgrown, plywood-and-sheet-rock ruins.

Prediction nine.
By the end of 2010, tens of millions of households will have fallen behind on their mortgages or stopped paying altogether. Many banks will be unable to process the massive volume of foreclosure paperwork, much less actually seize and resell the homes.
Devaluation (as mentioned in prediction four) could ease the situation for those mortgage holders still afloat, but it would also eliminate any incentive for most banks to stay in the mortgage business. In any case, the housing market in many parts of the country will lock up completely—nothing bought or sold. With virtually no loans being made, even the government will finally acknowledge that most banks are fundamentally insolvent. A general bank run will only be averted through a roughly one trillion-dollar recapitalization of the FDIC, courtesy of new money from the Federal Reserve.

Prediction ten.
As an economy is never independent of the society within which it functions, the next few paragraphs will focus on social and political factors. These factors will have as much of an impact on market and consumer confidence as any developments in the financial sector.
Whether rightly or not, President Obama, having come to power at the dawn of this crisis, will be blamed for it by over 50 percent of the population. He will be a one-term president. In response to his perceived socialization of America, there will be a swarm of secessionist and extremist activity, much of it violent. Militias and armed sects will be more prominent than in the early 1990s. Stand-off dramas, violent score-settlings, and going-out-with-a-bang attacks by laid-off workers and bankrupted investors—already a national plague—will become an everyday occurrence.
For both economic and social reasons, millions of immigrants and guest workers will return to their home countries, taking their assets and skills with them. The flow of skilled immigrants will slow to a trickle. Birth rates will plummet as families struggle with uncertainty and reduced (or no) income.

Property crime will explode as citizens bitter over their own shattered dreams attempt to comfort themselves by taking what is not theirs. Mutinies and desertions will proliferate in an increasingly demoralized, over-stretched military, especially when states can no longer provide the educational and other benefits promised to their National Guard troops.
There will be widespread tax collection issues, and a huge backlash against Federal and state bureaucrats who demand three-percent annual pay raises while private sector wages remain frozen or worse. In short, the “Tea Parties” of tomorrow will likely not be so restrained.
Finally, between now and 2012, we are likely to see another earth-shaking national embarrassment on the scale of the 9/11 attacks or Hurricane Katrina and its aftermath. This will demonstrate conclusively to all Americans that their government, even under a savior-figure like Obama, cannot, in fact, save them.

By 2012, there will be a general feeling that the nation is in immediate danger of blowing up or coming apart at the seams. This fear will be justified, given that the U.S. has always been held together by the promise of a continuously rising material standard of living—the famous “pursuit of happiness”—rather than any ethnic or religious ties. If that goes, so could everything else. We were lucky in the 1930s—we may not be so lucky again.

[SwordoftheVistula]

Generally, a quite possible scenario.


Prediction three.
Millions of new retirees—including white-collar people with high expectations for a Golden Retirement—will be left virtually penniless. Thousands will starve or freeze to death in their own homes. Hundreds of thousands will find themselves evicted and homeless, or will have to move in with their less-than-enthusiastic children.

This part here is highly unlikely to happen, since the government can issue more 'food stamps' (used to buy grocery items) and 'section 8 vouchers' (used to pay rent). Food is domestically produced, and the landlords who own the existing housing stock will be more likely to accept the government rental vouchers since they will have a hard time finding other tenants. Most of these people own their own homes anyways, many with the mortgage paid off or nearly so.

The 'freezing' is another matter, since energy is imported from other countries, and the price will rise as the dollar devalues-a large portion of the homes in the places where 'freezing to death in their own homes' could occur are heated with 'heating oil' aka diesel fuel. So far in the recession though, oil prices have declined. One step the government may take is to dramatically raise the tax on gasoline, including diesel fuel (which the govt wants to do anyways for a variety of other reasons), reducing demand for diesel fuel and thus lowering the cost of heating oil.




Already strained by the rising tide of the working-age unemployed, state and local welfare services will be overwhelmed, and by 2012 will have largely collapsed and ceased to function in many parts of the country.

Federal bailout! (with more newly printed money). This is essentially what the recently passed 'stimulus' plan was, the 'shovel-ready infrastructure projects' were only a portion of the spending. The aforementioned food and rental vouchers are already funded at least in part by the federal government.


Prediction six.
The government’s narrow unemployment figure (U3) will rise into the high teens by late 2010. The government’s broader unemployment figure (U6) will cease to be reported when it reaches 25 percent—it will simply be too embarrassing. Ultimately, one in three work-eligible Americans will be unemployed, underemployed, or never-employed (e.g. college grads permanently unable to find suitable work).

Quite possible, but the government only classifies as 'unemployed' the recently employed and those claiming to be 'looking for work', leaving out the long term unemployed who are instead classified as 'discouraged workers' who are instead considered 'out of the 'labor force'. So a more likely scenario is the government reporting an 8.5% 'unemployment rate' when in truth a third of the working-age population is not working.



Prediction seven.
With their pension dreams squashed, and their salaries frozen or cut, police and other local government workers will turn to wholesale corruption in order to survive. America’s ideal of honest, courteous, and impartial cops, teachers, and small-time local functionaries will have come to an end.

This too will get a federal bailout. We haven't had 'honest, courteous, and impartial cops, teachers, and small-time local functionaries' for the most part in a long time. These jobs may actually get an increase, as a jobs program for the aforementioned recent college graduates (teachers), those leaving the military (police) and urban/black populations (small-time local functionaries), thus providing employment for and pacifying 3 groups of people most likely to foment serious unrest.



By the end of 2010, tens of millions of households will have fallen behind on their mortgages or stopped paying altogether. Many banks will be unable to process the massive volume of foreclosure paperwork, much less actually seize and resell the homes.
Devaluation (as mentioned in prediction four) could ease the situation for those mortgage holders still afloat, but it would also eliminate any incentive for most banks to stay in the mortgage business.

This will be dealt with in the same way as in the mortgage crisis that started this whole mess.


In any case, the housing market in many parts of the country will lock up completely—nothing bought or sold.

Aside from losing a lot of jobs, the government won't mind this too much. They may end up nationalizing the banks and thereby taking ownership of the houses, then handing out the aforementioned rental vouchers to occupants.


With virtually no loans being made, even the government will finally acknowledge that most banks are fundamentally insolvent. A general bank run will only be averted through a roughly one trillion-dollar recapitalization of the FDIC, courtesy of new money from the Federal Reserve.

I don't know how much money will be left in bank savings accounts for there to be a 'run on banks'. Most peoples' assets are tied up in real estate, stocks, and bonds. A slow steady 'run on banks' is more likely as people deplete their savings accounts to pay their bills and living expenses, as fewer people have jobs or other sources of income. But yes, they will be 'recapitalized' by the FDIC courtesy of new money from the Federal Reserve, probably in return for giving the government control of the banks, who may then give out loans in a more direct fashion than the Fannie Mae.



Mutinies and desertions will proliferate in an increasingly demoralized, over-stretched military

Unlikely, since as long at the government can print money and find people to accept it, they will ensure that members of the military are taken care of as well as possible. Take North Korea for example, the country has been starving for years, and what little food and resources they have go largely to the military, because the military is what prevents the regime from collapsing. Zimbabwe for another example, the seizure of white owned farms came about because the government blew the money it had promised for soldier pensions on a war in the Congo, so it decided to carve up the white owned farms and give them to the military veterans as compensation instead.


especially when states can no longer provide the educational and other benefits promised to their National Guard troops.

More federal bailouts! This will have the added bonus of providing employment in the educational system for some of those recent college graduates without job prospect.




There will be widespread tax collection issues, and a huge backlash against Federal and state bureaucrats who demand three-percent annual pay raises while private sector wages remain frozen or worse. In short, the “Tea Parties” of tomorrow will likely not be so restrained.

This could be prevented by reducing taxes and printing more money instead like George Bush did, but ideological constraints may prevent them from doing this.


the U.S. has always been held together by the promise of a continuously rising material standard of living—the famous “pursuit of happiness”—rather than any ethnic or religious ties. If that goes, so could everything else. We were lucky in the 1930s—we may not be so lucky again

In the 1930s the US was still largely held together by ethnic and religious ties, being nearly all christian and white, mostly protestant and from Germany and the British Isles. Blacks were still mostly in the south and under control of the state and local governments there, and the whole area was already so poor that it wasn't really affected by the Depression as much. Jews and southern/eastern European Catholics were concentrated in the urban centers of the northeast, and the German Catholics and many of the Irish who had come over in the 1800s had been integrated at that point. The country was also a lot more decentralized at that point, and the regions were much more ethnically and religiously homogeneous at that point in time. There was still some conflict, with westerners not wanting to pay off mortgages to east coast bankers.

As the author says, it could all blow up in a few years, but the country still has a lot of accumulated capital and economic momentum to burn through, and if the governments of countries like North Korea and Zimabwe can remain in control for all these years, so can the US government. However, unlike those countries, the US has a more 'unruly' population and its citizens are in greater communication with eachother.


As to the first post, I don't know how he arrived at that timeline, especially since most people were unable to predict the current crisis even a few years ago.

Probably he thinks this:

2012-2015: Governments regulate the economy and people accept it because they are in shock after what happened.

Will create this:

Slowly and not without problems the economy starts to pick up and improve slightly.

on which point he is very much mistaken. Government regulation of the economy can prevent social unrest, but it puts a damper on the economic health of the country as a whole.


If we're talking timelines, I'd say we're more along the lines of Russia in 1917 than the US in 1929.

2001-2005 'Czarist period'. A government losing popularity and facing rising dissent in the midst of an unpopular war (Iraq), use of police powers to monitor and suppress dissidents (Patriot Act), and co-dependence on religious elements.

2006-2008=1917. Collapse of the ruling regime. The US being a democracy/republic instead of a monarchy, a takeover by the electoral process rather than armed revolution is possible.

So now-decades of some kind of USSR-evolving-into-Brazil hybrid?