The Reckoning: “All Evidence Points to US Economic Failure in 2014”

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by Mac Slavo

Originally Published at SHTFplan


Earlier this week economic strategist Marc Faber warned that some time in the next 12 months the U.S. stock market will experience a crash worse than the massive drop seen in 1987.

He’s not alone. Many contrarian economists seem to agree. And given the state of economic and geo-political affairs they could well be right, much to our detriment.

On the domestic front, the much touted economic recovery is in significant danger of being revealed for the illusion that it really is. Nationwide home sales, for example, have dropped off in record numbers in the last few months and a report released this morning indicates that mortgage originations are as bad today as they were just before the Lehman crisis of 2007. Couple that with a jobs market that is at best stagnating and at worst completely falling apart, and you can probably deduce that if there is any economic growth at all taking place it is about to come to a standstill.

Internationally, the world is fed up with The Fed and the U.S. government’s unabashed debt growth. China, Russia, Iran, India and a host of other countries are establishing trade relationships that are bypassing the U.S. dollar altogether, a move that will soon see the world’s reserve currency lose purchasing power and status. In anticipation of this imminent collapse gold is being hoarded by private and public entities from Berlin to Beijing in an effort to preserve wealth before the Tsunami hits.

In light of these developments, former Undersecretary of the Treasury Paul Craig Roberts suggests that there are only two possible outcomes given our dilemma – World War Or The End Of The Dollar – neither of which bodes well for global economic, financial, social and political stability.

This means a big drop in the demand for US dollars and a corresponding drop in the dollar’s exchange value.

As John Williams (shadowstats.com) has made clear, the US economy has not recovered from the downturn in 2008 and has weakened further. The vast majority of the US population is hard pressed from the lack of income growth for years. As the US is now an import-dependent economy, a drop in the dollar’s value will raise US prices and push living standards lower.

All evidence points to US economic failure in 2014, and that is the conclusion of John Williams’ April 9 report.

This year could also see the breakup of NATO and even the EU. Washington’s reckless coup in Ukraine and threat of sanctions against Russia have pushed its NATO puppet states onto dangerous ground. Washington misjudged the reaction in Ukraine to its overthrow of the elected democratic government and imposition of a stooge government.

Across many fronts, Washington is emerging in the world’s eye as duplicitous, untrustworthy, and totally corrupt.

This audacious recklessness comes on top of Washington’s overthrow of the Ukrainian government, the NSA spying scandal, Seymour Hersh’s investigative report that the Sarin gas attack in Syria was a false flag event arranged by NATO member Turkey in order to justify a US military attack on Syria, Washington’s forcing down Bolivian President Evo Morales’ presidential plane to be searched, Saddam Hussein’s “weapons of mass destruction,” the misuse of the Libyan no-fly resolution for military attack, and on and on. Essentially, Washington has so badly damaged other countries’ confidence in the judgment and integrity of the US government that the world has lost its belief in US leadership. Washington is reduced to threats and bribes and increasingly presents as a bully.

The self-inflicted hammer blows to Washington’s credibility have taken a toll.

China and Russia protested but accepted Libya’s destruction even though it was to their own detriment. But Iran became a red line. Washington was blocked, so Washington decided to cause major problems for Russia in Ukraine in order to distract Russia from Washington’s agenda elsewhere.

China has been uncertain about the trade-offs between its trade surpluses with the US and Washington’s growing encirclement of China with naval and air bases. China has come to the conclusion that China has the same enemy as Russia has–Washington.

One of two things is likely: Either the US dollar will be abandoned and collapse in value, thus ending Washington’s superpower status and Washington’s threat to world peace, or Washington will lead its puppets into military conflict with Russia and China. The outcome of such a war would be far more devastating than the collapse of the US dollar.

Read the full article at the Institute for Political Economy

What’s coming in short order isn’t just a result of lackluster job growth, or consumer spending, or a degradation of America’s economy.

The leading developed nations of the world no longer trust the United States and America’s status as the “world’s only super power” is being challenged on all fronts.

According to cyclical theorist Martin Armstrong the cycles of change (political, economic, war) are all converging. This year will see a turning point in June of 2014, and some time in late 2015 the rug will be pulled out from under the global economy, leading to a series of events that may well destroy the world as we’ve come to know it in modern times.

We’re already seeing the prelude to this with civil unrest taking hold across the entire world (including Bunkersville, Nevada), and that trend will continue until the system finally buckles.

This is no plain modern event with civil unrest erupting because of an interconnected world. These are grassroots uprisings cross-fertilized perhaps from a world contagion yet they often have similarities – corrupt governments. Turkey, Ukraine, Thailand, Venezuela and Bosnia-Herzegovina are all middle-income democracies with elected leaders besieged by people angry at misgovernment, corruption and economic sclerosis. These days it is no longer just dictators who have something to fear from the crowd. This is the promise of Marxism that centralized planning and false promises are coming home and governments are too corrupt and incompetent to deliver what they have claimed for decades.

Communism is dead. The socialistic agendas that have lined the pockets of government and filled the coffers of banks is over. The national debts are on average composed of 70% interest payments not programs to help the poor as marketed. The debts that keep growing with no intent upon paying anyone back are draining the national productivity and turning the people into economic slaves.The standard of living has declined and it now takes two incomes to survive where one use to be just fine. Women won the right to work and lost the right to stay home.

The promises that you save for the future have collapsed into dust as interest rates have been driven lower making savings utterly worthless. There is no such thing as saving and living off your fixed income. The elderly are being driven back into the work force and the whole ideas that a generation believed in are vanishing before their eyes.

So it is no longer communists and dictators that are the targets. All governments are now the targets and when the economy turns down after 2015.75, the threat of civilization will be pulled apart by the self-interest of politicians clinging to power to the detriment of the people.

Martin Armstrong Via Zero Hedge

There are terrifying events on the horizon. Most people haven’t a clue and won’t until it’s already too late to act.

We best get ready.

The-Reckoning---Thumb

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  • I do not believe anyone will be truly prepared for our future economic problems. One can choose the model they think the future holds, and there are more than one, but in the end, we will only know for sure when the rubber meets the road. The most disturbing, at least to me, is the decimation of our manufacturing base. This is what drives the engine for a country. We do not have enough manufacturing in the US to supply the needs-I am not talking about wants-of the our current population. I have read that the population of a certain group will increase to an immense amount. We will have a greater strain on the limited resources, unfortunately, by design. It seems that those in positions to do so, are setting us up for a gigantic fall.

    When a country imports more than they export, they are beholden to the country/countries that are making their goods. It makes that country vulnerable. It doesn’t matter if it is called a “blockade,” embargo, shortages, or double or triple prices due to end of the petrodollar.

    In all honesty, I lived through the crash of 1987 just fine. If the results are the same, the effect will be worse because that was then, and this is now. We are not the same country we were ten years ago, no less 27 years.

    After years of government education, along with mass media, and our fake, “culture,” we have become self absorbed, dumbed down, feel entitled, and are narcissistic. Most wear the T-shirt that says, “It’s All About Me! This will impede progress.

    2 Timothy 3:1-5

  • RE: “The most disturbing, at least to me, is the decimation of our manufacturing base. This is what drives the engine for a country. We do not have enough manufacturing in the US to supply the needs”

    Is anything which is manufactured, really a “need’?

    Maslow’s Hierarchy of Needs was flawed, at the bottom of the pyramid there should be Freedom and Liberty.
    After that: Water, food, safety, clothing and shelter.

    With the possible exception of shelter, and maybe clothing, none of those needs is “manufactured”.

    What we really “need” is to be left alone to provide for our own, and for others. -This – is what really ‘drives’ the engine for a country.

    • I am a bit confused on your position on manufacturing. When a country no longer produces goods…for food, safety, clothing, and shelter, they are at the mercy of others.

      The definition of manufacturing according dictionary.com is “to make or produce by hand or machinery, especially on a large scale.”

      I suppose one could argue exactly what a “large scale” is, especially when making things from raw materials for personal use, but if one makes, than one manufactures. This puts you in a rather interesting position, especially if you walk your talk. Why is shelter and clothing acceptable to manufacture but not other essential items? Should you make anything, for needs only? Wouldn’t that be manufacturing? Or should get keep your computer? It is certainly not a “need.”

      • I was focusing in more on your comment about the manufacturing ‘base’ and the process of making products with machines in factories, not so much the process of making wares by hand.

        For instance, a lean-to for shelter which a person constructs in the woods might be said to have been ‘manufatrued’ but it’s clear “the manufacturing base” did not do so.
        A person might grow a tomato and put it into a jar. You could say that canned tomato was ‘manufactured’ but I would not. The tomatoes canned in a large factory would be ‘manufactured’ but are they a necessity? The tomatoes Daisy puts up are different from the ‘manufactured’ ones. No? I do not consider Daisy a canned tomato manufacturer. Do you? She is a producer.

        Anyway, I thought of your comment, “This is what drives the engine for a country.” when I saw this:

        “Original mercantilism was a widely believed and invariably incorrect theory of trade that insisted that a nation grows rich by exporting more than it imports. David Hume, the Scottish philosopher, refuted this logic over 250 years ago. His fellow Scot, Adam Smith, refuted it in detail in 1776.

        A nation gets rich only if its residents get rich. Residents get rich by increasing their productivity. They stay rich by being allowed by the government to do whatever they want with their wealth, whether counted in gold, bank accounts, or goods. Liberty is the #1 basis of increasing people’s ability to become more efficient and therefore more productive. That was Smith’s argument in 1776. This is denied by Keynesianism.” …

        http://www.lewrockwell.com/2010/12/gary-north/theft-by-mercantilists/

        “Chinese goods account for 2.7% of US PCE” [I’d hardly call that being vulnerable or being at the mercy of others.]

        What the handwringers never mention is that the USA is the largest manufacturing nation on earth, with 20% of the world’s total manufacturing output. Wikipedia reports: “The United States is the world’s largest manufacturer, with a 2007 industrial output of US$2.69 trillion. In 2008, its manufacturing output was greater than that of the manufacturing output of China, India, and Brazil combined, despite manufacturing being a very small portion of the entire US economy as compared to most other countries.” […]

        “The problem is not China. It is not India. It is not imports. The problem is the endless call from each special-interest group for the government to Do Something to Save America. The problem is that the government has done way to much for too long, all in the name of Doing Something to Save America.” …

        https://www.lewrockwell.com/2011/08/gary-north/i-just-want-cheap-socks/

  • Herlot, apparently Maslow missed the need for history lessons. Your children (and Maslow’s) would be German-speaking slaves if in the 3-1/2 years of World War II the USA had not manufactured 22 aircraft carriers, 8 battleships, 48 cruisers, 349 destroyers, 420 destroyer escorts, 203 submarines, 34 million tons of merchant ships, 100,000 fighter aircraft, 98,000 bombers, 24,000 transport aircraft, 58,000 training aircraft, 93,000 tanks, 257,000 artillery pieces, 105,000 mortars, 3,000,000 machine guns, and 2,500,000 military trucks.

    Sorry but facts are pesky things. I stand with G.

  • The history lesson you seem to have missed is that War is a Racket.

    https://www.lewrockwell.com/2013/10/laurence-m-vance/is-the-typical-us-soldier-really-this-ignorant/

    Also, Who Really Won World War II?

    “The winner of W.W. II, tragically, was in reality not the Allies but instead the theory and practice of the large-scale coercive collectivist state, be it in the form of Communism or the large-scale welfare/warfare states of various types and the consequent rise of a violent, unstable, impoverished Third World addicted to the benefits of the same as cavalierly dispensed by the meddlesome mandarins of the First World. True, since 1945 we’ve been speaking a different language, and it’s not German, Japanese, or even Russian or Chinese. Rather, it’s the language of socialism couched in perpetual, petulant demands for ever-more forced, taxpayer-supported “fairness and social justice” on a global scale (commonly called “humanitarian intervention”) at the heavy expense of true peace, prosperity, and individual liberty. And the price, as usual in the imposition and maintenance of socialism, was and still is the untold millions of dead, impoverished, miserable, and imprisoned.”

    https://www.lewrockwell.com/2001/06/michael-e-kreca/who-really-won-world-war-ii/

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