World Economy: "IMF Issues Catastrophic Warning"IMF Issues Catastrophic Warning As France Calls For End Of US Hegemony"
By Sorcha Faal
"In a shock warning to a World entering its third year of Global economic chaos, the Managing Director of the International Monetary Fund (IMF), Dominique Strauss-Kahn, stated today that the unemployment situation facing all Nations has now become a “catastrophic situation” that is “unparalleled” and is fast leading to the creation of a “lost generation” of human beings numbering in the hundreds of millions. Strauss-Kahn’s grim warning follows on the heels of French President Nicolas Sarkozy calling for the end of US hegemony and the establishment of a new International monetary system he plans to propose at the upcoming G-20 summit in November and supported by the emerging economies of China, India, Brazil and Russia, who, like Sarkozy, are angered by the collapsing American Dollar's supremacy. These shocking developments also follow the United States surprise move this past month wherein the Americans called for shifting the balance of power over the Global economy from the West to East by allowing the so called emerging economies of the Middle East, South America and Asia to dominate the IMF, and hence control World economic power.
The response of the United States, where the top 1 percent of American earners now take home nearly a quarter of Americans’ total income, to these latest grim developments appears on its face to be one of shocking complacency with reports showing that Obama has scheduled a week of White House parties instead of working to prevent the total economic collapse of his Nation. Obama’s actions in partying now is significant because it is happening at the same time American investors are using options to brace for big swings this week as Wall Street enters the peak of the most volatile month for stocks historically, and which Brian Overby, a senior options analyst at online brokerage TradeKing in Charlotte, North Carolina, states “this week is the real start of a month to be nervous about.” Even more ominously for the United States are the many historical warnings pointing to their soon to come total economic collapse that we had previously written about in our reports Hindenburg Omen Warned Spells ‘Final Doom’ For America and “Triffin Paradox” Collapse Of US Economy Sends Shockwaves Around World.
To how catastrophic Obama’s economic polices been to the United States we can see in newly released US government statistics showing that under his leadership the poverty rate in America has soared to levels not seen since the early 1960’s, numbers so horrific they led then President John F. Kennedy to declare his famous War On Poverty. Unlike the early 1960’s, though, Obama has no economic power to launch his own war on poverty as the millions of jobs lost under his Presidency are warned will never come back and likening the conditions he is facing to those of the Great Depression era President Franklin Roosevelt, rather than those of Kennedy. And in comparing the present day actions of Obama against those of Roosevelt one can sadly see with great clarity his ‘master plan’, so to speak, to keep himself and his elite cronies in power for decades to come, a future of unending Global wars increasing to such size and magnitude our whole Planet will be engulfed.
To fully understand this, especially if you’re an American, you have to remember the pivotal year of 1937 which saw the United States still in the grip of a nearly decade long economic depression set into motion by their historic October 1929 Stock Market Crash, and which up to that year Roosevelt, and all of the polices and laws he enacted, still failed to break. Faced with an enraged US Congress and American electorate who had lost faith in his New Deal because of the staggering size and scope of their National budget deficit, made even worse by the fact that all of the money spent had not only not ended the Great Depression but made it worse, Roosevelt cut back on his economic stimulus plan in what experts today call his single most disastrous move and launching what is called The Recession of 1937.
To see how frightenly those times now mirror our own one only need see the results of a Gallup poll conducted in March, 1938 which asked Americans whether government spending should be increased to fight the slump and 63% of those polled said no. Asked whether it would be better to increase spending or to cut business taxes, only 15% favored spending; 63% favored tax cuts. Equally to consider as a mirror from that time to ours today was the 1938 election that was a total disaster for Roosevelt and his Democratic Party, who lost 70 seats in the House and 7 in the Senate.
Now the most important thing to remember is that Roosevelt, like Obama today, in knowing that he would surely be defeated in the 1940 Presidential election, and having the vast majority of the US Congress and American people fed up with his New Deal socialist polices, had one last trump card to play to stimulate the economy of the United States, TOTAL GLOBAL WAR! So, in 1937, Roosevelt began a series of seemingly contradictory US foreign policy moves both benefiting and antagonizing the powers of the Empires of Japan and Germany and fascist Italy thus positioning the United States to be a combatant in a World War the American people overwhelmingly wanted nothing to do with.
So strident were the American peoples objection to what they called ‘Roosevelt’s War’ that two of the United States greatest public spokesman of the time, aviation hero Charles Lindberg (refused to return a medal given to him by Nazi Germany) and US auto giant Henry Ford (Ford and Hitler were great admirers of each other), started an anti-war movement known today as America First that sought to keep their country from war. Roosevelt’s plan for World War was almost undone with Nazi Germany’s September, 1939 invasion of Poland due to secret pact between Adolph Hitler and Soviet Leader Joseph Stalin that allowed Soviet Russian troops to invade at the exact same time from the East as German soldiers were invading from the West.
Though both Great Britain and France had a mutual defense pact with Poland, and under pressure from Roosevelt, they declared war on Nazi Germany setting off World War II, but not on the Soviet Union, a move none of the Allied Powers have every allowed to be explained to their citizens. Roosevelt’s trade polices against the Empire of Japan led that Asian Nation in 1937 to begin its conquest of China, and other Asian neighbors as it sought oil and raw materials denied it by the Americans, and which without their economy would collapse.
The United States Presidential election of 1940 was fought in the shadow of World War II as the United States was emerging from the Great Depression and Roosevelt broke with tradition and ran for a third term. The surprise Republican candidate was maverick businessman Wendell Willkie, a dark horse who crusaded against Roosevelt's failure to end the Great Depression and eagerness for war. Roosevelt, aware of the strong isolationist sentiment in the US promised there would be no foreign wars if he was reelected, and he was.
Unbeknownst to the American people, however, Roosevelt’s plan for plunging his Nation into war was just starting, and which he vastly accelerated, in early 1941, after his inauguration by enacting Public Law 77-11 (also known as The Lend Lease Act) which was a program under which the US supplied the United Kingdom, the Soviet Union, China, France and other Allied Nations with vast amounts of war material amounting to over $50 Billion. (In today’s dollars equal to $1 Trillion.) By late 1941 Roosevelt’s ‘master plan’ for plunging his people into war was realized, and in the words of the Noble Prize winning American economist Paul Krugman resulted in:
“From an economic point of view World War II was, above all, a burst of deficit-financed government spending, on a scale that would never have been approved otherwise. Over the course of the war the federal government borrowed an amount equal to roughly twice the value of G.D.P. in 1940 — the equivalent of roughly $30 trillion today.
Had anyone proposed spending even a fraction that much before the war, people would have said the same things they’re saying today. They would have warned about crushing debt and runaway inflation. They would also have said, rightly, that the Depression was in large part caused by excess debt — and then have declared that it was impossible to fix this problem by issuing even more debt.
But guess what? Deficit spending created an economic boom — and the boom laid the foundation for long-run prosperity. Overall debt in the economy — public plus private — actually fell as a percentage of G.D.P., thanks to economic growth and, yes, some inflation, which reduced the real value of outstanding debts. And after the war, thanks to the improved financial position of the private sector, the economy was able to thrive without continuing deficits.”
And so today, as the United States sinks ever deeper into its latest Great Depression, as millions of its people remain hungry and homeless, as tens of millions more remain jobless, as their poverty rate skyrockets to levels not seen since the early 1960’s, as all of the historical indicators point to stock market crash of unprecedented proportions, as millions of them rally against their governments spending their children’s future away, ‘partying’ Obama has just announced the largest arms sale in American history to of all places Saudi Arabia. For these self deluded people not to see the proverbial ‘writing on the wall’ of what their future is soon going to look like is beyond imagining, but nonetheless real."
http://www.whatdoesitmean.com/index1405.htm
Read the original story at CoyotePrime
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Doomsday warnings of US apocalypse gain ground
Sep 12 07:15 AM US/Eastern
http://www.breitbart.com/article.php?id=CNG.a64b6fa820c23d9ef2058a22276ce3a1.2c1&show_article=1
Economists peddling dire warnings that the world's number one economy is on the brink of collapse, amid high rates of unemployment and a spiraling public deficit, are flourishing here.
The guru of this doomsday line of thinking may be economist Nouriel Roubini, thrust into the forefront after predicting the chaos wrought by the subprime mortgage crisis and the collapse of the housing bubble.
"The US has run out of bullets," Roubini told an economic forum in Italy earlier this month. "Any shock at this point can tip you back into recession."
But other economists, who have so far stayed out of the media limelight, are also proselytizing nightmarish visions of the future.
Boston University professor Laurence Kotlikoff, who warned as far back as the 1980s of the dangers of a public deficit, lent credence to such dark predictions in an International Monetary Fund publication last week.
He unveiled a doomsday scenario -- which many dismiss as pure fantasy -- of an economic clash between superpowers the United States and China, which holds more than 843 billion dollars of US Treasury bonds.
"A minor trade dispute between the United States and China could make some people think that other people are going to sell US treasury bonds," he wrote in the IMF's Finance & Development review.
"That belief, coupled with major concern about inflation, could lead to a sell-off of government bonds that causes the public to withdraw their bank deposits and buy durable goods."
Kotlikoff warned such a move would spark a run on banks and money market funds as well as insurance companies as policy holders cash in their surrender values.
"In a short period of time, the Federal Reserve would have to print trillions of dollars to cover its explicit and implicit guarantees. All that new money could produce strong inflation, perhaps hyperinflation," he said.
"There are other less apocalyptic, perhaps more plausible, but still quite unpleasant, scenarios that could result from multiple equilibria."
According to a poll by the StrategyOne Institute published Friday, some 65 percent of Americans believe there will be a new recession.
And the view that America is on a decline seems rather well ingrained in many people's minds supported by 65 percent of people questioned in a Wall Street Journal/NBC poll published last week.
"It is true: Today's economic problems are structural, not cyclical," argued New York Times editorial writer David Brooks.
He said the United Sates is losing its world dominance much in the same way the British Empire began to crumble more than a century ago.
"We are in the middle of yet another jobless recovery. Wages have been lagging for decades. Our labor market woes are deep and intractable," Brooks said.
Nobel Economics Prize winner Paul Krugman also voiced concern about the fate of the fragile economic recovery if voters return the Republicans to political power.
"It's hard to overstate how destructive the economic ideas offered earlier this week by John Boehner, the House minority leader, would be if put into practice," he wrote in a recent editorial.
"Fewer jobs and bigger deficits -- the perfect combination."
The Wall Street Journal, usually more favorable to Boehner's call for tax cuts, ran a commentary from another Nobel Prize-winning economist -- Vernon Smith -- that failed to provide much comfort for readers.
"This fact needs to be confronted: We are almost surely in for a long slog," Smith wrote.
And it seems such pessimism has even filtered into the IMF, which warned on Friday that high levels of national debt and a still shaky financial sector threaten to derail the global economic recovery.
"The foreclosure backlog in US property markets is large and growing, in part due to the recent expiration of the home buyer's tax credit. When realized, this could further depress real estate prices."
This could lead to "disproportionate losses" for small and medium-sized banks, which could in turn "precipitate a loss of market confidence in the recovery," the IMF warned.
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