|
Trends for Downsizing the US: The Bright Side of the Panic of ‘08
by Christopher Ketcham
Futurist and trends forecaster Gerald Celente, director of the Trends Research Institute in Rhinebeck, NY, predicted the 1987 stock market crash, the collapse of the Soviet Union in 1989, the Asian economic implosion of ‘97, the decline of the dollar beginning in 2005, the meteoric rise in gold prices in an age of currency volatility, and the turn of events that may be the blessing of our era, the subprime mortgage crisis.
Because of this habit of prescience, Celente has appeared regularly on CNN and Fox and MSNBC, his “Trends Reports” widely quoted in newsprint, on Oprah Winfrey, on Good Morning America.
Now in his Report for 2008, issued in mid-December, he carried the news every thinking American already knows. “The United States of America,” Celente pronounced, “has gone from first class to third rate.” It’s a “nation on the skids and heading down.”
Celente projects economic and political crisis in the coming
year. “In 2008, Americans will wake up to the worst economic times that
anyone alive has ever seen,” he wrote on December 17. “Just as they
didn’t see 9/11 coming and were frozen in shock when terror struck,
[Americans] will be frozen in shock when terror strikes again.” He
predicts “failing banks, busted brokerages, toppled corporate giants,
bankrupt cities, states in default, foreign creditors cashing out of US
securities…the stage is set, the big one is on its way.”
A
similar wake-up call was issued last summer in a report by none other
than the chief investigator for the US Government Accountability
Office, comptroller general David Walker, who warned that US policy on
energy, education, the environment, health care, immigration, Iraq –
pretty much the gamut – was on an “unsustainable” course, bound for a
maelstrom of insolvency that could threaten to sink the ship.
According
to the GAO chief, the fall of Rome seemed an apt historical comparison:
- “[D]eclining moral values and political civility at home, an
over-confident and over-extended military in foreign lands, and fiscal
irresponsibility by the central government. Sound familiar? I’m trying
to sound an alarm.”
When I called up Celente on Jan. 2 to
see how the new year was taking shape on the first day of trading, he
fired back in an e-mail:
- “An attack in Nigeria (Africa’s biggest oil
producer) by anti-government forces on the port city of Port Harcourt
hit the futures markets hard. On the New York Stock Exchange, trading
conditions worsened on reports that the Institute for Supply
Management's manufacturing index dropped to 47.7, the lowest reading
since April 2003. Growth in European and Singapore manufacturing also
slowed in November, showing signs for all those that were looking that
the slowdown would be global.”
By early afternoon, gold had surged $24
an ounce, crude oil climbed $3, the dollar fell against all major
currencies, and the Dow was down over 200 points. The next day, Jan. 3,
oil hit a record $100 a barrel. And indeed, as Celente warned, world
markets were unraveling by the second week of January, the Nikkei on
its worse start to a new year since 1970, the MSCI World Index dropping
6.9 percent, a loss of $2.1 trillion from members' market
capitalization, while Swiss world banking giant UBS posted a $13
billion loss, and authorities in Britain reported the first run on a
British bank in a hundred years.
When on January 14 Celente sent
out his weekly e-mail alert to subscribers, the news was no better. The
Dow registered its third consecutive week of losses, one of its worst
New Year starts in history, losing in just the first week of 2008 half
its gains from 2007.
- “Slumping retail sales, dire housing data, rising
unemployment rates, gloomy consumer confidence, spiking oil prices, a
ballooning trade gap, eroding wages, mounting credit card debt and
delinquencies, mortgage defaults, record foreclosures,” said Celente.
“The data floods the wires and spreads the fear.” It’s telling that
Tiffany's was off 11 percent in sales, as even the very rich hide their
cash under beds.
So is the subprime mortgage mess the catalyst
for the Big One, what Celente calls the Panic of ‘08? Stock guru Jim
Cramer, host of CNBC’s Mad Money and co-founder of TheStreet.com, seems
to think so.
- “There are a group of insurance companies that insure all
these bad mortgages,” he told Chris Matthews on Jan. 18. “And I think
they’re all about to go belly up. And that will cause the Dow Jones to
decline 2,000 points. They have got to be shut down. This is going to
happen in maybe two, three weeks, Chris. It’s going to be on the front
of every paper. And no one in Washington is even willing to admit it. I
am telling you these companies do not have the capital to make good.
And, when they do fall – I believe it is when – if the government
doesn’t have a plan in action, you will not be able to open the stock
market when they collapse…No one is even talking about it.”
From
panic, offers Gerald Celente, will arise almost overnight an era of
social and political upheaval and plain awfulness. Self storage will
finally “live up to the meaning of its name. Down and out, thrown onto
the streets, homeless Americans will empty out storage lockers of
useless junk…to store themselves.”
He predicts wage riots and
anti-government street protests and intensified anti-immigration
movements looking to scapegoat the “aliens” among us.
Toward the 1
percent of Americans who received 50 percent of all income gains in
recent years – those same 1 percenters, roughly 3 million people, who
took in 22 percent of all income in 2005 – there will be growing rage.
- “Kidnappings for ransom will become common, as they were in the
Depression and as the poor strike out against the rich,” Celente
predicts. Lawlessness will be met, as in most third rate nations, with
violence from an increasingly sophisticated and brutal police state. A
different type of violence from the ground up, tax revolts, will also
develop in strength, targeting a tax-ravenous federal government that
Celente charges has failed “to protect food, win wars, clean the
environment, upgrade infrastructure, improve living standards, provide
health services or advance education.”
Meanwhile, the dollar
will bottom out at 10 cents to the euro sometime in the next several
years, perhaps by 2010. Newspapers report that even Third World vendors
are beginning to refuse payment in greenbacks, while foreign
governments and investors, mostly the Chinese, deploy the muscle of
their currencies to buy US property and businesses (proxies of the
Chinese government late last year snagged a 5 percent stake in
Citibank, a 10 percent stake in Morgan Stanley).
Note that this
is no fringer veering into conspiracist phantasm: Celente consults for
hundreds of large and small corporations, addresses government bodies
worldwide. Norway flew him to Europe in 2006 to address a conference on
innovation, while the International Council of Shopping Centers hosted
him as the key-note speaker at its 2007 convention – the mall builders
hoped to glean from Celente “what people want from malls.”
It’s
notable, in the wake of the prognoses of his 2008 reports, that he is
no longer invited onto the TV and cable networks – “the first year in
decades,” he says, “that they did not have me on and that USA Today did
not cover the Trends Report.” When Celente sent out an e-mail alert to
his mailing list in mid-January, Jack Marks, the publisher and CEO of
The Wall Street Reporter, one of the oldest investment organs in New
York, wrote him back to say “You are a fucking retard motherfucker” and
“Remove me from this list, you fucking moron.”
The local publishing
group near Celente’s home in Rhinebeck is perhaps more typical in its
spinelessness: The Taconic Press, which publishes six newspapers in the
Hudson Valley and upstate New York, told Celente in December via e-mail
that there was “a general uproar about the inclusion of your Trends
forecast [in 2007]… reader and advertiser reaction was strong, and they
made their feelings known to our publisher.” Celente’s long
relationship with Taconic Press is no more. Par for the course in the
nation of blinkered denial.
There is apparently an upside to the
rottenness to come, according to Celente – if Americans dare to
reinvent for the 21st century the free thinking and civic courage of
their past. This good cheer as Rome burns is buried somewhat in
Celente’s report for 2008, but what it suggests is that, catalyzed by
crisis, a fair number of Americans – a minority, likely, but still to
watch – will begin this year a transformation of consciousness.
Celente
predicts that the smaller communities, the smaller groups, the smaller
states, the more self-sustaining communities, will “weather the crisis
in style” as big cities and hypertrophic suburbias descend into misery
and conflict.
“Like Katrina’s victims that knew the hurricane was
coming but didn’t flee – and looked to Uncle Sam to save the day –
those that don’t take action before panic strikes or wait for
Washington to lend a hand, will suffer the most from the calamity that
follows,” he writes.
Economically, the new consciousness will recapture
Yankee frugality and reject the lunatic behaviors that have been
unsustainable since the Second World War – big houses, big cars, big
spending. Those who market and embrace “products and services that
focus on compact, smart, functional, efficient, neat, clean, reusable,
'less is more' and 'small is beautiful',” Celente writes, “will
handsomely profit.”
There will be a downsizing of expectations and
perceived needs. There will be a downsizing of giantist institutions to
fit to human scale – the center cannot hold, particularly as state’s
righters and tax rebels and what Celente calls “the newly flourishing
state secessionist movements” begin to repudiate a $9 trillion-in-debt
federal government that too often practices the most offensive kind of
taxation without representation. Altogether, there will be a downsizing
of America.
- “This could be the end of something really ignorant
and stupid and dark,” Celente told me recently in a phone interview.
“The end of a dark age! The end of the age of what I call Bottom-Line
Fascism, the ruthless and dictatorial profit-only way of thinking that
produces crap over quality in all the major institutions, dopiness and
blob-thinking, the manipulations of an idiotic media and political
establishment, the Cartoon News Networks, the Greta Van Susterens and
the Hillary Clintons uttering the same pablum ad nauseum over and over.
All the institutions are coming apart – government, corporations,
media, education, health care. They present nothing less than a vacuum!
Something has to fill it! The systems that are in place? Things can
only get worse if they stay in place. But I’m an optimist. I’m gunning
for something better to replace what we got.” He pauses. “A
renaissance! I’m gunning for a renaissance: an era where quality beats
out the crap of quantity.”
source
POST-SCRIPT: Alarm bells are also
ringing for former CIA consultant Chalmers Johnson, author of the
Blowback Trilogy, including most recently the final installment
Nemesis: The Last Days of the American Republic. Like Celente, Johnson
sees the subprime mess as only the most visible part of a far-reaching
debt crisis with lethal implications. “Confronted by the limits of its
own vast but nonetheless finite financial resources and lacking the
political check on spending provided by a functional democracy,”
Johnson wrote in Harper’s last January, “the United States will within
a very short time face financial or even political collapse.” The folly
of what Chalmers terms “military Keynesianism” – devotion to
militarism, weapons, warfare as fiscal stimulus, a policy embraced with
equal fervor by both parties in Congress – will speed the country to
moral, fiscal and political bankruptcy. To grasp the horror of military
Keynesianism, consider this statistic: By 1990, production for the
Department of Defense amounted to 83 percent of the value of all
manufacturing plants and equipment in the US. Only 17 percent of the US
manufacturing base actually made products not meant to kill. In this
regard, bankruptcy and collapse is much-deserved, a comeuppance long
overdue. On the bright side, Johnson notes that “bankruptcy will not
mean the literal end of the United States any more than it did for
Germany in 1923, China in 1948, or Argentina in 2001. It might, in
fact, open the way for an unexpected restoration of the American
system, or for military rule, revolution, or simply some new
development we cannot yet imagine.”
 |
Writings 
Subscribe to this comment's feed
Come on America, vote with your heads.