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Posts Tagged ‘Gerald Celente’

Just requoting Paul Kedrosky’s post today:

What people don’t get about sovereign debt is that countries are sharks when it comes to debt and default. That is the real lesson of research and writing and history in this area – that countries have been messing around, defaulting and restructuring in debt markets for hundreds and hundreds of years. Defaults, busted banks and the like is what happens when you lend to countries that have much more experience and cynicism about their use of debt than you think they do.

This blogger through firsthand experience in a commercial bank’s risk and asset division, is witness to the financial wizardry the modern financial system employs to build the mountain of debt on which our capitalist societies exist on. In the news we are also witness to the horrors that mismanagement of debt and currency can create.

Kedrosky is not a lone voice here. We’ve captured the sentiments of others
like Gerald Celente, Max Kaiser, and Peter Schiff all of whom have put up credible arguments about how tentative and fragile a system based on debt is.

Not all who understand the system are speaking up vehemently against it. Our favorite speculator George Soros certainly understands the goings-on but is content to “game” the system for profit (and successfully too).

What this blogger finds interesting is despite all these critiques, the system continues unabated–notwithstanding the ever increasing magnitude of crises that recur. The arguments put forth by the pundits are actually dated–these sentiments have been around for as long as a monetary system has been around. Our favorite skeptical empiricist, Nassim Taleb, blames moral hazards for perpetuating the flawed system, but even the question of moral hazards isn’t new.

After all isn’t rewarding someone for “bad” behaviour the crux and aspiration of prosperity and decadence? The whole system is rigged to feed on itself! So far the common alternatives to the flawed system, barring a return to primitive times, propounded by the pundits range from a form of “modified capitalism” (shades of the Austrian School) to more “radical socialism” (e.g. Zeitgeist, Venus Project).

Which is why it far from surprises this blogger that “experience and cynicism” are the placeholders that Kedrosky chose to describe what underpins the motive of governments regarding debt. There are those who complain and those who game, but the last bucket are those who still choose to participate in the system–maybe in a fit of realism, maybe fatalism.

Meanwhile someone please buzz this blogger when and if we decide to let go of this monetary system and its sydstem of debt.

“Sent from my BlackBerry® wireless handheld”

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Gerald Celente interviewed by Marina Portnaya on Russia Today with his thoughts on what’s to come in 2009.

Some of the things he talks about:

  1. 1:16 Who is going to take up all of the retail space left vacant by the bankrupt retailers, banks, and institutions? Nobody. This will lead to a collapse of commercial real estate–at a level that will dwarf the residential housing collapse of 2008.
  2. 2:11 Unemployment is understated by the US Government. The number of people who are no longer looking for jobs because they have become discouraged at the dim prospects are not reflected in the unemployment figure. Neither are part-time workers. Celente thinks the real unemployment number is nearly double what is reported (c. 13% vs. 7%).
  3. 2:57 With reduction of retail establishments, not only will it affect commercial real estate and unemployment directly, but support industries dependent on these companies such as advertising and manufacturing will also be negative affected–creating more unemployment and real estate vacancies.
  4. 3:33 To be using economic models of the 1930s to solve the crisis is absurd since the economy of the great depression is very different from the complexity we have today: most people didn’t have homes, there was no such thing as a home-equity loan, there were no credit cards, the national debt was much smaller, the US had a very strong manufacturing base.
  5. 4:13 Crime levels in the US will rival that of third-world countries. Kidnapping and violence will be rampant similar to underdeveloped nations. We’re going to see “off with their heads” and another revolution. And he’s not exaggerating.
  6. 5:18 There’s going to be a tax revolt, as desperate people resist the attempts of the US government to tax them more to recover from the deficit brought about by the crisis.
  7. 5:37 Quoting biblically: “By their deeds you shall know them” Celente criticizes the Obama administration as hardly the “Change” it purports to be, as the economic and policy team being assembled by the adminstration are the same people on the Clinton administration.
  8. 7:25 Buy gold, it’s the only safe storehouse of value in these times. Don’t spend more than you need. Hot Jobs: Health is a Growth Industry, Conservation Engineering, Alternative Energy.
  9. 9:00 Geopolitics: tension in the middle east. if Israel attacks Iran, it will begin World War 3. It will inflame the middle east, start an oil crisis, and aggravate the economic crisis. If Obama decides to put a missile defense shield in Eastern Europe it will reignite the cold war.

Some things Celente mention have to do with critical thinking:

  • Current events form future trends. This is similar to what George Soros said in another interview we featured about how prediction of the future is always in flux, since it depends on what happens now. However, Celente is more certain of his own views based on the crisis he sees before us today.
  • When people look at trends, they color them with their own belief: they see what they hope for, what they want. It’s best to see trends as they are, without bias.
  • What got the US out of recession in the 90s was the Internet revolution. The same drive for productive capacity and intelligent solutions is what will bring us out of this crisis. Alternative energies is one sector that will be very important in the immediate and long-term future.

The question now: is he on the level, or is his own thinking colored by hysteria?

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