The Great Depression–Coming?
CNBC wrote on July 5:
“The Dow Jones Industrial Average is repeating a pattern that appeared just before markets fell during the Great Depression, Daryl Guppy, CEO at Guppytraders.com, told CNBC Monday.
“Those who don’t remember history are doomed to repeat it” there was a head and shoulders pattern that developed before the Depression in 1929, then with the recovery in 1930 we had another head and shoulders pattern that preceded a fall in the market, and in the current Dow situation we see an exact repeat of that environment,’ Guppy said.”
“The Dow retreated 457.33 points, or 4.5 percent last week, to close at 9,686 Friday. Guppy said a Dow fall below 9,800 confirmed the head and shoulders pattern.”
You might want to listen to our StandingWatch program from two years ago, titled, “Coming–The Great Depression?“
Also, you might want to listen to our StandingWatch program from one-and-a-half years ago, titled, “After the Great Crash of 2008.”
USA Still Trapped in Depression
The Telegraph wrote on July 6:
“With the US trapped in depression, this really is starting to feel like 1932. The US workforce shrank by 652,000 in June, one of the sharpest contractions ever… Wages are flirting with deflation. ‘The economy is still in the gravitational pull of the Great Recession,’ said Robert Reich, former US labour secretary. ‘All the booster rockets for getting us beyond it are failing. Home sales are down. Retail sales are down. Factory orders in May suffered their biggest tumble since March of last year. So what are we doing about it? Less than nothing,’ he said.
“California is tightening faster than Greece… Governor Arnold Schwarzenegger is cutting pay for 200,000 state workers to the minimum wage of $7.25 an hour to cover his $19bn (£15bn) deficit. Can Illinois be far behind? The state has a deficit of $12bn and is $5bn in arrears to schools, nursing homes, child care centres, and prisons. ‘It is getting worse every single day,’ said state comptroller Daniel Hynes. ‘We are not paying bills for absolutely essential services. That is obscene.’
“Roughly a million Americans have dropped out of the jobs market altogether over the past two months. That is the only reason why the headline unemployment rate is not exploding to a post-war high. Let us be honest. The US is still trapped in depression a full 18 months into zero interest rates… Eight million jobs have been lost. The average time needed to find a job has risen to a record 35.2 weeks. Nothing like this has been seen before in the post-war era…
“Republicans on Capitol Hill are filibustering a bill to extend the dole for up to 1.2m jobless facing an imminent cut-off. Dean Heller from Nevada called them ‘hobos’. This really is starting to feel like 1932. Washington’s fiscal stimulus is draining away… The housing market is already crumbling as government props are pulled away. The expiry of homebuyers’ tax credit led to a 30pc fall in the number of buyers signing contracts in May. ‘It is cataclysmic,’ said David Bloom from HSBC.
“Federal tax rises are automatically baked into the pie… The states and counties may have to cut as much as $180bn. Investors are starting to chew over the awful possibility that America’s recovery will stall just as Asia hits the buffers. China’s manufacturing index has been falling since January, with a downward lurch in June to 50.4, just above the break-even line of 50. Momentum seems to be flagging everywhere, whether in Australian building permits, Turkish exports, or Japanese industrial output.
“On Friday, Jacques Cailloux from RBS put out a ‘double-dip alert’ for Europe [in 2011]… The Fed is already eyeing the printing press again… Last week the Bank for International Settlements called for combined fiscal and monetary tightening, lending its great authority to the forces of debt-deflation and mass unemployment. If even the BIS has lost the plot, God help us.”
God will only help us if we change our ways and repent of our many sins. It is unlikely that this will happen on a grand and national scale. And so, with disaster looming, irresponsible fiscal policies and a helpless and clueless leadership, the downfall of the USA is inevitable. The next two articles on healthcare should speak for themselves…
President Obama’s Healthcare Bill and New Taxes
For most Americans, it is totally unclear what the new healthcare bill will accomplish for them… if anything… but one thing is certain: They will have to pay much higher taxes to finance it. ATR reported on July 2:
“As the nation prepares to celebrate Independence Day with parades and barbecues, America’s veterans face a new tax on prosthetic limbs and other vital medical devices. The health care overhaul passed by Congress and signed into law by President Obama earlier this year contains a new tax on medical devices such as prosthetic limbs, pacemakers, and wheelchairs. This tax, which its proponents claim will raise $20 billion over the next ten years, contains no exemption for the nation’s 22 million veterans. In fact, Senate Democrats specifically refused to exempt veterans from the tax.
“On March 24 2010, Senate Democrats rejected an amendment offered by Senator Orrin Hatch (R-Utah) to the healthcare bill. This amendment (SA 3644) would have prevented the medical device tax from hitting veterans covered by the Veterans Healthcare Program or TRICARE for Life. This amendment was rejected by a vote of 44-54. All but five Democrat senators voted in favor of retaining the tax for veterans.
“The medical device tax was one of over twenty new or higher taxes in President Barack Obama’s healthcare overhaul. This permanent new tax is being collected now.
“‘On March 24, Senate Democrats had the opportunity to exempt our veterans from Obamacare’s new tax on medical devices such as prosthetic limbs. But 54 Democrats voted against the measure. They chose to side with the tax-and-spend crowd in Washington over our wounded warriors,’ said Grover Norquist, president of Americans for Tax Reform. ‘This is one of the many reasons Harry Reid and the Democrats did not want Americans to read the 2,500 page health care bill before it was passed.'”
In light of the foregoing, it almost appears like irony when reading the following address by President Obama, which was circulated over the Internet, pertaining to the 4th of July celebrations:
“As we celebrate the profound pride of being American, today is a time to honor the women and men in our armed forces, whose immeasurable bravery and sacrifice have made our country what it is today. That sacrifice is shared with husbands and wives, with sons and daughters, with fathers and mothers, who are asked to wait at home as their loved ones protect our nation. Their heroism, too, has helped pave the path of our freedom.
“Even before we moved into the White House, Michelle was a champion for those military families. She has witnessed their struggles, and she has made it her personal mission to fight for them. On this Fourth of July, she recorded a personal message, commemorating our nation’s birthday and paying tribute to these families.”
Outrageous Regulations in the New HealthCare Bill
We recently received a memo advising us that under the new healthcare bill, “starting in 2011… your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company… you will be required to pay taxes on a large sum of money that you have never seen… This is how the government is going to buy insurance for 15% that don’t have insurance and it’s only part of the tax increases… Under TITLE IX REVENUE PROVISIONS- SUBTITLE A: REVENUE OFFSET PROVISIONS – (sec. 9001, as modified by sec. 10901) Sec.9002 [it states that that law] ‘requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employee’s gross income.'”
We investigated further and were advised by a competent life and health insurance agent that the above is correct, adding: “This was sold as a cost savings to the population on their health insurance. Unfortunately, the initial impact was a raise in cost, not only on the tax issue but because companies cannot exclude people who are seriously ill, so everyone else must pay more to cover them.
“They did everything wrong on this bill and nothing right. If you are a young person and don’t think you need coverage, the penalty you have to pay is so small that there is little to no incentive to buy insurance unless there is a serious health issue, which you can now buy because they can’t refuse you. It is filled with political patronage, and does nothing to solve the reason that health insurance is so high–the rising cost of care! Things like, being able to buy insurance across state lines, if you live in a state where health insurance is high, because of state mandates is still not allowed. But the big one, capping awards for malpractice, would solve a huge cost problem because doctors wouldn’t have to order unnecessary expensive tests, to protect themselves from suits in the event a case went bad. If awards were capped, they wouldn’t have to charge as much because their malpractice insurance rates would be reasonable.”
To top it all off, a video-recorded comment by Nancy Pelosi, Speaker of the House, is being circulated on YouTube, stating: “But we have to pass this [healthcare bill] so that you can find out what is in it…”
Well, we are finding out, step by step, and the results are appalling…
Obama vs. Supreme Court
The Los Angeles Times reported on July 6:
“The Supreme Court wrapped up its term last week after landmark decisions protecting the right to have a gun and the right of corporations to spend freely on elections. But the year’s most important moment may have come on the January evening when the justices gathered at the Capitol for President Obama’s State of the Union address. They had no warning about what was coming.
“Obama and his advisors had weighed how to respond to the court’s ruling the week before, which gave corporations the same free-spending rights as ordinary Americans… Some advisors counseled caution, but the president opted to criticize the conservative justices in the uncomfortable spotlight of national television as Senate Democrats roared their approval.
“Chief Justice John G. Roberts Jr. is still angered by what he saw as a highly partisan insult to the independent judiciary. The incident put a public spotlight on the deep divide between the Obama White House and the Roberts court, one that could have a profound effect in the years ahead… Many legal experts foresee a clash between Obama’s… agenda and the conservative court…
“Already, the healthcare overhaul law… is under attack in the courts. Republican attorneys general from 20 states have sued, insisting the law and its mandate to buy health insurance exceed Congress’ power and trample on states’ rights. Two weeks ago, a federal judge in New Orleans ruled Obama had overstepped his authority by ordering a six-month moratorium on deep-water drilling in the Gulf of Mexico. On another front, the administration says it will soon go to court in Phoenix seeking to block Arizona’s controversial immigration law, which is due to take effect July 29. Republican Gov. Jan Brewer said Arizona would go to the Supreme Court, if necessary, to preserve the law.
“As chief justice, Roberts has steered the court on a conservative course… McConnell, … law professor, said the administration’s broad set of regulatory moves made a clash almost inevitable.”
“The President Without a Country”
On June 6, 2010, WorldNetDaily published a commentary by famous entertainer and TV evangelist Pat Boone. We are quoting the following excerpts:
“‘We’re no longer a Christian nation.’ — President Barack Obama, June 2007… ‘You might say that America is a Muslim nation.’ — President Barack Obama, Egypt 2009… reading and hearing the audacious, shocking statements of the man who was recently elected our president — a young black man living the impossible dream of millions of young Americans, past and present, black and white — I want to ask him, ‘Just what country do you think you’re president of?’
“You surely can’t be referring to the United States of America, can you? America is emphatically a Christian nation, and has been from its inception! Seventy percent of her citizens identify themselves as Christian. The Declaration of Independence and our Constitution were framed, written and ratified by Christians. It’s because this was, and is, a nation built on and guided by Judeo-Christian biblical principles that you, sir, have had the inestimable privilege of being elected her president.
“You studied law at Harvard, didn’t you, sir? You taught constitutional law in Chicago? Did you not ever read the statement of John Jay, the first Chief Justice of the Supreme Court and an author of the landmark ‘Federalist Papers’: ‘Providence has given to our people the choice of their rulers — and it is the duty, as well as the privilege and interest of our Christian nation — to select and prefer Christians for their rulers’?
“In your studies, you surely must have read the decision of the Supreme Court in 1892: ‘Our lives and our institutions must necessarily be based upon and embody the teachings of the Redeemer of mankind. It is impossible that it should be otherwise; and in this sense and to this extent our civilization and our institutions are emphatically Christian’…
“… how did you come up with the ridiculous, alarming notion that we might be ‘considered a Muslim nation’? Is it because there are some 2 million or more Muslims living here, trying to be good Americans? Out of a current population of over 300 million, 70 percent of whom are Christians? Does that make us, by any rational definition, a ‘Muslim nation’?
“Why are we not, then, a ‘Chinese nation’? A ‘Korean nation’? Even a ‘Vietnamese nation’? There are even more of these distinct groups in America than Muslims. And if the distinction you’re trying to make is a religious one, why is America not ‘a Jewish nation’? There’s actually a case to be made for the latter, because our Constitution — and the success of our Revolution and founding — owe a deep debt to our Jewish brothers…
“It seems increasingly and painfully obvious that you are more influenced by your upbringing and questionable education than most suspected. If you consider yourself the president of a people who are ‘no longer Christian’… and might even be ‘considered Muslim’ — you are president of a country most Americans don’t recognize. Could it be you are a president without a country?”
NASA’s Foremost Mission–Improve Relationships with Muslims
Fox News reported on July 5:
“NASA Administrator Charles Bolden said in a recent interview that his ‘foremost’ mission as the head of America’s space exploration agency is to improve relations with the Muslim world… ‘When I became the NASA administrator — or before I became the NASA administrator — he [President Obama] charged me with three things. One was he wanted me to help re-inspire children to want to get into science and math, he wanted me to expand our international relationships, and third, and perhaps foremost, he wanted me to find a way to reach out to the Muslim world and engage much more with dominantly Muslim nations to help them feel good about their historic contribution to science … and math and engineering,’ Bolden said in the interview.”
Frictions Between USA and Israel
“It was only one paragraph buried deep in the most plain-vanilla kind of diplomatic document, 40 pages of dry language committing 189 nations to a world free of nuclear weapons. But it has become the latest source of friction between Israel and the United States in a relationship that has lurched from crisis to crisis over the last few months.
“At a meeting to review the Nuclear Nonproliferation Treaty in May, the United States yielded to demands by Arab nations that the final document urge Israel to sign the treaty — a way of spotlighting its historically undeclared nuclear weapons. Israel believed it had assurances from the Obama administration that it would reject efforts to include such a reference, an Israeli official said, and it saw this as another sign of unreliability by its most important ally.
“… some analysts said the nuclear nonproliferation issue symbolizes why Israel remains insecure about the intentions of the Obama administration. In addition to singling out Israel, the document, which has captured relatively little public attention, calls for a regional conference in 2012 to lay the groundwork for a nuclear-free zone in the Middle East. Israel, whose nuclear arsenal is one of the world’s worst-kept secrets, would be on the hot seat at such a meeting.”
Rift? What Rift?
The Telegraph reported on July 6:
Barack Obama yesterday backed calls by Benjamin Netanyahu, the Israeli premier, to resume direct peace talks with the Palestinians as both men hailed the “unbreakable” bond between the United States and Israel… The effusive language and a warm handshake before the cameras that lasted several seconds was in striking contrast to the coolness of their last meeting when the Israeli leader and his aides were left alone in the West Wing as Mr Obama dined privately. .
“This time, Mr Obama lavished praise on Mr Netanyahu and said that the relationship between the US and Israel was ‘unbreakable’ and enduring. Mr Netanyahu denounced reports of a US-Israeli rift as ‘flat wrong’. Mr Obama said… he was convinced that Mr Netanyahu ‘wants peace’ in the Middle East and was ‘willing to take risks for peace’. The US would never ask Israel to ‘take any steps that would undermine its security interests,’ he said.”
The future will tell how reliable that promise is…
Sanctions Against Iran
The Financial Times wrote on July 2:
“Lloyd’s of London, the insurance market, is restricting cover for any ships carrying petroleum to Iran. President Barack Obama signed new sanctions legislation into law on Thursday night. Lloyd’s said it would move to ensure its members complied with the US rules, the toughest unilateral measures taken against Iran in over a decade…
“International companies that defy the unilateral measures could be barred from conducting any transactions with US banks and have their US assets frozen, as well as being denied US government contracts. The sanctions take aim at companies providing Iran with petroleum and the underwriters of those shipments. They also target international banks that trade with Iran’s Revolutionary Guard Corps, or with 16 blacklisted Iranian banks. Because of limited refining capacity, Iran depends on imported petroleum to meet between a quarter and a third of its domestic consumption… This time, the EU’s three leading powers — Germany, France and Britain — all support tougher sanctions against Iran.
“Iran will now find it harder and more expensive to secure supplies of petroleum. But the biggest future impact of the legislation may be to limit international banks from dealing with Iran. Many European banks have pulled out, but others, notably those from China and the Gulf, continue to do extensive business in the country…
“The legislation allows Mr Obama to grant a waiver for sanctions on a case-by-case basis for a maximum of twelve months, if he deems this vital for US interests and if the home country of the company concerned cooperates with the US on Iran policy — as is true of the UK.”
This leaves quite some room for political maneuverings…
US Attack on Iran?
Newsmax reported on July 7:
“The United States may be forced to launch an attack on Iran’s nuclear weapons facilities if diplomatic efforts and economic sanctions against the Islamic Republic fail, Sen. Joseph Lieberman said Wednesday after a meeting with Israeli officials in Jerusalem. Appearing at a news conference with Sens. Lindsey Graham and John McCain, Lieberman was unusually harsh in his assessment of the Iranian threat. There is a broad consensus in Congress that military force can be used if necessary to stop Iran from obtaining nuclear weapons, he said… this is one of the few times an official of Lieberman’s standing has explicitly used the term ‘military action’ while in Israel, The Jerusalem Post reported.
“The group also addressed President Barack Obama’s fence-mending meeting with Israeli Prime Minister Benjamin Netanyahu and the worsening situation with relations with Turkey, whose Islamic government is steadily moving away from the West to a closer relationship with Iran, according to experts…
“Iranian officials, meanwhile, said Wednesday that sanctions could slow down its nuclear progress. It was the first time Tehran has acknowledged the measures might have some bite, according to Reuters.”
Der Spiegel Online wrote on July 5:
“Poland’s new President Bronislaw Komorowski is a close friend and political ally of Prime Minister Donald Tusk and his election is bound to clear the way for tough reforms in Poland… Bronislaw Komorowski… had won the second round of the presidential election with just over 50 percent of the votes…
“Jaroslaw Kaczynski just barely missed out on replacing his twin brother Lech, who died in the terrible air crash near Smolensk in April. Lech never made things easy for Tusk. He wanted to have an equal say in foreign policy and often put a halt to legislation with his veto. Now the way is clear for Tusk…
“From the point of view of Poland’s neighbors the new constellation in Warsaw is positive. Tusk and Komorowski are in favor of a conciliatory approach toward both the Germans and the Russians. They are, to be sure, opposed to the planned Berlin museum to commemorate Germans expelled from Polish territory after World War II. They are also against the Baltic Sea pipeline between Russia and Germany. But they are much less shrill about their opposition than the Kaczynskis were… Since Tusk has been in power, the tone between the two neighbors has been much more respectful.
“The prime minister and his new president also have an unambiguously positive relationship to the EU. They are in favor of Poland adopting the euro as its currency as soon as possible. Lech Kaczynski and his brother were always torn on the issue. On the one hand, they acknowledged that Poland was doing well within the EU, but on the other hand they feared that the country could fall under the influence of the hegemonic power of Germany or that Brussels would destroy Poland’s national character with directives on issues like gay marriage, for example. That made Poland under the Kaczynskis an uncomfortable, demanding partner, one that often enraged those attending meetings in Brussels.”
The EUObserver commented on July 5 that “EU’s dream candidate wins Polish election.” It appears certain that Poland, a predominantly Catholic country, will soon adopt the euro.
Life More Difficult for Chancellor Merkel
Deutsche Welle reported on July 6:
“Nearly two months after a general election in the western German state of North Rhine-Westphalia, the Social Democrats and the Green Party have sealed their coalition agreement to form a minority government. Hannelore Kraft, head of the Social Democrats in the state, is expected to be elected as premier next week. This will make her the first woman to hold the post in Germany’s most populous state. Following the election, the Social Democrats and the Greens are just one seat short of an absolute majority in the state assembly in Dusseldorf.
“Coalition talks with the Christian Democrats and the Free Democrats failed. The minority coalition in North Rhine-Westphalia will alter the political balance in the Bundesrat, Germany’s upper house of parliament, making life more difficult for Chancellor Angela Merkel’s government in Berlin. Until now, Merkel’s center-right coalition has held the majority both in parliament and in the upper house. But the new government in North Rhine-Westphalia means that any bill that needs to pass the Bundesrat will need approval from the center-left opposition.”
It appears the days of the present Merkel-Westerwelle coalition are numbered, and that perhaps the time for a charismatic influential leader in Germany is drawing nearer.
Catholic Church–No Change
Der Spiegel Online wrote on July 6:
“This spring, it looked as though the Catholic Church was finally going to confront charges of sexual abuse head on. Following recent police raids in Belgium, however, the Vatican has once again closed ranks. In the internal Holy See debate, the conservatives have regained the upper hand…
“Even if the raid in Belgium was inappropriate, it is another indication that the scandal-ridden Catholic Church can no longer expect leniency — neither in Belgium nor in the US, where a week ago Monday the Supreme Court ruled that the Vatican enjoys no immunity in cases of alleged molestation by priests. The ruling means that, in theory, even Pope Benedict XVI could be taken to court…
“It had taken months for Pope Benedict XVI to comment on the abuse scandals in Ireland and Germany… But now that secular investigators have decided to take action, he has condemned the ‘surprising and regretful’ circumstances of the Belgian raid… Benedict’s allies in Rome wasted no time in ensuring that relations between the Catholic Church and the secular world took another turn for the worse…
“After a brief period of remorse, it looks as if everything is back to business as usual at the Vatican. Little appears to have changed…
“First Ireland, then the US, Germany, Austria and now Belgium — the Catholic map of the world is rapidly filling with countries where new cases of abuse continue to surface. It has long ago become a global problem, but the Vatican under Benedict XVI is reacting at its own pace… Only the pope is allowed to reprove a cardinal — no one else.
“German bishops Robert Zollitsch and Reinhard Marx were also given a dressing down. Benedict reproaches them for not being tender enough with their fellow bishop Walter Mixa when he came under fire amid allegations of violence towards children in his care… He announced that, ‘following a period of healing and reconciliation,’ Bishop Mixa, like other retired bishops, would again be available for pastoral duties.”
Dangerous Deepwater Drilling
Der Spiegel Online wrote on June 28:
“Last week the beleagured oil industry fought back: Despite the flow of crude oil still spoiling the Gulf of Mexico, they successfully protested a US moratorium on deepwater drilling. They’re determined to continue exploration on oil’s final frontier — using high-tech methods they have not mastered…
“Ten weeks after the drilling platform disaster and oil continues to flow into the Gulf of Mexico. So far, according to some estimates, ten times more oil has leaked into the water than spilled from the Exxon Valdez when it struck an Alaskan reef in 1989…
“On Wednesday Norway tendered licenses for oil exploration in 94 sectors of the North Sea. A day before, the shareholders of the Brazilian oil company Petrobras approved a stock offer worth up to Ä68 billion ($83.2 billion), the largest in history. Petrobras will use this gigantic influx of capital to explore deepwater oil fields off the shore of Rio de Janeiro. And off the coast of… Newfoundland, in Canada, Chevron has started work on a borehole at depths of 2,600 meters below the ocean surface — over 1,000 meters deeper than the hole that the ill-fated Deepwater Horizon had drilled…
“Deepwater oil exploration will go on, because this is where most of the new sources of oil are being found… Only 3 percent of worldwide oil production originated from the deep sea in 2002; that fraction will rise to 10 percent in two years… The Gulf of Mexico and the Brazilian and West African coasts make up a ‘golden triangle’ of deepwater oil exploration with enormous, if still undeveloped, potential…
“A few thousand meters down and the pressure is so great that… water pressure simply crushes machinery… Breakdowns with hydraulics are… an everyday occurrence… at those depths… The water is also very cold, around 2 degrees Celsius (35.6 degrees Fahrenheit). At such temperatures the gas that is almost always present in oil fields forms hydrates, as well as ice crystals, and these can block pipes… In the ‘golden triangle,’ the oil often lies under layers of salt, kilometers deep. These blanket the oil reserves, and they also muffle the seismic-pulse technology which engineers normally use to find oil…
“Drilling blind is dangerous, because the engineers are forced to calculate the pressure in the chambers where the oil will be found. The coveted resource sits in porous rock reservoirs, similar to sponges. The first time the drill hits one of these deposits the pressure of the oil flowing upwards must be equal to the pressure of the oil underneath. It is like walking a tight rope — to get the desired result specialists inject the holes with drilling mud, made of water, clay, barite and other ingredients. Should the engineers not add enough pressure, the oil can spurt out violently, causing a much-dreaded blow out.
“Another potential deepwater drilling catastrophe: The ground underwater is still relatively young, and therefore contains many gas bubbles. Should the drill bit hit one of these bubbles, the whole thing could go up — this is what is called a ‘gas kick’…
“And all the while, crude oil continues to flow into the Gulf of Mexico. And there could be worse to come… the oil flow and the attempts to prevent it may have damaged the pipelines at the oil source. In which case gas and oil could start coming up through the sea floor… [In that case] drilling to relieve pressure would be in vain.
“The emergency plan BP has provided may indicate the level of concern the petroleum giant has about such horror scenarios. The plan says walruses must be protected, even though walruses don’t live in the Gulf of Mexico. The company also promises advice from an expert, Peter Lutz. In case of catastrophe, the biologist from Boca Raton, Florida, can help assess damages to the environment. But the originators of the emergency plan at BP had evidently not spoken to that particular expert for some time; Professor Lutz died of cancer five years ago.”