Future Forecast...

by JASON | 6:26 PM in |

Update: 5/29/2009

For economic background see my post - Foundation of the Pyramid...


http://yophat.blogspot.com/2009/04/foundation-for-pyramid.html

I see unemployment payments running out between Aug & Oct. When that happens credit card defaults will spike while credit limits are curtailed. California is starting to awaken...

http://yophat.blogspot.com/2009/01/californification.html

The stimulus payments are mostly geared towards big government....this is the biggest & fastest transition to oligarchy yet...

See here's the trick with the stimulus money - its a giant injection into government agencies while the state & local stuff dries up. Case in point - rumor has it the INEL "Idaho Nuclear Engineering Laboratory" is getting $400 million in stimulus money and can't figure out how to spend it all.....to put that in perspective Walmart's total revenue last year was a hair over $400 million...


Bigger than Europe's Carrefour, Tesco, and Metro AG combined, it is the world's #1 retailer, with more than 7,870 stores, including about 890 discount stores, 2,970 combination discount and grocery stores (Wal-Mart Supercenters in the US and ASDA in the UK), and 600 warehouse stores (SAM'S CLUB). About 55% of its stores are in the US, but Wal-Mart continues expanding internationally; it is the #1 retailer in Canada and Mexico and it has operations in Asia (where it owns a 95% stake in Japanese retailer SEIYU), Europe, and South America.


meanwhile the local stuff looks like this...

The police department was asked to reduce their budget the first time by 12%, then the city asked for another 10%, then another cut at ???% – By the time they were done, or thought they were done, there was nothing left to cut unless you got rid of officers. They have no ammunition budget, no training budget and $2400 for the dog program. They reduced all civilian positions in the PD to part-time, cut the buy-back on comp time (you used to be able to get compensated for part of your unused paid time off), and required everyone to take unpaid time off. This week the mayor asked the chief to cut another $150,000. They’ve finally backed off the police department though, as the city manager stepped up and said there was nothing left to cut at the PD. Good thing the city manager took a hefty raise right before they started the worst of the budget cutting.

They asked the officers this week to think of things/ideas of more ways to cut costs. They have a small mounted patrol and it’s being cut to only the volunteer civilian mounted personnel. .... thinks they might cut the funding for the SWAT team and the K-9 program. They are applying for funding for a school resource officer from the stimulus money, but it won’t really be a full-time resource officer, and the town will absorb that money into their own budget. They took on the airport security and will use officers to staff it, and are receiving money for 3 positions, but (of course) won’t let the PD hire the 3 positions to staff it. The chief is looking at cutting the schedule so there is no graveyard shift (which he doesn’t want to do, as it will leave the entire county without any law enforcement during the early morning hours). That option is especially dangerous as there is a 2 hour call out delay because most of the officers don’t live anywhere near town. The chief doesn’t have a lot of options as officers are already left alone without backup on the current 24-hour schedule.



FYI: This is one of the largest cities in an oil rich state and one of four states that employment levels in 2008 exceeded 2007...


or like this...

Council's finance committee received a report from the city's finance department Monday saying the city was already $7.7 million behind its revenue forecast by the end of April. And, if the trend continues, the city could face a deficit of about $40 million through next year.

"Hell would have to freeze over for us to get out of this,'' said Council member Leslie Ghiz. "There will be layoffs. There will be cuts. And it will be painful."

For the short term, City Manager Milton Dohoney has called for a five percent cut in 2009 spending from all city departments; and ordered department heads to submit plans to him by the end of the week on how they will do that.

The city administration had expected to collect nearly $82.6 million in income taxes through April, but the actual receipts were about $76.5 million. Admission tax revenue - the money the city gets from the sale of tickets to entertainment and sporting events - is down as well; and the city took a $1.3 million hit when the state of Ohio reduced the amount of money municipalities get from the state's Local Government Fund.


http://news.cincinnati.com/article/20090519/NEWS0108/905200319/Huge+deficit+stuns+city

You can expect more of that....as tax revenue falls and social costs increase...

I expect the retail sector to dry up by Jan/Feb as Christmas doesn't come around this year...sporadic riots in the larger metropolitan areas over the winter....picking up in frequency, intensity and duration by summer/fall 2010...the state, county, city budgets will bleed out by July 2010 when the new budgets roll around and I expect many of them won't survive as coherent organizations by Fall/Winter 2010...


Update: 5/11/2009

If Bernanke does not back off he will find himself in a tightening monetary flat spin. As he comes to own more and more of the public float of the long end the impact of each sale into his program by private holders is magnified in the market.

That is, if there is $1 trillion of something outstanding and you buy $100 billion of it (10% of the float) the impact is X. If there is now $900 billion outstanding (after the first operation) and you buy another $100 billion you have in fact sucked up about 11%. When you get to owning $500 billion another $100 billion sucks up 20% of the float. Each tender operation of the same size thus creates an ever-increasing impact on the underlying price, and since nobody in their right mind will continue to hold something they believe is overvalued, the spiral will tighten precipitously, forcing even more purchases until The Fed owns it all.

At or before that point the long end becomes unavailable to Treasury as a funding source. Forcing all the issue to the short end now starts to ramp short yields (supply and demand, remember - add massive supply and what happens to price?) and Bernanke will then be urged to buy down the time line.

This path leads to a singularity - and both monetary and political failure. The bad news is that the event horizon is far before Bernanke actually winds up owning the entire float, but nobody knows exactly where it is.

Yet once crossed, there is no escape from the outcome.

We best not go there, because if we go down that road too far Americans will be needing all those firearms that they've been buying since Obama was elected - not for a revolution, as some suppose, but rather for self-defense as our political, social and economic structures collapse.
http://market-ticker.denninger.net/archives/1030-The-Economic-Tsunami-Is-Curling-Over.html



Feb 09 - Here's my predictions...

The stock market, at a minimum, will fall below early 90's levels. Keep in mind that I forecast in the spring of 2008 that the S&P 500 would be 800 or below January 1st 2009. I was off by a little.

Mexico will collapse into riots and civil war before the end of 2009.

California will collapse into chaos and anarchy by the end of 2009.

Sporadic riots and anarchy will spring up across the United States by the end of 2009.

The banking roll up will be complete or nearly complete by the end of 2009.

Foundation:

Baby Boomers - 401k/investment collapses, bankruptcy of social security and medicare, housing collapse, etc etc

Middle class decline -


A Vermont mother wrote, "We have at times had to choose between baby food and heating fuel." A 55-year-old man from rural Pennsylvania said, "I am just tired, the harder that I work the harder it gets." A retired couple in Vermont asked, "Does anybody in Washington care?"

It is one thing to read dry economic statistics which describe the collapse of the American middle class. Since George W. Bush has been in office 5 million Americans have slipped into poverty, 8 million have lost their health insurance and 3 million have lost their pensions. In the last seven years median household income for working-age Americans has declined by $2,500. Our country, for the first time since the Great Depression, now has a zero personal savings rate and, all across the nation, emergency food shelves are being flooded with working families whose inadequate wages prevent them from feeding their families.

It is another thing to understand, in flesh-and-blood terms, what that means in the lives of ordinary Americans. The responses that I received describe the decline of the American middle class from the perspective of those people who are living that decline. They speak about families who, not long ago, thought they were economically secure, but now find themselves sinking into desperation and hopelessness.
http://www.huffingtonpost.com/rep-bernie-sanders/the-collapse-of-the-middl_b_105658.html

Feb. 26 (Bloomberg) — In California’s Contra Costa County, 40,000 families are applying for just 350 affordable-housing vouchers. Church-operated pantries are running out of food. Crisis calls have more than doubled in the city of Antioch, where the Family Stress Center occupies the site of a former bank.

The worst financial crisis in seven decades is forcing thousands of previously middle-income workers to seek social services, overwhelming local agencies, clinics and nonprofits. Each month 16,000 people, including many who were making $60,000 to $100,000 annually just a few years ago, fill four county offices requesting financial, medical or food assistance.

“Unless we do things differently, not only will we continue to be on life support, but the power to the machine is going to die,” said county Supervisor Federal Glover, who represents Antioch and the cities of Pittsburg and Oakley about 50 miles (80 kilometers) east of San Francisco.



Here's a summary for those interested, but not that patient. Professor Warren studied economic data on spending and income gathered by the government for the "iconic" middle class family, trying to figure out the differences between the seventies and the current situation. The family from the seventies was single income with a stay-at-home Mom, whereas today it would primarily have two incomes.

Key points (as percentage of annual income):

* Saving went from 11% to less than nothing
* Credit Card Debt went from 1.4% to 15%

So basically what was once saved has instead been spent. But spent on what?

Consumption spending on: Clothing, Appliances, and Food all decreased. So where did the money go? The increases are found in important areas (which she describes as "fixed, relentless expenses"):

* 76% Mortgage (People buy bigger houses; true "entry level", affordable homes are not being built)
* 74% Health Insurance
* 52% Cars (People need two cars)
* 100% Child care (Stay-at-home Mom's save money)
* 25% Taxes (Two incomes = bigger tax bracket)

The seventies single-income family spent about half it's income on the basic expenses, whereas the current two-income family spends about three quarters of their income on these basic expenses.

She makes the point that two income families are necessary today, and almost all the income is already "fully budgeted." In the seventies, if the primary bread winner gets sick or fired, the stay-at-home Mom could go to work to provide a cushion.

She also points out that income volatility (the likelihood of getting fired) has gone up drastically since the seventies. The odds of suffering an economic blow for a family with two children has gone up 95%. The cost of a new home for a family with two children has gone up 100%, which she attributes to people buying homes near a good school.

She also points out that the widespread belief in the seventies was that if you had a good work ethic and a high school diploma, you'd make it into the middle class. The widespread belief today is that preschool and a university degree are required to make it into the middle class.
http://www.reddit.com/r/business/comments/7vy9o/the_coming_collapse_of_the_middle_class/

The man who predicted the 1987 stock market crash and the fall of the Soviet Union is now forecasting revolution in America, food riots and tax rebellions - all within four years, while cautioning that putting food on the table will be a more pressing concern than buying Christmas gifts by 2012.

Celente says that by 2012 America will become an undeveloped nation, that there will be a revolution marked by food riots, squatter rebellions, tax revolts and job marches, and that holidays will be more about obtaining food, not gifts.

“We’re going to see the end of the retail Christmas….we’re going to see a fundamental shift take place….putting food on the table is going to be more important that putting gifts under the Christmas tree,” said Celente, adding that the situation would be “worse than the great depression”.

“America’s going to go through a transition the likes of which no one is prepared for,” said Celente, noting that people’s refusal to acknowledge that America was even in a recession highlights how big a problem denial is in being ready for the true scale of the crisis.
http://www.infowars.com/celente-predicts-revolution-food-riots-tax-rebellions-by-2012/



He cites the warning of respected LSE economist Robert Wade, who recently told a protest meeting in Reykjavik that the world was approaching a tipping point and that March to May would be marked by widespread global civil unrest.

“It will be caused by the rise of general awareness throughout Europe, America and Asia that hundreds of millions of people in rich and poor countries are experiencing rapidly falling consumption standards; that the crisis is getting worse not better; and that it has escaped the control of public authorities, national and international,” said Wade.
http://www.infowars.com/2009-heralds-%E2%80%9Ca-new-age-of-rebellion%E2%80%9D/

MOSCOW -- For a decade, Russian academic Igor Panarin has been predicting the U.S. will fall apart in 2010. For most of that time, he admits, few took his argument -- that an economic and moral collapse will trigger a civil war and the eventual breakup of the U.S. -- very seriously. Now he's found an eager audience: Russian state media.

Prof. Panarin, 50 years old, is not a fringe figure. A former KGB analyst, he is dean of the Russian Foreign Ministry's academy for future diplomats. He is invited to Kremlin receptions, lectures students, publishes books, and appears in the media as an expert on U.S.-Russia relations.

"There's a 55-45% chance right now that disintegration will occur," he says. "One could rejoice in that process," he adds, poker-faced. "But if we're talking reasonably, it's not the best scenario -- for Russia." Though Russia would become more powerful on the global stage, he says, its economy would suffer because it currently depends heavily on the dollar and on trade with the U.S.

Mr. Panarin posits, in brief, that mass immigration, economic decline, and moral degradation will trigger a civil war next fall and the collapse of the dollar. Around the end of June 2010, or early July, he says, the U.S. will break into six pieces -- with Alaska reverting to Russian control.
http://online.wsj.com/article/SB123051100709638419.html

Pastor Lindsey Williams called the meltdown, along with dropping crude oil prices on 7-28-08 in an interview with Alex Jones. If you have never listened or watched Jones' program I suggest you start. He has the truth about this world and what is coming and has been broadcasting the warning for over a decade now. (www.infowars.com, www,prisonplanet.tv, also on shortwave radio)

The United States of America and its citizenry has been assessed, warned, plotted against, and sold out by internationalists in government, business, and the banking industry. Its workforce has been decimated, its standard of living shredded and its working people made financial slaves through unjust taxation, socialist government practices, rules and regulations at all levels in society that would make any communist dictator grin with envy.

Our role as partners in governmental affairs has been reduced to a whisper that is not heard by any elected official anywhere—with very, very few exceptions. Our representative government has become 535 regional dictators who live a life of luxury, self-importance and as arrogant master over the populace. The congress of the United States has carefully exempted itself from virtually all repressive laws they choose not to adhere to and have given themselves retirement pensions, health care and other perks, the rest of us can only dream of. They have become the Duma (Soviet Parliament) types who exemplify nothing other than crass selfishness at the expense of every American working citizen.

The past and present Administration has been pursuing a blending of Canada, America and Mexico into the “North American Union.” They have done it under the cover of governmental darkness. They have been running a race as to how fast they can manipulate our great nation into a “no going back” strategic position with these other two nations. The president and his cabal of sell-out White House/Congressional turncoats have intentionally kept the American people in a state of confusion (war on terror, etc.) so that organized resistance to this national sovereignty killing plan can not be formulated. Business and banking interests are salivating at the thought of trillions of dollars in “free trade” being exchanged throughout North America.

The cultures of Canada and Mexico are not that of the United States and its citizens. A disaster of Biblical proportions is on its way WHEN this plan is forced upon our nation. It is only one of several scenarios that are nearing completion and will spell the absolute end of the United States as we know it. Some will argue that the USA needs drastic overhauling and that this is the natural result of “planned obsolescence” in American culture. There are huge problems that must be addressed now by the American public, or the last opportunity to do so under “open and free” conditions will be lost.
http://www.thecitizen.com/~citizen0/node/35170

What others have said....

Former Vice President Dick Cheney warned that there is a “high probability” that terrorists will attempt a catastrophic nuclear or biological attack in coming years, and said he fears the Obama administration’s policies will make it more likely the attempt will succeed.
http://www.politico.com/news/stories/0209/18390.html

Video Link...
http://link.brightcove.com/services/player/bcpid1155201977?bctid=10116015001

Lord West, who advises the Prime Minister on security matters, told the House of Lords: "There is another great plot building up again and we are monitoring this."

He told peers: "Some of the measures that we have put into place in the past 15 months have made us safer, but that does not mean that we are safe.

"The threat is huge. It dipped slightly and is now rising again within the context of 'severe'.

"There are large complex plots. We unravelled one, which caused damage to al-Qaeda and the plots faded slightly.

"However, another great plot is building up again, which we are monitoring.
Lord West, the former First Sea Lord, is now Parliamentary Under-Secretary of State at the Home Office with responsibility for Security and an advisor to the Prime Minister.
http://www.telegraph.co.uk/news/uknews/3198082/Lord-West-Terror-plot-being-investigated.html

SYDNEY (AFP) — The world is on the brink of an avalanche in the spread of devastating weaponry, a new global non-proliferation group warned Tuesday, saying that a nuclear incident would dwarf the September 11 attacks.
http://afp.google.com/article/ALeqM5gtW4R5X16sSsWPtKlo-SCugZ42qg



Link to news article with quote.
http://blogs.abcnews.com/politicalradar/2008/10/biden-to-suppor.html



For more info see my posts on State Bankruptcies and State Sovereignty...


http://yophat.blogspot.com/2009/02/state-bankruptcies.html

http://yophat.blogspot.com/2009/02/state-sovereignty.html

For possible solutions to the mess see my post on economic survival...

http://yophat.blogspot.com/2009/02/economic-survival.html

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