he Phoenix Project Daily Journal (Phoenix Journal)
Year 22, Day 325
July 7, 2009
Gerald Celente: Obamageddon – Fascist Apocalypse
“Food riots, tax protests, strikes, high unemployment: all will characterize our economic future.”
“What we’re looking at, really, it’s much bigger than an economic collapse. We’re looking at the decline of Empire America. And in all fairness—and I’m a political atheist, I don’t bow to politicians or kneel or genuflect at their altars—no, we just look at the facts for what they are. It’s been long in the making but now it’s being accelerated with these programs of stimulus packages, bailouts, buyouts, government takeovers. And by the way, people are calling it—is it nationalism, is it socialism? The merger of state and corporate powers—according to Mussolini, who knew a thing or two about it—is called FASCISM. So what we’re doing is we’re looking at the disintegration of the Empire in terms of this used to be the entrepreneurial empire of the World and now it’s become a place for the “Too Big to Fails”.–Gerald Celente
California Hotel Foreclosures Skyrocket
And Other Signs of a Dying Economy
In yesterday’s Journal, in the piece captioned, “How Many Houses Is a Hotel Worth?”, we pointed out the astonishing 933% increase in hotel loan delinquencies in Arizona over the prior 8 months. “Richard Warnick of Warnick & Co. said he’d be surprised if nearly all hotels and resorts, here and across the country, weren’t in technical default on their loans …” Here are some numbers from California:
The number of California hotels in default or foreclosed on has jumped 125% in the last 60 days. The state now has 31 hotels that have been foreclosed on and 175 in default.
“In reviewing the hotels in default or foreclosed on, we found that over 75% of the loans originated from 2005 to 2007. During this period, over 2,500 California hotels either refinanced or obtained new purchase loan financing,” Reay added. “Unfortunately, based on today’s market values, we estimate that none of these hotels have any equity remaining. The unprecedented decline in room revenues (California is down 21.5% year-to-date) combined with the jump in cap rates has resulted in a massive loss in values. We estimate that values are currently 50 to 80% lower than at the market’s peak in 2006-2007.”
All emphasis in the foregoing excerpts has been added. Based on the sharp 125% increase in REPORTED defaults and foreclosures in just the last 60 days, this “other shoe” has definitely started to drop.
If 75% of the loans originated near the peak of the market and NONE of those have any equity left, does it not seem likely that MOST of those situations are headed for foreclosure? The worst part is that it is not just the hotels in one or two states but across the nation. And again, the implosive effect on liquidity will be enormous due to the leveraged nature of the fractional-reserve banking system.
Renowned economic blogger “Mish” reports that office vacancies are near a 4-year high, with 24% of those vacancies in the suburbs–and rents are falling as a consequence.
Mish also documents how credit card defaults are soaring: “500,000 Canadians 90 Days Behind on Credit Payments, Delinquency Rate Hits 1.52%; U.S. Delinquency Rate is 1.32%“. This report shows a “19% rise in delinquencies year-ending May 31″.
Check out the new Google Homes for Sale Search function. Try this example search for Homes for Sale in San Francisco. It is obvious at a glance that for-sale inventories are immense.
Second Stimulus Package Coming
The U.S. should consider drafting a second stimulus package focusing on infrastructure projects because the $787 billion approved in February was “a bit too small,” said Laura Tyson, an adviser to President Barack Obama.
… “The economy is worse than we forecast on which the stimulus program was based,” Tyson, who is a member of Obama’s Economic Recovery Advisory board, told the Nomura Equity Forum.
… “We probably have already 2.5 million more job losses than anticipated.”
… Tyson, 62, later told reporters that the U.S. can afford to pay for a second package, even as the fiscal deficit soars. She said the budget shortfall is “likely to be worse” than the equivalent of 12 percent of gross domestic product that the administration forecast for 2009 and the 8 percent to 9 percent it projected for next year.
A second stimulus package is coming because there remains an enormous and still increasing hole caused by imploded liquidity as debt (which IS money) contracts. All remonstrations to the contrary amount to only “not yet”–but the longer they delay, the more negative the repercussions on the economy, especially in terms of lost jobs.
DEflation As New Money Fails to Stimulate Economy
“You can’t beat deflation in a credit-based system.”–Robert Prechter
So now, two years into this crisis, where do we stand and where do we go from here? History offers limited guidance, as we have never experienced the bursting of a bubble of this magnitude before. The closest thing is the collapse of the Japanese credit bubble around 1990. As the Japanese have since learned, recovering from a deflated credit bubble is a long and very painful affair.
Governments and central banks on both sides of the Atlantic are pursuing a strategy of buying time, hoping that a recovery in economic conditions will allow our banking industry to re-build its capital base. The Japanese pursued a similar strategy back in the early 1990s. It failed miserably and set the country back many years in its recovery effort. Ironically, the Japanese approach was almost universally condemned as hopelessly inadequate.
… Japanese authorities have used every trick in the book to reflate the economy over the past two decades. The results have been poor to say the least: Interest rates near zero (failed), quantitative easing (failed), public spending (failed), numerous attempts to drive down the value of the yen (failed)
We are effectively caught in a liquidity trap. The Bank of England, the European Central Bank and the Federal Reserve have all flooded their banking system with enormous amounts of liquidity in recent months but what has happened? Instead of providing liquidity to private and corporate borrowers as the central banks would like to see, banks have taken the opportunity to repair their balance sheets. For quantitative easing to be inflationary it requires that the liquidity provided to the market by the central bank is put to work, i.e. lenders must lend and borrowers must borrow. If one or the other is not playing along, then inflation will not happen.
This is illustrated in chart 3 which measures the growth in the U.S. monetary base less the growth in M2. As you can see, the broader measure of money supply (M2) cannot keep up with the growth in the liquidity provided by the Fed. In Europe the situation is broadly similar.
If our overview is correct, the liquidity that has been supplied to the system has not really gone towards making the banks’ “balance sheets” stronger. And the reason the “new money” (new taxpayer debt) has not benefited economic growth is not really because the banks are tight and won’t loan–it’s because the “money” was needed to shore up the reserve ratio–which apparently went NEGATIVE and it took TRILLIONS of dollars to restore a condition of having any reserves at all upon which to foundation the banking system.
Pictures from the Chicago TEA Party
Bolsheviks have, indeed, taken over the American government. The great American Eagle has red tail feathers!
It’s time to clean house in Congress, and replace our old-school, do-nothing, so-called “representatives” with a new generation of political leadership that will stand up to the entrenched failures of our political system (like 1500-page bills that are passed without being read) and fight for our rights, freedom & prosperity as individuals.
I’m being told I’m “tilting at windmills” by trying to kick out the people who have failed us… but this time, the WINDMILL IS GONNA LOSE.
Support S604 to audit the Fed.
Senate Stymies Audit the Fed Bill
… Seizing on a chance to take quick action to bring Audit the Fed up for a vote, and with the GAO provisions in mind, Senator DeMint attached the full text of S 604, the Senate version of Ron Paul’s Audit the Fed bill, to HR 2918 as Senate Amendment 1367 before it was considered for final passage.
However, Senate Democrats refused to even allow a vote on the amendment! That’s right. The internationalist, Fed-loving elite in the Senate used a parliamentary tactic to shut down DeMint’s amendment.
After Senator DeMint brought Audit the Fed to the floor, Senator Ben Nelson of Nebraska raised a “point of order” to prevent a vote, claiming that the amendment violated Senate Rule 16 by “legislating” on an appropriations bill. The Senate president agreed, and the amendment was shot down.
Senator DeMint did not back down, though, and directly challenged Senate leadership by pointing out the other GAO audits contained in the bill. As Senator DeMint listed them off, the Senate president was forced to agree with Senator DeMint that each one he described, all of which would be left in for final passage, also violated Senate Rule 16.
Which tells us at least one thing: the problem wasn’t with “legislating” on the bill or violating Senate Rules (which is commonly done). Shooting down the amendment was about preventing a thorough audit of the Federal Reserve for the first time in its history! …
Proof of the New World Order in Under 11 Minutes
Seven Pillars Of Zionist Subterfuge by Arthur Topham
The struggle for freedom of speech in Canada continues. It’s has now been over 19 months since the Zionist organization nominally referred to as B’nai Brith Canada registered a formal complaint with the Canadian Human Rights Commission, the premise of which was the contention that I and my website RadicalPress.com were contriving to promote ongoing hatred affecting persons identifiable as Jews and/or as citizens of Israel.
In an effort to prevent any examination of the truth in Mr. Topham’s forthcoming inquisition before the Canadian Human Rights Commission Tribunal, the complainants have filed with the Court a special “Judicial Notice”, which, if uncontested by Mr. Topham, would serve to make the following 7 points UNQUESTIONABLE (justifying the assertion that these are Seven Pillars of Zionism):
- “The Holocaust, that is: the systematic industrial-scale genocide of millions of European Jews during World War two is a historical fact.”
- “The PROTOCOLS OF THE LEARNED ELDERS OF ZION (and other permutations thereof) is both a forgery AND a classic of antisemitic hate literature.”
- “The nation state of Israel is a constitutional, parliamentary democracy. In Israel today, Arab Muslim citizens comprise approximately 20% of the population of Israel. Arabic is one of the three official languages. Israeli Arabs participate fully in Israeli society and are represented in all professions.”
- “The Jewish religion does not sanction or condone sex with babies, under aged children or cadavers.”
- “The Jewish religion does not sanction or condone murder of non-Jews.”
- “Zionism is the international political movement that originally supported the reestablishment of a homeland for the Jewish People in Palestine.”
- “Neither Judaism nor Zionism have agendas to diminish, subjugate or despoil other religions or systems of belief.”
Mr. Topham’s point-by-point refutation of these “pillars” makes for worthwhile reading. We encourage you to support him by at least visiting his website.
Amnesty International official report on Gaza, (released July 2009) regarding the 22-day Israeli assault reveals that Israel committed war crimes and carried out reckless attacks and acts of wanton destruction in its Gaza offensive. Hundreds of Palestinian civilians were killed using high-precision weapons [and not-so-precise weapons such as the illegal use of white phosphorus to burn the flesh of Palestinians down to the bone], while others were shot at close range, the report concluded that Israel committed frank war crimes in Gaza.
