I mean it.
How to describe this mess. This horror. We are witnessing the total transformation of the world economy at the same time that the world is awash in debt. At the same time the world is very clearly and scarily entering a food crisis that originates as scarily and simply as the petri dish model or the glass of sugar water... that the organisms (in this case bacteria) multiply and notice no shortage of sugar (food) until the end and start to run out. Do you know what happens? They cannibalize each other. This clearly relates to the food crisis as a model. Each year we have roughly two harvests, and the entire food supply for the world must be replaced in total - or the world starves. Food commodities are totally different than say oil- which is supposedly a fixed reserve we draw down.
That was the analogy (glass of sugar water) I am trying to covey here, because clearly I could write a lot about this, there is so much going on.
Battle of the central banks
We are witnessing a battle of central banks to reflate their respective bubbles. The US Fed is presently re - inflating markets here, but there is clear danger that a crash or major correction could start. Many financial writers voice these concerns.
So far, the Fed has averted a Crash in 2010. Maybe they can do it for 2011 too? It is possible but not as likely in my view.
(I assume people here are informed roughly on how the Fed supports markets of all types - QE, they buy any market or index in trouble.)
But the central banks with money, the Fed and the Chinese and the Japanese are doing everything they can to take control of financial markets through fiscal policy, and currency devaluation. They will battle in 2011 to see who wins (or is winning). Right now, it's said the Fed is winning because our markets are up and the Chinese is way down over the last few months, for example.
If one central bank won that battle, (and we might want to define the battle) would they win the world leadership for the next century?
The US did not have to lose its leadership to China. And they may not either, even if the currency crashes when the US maxes out the credit card they used to bail out the world financial system. By the way, do you know of very many people prosecuted for financial theft?
They always escape!
I would like to create a special prison for about 1 million bankers and make them turn big rocks into small rocks. Im serious.
Our world has changed forever.
Our world is trying to decide if it will align with the West or the East. If they align with the East, the Asian model, they will inherit a world of slave employment. Right now in China half the college grads are not getting hired. They graduate 3 million engineers alone. Where will they go, year after year? The US and the West must immediately come up with a solution to labor arbitrage. The US cannot compete with factory workers who make 1 dollar an hour, and or even 50 cents, and an engineer in China who earns one tenth of the US wages. Same for India but I have better prospects for them if they work things differently than China.
Right now those Chinese Ants (The Chinese picked the name not me) are millions of college grads who cannot get work with out connections....
This is a problem.
Let me explain.
In China and many civilizations, the family structure is the organized unit. And Friends. Any major business is done with Guanzi, bribes or networking.
This causes a bifurcation of the population into haves and have nots. This leads to revolutions and war. And China has about - they stated this - 200 million reserve and other military. Their published strength is around 3 million depending on the source , but military reserves are usually ten times that number. China has about 700 million people of military age. For informational purposes, I was in the US Army Reserve as an artillery Leutenant. I am familiar with the military.
Now, what do you do with 3 million engineers, each year, half who are unemployed...you create a gigantic military...I think you might guess where I am going. We are going to have a war with China over a malthusian nightmare, for commodities and food. It also just might start in 2011...things are totally changing. Fast. I am not saying war in 2011 with China but I am definitely saying the first stage is economic...think about that.
The former US economic model grew the middle class was also family unit structured. But in THIS country, you can basically do anything you want to try to make money - honestly and paying taxes.
That stops the unwarranted nepotism. That grew the Middle Class. China is trying to grow their middle class with nepotism? This is real and it goes right to the top of the regime. This is why they cannot grow the middle class; you have basically two classes in China, a small middle class, a very small elite and about what 900 million wage slaves? Just investigate this on your own.
Anyway I have a lot more to say about this.
But get ready to be as flexible as you can be, and you must have a decent amount of cash.
Think about what I am saying. This is a breif outline. Malthusian food crisis, world economy transforming for the far worst scenario, an economic war - I mean war to see who will dominate this century, and then a commodity shooting war. And all in the tenor of a war or economic battle for survival, not merely to get some money. You will see what I am talking about if the food crisis explodes like it appears to be doing in this year, 2011. The 2008 and now the present crisis is scaring the HELL out of everybody - China the Middle East, everywhere, South America and so on, India.
Now then. To some specifics here in our little financial world...
Lying in the markets
I suppose that many of my readers would say the markets are very illogical today. I do not do charting but macro analysis, but I would guess that the chartists are having a bad day. The reason is the financial media and corporations and banks and the governments are all lying though their teeth on many economic statistics.
I know of several weird and blatant cases of manipulating the finacial media. The last time I wrote about it I got some big problems thown at me but never mind. Here we go again..
I remember last year when one major financial media had not only their main people, but what appeard to be doubles of several of the major anchors or reporter types. They also put up bad data on the television screen, and the fakes or whatever, were talking erroneous stuff about it. I wonder if that was some kind of a test to see if the major media can get away with doubles... I know it sounds a bit weird. It is a known strategy for media control, and just one example. The doubles or what appeard to be doubles were on for about a month on and off particularly if there was a crash brewing...look at your own favorite media and check it out. It might only be used during crashes.
I have seen overt manipulation of the US stock market via images of the BP well, and when I wrote about that last summer, the well was immediately 'fixed'...I have no idea if it was due to my article.
The basic problem you and I have is that we live in the internet or media news for our information. This means you live inside a bubble. You don't see the real data yourself. This is a big big problem. The world governments are well aware that you are inside an information bubble and the internet is making it worse, not better. The people who want to lie know you cannot check them easily.
But this is only a sliver of what you, my readers are up against. Every time I wrote about this lying of the Financial media, I got something happening to me personally. I don't care either. Your problem is trying to know the truth. My problem is writing about things that are a bit dangerous. So far so good but ... I am not taking this lightly. I can say this, the financial media better reform or I will do more. I come from a family who wrote about the truth, my Dad was Financial editor of KNX 1070 in Los Angeles for decades, and my Grandmother, Alice Widener, wrote extensively about the communist infiltration of the US institutions (yes it is real), universities, and government here, for decades and also was threatened. I have been threatened about 5 times this last year.
But my point is, I know of specific examples of financial media lying in the middle of big stock crises. And I know, being in the computer field and internet field myself as an Oracle systems engineer, that this lying is starting to become epidemic. I can see the problem the internet is creating for not only investors, but for governments.
Must have truth must vet information
This is particularly a problem where the internet is doubling in size every two years. You all will need some way to vet this voluminous financial information we are all wading through. I sincerely believe that. So, I volunteer as an analyst for you, on these and many other topics. You also need an analyst who is very technical, since this is dominating the changes in the present world. I am. I am also a history buff. I could have gotten a double major in History and Math at UCLA but stopped at math but took most of the history courses...
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Disclaimer: Chris Laird is not an investment advisor/professional. This article, and the PrudentSquirrel newsletter and alerts, are general market commentary only. They are not intended as specific advice. You should talk to your own investment professionals for specific advice. Information here is deemed reliable but should be verified by you if you think it's important.