Saturday, September 26, 2009

The Recovery's True Believers

Celebrating A Decade of Reckoning
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The Weekend Edition - The Recovery's True Believers

  • The Feds are now 'true believers' in the recovery...
  • A lesson on speaking silver's language from the Mighty Mogambo...
  • An excerpt from Bill Bonner and Addison Wiggin's latest book...
  • Patrick Cox on the power of technology...
  • Mike Covel with a review of Michael Moore's latest endeavor...
  • Bill Bonner with a look at the last bear standing...and more!

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    The Daily Reckoning's Highlight of the Week:
    The Recovery's True Believers
    Baltimore, Maryland

    This week, the Fed released its statement following its September meeting. And after translating it from Fed-speak to something us mere mortals could understand, the statement was declared more 'upbeat' than it had been in the past.

    And why shouldn't they be upbeat? After all, there's a recovery going on! According to them, the US economy is out of the dumps and once again growing.

    "The Fed has moved from agnostic to true believers when it comes to economic recovery," says Steven Blitz of Pangaea Market Advisory.

    In the Highlight of the Week, Bill Bonner questions the Fed's rationale and warns of what is likely ahead for the United States. Read on...

    According to the papers, the feds have already done it. "Fed says recovery underway," says a headline from yesterday's press.

    Another headline tells us that the feds are considering how and when to ease themselves out of their interventions. But what would the economy look like after they stopped meddling? Just look at auto sales. People bought cars when the feds bribed them to do so. When the bribes stopped, so did car sales. Now, the clunker program has ended and spiders are busy building their webs in showrooms again. Sales fell 38% from August to a 28-year low.

    House sales too have been goosed up by the feds' tax credits. According to an estimate we reported yesterday, 350,000 new house sales since January were assisted by federal intervention - about 80% of the total. What will happen when this program ends in November? Hey...let's guess...uh...housing sales will fall, right?

    And speculators are worried about what will happen when the feds stop their intervention in the financial industry, scheduled for December. Thanks to taxpayer money, the bankers were spared the consequences of their own stupidity. Instead, taxpayers will pay for their mistakes. No one is particularly upset about it. The taxpayers don't know what is going on. And bankers are happy to continue living in the style to which they have become accustomed.

    But no matter how malign and imbecilic the feds are, the public is rooting for them. People think Bernanke has avoided a 'Second Great Depression,' and that the government has rescued the economy. Now they see nothing but clear highway ahead...perhaps with a little bump from time to time.

    What's ahead? We don't know. Neither does anyone else. There is no precedent. Never before has a major central bank reacted so recklessly to a market correction. Never before has the monetary based exploded so violently. Never before have so many people with so many bills to pay had to face such a downturn.

    But amid all the confusion, uncertainty and noise...your editor is calmly, cheerfully and confidently awaiting a depression. Yes, dear reader, we don't know what markets will do. We don't know how much gold will sell for next year...or what the actual GDP will be. But when we look at the shadows...we have a strong hunch that we are entering a depression...and that we won't get out of it soon.

    That said, we caution readers not to expect soup lines or people selling apples on the street corners. This is a depression a la 21st century. A depression with iPhones and Twitter. This is NOT your grandfather's depression.

    [And this 'recovery' is just a figment of the feds' imagination, unfortunately. And unfortunately for you, this means that you are losing money hand over fist - and you may not even know it yet. It's time to implement your financial defense strategy, which you can find here - for free. Get all the info you need to get started here.
    The above is just an excerpt from Bill's standout essay from this week. You can read it in its entirety on The Daily Reckoning site - it's an essay you don't want to miss. Get it here.

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    ALSO THIS WEEK in The Daily Reckoning: Did an issue of the DR slip by you this week? Don't worry; we have them all catalogued for you, below...

    Speaking Silver's Language
    by The Mogambo Guru
    Tampa Bay, Florida

    "This means it is NOT 'beyond description' when it is perfectly described by silver, which is also 'grotesque beyond description' and which can be described as 'like gold'!"

    Hegemony in Question
    by Bill Bonner and Addison Wiggin
    London, England

    "China could dump enough US dollars to set off alarms all over the world. All of a sudden, dollar holders would rush for the exits - each one trying to get out before the others. In minutes, the dollar market could collapse...taking down US Treasury bonds with it."

    The Power of Technology
    by Patrick Cox
    Marco Island, Florida

    "When we finally emerge from this government-created fiasco, it will be a far better and more profitable world. As old institutions crumble, new ones will be born, and we'll invest in the best of them."

    Michael Moore Kills Capitalism With Kool-Aid
    by Mike Covel
    San Diego, California

    " was clear to me at that moment capitalism was on shaky ground. Starting with Bush 'abandoning' capitalism to bailouts for everyone to Obama gifting away the future - we seriously might be past the point of no return toward a socialization of America."

    The Last Bear
    by Bill Bonner
    London, England

    "What will happen next, we don't know. But if we turn bullish on this economy and urge you to buy stocks, it will surely be time to sell them."


    As we pointed out above, this recovery is not to be trusted. That's because what we are facing right now is not merely a recession, but a depression. As Bill and Addison state in the newly updated edition of Financial Reckoning Day, the similarities between the United States and Japan are staggering - and we can learn a lot by looking at the mistakes Japan made.

    If you haven't gotten your copy already, you can get it, along with a 'Rescue and Recovery' bundle that will help you set up barriers around your existing wealth against the fallout that will come from this 'recovery'.

    Learn all about this financial defense strategy - and get your copy of the book - here.

    Enjoy the rest of your weekend,

    Kate Incontrera
    The Daily Reckoning

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    The Daily Reckoning - Special Reports:

    History of Financial Disasters: Will you be Wiped Out?

    US Recession: By far the Weakest Recovery

    "THE GREAT AMERICAN RECOVERY RP-OFF" Brace yourself for what's about to go down as the BIGGEST FINANCIAL SWINDLE in world history.

    AGORA Financial Resources: The Daily Reckoning Is:

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    Founder: Bill Bonner
    Editorial Director:
    Addison Wiggin
    Publisher: Rocky Vega
    Managing Editor: Kate Incontrera
    Web Editor: Greg Kadajski
    About The Daily Reckoning: Now in its 10th anniversary year, The Daily Reckoning is the flagship e-letter of Baltimore-based financial research firm and publishing group Agora Financial, a subsidiary of Agora Inc. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas. Published daily in six countries and three languages, each issue delivers a feature-length article by a senior member of our team and a guest essay from one of many leading thinkers and nationally acclaimed columnists.

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