No Recovery In Sight
November 16, 2011 by John Myers
You don’t have to be a news buff to have heard about the deadbeat protesters that are occupying cities in North America and Europe. I have seen lots of coverage but little insight. What I have noticed in big Canadian cities is that the protesters are angry without cause.
Canada is in the midst of an economic recovery. The unemployment rate is slightly above 7 percent, and the Canadian dollar is up 25 percent against the greenback in just the past 2.5 years. While people rage against spending cuts in nations like Greece, there isn’t a hint that Canadians will have to endure any reduction in government benefits. In other words, Canadians have never had it so good; yet they, too, are angry enough to take to the streets.
Canadians recently demonstrated that they don’t need a good reason to riot. Hundreds of people tried to burn downtown Vancouver last June because their hockey team lost the Stanley Cup. Those riots tell me that there is more to this growing global unrest than just a bunch of anarchists and addicts, even though two of the protesters in Vancouver have overdosed on heroin during the crusade. Nobody would confuse those two with a Leon Trotsky or Maximilien Robespierre.
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I am not going to concern myself with the cause of the unrest in Canada or anywhere else. Long after the Russian and French revolutions, historians cannot agree on what caused them. What concerns me and what you need to protect yourself from are civil unrest and the response by our government.
When Revolutions Spin Out Of Control
It is worth remembering that the French Revolution started slowly but quickly gathered steam. What began with concessions from Louis XVI sparked the Liberté, which morphed into Robespierre and his Reign of Terror. At one point, more than 1,000 French people were guillotined every month. Robespierre lost his head before it ended.
The bloodshed during the Russian Revolution was far worse. It is estimated that 5 million to 10 million people were killed during that revolt. To that total, add more than 40 million Soviets who died at the hands of the resulting dictator, Joseph Stalin.
Obama’s Blame Game
I understand there is a lot of anger in America. I, too, am an American citizen and I am angry. However, I don’t blame big corporations or big banks for this worsening crisis. I lay it where it belongs, squarely on the shoulders of the Federal government.
The Administration of President Bill Clinton was eager to do away with financial regulations. The Administration of President George W. Bush wanted everyone to own a home, whether he could afford it or not. And when it all blew apart three years ago, the Federal government forced U.S. investment banks to accept $125 billion in taxpayer money. (I urge you to read the bestseller by Andrew Sorkin, Too Big to Fail.)
It began in the summer of 2008. When the markets began to crash, the Chinese and Russians threatened to sell their $1 trillion in U.S. assets. Then-Treasury Secretary Henry Paulson held the system together until American International Group Inc. began to fail. AIG had never been regulated. Why? In the words of Paulson, the former chairman and CEO of Goldman Sachs Group Inc.: “Because everyone was too busy making money.”
And So Now We Fall
Washington’s turning a blind eye to regulating investment banks precipitated this crisis. Since they were let off the hook, the investment banks did what they are dictated to do under a free market system; they made as much money for their shareholders as they could.
When it all broke down in September of 2008, Federal Reserve Chairman Ben Bernanke and Paulson took the extraordinary measure of getting the Federal government to inject the largest bailout ever organized. But Washington’s malfeasance didn’t stop there.
Congress’ first vote for the Troubled Asset Relief Program (TARP) failed. Paulson forced the nine largest U.S. investment banks to accept the bailout. Even banks that didn’t want Washington’s ownership or participation were forced to swallow it.
The dominoes paused. Even though the stock market declined another 37 percent, the injection of money and the nationalization of the banks stopped an economic collapse.
It will prove to be a temporary solution. It is still tough to borrow money. Unemployment in the United States is still close to 10 percent, and the recovery Obama promised seems farther away than ever.
This is why there is anger in the streets. This is why there will be blood in the streets. And what exactly is Obama doing to clamp down on the unrest? He is complicit with the reactionaries in blaming Wall Street.
Obama has failed to accept his role in the ongoing collapse, even though he helped panic the markets in 2008 when he warned that the banking crisis could cause a financial panic.
The President has promised a recovery, but it is a mirage. He understands that, and his chances for re-election depend on his ability to deflect blame onto corporate America. He is willing to incite class warfare, regardless of the consequences.
The dominoes that began falling more than three years ago continue to tumble today. In 2008, the big banks were falling one after the other. Now, individual nations and even communities are set to tumble.
I urge you to take the proper steps, to be the “1 percent” who prepare for the whirlwind that is coming. Consider Sun Tzu’s words in The Art of War:
“Therefore one who is good at martial arts overcomes others’ forces without battle, conquers others’ cities without siege, destroys others’ without taking a long time.”
It’s called “strategic siege.” It is a long-range strategy to achieve one’s goals. Even as you read this, it is being practiced against you. It wasn’t engineered by fat cat bankers. They are the fall guys. It is being orchestrated by our President and by the very Congress that has falsely sworn to protect us.
Yours in good times and bad,
Editor, Myers Energy & Gold Report