Wall Street WARZONE

“Kamikaze Capitalism:” Can GOP Destroy Obama? Without Destroying the American Economy Too? What a Dumb Plot: Capitalism Loses, China Wins!

by Paul B Farrell, JD, PhD
| Discuss | Print | 1/11/2011

Foreign Policy’s journal is inspiring: Don’t miss their annual issue on “Failed States” listing the 25 worst dictators: “The Committee to Destroy the World.” Next, think domestic policy. Think of Mitch McConnell’s “Mission Impossible” vow to do anything, including kill our economic recovery for the next two years – anything to make Obama look bad, make him a one-term president. Call it “Kamikaze Capitalism!”

Go Mitch! You stir my cinematic imagination. Made it go into hyper-drive last week when your GOP team decided to defeat Reagan’s signature national security victory, the nuclear disarmament treaty with Russia. You guys sure have a bizarre suicidal idea of leadership and governing. Ol’ grumpy Mitch also led his GOP saboteurs in killing the unemployment benefits extension, while making an even more bizarre claim that billionaires “need” a $800 billion bailout (that’ll trickle down to unemployed Middle Americans?). Then he played his ace, calling the GM IPO a failure that should have been left to the bankruptcy courts, with more jobless millions. Yes folks, ol’ grumpy would definitely get on a domestic list like “The Committee to Destroy American Capitalism.”

Folks, this is the stuff of great movie plots. Not an Oliver Stone or Michael Moore film. No, this is a true Eastwood thriller. Think “Magnum Force,” Dirty Harry killing real bad guys. Better yet, “Absolute Power.” Imagine: What if McConnell’s GOP gets their wish? Game on. The hunt begins. The GOP tried once before under Bush. Now they want a new shot at that old adage: “Power corrupts, and absolute power corrupts absolutely.”

Eastwood brilliantly reveals why power corrupts. Why it blinds. Why it self-destructs. In “Absolute Power” we see an arrogant President convinced he’s untouchable, surrounded by Secret Service officers who will do anything to protect him, hide affairs, even murder. Until the unexpected, what economist Paul Krugman calls the “great unraveling.”

“Kamikaze Capitalism:” GOP stars in Eastwood “destroy the presidency” thriller?
Eastwood plays Luther Whitney, a small-time crook. Just wants enough from one last job, before retiring in the American Dream. His victim is out. But as luck would have it, the President, Gene Hackman, suddenly appears with the lady, upsetting Luther’s cleverly planned robbery. Luther hides in a secret room, a voyeur behind a one-way mirror. This President’s into kinky sex. But sadomasochism consumes him, he kills her.

Luther is what economists call a Black Swan, every thriller has them. Unpredictable events you never see coming, can’t plan for. They blindside you, taking a thriller into new dangers. Filmmakers love them. Tittilated, Luther watches the lurid sex, the murder, the cleanup by the Secret Service. They dispose of the body. But later, a new twist, they find evidence of Luther. Then frantic spinning, blaming a home invasion robbery gone bad. The hunt for Luther begins … and ends … absolute power corrupts absolutely … the presidency falls. Yes, Eastwood planned this … but McConnell can’t … no trick mirrors.

 …. read column on Marketwatch

22 Reasons Your Federal, State & Municipal Taxes Must Keep Rising, in 2011, 2012, even 2020 … And Nobody, Not Boehner, McConnell, Palin, the GOP nor TeaParty Will Stop Debt From Growing!

by Paul B Farrell, JD, PhD
| Discuss | Print | 1/1/2011

Social Security and Medicare equal $65 trillion of unfunded debt. Add in the Bush/Cheney/Obama War debt from Iraq and Afghanistan, Paulson’s TARP Plan, the Obama Stimulus, plus add in Bernanke’s estimated $23.7 trillion in secret credits, loans, writeoffs and guarantees to Wall Street’s “too-greedy-to-fail” banks … now add in the costs of the new healthcare reforms and it looks like my early ’09 prediction is unfolding right on schedule.

Subtitled “Tax Bomb Dead Ahead: Former GAO Chief says your taxes will double” is now worth a second look, especially when you consider states and local governments are already desperately adding taxes to make up for lost property tax, sales and income revenues. The New York Times warns: “As Revenue Slump, States Look to Tax Services, From Head to Toe.” If you wonder whether we really are in an economic recovery, take a look at the bigger picture unfolding across America, at the 22 reasons all taxpayers at all levels of government will be impacted for years to come …

Imagine doubling your taxes: Yes, that’s what David Walker, the former U.S. Comptroller General and GAO chief warned on CNN: “Why Your Taxes Could Double: The federal government has spent more money than it takes in at an increasing rate. Total federal debt almost doubled during President George W. Bush’s administration and, as much as we needed some stimulus spending to boost the economy, the nonpartisan Congressional Budget Office now estimates total debt levels could almost double again over the next eight years based on the budget recently outlined by President Obama,” with our “tax bill doubling over time.” Don’t say you weren’t warned!

Debt is killing the American Dream. We’ve mortgaged our future, and now Obama’s adding a new $1.84 trillion federal deficit. That’s four times Bush’s record deficit his last year. Plus deficits over $500 billion annually for the next decade. The president’s gambling, doubling down, betting the farm, going “all in” with a huge bet that could break the bank. Is this America’s “last hand” in high-stakes poker game? More grim tax facts: A few years ago Peter Orszag, Obama’s Budget Director warned: “Balancing the budget would require a 41% cut in spending on Social Security and Medicare, a 47% cut in discretionary spending, or a 17% cut in all non-interest spending.”  

Secretary Geithner gave us an update: “The longer we wait to address the long-term solvency of Medicare and Social Security, the sooner those challenges will be upon us and the harder the options will be.” Those two trust funds already eat up more than a third of the federal budget and are increasing $2 trillion a year. Still, AARP and other lobbyists resist all benefits cuts (that affect Boomers) more than tax increases (paid by younger workers), despite a new study telling us: Medicare surpluses will run out in 2016, Social Security by 2037, both earlier than previously estimated. Together they account for roughly $80-to-$120 trillion in unfunded liabilities, with Medicare 80% of the total … and please note, America’s debt now exceeds the $50 trillion GDP of all economies in the entire world! (more)

America’s Failed 30-Year “War on Drugs” is Sabotaging Our Economy, Our Future As a World Power, War on Terror & Wars in Afghanistan, Iraq, Mexico

by Paul B Farrell, JD, PhD
| Discuss | Print | 12/20/2010

“Civilizations die from suicide, not by murder,” said Arnold Toynbee, whose 12 volume Study of History traces the rise and fall of civilizations. Get it? The “fall” is an “inside job.” Attitudes, behavior, values die first. The soul is left for dead. Oh, some outside force may push the button, pull the trigger, or, as in ritualistic hara-kiri, some stranger may bring the sword down upon our neck. But we set the ball in motion. We create the world around us, including our enemies, as individuals and as a nation, we are totally responsible for our karma, our fate, our destiny, our demise.

“Suicide, not murder:” Toynbee’s chilling warning came to mind a few years ago as I read three reports of dangerous economic trends, all tied directly to America’s addiction to drugs and how they are destroying us from within, rendering our borders vulnerable, giving our enemies billions to buy weapons and attack us from without. These three reports highlight threats far more ominous than any threats from terrorists, nuclear war, energy shortages, entitlement failures, global warming, or government deficits, as bad as they all are. Why? Because we are creating an inner world that is far darker, far more lethal. The reports cover these three areas:

1. “The Lost War on Drugs.” America’s failed 30-year “War on Drugs” that’s now sabotaging our “War on Terror.”
2. “Weakening Defenses.” America’s leaky borders that expose us not just to terrorists, but openly invite transnational drug syndicates, mobsters, criminals.
3. “Prescription addiction.” America’s out-of-control addiction to prescription drugs, with Big Pharma as the main pusher.

These three trends have been exposed in recent media reports as three separate trends with significant economic impact. However, they are very much linked together in the inner workings of the American soul. So why does the media treat them separately? Very simple: The media (like people in general) is also trapped in America’s ubiquitous state of denial, denial of a disease so cunning and powerful that most Americans refuse see the underlying disease, either as individuals or as a nation: In her writings noted psychotherapist Anne Wilson Schaef aptly describes America as a “Nation of Addicts.” Once “in” the disease we can no longer see ourselves objectively, we become zombies, like pod people in “The Invasion of the Body Snatchers.” (more)

Doomsday Capitalism 2011: Warning, Buffett’s Billionaire Buddies Already Fighting (& Winning) a Self-Destructive “Class War” Against All Americans! Watch the Next Revolution in 22 Tweets!

by Paul B Farrell, JD, PhD
| Discuss | Print | 12/13/2010

Yes, I call it the “Doomsday Capitalism” revolution. And I’m betting you’ll be able to track it on Twitter. In fact, I’ve got 22 rapid-fire Tweets in four acts, all ready when the flashpoint ignites. Deals below. We’ll fire them off in milliseconds, like secret offers from a quant’s high-frequency trading algorithms.

Warning: For Buffett this revolution began years ago: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” Yes, that is exactly what Buffett told Ben Stein a few years ago in a New York Times interview.

Get it? This new preemptive war is already in progress, and America’s billionaires are the aggressors: Buffett’s billionaire buddies on the Forbes lists, his Wall Street banker buddies, his exporter buddies in China, all of Buffett’s buddies in this “rich class” are already engaged in a hostile takeover war against the American middle class, against the working class and the poor, against all Americans not on the Forbes lists of billionaires. And yes, they’re already winning big, as you can see in their latest war strategies to “buy” the midterm elections and further concentrate their power at the top.

But they’re doomed to implode. We warned of the dotcom crash in early 2000. Warned of a subprime credit meltdown for four years before 2008. Now we’re warning that a “Doomsday Capitalism” revolution is near ignition. Buffett’s aggressive “rich class” is overplaying their power grab, and … well, listen, here’s how I imagine this revolution unfolding as a series of rapid-fire Tweets, as citizen-warriors pass along this collection of earlier warnings to reenergize and drive the rest of America to rebel against Buffett’s “rich class,” Tweets that will trigger an anti-capitalists revolution.

Warning to all investors, prepare now: Play defense. Expect an economic upheaval rivaling the 1929 crash, creating a climate for true reform that will make the 1930s look like a real tea party. Stretch your imagination: See these earlier warnings as edited Tweets traveling across America in milliseconds, a rebellion energizing 300 million Americans to rise up, counterattack, overwhelm and defeat Buffett’s “rich class” buddies. Here’s how we see America’s emerging new ideology unfolding rapidly, a tense drama in four acts:

Act 1. Huge “Wealth Gap” is Fueling “Class Warfare”

Robert Reich, former Labor Secretary, Aftershock
“The last time in American history when wealth was so highly concentrated at the top … was in 1928, just before the Great Depression. … The economic game is rigged—that no matter how hard we try we cannot get ahead because those with great wealth and power will block our way.”

Robert Frank, New York Times
“During the last three decades … all significant income growth has been concentrated at the top of the scale. The share of total income going to the top 1% of earners, which stood at 8.9% in 1976, rose to 23.5% by 2007, but during the same period, the average inflation-adjusted hourly wage declined by more than 7%.” (more)

8 Reasons Wall Street Will Lose Another 20% of Your Retirement Money in Next Decade (2011-2020). Never Bet at the Wall Street Gambling Casino. You’ll Lose!

by Paul B Farrell, JD, PhD
| Discuss | Print | 12/3/2010

Remember Charlie Ellis’ famous 1975 classic: “Winning the Loser’s Game: Timeless Strategies for Successful Investing?” Like Napoleon Hill’s “Think & Grow Rich” everyone on Wall Street has read it. Well, guess what: Charlie failed us the past decade. Wall Street lost trillions, lost 11% of your money. Adjusted for inflation, Wall Street lost 20% of your money. Warning: Wall Street will do it again by 2020.

First, let’s review Ellis’ famous 10 strategies for winning at Wall Street’s casino: “Never speculate. Your home’s not a stock or piggy bank. Save more money. Your broker’s not your friend. Never trade commodities. Don’t chase hot stocks. Bonds also ride up and down. Don’t invest for tax benefits. Write goals and stick to them. Never trust your emotions.” You probably knew them by heart. What happened? This insider gave you ten rules for beating the Wall Street casinos … and still you lost 20%.

But in your defense, even if you broke all ten of Charlie’s rules the past decade and lost 20%, it still wasn’t your fault. Wall Street was conning, scamming and manipulating you all along, all day, every day for the past decade. And yet I’ll bet you’re still an optimist, gullible, trapped in Wall Street’s seductive pseudo-optimism, one of the majority of Americans who believe the market will go up 20% or more in 2010, “confident better times are ahead.”

Best advice today? Burn Ellis’ book. His next edition should be titled: “Losing the Loser’s Game: How Wall Street Got Rich Between 2000 and 2009 Because Main Street Investors Are So Gullible, Stupid and Predictable Irrational.” You cannot win at Wall Street’s “Loser’s Game.” The past decade proves it. The “house always wins” in Vegas and on Wall Street.

How not to lose 2010-2020? Avoid Wall Street. Don’t play by “their rules.”
So why bet on the house? Why bet with the Wall Street casino for another decade? Why? You’re betting in a rigged casino. Worse, they keep adding powerful new tools, scams and algorithms to their “financial weapons of mass destruction” arsenal, as Buffett calls this mysterious $670 trillion global shadow banking world of derivatives. You cannot win.

Statistically, the odds now predict Wall Street losing another 20% of your money in the next decade. The momentum’s headed down. So why risk it when the odds are you’ll lose another 20%? Why keep gambling when you know the “house always win,” when inflation increases your losses, when Wall Street controls the tables in this “Loser’s Game?” So, what should you do if you believe they’ll lose another 20%? Sell all your stocks, ETFs, bonds funds. Get out of commodities and gold. Sell. You think I’m crazy? Imagine: You’re a 50-year-old boomer. Flash forward to 2020. Retirement time? But you’ve lost another 20%, while those Wall Street fat-cats will be paying themselves record bonuses averaging half-a-million annually for all ten years from 2010 and 2020 … but you can’t retire. They got their bonuses siphoning money out of your accounts. What do you expects some kind of divine intervention will save you? Get real, consider the “Swiss Family Robinson” scenario. (more)

“Zombie American Capitalism” vs China’s “Zombie-Eaters” (Death Watch 2020)

by Paul B Farrell, JD, PhD
| Discuss | Print | 11/29/2010

“Zombie Economics: How Dead Ideas Still Walk Among Us,” could easily have been entitled “Zombie Capitalism.” Why? The book is all about undead Reaganomics zombisms like “trickle-down” that nearly destroyed the American economy in 2008. Now that same “Zombie Capitalism” is being resurrected from the dead by the Goldman Conspiracy of Wall Street Banksters and their new partners in the GOP Tea Party of No-No. Yes folks, America’s self-destructive “Zombie Capitalism” has once again returned from the mausoleum of toxic undead ideas.

But this was so predictable. As Naomi Klein, author of Shock Doctrine: The Rise of Disaster Capitalism warned: “Free-market ideology will come roaring back when the bailouts are done, and the massive debts the public is accumulating to bail out the speculators will then become part of a global budget crisis.” Get it? The Zombie Capitalism of Reaganomics couldn’t kill us during the dotcom crash or subprime credit collapse, but now Zombie Wall Street is shooting for the “Third Meltdown of the 21st Century.”

Wait, an even better title would be, “Zombie America.” Why? America is not only enjoying Halloween, the great celebration of the undead, but in our election madness we also created a historic “trick-or-treat,” with invisible monster billionaire backers, ghoulish politicians, blood-sucking vampires emerging from graves in foreign sovereign nations, to poison our souls from within.

But the scariest monster this Halloween is the “China Zombie-Eaters” who are devouring the dying jobs of Zombie Americans. China’s “Zombie-Eaters” are infinitely more dangerous than all the spooky foreign nations funneling megabucks into the Chamber of Commerce’s Supreme Court-sanctioned lobby. Here are 8 demonic reasons why China’s aggressive “economic warfare” is also a secret long-term defensive military strategy:

One: Zombie-eating China has a long-range plan to conquer America
Listen closely, because the nuttiest theories are so often revealed later as hidden truths. Remember Delaware Tea Party Senate candidate “I’m no witch” O’Donnell. You may question her credibility about secret classified documents revealing that China has a “carefully thought out and strategic plan to take over America.” But still, the facts are that the China “Zombie-Eaters” are destroying and devouring millions of American jobs.

We also know China is stealing U.S. state secrets, stealing proprietary patents, stealing our technology. We know China is hacking away, aggressively engaged in a not-so-secret cyber-war against America. We also know China has forged alliances with America’s enemies, including Iran, Venezuela and North Korea. So while you’ll chuckle at a non-witch’s “classified” plans, the fact is, China “Zombie-Eaters” are our worst nightmare, aggressively engaged in wars against America on multiple fronts.

As Ross Terrill, a China expert at Harvard, put it in the Wilson Quarterly: “The Chinese Communists are very aware of this contest with the United States, though Americans (beyond the Pentagon) are not.” Yes, Zombie America is clueless about the threat from the China “Zombie Eaters.” And Terrill warns, our lack of awareness will destroy us: “By being a shrinking violet, the United States would simply hand over the future to China.” (more)

Thanksgiving Salute to America’s Heroes … and the Families Left Behind …

by Paul B Farrell, JD, PhD
| Discuss | Print | 11/24/2010

Thanksgiving is a time of celebration, a time to have lots of good-natured fun, share stories and hugs, a time to look past matters of money, investing and retirement plans. Thanksgiving’s about family. Loved ones. Grandma and grandpa. Mom and dad. Kids and grandchildren giggling. A special time to give thanks by sharing the gifts you have, the tears, the laughter! That’s the way our creator wants it too.

Be thankful for all we have right now, today. For the family gathering, roast turkey, gravy, stuffing, hot cider and punch, gramma’s pumpkin pie, board games, gossip and rumors, football games, movies and naps, family rituals and traditions, and lotsa laughs retelling stories about the good ol’ days, the neighbors, and all the loveable odd-balls in the family.

But before all the fun begins, let’s take a moment to honor all of America’s heroes who made the ultimate sacrifice for you and me, and for the families left behind who gave even more, for all their kids, siblings, parents, grandparents and friends who are left with fond memories as they sit near an empty chair at their table this Thanksgiving.

One special story captures this moment better than anything I could ever say. I choke up every time I think about it, maybe because I was also a Marine in Korea, although this story’s for the families of every soldier, sailor, airman and marine who ever fought to protect our freedoms. The story honors all their sacrifices. It goes to the heart of what Thanksgiving’s really about, especially at this unique moment in America’s history.

The story is often told. I first heard it in a sermon by Dr. Robert H. Schuller of “Hour of Power” fame at the Crystal Cathedral in Garden Grove, California. You probably know about him through his many books on the “Power of Possibility Thinking.” So for a moment, let’s share the spirit of Thanksgiving in Dr. Schuller’s simple story passed along to him by a dear friend years ago: (more)

10 Reasons President Obama is Failing America: Piling Trillions of Debt on Future Generations, on Top of Bush’s Trillions. Next, Obama’s Final Surrender of His Principles: Capitulation to GOP on Bush Tax-Cuts for Billionaires

by Paul B Farrell, JD, PhD
| Discuss | Print | 11/16/2010

Back in January one of my MarketWatch columns was an “open letter” to the president: “10 reasons Obama is failing 95 million investors: Why his ‘Fat Cat Bankers’ are destroying both capitalism and democracy.” The response was strong. Today, given all the financial reforms now being secretly contested in Washington, especially the Consumer Financial Protection Agency that the banks are spending millions to kill, those “10 reasons” seem far more important. Read them closely, not as some short-term critique, but for the long-term historical consequences, not their impact on your retirement but the impact on future generations of Americans …

Mr. President: We know that the future—seen through a broader historical lens—will reveal a natural cycle with you cast in the predictable scene of a Shakespearean-style plot driven by fate, the same dramatic destiny of all great nations and civilizations. We know a “Happy Conspiracy” of Wall Street, Corporate CEOs and the Forbes 400 controls Washington, limiting and manipulating you. Shakespeare says: “All the world’s a stage, and all the men and women merely players. They have their exits and their entrances.” As this past year unfolded it became painfully obvious you are indeed playing a role in a historic drama, along with other leaders in a staged, life-cycle, endgame that includes Presidents Reagan, Clinton and the Bushes, Fed Chairmen Greenspan and Bernanke, and Wall Street’s bosses Paulson and his “Fat Cat” banker buddies. The final scene of this historic Shakespearean drama is playing out this very moment, with 10 improvisational plot points driving your character’s role:

1.  Failing to grasp John Adams’ warning: All democracies “commit suicide”
“Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide:” Yes John Adams, a great American president made that famous prediction at the beginning of our great nation. And yet, paradoxically, when a democracy commits suicide, it also kills off the very capitalism that made it powerful, the economic system Adam Smith identified the same year our Declaration of Independence was signed. Today we are neither independent nor free, King George has been replaced by a far more powerful moneyed conspiracy that you sold out to last year.

2.  Failing to sense the psychological impact of being an aging democracy
Yes, our time is up says Scottish historian Alexander Tytler, recently quoted by economist Marc Faber: “The average life span of the world’s greatest civilizations has been 200 years.” Then “once a society becomes successful it becomes arrogant, righteous, overconfident, corrupt, and decadent … overspends … costly wars … wealth inequity and social tensions increase; and society enters a secular decline.” We’re on ‘suicide watch,’ acting out the final scenes President Adams predicted for democracy, as Wall Street murders capitalism. (more)

20 “Triggers” That Can Set Off the “Global Debt Time-Bomb,” Trigger Massive Class Wars, Create a New “Great Depression” … and Wipe Out Your 401(k)!

by Paul B Farrell, JD, PhD
| Discuss | Print | 11/15/2010

Retire? You can fuggetaboutit if the new “Global Debt Time-Bomb” is detonated by any one of 20 “Made-in-America” trigger-mechanisms. Yes, 20. And yes, any one can destroy your retirement, because all 20 are inexorably linked, a house-of-cards, a circular firing squad destined to self-destruct, triggering the third great Wall Street meltdown of the 21st Century, igniting the “Great Depression II” that Bush, Bernanke,Paulson and now Obama have simply delayed with their endless knee-jerk, debt-laden wars, stimulus bonanzas, and bailouts.

Wow, what an epic Hollywood blockbuster this will make: You know the drama, can’t miss the warnings. The financial press is flooding us with plot lines … a Forbes cover story focuses on a “Global Debt Bomb: How It Could Wreck Your Life” … Last year leaders at the World Economic Forum on Swiss Mt. Davos fear another global meltdown will trigger mass rebellions … The Economist calls the plot a “Global Asset Bubble,” with cheap money fast driving up asset prices, a new trigger for the ticking debt time-bomb. Plus, Bloomberg-BusinessWeek is adding jet fuel to the ticking time-bomb in: “After the Stimulus Binge, a Debt Hangover: Trillions of dollars have been spent keeping the global economy afloat. But now fears about the Great Recession are giving way to worries about something else: The Great Reckoning” when massive debts come due. Then the debt bomb explodes “and the results won’t be pretty for investors or elected officials.”

You’ll find the trigger mechanism deep in your brain, your irrational behavior and your DNA. You’ll also find it in historical cycles: For example, in This Time It’s Different: Eight Centuries of Financial Folly by economists Reinhart and Rogoff we discover: The “90% ratio of government debt to GDP is a tipping point in economic growth.” For 800 years “you increase it over and beyond a high threshold, and boom!” Well guess what? “The U.S. government-debt-to-GDP ratio is 84%.” Soon, Ka-Booom! Depression. Kiss your retirement goodbye.

Who knows? Forbes? Bloomberg/BusinessWeek? The Economist? Davos-World Economic Forum? True, they’re all looking at the same plotline for a Hollywood blockbuster about the “Global Debt Time-Bomb.” But the financial press navigates in a fog. There’s not just one, but many triggers, all linked in a lethal network, we’ve reported on it for years. Any one could easily trip this debt-bomb, set off a chain reaction of unintended consequences, ignite the 21st Century’s third meltdown, spread the coming “Great Depression II,” the new Black Plague. You tell us: What triggers this firestorm?

Poll: 20 economic “WMDs” triggering ticking “Global Debt Time-Bomb”

1.   Federal Budget Deficit Bomb
The Bush/Cheney wars pushed America deep into a debt hole. Federal debt limit was just raised almost 100% with Obama’s 2010 budget, to $14.3 trillion vs $7.8 trillion in 2005. The Congressional Budget Office predicts future deficits around 4% through 2020. Get it? America’s debt at “84% of GDP” will soon pass that toxic 90% trigger point.

2.   U.S. Foreign Trade Bomb
Monthly deficits actually dropped from $50 billion per month to roughly $35 billion. But the total continues climbing as $400 billion is added each year. Foreigners now own $2.5 trillion of America, with China holding over $1.3 trillion in Treasury debt.

3.   Weakening US Dollar as Foreign Reserve Currency
Fear China and other currencies will replace dollar as main foreign reserves. The dollar’s fallen: From the $120 range at the Clinton-to-Bush handoff to a $70-$90 range.

4.  “Cheap Money” Bomb: Credit Ratings Down, Rates Up
Economists at S&P, Fitch and Moody’s were totally co-conspirators of Fat Cat Bankers, misleading investors before meltdown: Soon, debt up, ratings down, interest rates soar.

5.  Global Real Estate Bomb
Dubai Tower, new “world’s tallest building” is empty. BusinessWeek warns that China’s housing collapse could be worse than America’s. Plus the U.S. commercial real estate bubble is now $1.7 trillion, a “ticking time-bomb” bloating 25% of bank balance sheets.

6.   Peak Oil & the Population Bomb
China and India each need 500 new cities. UN estimates world population exploding 50% from 6-to-9 billion by 2050: Three billion more humans demanding more automobiles, exhausting more resources to feed their version of the gas-guzzling “America Dream.

7.  Social Security Bomb
We have no choice, eventually we must either cut benefits or raise taxes. Politicians hate both, so they’ll do nothing. Delays worsen solutions. Without action, by 2035 Social Security and Medicare benefits will eat up the entire federal budget other than defense.

8.  Medicare: a Nuclear Bomb
Going broke faster than Social Security. Prescription drug benefit added an unfunded $8.1 trillion. In 5 years estimates rose from about $35 trillion to over $60 trillion now.

9.  Healthcare Insurance Bomb
Burden increasingly shifted to employees. Costs rising faster than inflation. Recent Obamacare plan would have cost $90 billion annually, paid to Big Pharma and insurers.

10.  State & Local Gov’t Budget Bombs
Deficits of $110 billion in 2010, $178 billion in 2011on top of more that $450 billion in underfunded state and municipal employee pension funds.

11.  Underfunded Corporate Pensions Bomb
From $60 billion surplus in 2007 to $409 billion deficit in 2009. And a whopping 92% of the pension plans of companies are now under-funded. Defaults guaranteed by taxpayers.

12.  Consumer Debt Bomb
Americans are still living beyond our means. Even with a downturn, consumer debt rose from about $2.3 to $2.5 trillion. Fat Cat Bankers love it, yes, love making matters worse by gouging cardholders and mortgagees, blocking help in foreclosures and bankruptcies.

13.  Personal Savings Bomb  
Before 2008 meltdown savings rate dropped from about 10% in the early 1980s to below zero, now increasing, slowing retail recovery. Today, government’s the big “unsaver.”

14.  War and Military Defense Deficits
Costs of Iraq and Afghanistan wars costs $200+ billion annually, $3 trillion minimum, with massive long-term costs for veteran medical care, equipment renewal, recruitment.

15.  Homeland Insecurity Deficits
Security at airports, seaports, borders, vulnerable chemical plants alls increase budgets.

16.  Fed/Treasury Bailout Bombs
Tax credits, loans, cash and purchase of toxic assets from Wall Street banks estimated at $23.7 trillion as new debt was shifted from too-big-to-fail “Fat-Cat” banks to taxpayers.

17. Insatiable Washington Lobbyists Bombs
Paulson, Goldman, Geithner, Morgan and Wall Street banks, through their lobbyists and former employees working inside now have absolute power over government spending. Democracy and voters are now irrelevant in America’s new “corporate-socialism.”

18.  Shadow Banking: The Derivatives “WMD” Bomb
Wall Street wants no regulation of this $670 trillion, hi-risk, out-of-control, gambling casino that’s highly leveraged versus the $50 trillion total GDP of all nations. We forget that derivatives akmost destroyed global economies in 2008-09, finally will by 2012.

19.  Dysfunctional Two-Party Political Bomb
Polarized partisanship increasing: Every day both parties show zero interest cooperating for the public good. Instead they fight viciously, resisting everything and anything proposed by opponents. Only goal: Score political points; make the other side look bad.

20.  The Coming “Populous Rebellion” Bombs
Nobody trusts anyone in authority. For good reason. So immediate gratification, short-term betting, and a lack of long term perspective wins for individual investors, consumers and taxpayers as well as Washington, Wall Street and Corporate America CEOs. Today: “Doing what’s right for the common good and country” is just empty political rhetoric.

Forbes. The Economist. Davos-World Economic Forum. Bloomberg-BusinessWeek. All one voice, one loud, lonely chorus echoing that famous Beatles tune: “Head in a cloud … The fool on the hill, sees the sun going down … a thousand voices talking perfectly loud. But nobody ever hears him, or the sound he appears to make … And the eyes in his head, see the world spinning ‘round …ooh, round and round and round.”

A decade ago, on March 20, 2000 as Nasdaq and the DJIA peaked I wrote a column: “Next crash? Sorry, you won’t hear it coming.” But nobody wanted the party to end. What followed? A 30-month recession and an $8 trillion market cap loss. We reported on warnings again many times starting in 2004. Till Wall Street triggered another meltdown in 2007. You know what happened. Same today. Nobody listens. Lessons not learned. Warning: A third great meltdown is coming. But nobody listens to the “fools on the hill.”

Historians and behavioral economists tell us most investors are blind optimists. Investors cannot see bubbles from inside their bubble. Nor “Fat Cat Bankers” from inside their mega-bonus-bubble. Nor politicians from inside the “beltway bubble.” Why? The optimist’s brain filters out “bad” news. They “know” their dreams of prosperity will come true. Then, when they finally do see that the proverbial “light at the end of the tunnel is an oncoming train,” it’s always too late.

I will say it again, gently: A new meltdown coming. The “Great Depression II” is coming, soon. And yet, I know your mental filters are working overtime, blocking warnings of a bomb. I can even hear you calling me “the fool on the hill who sees the sun going down, the world spinning round” … sees us kissing our retirement goodbye.

Reagan Insider: “GOP Destroyed U.S. Economy.” Warning, McConnell, Boehner & GOP Will Now Push America into a Double-Dip Recession for 2 More Years, to Make Obama Look Bad & Elect a New Reaganomics President in 2012

by Paul B Farrell, JD, PhD
| Discuss | Print | 11/7/2010

“My G.O.P. destroyed the U.S. economy.” Yes, that’s exactly what David Stockman, President Ronald Reagan’s Director of the Office of Management and Budget wrote in a NY Times op-ed piece, “Four Deformations of the Apocalypse.” Not “destroying.” This key man behind Reaganomics says the GOP has already “destroyed” the U.S. economy, setting up an “American Apocalypse!” And that was months before the midterm election. Now it’s going to get much uglier because the GOP can’t afford to let the economy improve. Get it? For two years, the GOP must push the economy deep into a recession … to make Obama look bad for the 2012 elections!

Stockman also condemned the Dems’ Keynesian policies. But what this indictment by a party insider—someone so close to the development of the Reaganomics ideology—says about America, helps all of us better understand how America’s toxic partisan-politics “holy war” is destroying not just the economy and capitalism, but the “America Dream,” and unless this “war” stops soon, both parties will succeed in their collective death wish.

But why focus on Stockman’s message? It’s already lost in the 24/7 news cycle. Why? We need some introspection. Ask yourself: How did the great nation of America lose its moral compass and drift so far off course, to where our very survival is threatened?

We’ve arrived at a historic turning point as a nation that no longer needs outside enemies to destroy us, we are committing suicide. Democracy. Capitalism. The “American Dream.” All dying. Why? Because of the economic decisions of the GOP the past forty years, says this leading Reagan Republican. Please listen with an open mind, no matter your party affiliation: This makes for a powerful history lesson, because it exposes how both parties are responsible for “destroying the U.S. economy.” Listen closely:

Reagan Republican: the GOP should file for bankruptcy
Stockman rushes into the ring swinging like a boxer: “If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt … will soon reach $18 trillion.” It screams “out for austerity and sacrifice.” But instead, the GOP insists “that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.”

In the past forty years Republican ideology has gone from solid principles to hype and slogans. Stockman says: “Republicans used to believe that prosperity depended upon the regular balancing of accounts—in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too.” No more. Today there’s a “new catechism” that’s “little more than money printing and deficit finance, vulgar Keynesianism robed in the ideological vestments of the prosperous classes” making a mockery of GOP ideals. Worse, it has resulted in “serial financial bubbles and Wall Street depredations that have crippled our economy.” Yes, GOP ideals backfired, crippling our economy. Stockman’s indictment warns that the Republican party’s “new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one:” (more)