Obama, Bernanke and the gang talk about green shoots as if the economy is about to stage a recovery. It will do no such thing. If you throw enough seeds on the ground your going to get some green shoots but when they grow you find out that they were weed seeds that will now choke out any real growth. That is what the Obama administration is doing by throwing dollars they do not have and cannot borrow at this economic crises. The only thing they will grow out of this manure field is big government socialism and a future where Americans are forced fed weeds.

Don’t get mislead by talk of signs of recovery. There may be some short term recovery but it will be very short lived because all the long term fundamentals say the United States cannot recover before a dollar default or major devaluation. What that means to you is the loss of almost all wealth and continued double digit unemployment. In other words, you have seen nothing yet.

Remember in the great depression of the 1930’s the same type people were saying it was over because there were major stock market rallies but the rallies did not last long and the depression when on until the Second World War. Even a war will not get us out of this economic disaster this time because we are much too far in debt. Frankly, the only solution is to scrap the whole economic system and start over with a clean slate. That of course means writing off all debt and most wealth. It would be the end of everyone’s savings and it would create a world trade war and certainly a depression. There is not going to be any easy painless solution. America’s real worth is probably less then 30 percent of what Americans think it is. America’s future commitments and entitlements simply cannot be paid with dollars that are worth anywhere near what they are worth today.

There are many reasons why this crises is far from over. There are still huge economic shoes yet to fall. Today 20 percent of all home owners owe more than their property is worth and it grows to more each month. That means these people cannot lose their jobs (but they are) and cannot move for another job or there property will go into foreclosure. The facts are, there will be no recovery in real estate for two decades. It will continue to go down for years and when it reaches bottom it will stay flat (when adjusted for inflation).

The commercial real estate bubble has not even burst yet. The banks cannot make money on the interest rates that the government is forcing them to make loans at, so there will be bail out after bail out. The unemployment rate is going to go higher then the worst case stress test. The Fed has been continually underestimating the severity of this depression.

That means the government will be bailing out the banks for quite some time and will actually nationalize them making the taxpayer the owner and the losers. Same goes for major corporations being bailed out and being taken over by the government. There are now signs that people are defaulting on their credit cards but new regulations mean that the credit card industry will will also need to be bailed out. Other insurance companies are going to need bailing out just like AIG. Much of Europe has just started on its own downturn and that will impact our economy negatively. The bond market is about to crash (read the article) etc, etc.

Below are clips from three articles. One is from world trends forecaster Gerald Celente. I think they will give you the proper perspective of the dire economic situation.

Celente – Green Shoots Or Greatest Desperation?

Green Shoots Or
Greatest Depression?
By Gerald Celente
5-7-9

KINGSTON, NY — The financial fields replete with sprouting “green shoots” should be viewed with suspicion, if not alarm, warns Gerald Celente, The Trends Research Institute Director. “They are not a mirage, but they are ephemeral.”

Field Marshall Ben Bernanke and his Green Shoot Brigade have fertilized the economic landscape with trillions of sweat equity dollars extorted from today’s public and the public of generations to come. Regardless of how depleted the land, heavy doses of dollars spread so thickly over the financial and government territories, will force “green shoots” to grow. But the fundamentals of the economy remain unsound. They will not be corrected by forced fertilizing barren acreage.

“‘Green shoots’ may sprout,” said Celente, “but they will not flower. The economy cannot be coerced back into growth with tons of money manure.” As the ancient parable puts it:

Celente said no one could have forecast that the government would not only intervene in the markets by pouring unprecedented trillions into bailout schemes, but that they would commandeer the whole free enterprise system.

“The 800-pound gorilla has ridden the elephant into the Oval Office, and are there for all to see. But few will call a spade a spade,” declared Celente. “Benito Mussolini described Fascism as ‘The merger of state and corporate power.’ He suggested that, more appropriately, it should be called ‘Corporatism.’ By whatever name, Corporatism or Fascism, what it’s not is Free Market Capitalism, much less Democracy,” Celente said.

Trendpost: With so much money being dumped into the system, there will be money to made … and lost. The agile and the knowledgeable may be able to reap “green shoots” while they’re sprouted. But beware!

“The Greatest Depression” — that we forecast would begin to set in by the end of this year — may have been postponed, but it has not been averted. When it does set in, it will do so with enhanced intensity and at a pace accelerated by complex financial finagling … all under the guise of nation-saving action. Rather than let the failing industries fail and the failed banks go bankrupt, the government is deliberately bankrupting the nation.

The lesson to be learned from the financial crisis that began in the summer of 2007, is that nothing succeeds like failure. The greater their failure, the bolder they become. The more they lose, the more they take. The greater the chaos, the more control they exact. The bigger they fail, the harder we fall.

No act is too unthinkable or measure too draconian for the Washington-Wall Street Mob to concoct in order to maintain power, make money and cover their losses. While it is impossible to second-guess what the government will do next, it is absolutely certain that they will stop at nothing.

The “green shoots” will wither and conditions will deteriorate. Those who are prepared for the worst will not have been taken by surprise.

Full Article

Bond market: why you should be worried – MoneyWeek

Why you should be worried about the bond market

By Dominic Frisby May 06, 2009
Dominic Frisby
Bank of England

A collapsing bond market means higher interest rates

A lot of people have been asking me: ‘What’s next?’

Sentiment everywhere is improving. In fact, I was astonished to hear such bullish talk from the likes of Anthony Bolton and Crispin Odey this last week. Their records and experience dwarf mine, but I see an intermediate top coming in the stock markets more or less now. In fact, I think we may have made it on Monday.

What’s more, I am observing a worrying trend in the bond market, both for US Long Bond (the 30-year US Treasury) and for UK gilts. Even now, after months of attention due to the Bank of England’s quantitative easing plans, I suspect that few people – or politicians for that matter – are really that interested in government bonds. But, believe me, the last thing we need right now is a collapse in the bond market.

Unfortunately, it could be just around the corner…

The massive provision of credit or ‘liquidity’ from the US government has helped this recent stock rally. But if government’s own long-term borrowing costs go up, so – in the long run – will rates across the rest of the economy. This could add to the pressures on the US housing market, just as it seemed to be stabilising. Add to this mix the problems that may still lie ahead in credit cards, corporate loans and the commercial property market, and you can see that the problems of the banks, and the wider economy, are far from over.
Are higher interest rates just around the corner?

A collapsing bond market means higher interest rates. At the moment those in debt are not suffering too badly – those with tracker rate mortgages, for example, are sitting pretty at the moment. But higher rates will decimate anyone with any debt, be they individuals, companies or governments. They are the last thing the economy needs just now.

Now the Fed is still able to borrow in the shorter term at low rates, so this may not have an immediate impact. But the drop in bond prices in the last five months is an early warning sign that markets will only prop up even the world’s largest economies for so long.

full article

Small Business: Economic Recovery? What Recovery? | Newsweek Small Business | Newsweek.com

Recovery? What Recovery?

Why entrepreneurs aren’t so optimistic about the economy.

Don’t tell me that the economy is getting better, or has even hit rock bottom. My faith in an imminent recovery deserted me on May 5, when one of our customers, Salyer American Foods, based in Monterey, Calif., suddenly fell into receivership. There had been little to no indication that the company was so close to financial ruin. As it turns out, the company’s lenders say Salyer owes them over $34 million, a debt equal to almost half its sales. A company attorney told local media that tight credit markets and the economic recession had pushed Salyer over the edge. If the receiver doesn’t find some way to revive the company’s fortunes, our bag manufacturing company stands to lose nearly $1.5 million in revenue, about 2 percent of our $60 million in sales.

On the same day my customer fell into receivership, Fed chairman Ben Bernanke told a congressional committee that he believed the economy was in the process of bottoming out and “would turn up later this year.” He’s not alone in his optimism. Over the past two weeks or so, it has become a cottage industry among economists and the media to spot the first “green shoots” of a recovery. Certainly shoots there may be. The stock market has rebounded smartly over the past two months, as has consumer confidence. Pending home sales have ticked up, while unemployment claims are easing. And many economists insist a manufacturing revival is in the wings because inventories have fallen so low that restocking must begin soon.

SMALL-BUSINESS DIARY
Managing to Succeed
Kevin Kelly

After more than a decade of growing his family’s business, one entrepreneur copes with the collapsing economy.

Small Business: Can We Afford Health Care?
Credit Crunch Is Still Squeezing Small Business
American Workforce Shifts to More Part-time Jobs

But I haven’t found many small-business owners ready to jump on the recovery bandwagon, and for good reason. We’re still experiencing the “bottoming out” phase and worry that another bottom remains below this one. Call us pessimists, but we’re not sure the green shoots aren’t just weeds.