Thursday, November 15, 2012

Civil War II: Obama as Lincoln

August Forecast & Review
November 14, 2012

Civil War II: Obama as Lincoln

By the time Lin­coln unleashed the Civil War (1861 – 1865) to force southern states back into the Union, years of con­tentious pol­i­tics and civil dis­obe­di­ence had already set the stage. The seces­sionist states were exer­cising their Con­sti­tu­tional right to freely dis­as­so­ciate them­selves from Wash­ington, D.C, but Lin­coln thought oth­er­wise. While ignoring the Con­sti­tu­tion, Lin­coln pre­cip­i­tated a Civil War that left 620,000 Amer­ican cit­i­zens dead.
The modern seces­sionist move­ment has exploded within just a few days, thanks to the Internet, with over 675,000 peti­tion sig­na­tures col­lected thus far. The min­imum require­ment of 25,000 sig­na­tures per state has already been met by Texas, North Car­olina, Georgia, Florida, Ten­nessee, Louisiana and Alabama. How­ever, peti­tions have been started in all 50 states!
Of course, a Peti­tion has no more legal weight than a Res­o­lu­tion, but it does draw the battle line. Before his Pres­i­den­tial term is over, Obama may well try to actu­ally fill Lincoln’s shoes by starting Civil War II.
Civil War II will be vastly dif­ferent because the weapons of war are much dif­ferent. The Admin­is­tra­tion can use an array of tac­tics like verbal intim­i­da­tion, elec­tronic tracking, law­suits, arrests, harass­ment, tax audits, fore­clo­sures, etc., before a single shot is fired. As the seces­sion­ists push back, the ten­sion will build to a deci­sion point on both sides as to whether human life will actu­ally be lost.
R.J. Rummel wrote in his sem­inal work, Death by Gov­ern­ment, that var­ious gov­ern­ments have killed some 262 mil­lion of their own cit­i­zens in the last 200 years, far more than were ever lost by wars between nations. Of the coun­tries where “demo­cide” occurred, none of the cit­i­zenry ever thought or expected that it could or would happen to them at the hands of their own gov­ern­ment… but, they were wrong.
The fact is, evil men commit evil acts. Because of the evil already present at the highest levels of Amer­ican gov­ern­ment, cit­i­zens of America can only expect con­tinual “trickle-down evil” as a result. This is not a good mix and will likely end very poorly in the future, whether shots are fired or not.

State of the Economy

Main­stream econ­o­mists are paid to pro­mote main­stream ide­o­logue. Gov­ern­ment econ­o­mists are paid to pro­mote gov­ern­ment ide­o­logue. The Bible says “the love of money is the root of all evil” (1 Tim 6:10) and that applies to econ­o­mists as well.
The mainstream/government pitch is that the economy is recov­ering and will be gen­er­ally stronger in 2013; unem­ploy­ment will be lower, housing will rise and are we working toward energy inde­pen­dence by 2020.
Housing – Round two of the col­lapse in housing should hit some­time in 2013 and carry through to 2015 – 2016. The FHA (Fed­eral Housing Agency) is run­ning out of money for the first time in 78 years. Fannie Mae and Freddie Mac are not far behind, and the three of them may need a direct gov­ern­ment bailout. Com­pleted fore­clo­sures in 2012 are expected to be around 678,000, which is lower than 2011′s 800,000. How­ever, repos­ses­sions increased last month in 35 states. Notably, Nevada increased 76 per­cent! People who bought even two years ago are falling into the same repossession/default trap as those who bought before the crash began in 2005.
Employ­ment – It isn’t about to get any better in the next four years. There are a raft of com­pa­nies who are poised to start lay­offs just because Obama was re-elected. In October alone, planned lay­offs increased 41 per­cent! Big com­pa­nies are joining the layoff parade: Boeing, West­ing­house, Cater­pillar, Pepsi , US Cel­lular, Bristol Myers, Corning and Abbott Labs, to name a few. Record num­bers of workers have given up on finding a job and are not even in the unem­ploy­ment sta­tis­tics. Most jobs are offered as part-time so the employers don’t have to pay ben­e­fits, so many end up working 2 or three mediocre jobs and still have to pay for their own benefits.
Fiscal Cliff – It’s really a train wreck cer­tain to happen, where two opposing trains are hurtling toward each other on the same track. It’s hap­pening in Greece, Italy, Spain and other Euro­pean coun­tries: Politi­cians, bankers and cit­i­zens will never be on the same page without total melt­down and purging of their eco­nomic sys­tems. In every con­ceiv­able mea­sure and sta­tistic, the U.S. is much worse off than even Greece, yet they are having weekly riots in the streets and we aren’t. Just wait!
U.S. Credit Rating  – I fully expect two down­grades by the major rat­ings agen­cies by the end of 2013. The first down­grade will be tied to the mediocre solu­tion (if any) for the near-term fiscal cliff prob­lems. The second down­grade will come as the fes­tering grows worse and the U.S. plunges back into a deep recession.
Man­u­fac­turing – Euro­zone PMI (Pur­chasing Manager’s Index) is in con­trac­tion at 45.4, and the con­trac­tion is accel­er­ating. The U.S. PMI is barely above 50, indi­cating a minute expan­sion, but not nearly enough to call it a “recovery.” Busi­ness sen­ti­ment in the U.S. is weak­ening and will likely drop below 50 in the next month or two. Obama is anti-business and will evoke poli­cies that cur­tail busi­ness activity; com­pa­nies are not slow in fig­uring this out.
Middle Class Destruc­tion – Six­teen per­cent (almost 50,000,000) of Amer­i­cans live under the poverty level. Another 8 mil­lion are not in the poverty class only because they are receiving either food stamps or unem­ploy­ment insur­ance. Enroll­ments in food stamps have exceeded 47 mil­lion (19.33 per­cent of the pop­u­la­tion) and con­tinues to rise. Without food stamps, soup lines would eclipse even the worst periods of the Great Depression!
Stocks vs. Economy – His­tor­i­cally, there is a strong link between eco­nomic activity and stock market values. The economy has improved since March 2009 when the first leg of the bear market con­cluded. Rising stock prices bol­stered the economy, but not nearly in the same pro­por­tion. Now that stocks are most likely headed into Pri­mary Wave 3 down, the economy should track with it in the same direction – down.

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