muses of the moment

October 17, 2009

Frozen Falls-The Coming Second Great Depression

A FROZEN Niagara Falls-Winter 1911

A FROZEN Niagara Falls-Winter 1911

The unimaginable.

Yes, those are people walking across Niagara Falls. This is why I am constantly saying, study at least the last 200 years of economic history to understand all the possible outcomes of this current financial crisis. We are in the winter phase of the 100-year K-Wave economic cycle.

Prepare, this current economic winter cycle is not a normal winter, just like Niagara Falls in 1911 was not a normal winter.

Click here for an excellent post from neithercorp.us, The Latest Signs of Complete Economic Meltdown: Phase 2 Begins, about the next leg down in the financial crisis and the coming Second Great Depression.

A snippet:

This massive level of printing press inflation has created a kind of new “Sucker’s Rally”, the likes of which has not been seen since the bullet-train rally of 1930 that eventually heralded the train wreck of the Great Depression. Banks, instead of using the bailout money to increase loans and unfreeze credit mechanisms as it was intended, have decided it would be better to bet the bag on the stock market roulette wheel. Trillions of taxpayer dollars have thus been thrust into the markets, creating the illusion of an investor resurgence. This is why the Dow has gained to nearly 10,000 points while the rest of the economy continues to sink into the quicksand.

In response to these inflationary practices (and as we predicted in 2008), the dollar has begun to tumble versus other national currencies, and gold has surged to a record high of over $1040 an ounce!

It is now October, 2009, and the “new sucker’s rally” is beginning to falter. Very soon, I believe, massive swings in the Dow like those we witnessed in 2008 will resurface once again, and stocks will resume their downward spiral, while at the same time, the dollar will lose the “safe haven” investment status it had in 2008, causing possible hyperinflationary conditions for the Greenback. Here are some reasons why:

Click here and scroll down to view the vintage cartoon and the “Plan of Action for the US” sign . Government reactions to currency events do not change. They are repeating the same mistakes. Just as a depression resulted in the 1930’s, so will it in the 2010’s. Take a look at that bond graph, too. When that trend breaks, it is a major turning point in the financial crisis and value of the USDollar.

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