Saturday, July 16, 2011

THE FACE OF THE GREAT DEPRESSION


You are allowed to call it a recession. You are allowed to call this a recovery. You may want to even call this prosperity. Maybe a "buying opportunity" would be your cup of tea. But for tens of millions of Americans and hundreds of millions worldwide this is a Depression. NO Jobs and crushing prices of essentials like food and medical services are beginning to take their toll. I realize that you don't want to hear doom and gloom but this is the reality of bad choices made decades ago for the benefit of a few.......the "job creators". You know which ones I am talking about. The people that are in charge of small businesses.......hehehe. Right.......sure. This entire crises has NOTHING to do with small businesses and EVERYTHING to do with the preservation of control by the Large corporate oligarchy. It has been a sytematic plundering of this country's treasury and future by a handful of corporations for the benefit of a few. When its over and it is over.....we will no longer be the empire of the world with 800 military bases in over 125 countries. We will no longer be the enforcing arm that runs the world for the international cartel. They will have moved on to a group of governments where less emphasis is placed on an aging small population like the United States. We will be relagated to the proverbial scrap heap of ex-empires like Greece, Rome, Spain, France, and England.

I remember watching the transformation of this country in the 80s as we shifted into this last phase of the Grand Supercycle. Suddenly I began to notice incredible shifts in the balance of compensation in our large corporation CEOs. We had always had the creation of incredible wealth with idividual creativity and innovation. But in the 80s a new breed began to come to the fore...the corporate pirate ...and they were quite public in accepting their laurels. They would gain control of a corporation had been in existence for generations. There were actual playbooks created with consultants that were hired to assist the CEOs. Their compensations climbed exponentially from about 20:1 to their average company worker to a peak in the mid 2005 of about 350:1. Some companies obviously were well over 2000:1.

In the late 80s I remember watching the financial media applaud the announcement of Michael Eisner's compensation at Disney. He began to take hundreds of millions out of the company. I was stunned that in the 80s after coming out of the pain of the 70s and early 80s a man that had taken over a beacon of entertainment and creativity that had started in the Great Depression of the 30s could be taking that much capital out of a company that he had nothing to do with for most of the company's existence. I remember the avuncular Walt Disney's soothing voice on Sunday nights introducing his latest show and/or development. I was now looking at a different breed of animal. The corporate carnivore. A natural evolution? Perhaps. But it was telling me that a storm was on the horizon. It wouldn't be long either. Soon this playbook of systematic corporate raiding spread across the entire corporate structure. All of the boardrooms were stacked.......and the game was over for the stockholders.

The late 90s and 2000s were just a matter of creating enough liquidity to keep the game going. They did this through the creation of derivatives and almost wholly ran them off of real estate. It provided the last gasp for a dying economy with jobs and fast cash for a collapsing manufacturing infrastructure that was being sold overseas...mostly to China. Once the plundering of the factory base was accomplished and 5000 mergers and aquisitions had been completed.....the ponzi was through and thousands of Michael Eisners had been created. Our three branches of government had been totally coopted and the game was over.

Now the structural disaster created is apparent in all of its splendor. NO jobs....NO factories...No educational system....just DEBT. The party is over and now the bill comes. The five active wars we are fighting right now that continue to drain your treasury aren't even on the table right now with the "press" or the politicians. So you see.....this Depression is in its infancy. The five steps of dying by Kubler Ross are still in step 1.........DENIAL. gl I hope Walt Disney is rolling over in his grave.


from metals rport

25 comments:

  1. Great post Kli.

    I kept rereading it,...thinking of something to add. But, your post is succinct & complete.

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  2. "We will be relagated to the proverbial scrap heap of ex-empires like Greece, Rome, Spain, France, and England." --- You forgot the U.S.S.R

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  3. Once again you've managed to sum up many of our thoughts so powerfully...& beautifully. Thanks Kli!

    Question for the group: I've got a fairly large amount of restricted shares from my current employer that vest at different times (e.g. 200 shares in 6 mo....400 in 1 yr...etc). Are put options the best way to protect/hedge myself?

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  4. Hi Kli,

    Great Post!

    I noticed that GOOG is above its 200MA and 50MA with big volume and approaching its resistance. RSI is positive too.
    I’ve been reading my stock books, and noticed this while playing around with charts, and thought I’d ask the groups opinion of my analysis.

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  5. Look for GOOG to break resistance with a nice "throw over" then fall back below. if it holds the 50 then play it long....otherwise.....itsa pig...thnx all for comments

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  6. slw..

    I bought this at 3.00 and rode it to 45.00.....stop out at 40.00

    my buy in is 31.00..
    it is at 38.80

    I wanted to pull the triger on this on friday..

    Trud said this.

    It's almost time to get really excited about silver but I can't blame you if you already are. First look at this 8-hour chart. As you know, I've maintained for quite some time that silver must perform 3 steps before we can get aggressively long again. First, it had to get through the down trendline off of the peak in late May. Check! Then, it had to get through the down trendline off of the recovery high of 39.45 set on 5/11. Check! Lastly, it has to get through and close above that 39.45 level. Not yet but soon?



    If you ever wanted to see a classic, textbook bottom, you have one here on this 2-hour silver chart. A steep decline and sharp reversal off of the second bottom at 33.50. A rally to 37 with a sharp pullback that stops right at the level of the top between the two bottoms, near 35. Then, a powerful rally. Like gold, silver pulled back almost exactly to the point I'd mentioned yesterday as a good entry spot. I hope you were able to take advantage of the opportunity. If not, don't despair. More opportunities await.



    Let's watch silver very closely here. Once silver closes above 39.45, it will move very quickly toward $40. When it begins printing numbers that begin with "4", open interest will explode as big money will rapidly return to the pit. Once this happens, I expect silver to rapidly advance toward 48-50.

    so I held my SLW

    paladin

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  7. SLW inverse HnS with an intermediate 3mo target of 58

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  8. Rhabbi.....Russia was only an empire from the standpoint of a "strawman" argument...it provided the basis for an "evil empire foil" for us to combat and build out our Military industrial complex. It was always a second rate "empire"...I purposely excluded it.

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  9. on a 30k investment

    I have 7200.00 to 7300.00 profit on the table..

    I so much want to pull the trigger on this

    paladin

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  10. paladin......that's a different issue....take at least half off the table if not all

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  11. BTW paladin I closed out all of slw several days ago

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  12. Denial - that about says it all.

    I look on Facebook every now and again and all the people I grew up with had perfect parents, perfect children amd now perfect grand children. They have perfect spouses. It seems to be the "perfect" platform for denial. Hehehe

    I seem to be the only one with less than perfect parents (they were good people, but they had their flaws), without a perfect child, and a spouse that turned out to be far from perfect (now X spouse).

    Yes, I have reached a point where my needs are met, I live alone and have lots of quiet, peace and serenity. Which I love.

    Still I am AWARE of the potential dangers and am slowly preparing for them (just hope I am not moving too slowly).

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  13. Kli,

    Perfect! I'd add only America needs a Yucca Mountain project to dump all the credit reactive wasteful materialistic humans into its caverns and the first load comes from Wall Street, corporate oligarchy and the corporate whores of congress over last 30 years..

    Were in a real life movie like Westworld but the set is not about a western town its about a dying country where bankers are the robots who have gone astray...Creditword where make believe comes true and digits are increased so Greed can control the serfs (us)

    http://www.youtube.com/watch?v=dQVWP8fP5To

    Society has no idea how credit works....its the monopoly game that was kept in Area 51....to roll that education out to the masses would have caused a paradigm shift that the pigmen could not exploit...

    I'm hoping for change, actually the first candidate that whips out a white board and a stick with explanations of what happened to jobs, housing and how the banks fucked citizens in the ass will garner a lot of votes....

    Perot was right more than he was wrong....Sucking sounds were not very vogue then...much different now...

    http://www.irle.berkeley.edu/cwed/wp/wealth_in_the_us.pdf

    good reading on what the great depression has done Kli...if u want I'll send it email...

    keep up the good work..I still want to bet one beer on the qe 3...a fine gentlemen bet!

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  14. Inlet.. me too..I need step up the prep work...

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  15. yeh chuck you know that bet is a gentleman's bet.......but I think bat is reaching if he thinks this thing collapses in a month or two.....hehehhehe......they have a lot more time to keep the lights on in the casino

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  16. I agree with you Kli....they have so much ammo left and the hopium they will sprinkle for the masses will be unbelievable to watch....

    the last roman senate would approve of our congress....complete with the corporate fluffers and theatre...

    Your a throwback to the days of america the great...keep hitting the pigmen hard...as stated here previously

    "evil prevails when good men do nothing"

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  17. Good stuff as always Kli! Question about your statement regarding SLW (and probably miners/silver) in general. You predict a potential $55 3-month target, which is a 50% gain from current levels. But you don't currently own any positions? Are your expecting a pullback before loading up?

    I have a small core, and actualy want to add on any dip, because I also see gold, silver, and miners heading quite a bit higher till the end of the year.

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  18. Gotta luv the inverted H&S on $hui.

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  19. from RTS.....
    Excellent, inspired writing Kli. You are regularly hitting the nail on the head lately. I am not sure how much time is left. Yes, there are plenty more games that can be tried, but there's really a rapidly growing awareness that the system is no longer an ally to the regular folks. The whole austerity thing, along with a repeat in the decline of home values and high gas prices, mixed with political brinksmanship, has woken up many that were asleep as little as a few months ago. In short, millions of people now realize they have been being lied to for a long time.


    I predict that many people will decide to opt out of their erstwhile obligations, like their mortgage payments and paying taxes. My neighborhood is filled with homes that the owners have stopped paying on. I don't think we have long before America starts to see general strikes, a la Europe. Why participate in a rotten system that doesn't consider your needs? Many people who were previously fearful of what they would lose by opting out, will come to see that the price of opting out is less than the cost of staying in. Healthcare costs and gasoline costs will be the catalysts for that final decision.


    As I have been predicting for a long time, as you know, is that with the system in crisis, America's worst (and there are millions of them) will strike out as their previously government paid life is reduced or withdrawn. The elderly are in for a very tough road. Witness Obama's highly disingenuous threat of stopping social security checks absent a hike in the debt ceiling. Forget COLA adjustments; let them chew on beef jerky and Alpo.


    The whole world risks collapsing simultaneously. Remember that weekend in September 2008, when on Sunday evening it was announced that Merril was being sold to BAC, and that Lehman was bankrupt and that AIG needed to be bailed out? It was all denials and business as usual, until it wasn't. That was a scary evening, for those of us who knew why what was happening was happening.


    I can't measure the timing, but I do think it's closer than it might seem.


    RTS

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  20. Agree with all, great commentary Kli...surprised BO chose to threaten w/the SS checks, shows us old folks are expendable. silver up over 2% as we speak.

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  21. Kli,

    evidentally Rupert Murdoch pissed the wrong people in the "Cabal"

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  22. not so much pissed rude as .....time to go....his purpose had been served

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  23. Kli, are you saying slw target 58? or was that typo, meant 48? 58 is over 50% in 3 mos. Just verifying.

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