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Paul B. Farrell
Jan. 4, 2011, 7:19 a.m. EST
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Twelve tips for profiting on commodity demand
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Fed borrows White House method to judge QE2
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) "” Dateline December 2020. Let's look back on the 2011-2020 decade, at what historians call the "Worst Decade in American History." Totally predictable, totally denied.
Back in January 2011 we made 10 predictions of a chain of events that would reach a critical mass and consume America in a torrent of creative destruction, crippling capitalism and other outmoded institutions, forcing new power players to step out of shadows and assume leadership in a time of extreme crisis.Now we see how they came true.
Investors are greeting the New Year with an extreme level of cheer about the prospects for 2011. This could be a near-term challenge.
"The U.S. economy appears to be coming apart at the seams," Columbia Professor Robert Lieberman warned back then in the Foreign Affairs Journal. "Unemployment remains at nearly 10%, the highest level in almost 30 years. A long trend of "ballooning incomes at the very top and stagnant incomes in the middle and at the bottom. The share of total income going to the top 1% has increased from roughly 8% in the 1960s to more than 20% today. "¦ a level of economic inequality not seen in the United States since the eve of the Great Depression."
As the decade opened in 2011 we were being conned again, like before the 2008 meltdown "” by the same crooks we bailed out. We should have forgotten all Wall Street's hoopla about a 2011 bull market with the Dow rocketing to 15,000. We should have thought long-term. We knew Wall Street lost an inflation-adjusted 20% of our money the previous decade. We should have known they would lose another 20% by 2020.
The "Gilded Age" bubble from a decade ago ended in a crash worse than 1929, and left us on the brink of a Great Depression 2. We ended up with a decade of increasing battles between the haves and have-nots, where there is no longer room for "compromise" between the two ideologies destroying America from within.
We could have seen that coming, too, as Lieberman warned of class warfare a decade ago: "Income inequality in the United States is higher than in any other advanced industrial democracy "¦ It breeds political polarization, mistrust, and resentment between the haves and the have-nots and tends to distort the workings of a democratic political system in which money increasingly confers political voice and power."
"The Gap," the divide, the greed, the entitlements, the hostilities are now so entrenched that "negotiations" are impossible and only a catastrophic 1929-style collapse of our self-destructive capitalism and a descent into economic hell will force America to restructure.
Here's how we got here over the last 10 years:
Thanks to the conservative takeover of America's so-called democracy the past three decades, from Reagan to Obama, our activist Supreme Court delivered the coup de grace into America's psyche in 2010, overturning long-established precedent and giving rich owners of zombie corporations absolute rights of live humans, a decision that would have gotten a failing grade in my constitutional law class at the University of Virginia. It set up Wall Street's super-rich in 2011 as they advanced their takeover.
The bizarre decision, which essentially legalized political bribery, led to billions passing through lobbyists to politicians in all parties, with one goal: A guarantee that all politicians (President, Congress, Fed, regulators and state governments), all adhere to Reaganomics and the ideology that money talks and wealth rules.
As a result, America was no longer a democracy by 2012, not even a plutocracy. Our middle class rapidly spiraled down into third-world status, while the rich get richer and the gap between the richest and the rest widened. Worse, the 2012 presidential race became irrelevant, because money corrupts all in Washington and Obama was already a puppet of America's super-rich conspiracy.
Back during the Bush II presidency, Fortune analyzed a classified Pentagon report that predicted "climate could change radically and fast. That would be the mother of all national security issues." Billions more people will increase unrest across the world, creating "massive droughts, turning farmland into dust bowls and forests to ashes."
As a result, "by 2020 there is little doubt that something drastic is happening ... an old pattern could emerge; warfare defining human life," confronting political leaders everywhere with the reality of our civilization collapsing, even the end of life on the planet. This was the year the hard evidence materialized.
By now it had become clear that America's Conspiracy of the Super-Rich was draining trillions from middle-class taxpayers. They see global population growth (exploding more than 100 million annually) not as a drain on scarce resources but only as a way to get richer through their obsession with free-market "globalization."
They ignore the coming 2050 tragedies when global population is 9 billion, dwarfing America's 400 million, and all are demanding more of the Earth's limited, non-renewable commodity resources, and demanding payback from America's long failure to heed warnings of environmentalists like Bill McKibben: "Act now, we're told, if we want to save the planet from a climate catastrophe. Trouble is, it might be too late. The science is settled, and the damage has already begun."
Paul Farrell writes the column on behavioral economics. He's the author of nine books on personal finance, economics and psychology, including "The Millionaire Code," "The Winning Portfolio," "The Lazy Person's Guide to Investing." Farrell was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner. He has a Juris Doctor and a Doctorate in Psychology.
When it comes to evaluating the impact from its plan to purchase $600 billion worth of government bonds, the Federal Reserve seems to be borrowing a trick from the White House, says Steve Goldstein
2:17 p.m. Jan. 4, 2011
"America's 10 worst years start right now http://on.mktw.net/fOVFsf" 7:59 a.m. EST, Jan. 4, 2011 from MKTWFarrell
"Twelve tips for profiting on commodity demand http://on.mktw.net/hKQVMb" 12:35 a.m. EST, Dec. 28, 2010 from MKTWFarrell
"Use "?Noah's Ark' survival kit for a stormy 2011 http://on.mktw.net/hx9x1L" 12:12 a.m. EST, Dec. 21, 2010 from MKTWFarrell
"Obama is a hostage, but not to the GOP http://on.mktw.net/fVbZps" 12:08 a.m. EST, Dec. 14, 2010 from MKTWFarrell
"10 reasons to shun stocks till banks crash http://on.mktw.net/hahEQk" 12:03 a.m. EST, Dec. 7, 2010 from MKTWFarrell
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