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Paul B. Farrell Archives | Email alerts
Dec. 27, 2011, 12:01 a.m. EST
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) "” "Strategists predict a glowing 2012: Stocks forecast to finish the year up more than 10%." Yes, USA Today reports that the strategists are high on holiday cheer. But is "America's Financial Doomsday" a more likely headline for 2012, as international bank analyst Martin Weiss predicts?
Here's what he sees in the near future: "An historic world-changing event is about to crush the U.S. economy and stock market."
"Crush"? Is that word too strong? No. Even the International Monetary Fund's chief, Christine Lagarde, echoes the warning: "The world economy is in a dangerous situation."
Weiss Ratings was the first to downgrade U.S. debt "” before the ratings agencies. Weiss has 500,000 readers because he's been making solid market predictions for 40 years: The 1980s S&L crisis, the dot-com crash in the '90s, the 2008 credit meltdown and now the new European bank crisis.
So listen closely (and protect your portfolio): The next crisis, according to Weiss, "will destroy the incomes, savings, investments and retirements of millions of Americans."
Yes, destroy.
"It will plunge vast numbers of families into the nightmare of poverty "¦ hunger "¦ and homelessness. Only a minority of investors will survive intact."
Get it? A new and "crushing" global meltdown. Destroying trillions. Most will lose. Only a few will "survive intact." Are you a gambler? Bad odds. On an inflation-adjusted basis, Wall Street has lost trillions of your retirement money since 2000. Are you going to keep betting your future on winning 10%, hoping USA Today's short-term thinking "strategists" are guessing right?
Or will a "historic world-changing event" crush the American economy, markets "¦ and your retirement? Ask yourself, is gambling on making 10% too risky in 2012? Before you place any bets at the Wall Street casino tables, mull over these 10 "macrotriggers," any one of which could ignite the global "doomsday scenario" that Weiss is predicting.
Trigger 1: Doomsday's mutant democracy. "Occupy Wall Street" and the tea party agree: Democracy is dead. "All men are created equal" is now a political fiction. The public has no voice in a nation where wealth buys votes, a naive public is easily manipulated, and elected officials have a price. Capitalism won the battle for the soul of capitalism. Vanguard's Jack Bogle warned us: The "invisible hand" no longer serves the public welfare. Today, an insatiably greedy class of "Super-Rich," the 1%, steers America from the shadows, obsessed with restoring the unregulated free-market ideology that loved gambling in the speculative $600 trillion global derivatives that triggered the 2008 meltdown.
Trigger 2: Doomsday's class warfare. After our bankrupt Wall Street banks were bailed out in 2008, it became painfully obvious that Bogle's "mutant capitalism" was self-destructing, killing democracy. Today nobody trusts Washington. Wealth rules government. Polls show the public now believes that no matter who's elected in 2012, our descent into disaster can't stop. Sen. Bernie Sanders of Vermont said it best: "There is a war going on in this country "¦ the war waged by the wealthiest people in America on the disappearing and shrinking middle class of our country. The nation's billionaires are on the warpath. They want more, more, more. Their greed has no end, and they are apparently unconcerned for the future of this country if it gets in the way of their accumulation of power and wealth."
Trigger 3: Doomsday's legal conspiracy. In the past generation Adam Smith's invisible hand" was replaced by an open conspiracy among Wall Street, corporate CEOs, politicians and Forbes 400 billionaires operating with arrogance and absolute power, corrupting America's soul. This conspiracy has no moral compass yet, ironically, is legal. Yes, "legal," thanks to the Supreme Court. Wealth buys favorable laws, making even the most unethical, selfish, corrupt behavior "legal" by fiat: All the rewards of capitalism for a Super-Rich 1%, while the liabilities are dumped on the 99%.
Trigger 4: Doomsday's political anarchy. Forget buzzwords like "socialism," "oligopoly," "plutocracy," even "republic." Washington is now a pure anarchy with 261,000 high-priced lobbyists fighting for the best budget deals for their clients' interests, not the public interest. Our Super-Rich anarchists know the only votes that count are in Congress, where lobbyists are brokering special interests, fighting for a slice of a $1.7 trillion federal budget pie, for special regulations, for tax loopholes, exemptions, loans, earmarks, access to policy makers, agency appointments, defense contracts "” you name it.
Trigger 5: Doomsday's growth economics. The principle of "growth or die," once a given in economics and politics, is being challenged by new "growth and die" research yet relentlessly subverted by a numbers racket used by traditional economists to hide their manipulation of government, consumer and financial data to deceive investors, consumers, voters, the public. Most economists work for the "establishment": banks, politicians, CEOs, biased think tanks or the Fed. And all economists have political agendas. They're more like speech writers, hyping short-term policy agendas, while dismissing long-term consequences. For example, global population will increase from 7 billion to 10 billion by 2050, yet old-school economics pretends natural resources are infinite.
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Paul Farrell writes the column on behavioral economics. He's the author of nine books on personal finance, economics and psychology, including "The... Expand
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. Collapse
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