Showing posts with label predictions. Show all posts
Showing posts with label predictions. Show all posts

04 November 2011

The top 5 current threats to the United States

Over my years of blogging... damn, I never thought I would be able to say that as I never intended to blog for years... a few weeks or a month or two, maybe... I have covered a wide array of threat types to the United States.  Be it terrorism, organized crime or geophysics, I've gotten a good look at some of the nastier things that can be unleashed at a moment's notice that will leave you next to no time to prepare.  The fact that my top 5 geophysics disasters that will happen to the North American continent, sooner or later, are not being prepared for tells me much about how we, as a society, prepare to deal with just about anything.  I like geophysics as it is reliable, cyclic and gives warning via the periodicity of events over time.  If you don't heed the warnings then it is you who will pay the price.  The planet will go on its stately way with or without us, which is why I am always advocating that the best place for industry is not in a biosphere but in the clean vacuum of space.  Once we get off this rock and into our solar system with a sustainable population base that doesn't rely on Earth, then we will be very, very hard to extinguish as a species.

We aren't there, yet.

Outside of those 'known unknowns' of geophysics there are the other 'known unknowns' of terrorism, socialism/communism/fascism/anarchism, and pure old asinine political meddling in culture and economics.  These latter are all inter-related, however, as old revolutionaries tend to hide who they are and become sanctified by their cronies and enter the system. When a guy like the terrorist Bill Ayers can be blessed by the MFM without any hint at repentance for his past misdeeds, indeed he said he hadn't done enough as a terrorist, gets into the position of helping to draft the very history books that is used in school districts, and no one raises a fuss, then one can say that the 'elite' structure is in bed with the radicals.  This has a corrosive and corrupting influence on society, as a whole and as individuals, as actual history gets slanted towards viewpoints that remain unexpressed until they fester long enough to pop up like zits in OWS.  These people don't need to breathe together to share the same hookah, and if their ideas have spread globally it is because those who would normally defend the standard culture of various Nations have been complacent or asleep at the wheel.  This is the wet dream of Progressives: to dictate to society what individuals should think, eat, breathe and how they should live and die at the behest of government.

It is the dream of despotism and tyranny.

So for this remix I'm going to shuffle in the other sociological problems that these nefarious actors have put in place while we have all been hitting the snooze button.  A fun treat it isn't because I will also be mixing in military threats of the 'known unknown' variety, which ought to scare the pants off just about anyone.  Some of these I see as near-dead certainties.  You can still search this blog under the DIY category and get some ideas of what it means to prepare, now, before they happen.

So here we go.

#5 - Good-bye to the EU - After WWII the US extended its nuclear umbrella and troops into Western Europe to defend it.  The various leftists and social do-gooders realized that they didn't have to spend more than a paltry 1% or thereabouts on defense and the US expanded its defense budget to 6-8%+ to cover for that.  With all that lovely non-spending doing on did the European Nations of the West: 1) cut back on all other forms of government to get thriving, world beating economies, 2) pay off all government debt to make their currencies sound and stabilize the world, 3) decide that after two world wars that they really, and for true, weren't going to solve their problems either militarily or via diplomacy (causes for both world wars) and settle into a generally neutral stance towards each other and attempt to keep the lid on both military and diplomatic adventurism or, 4) the opposite of all that.

If you chose #4 for the expansive welfare state, increasing regulations, attempts to 'integrate' highly different populations that didn't have a great history with each other, spend like drunken sailors who can't pass out, get perennial unemployment over 8%, go into debt that none of them or all of them could repay, see a declining demography because of the growth of the state into all areas of life, have to invite in foreigners who made it a point not to assimilate, and the only real economy left was then asked to support all the ne'er-do-well spendthrifts, all the while finding out that being weak militarily at home meant no real feeling of patriotism or even a need to continue the culture, then you have a Weiner!  Ah... sorry... Winner!

Given a great protective umbrella the entire continent went towards socialism even before the commies disappeared and started calling themselves socialists, too.  Now Europe is in a permanent demographic slide unlike any other seen since the Roman Empire hit the skids, has a debt problem about to sink all the Nations in Europe separately and collectively, has foreign populations now starting to not see themselves as Europeans and wanting to change the Nations into something different... and an elite class who feels that the general public is too stupid to recognize this as a good thing!  Can Europe pull out of this tailspin?

No.

Parts of it might abandon ship in the next few months and then the jig is up.  All of the 'social safety nets' will fall and all the 'collective' help will go away as it can't be paid for as the increasing debt load year on year should have clued them into.  In giving a large umbrella over Europe the US, apparently, removed the cluebats.  The answer by the Euro-Elites (be they Kings, Emperors, Princes, Dukes, Ministers, Members of Parliament, or the local Mayor and city council) in such circumstances is clear: war.  With unrest in Europe comes war.  The French Revolution was cleared up by a Corporal, a 'whiff of grapeshot' and then the great economy booster of foreign war.  When the anarchists had been shooting down political leaders the world over for a few decades it was to get only one Arch-Duke that would trigger a global conflict.  The rise of communists in Russia and the expansion of the prior socialist parties in Europe to deal with problems, particularly in Italy and Germany, grew out of the unrest of the post-war era and turned it into the inter-war era by yet another great war building spree that led to, yes, war.  The nasty Cold War stalemate was won by the West when everyone who had red stars on in Russia changed their philosophy from communism to socialism.  The red stars were kept around to adorn party functions, however.  Needless to say getting in bed with organized crime is a mixed blessing in Russia.  Western Europe spending itself into oblivion will lead to great numbers of unemployed and the state, having only one major way to help, will authorize military spending to 'boost' the economy.  China, too, is facing this by propping up the price of copper by building vast, uninhabited cities and seeing its industrial cost rise to the point that people are being automated out of jobs or they are going, with delicious irony, to the next low wage destination of Vietnam.  Needless to say the US was wise enough to see this folly and stopped going down that road...

Oh, wait.

We didn't.

The Collapse of the EU is the symbolic collapse of Western Socialism (socialism, communism, leftism, progressivism, and big government anarchists which are a delicious stab in the back to traditional anarchists) and it isn't going to be pretty.

 

#4 - The Next World War- I can now name some major governments undergoing economic decline from which military spending may be the only hope of keeping people employed: Greece, Italy, Spain, Portugal, France, Russia, China, Japan, Mexico (more on that later) and the UK. Even better is that a few of them have historical militarism that their elites can fall back on and resurrect.  Greece has the Spartans, Italy has the Roman Empire, Spain and Portugal were once world colonial powers, France had Napoleon, Russia had Stalin, China had a slew of guys from the Yellow Emperor on to Mao, Japan had the military class and god emperor, the UK has a great history to work with like that Nelson fella, and even Mexico has patriots in their history of various stripes.

Pick three of those and say they take that path, even the worst off and most minor.  Throw in a bit of 'expansionism for resources' to help get economies going again.  Now put a large power into that mix doing that.  Within 5 years that will be about the only option left as it will be the ONLY way to get out of collectivism as NO ELITE will say that it is a FAILURE.  Internationalism just isn't a rallying point, and all the lovely bankers with their manipulation of world currencies will face a hard problem when a few enterprising countries realize that they can go it alone with just a few more resources under their belt.  They will shear off debt, see their currencies disappear, put in a scrip, open military based systems using scrip and have no need for a social safety net.

The first Nation to clear out its 'social safety net' will be the new 'leader'.

And it doesn't matter how small your population is, either, as modern technology will allow the leveraging of some very elite tactical units to perform deeds that entire armies couldn't accomplish just 60 years ago.  Technology is becoming a deadly equalizer between the large and small, and while quantity has a quality all its own, if you are stuck a couple of cycles back on the technology parade, you aren't going to make it.

No matter how chaotic and moribund economies and societies appear now, the simple solution for the worst off of cutting out the old currency, making a new scrip, torching the social safety net, killing off the radicals (always a crowd pleaser, that) and putting a military style order in place is a demonstrable winner throughout history.  And it always, without fail, ends badly.

This is the know nothing Elites we are talking about doing this and their failure to understand history and become entranced with power always allows this to happen.

We gotta get off that merry-go-round.

 

#3 - EMP the Great Equalizer - One EMP burst from a low yield nuclear device over Kansas will destroy the electronics of nearly 80% of the US that aren't hardened or shielded.  No modern commerce, no trucks, no planes, no cars (unless you got a pre-electronic one available... if you got points and plugs you have something that might survive), no industry, no farming,  no hospitals, pharmaceuticals left to what is on hand...

Remember that technology is a great equalizer against even the US.

We haven't hardened our power generation infrastructure nor our consumer commodity infrastructure.

And you may not even need a nuke to do this, but you will need a missile.

Or very high floating balloons.

Who could do this the old fashioned way with a nuke and a primitive missile?  There is a short list of supsects: the US, Russia, China, India, Pakistan, France, UK, Israel, North Korea, and Iran.  If you throw in a small technical group working with a different way to generate the pulse and balloons, then you can expand that list down to any Nation with factories producing electronics.  Gotta love that, huh?

Mind you this can also be done to China and Russia (probably requiring two devices each), all of Europe, Africa (about two devices), South America (two devices), all of North America (two devices), India, Australia, Japan if you have to get them separately, and maybe another six devices to cover all of the Pacific and three more for the Atlantic.  And one more to get all of North America.  That is N. Am. - 2, S. Am. - 2, Eurasia - 3,  India - 1, Australia - 1, Africa - 2, Pacific - 6, Atlantic -3.  Call it 25 total devices.  If they are high tech and balloon delivered you can use GPS to make them go off (isn't that sweet?) as they are shielded by not being in the EMP zones.  Missiles with AQ Khan style bombs might be a bit harder to do, but 25 is still a pretty magic number.

Hardened military equipment would survive, yes, but without a production system to produce more you are in a 'come as you are' war.

And if an eco-terrorist group did this with a bit of savvy on their part, or a death cult like the old AUM Shinrikyo?  In one year the global population would be about 1 billion people.

Now replace all the EMP devices with a major solar storm putting out highly energetic particles just in front of the Earth as it passes through it for, say, 3 days.  Same effect.

Bad enough the US and the fact that if we disappeared from the world economy most of the rest of the world would go into chaos once the big food supplier went away.  Those asshats bemoaning hunger in Africa should be wanting a hardened electronics system in the US so that if a major solar storm did hit the planet there would be SOMEONE left to still grow food on a scale large enough to supply 2-3 billion people.  That would require forethought, seeing how nasty a place the Earth and our fellow man can get, and then saying: 'You know it doesn't do us much good to have a social safety net if it all collapses due to one bad act'.

Damn I'm not even to #2 yet!

Wasn't the Cold War so nice?  All you had to deal with was vaporization due to nukes!

Even better: you can prepare for these!  Build some Faraday Cages for equipment (basically wrapping them in conductive mesh or foil that isn't in contact with the electronics, and ground the mesh/foil) and once the EMP is done, you can haul out your generator and equipment and get to the business of rebuilding society.  Everything with a transistor and a lot of stuff with vacuum tubes are toast if they aren't protected.  That laptop you tucked into the microwave will ride it out (it does have a mesh to protect stuff outside form the internal microwave effects) but that lovely desktop system is gone.  Got batteries stored away?  How about an inverter and solar panel array? Means to get clean water?  Sanitary considerations need to be given top priority.  Yup this is full, 'no grid exists' living.  No medical supplies coming around, either, so what you got is what you got.  Ditto groceries.

Global Nuclear War never looked so good!

 

#2 - La Palma landslide and tsunami - I'm not going to reprise my geophysics article, but this one remains at #2.  Why?  Here is the idea: name every city that is within 25 miles of the Atlantic coast or half of that in the Gulf of Mexico, all north of the equator.  And that 25 miles is a pure, wild-ass guess.

Now make them go away with only 6-12 hours of warning time.

Simple, huh?

Entire islands will be washed over.  Florida might not be around as we know it.  London might survive, maybe.  Paris will.  The Netherlands, not so much.  Nice knowing you, Denmark.  Ireland's coast along the south just gone.  Boston, Hartford, NYC, all of Long Island, Philadelphia, Newark, Baltimore, DC, Miami...  New Orleans, Galveston... maybe the highlands of Cuba left... I shudder to think about coastal Africa and some of the waves will get to the South Atlantic, too.  Maybe dislodge some polar material north and south, perhaps shift the northern polar ice cap a bit, or just break it up for a year.

Wouldn't that be fun?

There is zip you can do about it.  No diplomacy will stop it.  Nukes might trigger it.  All the concrete on the planet would make it worse, not better.  There is no 'bedrock' to stabilize, just a trillion tons and more of waterlogged dirt and weathered volcanic rock.  It is waiting for one earthquake or volcanic event on an island with an active volcano.  And most likely the other half of the island goes with it, too, due to subsidence, and the inrushing seawater once the mass slides in.

Would the current 'global community' pull together?

Or fall apart?

This will remove some of the largest transport hubs on the planet from the map, as well as killing hundreds of thousands to millions (or more) directly, and then the collapse of systems afterwards will ripple out economically.

And there will be no escaping this tsunami by going up as it will go over the top of the Empire State Building.  Hell it will get channeled all the way up to Albany by the Hudson River at the Palisades. Places that normally couldn't be reached by any tsunami will feel the wrath of this one in the Atlantic.  Gibraltar might go on wave one (the other side of the island going) and then a larger mass move into the Med to give the entire place a nice 20-30' tsunami like in Japan.  Wonder what will happen to the Panama and Suez canals when they are over-topped and washed out?

You can prepare for this one, too.  And while it doesn't, necessarily, take out things in the way a solar flare or committed global EMP attack would, it is more likely to happen.

 

#1 - Yellowstone - Megavolcano.  Overdue.  Last time its cousin went, the human race got put down to a few tens of thousands of individuals from diverse populations in the millions.  Toba is smaller than Yellowstone.  Yellowstone has been rising, steadily, for decades.  It might not erupt for 100,000 years.  Or a something might touch it off so soon that nothing could be done to even analyze it, much less prepare for it.  The dust cloud will encircle the planet and while not every place will be uninhabitable, the growing seasons for the next decade might not be what one would call, uh, there.

Even if you don't get caught in the major dust cloud and have your lungs shredded by fine particulates, you will get a massive global cooling effect due to the reflected sunlight caused by the high floating particulates.  They will come down via Stokes Law, and the finest will be last.  Great for pretty sunrises and sunsets, horrible for storms and growing seasons.

Due to size and severity, and being that we are now in the zone for cyclic repetition, this tops it all as threats to the US.

There are lots of other things that can happen to us, here on Rock 3 from the star Sol, even such things as a gamma ray burst from a star that is likely to have one that is pointed like a search beacon in our direction, soft of like a gun barrel deal.  A major boloid could come sailing in from out of nowhere and make a bad time for life here, too, as the dinosaurs found out.  Really, that would suck worse than Yellowstone.  Ditto the gamma ray burst, although you wind up dead within a few minutes for that, as compared to a few hours for a boloid and up to a couple of years for Yellowstone outside of its blast radius.  These are 'known unknowns' but with a non-cyclic or non-determinative factor to them, which makes them drop far down the list.

Of those things that can be done by man, a few do raise up to the major threat level region, with the collapse of the Western Way of Life coming in at #5, and that only for the socialist, not capitalist variant of it.  Capitalism actually works, it is this 'social control of capital' deal that doesn't no matter which way you cut it.  The folks who are grey are not those pushing forward individual liberty and reward for same, no it is those pushing 'everyone gets a prize' folks.  These are grey as they show no love of human ingenuity, fortitude and the rewards due the blessings of liberty.  They prefer the despotism of reduced choices to impoverish all mankind, rather than achievement to enrich mankind.  Those grey folks in various forms of red, green and black are about to go.

And it won't be pretty.

Lets try to keep things down to #5, and make some preparations for #2-4 and get off this planet so #1 won't get us.

I'm the optimistic guy in the long run.

The short run is always pessimistic, as I can only be pleasantly surprised.

23 December 2007

Your MSM Christmas gift: A Recession

Time for some fun with the 'recession is imminent' meme at Christmas! No matter how good things are a recession is just around the corner...

That 2006 Christmas gift recession was just going to be awful in 2007, this from BusinessWeek 30 NOV 2006:

The Economy: Not Looking Like Christmas
The GDP, even revised up, is still down. Inventories have grown. And data like truck-freight stats are nothing you'd want under the tree
by Peter Coy

Don't jingle any bells for the U.S. economy as the holiday season heats up. From major headline numbers like the gross domestic product (GDP) report to out-of-the-way stats like truck tonnage, the economy seems to be stuck in below-trend growth. Let's hope Federal Reserve Chairman Ben S. Bernanke is right that things will get better in 2007. (see BusinessWeek.com, 11/28/06, "Questions for the Fed Chairman" and 11/29/06, "The Economic Outlook").

Start with the biggest number of the week: the Commerce Dept.'s Nov. 29 revision of third-quarter GDP. It looked positive at first glance: a 2.2%, instead of a 1.6%, annual rate of growth in GDP in the third quarter. Stocks even rallied, with strong gains from AT&T (T) and Dell (DELL) to ExxonMobil (XOM) and ConocoPhillips (COP) (see BusinessWeek.com, 11/29/06, "Stocks Rise on GDP Data").


Look At The Fine Print
But take a closer look. The 2.2% growth rate is still a deceleration from the first quarter (5.6%) and second quarter (2.6%), and is below the economy's sustainable path for long-term growth, which is a little below 3% per year.

[..]

Looking ahead to 2007, it takes a sunny disposition to share the Fed chairman's view, expressed in a Nov. 28 speech, that the economy will get back on or close to its regular growth path. The buildup of inventories will tend to dampen growth because companies don't need to produce as much if there's a backlog of unsold products. Housing will continue to be a drag as well. Residential construction fell at an 18% rate in the third quarter, even worse than originally estimated. That alone took almost 1.2 percentage points off the rate of GDP growth. And the inventory of unsold homes remains exceptionally high.

Now we can't have a sunny disposition around Christmas, can we?

Nor just after it, apparently, this from CNN, 26 DEC 2006:
Recession clouds darken 2007 outlook
Most economists expect slower growth and no downturn, but some recent signals are flashing red.
By Chris Isidore, CNNMoney.com
December 26 2006: 3:26 PM EST

NEW YORK (CNNMoney.com) -- The economy is stumbling at the end of 2006, setting off alarm bells that growth might not just slow next year but that the nation could tumble into a recession.

The recent trend of slower growth is not expected to be reversed any time soon. Home building and the broader real estate market are both already in a recession by most accounts and are expected to stay there well into next year. Manufacturing could soon follow, according to some recent readings.

While most economists are still expecting the economy to avoid a full-blown downturn next year, several say the odds of a recession have risen. Even the more optimistic analysts are looking for a slowdown in growth in gross domestic product (GDP), the broadest measure of the economy, to between 2 and 3 percent next year, from 3 percent or better this year.
Yes the odds of recession have risen!! Mind you this is with all of that current worries about folks taking out mortgages they could never afford in full play... the housing market was 'stumbling'!!

Happy New Year!

Just how was that 2007 recession, anyway?

Of course that 2005 look at the coming problems in 2006 was nothing to write home about, either, as seen by a WSJ article at SouthCoastToday.com 11 NOV 2005:
Economists see consumer spending dropping
By DAVID WESSEL, The Wall Street Journal

Will the triple whammy of higher energy prices, higher interest rates and a slowing U.S. housing market bring the long-forecast end to American consumers' buying binge just in time for the Christmas shopping season?


You would think so to glance at economists' forecasts for the fourth quarter. Consumer spending, adjusted for inflation, could fall for the first time since the early 1990s recession, they say. At best, they expect a tiny increase of less than 1 percent, far below the 3.5 percent-plus increases of recent quarters, measured at an annual rate.


Much of that reflects developments that depress spending temporarily, such as the ill-effects of the hurricanes. But the big factor is auto sales. They plunged in October as auto makers tried--unsuccessfully--to wean their customers off various incentives.


Still ahead is the economically important holiday season. Department, discount, clothing and electronics stores do about 25 percent of their sales in November and December; jewelry stores do one-third. With gasoline and heating prices siphoning money from consumers' wallets, the betting is that this year's sales increase won't match last year's strong one. Scott Hoyt of forecaster Economy.com sums up his Christmas forecast this way: "Not as good as the last two, but not as bad as the two before that."

[..]

With raises scarce, consumer spending has been sustained by Americans refinancing their mortgages and spending some of the proceeds. Americans pulled about $600 billion out of their homes in 2004. Lehman Brothers economist Joseph Abate figures that'll drop to about $540 billion this year and $380 billion in 2006.


This slowdown in consumer spending will hurt--not only consumers who may spend more on gasoline and heat and enjoy less of other things, but also auto makers, computer makers, cable-TV companies, ball clubs, retailers and other businesses that depend on consumers.

But the overall U.S. economy can continue to grow at a reasonably healthy pace--if business investment and exports perk up. The optimists say that's likely. Mickey Levy, chief economist at Bank of America, for instance, expects the moderating of consumer spending to be offset by a big boost in government purchases triggered by the hurricanes, healthy growth in investment by businesses enjoying fat profits and an improving export picture as Japan (finally) recovers.

At the Fed and some other quarters all this would be a very welcome outcome. "I…expect some slowing in the rates of increase of consumer spending…in response to higher interest rates and a less ebullient housing market," Fed governor Donald Kohn said in a recent speech. "In my view, these developments--housing markets coming off the boil and an accompanying gradual rise in household saving out of current income--would be favorable for fostering sustainable economic growth and better balance between spending and production here in the U.S."


Yes this 'housing crisis' we have today was due to the 'less than ebullient' housing market coming 'off the boil' in 2005 and prior to that, right? But that was due to the lovely recession of 2005 now, wasn't it? That is how WorldOil.com saw things in a FEB 2005 article, wantint to prepare folks for the really bad shock of 2005:
Congress likely to differ with Bush on US energy policy

John McCaughey, Contributing Editor, Washington

A second term, the political scientists instruct us, is often referred to as "the legacy term," in which a US President seeks one (or, with good luck, several) achievements that will define his role in history. This is all very commendable, to be sure, but the question is whether the buoyant (although not, of course, triumphal) President George W. Bush can deliver.

In energy, the signs are not encouraging. Washington energy lobbyists and other observers fear that the President will have as little success with his energy bill and other goals (such as opening up the Arctic National Wildlife Refuge to drilling) as he did in his first term. That is to say, no success. They fear that he will be preoccupied with spending his political capital on big-ticket items like Social Security, tax simplification and tort law reform.

[..]

Contrary to the bombast of the over-heated election campaign, the US economy is not in bad shape. Inflation-adjusted gross domestic product (GDP) growth is up about 4%, annually, over the last two years, or a half-percentage point better than the long-term average. But there is no shortage of threats - notably the price of oil and the falling dollar.

Oil prices are the biggest worry, not so much because of OPEC greed, but because of the long-running debate on when, exactly, global oil production will irreversibly peak. A pessimistic school argues that this could be as soon as within the next 10 years, with catastrophic consequences if mitigation measures are not put in train immediately (coal, nuclear and oil shale alternatives are most often mentioned; wind power and renewables just won't cut it).

OPEC (notably Saudi Arabia) beats a contrary, optimistic drum on reserves and production potential, but nobody with intelligence has believed OPEC production or reserves numbers for decades past. A forthcoming DOE study on global oil production peaking may throw light on the contentious topic, if the agency ever screws up the nerve to release it. Peaking aside, if oil prices stay at their present level (nudging $50/bbl), many economists predict a recession in 2005.
Yes, it was 'the economy, stupid' which wasn't doing so bad in 2004. But those $50/barrel prices on oil were sure to make a nasty recession, right?

Your Christmas joy for 2005, dampened:

Enjoy Your Last Christmas Before The Bear Market - by Paul Ferrell - Fox News, 14 DEC 2005

ARROYO GRANDE, Calif. — Yes, you heard me right: This is the very last Christmas before next recession and bear market. So make the most of it. Seriously, have fun, buy lots of presents (on credit), celebrate with the folks, eat hearty, enjoy the eggnog, kiss a cutie under the mistletoe, root for your favorite team on New Year's Day.

Have fun, because the party's almost over. The bets are that 2006 is going to be bad news for the market, the economy and your pocketbook. So live it up, folks! You may as well have one last big fling before reality sets in and the bottom falls out. Here's what some of America's meanest old Scrooges are saying to try to dampen your holiday spirit:

Jeremy Grantham of GMO ($135 billion assets) [..]
Gary Shilling, economist [..]
Bill Gross of Pimco ($475 billion assets) [..]
Fed Chairman Alan Greenspan [..]
Yes 2006 was such a gloomy year!

We knew this was so because George Soros said so, NewsMax 09 JAN 2006:

Soros Fears U.S. Recession, Housing Market Bust
MoneyNews
Monday, Jan. 9, 2006

[..]

"I expect the recession to occur in 2007," he said, indicating that the Fed will spend some or all of 2006 raising interest rates to fend off inflation.

Soros predicted the Fed will increase the federal funds rate, now at 4.25 percent, to peak at 4.75 percent.

"Almost inevitably, they have got to overshoot because they can't stop (raising interest rates) until the economy shows signs of a slowdown," Soros said. "By the time it shows those signs it may be a little too late. I happen to be on the pessimistic side."

And Soros is hardly alone in his assessment that the U.S. housing market is in peril.

Bloomberg reports that the number of mortgage applications filed during the last week of 2005 were at a three-year low (of course, not many Americans purchase homes during the week between Christmas and New Year's Day). And David Heike, chief credit analyst at Lehman Brothers Holdings, tells Bloomberg that a housing slump will shave the U.S. growth rate by up to 1%.

In minutes from its Dec.13 Federal Open Market Committee Meeting the Fed indicated that American economic growth would slow down in 2006, but not significantly.


So there you have Alan Greenspan AND George Soros predicting doom 'n gloom to dampen the fading holiday cheer. Always toss the gloomy stuff up front and put the countervailing positive news at the end of the article, so it is already pre-gloomified. So much for 2006, just a full-on recession, I guess.

That recession of 2oo5 was going to be so awful! The Merk Fund said so on 12 AUG 2004:
New chapter in inflation/deflation battle: US economy is setting up for recession
Axel Merk, August 12th 2004
This article was written by Merk Investments before the Merk Hard Currency Fund was launched.

Employment growth in the US has stalled, corporate inventories are rising at alarming rates. CEOs say it's only a "soft patch" in the economy; Greenspan says its due to "transitory influences" of higher oil prices.

We disagree. Only a few weeks ago, Greenspan forecast that employment growth will accelerate, it's not a question of whether, but when. He was wrong. The massive stimulus provided by the Bush administration and Greenspan over the past couple of years has run out, and the economy has run out of steam. The next stimulus package will not be passed before the next administration is in office. Until then, the only stimulus we will get is the extraordinary multi-billion dollar cash dividend by Microsoft, some of which will find its way into consumer pockets around Christmas time, a boost to GDP by some estimates of 0.2%-0.3%.

Greenspan has acted to raise interest rates further this week. He had little choice as he has waited too long to raise rates and must get rates to a higher level, so that he can lower them down the road to provide a stimulus. Even at current levels, interest rates build inflationary pressures. Greenspan must also put a brave face on the economy, as the perception of his actions is becoming ever more important.

The inflation/deflation battle is unfolding, and it has taken a turn different from what we had seen as the most likely scenario. Over the past year, long-term interest rates have only reacted to economic growth, not to the inflationary buildup. This spring, long-term bonds collapsed, and we anticipated that inflationary forces would start to be reflected in long-term interest rates. Last week, it became apparent that both the rise, and - as of a few weeks -, the fall in long-term rates, are solely attributed to economic growth, or lack thereof. When it was confirmed last week that the economy is slowing down, long-term rates fell, the stock market fell, the dollar fell, gold rose.

[..]

A year ago, we believed that the most optimistic scenario to unfold would be a high-growth, high-inflation scenario. This is not happening, not with no additional stimulus for at least another 6-9 months and rising short-term interest rates.

The US housing market is topping out. In Southern California, one of the hottest housing markets, a rush of inventory has come on the market, but fewer buyers are around -- so far, prices are holding up. A collapse of the housing bubble would be a death blow to the US consumer, a consumer that was stimulated to continue spending throughout the past 10 years.

Every economic cycle unfolds differently. Just when central bankers thought they had seen it all, they are faced with new challenges. This will unfold differently from the stagflation of the 1970s, but we don't envy the winner of the upcoming election.
Not that a "Hard Currency Fund" just might spin things a little before they actually announce it... and how about that 'housing bubble' collapes being a 'death blow' to consumers? That has got to be one of the neatest wrestling holds ever seen - the bubble collapse death blow!

In case anyone missed it the US economy was coming out of a recession in 2004 the so-called 'jobless recovery' in which plenty of folks were still finding jobs. By 2005 that would be the haunting spectre to gloom up the recovery. This from Fox News, 15 JAN 2005:
Slow Job Growth Casts Shadow Over Sunny Economic Forecasts
Sunday, January 16, 2005

By Susan C. Walker


Midway through January, and the economic forecasts for 2005 are in.

The Conference Board predicts annual real gross domestic product (GDP) of 4.7 percent. That number represents the high end of the range, as a group of economists surveyed by The Wall Street Journal pegs it at 3.6 percent, while the White House declares it will be closer to 3.5 percent.

And here's some good news for those who are worried about inflation: the Federal Reserve says that "inflation and longer-term inflation expectations remain well contained."

So, decent GDP growth with few worries about inflation — the kind of reassuring outlook that says all will be well in 2005. Except for one thing: slow job growth.

A pessimistic report for job growth in 2005 got buried under the more optimistic economic forecasts. It's been lurking around since Dec. 17, when the White House announced it was scaling back its expectations for U.S. job growth. Instead of the 3.6 million new jobs it had projected for 2005 in early 2004, it now projects 2.1 million new jobs.

Let's take a look back to the beginning of 2004 to find out what the outlook for job growth was then. On Jan. 2, 2004, The Wall Street Journal reported that 54 economists it surveyed believed that "rising corporate profits and steady economic growth are expected to prompt companies to hire workers more aggressively in the months ahead."

But in July, the Christian Science Monitor (search) published a story on the economy that stated: "So far this summer, the job market is the economy's weakest link." Following a good report in October of 312,000 new jobs (revised), the latest report from the Bureau of Labor Statistics (search) was little more than half that number, coming in at 157,000 new jobs created in December. Wall Street had been expecting 175,000 new jobs for the month.

Here’s the point: This economic recovery is creating new jobs (and 2004 was the best year since 1999), but it's not creating enough new jobs to support a full recovery from a recession. And no one — not private-sector economists, not academic economists, not Council of Economic Advisors economists — had forecast such a scenario.
And, I take it, the economy tanked in 2005? The unemployed wandering the Great Plains like vast herds of Bison?

Then there was the post-9/11 Recession that was predicted to last well into 2002 (via FindArticles):

Yes, Virginia, there really is a recession - View Point - discount stores, drug store chains report good sales figure for Christmas season 2001 - Brief Article - Statistical Data Included

Drug Store News, Dec 17, 2001 by Rob Eder

[..]

While the economy may have bottomed out already, it is highly unlikely that any turnaround will be completed over the next 12 months. Consumers are going to get used to living with less and continue to respond to the strong value proposition in 2002. Drug chains may want to keep that in mind when they start thinking about next year's holiday promotions. They just might find themselves a destination for holiday gift shopping--and not just the last-minute variety.


I assume the drugstores shriveled up and died in 2002, along with everyone else...

And the recession that hit? Why it had been predicted for YEARS ahead of time, as witness by Greg Kaza in that 'recovery' year of 2004 at National Review Online, 04 MAY 2004:
“Clear Signs of Deterioration”
The Fed was worried about the economy in 1998.


By Greg Kaza

Tax-cut opponents may call the economic slide of 2001 “the Bush recession,” but the Federal Reserve was worried about recessionary indicators as far back as 1998, more than two years before President George W. Bush took office.

According to 1,065 pages of Federal Open Market Committee transcripts released in late April (after a five-year embargo), Fed chairman Alan Greenspan worried privately about deteriorating economic conditions well prior to Bush’s election or candidacy, with FOMC members repeatedly expressing concerns about the manufacturing sector.

“The economy has been holding up,” Greenspan said in a Sept. 21, 1998, teleconference, “but it is now showing clear signs of deterioration, including anecdotal indications of some softening that we are now picking up at an increasing pace.” This September meeting was called to discuss the first of three consecutive monthly reductions in the federal funds interest rate. The last time the Fed took such action was in late 1991, the year the last recession ended.

The transcripts supplement economic data that show serious problems in the private manufacturing sector well in advance of the recession, which lasted from March to November 2001.

Manufacturing employment, an important indicator, peaked in March 1998. Fed bank presidents representing districts in industrial states (Michigan, Ohio, Wisconsin, and Pennsylvania) are quoted in the 1998 transcripts discussing manufacturing problems in those regions.

At the Aug. 18, 1998, FOMC meeting, Chicago’s Michael Moskow referred to “weakness” in durable-goods manufacturing employment. Anecdotal evidence of such weakness was discussed at two FOMC meetings the following month.

“While the economy is operating at a relatively high level,” said Philadelphia’s Ed Boehne on Sept. 21, “I have sensed a notable change of sentiment in recent weeks. It had been largely in the manufacturing area, but it now appears to have spilled out into broader sectors of the economy.”
Anyone ever hear of the 'internet stock bubble'?

No?

So maybe it was just more than 9/11... or course that would leave President Clinton's policies a bit at fault. And far too much venture capitalism in the tech market and, well, a recession is just around the corner anyways.

Especially at Christmas! Economic gloom is the perfect gift for holiday cheer.

Merry Christmas!

And remember that lump of coal in your stocking is 'recession proof' as you can't go much further down than that with Santa...