PIIGS, Presstitutes, and the Global Meltdown

Lew Rockwell

by Gerald Celente

Read All About It!" You couldn’t not read all about it! The media was full of reports about how happy stock market days were here again. After a stormy start, June closed and July began with US benchmark indexes racking up their biggest weekly gains in two years on good news: the US manufacturing index had unexpectedly risen, and the beleaguered debt-burdened Greeks were bailed out yet again – piling un-payable new debt on top of un-payable old debt.

Yes, there was some concern, but, as The New York Times reported on June 25th, "Two years into the official recovery, the economy is still behaving like a plane taxiing indefinitely on the runway. Few economists are predicting an out-and-out return to recession … analysts generally expect the economy to pick up in the second half."

The economists were forecasting strong job growth for June. But two weeks later, when the numbers came in, the Bureau of Labor Statistics reported that only 18,000 jobs had been created – not the 125,000 jobs projected … by those same economists who were also not "predicting an out-and-out return to recession."

Accordingly, without missing a beat, the Times changed its tune – writing new words to replace the old words they would never be forced to eat:

Feeble Job Numbers Show Recovery Starting to Stall

Defying Economists Forecast for Hiring, Unemployment Creeps Up to 9.2% 

For the second consecutive month, employers added scarcely any jobs in June, startling evidence that the economic recovery is stumbling … The government also revised downward the small gain for the previous month to 25,000 new jobs, less than half the original estimate. (The New York Times, 9 July 2011)

"Dismal Jobs Data Rock US Recovery" and "Worries Grow Over Jobs," read the respective headlines in the Financial Times and Wall Street Journal on July 9th, dissipating the air of optimism that had recently rallied equity markets. 

"Employment!" More than factory orders, GDP, corporate profits, retail sales, durable goods … employment was the one big number that counted. There was no way to spin the consequences of 18,000 mostly low paying health care and hospitality jobs into the hopeful message implied by the 125,000 jobs forecast by most economists.

The equation was simple; the more people out of work, the less they consume. And in the United States, where consumer spending accounts for an estimated 70 percent of the GDP, without increased consumer spending, the economy was again recession bound.

Virtually overnight, one dire employment report unraveled two years’ worth of government spin and media complicity. In April 2010, Vice President Joseph Biden promised, "we're going to be creating between 250,000 jobs a month and 500,000 jobs a month." And in August 2010, Treasury Secretary Timothy Geithner declared that the "actions we took at its height [of the crisis] to stimulate the economy helped arrest the freefall, preventing an even deeper collapse and putting the economy on the road to recovery."

But almost a year later, talking on "Meet the Press," two days after the devastating employment data was released, the new, revised Geithner forecast was, "Oh, I think it’s [the recovery] going to take a long time still. This is a very tough economy. And I think for a lot of people it’s going to be – it’s going to feel very hard, harder than anything they’ve experienced in their lifetime now, for some time to come."

Like the Biden boast long-buried and un-exhumed, the Geithner statement, a direct contradiction of his former projection went unchallenged, given the usual free pass by the "Meet the Press" Presstitutes. 

There was, and is, no "return to recession." As The Trends Research Institute had been forecasting since the onset of the Great Recession and the "Panic of ’08," all those "bold actions" proudly cited by Geithner were no more than financial Prozac – multi-trillion-dollar band aids, palliatives, placebos and cover-ups packaged as TARP, the American Recovery and Reinvestment Act, QE2, and so on. At best, the "bold actions" merely guided the Great Recession into a brief remission, and that is all. 

Global Ponzi It was a cover-up, not a recovery. And while the US may have been the first, it was not the only nation to try to fraudulently finagle its way out of a crisis and into prosperity. Like the US bailouts, the Greek survival package – praised as an important stopgap success only last week – has neither guaranteed keeping the Greek banking system afloat nor guaranteed it won’t default. 

Now Italy has caught the contagion. Fattest of the PIIGS (acronym for Portugal, Ireland, Italy, Greece and Spain) – the eurozone’s third largest economy – with its 120 percent public debt to GDP ratio, Italy is bleeding red ink all over its balance sheet. Borrowing more to service its debt load and imposing draconian austerity measures to reign in government spending will, at best, provide a respite from the financial crisis … or, at worst, foment a revolution. (See, "Off With Their Heads, 2.0, Trends Journal, Autumn 2010) 

Then there’s China, who panicked when the "Panic of 08" blew out their export driven economy, and, like the West, used cheap credit and huge stimulus packages to prevent a major economic contraction. While China’s crisis differs from the West’s in that it has large currency reserves and its debt is homegrown and home-loaned, it’s still debt and has to be repaid. 

And unlike the West, which pumped trillions into just keeping its economies afloat, the Chinese multi-trillion yuan infusions have created an immense, ready-to-pop property bubble. But this time, like the West, there will be no available fiscal or monetary government policies to re-inflate their faltering economy. 

And as goes the US, Europe and China – so goes the rest of the world. From India to Israel, Brazil to Bangladesh, Chile to Russia, no nation will escape the economic fallout and few will escape the political consequences. 

Yet, despite the widely available economic facts and the ample evidence of faulty forecasts and failed government policies, the mainstream media continues to sell the public the big lie. By providing cover for the politicians and financiers, the Presstitutes of the world – with their stable of "well respected" pundits – are accomplices in promoting the egregiously transparent cover-up as a "recovery."

Trendpost: After descending to $1,480 less than two weeks ago, as this is written, gold is flirting with $1,600. We see this surge as a recognition of the greater financial and socioeconomic collapse we have been forecasting since the onset of the "Panic of ’08." We hold to our forecast of "Gold $2,000," and depending on how the coming crisis unfolds and the responses to it made by governments and central banks, $2,000 may prove but a temporary ceiling before climbing higher.

Gerald Celente is founder and director of The Trends Research Institute, author of Trends 2000 and Trend Tracking (Warner Books), and publisher of The Trends Journal. He has been forecasting trends since 1980, and recently called “The Collapse of ’09