Tuesday, February 16, 2010

RED ALERT: Next debt crisis near!

by Martin D. Weiss, Ph.D. 02-15-10

One year and five months ago — armed with a 92-page white paper and 59,000 petitions — we warned Congress about the grave danger of government bailouts.

To view the video of my presentation at the National Press Club, click here. To download the white paper, “Dangerous Unintended Consequences,” click here.

And to understand how this is likely to impact your investments this year, please listen carefully to what I have to say now about the NEXT major debt crisis — this time hitting soveregn governments …

The Spreading Rot

In a debt crisis, Washington, Wall Street and European governments still seem to think that the only way to “restore investor confidence” is to pump in massive amounts of rescue capital, bail out the sinking ships, and plug the biggest leaks in the system.

But they accomplish little more than spreading the bad debts from one place to another. And recent history has proven, ad nauseam, that the relief they provide is pitifully short-lived … while the toxic material they spread is inevitably lethal.

Yet, despite everything, few have recognized the historical patterns that have emerged:

Pattern #1
The stampede to risk is a herd phenomenon.

Pattern #2
Greed breeds corruption. To keep the party
going, companies and governments dress up
the numbers, hide the facts, or simply lie
through their teeth.

Pattern #3
Inevitably the truth is revealed,
setting investors on a selling frenzy.
Like predators, they first attack the
weakest, at the periphery of the herd.

Pattern #4
The bailouts merely helped
spread the rot.

The most important pattern of all:
Until and unless excess debts are liquidated,
the disease cannot be subdued. It will merely
return at a different time, in a different form.
Next to feel the pain: Sovereign nations!

Chris Hedges: Fighting corporate rape of US

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