[+ Font] :: [- Font] :: Printable

American Dreams; Personal Stories; the Next Phases of War

Written and published by Warren Pollock
pollock.warren@verizon.net
from The Macroeconomic Newsletter

June 21st, 2005

Warren; You're going to get yourself labeled "anti-American" or "seditious", writing stuff like this. I assume you've noticed this infantile trend? Pointing out the increasingly apparent, and calling it by its proper name, puts you right in the firing line. Jeremy

At this point, the specter of an economic slowdown looms in the near distance, ready to sweep down upon us. Yet even at this early juncture towards downturn, stories from the economic walking dead abound. The people I am talking about reside in the shadows of the middle class. They are wraiths, ghosts.

The walking dead shamble down the aisles of Walmart, looking not for cheap Chinese consumer goods but instead for sustenance, foodstuffs. These people cannot afford a $67 air conditioner, or the power to run it. In food’s stead they will encounter product from the merchants and lobbyists heralding death, the great food processors, Conagra, Tyson, and others. The ghost of America past clutches desperately for the name brands of a middle class existence.

A woman in her thirties with three children. Her husband, recently deceased, took with him in death their access to affordable health care. With a sub-par job and social security for her children, she earns too much to qualify for health insurance or social benefit. A World War Two veteran, who survived battles in North Africa and Messina, anticipates a time in the near future where the security blanket that he earned in the form of pension and military benefit will be ripped from him in its entirety. Over the last few years he has seen his safety net shrivel and shrink, with only vestiges remaining.

A person fired from her job, their son needing open-heart surgery. The family made the choice to exhaust their savings to pay for health insurance.

In contrast we have another family, the “haves,” living a leveraged existence by supersizing their primary residence and flipping houses. To the consumption-driven, a home equity spiral can be a wonderful thing. Unfortunately for them, the “house rich” have built their fantasy on the theory of the “greater fool.”

The personal stories I have told disclose to you a trend: contraction. In credit contraction, fraud will hatch out. It’s been very interesting that government has been an active partner in facilitating and extending to the people a real estate boom. It is a Ponzi scheme; a fraud-scheme timed to the advent of war.

It is not surprising, because the economics and politics of war are bedfellows of the same dynamic, which is failure. The quality of economic activity has been poor, but the boom has been used as a tool to cloud reality. War and economic failure are synonymous.

In the first phase of this war (December 1992 to August 2001), Americans were entirely unaware that something in the political fabric of global trade was seriously amiss. Our first reckoning of change was in September of 2001, since when chaos has remained peripheral.

An oil analyst I speak too, a person with experience on the ground in far-off foreign lands, finds it curious that oil inventories are well above the norm. To him, this inventory build suggests that the informed are hoarding in advance of an event. The next phase of the war, when it arrives, will not be transparent or peripheral.

(Oil should get a bit tired now. It needs to find $53. It could find $53 through $65.58, or it could simply retrace from here. Should and will are two different things, see oil chart next page for the larger story.)

Dictatorial interests use the forces of conflict to concentrate anger away from themselves. Lobbyists for special interest groups, both corporate and religious, have become so intractably entrenched in our governance that we live under a new type of despotism. So destructive has the force of tyranny become that we are legally obligated to cast it off. However, American tyranny has no identifiable center and will not easily be toppled.

The only hope for America resides across the valley of conflict and hard economic circumstance. The majority – “the people” – are not attuned to reality. They are clutching a fantasy. The economic ghosts among us, the wraiths of America past, will be ignored until the reality of desperation becomes universal. Desperation will be used as a tool to concentrate power, to control the ignorant and the surprised.

I do not fear a severe economic event. Americans, and America, can afford to be poor. Tyranny on the other hand cannot be afforded favor. Alas, in the modern age we cannot assign culpability to King George III.

Written and published by Warren Pollock
pollock.warren@verizon.net

June 21st, 2005

This generalized publication seeks to discuss macroeconomics, technical analysis, investing theory, politics, news and markets. It does not provide specific advice to any individual. It is our recommendation and opinion that individuals seek the counsel of a licensed financial adviser who can design a plan appropriate to specific financial conditions, objectives and risk tolerance. The publisher of this newsletter may purchase, hold, and dispose of positions in financial instruments discussed herein at will.

Subscriptions are billed at USD 1,450 per calendar year (CAD 1,800 for Canadian residents). Subscribers will be e-mailed at least 26 issues per year. Newsletters are published to the tempo of events. Payment can be made either by Paypal (www.paypal.com) to the publisher at pollock.warren@verizon.net or by check made out and mailed to Warren Pollock at POB 413, Garrison, NY 10524.