As noted in the the June Cosmic Weather Forecast Part One, for many years astrologers have been predicting a series of global financial crises to begin in 2008 and contine through the second decade of the 21st century, all related to a very rare outer planet Grand Cardinal Cross, and especially, a series of Uranus-Pluto Squares. Read Part One of this month's Cosmic Weather Forecast for the complete big picture overview of this month's amazing Celestial weather patterns.
According to an article on our website entitled Clarifying the Timeline of Change: 2012 and Beyond! by Master Astrologer Bill Herbst, who has written over 100 articles on the Grand Cardinal Cross of the Early 21st Century, June 2012 is the pivotal moment when the awesome scope of the changes in human civilization we have been experiencing will become apparent to the bulk of humanity, and many more aware individuals will understand intuitively that there is no “going home again”, that the changes we are experiencing are irrevocable and that human experience of life on Earth will never be the same.
On the financial front, the impending collapse of the Eurozone, which is intensifying rapidly as the month of June 2012 begins, is a potentially game-changing event that could alter our economic relations forever on a global level.
I was a financial reporter and editor for decades, and now I have to manage my Father’s small investment portfolio since he is bedridden with advanced Parkinson’s disease and it makes for a very sobering and educational experience as I view a dozen websites devoted to financial markets every morning.
Like many of you who follow financial markets, I am aware that the potential unrest in Greece could result in the first in a series of financial defaults by European Union nations, and that Spain and Italy could be close behind. Then the UK would be weakened, and so would Germany. In fact, financial insiders know that Germany exports most of its products to its European neighbors, so if they go bankrupt, Germany will not be in for an easy time. Maybe that’s why Germany’s stock market is tanking this week, despite a robust economy and a strong credit rating.
I know that China’s economy is weak, because it too relies on exports to industrialized nations whose debt problems and increasing income inequality are destroying the middle class worldwide, and the middle classes are the people who buy China’s exports. The same is true of Brazil and India.
I know that this won’t change anytime soon because the top ten industrialized debtor nations, including the US, Germany, Spain, Italy, Greece, Japan and yes Switzerland, owe $70 trillion.
And I know that there are $700 trillion in derivative debt instruments resting upon that $70 trillion in debt. So if these countries’ debts begin to default and financial markets and banks lose confidence in the ability of counter-parties to make good on the $700 trillion in extremely complicated wagers and counter-wagers they have made to one another it’s game over! There is not enough money in the world to make that kind of loss good, paper it over, or prevent financial panic on a scale never seen in the world before.
Knowing all this, I was stunned to read a forecast by a highly regarded hedge fund manager named Raoul Pal on the Zero Hedge website.
The author says, “If Raoul Pal was some doomsday spouting windbag, writing in all caps, arbitrarily pasting together disparate charts to create 200 page slideshows, it would be easy to ignore him. He isn't. The founder of Global Macro Investor ‘previously co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul came to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe... Raoul Pal retired from managing client money in 2004 at the age of 36 and now lives on the Valencian coast of Spain, from where he writes.’ It is his writing we are concerned about, and specifically his latest presentation, which is, for lack of a better word, the most disturbing and scary forecast of the future of the world we have ever seen....”
Here are Pal’s bullet points:
- We don’t know exactly what is to come, but we can all join the very few dots from where we are now, to the collapse of the first major bank…
- With very limited room for government bailouts, we can very easily join the next dots from the first bank closure to the collapse of the whole European banking system, and then to the bankruptcy of the governments themselves.
- There are almost no brakes in the system to stop this, and almost no one realises the seriousness of the situation.
- The problem is not Government debt per se. The real problem is that the $70 trillion in G10 debt is the collateral for $700 trillion in derivatives…
- Yes, that equates to 1200% of Global GDP and it rests on very, very weak foundations
- From an EU crisis, we only have to join one dot for a UK crisis of equal magnitude.
- And then do you think Japan and China would not be next?
- And then do you think the US would survive unscathed?
- That is the end of the fractional reserve banking system and of fiat money.
- It is the big RESET.
- Bonds will be stuck at 1% in the US, Germany, UK and Japan (for this phase).
- The whole bond market will be dead.
- Short selling on bonds - banned
- Short selling stocks – banned
- CDS – banned
- Short futures – banned
- Put options – banned
- All that is left is the Dollar and Gold
It only gets better. We use the term loosely:
- We have around 6 months left of trading in Western markets to protect ourselves or make enough money to offset future losses.
- Spend your time looking at the risks of custody, safekeeping, counterparty etc. Assume that no one and nothing is safe.
- After that…we put on our tin helmets and hide until the new system emerges
And the punchline:
From a timing perspective, I think 2012 and 2013 will usher in the end.”
You need to click on the link to Zero Hedge to see the full presentation, where Pal shows charts and graphs indicating the incredible historical weakness of the global economy, which is in an unprecedented state of disarray going into this global financial storm.
Does this mean I expect total financial collapse in six months? Not necessarily. I think there could be a replay of the type of panic that surrounded the collapse of Lehman Brothers and led to the multi-trillion dollar bailout of America’s big banks and investment firms.
And I’m not alone in that fear.
Friday May 31, Robert Zoellick, “the head of the World Bank warned that financial markets face a rerun of the Great Panic of 2008,” according to an article in the UK Daily Mail newspaper.
Zoellick said: “Events in Greece could trigger financial fright in Spain, Italy and across the eurozone. The summer of 2012 offers an eerie echo of 2008.”
“If Greece leaves the eurozone, the contagion is impossible to predict, just as Lehman had unexpected consequences.”
“Eurozone leaders need to be prepared to recapitalise banks. In the eurozone, the guarantees of some national sovereigns are unlikely to be sufficient and only that of the ‘euro-sovereign’ will suffice.”
“It is far from clear that eurozone leaders have steeled themselves for this step. Eurozone leaders need to be ready,” Zoellick warned.
“There will not be time for meetings of finance ministers to discuss the outlook and debate the politics.”
“In panicked markets, investors flee to safe assets, sparking other flames,” Zoellick concluded.
A series of political confrontations will follow immediately on the Eurozone banking crisis now erupting, and continue for the foreseeable future, certainly for several acrimonious years.
The crisis will be the excuse Eurozone bureaucrats, IMF austerity technicians and right-wing billionaires need to impose an austerity agenda on all of Europe, lowering taxes on the rich and the corporations, crushing unions, gutting social programs, privatizing national assets, and destroying the middle classes. All in the name of “competitiveness”. When living standards and income inequality in Europe reach Third World levels, I suppose “competitiveness” will have been successfully achieved.
But there will be pushback, as there is in Greece, where Syriza, the left-wing party looks set to win upcoming elections.
Americans might benefit from seeing what a genuinely progressive political alternative to the two-party rule of the corpocracy in the US might look like.
Matthew Rothschild, Editor of The Progressive magazine, outlines the Syriza agenda as follows:
“This translation of the official program of the ascendant Greek left party, Syriza, just came in, and I wanted to share it far and wide,” says Rothschild. “Note how progressive and truly radical it is.”
1. Audit of the public debt and renegotiation of interest due and suspension of payments until the economy has revived and growth and employment return.
2. Demand the European Union to change the role of the European Central Bank so that it finances States and programs of public investment.
3. Raise income tax to 75% for all incomes over 500,000 euros.
4. Change the election laws to a proportional system.
5. Increase taxes on big companies to that of the European average.
6. Adoption of a tax on financial transactions and a special tax on luxury goods.
7. Prohibition of speculative financial derivatives.
8. Abolition of financial privileges for the Church and shipbuilding industry.
9. Combat the banks' secret [measures] and the flight of capital abroad.
10. Cut drastically military expenditures.
11. Raise minimum salary to the pre-cut level, 750 euros per month.
12. Use buildings of the government, banks and the Church for the homeless.
13. Open dining rooms in public schools to offer free breakfast and lunch to children.
14. Free health benefits to the unemployed, homeless and those with low salaries.
15. Subvention up to 30% of mortgage payments for poor families who cannot meet payments.
16. Increase of subsidies for the unemployed. Increase social protection for one-parent families, the aged, disabled, and families with no income.
17. Fiscal reductions for goods of primary necessity.
18. Nationalization of banks.
19. Nationalization of ex-public (service & utilities) companies in strategic sectors for the growth of the country (railroads, airports, mail, water).
20. Preference for renewable energy and defence of the environment.
21. Equal salaries for men and women.
22. Limitation of precarious hiring and support for contracts for indeterminate time.
23. Extension of the protection of labor and salaries of part-time workers.
24. Recovery of collective (labor) contracts.
25. Increase inspections of labor and requirements for companies making bids for public contracts.
26. Constitutional reforms to guarantee separation of Church and State and protection of the right to education, health care and the environment.
27. Referendums on treaties and other accords with Europe.
28. Abolition of privileges for parliamentary deputies. Removal of special juridical protection for ministers and permission for the courts to proceed against members of the government.
29. Demilitarization of the Coast Guard and anti-insurrectional special troops. Prohibition for police to wear masks or use fire arms during demonstrations. Change training courses for police so as to underline social themes such as immigration, drugs and social factors.
30. Guarantee human rights in immigrant detention centers.
31. Facilitate the reunion of immigrant families.
32. Depenalization of consumption of drugs in favor of battle against drug traffic. Increase funding for drug rehab centers.
33. Regulate the right of conscientious objection in draft laws.
34. Increase funding for public health up to the average European level.(The European average is 6% of GDP; in Greece 3%.)
35. Elimination of payments by citizens for national health services.
36. Nationalization of private hospitals. Elimination of private participation in the national health system.
37. Withdrawal of Greek troops from Afghanistan and the Balkans. No Greek soldiers beyond our own borders.
38. Abolition of military cooperation with Israel. Support for creation
of a Palestinian State within the 1967 borders.
39. Negotiation of a stable accord with Turkey.
40. Closure of all foreign bases in Greece and withdrawal from NATO
As you contemplate the vast gap between the agenda of the 1% Euro-elites and the needs of the 99%, the rest of the European people, you don’t need a weatherman to know which way the wind blows.
What’s Next for the Individual Investor?
The American response to the Euro-crisis will certainly be forthcoming before the election. The likelihood of Federal Reserve intervention is already looming large and so gold is spiking this week, as investors presume that the Fed’s interventions will lead to inflationary pressures in the near to middle term. Of course the real danger is a global depression and deflation, but markets are not predicting the logical outcome at this time because that would interfere with their ideological insistence on an austerity program that would benefit the 1% and the banks at everyone else’s expense.
I suspect there will be a flight to the dollar when the Euro project collapses, and that may not be so good for a gold spike into the stratosphere.
So I am not into buying up gold.
I would certainly not expect Facebook, or even Google or Apple, to provide exciting returns this year or next.
I would also expect that energy stocks, oil companies, natural gas companies, and commodities plays that have had their moments in the sun over the last few years will be vastly underperforming because people are baking the Euro-disaster into their projections, and the markets are also very nervous about the coming political crisis in America that will be triggered by the contentious issue of raising the debt ceiling.
Here in America there is the imminent expiration of the Bush tax cuts and the potential for automatic spending cuts thanks to previous Congressional actions that could result in trillions of dollars of new taxes and trillions of dollars of new spending cuts next year that would cut America’s financial recovery, such as it is, off at the knees.
Although it is likely that some compromise will be reached on these issues, the fact that America’s political classes can no longer deliver the most basic economic policies needed to prevent total financial chaos without creating bloody sectarian warfare - warfare where the potential for a single mistake could lead to the collapse of America’s role as the global financial hegemon - has really ticked off financial markets.
I know I’m not too happy about it, and I blame both parties. So do the financial markets.
So the elections are not likely to give the global economy a bump either. And do I trust the banks as repositories of my wealth? Ha ha.
Generally speaking, you can expect governmental agencies and central banks, along with the IMF and World Bank to bend over backwards to recapitalize tanking banking giants as they have done to date, saddling taxpayers of all industrialized countries with a bill beyond reckoning.
US Banks already have trillions of dollars of zero interest money from the government shoring up their balance sheets and they must invest that money somewhere. Hedge funds and investment banks are investment whales and vampire squids hungry for the scent of high yield, which to them is like blood in the water.
So over the last few years of financial crisis, a tsunami of this “hot money” has poured into a series of bubbles in gold, Treasury bonds, commodities, energy stocks, Apple computer stock, and so forth. After a few quarters, money managers reset their computer programs to take profits and then go seeking the next emerging bubble.
You can expect that trend to continue, pumping up certain classes of investment vehicles into bubbles then deflating them, every few months in markets around the world.
There is plenty of volatility in today’s languishing, deflation-driven chaotic global marketplace for professional traders with sophisticated computer programs to make money via very short term trading.
As for individual investors, bond yields are down, stocks are going up and down like yo-yos in a sideways market, indexes are flat to declining, annuities are more and more costly, and cash in the bank yields virtually nothing. Gold and silver are also prone to ups and downs that make them less than the stable store of value investors might prefer, much less a profitable source of yearly appreciation.
So there’s a lot to think about on the financial front. I am seeking guidance in meditation, and preparing to support a popular insurrection against the two-party duopoly that currently runs this country for the benefit of the 1%, the multi-national corporations, and the celebrity elite.
So I can’t offer you a list of safe, profitable investment ideas today. I recommend that the investor’s number one priority is simply to try to preserve capital. One can only hope that you don’t have to liquidate holdings in the next few years, or that if you do need to obtain income from investments that you have a portfolio well-balanced between carefully chosen safe dividend stocks, bonds, cash and gold and that you can liquidate a little at a time as needed during the coming financial storm, which could last for many years. With luck, you can pick an investment that is appreciating at the time, and sell high, while the rest of your portfolio is languishing in either a sideways or down market.
Oh yes, I did get some guidance for our personal situation and Jane and I are investing big bucks in a major upgrade of the Satya Center website and our crystal business. We have the understanding that people will need what we have to offer more than ever and we look forward to being of service!
Part 3 of the June 2012 Cosmic Weather Forecast concerns the meltdowns at the nuclear reactors in Fukushima, Japan -- another Plutonian catastrophe that has been linked to the ongoing Cardinal Cross and the pattern of Uranus-Pluto squares which began several years ago and is intensifying massively this month.
Scientists worldwide are now beginning to realize that there is tremendous danger of another earthquake in the Fukushima area, another set of nuclear meltdowns, and risk of major contamination of Japan, the Pacific Ocean, and the entire Northern Hemisphere.
Read all about it in Part 3 of this month's Cosmic Weather Forecast.