STAFF NEWS & ANALYSIS
Crackerjack Global Analysis or Analysis on Crack?
By Staff News & Analysis - January 14, 2013

Save? Party like it's 2013! … Economic forecast for 2013: Forget the fiscal cliff, this is the year to spend, spend, spend … If the words 'fiscal cliff' send you into a comatose state, fear not, help is at hand. Here, TNT is going to explain in layman's terms the economic forecast for 2013. No, we haven't gone all Financial Times on you, but if you want to make sure you get more bang for your buck while travelling, or if you'd like to know where to head for work to fund your global jaunts, read on; this is your essential guide. 2012 was full of doom and gloom; increased unemployment, austerity cuts, double-dip recessions … you get the drift. However, 2013 marks a new dawn – it's the year to party and spend, spend, spend. – TNT Magazine

Dominant Social Theme: The good times are here again!

Free-Market Analysis: This is one of the stranger articles we've read in a while, and it is published in TNT Magazine, which is one of the first-ever "expatriate" magazines for readers in such countries as Australia and South Africa.

The gentleman providing the financial analysis is "economic guru Clifford Bennett," and to call his forecast "upbeat" is a bit like calling Liberace an "emotional pianist." This is financial analysis on "crack," to put it mildly – in our humble view, anyway. And yet it is a mainstream variant of an economic meme. We looked at a number of 2013 forecasts and while they are far more subdued, they say basically the same thing.

Reading mainstream forecasts, many of them anyway, that appear on the Internet or in popular publications, you'd never know that Spain's unemployment rate was 35-50 percent or that the Middle East was embroiled in about five serial wars (secretly backed by the West).

No, the prevailing tone of many general analyses we've read is modestly upbeat. Which is weird. The world is only five years removed from the greatest financial disaster since the 1929 stock crash and subsequent depression. To advocate that a recovery is on track seems to us to ignore the ongoing weaknesses of many regional economies around the globe.

Perhaps it is instructive that there's only one significant comment on the article – a kind of bemused yelp from a feedbacker named Kraken, who writes plaintively, "Are these guys for real?" We had the same question. Here's a bit more from the article:

Only a week in and things are already looking up for the new year, with even the "negative" International Monetary Fund expecting global growth to accelerate to 3.6 per cent – although Bennett, chief economist at White Crane Reports believes this could be as high as 4.2 per cent: "The outlook for 2013 is better than many suspect."

He adds: "Do not expect more spending cuts. Even the oldies at the top of politics and central banking are finally starting to recognise a balance is needed between getting government debt down and keeping the economy going, for which read 'voters still being prepared to play along'.

"So austerity has been established, and will be maintained or slightly softened, but things will not get any tougher." He cites growth at 3.1 per cent GDP in the US as an indicator, saying despite the fiscal cliff being dealt with "clumsily", the States should have a strong recovery year.

As for the rest of the world, Bennett adds: "China and Asia generally are already in re-acceleration mode.

"There is no doubt that with China ready to make the next big move, that is to urbanise central China after the success on the eastern coast, that demand for commodities and fashion labels will intensify.

"Latin America is stabilising, and about to surprise with a strong take off again in the first half of 2013. Even Europe will muddle through as usual, and could surprise as a bright spot of the global economy in the second half of the year."

"European travellers are going to have a fantastic year in terms of both choice and value," explains Bennett.

"The euro will surprisingly be one of the strongest currencies in the world. This is because everything negative, all the bad news, that could be thrown at the euro already has been.

"It is a little like a beach ball in the pool, it just keeps bouncing back, and this year with the US struggling to do much at all about its own debt problems, the hard work Europe has done over the last few years to get its house in order will begin to be fully appreciated.

It goes on like this. Grant that it is written for the "expatriate traveler"; nonetheless, there is something almost gruesome about the celebratory tone.

Sure, in Europe, for instance, certain travelers will do well in places like Spain and Portugal. But this is only because those economies are so damaged that anyone with money is bound to be treated like a king.

Again, however, if one adjusts for the strangely manic optimism, what this article is preaching is not so far from the mainstream perspective, which is being ladled out at the beginning of 2013 with a kind of subdued determination.

One gets the feeling that prognosticators would like to write an article such as this one if only they could. Their innate common sense is getting the better of them but, nonetheless, this article, we'd argue, provides a template for an underlying theme.

Mainstream economic projections are ALWAYS optimistic. The mainstream analytical shops and media are bought and paid for by the powers-that-be, what we call the "power elite." This intergenerational elite apparently controls central banking around the world and thus has an unlimited supply of money with which it is building formal, global government.

The bulwark of global government is the central bank. Without it, the funding necessary to carry out this enormous sociopolitical terraforming would be lacking. And thus, those in charge of the world's central banking economy are going to do everything they can to ensure that a positive profile emerges.

In fact, the US is yet mired in a terrible financial bust – with up to 30 percent or more of an able-bodied workforce unable to find suitable employment. Europe is even worse, while economies such as those that compose the so-called BRICs are facing barely controlled price inflation, with all the possible social unrest that entails.

The "developing world" is worse off still. Malnutrition and disease are ubiquitous and violence is endemic. This is the larger world, generally, that this article proclaims is "booming."

Again, this article is only an extreme example of the perspective that the mainstream media has cautiously adopted. It is a kind of meme gone mad but one that nonetheless expresses Money Power's greater certainty – that things in many ways are swell, growth has returned, etc.

The media's happy talk influences each of us … and we used to have only our own reality as a counterweight. But now, thanks to what we call the Internet Reformation, we can better understand the Way the World Really Works.

And here is the central conclusion: Monopoly central banking is NOT an ideal solution. It drives great booms and then subsides into greater busts that tend to bankrupt those who trusted the evanescent boom.

This boom/bust cycle is always ignored by the mainstream media. But the biggest lie of THIS "recovery" has to do with what comes next. Central banks around the world have pumped something like US$50 trillion into various economies to try to salvage what is left of the dollar reserve system. This astronomical sum is never mentioned when one is exposed to the happy talk regarding the current "recovery."

Unfortunately, this almost impossible-to-comprehend sum will circulate at some point, causing central banks to raise rates and choke off the "recovery" just as it is getting started.

Perhaps, as the powers-that-be wish us to do, we should surrender to the seductive narrative that the world generally is engaged in a central-banking led recovery and all is right with the larger economy. That's surely what we are supposed to think.

After Thoughts

Yes, let the good times roll … while in the distance, Bethlehem's beast slouches toward us. The cataclysm has not yet arrived. It is delayed, but that doesn't mean that "sound monetary policy" has denied its eventual immanence.

Posted in STAFF NEWS & ANALYSIS
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