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Are we in a Depression?

Bob Moriarty
Jan 30, 2009

I was in Vancouver at the first of the week. Joe Martin had me on a panel at his January Gold show. I got a lot of questions while I was there about the state of the economy that is obviously on the minds of many.

And then Ken Gerbino did a piece on Tuesday listing the reasons there would not be a depression. I have a world of respect for Ken; he's a friend and a very astute guy. In this case, he happens to be dead wrong.

Readers should understand first of all, there is no definition for either recession or depression; they are variations of the same thing. So someone could rightly argue that the Great Depression wasn't really a Great Depression but more of a Great Recession on Crack. There is no line in the sand as it were.

In 1932 we were the world's greatest creditor nation. Today we are the world's greatest debtor nation. Anyone who can read has known since 2001 when Treasury Secretary Paul O'Neil released his study on the state of US finances that we are essentially bankrupt as a nation. At that time we were some $43 trillion in debt. It's more like $100 trillion and growing daily now.

According to the BIS, there are $683 trillion dollars outstanding in derivatives worldwide. That's 11 times the world economy and still growing at a pace 300% faster than the economy. Why do we have $100,000 in derivatives for every man woman and child on earth? That's nuts.

John Williams of Shadow Government Statistics shows that the real unemployment rate as of today is over 17%. I see it going up to over 30% before we hit bottom. The government claimed unemployment increased by 525,000 in December, the real number was 975,000. On Monday of this week, as I was speaking in Vancouver, unemployment in the US increased an incredible 75,000. In one day.

Are we in a depression? Are you kidding?

It's going to get ugly. There are riots all over the world even now. Rioters have forced the government of Iceland to resign; Greece went through weeks of riots after police shot someone. When some minor incident takes place in Detroit or Chicago or Washington DC or Cleveland in the next couple of months, we can safely predict police will overact and start shooting people. But unlike Iceland and Greece, Americans are armed. It's going to get very ugly.

Gerald Celente of Trends Research predicts a revolution in the US. He's not wrong. We are involved in two incredibly stupid wars in which we stand to win nothing except bankruptcy. It was the involvement of the French in the American Revolution that led to the French Revolution when the Crown went bankrupt. We are in far worse financial shape today.

And we are financing yet another silly war on the part of Israel in Gaza. In 22 days of carnage, the Israelis managed to kill the same as 300,000 Americans if you consider we have 200 times the population. They attacked the concentration camp that they had created with the most deadly weapons available today. They accomplished nothing except to prove to the world once again that they are a rogue state who totally ignores all the rules of warfare. They have turned into what they most fear.

We are paying for 2.5 stupid wars. If Obama wants a real economy he needs a real monetary system and we need to stop fighting stupid senseless wars.

Jan 30, 2009
President: 321gold

321gold Ltd