Optimism Opium

In an Op-Ed piece in The New York Times (October 16, 1998), Gerald Celente predicted that government intervention to rescue "private corporations deemed ‘too big to fail’," would result in the demise of free-market capitalism.

Back then he called it "Capitalism for Cowards."

Today it’s called stimulus programs and rescue packages.

Back then, Celente warned the bailouts wouldn’t work.

Today, Celente repeats the warning … they still won’t work.

Back then, the government warned that if Long Term Capital Management, a hedge fund, was not rescued, the global financial markets would implode.

Today, with the markets imploding, the government warns that if favored banks, brokerages, leverage buyout firms, insurance companies, etc. are not rescued, the global economy will collapse.

Back then, Gerald Celente accurately forecast, "The global contagion may be temporarily suppressed by doses of monetary amoxicillin, but when an outbreak recurs, it will be in a bailout-resistant and far more virulent strain."

The global contagion was suppressed, the outbreak has recurred, and the more virulent strain is upon us. And, as Celente predicted, it is proving bailout resistant.

Today, Celente forecasts that no amount of monetary amoxicillin can cure the spreading virus.

Trend Warning #1: What’s being pitched today by the government has been tried before. It didn’t work then, and it won’t work now.

Following the Group of 20 summit, Barack Obama, while acknowledging there are no guarantees of success, declared, "I have no doubt, though, that the steps that have been taken are critical to preventing us sliding into a depression."

Given that President Obama cannot provide guarantees, how can he "have no doubt"? Moreover, all of the bailouts, rescue packages, stimulus plans that he has supported/and or initiated to date, have already failed. And since the new plans are but variations upon tried, tested and failed policies, they, too, are destined to fail. The G-20 will not be a "turning point" and while the steps taken may slow, they will not prevent us from "sliding into a depression."

Trend Warning #2: Don’t be seduced by temporary equity market spikes or leading economic indicator upticks. Be especially wary of pitchmen claiming the markets have bottomed and headlines insinuating that the worst is over ("Car sales not as horrid in March" and "Investors jump on good financial news," USA Today, 2 April 2009).

What is being sold as "good financial news is, upon examination, news that is marginally less dismal than expected. Nevertheless, for insiders and professional gamblers, there will be opportunities to briefly ride the market waves.

There may also be ephemeral selling opportunities following accounting rule changes allowing banks to set their own prices for assets regardless of market values, and thus dramatically reduce their losses. This is not a step to recovery. This little reported Financial Accounting Standards Board (FASB) ruling is accounting flimflam, a capitulation that allows banks to set values to their own toxic assets.

Pessimism Porn

Back in 1998, Gerald Celente was virtually alone in forecasting both increased government intervention, its inevitable failure and its catastrophic consequences. In the midst of the dot.com euphoria, with markets flying high, fortunes being made and optimism pandemic, any negative vision was ignored or sloughed off as gloom and doom.

Today, with every element in that decade-old forecast a daily reality and making global headline news, derision has replaced neglect. No longer able to dismiss, they attack. First it was TV clowns, now it is equally unqualified commentators.

Unwilling to face inescapable realities themselves, they try to deflect the public’s attention away from uncomfortable truths with unhappy endings. In his New York Times Op-Ed piece, Ben Schott, having cited Celente for correctly forecasting "The Asian Crisis and other calamities," sneers away his current predictions as "Pessimism Porn." (NYT, 26 March 2009.)

Presumably, Schott is more comfortable with the exhortations to Hope, Confidence and Optimism delivered by the Confidence-Man-in-Chief and his cadre of boosters. But if we are purveying "Pessimism Porn," Schott & Co. are peddling "Optimism Opium."

This pernicious panacea anesthetizes the public. "Optimism Opium" dulls the pain – lost jobs, foreclosure, financial ruin – relaxes anxiety, decreases alertness, impairs coordination, and is highly addictive. Repeated or chronic use results in mental deterioration. Overdoses can result in stupor, coma and death.

America is facing crises far beyond the financial. The implications are momentous. We are witnessing the decline of Empire America.