The US economy

Is ‘Fiscal Cliff’ Already Wreaking Havoc with Economy?

New economic data  isn’t pretty. And Larry Kudlow fears it’s going to get much worse.

CNBC,

27 September, 2012

He thinks the looming “fiscal cliff” has already started to do serious damage to the economy, and worries the damage could get much worse, with Congress ultimately driving Corporate America right to the edge.

The fiscal cliff, or confluence of tax hikes and spending cuts that could go into effect as soon as January, 2013, has generated bickering among Republicans and Democrats alike, with both sides all but refusing to address the issue until after the election.

And Larry Kudlow firmly believes months of negotiations are still needed to resolve the “fiscal cliff.” That doesn’t bode well since there are only 3 months left in the year.

If Kudlow’s interpretation of the latest durable goods numbers is on target, the uncertainty has already taken a toll.

According to the Commerce Department, new orders for durable goods or long-lasting manufactured goods fell by the most in 3-1/2 years last month. That’s the largest drop since January 2009, when the economy was in the throes of a recession.

Business is getting defensive and not buying big ticket items, says Kudlow, simply because they don’t know what to expect.

As the situation stands now, unless Congress acts $109 billion will automatically be cut from Federal spending with military programs taking a big hit.

Republicans, however, want to cancel most of the military spending cuts and mandate more reductions to domestic programs,.

On The Kudlow Report Andrew Liveris, the CEO of Dow Chemical cited the fiscal cliff as one of his chief concerns about doing business.

Faber Warns “Everything Will Collapse”

Money Morning,

2 September, 2011

Famed economist Marc Faber appeared on Bloomberg TV with a harsh, direct warning to investors.

"U.S. monetary policies will destroy the world," he said, referring to the new round of stimulus - QE3, or "QE Forever" - the Fed plans to launch this year.

As the publisher of the influential Gloom Boom & Doom report, Faber is well-known for making ominous predictions. Many regard him as the first to warn investors to get out of the stock market one week before the October 1987 crash.

And since the 2008 meltdown, he's been a fierce critic of the Fed's policy of money printing, arguing it only creates a phony recovery.

So it wasn't surprising to hear him speak out against Bernanke's most recent stimulus plan, quantitative easing or QE3.

What was surprising - and frightening - was the level of wealth-destruction he believes will occur.

According to Faber, "eventually we will have a systematic crisis and everything will collapse."

Faber couldn't pin down the timing of his alarming prediction, but said the bigger concern wasn't when the economic storm will begin, but how high the market will go until then.

"The question is really between here and then," he said. "Will everything collapse with Dow Jones 20,000 or 50,000 or 10 million? Mr. Bernanke is a money printer and, believe me, if Mr. Romney wins the election the next Fed chairman will also be a money printer. And so it will go on."

Faber's not alone.

A group of his economic peers agree that with more central bank action like QE3, global economic collapse is imminent.

In a newly released documentary that went viral last month, a team of influential economic experts say they have discovered a "frightening pattern" they believe points to a massive economic catastrophe unlike anything ever seen.

And according to these experts - who have presented their findings to the United Nations, the UK Parliament and a long list of world governments - the catastrophe may happen well before Americans hit the polls in November.

The work of this team garnered such attention, they were brought in front of the United Nations, U.K. Parliament, and numerous Fortune 500 companies to share much of their findings. Click the video above to see a sample.

"What this pattern represents is a dangerous countdown clock that's quickly approaching zero," said Keith Fitz-Gerald, the Chief Investment Strategist for the Money Map Press, who predicted the 2008 oil shock, the credit default swap crisis that helped bring about the recession, and the Greek and European fiscal catastrophe that is still wreaking havoc until this day.

"The resulting chaos is going to crush Americans."

Another member of this team, Chris Martenson, a global economic trend forecaster, former VP of a Fortune 300, and an internationally recognized expert on the dangers of exponential growth in the economy, explained their findings further:

"We found an identical pattern in our debt, total credit market, and money supply that guarantees they're going to fail," Martenson said. "This pattern is nearly the same as in any pyramid scheme, one that escalates exponentially fast before it collapses. Governments around the globe are chiefly responsible."

"And what's really disturbing about these findings is that the pattern isn't limited to our economy. We found the same catastrophic pattern in our energy, food, and water systems as well."

According to Martenson, these systems could all implode at the same time.

"Food, water, energy, money. Everything."

Dr. Kent Moors, one of the world's leading energy analysts, who advices 16 world governments on energy matters and who currently serves on two State Department task forces on energy, also voiced concerns over what he and his colleagues uncovered.

"Most frightening of all is how this exact same pattern keeps appearing in virtually every system critical to our society and way of life," Dr. Moors stated.Do these charts and graphs prove that the Obama administration's current economic path is headed for disaster?

"It's a pattern that's hard to see unless you understand the way a catastrophe like this gains traction," Dr. Moors says. "At first, it's almost impossible to perceive. Everything looks fine, just like in every pyramid scheme. Yet the insidious growth of the virus keeps doubling in size, over and over again - in shorter and shorter periods of time - until it hits unsustainable levels. And it collapses the system."

Martenson points to the U.S. total credit market debt as an example of this unnerving pattern.

"For 30 years - from the 1940s through the 1970s - our total credit market debt was moderate and entirely reasonable," he says. "But then in seven years, from 1970 to 1977, it quickly doubled. And then it doubled again in seven more years. Then five years to double a third time. And then it doubled two more times after that.

"Where we were sitting at a total credit market debt that was 158% larger than our GDP in the early 1940s... By 2011 that figure was 357%."

Dr. Moors warns this type of unsustainable road to collapse can be seen today in our energy, food and water production. All are tightly connected and contributing to the economic disaster that lies directly ahead. Is Something Worse Than The Great Depression Waiting For Us?" See the investigation here.

According to polls, the average American is sensing danger. A recent survey found that 61% of Americans believe a catastrophe is looming - yet only 15% feel prepared for such a deeply troubling event.

Fitz-Gerald says people should take immediate steps to protect themselves from what is happening.

"If our research is right," says Fitz-Gerald, "Americans will have to make some tough choices on how they'll go about surviving when basic necessities become nearly unaffordable and the economy becomes dangerously unstable."

"People need to begin to make preparations with their investments, retirement savings, and personal finances before it's too late," says Fitz-Gerald.