2008 - Looking Back

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The Solari Report – 26 Dec 2008

 

The global financial bubble burst in 2008 — and that’s a good thing. It means that the bubble economy will stop draining the real economy. Instead of capital being invested in fraudulent mortgage securities, derivatives portfolios, and companies running black-box ponzi schemes, perhaps it can be used to finance real solutions to the problems before us. Now we can talk about the real world and real issues: there are many worth addressing.

The big question of 2008 is “Where is the money?” It just keeps disappearing. There was $4 trillion plus that disappeared from the US government between 1998 and 2002 along with the pump-and-dump of the Internet and telecom stocks and Enron. Since then and into 2008, funds keep disappearing into the Afghanistan and Iraq campaigns. Now we have $700 billion in bailouts and $7 trillion plus in loans by the Fed, not to mention the $5 trillion in mortgage market liabilities assumed by the Federal government with the passage of the Housing and Economic Recovery Act of 2008. The fraud in the US mortgage bubble was clearly enormous. But, where did all the money go?

The global financial meltdown that some market pundits predicted hasn’t happened. Instead, the “Slow Burn” continues. But, investor losses have been significant. The result has been an outbreak of healthy distrust which has resulted in the freezing up of the global financial system. Because they are not leveraged, pension fund losses have been relatively quiet. Look for reports regarding pension fund performance to have a profound impact in 2009.

What this all adds up to is financial coup d’état. Trillions are being stolen through the financial system in a manner that centralizes wealth, leaving governments bankrupt but with bigger budgets to assert control over the wider population. Not surprisingly, this leaves economies ever more dependent on defense and enforcement spending as the infrastructure of central control grows.

One of the biggest stories in 2008 was the continuing censorship of stories about manipulations harmful to our health, including chemtrails, the efforts to control the food and seed supply, and the ongoing suppression of energy technology. Watch for a continued failure of traditional media in 2009 … and a continuing loss of market share due to public disgust at such censorship. Go, Wikileaks!

The Good News
One of the few good investment categories in 2008 was building local self-sufficiency. From the success of the Financial Permaculture conference in Hohenwald, Tennessee to the rapid spread of Transition Towns around the world, to the spreading of participatory budgeting from Latin America, efforts by local communities to re-localize are very encouraging. The logical response to uneconomic centralization is to look for ways to decentralize. Despite all the difficulties in the economy, entrepreneurs doing natural home building, farmers markets, starting farms, installing solar energy and weatherizing homes enjoyed a market moving their way. These efforts will continue to grow well beyond any shakeout.

In this week’s Solari Report (Friday, December 26), I’m doing a year-end “wrap-up” looking back at events in 2008 and discussing what they mean to our future. Here’s an outline:

– The Slow Burn
– Bailouts: Where’s the Money?
– Financial Coup d’état
– The Crash in Commodities: Temporary or Permanent?
– The Freezing Up of the Global Financial System
– Election 2008: The First Billion Dollar Candidate
– Russia, China, and the Middle East Rising
– Pension Fund Time Bomb
– The Shake-Out Moves into 2009

You can learn more about The Solari Report and subscribe here. We’ve completed (2) reports thus far and subscribers can access our complete archive of MP3 files.

I hope you’ll join us.

Note: Solari Report subscribers can now listen to Catherine’s discussion of this topic via MP3 recording. You can subscribe monthly or annually here.

26 Comments

  1. Sophie:

    If you check out our blog links, globalresearch.com is among them. I skimmed the article you linked to…I did not find it useful.

    I have read some interviews of Fulford. I am very interested in finding more information about the use of HAARP or other invisible weaponry to trigger earthquakes and tsunamis. I believe that the financial circumstances and trading patterns around some of these events supports the contention that these events may be induced and may not be 100% natural. However, I can not find evidence to disclose what weaponry exists and who controls it.

    Catherine

  2. Brad:

    Thanks so much for your feedback! I am delighted to hear The Solari Report is useful for you. Keep me posted on how we can best support you.

    Catherine

  4. As I was reading through the first draft of this I wrote a few notes as things occurred to me.

    I wrote down “BIG”, “DURATION”, “RULES V. EDUCATION”, “PUMP”. I think we have to think about the right size for things and the right duration. At least for man made stuff. Hard to fault a flower that’s been around for a billion years no matter how big it is. I’ve been thinking about Tony’s response to the Madoff affair and perhaps we all depend too much on rules and not enough on relationships. If we were all really paying attention, how could things get pumped regardless of our trust in rules to save us from the inevitable dump.

    How do we establish reasonable expectations for accountability. Clearly the inspector generals don’t seem to work. Is it the mote in their eyes?

    Is it how the engineering of markets is managed or how the managing of markets is engineered. In either case we are now longer talking about markets, but a rigged game.

    The financial meltdown reminds me that we have to slow down. Look at the pace that food grows when it is not over stimulated with chemicals. Is there not a proper pace of things? Was that not the lesson we all learned from Aesop in his story about the hare and the tortoise?

    At what point is a healthy distrust becoming a healthy trust? The former is to stop doing dumb things, the latter to turn toward doing good things at the proper pace and scale.

    Bankrupt governmentss with bigger budgets seems to imply that we are surviving by eating our tails!

    Lawrence Lessig of network neutrality and file sharing fame is leaving Stanford to go to Harvard to study corruption. He’s a person with a lot of good ideas on how to make art and commrce thrive, but in the course of his study discovered that money prevents congress from making sane laws in this field so he’s going to Harvard to study this. Irony at its best.

    It occurred to me that contracting can also mean “shrinking”. I hope that’s not the interpretation for expanding and improving the infrastructure.

    On to Wikileaks and Edwin Black.

    Court

  5. Catherine,

    I have often listen to you on coast to coast and I agree with you that people need to
    get back to the local economy. Looking at this financial crisis, would you agree that there
    is a possiblity that China or other potential adversaries have declared economic warfare
    on the United States. That is not to say americans are not to blame for themselves in this
    position.
    I read about year ago in a top geopolitical magazine certain American enemies could be trying to purchase American dollars and that at a certain point dump dollars on the market destroying the US Economy. I get this feeling that behind the curtain there are certain countries, groups or both that are trying to take USA down in an economic 911

  6. That may be so Doug, but it seems that we’re also doing our best to make it easy for them. For all we know, our own government may be part of the plot – to create a New World Order as it were.

  7. Roger/Catherine

    It is not just the economy that is imploding but the Middle-East, South Asia are in crisis mode as well. The current Israeli government wants destroy Hamas before the February elections and the arrival of President Obama in the White House. Reading BBC News, Deustche welle and Haaretz that seems unlikely with Hamas gaining support. If Likud wins we can expect a possible conflict with Iran by attacking their nuclear facilities. That would trigger a grave international crisis in which the other powers aka China, Russia would be involved. My point was could it be that the Chinese or possibly other groups aware of the Middle East situation might strike at the US first through economic means. On the other hand, certain groups wanting a crisis with Iran might weaken the economy first and then procede with the war.

    Whatever happens, Catherine you are correct in that wealth should stay at home and not be sent to some Saudi Bank Account in Geneva.

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