US war law is crystal-clear in letter and intent: no nation can use their military in armed attack unless they are under attack by another nation’s government.

This is the basic history and government lesson that all our families sacrificed to teach us through two world wars. The US is in obvious violating of this essential law, both now and in the US war-murders of 20 to 30 million human beings since World War 2 (further history of unlawful US wars going back to stealing half of Mexico here).

Do you really want peace?

Isn’t it therefore obvious to demand the arrests of obvious US War Criminals of both parties, and the lying sacks of spin in corporate media?

Without arrests, the wars will continue to kill millions, harm billions, and loot trillions of our dollars.

Do you want peace enough to think, speak, and act for the arrests of this obvious criminal class?

The criminal 1% violate the US Constitution in other ways subject to prosecution, and US military are already empowered through their Oath of Enlistment to refuse unlawful orders with officers authorized to arrest those who issue them.

David Wilcock and Benjamin Fulford write about imminent arrests of 1% “leadership” for financial fraud. I hope that this is true and happens. Supporting evidence is major banking resignations from 116 at the beginning of March, to 450 a month ago, and now over 600.

If the arrests David and Ben explain do not happen, I see two alternatives to arrest and remove the 1% criminals. The first is for the easily understood crime of waging unlawful Wars of Aggression. The 99% understand this is what prosecution of Nazi leadership was about.

The other easy alternative is arrests for economic fraud from having debt for what we use for money.

This is more difficult to understand than one war law, and not nearly as understood as a natural lesson from two world wars, but can be understood with a few moment’s attenion: This debt-system creates increasing and unpayable aggregate debt; the fraud is representing this as “good” for the 99%.

The alternative to a national “debt supply” is a debt-free money supply. Monetary and credit reform can be understood with three simple areas of facts taught in basic economics:

1. The US does not have a money supply; we have its Orwellian opposite as a debt supply. This is because the US leading banks won legal right through passage of the 1913 Federal Reserve Act to have private banks and the Fed create debt for what we use as money, and then charge the 99% for its use.
2. The policy choice of a debt supply compounded with interest causes ever-increasing aggregate debt that can never be repaid. It can’t be repaid because this is what we use for money. The US national debt now pushing $16 trillion has a gross annual interest payment over $400 billion a year; ~$4,000 per US family of $50,000 annual income (if your household earns $100,000, then your gross annual interest payment is ~$8,000 every year).
3. Monetary reform creates debt-free money that extinguishes the debt (details here), and allows government to become employer of last resort for infrastructure investment (hard and soft). This creates full-employment, optimal infrastructure, and falling prices because infrastructure historically creates more value to the economy than cost. Credit reform allows for public loans (interest directly pays for public goods/services) as another monetary tool for stable money supply (credit reform details here).

Pat Robertson discussed the banking crisis and glowingly spoke about how Iceland jailed many of the bankers who devastated their nation’s economy by taking out fraudulent loans. Robertson hailed the Nordic nation for its actions and said that Americans should deal with the financial crisis in the same way.

from Mediaite.com

Pat Robertson Says: Put Bankers in Jail, Florida Legislators Say, Put …

Pat Robertson Says: Put Bankers in Jail, Florida Legislators Say, Put Floridians In The Street! NOW!

Now the Republican rhetoric used to be something like, “Uphold the Rule of Law”, “Respect Contracts”, “Hold Property Rights Sacred”…But if you listen to Florida’s Republicans, who just today, voted to Trash the Rule of Law, Disrespect Contracts and Violate Property Rights, you’ll see just how twisted and out of whack the whole state is…

Publish Date: 02/22/2012 14:37

http://mattweidnerlaw.com/blog/2012/02/pat-robertson-says-put-bankers-in-jail-florida-legislators-say-put-floridians-in-the-street-now/

Interview with London activist Jamie Kelsey-Fry Occupy Wall Street – the fight has only just begun

He was part of a large group of escaped slaves. His people had been oppressed for hundreds of years in a foreign land. The ruler of a great empire in the south had originally invited them to his land as guests. The ruler’s successors employed them in building massive monuments to the dynasty’s glory. Originally they were paid wages. Then they had to work longer and longer hours with decreasing pay. Eventually they were incarcerated in work camps. They were forced to work day and night with no rest. When their bodies wore out they were thrown into the ditch like human garbage.

The ruler of this empire used to walk around among the slaves to inspect their work. He would wear a heavy yoke on his shoulders, like those that used to be placed on oxen. The tyrant would taunt the slaves, saying that they were weaklings, more tender than himself. After all, he told them, he too was a slave of his position. His economic policy for all people in the empire was one of genocidal austerity. There were a few exceptions. These were his family and relatives and the priests, who numbered about one percent of the population. They were worshipped as gods.

The slaves were finally able to leave this powerful empire. An inspired prince arose who led them to freedom. The people won a decisive victory over the tyrants. The tyrant and his army all drowned in the ocean. The liberated slaves marched across the desert and whenever they encountered opposition they easily defeated their foes. These people were becoming legendary among the oppressed in neighbouring countries. The word in the street was that these slaves had some sort of supernatural power aiding them.

The former slaves were approaching the land that they believed their god with no name had promised to them, where they could once again live as free people. But there was a problem in the land where they were going to live. It was already inhabited. It was controlled by a group of psychopaths who called themselves “the Lords”. They were descendants of a legendary great hunter from the East who centuries before had constructed a tower higher than all the other structures on earth. He had perfected a system of psychological confusion and monetary control to ensure the enslavement of all mankind.

The rulers of this land, “the Lords”, owned almost everything of productive value. The mass of the people that they controlled were either slaves or serfs living in a state of desperate poverty. The mass of the poor were that way because they were burdened with heavy debt loads. The “Lords” had established religious cults of prostitution and human sacrifice to control the souls of the degraded population. One of their rituals was the burning of children alive in the flames to appease their “Lord” god.

Dog was part of a group of twelve princes sent into this land on a secret reconnaissance mission. Their commander reminded them to be valiant and very courageous. For they had already easily won a series of battles in the desert. Their enemies were quaking with fear at their approach. The mass of the oppressed in the land had heard legends of these “outsiders”, these “anarchists” who did not believe in the divine right of kings. They had heard of the brave warriors of the desert who were overthrowing tyrants left and right. And “the Lords” were trembling in fear.

Dog was particularly excited about the coming conquest. His name “Dog” literally means “raging with canine madness”. He was anxious to get possession of the land where his ancestors’ bones were buried.

The job of the spies was to cross enemy lines and then survey the land over a forty day period. They would determine the best invasion route and which cities to capture first. Their commander had asked them these questions: How many live there? Are the people weak or strong? What is the state of their defences? Is the agricultural land fertile or not? The spies were also commanded to bring back some loot when they returned from their spying mission.

Although he was a prince of the people, Dog was the only one of the spies with a derogatory name. All his companions had glorious-sounding names. These names, interpreted in our modern English, are: Renowned, God Judges, God Redeems, Delivered (2 spies had names with this meaning), Redeemer, Fortune of God, Fortunate, Hidden, Concealed, Majesty of God, and Deliverer.

The spies performed their mission for the allotted forty days. They returned with grapes and other fruit, evidence of the abundant riches of the land. The spies returned with only a single cluster of grapes. It was so gigantic that it required two men with a large pole over their shoulders to transport it.

The spies gave the following report to their people: “We went into all the land. The hill country, the valleys and the coast. We saw many cities and peoples and great wealth. We saw many giants living there. It is a land of abundance, where we can live in great prosperity.”

Dog stood up in front of the people, and said, “We should invade the land immediately. We can easily conquer it. Our God will give us the victory”. His friend Deliverer agreed with him. Taking the land would be a cakewalk. Victory was assured.

But the other ten spies gave a negative report: “We cannot take the land. The people who live there are stronger than us. We saw giants in the land. We are like grasshoppers compared to them”.

The majority of these spies with the illustrious names proved to be cowards. They had no vision of victory. They forgot the riches they had seen. They forgot the promises of their god. They only saw giants. And they thought of themselves as grasshoppers. They gave in to their fears. After listening to the cowardly report, most of people believed the worst. The people headed back to their tents and cried like little children. They forgot their goal of living free in a condition of liberty and abundant happiness. They trembled in fear of giants. They gave up and lived in fear the rest of their lives. The window of opportunity for successfully taking the land passed. The people wandered around for in the desert for another forty years. Eventually all the cowardly perished.

Only “Deliverer” and “Dog” lived to enter the land. leading a new generation of young people who were not controlled by fear. Dog got his bones.

Where there is no vision, the people perish.

Thanks to Sherrie at sherriequestioningall for bring this to the net’s attention.

Sherrie Questioning All: Iceland Forgives Mortgage Debt for the …

Iceland Forgives Mortgage Debt for the Population. Putting Bankers and Politicians on "Bench of Accused". This is awesome. It shows when the people DO STAND UP they have more power and win against the corrupt …

Publish Date: 04/13/2012 8:14

http://sherriequestioningall.blogspot.com/2012/04/iceland-forgives-mortgage-debt-for.html

“Suddenly the Debtors Will Arise: the Vision of Habakkuk the Prophet” will soon be available in both book and movie versions. I’ve taken a three month break from my writing here about jubilee to work on a verse-by-verse exposition of this most important but overlooked Bible prophecy.

Let’s begin at the end of Habakkuk’s vision. In his last couple of verses Habakkuk says that if the economy completely collapses and he loses everything that he will still rejoice:

Even though the fig trees have no blossoms,
and there are no grapes on the vines;
even though the olive crop fails,
and the fields lie empty and barren;
even though the flocks die in the fields,
and the cattle barns are empty,

Yet I will rejoice in the Lord!
I will be joyful in the God of my salvation!

The Sovereign Lord is my strength!
He makes me as surefooted as a deer,
able to tread upon the heights.

Habakkuk is the contemporary prophet for this time of economic and monetary chaos. Habakkuk declared that in the time of trouble he would be empowered to do the seemingly impossible and make great progress.

The most important question you should be asking yourself right now in this time of economic stress is whether you will choose to have the attitude of Habakkuk or lose it all:

If the economy continues its collapse into depression and it looks like you are about to lose everything, will you curse God and die or rise up and be a part of the solution?

Here is a small excerpt from the first chapter of my book:

Run with the Vision

The Vision of Habakkuk, written around 620 B.C., reveals a prophecy of a sudden awakening and a worldwide debtor’s revolt at an appointed time in the far distant future. This great awakening of the debtors is the key event to the collapse of a secretive world-controlling system that has been plundering the wealth of nations throughout history.

Habakkuk was instructed to write the vision in big letters on tablets, making it plain (easy to understand) so that all that read it can run with it, communicating the message to others:

Write the Vision and make it plain
upon tablets, that he may run that reads it.
For the Vision is for an appointed time.
And it is not a lie. Wait for it, because it
Will surely come to pass, and not delay
When the time is right.

Here is the core of the prophecy announcing the great awakening:

Woe to the proud, who has taken what is not his,
Making himself rich with loans.
Suddenly the debtors will awake, as a man out of sleep,
And they will bite him back, in an instant.
As he has ruined the nations, so the nations will ruin him.

The prophecy further declares that when you first hear of it, that you will not believe it, but that it will absolutely come to pass. When this event does occur, it will be a wonderful providential blessing for all mankind:

For the earth will be filled with the knowledge
of the glory of the Lord, as the waters cover the sea.

The purpose of this book is to make the Vision plain so that you may clearly understand it and run with it. For the prophecy invites those with understanding to run with it, to play a part in its transmission.

More information on the upcoming book and movie is at habakkuk.net

It was a time of great exulting and excitement. The country was up in arms, the war was on, in every breast burned the holy fire of patriotism; the drums were beating, the bands playing, the toy pistols popping, the bunched firecrackers hissing and sputtering; on every hand and far down the receding and fading spread of roofs and balconies a fluttering wilderness of flags flashed in the sun; daily the young volunteers marched down the wide avenue gay and fine in their new uniforms, the proud fathers and mothers and sisters and sweethearts cheering them with voices choked with happy emotion as they swung by; nightly the packed mass meetings listened, panting, to patriot oratory which stirred the deepest depths of their hearts, and which they interrupted at briefest intervals with cyclones of applause, the tears running down their cheeks the while; in the churches the pastors preached devotion to flag and country, and invoked the God of Battles, beseeching His aid in our good cause in outpourings of fervid eloquence which moved every listener. It was indeed a glad and gracious time, and the half dozen rash spirits that ventured to disapprove of the war and cast doubt upon its righteousness straight way got such a stern and angry warning that for their personal safety’s sake they quickly shrank out of sight and offended no more in that way.

Sunday morning came – next day the battalions would leave for the front; the church was filled; the volunteers were there, their young faces alight with martial dreams – visions of the stern advance, the gathering momentum, the rushing charge, the flashing sabers, the flight of the foe, the tumult, the enveloping smoke, the fierce pursuit, the surrender! – then home from the war, bronzed heroes, welcomed, adored, submerged in golden seas of glory! With the volunteers sat their dear ones, proud, happy, and envied by the neighbors and friends who had no sons and brothers to send forth to the field of honor, there to win for the flag, or failing, die the noblest of noble deaths. The service proceeded; a war chapter from the Old Testament was read; the first prayer was said; it was followed by an organ burst that shook the building, and with one impulse the house rose, with glowing eyes and beating hearts, and poured out that tremendous invocation:

“God the all-terrible! Thou who ordainest, Thunder thy clarion and lightning thy sword!”

Then came the “long” prayer. None could remember the like of it for passionate pleading and moving and beautiful language. The burden of its supplication was, that an ever-merciful and benignant Father of us all would watch over our noble young soldiers, and aid, comfort, and encourage them in their patriotic work; bless them, shield them in the day of battle and the hour of peril, bear them in His mighty hand, make them strong and confident, invincible in the bloody onset; help them to crush the foe, grant to them and to their flag and country imperishable honor and glory – An aged stranger entered and moved with slow and noiseless step up the main aisle, his eyes fixed upon the minister, his long body clothed in a robe that reached to his feet, his head bare, his white hair descending in a frothy cataract to his shoulders, his seamy face unnaturally pale, pale even to ghastliness. With all eyes following and wondering, he made his silent way; without pausing, he ascended to the preacher’s side and stood there, waiting. With shut lids the preacher, unconscious of his presence, continued his moving prayer, and at last finished it with the words, uttered in fervent appeal, “Bless our arms, grant us victory, O Lord our God, Father and Protector of our land and flag!”

The stranger touched his arm, motioned him to step aside – which the startled minister did – and took his place. During some moments he surveyed the spellbound audience with solemn eyes, in which burned an uncanny light; then in a deep voice he said:

“I come from the Throne – bearing a message from Almighty God!” The words smote the house with a shock; if the stranger perceived it he gave no attention. “He has heard the prayer of His servant your shepherd, and will grant it if such be your desire after I, His messenger, shall have explained to you its import – that is to say, its full import. For it is like unto many of the prayers of men, in that it asks for more than he who utters it is aware of – except he pause and think.

“God’s servant and yours has prayed his prayer. Has he paused and taken thought? Is it one prayer? No, it is two – one uttered, the other not. Both have reached the ear of Him Who heareth all supplications, the spoken and the unspoken. Ponder this – keep it in mind. If you would beseech a blessing upon yourself, beware! lest without intent you invoke a curse upon a neighbor at the same time. If you pray for the blessing of rain upon your crop which needs it, by that act you are possibly praying for a curse upon some neighbor’s crop which may not need rain and can be injured by it.

“You have heard your servant’s prayer – the uttered part of it. I am commissioned of God to put into words the other part of it – that part which the pastor – and also you in your hearts – fervently prayed silently. And ignorantly and unthinkingly? God grant that it was so! You heard these words: ‘Grant us victory, O Lord our God!’ That is sufficient. The whole of the uttered prayer is compact into those pregnant words. Elaborations were not necessary. When you have prayed for victory you have prayed for many unmentioned results which follow victory – must follow it, cannot help but follow it. Upon the listening spirit of God the Father fell also the unspoken part of the prayer. He commandeth me to put it into words. Listen!

“O Lord our Father, our young patriots, idols of our hearts, go forth to battle – be Thou near them! With them – in spirit – we also go forth from the sweet peace of our beloved firesides to smite the foe. O Lord our God, help us to tear their soldiers to bloody shreds with our shells; help us to cover their smiling fields with the pale forms of their patriot dead; help us to drown the thunder of the guns with shrieks of their wounded, writhing in pain; help us to lay waste their humble homes with hurricanes of fire; help us to wring the hearts of their unoffending widows with unavailing grief; help us to turn them out roofless with their little children to wander unfriended the wastes of their desolated land in rags and hunger and thirst, sports of the sun flames of summer and the icy winds of winter, broken in spirit, worn with travail, imploring Thee for the refuge of the grave and denied it – for our sakes who adore Thee, Lord, blast their hopes, blight their lives, protract their bitter pilgrimage, make heavy their steps, water their way with tears, stain the white snow with the blood of their wounded feet! We ask it, in the spirit of love, of Him Who is the Source of Love, and Who is the ever-faithful refuge and friend of all that are sore beset and seek His aid with humble and contrite hearts. Amen.”

[After a pause.] “Ye have prayed it; if ye still desire it, speak! The messenger of the Most High waits.”

It was believed afterward that the man was a lunatic, because there was no sense in what he said.

A War Prayer for the Twenty-First Century by Laurence M. Vance

Mark Twain (1835-1910) recognized the true nature of war prayers a hundred years ago. In his brief story called "The War Prayer," Twain tells of a church service held on the Sunday before "the battalions would leave for the …

Publish Date: 01/15/2012 19:23

http://lewrockwell.com/vance/vance275.html

Visions of Peace: A Combat Vet's Dream: You Get Over It!

Mark Twain knew the body had to be displayed in THE WAR PRAYER. He took it to the great religious leaders who rallied the young to war. Have the religous leaders of today changed all that much from Twain's time? Hardly.

Publish Date: 02/06/2012 15:42

http://visopeace.blogspot.com/2012/02/you-get-over-it.html

Only In America: Behold: The U.S. God Of War. A Brief Statement of …

However, and for reasons unknown, I did watch this morning, the video under the header Behold: The U.S. God Of War. There was little accompanying the clip, other than a reference and a link to Mark Twain's, The War Prayer …

Publish Date: 02/07/2012 3:36

http://onlyinamericablogging.blogspot.com/2012/02/behold-us-god-of-war-brief-statement-of.html

Thoughts on Mark Twain's 'The War Prayer' « Pakpotpourri2's Blog

Hence it was a brazen act of effrontery for author Mark Twain to have made a statement denouncing the acts of brutality that accompanied this war. In his short story, The War Prayer, he portrayed a priest who, with fervor, …

Publish Date: 12/18/2011 17:44

http://pakpotpourri2.wordpress.com/2011/12/18/thoughts-on-mark-twains-the-war-prayer/

A bank in France, celebrating its 375th  anniversary, has cancelled the debts of many of it poorer customers, reports good.is Hurray for another bank that has caught a bit of the Jubilee spirit. Was this just a good PR stunt or a little bit of a scrooge-like conversion to generosity on the part of the lenders? As far as banks go, the Crédit Municipal de Paris, also known as the “Mont-de-piété,” or the bank of the poor, is one of the best. It functions in a fair manner towards the poor in the midst of a debt based system that normally only loots them or offers them no help at all. This bank in Paris was operating much like a pawn shop to help those in dire straits, offering an alternative to loan sharks.

Getting rid of debt is a good thing.

But even better than eliminating the debts of a few poor people  would be the elimination of all fraudulent debt. Operating within today’s fiat money debt-based system, banks don’t loan out depositors’ money. They merely create debt out of thin air by pushing a few buttons on their computers, creating credit from nothing. This nothing they have created then entitles them to charge interest. They didn’t loan out anything of substance, they merely obtained a promise to repay while they handed out counterfeit money. The collateral of the debtors is the only real value in the equation.

Some years ago when I applied for a home mortgage at my local credit union, the manager told me:

“Don’t think the banks are doing you a favor when they loan you money for a mortgage. You are the only one paying. The home is the only item of value in the equation. You are the only one at risk. The banks are putting up nothing, and they are the main beneficiary of the arrangement.”

Ah, an honest banker. If only they were all totally honest they would stop playing their little Babylonian creation of money games. They would shut down their usurious system. And return to real capitalism where risk comes before reward, where the lenders place real assets on the line, earning from  investment profits rather than speculation and robbing the poor.

Charles Hugh Smith this week writes an excellent article on the counterfeiting Federal Reserve and the banks: Counterfeit Money, Counterfeit Policy

What is the difference between printing money and counterfeiting? There is none.

Counterfeiting is illegal because it is the false creation of value. The counterfeiter takes low-value paper and turns it into high-value money, which is fundamentally a claim on the real productive value of the economy that issues the currency and recognizes it as a proxy means of exchanging that productive value.

Counterfeiting is illegal because the counterfeiter creates no additional value–he creates only the proxy for value. Creating real value–adding meaningful goods or services to the economy–is tedious, hard work. How much easier to simply transform near-worthless paper into a claim on actual goods and services.

If this is illegal, then would somebody please arrest the Board of the Federal Reserve for counterfeiting? The Fed has blatantly printed money without creating any real value to back up their added claims on productive value. Hence they are counterfeiting, pure and simple. A government based on rule of law would arrest these fraudsters and cons at the earliest possible convenience.

The Fed Trades Counterfeit Money for Power II

Don’t listen to millionaire/billionaire politicians, talking heads and central banksters. They are slowly destroying the US Constitution with more corrupt tyrannic control of our society. The Bailouts passed against the will of the People. The Bankst…

Ron Paul: Federal Reserve Is “Counterfeiting” Money

“The Founders felt pretty strongly about counterfeiting. I don’t — I wouldn’t call it treasonous, but I would call what our Federal Reserve does morally equivalent to counterfeiting because they create money out of thin air and they give us our prob…

“In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. The catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability – problem areas where America will have neglected, denied, or delayed needed action.” – Strauss & Howe – The Fourth Turning - 1997

In December 2010 I wrote an article called Will 2012 Be as Critical as 1860?, that pondered what might happen with the 2012 presidential election and the possible scenarios that might play out based on that election. Well, 2012 has arrived and every blogger and mainstream media pundit is making their predictions for 2012. The benefit of delaying my predictions until the first week of 2012 is that I’ve been able to read the wise ponderings of Mike Shedlock, Jesse, Karl Denninger, and some other brilliant truth seeking analysts regarding what might happen during 2012. The passage above from Strauss & Howe was written fifteen years ago and captured the essence of what has happened since 2007 and what will drive all the events over the next decade. Predicting specific events is a futile human endeavor. The world is so complex and individual human beings so impulsive and driven by emotion, that the possible number of particular outcomes is almost infinite.

But, as Strauss and Howe point out, the core elements that created this Crisis and the reaction of generational cohorts to the implications of debt, civic decay and global disorder will drive all the events that will occur in 2012 and for as far as the eye can see. Linear thinkers in mega-corporations, mainstream media and Washington D.C. focus on retaining the status quo, their power and their wealth. They believe an economic recovery can be manufactured through monetary manipulation and Keynesian borrowing and spending. They are blind to the fact that history is cyclical, not linear. In order to have an understanding of what could happen in the coming year, it is essential to keep the big picture in focus. As we enter the fifth year of this twenty year Crisis period, there is absolutely no chance that 2012 will see an improvement in our economy, political atmosphere or world situation. Fourth Turnings never de-intensify. They exhaust themselves after years of chaos, conflict and turmoil. I can guarantee you that 2012 will see increased mayhem, riots, violent protests, recessions, bear markets, and a presidential election that will confound the establishment. All the episodes which will occur in 2012 will have at their core one of the three elements described by Strauss & Howe in 1997: Debt, Civic Decay, or Global Disorder.

Debt – On the Road to Serfdom

The world is awash in debt. Everyone is focused on the PIIGS with their debt to GDP ratios exceeding the Rogoff & Reinhart’s 90% point of no return. But, the supposedly fiscally responsible countries like Germany, France, U.K., and the U.S. have already breached the 90% level. Japan is off the charts, with debt exceeding 200% of GDP. These figures are just for the official government debt. If countries were required to report their debt like a corporation, their unfunded entitlement promises to future generations are four to six times more than their official government debt.

Any critical thinking person can look at the chart above and realize that creating more debt out of thin air to solve a debt problem is foolish, dangerous, and self serving to only bankers and politicians. The debt crisis took decades of terrible choices and bogus promises to produce. The world is now in the midst of a debt driven catastrophe. At best, the excessive levels of sovereign debt will slow economic growth to zero or below in 2012. At worst, interest rates will soar as counties attempt to rollover their debt and rolling defaults across Europe will plunge the continent into a depression. The largest banks in Europe are leveraged 40 to 1, therefore a 3% reduction in their capital will cause bankruptcy. Once you pass 90% debt to GDP, your fate is sealed.

“Those who remain unconvinced that rising debt levels pose a risk to growth should ask themselves why, historically, levels of debt of more than 90 percent of GDP are relatively rare and those exceeding 120 percent are extremely rare. Is it because generations of politicians failed to realize that they could have kept spending without risk? Or, more likely, is it because at some point, even advanced economies hit a ceiling where the pressure of rising borrowing costs forces policy makers to increase tax rates and cut government spending, sometimes precipitously, and sometimes in conjunction with inflation and financial repression (which is also a tax)?” – Rogoff & Reinhart

The ECB doubling their balance sheet and funneling trillions to European banks will not solve anything. The truth that no one wants to acknowledge is the standard of living for every person in Europe, the United States and Japan will decline. The choice is whether the decline happens rapidly by accepting debt default and restructuring or methodically through central bank created inflation that devours the wealth of the middle class. Debt default would result in rich bankers losing vast sums of wealth and politicians accepting the consequences of their phony promises. Bankers and politicians will choose inflation. They believe they can control the levers of inflation, but they have proven to be incompetent, hubristic, and myopic. The European Union will not survive 2012 in its current form. Countries are already preparing for the dissolution. Politicians and bankers will lie and print until the day they pull the plug on the doomed Euro experiment.

The false storyline of debt being paid down in the United States continues to be propagated by the mainstream press and decried by Paul Krugman. The age of austerity storyline gets full play on a daily basis. Total credit market debt in 2000 was $27 trillion. It skyrocket to $42 trillion by 2005 as George Bush and Alan Greenspan encouraged delusional Americans to defeat terrorism by leasing SUVs and live the American dream by putting zero down on a $600,000 McMansion, financing it with a negative amortization no doc loan. Paul Krugman got his wish as a housing bubble replaced the dotcom bubble. Debt accumulation went into hyper-speed in 2006 and 2007 as Wall Street sharks conducted a fraudulent feeding frenzy by peddling their derivatives of mass destruction around the globe. By the end of 2007, total credit market debt reached $51 trillion.

In a world inhabited by sincere sane leaders, willing to level with the citizens and disposed to allow financial institutions that took world crushing risks to fail through an orderly bankruptcy process, debt would have been written off and a sharp short contraction would have occurred. The stockholders, bondholders and executives of the Wall Street banks would have taken the losses they deserved. Instead Wall Street used their undue influence, wealth and power to force their politician puppets to funnel $5 trillion to the bankers that created the crisis while dumping the debt on taxpayers and unborn generations. The Wall Street controlled Federal Reserve provided risk free funding and took toxic mortgage assets off their balance sheets. The result is total credit market debt higher today than it was at the peak of the financial crisis in March 2009.

Our leaders have done the exact opposite of what needed to be done to address this debt crisis. The country is adding $3.7 billion per day to the National Debt. With the debt at $15.2 trillion, we have now surpassed the 100% to GDP mark. The National Debt will be $16.5 trillion when the next president takes office in January 2013. Ben Bernanke has been able to keep short term interest rates near zero and the non-existent U.S. economic growth and European disaster has resulted in keeping long-term rates near record lows. Despite these historic low rates, interest on the National Debt totaled $454 billion in 2011, an all-time high. The effective interest rate was approximately 3%. If rates stay at current levels, interest will be between $400 and $500 billion in 2012. Each 1% increase in rates would cost American taxpayers an additional $150 billion. A rapid increase in rates to the 7% level would ratchet interest expense above $1 trillion and destroy the last remaining vestiges of Bernanke’s credibility. It can’t possibly happen in 2012. Right? The world has total confidence in pieces of paper being produced at a rate of $3.7 billion per day. Confidence in Ben Bernanke, Barack Obama and the U.S. Congress is all that stands between continued stability and complete chaos. What could go wrong?

Debt related issues that will likely rear their head in 2012 are as follows:

• A debt saturated society cannot grow. As debt servicing grows by the day, the economy losses steam. The excessive and increasing debt levels will lead to a renewed recession in 2012 as clearly detailed by ECRI, John Hussman and Hoisington Investment Management.

“Here’s what ECRI’s recession call really says: if you think this is a bad economy, you haven’t seen anything yet. And that has profound implications for both Main Street and Wall Street.” – ECRI

At present, we observe agreement across a broad ensemble of models, even restricting data to indicators available since 1950 (broader data since 1970 imply virtual certainty of recession). The uniformity of recessionary evidence we observe today has never been seen except during or just prior to other historical recessions.- John Hussman

Negative economic growth will probably be registered in the U.S. during the fourth quarter of 2011, and in subsequent quarters in 2012. Though partially caused by monetary and fiscal actions and excessive indebtedness, this contraction has been further aggravated by three current cyclical developments: a) declining productivity, b) elevated inventory investment, and c) contracting real wage income. In summary, the case for an impending recession rests not only on cyclical precursors evident in productivity, real wages, and inventory investment, but also on the disfunctionality of monetary and fiscal policy. – Van Hoisington

• The onrushing recession will send housing down for the count. With 2.2 million homes already in the foreclosure process and another 13 million homes with negative or near negative equity, the recession will push more people over the edge. As foreclosures rise a self reinforcing loop will develop. Home prices will fall as banks dump houses at lower prices, pushing millions more into a negative equity position. Home prices will fall another 5% to 10% in 2012, with a couple years to go before bottoming.
• The recession will result in companies laying off more workers. It won’t be as dramatic as 2008-2009 because companies have already shed 6 million jobs. The working age population will increase by 1.7 million, the number of people employed will go up by 1 million, but the official unemployment rate will drop to 7% as the BLS reveals that 10 million people decided to relax and leave the workforce. Surely I jest. The government manipulated unemployment rate will rise above 9%, while the real rate will surpass 25%.
• The American people rationally increased their savings rate to 6.2% in the 2^nd Quarter of 2009. When you are over-indebted and the country heads into recession, spending less and saving more is a sane option. Consumer expenditures accounted for 69% of GDP in 2007, prior to the economic collapse. The “recovery” of 2010-2011 has been driven by Ben’s zero interest rate policy, the resumption of easy credit peddling by the Wall Street banks, and consumers convinced that going further into hock to attain the American dream is rational. Consumer spending as a percentage of GDP has actually risen to 71% and the savings rate has plunged to 3.6%. The 20% drop in gas prices since April bottomed in December. This decline temporarily boosted consumer spending, but prices are on the rise again. With the State and local governments reducing spending, do the Wall Street Ivy League economists really believe consumers will increase their consumption to 73% of GDP and reduce their savings rate to 1%? If you open your local newspaper you will see the master plan. Car dealers are offering 0% financing with nothing down for 60 months. The GMAC/Ditech/Ally Bank zombie lives as subprime auto loans are back. The “strong” auto sales are a debt financed illusion. Ashley Furniture is offering 0% financing for 50 months with no payments through Wells Fargo Bank. When the Federal Reserve provides the Wall Street banks with 0% funding, banks are willing to take big risks knowing that Uncle Ben and the naive American taxpayer will be there to bail them out when it blows up again.

• With recession a certainty as fiscal stimulus wears off, home prices fall, employment stagnates, and consumer spending grinds to a halt, what will happen to the stock market? The Wall Street shills paraded on CNBC and interviewed by the multi-millionaire talking head twits assure you that stocks are undervalued and the market will surely be up 10% to 15% by 2013. It’s a mortal lock, just as it has been for the last twelve years, with the S&P 500 at the same level as January 1999. The fact is the stock market drops 30% on average during a recession. The talking heads declare that corporate profits are at record levels and will continue higher. Not bloody likely. Corporate profit margins are at an all-time peak about 50% above their historical norms. Profits always revert to their mean. These profits are not sustainable as they were generated by firing millions of workers, zero interest rates for banks, fraudulent accounting by the banks, and trillions in handouts from the middle class taxpayers to corporate America.

In a true free market excess profits will draw more competitors and profits will fall due to competition. When corporate profits exceed the mean by such a large amount, you can conclude that crony capitalism has replaced the free market. Government bureaucrats have been picking the winners (Wall Street, War Industry, Big Media, Big Healthcare) and the American people are the losers. Corporate oligarchs prefer no competition so they can reap obscene risk free profits and reward themselves with king-like compensation. Mean reversion will eventually be a bitch. Real S&P earnings have reached the 2007 historic peak. To believe they will soar higher as we enter a recession takes the same kind of faith shown by Americans buying a $600,000 McMansion in Stockton with no money down in 2005. The result will be the same. Do you ever wonder how corporations are doing so well while the average American sinks further into debt, despair and poverty?

The brilliant John Hussman captures the gist of an investor’s dilemma in his latest article:

“With 10-year Treasury yields below 2%, 30-year yields below 3%, corporate bond yields below 4%, and S&P 500 projected 10-year total returns below 5%, we presently have one of the worst menus of prospective return that long-term investors have ever faced. The outcome of this situation will not be surprisingly pleasant for any sustained period of time, but promises to be difficult, volatile, and unrewarding. The proper response is to accept risk in proportion to the compensation available for taking that risk. Presently, that compensation is very thin. This will change, and much better opportunities to accept risk will emerge. The key is for investors to avoid the allure of excessive short-term speculation in a market that promises – bends to its knees, stares straight into investors’ eyes, and promises – to treat them terribly over the long-term.”

Ben Bernanke, Wall Street shysters and Barack Obama want you to be drawn in by the allure of short-term gains based on hopes of QE3. The stock market will be volatile in 2012 with stocks falling 20% when it becomes evident the country is going back into recession. Ben will try to ride to the rescue with QE3 as he buys up more toxic mortgage debt. Wall Street will do their usual touchdown dance celebration, but the bloom will fall off this rose fast, as quantitative easing has proven to be a failure in stimulating economic growth.Gridlock in Washington D.C., chaotic national conventions, and the implosion of Europe will contribute to the market finishing down by at least 15% for the year.

• Even though the U.S. economy has been stagnant for the past year and Europe is back in recession, oil is trading at $102 a barrel (Brent – $113 a barrel). This is a classic Catch-22 for Bernanke and his central banker buddies. The higher the price goes, the more recessionary economies become as energy and food costs rise. This would normally decrease demand and lower prices, but the massive money printing by the Fed and ECB artificially inflates the price of oil. The Canadian oil sands are only viable at $90 a barrel. Saudi Arabia needs $90 oil to balance their budgets. The onset of peak cheap oil, lack of Libyan supply, possible war with Iran, and increased demand from the developing world (China, India) will put a floor of $80 to $90 a barrel under oil. A shooting war with Iran would result in $150 a barrel of oil overnight. The trend in gasoline prices over the last three years is not your friend:

January 2009 $1.65

January 2010 $2.57

January 2011 $3.04

January 2012 $3.29

Gas prices are rising during the lowest usage time of the year. The average price of oil will exceed $100 during 2012 resulting in the highest average gas price in history for American drivers. These high prices, along with various weather related issues will keep food prices elevated, with 5% or higher increases likely. This should spur a few more peasant revolutions around the globe.

• The question of whether gold can keep its streak of 11 consecutive positive return years in a row intact is an easy one. Will Obama and Congress spend $1.3 trillion more than they bring in during 2012? Will Ben Bernanke and other central bankers around the globe keep printing pieces of paper and calling it currency? If the answer to these two questions is yes, then gold will finish the year higher. As always, it will be volatile and manipulated by the powers that be. A drop below $1,500 in the beginning of the year is possible, but when Ben announces QE3, it will be off to the races. I expect gold to reach $1,900 by year end. Silver will be more volatile, but will likely reach $40 by year end.

Civic Decay – Occupying, Plundering, Capturing

Civic decay revealed itself dramatically in 2011 as millions of young people across the country occupied parks and town squares in a fruitless effort to correctly point out how the ruthless oligarchs inhabiting Wall Street bank executive suites, Mega-corporation boardrooms, the Marriner S. Eccles Federal Reserve Board Building, and the hallways of Congress had pillaged the wealth of the middle class through inflation, taxation, fraud and outright thievery. The majority of over-medicated, lethargic, uninterested, ignorant Americans yawned at this selfless display of courage and civil disobedience as they chose to occupy lines for hours to get the latest iPad or $3 waffle-maker at Wal-Mart. Delusional, non-thinking dolts across the land watched on their 60 inch HDTVs as young protestors got clubbed, beaten, tear gassed, tasered, maced, and brutalized by paid mercenaries for the ruling oligarchy. They treated the horrific scenes of brutality as if it was just one of their 30 favorite reality TV shows like I Didn’t Know I Was Pregnant or Toddlers & Tiaras. They thought this was a new show called Mace A Millenial.

Despite controlling the media, the money and the levers of power in Washington D.C., those in power cannot spin the reality of a middle class being systematically wiped out by the policies put in place by the corporate fascist oligarchs running this country. As Wall Street profits and bonuses flow like honey, the lines at food banks look like the lines at Best Buy on Black Friday and homeless shelters overflow with former members of the middle class. The ministry of propaganda (BLS, BEA) reports improving economic conditions while the number of Americans in the food stamp program has jumped from 38 million when the recession officially ended in late 2009 to 46.3 million today. Having 15% of the population surviving on food stamps is surely a sign of economic recovery.

The mainstream media methodically spews misinformation and happy talk about increased consumer spending and retail sales above expectations as if Americans borrowing to buy another laptop, TV, Kindle, or Rolex proves we have a real recovery. Meanwhile, old line mall based retailers like Sears and J.C. Penney die a slow agonizing death as they stagger into the sunset like Montgomery Ward, Circuit City and thousands before them. There is a disconnect in society as high end retailers like Saks, Tiffany, and Neiman Marcus report record sales as the 1% feel confident and flush with cash. Meanwhile, real median income is lower than it was in 2001. It seems tax cuts didn’t lift all boats, just the yachts. The average Joe pays twice as much for a gallon of gas and 50% more for food since 2001 while taking home less pay. The ruling elite can’t figure out why the peasants are getting restless.

The wealthy elite have been out in force over the last few months broadcasting their storyline about 50% of Americans not paying taxes. They and their media mouthpieces pound this message home unceasingly. They portray themselves as job creators, when the facts prove they have destroyed jobs here in America. They successfully painted the Occupy Movement as a bunch of lazy good for nothing socialists who needed to get a job. Then they unleashed the full fury of their brute strength upon these citizens practicing their right to assembly and free speech by crushing them with their hired police thugs, while the ignorant by choice public looked away. Controlling the message is essential for the oligarchs to retain their wealth, power and control. Aldous Huxley’s understanding of the American people is as true today as it was eighty years ago:

“Most ignorance is vincible ignorance. We don’t know because we don’t want to know.”

It is time to not choose ignorance. The storyline peddled to the masses is false. The ruling oligarchy will do everything in their power to obscure and manipulate the truth. It is true that 50% of American workers pay no Federal income tax. It is also true that 50% of American workers make less than $25,000 per year. If these workers are employed in Philadelphia they pay 4% city income tax, 3% state income tax, 7.65% Social Security and Medicare tax, 6% sales tax on everything they buy, 15% state and federal taxes on gasoline, and they pay city and county property taxes whether they own or rent. They also pay the various sewer, trash, and myriad of other fees inflicted on them by government drones. Maybe someone should inform multi-billionaire hedge fund guru Steve Schwarzman that lower income families actually have most of their skin in the game. They can’t hire hoards of high powered lawyers and tax accountants to minimize their tax burden while contributing millions to politicians who write the laws to protect the oligarchs. I wonder why hedge fund managers don’t pay taxes on their profits.

Asked if he were willing to pay more taxes in a Nov. 30 interview with Bloomberg Television, Blackstone Group LP CEO Stephen Schwarzman spoke about lower-income U.S. families who pay no income tax. “You have to have skin in the game,” said Schwarzman, 64. “I’m not saying how much people should do. But we should all be part of the system.”

We are all part of the system, and the system is rigged. The middle class is systematically being obliterated as high paying jobs were shipped to low paying countries by mega-corporations. Their huge cost advantages have driven small domestic “job creating” firms out of business. The middle class has the majority of their wealth tied up in their homes, and they continue to see that wealth decline on a daily basis. The culprits in the housing collapse – the major Wall Street banks – have seen their profits skyrocket as they held the middle class hostage to a multi-trillion dollar banker bailout. Americans don’t hate the wealthy. Wealthy men like Steve Jobs and Bill Gates have been admired and emulated by Americans because they exhibited the true admirable traits of entrepreneurship, creativity, hard work, taking chances, and creating a better society. Wall Street shysters create nothing. They exhibit the worst traits of greed, avarice, and non-existent empathy for their fellow man.

Matt Taibbi summed up how the system is rigged rather succinctly in a recent article:

“And in the bigger picture, of course, you need the state and the private sector both to be functioning well enough to provide you with regular work, and a safe place to raise your children, and clean water and clean air. The entire ethos of modern Wall Street, on the other hand, is complete indifference to all of these matters. The very rich on today’s Wall Street are now so rich that they buy their own social infrastructure. They hire private security, they live on gated mansions on islands and other tax havens, and most notably, they buy their own justice and their own government.

But citizens of the stateless archipelago where people like Schwarzman live spend millions a year lobbying and donating to political campaigns so that they can jump the line. They don’t need to make sure the government is fulfilling its customer-service obligations, because they buy special access to the government, and get the special service and the metaphorical comped bottle of VIP-room Cristal afforded to select customers.”

The wealth inequality in this country did not occur because half the population is lazy and stupid. It didn’t happen because the 1% is intellectually superior, more highly motivated, or more entrepreneurial than the 99%. If any of these statements were true, the inequality would be consistent across decades and centuries. But, as the chart below details, the phenomenon has happened since 1979. Interestingly, it also occurred just prior to the 1929 stock market crash and Great Depression.

The chart reflects the results of three decades of crony capitalism based upon phony tax canards; delusions of a debt based American dream peddled by bankers, politicians and the media; and complete capture of our economic and political system by a self selected wealthy few. Jesse captures the essence of how it happened in a recent article:

“Anyone who has seriously studied applied macroeconomics knows that crony capitalists hate free markets, with all the fairness and transparency that they imply. Competition is a serious drag on enormous profits and introduces significant uncertainty and risk. As soon as the game is underway, successful capitalists are constantly pushing the envelope of the rules, seeking to establish rents, monopolies, unfair advantages, and debt traps to snare the bulk of the players and stifle the profit-eroding tendency of real competition.

This is the basis of all aristocracies, which are merely the institutionalization of privilege. Once they make it they bloody well want to change the rules to hang on to it, and take the risk out of their equation. They foster a culture of two sets of books, two sets of rules, and two systems of justice. They are given over in their personal and professional lives to the benefits of hypocrisy and cheating, with little conscience to restrain them. There is a predatory class that is nationless, without allegiance to anything, any principle, but their own greed and lust for power.”

What has happened over the last three decades is not particular to the United States. It is a flaw in all humanity. The majority of humans are inherently honest and if raised by good parents will do the right thing most of the time. When society allows psychopaths and evil men to attain high status in government and business through chosen ignorance, lack of vigilance, casting aside the rule of law, or admiration for wealth attained by any means, then wealth disparity reaches extreme levels. The fatal defect of the Wall Street psychopaths is their hubris. Too much is never enough. They are like sharks, always needing more to satiate their hunger. They will eventually go too far and collapse their crony capitalist system resulting in revolution and ultimately their demise. We are very close to the tipping point and 2012 is likely to reveal deep cracks in the foundation of our warped dysfunctional corporate fascist economic system. These are a few things I expect to happen in 2012:

• The Occupy Movement will become more extreme with more disruptions of the economic system with less warning so the authorities don’t have time to prepare. I expect more cyber hacking into Wall Street, government, and media computer networks, causing disarray and uncertainty regarding financial information. I expect the Democratic and Republican presidential conventions to be overrun by protestors. The authorities will respond with excessive force, resulting in further violent protests in other cities.
• Two simultaneous trends will eventually result in a domestic conflict. The Federal government grows ever more panicked by the knowledge that its ponzi scheme economy is going to collapse. This is why passage of the NDAA and the future passage of SOPA are so important to them. Imprisonment of citizens without charge and shutting down the only remaining means of truth – the Internet – are essential to retaining their power and control over the masses. At the same time, gun sales are at record levels. Critical thinking Americans can see the writing on the wall and no longer trust corrupt politicians of either party. Arming yourself and buying physical gold and silver is a prudent act in today’s world. If the financial system implodes in 2012 and an MF Global like stealing of customer funds from IRAs, 401ks, and bank accounts happens, all hell could break loose.
• The ruling elite hand selected puppets for the 2012 presidential election are Obama and Romney. They are virtually interchangeable and both are acceptable to the Wall Street oligarchs. The monkey wrench in the gears is Ron Paul. His message of freedom, liberty, non-interventionism, living within our means, self reliance, and a sound currency are poison to the establishment. His message appeals to young people and a growing number of realists who understand we are already bankrupt. He will run as a 3^rd Party candidate and focus a light on the crony capitalism that passes for free markets in America today. He will be vilified by both parties and their media mouthpieces, but if he gains traction I fear an unfortunate accident will befall him. Either way, he will have a dramatic impact on the debate and the outcome of the 2012 election.

The question for 2012 is whether the gaping multitude will come to their senses and respond accordingly against the ruling oligarchy.

“Modern fanaticism thrives in proportion to the quantity of contradictions and nonsense it pours down the throats of the gaping multitude, and the jargon and mysticism it offers to their wonder and credulity.” – William Hazlitt

Global Disorder – War, Oil, Religion

“We do not have to visit a madhouse to find disordered minds; our planet is the mental institution of the universe.” – Johann Wolfgang von Goethe

Disorder is an understatement when describing what is happening on the global scene. It seems like the inmates are running the insane asylum. The beauty of globalization, sold to Americans by the corporate oligarchs, is being revealed for all to see. Besides seeing millions of jobs shipped overseas by mega-corporation executives and our industrial base gutted beyond repair, the other “benefits” are aplenty. The interconnectedness of the global economy insures that a recession in Europe and the U.S. will spread across the world. The producing countries will fall when the consuming countries run out of fiat currency to spur consumption. Federal Reserve created inflation in the United States instantaneously spreads around the world creating revolutions across the Middle East and social unrest in China as food and energy prices surge to levels of pain which cause the poor to revolt against the ruling establishment. People lose it when they have nothing to lose.

But, the biggest gift of globalization has been provided by whom else – the Wall Street banks and the large European banks. The European banks did their part by loaning hundreds of billions to PIIGS that could never pay them back. Next, they leveraged their balance sheets 40 to 1, insuring that a 3% loss on their capital wipes them out. When their losses clearly exceeded 40%, the bankers employed their politician puppets running the insolvent countries across the continent to dump the losses on the taxpayers through austerity measures that insure a deep European recession. Since derivatives of mass destruction link the insolvent Wall Street banks to the insolvent European banks, the Federal Reserve has now stepped into the breach with American taxpayer money by providing swap lines to European banks. The oligarchs are perfectly willing to destroy the lives of hundreds of millions of citizens across the globe to insure their wealth and power remains intact.

The other crucial component of global disorder is oil. The storyline currently being peddled to the masses is the return of energy independence for America. The political class and their lapdog media pundits blatantly lie to the American public with stories of 100 years of oil supply under our soil. GOP candidates declare we can be energy independent in two years if we just drill, drill, drill. Meanwhile, in the real world 33 billion barrels of oil are consumed every year, with the U.S. consuming 7 billion barrels per year, of which 3.3 billion barrels are imported. Total U.S. oil production continues its 40 year decline, despite the shale oil boom in the Dakotas and the massive fracking hype touted by the gas industry. If Americans used some critical thinking skills they would conclude that our oil dependent society is balanced on the head of a pin. The chart below paints a picture of current and future global disorder.

One look at this chart and you begin to understand the War on Terror cover story. The average person in these Muslim oil rich countries wants a chance for a better life, food, clothing, and hope for their children’s future. They are not the evil, freedom hating, religious fanatic terrorists portrayed by the neo-cons and war mongers like Santorum, Gingrich and Romney. American troops are stationed in or around the countries with the most oil. Any dictator that fails to play along with the U.S. and its oil demands isn’t around for long. Hussein and Gaddafi learned the hard way. It’s just a matter of time for Ahmadinejad. Expect the rhetoric about the dangerous Chavez to escalate in the near future. Controlling 300 billion barrels of oil will be essential to keeping our suburban sprawl society functioning. Soccer moms will become irate when they can’t fill up their GMC Yukon with 39 gallons of precious fuel. Our own military clearly documented why the War on Terror will never end in their 2010 Joint Operating Environment report:

A severe energy crunch is inevitable without a massive expansion of production and refining capacity. While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India. One should not forget that the Great Depression spawned a number of totalitarian regimes that sought economic prosperity for their nations by ruthless conquest. By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD.

The likeliest global events which will make 2012 a year to remember include:

• The disintegration of the European Union with outright default by Greece and the exit from the Union by Italy, Spain, and Portugal. A default and currency devaluation would bankrupt banks across Europe and would guarantee a worldwide recession and possibly depression.
• It seems more likely by the day that someone will do something stupid in or around Iran and the Persian Gulf will explode into a virtual hell on earth. The unintended consequences of such a development will far outweigh the intended consequences.
• The revolutions, protests, and brewing civil wars in Egypt, Syria, Libya and Iraq will flare up even if Iran doesn’t explode into a shooting war. The tensions in the Middle East will keep oil prices above $100, despite a world plunging into recession.
• China’s hard landing will arrive in 2012. Keynesianism on steroids has failed as they’ve built more than enough vacant malls, vacant cities, vacant condo towers, and bridges to nowhere. Property prices will plunge, exports will decline, and peasants will revolt as food and energy prices push them over the edge. Chinese leaders will look for a foreign bogeyman so they can rally their 1 billion peasants around the flag. With 11% of their oil supply coming from Iran, it could get very interesting.

Just as no one saw the most significant events of 2011 (Arab Spring, Mubarak & Gaddafi overthrown, Japanese earthquake, tsunami, nuclear meltdown, and Occupy Wall Street) in advance, 2012 will surely have some surprises. Possibilities include:

• An earthquake on the New Madrid fault or off the coast of California causing a tsunami to hit the west coast.
• One or more hurricanes entering the Gulf of Mexico causing widespread oil rig destruction and causing oil and natural gas prices to soar.
• A new bird flu or swine flu pandemic that spreads around the world.
• An actual terrorist attack in the United States in a mall, hotel or public venue that provokes a massive over response by our government could change this country forever.
• The assassination of political leaders and prominent bankers around the world as radicals take retribution into their own hands.

We have now entered the fifth year of this Fourth Turning Crisis. George Washington and his troops were barely holding on at Valley Forge during the fifth year of the American Revolution Fourth Turning. By year five of the Civil War Fourth Turning 700,000 Americans were dead, the South left in ruins, a President assassinated and a military victory attained that felt like defeat. By the fifth year of the Great Depression/World War II Fourth Turning, FDR’s New Deal was in place and Adolf Hitler had been democratically elected and was formulating big plans for his Third Reich. The insight from prior Fourth Turnings that applies to 2012 is that things will not improve. They call it a Crisis because the risk of calamity is constant. There is zero percent chance that 2012 will result in a recovery and return to normalcy. Not one of the issues that caused our economic collapse has been solved. The “solutions” implemented since 2008 have exacerbated the problems of debt, civic decay and global disorder. The choices we make as a nation in 2012 will determine the future course of this Fourth Turning. If we fail in our duty, this Fourth Turning could go catastrophically wrong. I pray we choose wisely. Have a great 2012.

“The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule. Thus might the next Fourth Turning end in apocalypse – or glory. The nation could be ruined, its democracy destroyed, and millions of people scattered or killed. Or America could enter a new golden age, triumphantly applying shared values to improve the human condition. The rhythms of history do not reveal the outcome of the coming Crisis; all they suggest is the timing and dimension.” – Strauss & Howe

Reprinted from Washington’s Blog, entitled 2012: The Year of Living Dangerously