02/05/09 Baltimore, Maryland I’m keeping an eye out for financial Black Swans this month — more than usual.
If none appears, it will finally scotch a stubborn Internet rumor that — at least in its early stages, and if you give the rumormongers benefit of the doubt — has proven startlingly prescient.
Our story begins nearly a year ago when the House debated in a rare closed-door session on March 13, 2008. Ostensibly the purpose was to debate the warrantless-wiretapping amendment to the Foreign Intelligence Surveillance Act — you know, the one that retroactively cleared the phone companies of breaking the law by indiscriminately scooping up millions of our phone calls for the feds to listen to if they so desired.
By March 25, rumors had spread across blogs and message boards that the assembled Congresscritters discussed much more than that amendment — essentially a grab-bag of the most familiar and persistent conspiracy theories, including the introduction of a single North American currency and roundups of dissenters to be thrown into internment camps.
But two key phrases stood out as catalysts for such dire measures, and they were very specific about the timing: “The imminent collapse of the U.S. economy to occur by September 2008,” and “the imminent collapse of US federal government finances by February 2009″
Stirring the pot was a posting to a message board during this same period from a guy who claimed he heard from his uncle high up in the military about bad stuff going down. No mention of the secret session of Congress that had already taken place, but he did mention the currency, the camps, and so on… plus, “He told me that there is an actual plan as to when the economy will completely crash. As of right now he said it will happen in the middle of sept of this year. Also he said that our Government will crash in Feb of 2009.”
Cue the Twilight Zone theme?
OK, so the U.S. economy didn’t exactly “collapse” in September. But you had Fannie and Freddie nationalized the weekend after Labor Day; and the following weekend (the “middle of sept”) you had the collapse of Lehman, the takeover of Merrill Lynch, and the (first) rescue of AIG. Over the following two weeks, Hank Paulson invoked the specter of martial law if Congresscritters didn’t pass the bailout, and when the House rejected it on the first try, the Dow dropped 778 points the same day. Maybe not “collapse,” but close enough for government work.
Which begets the question: What might constitute the “collapse of the U.S. Government finances by February 2009″? What Black Swans could appear to complete the next stage of this prophecy — this month?
Could be almost anything. Fund manager Eric Sprott is talking about the potential failure of a Treasury auction. (The biggest auction ever comes next week.) Trend forecaster Gerald Celente sees some sort of dislocation in the commercial real estate market this month; God only knows what sort of cascade effect that might have on the banks and ultimately the Treasury. Or maybe the worst fears of ex-Goldman CEO John Whitehead will be realized — the United States loses its AAA credit rating.
This much we know — Internet rumors aside, the potential for something big to happen is growing daily.
We’ll delve into the precise reasons for that tomorrow — provided no Black Swans show up before then.
Sign Up for The Daily Reckoning e-letter and receive a copy of Bill Bonner's The Trade of The Decade report… at NO CHARGE.
We Value Your Privacy.
ShareThis
Isaiah 30:12 Because ye despise this word, and trust in oppression and perverseness(fraud), and stay thereon:
vs 13 Therefore this iniquity shall be to you as a breach ready to fall, swelling out in a high wall, whose breaking cometh suddenly at an instant.
I would think you’re right ! ed
Why has Ben Berneke seemingly disapeared lately? Up until the time Obama took office he was on TV constantly.
Right on, Ed! Its time for a reckoning, and Isaiah says it so well. How’s this one?
“Who is this that cometh from Edom, with dyed garments from Bozrah?
This that is glorious in his apparel, travelling in the greatness of his strength?
I that speak in righteousness, mighty to save.
Wherefore art thou red in thine apparel, and thy garments like him that treadeth in the wine-vat?
I have trodden the wine-press alone, and of the people there was none with me: for I will tread them in mine anger, and trample them in my fury, and their blood shall be sprinkled on my garments, and I will stain all my raiment.”
Isaiah 63
you’re full of it. Lehman was hit way back in April!