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On November 8, 2006, Michael “Mish” Shedlock was on Coast to Coast AM with George Noory, to give his economic forecast.

  • He said an inverted yield curve for U.S. treasury bonds (e.g. the 6-month bond had a higher yield than a 10-year bond did), and a decline in housing starts and permits was the best predictor of an impending recession. They have predicted an impending recession every time since 1959.
  • He correctly predicted that the U.S. would be in a recession in 2008. It officially started in December 2007.
  • Americans had a negative savings rate since 2005. By February 2007, Americans had a negative savings rate for 21 consecutive months.
  • He sold a 3-bedroom, 1-bathroom house in Danville, Illinois for $14,000. A friend of his said a comparable house in Washington, D.C. would have sold for around $200k.
  • By 2006, Japan had experienced 18 consecutive years of declining real estate prices.
  • The major Japanese stock exchange index, the Nikkei 225, went from a high of around 40,000 to a low of around 7,000. Specifically, a high of 38,957 on December 29, 1989 to a low of 7,021 on March 10, 2009 — a decline of 82% over nearly 20 years.
  • Japan had a central bank rate of 0.25%, which the U.S. central bank, the Federal Reserve, adopted in December, 2008.

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On January 27, 1996, President Bill Clinton stated during his 1996 State of the Union Address, “The era of big government is over.”
The federal budget numbers are from the 1996 and 2009 budgets.

THEN: No government bailouts
NOW: Bailouts could reach $23.7 trillion

THEN: Total federal spending was $1.61 trillion
NOW: $3.1 trillion

THEN: Government was already big.
NOW: The PATRIOT Act, Department of Homeland Security, two unconstitutional wars, federalization of the National Guard, warrantless wiretaps, 30+ “Czars.”

THEN: Defense spending was $262.2 billion
NOW: $651.1 billion

THEN: The federal debt was $5.27 trillion
NOW: $10.41 trillion

THEN: “Our economy is the healthiest it has been in three decades.”
NOW: The economy is the worst it’s been in six decades.

THEN: “We have the lowest combined rates of unemployment and inflation in 27 years.”
NOW: The highest rate of unemployment in 26 years.

THEN: “America is selling more cars than Japan for the first time since the 1970s.”
NOW:  GM and Chrysler went bankrupt, Toyota overtook GM as the world’s largest car producer in 2008 for the first time ever.

THEN: “And for three years in a row, we have had a record number of new businesses started in our country.”
NOW: The highest number of bankruptcies in the past four years since the 2005 bankruptcy overhaul.

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Japan: rich or poor?

The mainstream media would have us believe that Japan is a rich country. Here’s a reality check.

According to the latest edition of The World Fact Book at https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html, Japan is the third most publicly indebted country in the world out of 126 countries, with a 2008 estimate of 170.40% of their Gross Domestic Product (GDP). That is, Japan owes to others 170.40% of the total value of all final goods and services it produced in 2008.

Only Zimbabwe at 241.20% and Lebanon at 190.50% of their GDP are more indebted, and no one says with a straight face that either of those countries are ‘rich’ by any measure. Why then Japan?

If you owed 170.40% of your annual income to others would you claim that you’re rich? You could try, but a loan officer at a bank would certainly think otherwise.

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