U.S. Economy Collapsed & WW III Began

Reading time: 2,885 words, 10 page 7 to 12 minutes.

They didn’t ring a bell when the U.S. economy collapsed nor when World War III began. Future historians will probably point to June, 2014 as the month for these two momentous events. And, it is a testament to the power of the government’s propaganda combined with the ass media’s complicity and the self-medicated masses’ dumbed-down education that few people noticed. Keep reading; you’ll notice.

U.S. GDP Collapse

At the beginning of 2014, U.S. 1st Quarter GDP was forecast to grow 2.6% (annualized). Of course, “forecasts’ are done by idiot neo-Keynesian economists so it should be no surprise when the actual numbers first came in at a meager + 0.1%. Although a tiny fraction of a percent is often considered statistically insignificant, it does show how much the U.S. economy has slowed.

Then, it got worse. The U.S. Dept. of Commerce progressively adjusts these numbers as more data is collected. The first revision produced a startling negative number i.e. – 1%. The final number at the end of June came in at a catastrophic – 2.9%. This is a 6 Sigma event. Zero Hedge calls it, “a 6 standard deviation miss.” In other words, it’s HUGE.

It’s no surprise that the ass media maintained their usual thunderous silence although a lot of alternate sources reported it here and here and also here as well as here and here too and here. In fairness, the British propaganda mothership, the BBC reported it, but blamed it all on, “Unusually bad winter weather.”

If this isn’t the beginning of the next recession then the chart below shows the worst print since 2009.


MarketWatch.blog says, “US GDP has never fallen more than 1.5% except during or just before an NBER-defined recession since quarterly GDP records began in 1947.”

The Fed-propelled stock markets hardly noticed and the morons at the Fed are desperately trying to pretend it’s just a little bump in the road that will be smoothed out over the next three quarters.

None of this should be surprising once you look beyond the government’s phony statistics particularly the so-called ‘unemployment rate’. As mentioned in previous articles, the ‘Labor Force Participation Rate’ is a more reliable employment indicator. Ali Meyer reports that, “In June, according to BLS, the labor force participation rate for Americans was 62.8 percent, matching a 36-year low.”

But Auto Sales are Up!

How could the U.S. economy be collapsing when auto sales are increasing? Well, there’s several ways to accomplish this contradiction. One way is ‘channel stuffing’ which inflates sales figures by forcing more products through a distribution channel than the channel is capable of selling. A good example is loading up auto dealers’ inventories so manufactures can report these as sales. See the chart below for General Motors.

GM channel stuffing

This merely robs sales from the future to produce short-term gain and long-term pain.

Another way is re-inventing the sub-prime real estate fiasco that led to the collapse in 2008 only now they’re doing it with automobiles; easy credit and no questions asked.

But House Sales are UP!

How could the U.S. economy be collapsing when house sales are increasing and prices are rising?

Again, we need to dig into the numbers. Many ‘buyers’ are well-heeled investors. According to Michael Krieger, “Squeezed out by financial oligarchs buying tens of thousands of properties for rental income, and faced with real wages that haven’t budged since the mid-1970s, the demographic of U.S. citizens that historically dominated the new home market has been forced to live in their parents’ basements.”

As well, foreign buyers now account for 7% of all U.S. real estate sales with Chinese in 2014 surpassing Canadians in 2013. Business Insider posted the chart below.

Intl sales

According to MarketWatch “Home sales made to international buyers rose about 35% for the year ending March 2014, as people took advantage of favorable exchange rates and affordable prices.”

Krieger goes on to say, “Just to kick em’ when they’re down, Americans now face the impossible task of competing with laundered Chinese money.”

U.S. Debt vs GDP

Long ago, Jim Sinclair reminded us we’d have ‘Q.E. to infinity’ i.e. endless money printing. As money is created out of debt, the U.S. debt has reached unprecedented levels. The chart below shows that the credit market debt to GDP ratio has exceeded even the level exceeded by the last Great Depression.

debt GDP

The chart above measures percentages so inflation does not affect these extraordinary numbers.

Disregard all the Fed-speak about raising interest rates and slowing Q.E. because it’s just talk. After more than five years of zero interest rates it’s obvious that they CANNOT raise rates and they CANNOT stop endless money-printing without collapsing the U.S. economy and dragging the whole world down with them. All they can do is TALK.

Also, given the shock of these numbers, we can expect 2nd Quarter numbers to be greatly cooked, at least until the revised numbers are again ignored by the ass media.
World War III

World War III is underway, primarily between the U.S.S.A and the former U.S.S.R. but in numerous other areas as well. Since both Amerika and Russia are nuclear super-powers, America cannot attack Russia with military force so the Americans are waging economic war using economic sanctions against Russia as trumpeted by the New York Times.

As I wrote last February and March Amerikans engineered the overthrow of a legitimate, albeit corrupt Ukrainian government. Corruption is a Ukrainian way of life so that’s hardly reason to overthrow a sovereign state. Instead, it was done as part of the U.S./NATO drive to contain Russia by encirclement and, when Russia refused to roll over and allow missiles on their doorstep, the Amerikans threw a hissy-fit and the rest, including Crimea, is now history.

Russia’s Vladimir Putin (former KGB head) is world-wise enough to allow the Amerikans to continue digging their hole ever deeper while he continues garnering support from a world that increasingly realizes how dangerous the psychopathic Amerikans have become. The psychotic Amerikan government is becoming more and more like the guy who murders the girl who rejected him so that nobody else can have her.

Washington is beginning to realize that, although the EU pays lip service to economic sanctions against Russia, they continue doing business with Russia. In other words, the incompetent but dangerous Amerikans are side-lining themselves as ever more allies abandon the U.S. Furthermore, it seems that sanctions against Russia hurt U.S. businesses more than Russian. This is evident in the graph below comparing their respective stock markets.

Russia US stocks

As well, sanctions have succeeded in pushing Russia, China and Iran closer together.

So now the war has entered a new phase with the downing of a Malaysian Airlines Boeing 777 flight MH-17 over Ukraine close to the Russian border. How convenient! And, how suspicious! Another Malaysia Boeing 777 just like flight MH-370 that supposedly disappeared into the Indian Ocean a couple months ago. I wonder what are the odds of that?

And, the Malaysians are such convenient patsies. No military to speak of (compared to mighty Amerika) and they’re Muslims and therefore targets of the tribe that controls the U.S. Furthermore, the Malaysians spoke out against USraeli war crimes and resist being plundered by the Powers-That-Be so presumably they needed to be spanked again notwithstanding that many aboard the doomed flight were European. As well, the timing could not have been more convenient to divert the world’s attention while the Ziopaths roll into the Gaza Strip on another genocide mission.

Shooting down a jetliner at cruising altitude requires a sophisticated surface to air missile, not some shoulder-launched Stinger-type missile. The speed with which the Western ass media jumped all over this is further cause for suspicion as is the pronouncement by a Ukrainian official before the fires were even extinguished or black boxes located that this was done by ‘pro-Russian’ terrorists.

Look at the tight timeline below. You’d think that the people in charge of ‘false flag’ events would have a little appreciation for our intelligence but then they need to accommodate the attention deficit-challenged majority whose brains are fried on TV.

11:50 AM – Malaysia Airlines Says Passenger Jet Missing Over Ukraine

11:59 AM – Malaysia Airlines confirmed via Twitter that it lost contact with MH17 en route from Amsterdam to Kuala Lumpur, and that the flight’s last known position was over Ukrainian airspace. – CNN

12:28 PM – Malaysia Airlines Jet Crashes in Ukraine

12:38 PM – The Facebook page of Anton Gerashchenko, adviser to the Ukrainian interior ministry, claims that a Malaysia-bound civilian aircraft was “shot down” over Ukraine by “terrorists” operating a Buk surface-to-air missile system. – CNN

12:47:24 PM – Complete minute-by-minute coverage of apparent Malaysia plane crash in Ukraine – “A Ukraine official said on his Facebook page that the Boeing 777 was shot down …” – MarketWatch

In other words, less than an hour after the first reports of the downing it’s on FaceBook and nine minutes later it’s posted on MarketWatch. And yet, later that evening, we get this ‘Breaking News’ from the New York Times:

6:11 PM – Surface-to-Air Missile Shot Down Malaysian Airliner, U.S. Officials Say “U.S. officials confirmed that a surface-to-air missile shot down the Malaysian airliner at about 30,000 feet based on a partial track of the missile’s final trajectory showing impact with the airliner.

“The track was obtained through infra-red sensors on a military spy satellite orbiting the earth, senior US officials said. The satellite, however, was able to detect only the final partial track, not the point of origin.”

Now, read that last sentence again. If they can’t (supposedly) track the origin of the so-called missile then how do they know who fired it? Move along folks; nothing to see here. We just gotta take the Amerikan government’s word for it. They wouldn’t lie to us, would they?


Earlier, the Ukrainian government in Kiev said they could not have fired the missile because they didn’t have any in the area thus pointing the finger at either Russia or the pro-Russian separatists in eastern Ukraine. However, the Russian Defence Ministry contradicted Kiev’s statements with, “a Ukrainian Buk anti-aircraft missile battery was operational in the region …The battery was deployed at a site from which it could have fired a missile at the airliner.”

As well, RT News (admittedly Russian) reports that, “Kiev deployed powerful anti-air systems to E. Ukraine ahead of the Malaysian plane crash.” ITAR-TASS, another Russian news agency, reported that, “Ukraine’s armed forces dispatched the Buk anti-aircraft missile system battalion to the area of the city of Donetsk on Wednesday.” And, so the propaganda war continues.

The following YouTube video is supposed to be the ‘smoking gun’ that proves the rebels shot down the jetliner.

Zero Hedge completely trashes the video as obvious western propaganda.

Paul Craig Roberts writes “The “investigation” is being conducted by Washington’s puppet regime in Kiev. I think we already know what the conclusion will be.”

Then too, there are questions about the aircraft’s flight path. Why was it diverted north from the traditional flight path and over restricted air space? What instructions did Kiev air traffic control give to the pilot shortly before the tragedy? With Ukraine conducting the investigation, do you think the flight data recording of that conversation will ever be released to the public? I’m not holding my breath.

There is little doubt that this is another in the endless list of false flag events. Washington’s Blog has this long list of false flag events carried out by governments world-wide throughout history.

false flag photo

Do you remember the Malaysia Boeing 777 that mysteriously disappeared two months ago that provided CNN with many weeks of daily propaganda telling us absolutely nothing? Now that the wreckage of another downed jetliner has been discovered in Ukraine, we can expect the ass media propaganda machine to go into over-drive.

Once again, we must ask the old Latin question, “Cui Bono?” – who benefits? The Ukrainian separatists had nothing to gain and the most to lose. The same applies to Russia. In fact the West has the most to gain. Increasingly isolated Washington is desperate to regain the support from its allies that it has been slowly losing.


Nor is this the only theatre of operations in WW III, the ‘forever war’. I’ve said numerous times that the most dangerous animal is a wounded one and the failing Amerikan Empire is proving it playing with fire by destabilizing sovereign nations and reaping the unintended consequences. The leadership of Afghanistan, Iraq and Libya have been unseated and replaced by Amerikan puppets lucky to get even fifteen minutes of fame before they, too, are replaced.

Appearing almost out of thin air, the ‘Caliphate’, Ibrahim al-Badri of Samarra and his horde of 10,000 strong force (former ISIS) and now just IS (Islamic State) has over-run Iraq. In short order, they looted hundreds of millions of dollars from banks, (the Iraqi banksters deny it.) as well as numerous weapons from arsenals, and captured oil fields and refineries. The Amerikan-trained Iraqi army is discarding its uniforms and fleeing ahead of them. How do you fight an enemy that wants to die?

The new ‘Caliphate’ seems destined to be the new bogeyman of the Middle-East. It’ll be interesting if we see pictures of helicopters evacuating the multi-billion dollar, fortress-like U.S. Embassy in Baghdad like the photos from Saigon just before South Vietnam fell.

The Independent reported, “Syria conflict: Western countries sending millions of pounds in aid to Isis.” It’s obvious that the West is recruiting, training and arming more mercenaries in their quest to topple Assad’s Syrian government. Amerikan war mongers are enraged that Assad has resisted ‘regime change’ in Syria for so long. Sunni Saudi Arabia’s fingerprints are all over anti-Shia IS’s takeover of northern Iraq and “escalating Sunni-Shia conflict across the Islamic world.”

If the Caliphate is not Amerika’s boy, then why is he not on Obama’s ‘kill-list’ and already ‘droned’ to paradise? Tongue firmly in cheek, Pepe Escobar mocks him as a ‘Super Star’. Fifteen minutes of fame isn’t what it used to be although it does provide a perverse form of entertainment as long as you’re far from the battle lines.

The reason they didn’t ‘ring a bell’ when WW III started is because it was not an event but a slow process of deterioration and desperation. Insolvent governments, desperately clinging to power first turn against other governments and then their own people. Historians in the future will be challenged to determine when this ‘Forever War’ actually started and when (if?) it ends.

The list of war ‘theatres’ below has been shamelessly stolen from Money and Market’s Larry Edelson and shows how these low-level conflicts spread world-wide.

“International military conflict. Between China and Japan. Between Russia and Europe.”

“Civil war. In many different parts of the world.

“In the Middle East, in Africa. Even in Europe, as the European Union disintegrates and the northern, richer countries of Europe are pit against the indebted southern countries and the periphery of the Union (Greece, Bulgaria, Spain).

“Financial warfare via currency devaluations.

“Government confiscation of assets and rising taxation against the people.

“Increased terrorism and jihadist movements as well as domestic terrorism.

“North Korea increasingly rattling its saber against South Korea. Japan. The United States.

“North Korea continues provoking the U.S.

“Massive domestic social unrest throughout the world.

“Cyber-espionage between countries.

“Cyber-espionage by governments against its own people.

“Capital controls as governments deal with their debts.

“Further losses of liberty and privacy.

“Continued shooting wars around the world as citizens go off the deep end.

“Corporate wars over natural resources.”

Martin Armstrong, known for his uncanny forecasting abilities, warns, “All governments had better open their eyes for we are on the brink of a major convergence between both the Cycle of Civil Unrest, Civil War & Revolution and International War. Both of these models converge and as I pointed out at the Cycles of War Conference, this is the first time we have seen this convergence since the 1700s.”

He, also warns “Both sides need a war to distract the stupid majority who really think this is over apple pie and capitalism. It is the diversion that becomes necessary for politics to survive.” Or, as Gerald Celente says, “When all else fails, they take you to war.”

Ernest Hemmingway once said, “The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin.”

We will witness the slow disintegration of the mighty U.S. Empire for a long time. Will it lead to all-out nuclear war? I very much doubt it. There’s too much at stake for every player although that doesn’t stop mistakes from happening.

I suspect that collapses like this play out like personal bankruptcies; slow at first, then suddenly.

You want to make sure you’re out of the way when ‘suddenly’ happens.

Stay tuned. It’s going to get very interesting.

July 19, 2014

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About gerold

I have a bit of financial experience having invested in stocks in the 1960s & 70s, commodities in the 80s & commercial real estate in the 90s (I sold in 2005.) I'm back in stocks. I am appalled at our rapidly deteriorating global condition so I've written articles for family, friends & colleagues since 2007; warning them and doing my best to explain what's happening, what we can expect in the future and what you can do to prepare and mitigate the worst of the economic, social, political and nuclear fallout. As a public service in 2010 I decided to create a blog accessible to a larger number of people because I believe that knowledge not shared is wasted.
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4 Responses to U.S. Economy Collapsed & WW III Began

  1. Richard says:

    Very good essay Gerold . “You want to make sure your out of the way when suddenly happens”
    I am a retired Canadian living in Peru and am slowly becoming a Ron Paul type Libertarian . I really can see the advantages of being in a Country that is not over regulated / governed and consequently growing at 6% .I feel guilty sometimes about taking advantage of things here but then again I am happy to be “out of the way” .thanks Richard

    • gerold says:

      Richard, as an expat, you are finding yourself in a growing company of people.

      Congratulations on your foresight in getting out of Dodge.

      – Gerold

  2. Eric Hayward says:

    Nice one Gerold, How strong to siege the walls of indifference, keep up the good fight.

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