Richard C. Cook: Market Predictions in Chaotic Environment


Richard Moore

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On Market Predictions in the Current Chaotic Environment

By Richard C. Cook

Global Research, August 28, 2007

No one can predict how deep the decline in Western economies that is underway 
will go, because there is so little transparent information. Within the U.S., 
the government is hiding the severity of the crisis in order to prevent a 
collapse of consumer confidence.

Realize that the problem does not lie on the side of production. Global industry
has the capacity to produce a huge quantity of goods and services. There is even
a glut in some sectors, such as automobiles, textiles, IT, and other consumer 

Rather the problem, as with the Great Depression, is that purchasing power at 
the consumer level is lacking. In the U.S., purchasing power, as measured by M1,
is already in a recession-level decline. The causes are the high level of 
consumer debt, high cumulative levels of taxation on the dwindling middle class,
and the tragic erosion of wages and salaries from job outsourcing.

In the absence of purchasing power, the Federal Reserve has chosen the strategy 
of trying to outrun collapse by creating inflation. This is the meaning of the 
bail-outs that are going on. It's an attempt to devalue debt at the macro level.
It¹s a hidden tax on everyone but the super-rich. Everyone else is poorer today 
than they were yesterday.

How long this can go on is unpredictable. It's another bubble following on the 
housing and asset bubbles that are already bursting on a daily basis before our 

I don't see any responsible analyst who foresees any better outcome than a 
recession that would see the DJIA at a level of 8000-8500 within a few months. 
Again, maybe the Fed's printing presses can hold this level of decline at bay 
for a while longer, but I doubt it.

There are major players in the markets who see an even steeper decline coming 
even sooner. Some say as soon as a month.

There is also a real chance of an eventual depression-level contraction. How 
much of a chance, I don't know. This conceivably could lead to a total collapse 
of consumer markets, economic paralysis, and widespread homelessness and 
starvation. Yes, even in the U.S. Agribusiness, bio-fuel conversion, seedless 
mega-farming, the disappearance of family farming, and the recent disastrous 
weather conditions place everyone at risk.

At some point, the federal government, at a minimum, has to step in with New 
Deal-type relief measures. Whether the Bush administration has that capability 
is doubtful. Look at New Orleans. They may even try to cover everything up by 
starting a war against Iran. Are they that crazy? Who can say?

There are also rumors going around that there are plans to allow the markets to 
be crashed by a terrorist event so as to divert blame. I have gotten no reliable
confirmation of these rumors, though there are parties placing what people in 
the markets are calling "bin Laden"-type bets similar to, but bigger than, the 
"puts" that were placed before the original 9/11.

These types of bets have been placed in the U.S., European, and Japanese markets
that assume a stock market crash of fifty percent within the next five weeks. A 
report was just carried, I¹m told, on CNBC.

Some have said the culprit may be China, but it makes no sense for the Chinese 
to crash the markets while holding U.S. dollars. Others say it is hedge funds at
work to try to drive down the markets in a self-fulfilling prophecy.

But a fifty percent market decline? That¹s just not conceivable. Even the hedge 
funds do not have that much power. The federal plunge protection team‹known as 
the "men in black" by floor traders‹would never allow them to do something so 
disastrous. This has caused some to speculate that the "men in black" are 
parties to the bets.

These remarks probably give some indication of the chaos going on right now in 
the U.S. and world economies. The only real solution is a new world financial 
system based on the concept of credit as a public utility. This is what should 
be implemented to replace the present system of institutionalized usury.

Richard C. Cook is a retired federal analyst, whose career included service with
the U.S. Civil Service Commission, the Food and Drug Administration, the Carter 
White House, and NASA, followed by twenty-one years with the U.S. Treasury 
Department. His articles on monetary reform, economics, and space policy have 
appeared on Global Research, Economy in Crisis, Dissident Voice, Atlantic Free 
Press, and elsewhere. He is the author of "Challenger Revealed: An Insider¹s 
Account of How the Reagan Administration Caused the Greatest Tragedy of the 
Space Age." His website is at

Disclaimer: The views expressed in this article are the sole responsibility of 
the author and do not necessarily reflect those of the Centre for Research on 

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