A few days ago a friend called me just after hearing Michael Panzner on the Thom Hartmann show on Air America. My friend wanted me to read Panzer's book, Financial Armageddon and see what I thought. Apparently, Panzer's radio interview remarks were filled with passion and a sense of urgency, and upon reading the book, I experienced the same intensity in the author's writing which pleasantly surprised me. Here was a financial guru with 25 years' experience in the stock, bond, and currency markets and a faculty member of the New York Institute of Finance, who unlike Ben Bernanke and the silver-lining pundits of the financial pages, was not telling us that everything is going to be fine or that things will "bounce back in 2010".
Anyone familiar with my writings knows that I have never claimed to be a fiduciary wizard, but in recent years I have written more on topics related to economics than at any time in my life. I do not believe that all social issues can be resolved if only we change how money works in the United States or the world, but I am profoundly aware of the role of economic issues-perhaps more than militarism, healthcare, education, politics, or any other institution, in the dead-ahead demise of empire. I also notice that few in the left-liberal end of the political spectrum have a firm grasp on economic issues which I suspect comes from a fundamental polarization between activism and financial intelligence-a reality which motivated me a few years ago to write an article entitled "
Activists And Accountants: Absolute Allies."
Michael Panzner is definitely not from the left end of the political spectrum, which makes the contents of Financial Armageddon all the more fascinating and momentous. I came away from the book with both remarkable reinforcement of my position that the United States has entered economic collapse, but also perplexed regarding the myriad blind spots that the author seemed to have regarding the causes of the current economic meltdown. I am not aware of how Panzner may have altered his views since the publication of his book earlier this year, but at the time of writing, Panzner did not mention or was not aware of a number of glaring realities regarding the gluttonous greed-fest that has characterized the United States since the end of World War II. I will address those inconsistencies first, then highlight the places where I think Financial Armageddon is absolutely on-target.
What is most disturbing to me about the book is what appears to be a total lack of perception regarding the role of fraud, theft, and malicious intent in the American and global financial train wreck which has been exacerbating over recent decades. Panzner seems to conclude that all of this is just one huge accident attributable to incompetence or the American consumer being lulled by creature comforts. The book begins with a chapter on debt-personal and governmental-a factor so pivotal in economic catastrophe, but little attention is given to the intentional engineering, for example, of consumer debt by centralized financial systems and how monstrously profitable it is.
In the recent documentary "
Maxed Out", Harvard law professor and author of several books on consumer debt, Elizabeth Warren, states that the middle class is near extinction not only because of a lack of financial information, but specifically because debt is, in her words, "obscenely profitable" for lenders. Panzner says little about this in the book, but he does say that "Ever-growing investment returns, an endless housing boom, and the Federal Reserve had conditioned Americans to believe that, inevitable good fortune would eventually bail them out-should it even prove necessary." (4) The current debt nightmare, however, is not merely about "conditioning" but is, in my opinion, based on hard evidence, calculated and contrived. Both "Maxed Out" and "
In Debt We Trust" make this exceedingly clear. Furthermore, in examining the history of the financial train wreck now in the making, one must grasp the history of America's aristocracy, not only in the days of the Robber Barons, but within the past thirty years. Catherine Austin Fitts' website subtitled, "
The Aristocracy Of Stock Profits" provides an excellent historical account of this.
Nowhere in the book does Panzner mention the $1.3 trillion
missing from the Pentagon or the $59 billion missing from the
Department Of Housing And Urban Development and a plethora of other
instances where money is "missing" as
documented, again, by Catherine Austin Fitts. Nowhere does he address the issue of fraudulent inducement, also noted by Fitts in her
audio CD on the housing bubble,
which simply means, enticing people to borrow when it is obvious that
it will be impossible or near impossible for them to repay.
It is crucial to understand that the current economic meltdown is a
transfer of wealth from the middle and lower classes to the ruling
elite. Wealth transfers do not just happen, nor are they the products
of incompetency. They are intentional and well-planned. Central to
wealth transfer is corruption at the highest levels of the economic and
political systems. In hindsight, we look back upon the Savings and Loan
debacle of the 1980s, at that time, the largest theft in the history of
the world, yet today, our minds cannot begin to wrap around the wealth
that has been stolen from the American people, making the S&L scam
look like piggy bank pilfering--and to my knowledge, Catherine Austin
Fitts at her
Solari and
Dunwalke sites, is the only person to have documented this so impeccably.
In fact, I recently received an email notice from Fitts stating:
Recently, we have seen numerous press accounts of bank and hedge fund
losses from sub-prime mortgages. Remarkably, these reports imply that
the losses are the result of a market downturn or contracting credit
cycle. But there has been no mention of the extraordinary profits that
were generated or who reaped them. There is no mention of who is poised
to make a fortune on the bubble collapse. Even the most sophisticated
commentators of our day are describing this financial coup d'etat as
the unintentional consequence of "market forces."
Coup d' etat? How's that for blowing the "incompetency theory" out of
the water? Panzner alludes to corruption in his book but overall tends
to place it in the future. Locating it in the context of a chaotic
society during and after collapse, he says that "Corruption will likely
become endemic...", but, I protest, corruption is now and has been and
is the principal reason for our financial predicament. In fact, in the
opening of the chapter "The Retirement System", he states that it is
the leaders of the public and private sectors who put off an accurate
assessment of what the future held, "even though they knew a day of
reckoning would come." (15) Yes, they knew a day of reckoning would
come, and their intention was to feed as voraciously as they could off
their current situations and be long gone before the reckoning. Just as
the culprits of the Savings and Loan caper profited on the way up, they
also profited on the way down, as will a few predators in the current
subprime catastrophe.
In fact, an article this week in Forbes Magazine, "Profiting From The Meltdown"
opens with: "A consortium of the nation's leading investment banks have
quietly created an index that is not only protecting them against the
recent market meltdown but also promising to make them bundles of money
in the process."
Panzner does not mention the role of
the Federal Reserve in engineering Financial Armageddon and the fact
that it is neither "federal" nor has any kind of reserve. No expose of
the Fed's money policy, fractional reserve banking, or printing money
out of thin air backed by nothing is offered. Nor does he illumine the
reader about the Fed's ultimate ulterior game plan. It appears that he
is unaware of the global ruling elite, sometimes are referred to as the
New World Order, who have engineered Financial Armageddon and will be
safely ensconsed in their solar-powered bunkers, calculating their
profits while surrounded with an abundance of food, water, and private
security forces when all hell breaks loose.
One cannot adequately comprehend the perfect economic storm that is
brewing worldwide without understanding the role of the Fed as one of
the pivotal entities necessary for the construction of what financial
analyst, Bill Bonner, calls the "
Empire of Debt".
Curiously, Panzner does not address the reality of empire nor its
historical ascension to global economic superintendent a la the Federal
Reserve.
Mike Whitney states in his most recent article "
Stock Market Meltdown" that:
Economic policy is not ‘accidental.' The Fed's policies were designed
to create a crisis, and that crisis was intended to coincide with the
activation of a nationwide police state.... The Federal Reserve is a
central player in a carefully considered plan to shift the nation's
wealth from one class to another. And they have succeeded. Nearly 4
million American jobs have been sent overseas, the country has
increased the national debt by $3 trillion dollars, and foreign
investors own $4.5 trillion in US dollar-backed assets. While the Fed
has been carrying out its economic strategy; the Bush administration
has deployed the military around the world to conduct a global resource
war. These are two wheels on the same axel. The goal is to maintain
control of the global economic system by seizing the remaining energy
resources in Eurasia and the Middle East and by integrating potential
rivals into the American-led economic model under the direction of the
Central Bank. All of the leading candidates-Democrat and
Republican---belong to secretive organizations which ascribe to the
same basic principles of global rule (new world order) and permanent US
hegemony. There's no quantifiable difference between any of them.
Whitney, of course, is talking about organizations like the Council on
Foreign Relations, the Trilateral Commission, and the Bilderberg Group.
It is within these entities that the ruling elite have been planted and
cultivated.
Additionally, Financial Armageddon does not mention energy depletion or
climate change as precipitous factors converging with global economic
meltdown, exacerbating it and creating what I have frequently referred
to as the
Terminal Triangle
as we "cook on the road to collapse". These are factors that will only
intensify the grim post-collapse world that Panzner does acknowledge
later in the book. However, to fail to mention the current and future
juxtaposition of these three for the first time in human history is a
glaring omission.
To his credit, however, Panzner does steer
his writing into future scenarios which sound remarkably like those
posited by Dmitry Orlov in his series on collapse entitled "
Post-Soviet Lessons For A Post-American Century".
Echoing James Howard Kunstler's adage that "suburbs are the slums of
the future", he states that "In the wake of the early 21st-century
housing boom, the migratory landing points may well be the millions of
condominiums and boarded-up new homes left empty or mired in
foreclosure in what were once the hottest real estate markets." (107)
Reminiscent of Orlov he writes:
Meanwhile, newfound
transparency in the wake of the unfolding financial crisis will expose
a scale of fraud, corruption, and self-dealing that many will find
almost impossible to comprehend. Day in and day out, reports will
surface about hidden losses, false accounting, inflated appraisals,
sizable off-balance-sheet obligations, valuation discrepancies,
unregulated offshore entities, phantom, profits, insider trading, and
businesses bled dry to enrich a few individuals at the expense of
employees, investors, bankers, and bondholders.(116)
Sorry to say, but all of this sound a whole lot like the current
moment, and certainly everything enumerated here will only worsen, and
Panzner admits as much in the final chapters as he presents a world of
chaos, lawlessness, hunger, thirst, homelessness, inveterate wandering,
and people with nothing to lose doing whatever it takes, in order to
survive.
I was getting worried early-on in the book that the author would not
mention martial law and "vast detention camps", but he does when
explaining the extent of lawlessness, troublemakers, and immigrants
"who will increasingly be seen as an unacceptable threat to national
security." (127) Additionally, "Americans will be confronted by an
unfamiliar and frightening array of legal, financial, and security
restrictions, including lockdowns, curfews, internments, capital and
exchange controls, and even [oh yes especially] martial law." (185) It
will be a world where the dark and seamy side of life are apt to be
predominant with addictions, vices, and suicide prevailing everywhere.
There will be much thievery, scamming, and violent crime and as Panzner
says, "People who underestimate the severity of the dangers ahead and
fail to take the necessary steps at the outset risk being left
penniless." (142)
When all is said and done, Financial Armageddon offers some sound
advice and strategies, which some readers may be aware of, for
navigating the crumbling empire . The author insists that having access
to information, especially alternative news, will be crucial. Not
knowing or predicting how long the internet will exist or remain
uncontrolled, he strongly recommends that people familiarize themselves
now with alternative news sites and continue to do so as long as they
can. In addition, he emphasizes hyperinflation and the risks it will
entail in terms of using cash. Precious metals will be a strong hedge,
and barter will become a basic, commonplace form of exchange. Practical
knowledge of fundamental skills, healing with herbs and other
alternative remedies, and personal disaster planning will be
essential-as will be the ability to navigate a rotting infrastructure
which, and I'm sure Panzner would concur, that in August, 2007, we are
just beginning to witness the tragic consequences of.
Panzer also adds the spiritual factor in the equation:
Coping when many people are trapped beneath the rubble of an
irresponsible or impetuous past will call for considerable courage,
stamina, and resolve, which must come from within. Constant turmoil and
heightened uncertainty about the future will require ‘what if?'
thinking and the ability to anticipate situations that used to be rare
or non-existent. (143-144)
In addition, Panzner states unequivocally that:
For most Americans, the period ahead will be a time to scrimp and
scrape and shy away from a natural sense of optimism that says tomorrow
will be better than today. Instead of looking for handouts and loans,
people will increasingly have to draw upon their own creative inner
spirit to satisfy whatever needs they might have and uncover
alternatives to spending money, without necessarily expending a great
deal of valuable time and energy in the process. (179)
Gee, do I hear Panzner saying what I have been saying for years-- that we must "
kill hope an enliven options"?
Yes, indeed I do, and I also hear in his chapter on Relationships, that
brains, wit, physical fitness, and the best laid plans of mice and men
without human connection and
skills that enable people to sustain it, will come to nought.
I look forward to Panzner's next book and trust that it will hit harder
than Financial Armageddon. Nevertheless, I enthusiastically recommend
this book as well as the
Financial Armageddon website.
In summary, the joyride is over, and if you are reading these words,
you are probably one of the few people in America or in the world who
really understands what that means.
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