Some Thoughts on 2010

So we took off the last bit of 2009, and the first bit of 2010, and after coming back to it, we realise we still have nothing in particular to say. That, however, has never stopped us before, so we look forward to another year of fun and games on the world scene, as the 2007 Depression rolls on. Since 2010 is still figuring out which way is up, we thought we'd offer some ideas as to how the year is going to look.

Previously, we called 2009 the Year of the Whinger; boy, were we ever right (insert back-patting here). The banks whinged, and got money; the health insurance companies whinged, and will probably get money; the auto manufacturers whinged, and got money; the home-builders whinged, and got money. Come to think of it, the only people who whinged and were ignored was the Citizenry, of the various countries which forked over said money, who really didn't want all the aforementioned whingers to get all that money. Oh well, they don't know what's best for them, now do they? Don't they know that they need autos, and health insurance, and banks, and home-builders? Why, what would a modern economy look like without these centrepieces of industry? Perhaps they'll learn better.

At any rate, this year, 2010, is certainly shaping up to be quite the doozie, what with the U.S. Treasury removing - not raising, but eliminating - the cap on how much money can be poured into the haemorrhaging enterprises known as Fannie Mae and Freddie Mac. Additionally, justice has been thrust to the side, with a U.S. judge throwing out a murder case against Blackwater agents (i.e. U.S. mercenaries), because the Government prosecutors botched, perhaps purposefully, the case. And the U.S. Transportation Security Administration is hounding a pair of bloggers who published the details of supposedly super-secret security directives. Say that last part ten times as fast.

But what will 2010 be, you ask, dear Reader? Well, we're getting to that. 2009 saw corporate powers across the globe - but perhaps most spectacularly in the United States - with their collective hands out, begging to be kept from going under. At the same time, we see that being the point where those same corporate powers have cemented their control over the Governments which gave them the money, to the detriment of the Citizenry to which a Government is supposedly responsible. This year, we see the fallout of that move start to make itself evident.

Simply put, the moves, for instance, by Goldman Sachs in the U.S., are of such a patently, and odiously, self-serving nature, it doesn't take a genius to figure out the Citizenry has gotten screwed so that Lloyd Blankfein can keep his $43 million a year for doing God's work - oh, we wish we had thought of that one! At the same time, we have a sneaking suspicion that the world markets will take their next big nosedive toward their final destination, which is a 90% drop or so from the peak.

Do you hear what we hear? Yes, the gnashing of teeth: those who got bailouts will grumble they did not get enough bailout; those who will pay for all the bailouts will grumble about how there is already too much slop in the trough. Both sides will be gnashing, and foaming at the mouth; take a look at the latest bailout of GMAC, as an example of what we're talking about. There will be many, many more bailouts, and we would like to be on record as saying this is the year the FDIC will need a direct bailout to keep operating. Ted Butler, we hear, recently stated that 2010 is the year when JP Morgan Chase closes its heart-stoppingly humungous silver and gold short positions; we'd like to put ol' JP on that list of bailouts-waiting-to-happen, too.

Simply put, this will not be a pretty affair, and might indeed result in the civil unrest which James Kunstler and Gerald Celente have been ranting about for about a year already. It could certainly result in the loss of legitimacy of the most bailout-happy Governments, as their respective Citizenry will see continued, extremely unpopular, bailout-age as a sign those Governments are no longer responsible. History has shown that, when Governments no longer seem responsible, they tend to become quite despotic and oppressive, to keep an increasingly restive population under control.

So, we posit two trends: the teeth gnashing on the part of corporate interests, screaming for another series of big bailouts, to ensure their primacy in a depressionary economy; and the teeth gnashing on the part of Citizens, riling against both the previous bailouts, and new bailouts being forced down their throats. Governments will respond to these two, conflicting demands by funnelling vast amounts of money, either directly or indirectly, to their corporate masters; whist simultaneously increasing the bread and circuses for the masses to keep them placated and obedient.

There you have it, then, dear Reader: 2010 is the Year of the Teeth Gnashers. The two different poles of the gnashers - i.e. the Citizenry and the corporate elite - will attempt to pull on Governments to be aligned more strongly with one, against the other. Unfortunately for the Citizenry of the world, they have already lost this fight, probably a long time ago; the corporate interests have the field, as it were. If those interests are smart, which they might or might not be, they will recognise the need to maintain the illusion that Governments are still responsible to the Citizenry, and make token gestures of hollow sacrifice. This, coupled with a sharp uptick in bread and circuses, will likely be enough to keep the Citizenry of the world in check, and docile.

We would like to make it clear, though, that we don't quite see massive civil unrest, a la James Kunstler or Gerald Celente, happening this year. This is not to say the possibility isn't there, of course - the 18th Century French aristocracy assumed the rabble would simply take their lumps, as it were, but those same aristocrats all had their heads chopped off during the Revolution. However, we feel that Governments will be able to maintain the illusion of responsibility to their respective Citizenry through most, if not all, of this year. Next year, 2011, we think all bets are off; we could see that being the year when even major OECD Governments start to loose their aura of faux responsibility.

However, if civil unrest does occur this year, it will likely be in those countries where the Citizenry has a long and noble tradition of taking to the streets. France, Greece, and Italy, for example, are the most likely, in our mind, to see some form of uprising, along with Spain and Portugal. The United Kingdom is a lesser possibility, along with the rest of the core counties of Europa (i.e. Germany, et cetera); Canada, Australia, Russia, and Brasil are not likely to see revolts, as those populations are either relatively docile, or well-policed. The United States, as the most docile and beaten-down country on the planet, will almost certainly not see anything resembling unrest. China, though, is the wild-card, in our mind: it will either have no problems whatsoever, thanks to the famous heavy hand of Communism, or it will completely blow to pieces, taking any mirage of a recovery down with it.

We end with a little tune, sung to Old MacDonald Had a Farm:

Ol' Lloyd Blankfein had a trough,
E - I - E - I - N!
And in that trough he poured some slop,
E - I - E - I - N!
And some slop! slop! here, and an oink! oink! there,
Here some slop, there an oink,
Here some slop, there an oink!
Ol' Lloyd Blankfein had a trough,
E - I - E - I - N!

Ol' Lloyd Blankfein did God's work,
E - I - E - I - N!
...et cetera...