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alstry (< 20)

WARNING!!!! Prepare for WAR!!!!!!!!!!!!!!!!!!!!!



May 16, 2009 – Comments (19)

Kingston, NY --  The biggest financial bubble in history is being inflated in plain sight, said Gerald Celente, Director of The Trends Research Institute. "This is the Mother of All Bubbles, and when it explodes," Celente warns, "it will signal the end to the boom/bust cycle that has characterized economic activity throughout the developed world." 


Either unwilling or unable to call the bubble by its proper name, the media, Washington and Wall Street describe the stupendous government expenditures on rescue packages, stimulus plans, buyouts and takeovers as emergency measures needed to salvage the severely damaged economy.

"All of this terminology is econo-jargon," said Celente. "It's like calling torture 'enhanced interrogation techniques.'

Washington is inflating the biggest bubble ever: the 'Bailout Bubble.' "This is much bigger than the Dot-com and Real Estate bubbles which hit speculators, investors and financiers the hardest. However destructive the effects of these busts on employment, savings and productivity, the Free Market Capitalist framework was left intact. But when the 'Bailout Bubble' explodes, the system goes with it."

The economic framework of the United States has been restructured. Federal interventionist policies have given the government equity stakes, executive powers and management control of what was once private enterprise. To finance these buyouts, rescue and stimulus packages -- instead of letting failed businesses fail and bankrupt banks and bandit brokerages go bankrupt -- trillions of dollars are being injected into the stricken economy.

Phantom dollars, printed out of thin air, backed by nothing ... and producing next to nothing ... defines the "Bailout Bubble." Just as with the other bubbles, so too will this one burst. But unlike Dot-com and Real Estate, when the "Bailout Bubble" pops, neither the President nor the Federal Reserve will have the fiscal fixes or monetary policies available to inflate another.

With no more massive economic bubbles left to blow up, they'll set their sights on bigger targets. "Given the pattern of governments to parlay egregious failures into mega-failures, the classic trend they follow, when all else fails, is to take their nation to war," observed Celente.

Since the "Bailout Bubble" is neither called nor recognized as a bubble, its sudden and spectacular explosion will create chaos. A panicked public will readily accept any Washington/Wall Street/Main Stream Media alibi that shifts the blame for the catastrophe away from the policy makers and onto some scapegoat.

"At this time we are not forecasting a war. However, the trends in play are ominous," Celente concluded. "While we cannot pinpoint precisely when the 'Bailout Bubble' will burst, we are certain it will. When it does, it should be understood that a major war could follow."

Alstry niether endorses nor refutes Mr. Celente's position.  However, based on how few really understand how bad things really are.....such a conclusion is very plausible.....and much more likely than many of you could ever know.

When Alstry tells you he Alstry......he knows!!!!!!!!!!!!!!!!!!!

Do you think he has been saying prepare over and over and over again just because he thought most of us are going broke?  Most of us going broke would be the best of all possible long as there was a sufficent supply of tomato juice to make bloodys.

Once a nation loses its values and moral compass........often it loses just about everything.  History is replete with examples dating back thousands of years.


19 Comments – Post Your Own

#1) On May 16, 2009 at 11:11 PM, OneLegged (< 20) wrote:

I'm tired of this economy. 

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#2) On May 17, 2009 at 12:07 AM, RainierMan (64.57) wrote:

I read a lot of your blogs, and generally like them, but that article frankly doesn't meet your standard. I'm surprised you even cited it. 

Bailout Bubble? It's a catchy term, but what exactly is it over-inflating to bubble-like proportions. It may be helping to slow the deflation of certain assets but I don't see what asset it's actually inflating that wasn't already over inflated. Propping up, yes. Inflating?...they (the government) wish.

As for war, well of course we could see one. The middle east and west Asia are a mess. China is become the new superpower. Terrorism is no closer to being defeated than it was after 9/11. All those are whole separate issues which have a superficial relationship to the bail out, at best.

The most positive thing to come out of that article is that I now think Celente is a crack pot.

I'm not being critical of you, just the article.  

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#3) On May 17, 2009 at 12:33 AM, alstry (< 20) wrote:

This article is really beyond the scope of CAPs and I probably shouldn't have cited it.  Alstry and The Institute of Alstrynomics have an expertise and experience an a number of areas and conflict is a factor in investing......especially if you play the game on a global scale.

Remember, inflation is often used in two primary fashions...the traditional view is monetary inflation or the printing or creation of money through borrowing and price inflation referring to rising and lowering of cost of goods and services.

What many fail to realize is you can have monetary inflation with price deflation at the same time.  In the article, I am confident Gerry is talking about monetary inflation.

Be careful about discounting Gerry too quickly.  He and his firm has been around a long time and they have one hell of a reputation for accuracy...and he doesn't give a damn whether people like his predictions or not as he is agnostic with his emotions to any party or political perspective....which from where Alstry stands gives him increased credibilty.

On his staff are a number of individuals with high level military experience including veterans from the Israeli Defense Forces.  Probably the most respected intelligence gathering group in the world today.

As far as the bailout bubble....the nomenclature is really not is the consequences of funding zombie banks with much of our nations wealth which is going to suck all of the money out of our economy and cause great distress to our free market system and the people of our nation. 

I am quite confident of this right now.  Quite confident.

Alstry has been a forecasting prognostication blogger for about three years now....his track record is likely one of the best on the internet anywhere in the world as it relates to various economic and business predictions.....few have come close looking is a little something from 2006:

Analysis of the housing market is really quite simple. This message was originally posted on the KBH message board.

First of all there seems to be a lot of confusion out there about the where the housing market is going. Hard landing. Soft landing. Moon landing. Knots landing.

With that being said, just step back a minute and look at things at the most basic, it often gives the best perspective.

We know that 25% of new home buyers in the past few years were speculators. Now we know that many of those speculators have abandoned the market.

We also know that in many "hot" markets, 50% of buyers used exotic mortgages. Now we know that the Fed imposed new guidelines restricting the issuance of these mortgages.

Finally, it is now pretty certain that there was significant fraud used in the purchase of real estate in the past few years. The example this week was the town in VA where the residents allege they were duped in buying $80 million dollars worth of homes in Indiana. We now are aware that the FBI is applying significant resources to track down this behavior nationwide.

Simply using the above numbers, sales should be slowing somewhere between 25% and 75% percent. Since there is probably a lot of overlap between the three catagories, a 50% reduction in the number of buyers seems appropriate.

Interestingly, we are now seeing net new contracts declining by around 50% in many cases. Further, we are seeing new building permits declining by 50% in certain areas. What a surprise:)

How economists can't predict that housing construction should revert to the historical average of about 700,000 new home sales per year versus the bubble 1,400,000 escapes very basic analysis.

Now lies the problem, we have probably built 1,500,000-2,000,000(2x the average for the past 3 years) more homes than the country needed in the past few years. That is about two years supply, even in a strong market. In other words, the housing industry could finish up what is under construction, and then simply just shut down for the next couple years and there should be enough inventory to satisfy real demand(obviously there will be some areas with more than two years supply and others with less) for a while.

What industry in America (the universe for that matter)can watch 50% of its customers evaporate and it not have a significant impact on the business.

With so much excess inventory and so much debt behind the inventory, any person who has ever run a small business would likely see a difficult outlook ahead.



People used to think I was nuts with my forecast at the looking appears I was conservative.

One day I will tell you about a funny time I had with a respected economist from The Federal Reserve and how we viewed the implications of the mortgage crisis very differently.  As it turns out, unfortunately for our nation....he made a fool out of himself with his perspective.

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#4) On May 17, 2009 at 12:49 AM, automaticaev (< 20) wrote:

celente is just a show.  A circus.

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#5) On May 17, 2009 at 12:57 AM, automaticaev (< 20) wrote:

you know turn on the discovery channel and the show about ufo sightings is on you dont go bar up your windows and get a tin foil hat.

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#6) On May 17, 2009 at 12:59 AM, automaticaev (< 20) wrote:

plus celente just uses buzz phrases.  He thinks eveyone under 30 is on meth...  He is crazy man.

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#7) On May 17, 2009 at 1:02 AM, alstry (< 20) wrote:

But Alstry is for real.  Here is another blog from 2006:


It is absolutely amazing to listen to business commentators on TV. This morning they were relieved that housing starts were running at a 1.7+mm unit clip in September indicating that pace was going to help support continued economic growth.

Doesn't anyone realize that there is CURRENTLY a glut of inventory out there right now? That the more they build the more that will have to be liquidated at even more distressed environment.

The following provides a great example:

Chrysler's Got An Inventory Overload

JANET BABIN: Chrysler's inventory has reached more than half a million vehicles. The company says that number is too high, and has a plan to lower it.

Analyst John Novak with Morningstar says most of what's sitting on lots are high-margin pickup trucks and SUVs that dealers didn't ask for:

JOHN NOVAK: "These are vehicles that weren't requested by anyone. They were built to keep the factories running, and therefore they really represent a slice of demand that isn't there right now."
Novak says the ballooning inventory is a problem for all the U.S. automakers. He says it underscores inherent problems with car dealer franchises:

NOVAK: "The franchise laws that exist tend to protect dealers, the dealers have a lot of power and it's a difficult process for the manufacturers."
One solution to the overstock is production cuts. But under union contracts, the company would still have to pay some workers even if they weren't on the job.

Another option is incentives. If the cost comes down enough, dealers could get interested again.

But writer Lawrence Ulrich says buyers are becoming immune to the carrot and stick routine:

LAWRENCE ULRICH: "It's like a discount carpet salesman, you know, when they scream that the whole place is on sale 24-7, after a while, you get numb to that and think, 'Well, I can always get this low price from these guys, I don't have to go and buy a new car.'"

When will we learn?

Unfortunately we are now learning.....the hard way.  Think how much better things would have been if we addressed the issue earlier and not cheered on the bubble?????

Too bad more didn't prepare when the data was everywhere.

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#8) On May 17, 2009 at 1:41 AM, checklist34 (98.60) wrote:

i like pie.  especially my moms apple pie.

but in a war scenario, we win.  the united states has no military peer, not from a technology standpoint, not from a buildup standpoint, not from a tactical standpiont, and not from a capacity standpoint. 

If Alstry's wildly dire, and wildly improbable, predictions come true, a war o fsome kind (world war?) is hardly improbable, and its highly likely to favor the US. 

Imaigne we could just go to war, and not have to worry about political correctness and stuff?  How rapidly would we end it? 

I vote no war, not depression, a VLV shaped recession where we move up for a while, take a dump that sends the markets into the toilet again, and then move up faster than anybody anticipates.

I think the stock market will be down next week, but I suck at predicting it.  I think we hit low 800's on the S&P and don't break into the 700's again, I think that long term (years) stocks are still cheap if you don't buy stock severybody else says to buy right now.  I think I don't know the future, and nobody else does either, and all the soothsayers you see on TV and the caps blog are more likely to trumpet the times they are right than they are to actually be someone who can see the future. 

I think I'm gonna get rich for buying into a market in the toilet and being patient.  And I think everybody loses in a bear market except one person - the bulls lose first (when things crash), the bears lose next (when the stop crashing and they can't let go of the fun of being right, coffee shop clowns), and then the guy who only buys in the bear market then sells out and sits around for the next bear market...

isn't he the guy who always wins?


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#9) On May 17, 2009 at 2:05 AM, alstry (< 20) wrote:

In 2006, the "experts" were telling us we had a strong job market and there would be a turn around in housing in 2007.

At the time Alstry was documenting layoffs in sector after sector, industry after industry, company after company.

In looking at the FACTS, Alstry didn't see it and predicted a severe downturn in  2007....and unfortunately Alstry turned out to be right and "experts" wrong.

Similar for 2008.  But not Alstry and we know what happened.

Today, the FACTS, based on the current Zombie life support program promoted by our leaders draining our nations wealth from its citizens and transferring it to the banks....things are likely going to get worse.....A LOT WORSE!!!!!!!!!!!!!!!!!!!!!!!!!!

Prepare.....avoid Fear!!!!!!!!!!!

When Alstry tells you things are about to get REALLY should not be surprised if things get REALLY REALLY BAD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!economically speaking of course.....anything beyond that is beyond my current perspective.

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#10) On May 17, 2009 at 2:41 AM, checklist34 (98.60) wrote:

alstry, your narcisissm bordres on the epic.  thats basically typical of bears these days.

its the prophet play.  predict horror every day, wait for a horrfying day even if that takes 6 months, then declare yourself a prophet despite a 2% success rate.

the smart money changes moods when appropriate.  I am a bit bearish now.  I'll be bullish again soon.  we'll see if it works out for me or if i lose.

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#11) On May 17, 2009 at 5:21 AM, ralphmachio (< 20) wrote:

Too much time wandering has left the cattle confused, now they have forgotten the intent of the rancher, once again...they are just happy to be back to keepin their nose to the ground in front of them, which consists of bs good news built on top of bs good news from the day before, and so on. Sometime before November, we will at least visit the lows of early March. 

 With things the way they are, we are vulnerable. We have bullied so many into being our 'friends', we may have started to believe they actually are our friends, at a moment of truth we may find otherwise. It's human nature to kick the bully when he's down.

After threatening to intercept the N Korean rocket, via Japan, and not doing it, we sent out a message of frustrated ineptitude. Our track record for defending the homeland is really really bad, considering we tell the world we can knock missiles out of space, yet big fat slow airliners are allowed to go off course for 45 minutes and never intercepted! Silly emotions aside, that spells FAILURE! We spend more than the rest of the world on defense, but it is made in america and other countries where (to account for politicians and middlemen) the prices of labor are outrageous! In other words, you get more bang for your buck everywhere else. Our technology remains potent, but our enemies are not what we have been painting them to be for the last three decades anymore.  

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#12) On May 17, 2009 at 8:51 AM, whereaminow (< 20) wrote:

And it was Lassalle who spoke the words which characterize best the spirit of the age to come: "The state is God." - Ludwig Von Mises, Omnipotent Govenrment, 1944

David in Qatar

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#13) On May 17, 2009 at 9:48 AM, alstry (< 20) wrote:


following the current economic and political path, at the current rate of November economic issues may be irrelevant.

At this point, so many are still unaware of how far down the path we really are.....and quite frankly, I am not sure this is the forum to enlighten others.

With knowledge comes responsibilty.....with responsibility comes frustration.

Sometimes are masses are better off just being surprised.


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#14) On May 17, 2009 at 6:36 PM, LongTermBull (89.43) wrote:

Why even post this?  This is the kind of crap the internet is famous for.  Even if he is right, how does that help anyone?  What are we going to do, take everything we own and go to the moon?  Unless your goal is to incite fear/paranoia in people how is this beneficial to anyone on CAPS?


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#15) On May 18, 2009 at 8:23 AM, alstry (< 20) wrote:


It gives you time to prepare.....and to each that preparation would be different.

Would you tell a doctor who diagnosis you with a serious disease he is fear mongering?

Alstry is the Dr. of of the most accurate economic prognosticators on the web.....if it is war......what investments would you make???

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#16) On May 18, 2009 at 8:57 AM, h2ound08 (< 20) wrote:

first off, @ checklist, no one wins in a war.  maybe we do "win" the war, but at what cost? american lives are american lives, and non-american lives are still human lives, and in a war no one wins. period.

@ alstry, i do find your posts incredibly pretentious, massively egotistical, and blatanly extreme and sensational, but they are also thought-provoking.  this one seems a little over the top though, even for you. i truly hope you are wrong.

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#17) On May 18, 2009 at 9:17 AM, ralphmachio (< 20) wrote:

I've been watching this for decades in disbelief, Alstry. Nobody ever learned anything worthwhile that didn't hurt their fragile ears at first. Sure, this isn't a place where I'm gonna find too many people who agree with me, but sitting around with a bunch of people who do agree with me is an unproductive circle jerk. Casting a bit of light upon the seemingly unelightenable (as upset as they get) is quite fun for me.

I don't think things will get as bad as you think this summer/fall, I'd give it a couple of years for it to not matter what the economy is doing. I could be wrong, but I think we have issues to deal with abroad before it gets too bad here. I expect a real bullish july and early Aug, followed by a conflict in an oil rich area that destroys the rally and changes the world. I have concern over India/Pakistan, and hope a conflict there can be avoided. I have a feeling that most of 2010 will be another eye in this storm.

What would it take to shut down international markets?  

With all due respect, you seem to enjoy telling the lego people what time it is as well, in a slightly easier on the ears approach.  

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#18) On May 18, 2009 at 9:59 AM, alstry (< 20) wrote:

@ alstry, i do find your posts incredibly pretentious, massively egotistical, and blatanly extreme and sensational, but they are also thought-provoking.  this one seems a little over the top though, even for you. i truly hope you are wrong.

This could be one of the most accurate and concise assessments of Alstry yet......

and Alstry endorses the entire comment in its entirety....especially the last sentence.

Alstrynomics is all about being right....nobody claims it is perfect......and is good to be wrong.

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#19) On May 18, 2009 at 12:08 PM, translator999 (99.93) wrote:

"Would you tell a doctor who diagnosis [sic] you with a serious disease he is fear mongering?"

Here's a little story you might find interesting. I have a friend who was diagnosed with a horrible condition. The diagnosing doctor went on and on about the effects of it and what she could expect (really horrible, trust me) and what surgery would be necessary. He really scared the crap out of her! I suppose one could say that he was PREPARING HER for her own good, eh? Just one little problem: he NEGLECTED to mention that the actual possibility of her having that condition, based on her specific test results, was about 4%. So, yeah, I would definitely consider that fear mongering. I calmed my friend down and convinced her to get a second (and third) opinion, because something about the whole business simply didn't sound right. Turns out she does NOT have that condition after all. She wants to sue. I don't blame her.

Is the doctor qualified? Perhaps he is a sadist? Maybe he enjoys having power over people? An egomaniac? Amazing the kind of power he had over her. She was simply CRUSHED by the news and had no intention of getting another opinion.

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