PANIC OF 2016

BY DYLAN SKRILOFF

The topsy turvy stock market has a lot of folks wondering: Will 2016 be an economic repeat of 2008?

Not quite. Trends Research Institute CEO Gerald Celente, one of the few forecasts to accurately predict the havoc of 2008, says it will be even worse. “This year will have a new panic,” Celente told the Rockland County Times this week. “The slowdown of oil prices, rapid decrease of iron ore prices, copper prices down to 2009 levels and commodities at 1999 levels” all foretell the major correction coming our way.

Celente already sees panic in many resource-rich second and third world countries reliant on first world demand. Brazil and Argentina are among the nations in crisis. “It’s a deflationary cycle,” Celente explained.

For Celente, the problems of 2016 are largely a matter of 2008’s chickens coming home to roost. The massive intervention in the economy taken by Congress and the Fed may have staved off total disaster, but it only caused worse problems in the long run.

Quantitative easing drove up stock prices, but where are the jobs? TARP bailed out banks, but now those banks have been deemed too big to fail, and are not subject to the natural corrections of the market.

Celente says don’t blame capitalism, because too big to fail is the antithesis of capitalism. The combination of corporate and state power, in fact, better resembles the economic model of fascism, he says.

“They should have let it do what it had to do [in 2008],” Celente said. “It only helped the super-wealthy. The press puts out BS saying the Fed had to do it…anyone who repeats that [uncritically] deserves to be beaten down.”

Celente believes the system is out of tricks this time and will simply have to undergo the correction, however painful it may be. The crash will be unpleasant but in the long-run there is reason for hope, if people wake up, he said.

Thanks to Celente, I was in on the “big short” of 2008

Recently, I took in the critically acclaimed film “The Big Short,” the story of a group of investors who foresaw the economic crises and eventual crash of 2007 and 2008 and specifically the crash of the subprime housing and broader housing market.

The movie is a fascinating portrait of a system destined to fail due to the ignorant and often dishonest practices of the many actors involved in running and profiting from it. From the big banks, to mortgage brokers, to individual applicants taking on loans they never had a capacity to repay, the film is uncanny in capturing the dynamics of the crash.

For me, “The Big Short” brought back memories of 2007 and 2008, when I was fortunate enough to interview Celente, who went on the record warning of many of the events that eventually transpired. At the time I was the staff journalist of the Hudson Valley Business Journal, since defunct, based in Wappingers Falls, which covered all of the Hudson Valley counties from Rockland up to Ulster and Dutchess.

One of the articles I wrote was picked up by the UPI wire and was perhaps the first mainstream news blurb to foretell the crisis. Celente was even able to tell me the best day to buy gold, what small amount I could afford.

I bought gold at its lowest value of the year around $620 and it then tripled in value. Celente remains a “gold bug” and said he expects the precious metal to increase in price this year.