New Press Release: The Escalating Economic Crisis
Palgrave Macmillan
April 24, 2008
Financial headlines scream everyday:
stock markets are tanking, fear grips Wall Street, oil price breaks new
records, the Fed bails out Bear Stearns, the housing market is in turmoil,
layoffs soar, on and on it goes. Even government officials acknowledge
that a recession has set in. None of this is a surprise to Ravi Batra, the best
selling author of a new book called The
New Golden Age: The Coming Revolution against Political Corruption and Economic
Chaos. He predicted all this way in advance, offering his latest forecast
in February last year to Texas Monthly:
“When the American bubble starts to burst around
mid 2007, and beyond, foreign investors will head for the exits…” Now that the
American housing bubble is bursting at the seems, Batra’s biggest fear is that foreign investors will indeed head
for the exits, and the already feeble dollar will collapse. Then we will see a
rapid unraveling of our debt based economy, rising unemployment, bulging poverty,
and big stock market crashes.
Batra has made a career out of making
controversial forecasts. Among his notable successes are the forecasts he made
in the late 1970s:
*The ayatollahs would take over Iran in 1979 and then rule for a while.
*The Soviet Communism would vanish
by the end of the century.
*The
United States would be entangled in a major fight with fundamentalist
Islam starting
around 2000.
He also correctly foresaw the stock
market crash of 2001. In The New Golden
Age that appeared in January 2007, Batra predicted
* Oil price will break new record until 2010 in spite of a slowing
economy, but collapse in
the next
decade.
* The housing bubble will keep bursting at least till 2009
* Share prices will see a slow fall in 2007 but an accelerated fall in
2008 and 2009
* An unprecedented movement will appear by 2009 to start a revolution
against the
rule of
wealthy lobbyists in politics. The revolution will lead to a new golden age in
the
next decade.
All these forecasts have been coming true
right before our eyes; even the revolutionary movement has taken shape under
the leadership of a charismatic leader, Barack Obama. It is clear that Batra is onto something. He uses a
variety of economic and historical cycles to make his case. According to his
economic cycle, we are now in the midst of an inflationary period where real
estate and oil prices first zoom and then collapse. Amazingly, such a cycle has
occurred every third decade in American history, with the 1970s being the last
such decade.
As regards the political cycle, Batra argues that nations pass through
three eras; some times the military dominates society, sometimes the
intellectuals including priests, and some times the wealthy. His political
cycle concludes that the age of money is about to end in America and Europe.
This cycle also predicts that China, where the rule of money or of wealthy
landlords ended in 1949, is about to move into its own golden age. History
reveals that the age of the wealthy always ends in a social revolution followed
by a golden age. This is the basis of Batra’s
prediction that we are about to move into a period of major economic chaos and
poverty that will wake up people to overthrow the rule of money in society in a
ballot-box revolution. Then will come a golden age of peace, prosperity
and ethical values.
The single most worrisome economic problem today is that productivity is
outpacing wages all over the world. Since productivity creates supply and wages
create demand, supply outpaces demand; to maintain economic balance, the world
is busy creating debt, which artificially raises demand. But now credit is not
easily available; markets realize that goods will go unsold and
profits will sink. So they are
tanking.
Batra explores a variety of economic reforms aimed at maintaining the demand-supply balance without increased debt. He offers an export-exchange rate plan to eliminate the U.S. trade deficit within the rules of free trade. In the meanwhile, the current crisis is just a tip of the vast American mortgage iceberg, and much more is yet to come. Fundamental reforms are immediately needed, not just the band aid that the Fed has applied.