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.