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BILL HANSEN is innovative in the field of cycle research and prognostication. His unique style of chart interpretation, a blend of ancient knowledge and modern statistical methods, results in highly accurate and practical information that you can use. Bill has contributed four valuable techniques to the field of astrology: a simplified method of natal and transit interpretation; the Relocation Plotter; the Diurnal Planet for a Year Progression technique; and the Dice Oracle. Meet Astro Bill
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INFLATION WARNING AND THE WAR IN IRAQ
by Bill Hansen
The next round of mega-inflation is just beginning. Three times this century inflation has leap upward. The last mega-inflationary waves peaked in 1919, 1947, and 1982. These peaks, and several lesser ones, accompany war. Wars cause inflation because material is produced in greater quantity, much of it being destroyed in the process. Inflation is determined by the quantity of goods compared to the available money supply. When material goods are produced in excess of the money supply, the government prints more money and issues bonds. The result is an increase of the money supply and a reduction in the value of the dollar.
PREDICTION: An inflationary crisis will begin shortly after the Jupiter conjunction Neptune of May 27, 2009. This aspect occurs twice more during its retrograde phase peaking July 10, 2009 and final direct motion peaking December 21, 2009. Inflation rates will rise rapidly reaching a peak near March 2010. A break in this hyperinflationary period will occur after January 2011. The long-term inflationary high will be in 2020 when Jupiter is sextile Neptune.
During times of inflation, the cost of goods increases. Wages may not keep up with the higher cost of living, and paper investments like stocks become worth less because the value of dollar is diminished. Valuable commodities like gold and silver, however, are a hedge against runaway inflation because they increase in value. There are several other ways to protect against inflationary times. I detail these in the Inflation chapter of my book Earth Changes. We face several perilous years pertaining to inflation, stock prices, and the ravages of other natural and man-made calamities. The first two decades of the 21st century, peaking around 2010, will usher in a new world order of unparallel proportions. But here, let me outline the inflation threat created by the War on Terrorism.
Gold prices fluctuate not only due to inflationary pressures but also on economic and political uncertainty. The international War on Terrorism, especially in Iraq and Afghanistan, and the recent armed conflict between Hamas forces in Lebanon and Israel caused gold prices to jump 8.7% in eleven days! Gold opened at about $613 an ounce on July 3, 2006. It then shot up to $666.30 an ounce due to the Middle East conflict. The world markets feared that Iran and/or Syria might get involved in the Israeli invasion of southern Lebanon. This could disrupt the supply of oil and spread violence throughout the region.
The tense standoff with Iran and North Korea can further erode world confidence leading to a spike in precious metal prices. Political instability, however, is not the only factor that can crash the financial infrastructure. Natural disasters and man-made problems like pollution and global warming are equally devastating to the economy. The pace of change today is even a leading factor in world instability. Governments’ realize the state of world affairs and are known to manipulate the price of gold to create an illusion of normalcy. They may sell vast quantities of gold to make it appear that they possess real wealth. This happened in the 1970s when the U.S. legalized individual ownership of gold. There was widespread uncertainty at the time. Anti-Vietnam War protests led to a counterculture revolution. Anarchy was literally spilling into the streets of America. Selling gold was a way for the government to ease public fear. The price of gold and other precious metals hit a high in 1980. Gold is now, by the way, at about the same price as it was in 1980. It is about to go much higher!
Gold will continue to go up because we are in a long cycle of continuous wars, huge financial readjustments, unusual weather patterns and natural disasters. In addition, China began to sell gold to its citizens about three years ago. China is buying gold like crazy in the world market to satisfy its demand. A similar situation occurred in the 1970s when the U.S. government sold gold to raise money for the Vietnam War effort. Some estimates are that gold will rise to $2500-$3000 an ounce. If gold reaches this price, it would amount to a 300% increase. Gold is considered a long-term investment. The price of this precious metal fluctuates wildly in response to worldwide unrest. Uncertainty is the bane of money market stability.
The time to act is now. It will take years for inflation to reach the high levels expected, but the rise will be spectacularly fast like it was in the 1970s. I predicted in Earth Changes that beginning in 2006 inflation would raise its ugly head. Although the inflation rate has been less than 4% a year, don’t bet that the FED can fiddle with interest rates to effectively keep inflation tamed for long. Inflation, heralded by war, is easy to foresee. The war on terrorism is not going to end anytime soon. It will, in all likelihood, lead to further entanglements involving Iran, North Korea, western Africa, and South American nations – even some of our allies today (Pakistan, Russia, Saudi Arabia, etc.). 2010 is an epochal war year. So the prospects for increased government spending are all too real in the coming years. Get ready, then, for the next mega-inflationary wave.
A whole chapter in my book Earth Changes is devoted to the causes, trends, and historical consequences of mammoth government spending. For now, I would like to add a short outline of historical notes regarding inflation that will put the current situation into better focus.
Gold has been a standard of value since ancient times. To increase the wealth of a nation, more gold was mined or taken from neighboring countries. Another ploy to increase the amount of gold in circulation was to add base metals, like lead or copper, to the coin of the realm. This amounted to devaluing the price of a coin by increasing the number of coins. Nations have been doing this throughout history.
Ancient Persia did this to finance its war against Greece. Alexander the Great won, however, and captured much of the Persian gold to finance his invasion of Asia.
Rome debased its gold coins during the classic struggle against Carthage.
The Anglo-Saxons used debased coins to buy mercenaries.
William the Conqueror used a similar tactic to launch his Norman Invasion.
The British did the same to fight Napoleon.
The American colonies lacked gold coins so they printed Continental Currency to pay for the rebellion against Britain. The resulting hyperinflation almost destroyed the war effort by creating a devastating recession.
Similarly, the Southern States printed Confederate dollars during the Civil War, which ruined its economy. The North was not immune to the massive war expenditures and took on inflationary debt by selling war bonds.
Bonds were used by the British in World War I and inflation soared as a result.
During World War II, the U.S. National Debt grew from $16 billion to over $260 billion resulting in an inflation rate of 18.13% by 1946.
Inflation rates shot up 6% during the Korean and Vietnam wars. After Vietnam, inflation was 11.04% in 1974 and 9.13% in 1975.
Notice how the accumulated national debt grows in relation to inflation and war. The War of 1812 raised the U.S. debt from $57 million to $127 million in just seven years. It took 20 years to pay this debt down to pre war levels.
The Mexican War quadrupled the debt from $16 million to $63 million in just two years.
The Civil War was the greatest inflator. It caused the federal debt to go from $75 million in 1861 to $2.8 billion four years later!
The beginning of the present national debt crisis started after the end of World War I, which added $26 billion to the debt barrel. Roosevelt’s New Deal swelled the debt level to $72 billion. Money was taken off the gold standard at this time, effectively allowing paper currency to flourish.
World War II increased the debt to a staggering $260 billion.
The Korean War, Vietnam, and the Cold War came next, which raised the debt to $2.7 trillion by 1988. Inflation went sky high and the standard of living sank. No longer could the majority of American families maintain a single “bread winner” to keep up with the cost of living.
The national debt is now over $8 trillion. The War on Terror and the wars to come will accelerate this debt. To make matters worse, we are borrowing money from China and other nations to finance our debt. We also buy more foreign products in turn. America is a debtor nation. That is why I keep saying that we are most vulnerable financially, not militarily. Terrorists’ strikes here may frighten and kill people, but a crash in the stock market will bring true terror to every American.
Current estimates are that the wars in Iraq and Afghanistan could cost nearly $550 billion a year. To pay for additional expense, Congress has been raiding trust funds from Social Security, Medicare and other programs. But the accumulated debt continues to increase from $5.6 trillion in 2001 to a projected $11 trillion by 2011.
The annual interest paid by the government to finance the debt is $220 billion in 2006 – more than 12 times NASA’s budget.
The next crisis situation to address is oil. Kevin Phillips writes in his book American Theocracy, “Excessive debt in the twenty-first-century United States is on its way to becoming the global Fifth Horseman, riding close behind war, pestilence, famine, and fire.” Phillips contends that the Republican Party has been taken over by zealous, religious fundamentalism. The fact that much of the world’s oil lies in Muslim countries makes our bid to secure and maintain a foothold in the region a power struggle between faiths. Many believe in a Biblical prophesy of Armageddon being fought in the holy lands. Interestingly, it is indeed in this region of the world that has become a focus point for hostilities based on ethnic disagreement and oil.
World economic powers are prone to collapse through a number of factors. War, climate extremes, natural resources, religious intemperance, and national debt head the list. The Dutch, for instance, were the dominant world power in the seventeenth-century based on their use of the wind for mill power and sailing ships.
From the 1580s until the European wars of 1688-1713, the Dutch commanded the foremost global trading empire of the time. The age of steel and machinery brought Britain to the forefront because of her coal abundance. The British era dated from 1763 and the defeat of France after The Seven Years’ War (also known in America as the French and Indian War). The U.S., although rich in coal, never utilized this resource like the British because wood was so plentiful. But America was next to wrestle economic and military control of the world due to her reliance on oil. Beginning in the 1890s, chemicals, petroleum products, and electrical engineering began to displace coal as an economic engine. Britain lagged behind in the large firms, scientific laboratories, and educated workforces needed in these new fields. By the end of World War I Britain was superseded by the United States. Oil became the all-important fuel of American global ascendancy. It is also likely to be the reason for her demise.
Neptune (planet of oil) is one of the strongest planets in the U.S. Declaration of Independence horoscope. Oil, and the other industries associated with Neptune, are economic giants in our country. Neptune is also square (a 90-degree aspect) with Mars in our national chart. This implies that war (Mars) will be fought over oil, and for clandestine (Neptune) reasons – mostly economic in nature. The true reasons for most of America’s foreign contraventions beginning in the 1890s have been kept secret (Neptune). If the facts were made known for why we have used our military (Mars) overtly and covertly to takeover and overthrow other nations, the public would disapprove.
So the government has either fabricated reasons for military intervention or emphasized what logical reasons existed without revealing certain crucial motives. A separate paper will detail America’s ongoing Manifest Destiny. What is relevant here is the dominance of oil in our economy. Without oil, America would be bankrupt.
We are in the Middle East, Europe, Africa, Asia, and South America for reasons based on oil resources and transportation lines. We do not have enough oil of our own so we must protect our sources overseas. The most recent example of this occurred since the December death of Turkmenistan’s flamboyant leader. Turkmenistan holds the 5th largest natural gas reserves in the world and is a major supplier of gas to Europe after first being pumped to Russia. The U.S. and Turkey have been vigorously attempting to secure oil and gas leases with this volatile country. Another reason America is clinging to oil is due to the fact that the United States is the world’s leading debtor. To pay for the interest on the national debt the government prints bonds, which are sold to individuals, and to European and Asian bankers. If foreign investors decide to sell their dollar holdings and switch to rival currencies, the U.S. would be in big financial trouble. Since oil is still the main world fuel, keeping it priced in dollars and not rival currencies props up the U.S. economy.
Oil is the current fuel of choice. But as oil wanes, a new energy super-giant will emerge, and with it, a new center of world power. The new energy might be natural gas, hydrogen, more nuclear reliance, renewable energies, or non-polluting fossil fuels like coal converted to a clear liquid. The U.S. must hurry to find an alternative fuel. China is already seeking innovations in hydraulics, natural-gas use, and deep drilling for oil. Unfortunately, change is not easy to make because entrenched corporate and governmental interests, and cultural habits, hinder the transition from oil.
Wars fought over natural resources, including water, are extremely likely in the years ahead. The Middle East is expected to hold two-thirds of the world’s remaining oil by 2020. Global demand will intensify as supplies tighten. China, India, Japan, Latin America, and Asia are all in need of vast energy resources and they will compete savagely on the world market. Although experts do not agree on how close world oil production is to its peak, optimists see it only two or three decades away. This does not mean that oil reserves will completely dry up in 20 to 30 years, only that oil production will peak and remaining supplies will, thereafter, become depleted. After the so called peak in oil production, remaining reserves become more difficult to find and extract; in other words, more costly to discover, produce, and use. Governments have optimistically estimated that global oil production will peak between 2025 and 2035. This puts the United States in the difficult position of importing roughly three-quarters of its oil needs by 2025.
The history of oil and the Middle East began in 1879 when Kuwait asked the British for protection. Kuwait was leery of German interests in the rich oil field of the Tigris-Euphrates Valley. The Germans had negotiated oil rights as far as Mosul by 1914. So when war broke out, Turkish Mesopotamia became a battleground. The British and French made a secret pact in 1916 (Sykes-Picot Agreement) that stipulated a postwar split of Mesopotamia. The British broke the agreement and continued to fight after the November 1918 armistice and took Mosul, which was to be under French control. The French were appeased with parts of Germany given in exchange. British control of the region was tenuous from the start. The Arabs rose in rebellion at least 30 times between 1919 and 1958, when the British finally had had enough and left Iraq.
German troops again pursued petroleum in the region during World War II by moving into Egypt and pressuring the Vichy French regime in Syria to help seize Iraq. In spite of a pro-German Iraqi group that staged a successful coup in Baghdad, the British eventually took control after heavy fighting around Fallujah.
After World War II, the CIA staged the 1953 overthrow of elected Iranian Prime Minister Mohamed Mossadegh. Mossadegh’s offense was his nationalization of the British-owned Anglo-Iranian Oil Company. This coup put a puppet Shah in power loyal to the U.S. and, consequently, reestablished the British Anglo-Iranian Oil Company - with one caveat – it was to yield a 40% share to U.S. oil firms.
Another nationalist Iraqi leader, Abdul Qarim Qasim, rose to power and a coup to replace him planned by U.S. intelligence in 1959 failed. Saddam Hussein was hired by the U.S. to carry out the coup.
So the government has either fabricated reasons for military intervention or emphasized what logical reasons existed without revealing certain crucial motives. A separate paper will detail America’s ongoing Manifest Destiny. What is relevant here is the dominance of oil in our economy. Without oil, America would be bankrupt.
We are in the Middle East, Europe, Africa, Asia, and South America for reasons based on oil resources and transportation lines. We do not have enough oil of our own so we must protect our sources overseas. The most recent example of this occurred since the December death of Turkmenistan’s flamboyant leader. Turkmenistan holds the 5th largest natural gas reserves in the world and is a major supplier of gas to Europe after first being pumped to Russia. The U.S. and Turkey have been vigorously attempting to secure oil and gas leases with this volatile country. Another reason America is clinging to oil is due to the fact that the United States is the world’s leading debtor. To pay for the interest on the national debt the government prints bonds, which are sold to individuals, and to European and Asian bankers. If foreign investors decide to sell their dollar holdings and switch to rival currencies, the U.S. would be in big financial trouble. Since oil is still the main world fuel, keeping it priced in dollars and not rival currencies props up the U.S. economy.
War almost broke out again in the Middle East over oil during the 1973-1974 Israel-Arab war. This conflict led to an Arab and OPEC embargo on oil shipments to the United States and the Netherlands. The economic effects were devastating bring long lines at gas stations and aggravating a severe recession. In response, the Nixon administration contacted senior British officials and set out to plan a joint airborne attack to secure the oil fields in Saudi Arabia, Kuwait, and Abu Dhabi. The British were hesitant, however, and the attack was called off.
The Iranian revolution in 1979 overthrew the Shah and seized 53 American embassy employees. President Carter ordered a helicopter rescue mission to free the hostages but it failed miserably.
The Iraq-Iran war of 1980-1988 was fought over boundary issues with oil being an implied reason for the Iraqi invasion. During the war the U.S., Britain, and several other nations sold arms to both sides to keep their fingers in the pie in the event that either side might win. Washington and London also arranged clandestine transfers of dual-use materials to Iraqi leader Saddam Hussein that helped him develop chemical, biological, and potentially nuclear weapons to defeat Iran. Saddam Hussein had been used before so assisting him into power made sense.
END
Article written by Bill Hansen 2010. All rights reserved.
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