When Hiroshi Yamauchi dropped out of college in 1948, to replace his grandfather as the president of the Kyoto-based hanafuda playing-card manufacturer Nintendo Koppai, the company, founded in 1889, had seen only moderate success. By 1991, fourteen years after the company launched the plainly named “Color TV Game 6,” Nintendo had supplanted Toyota as Japan’s most successful company, earning around $1.5 million per year per employee; in the early nineteen-nineties, the company’s earnings exceeded that of all the American movie studios combined, consistently posting more than a billion dollars in pre-tax profits each year.

Beyond the numbers, Yamauchi, who died this week at the age of eighty-five, was both the architect and the savior of the video-game industry as we know it today. With the Nintendo Famicom—known outside Japan as the Nintendo Entertainment System—and the famed Nintendo Seal of Approval, which assured wary consumers that its games would be functionally sound (unlike many of those released during the Atari boom) and enjoyable, his company restored public trust in video games following the American market’s grim crash in the early nineteen-eighties.

Despite playing only a handful of his company’s products himself (he fumbled with the Famicom’s controller the first time he picked one up to play a digital version of Go, eventually passing it to a junior staff member in frustration), Yamauchi’s philosophy was that creativity, not technological advancement, was the key to the medium’s development. “We cannot guarantee interesting video games just through the use of better technology,” he once said. For Yamauchi and his lieutenants—including the Super Mario creator Shigeru Miyamoto, who was Profiled by Nick Paumgarten in the magazine, and the late Gunpei Yokoi, the designer of the Game Boy—eliciting the joy of discovery and surprise in a player was video gaming’s great purpose. In this way, Nintendo and its games have continued to redefine the way humans play for more than three decades.

Henk Rogers, the man who brought Tetris out of the Soviet Union and secured the rights for Nintendo, was one of only a handful of Westerners to befriend Yamauchi. The pair would regularly discuss the state of the industry over a game of Go; Yamauchi was a master player with the advanced rank of sixth dan. Rogers once likened his friend to the fictional mobster Don Corleone. “He was tough as nails and quick to reach a decision,” he said. “When he did, everybody fell in line. He was a difficult man to please. If you publicly disagreed with him, your days were numbered.”

Yamauchi’s reputation as a callous businessman was forged early on. After suffering a severe stroke, his grandfather, Sekiro Yamauchi, offered the twenty-one-year-old the presidency of Nintendo from his hospital bed. (Yamauchi’s father had left when Yamauchi was just five years old; unable to cope as a single parent, his mother, Kimi, gave her son up to her parents, putting him next in line to run the family business.) The young man agreed to quit his law degree on the condition that he be the only family member working at the company. Regretfully, Sekiro fired his grandson’s cousin, a longtime employee, and in 1949 Yamauchi was appointed the third president of Nintendo. Company employees, many of whom had worked at Nintendo for their entire careers, resented Yamauchi’s youth and inexperience. His first act was to fire these dissenters en masse.

While Nintendo had no direct links to organized crime, in those early years the company benefited from its patronage nevertheless. The yakuza operated high-stakes games with hanafuda cards in casino-like parlors. Professional players would begin each game with a fresh deck, greatly increasing demand for Nintendo’s product. In 1951, Yamauchi changed the name of the company to Nintendo Karuta—Nintendo Playing Cards. His first business breakthrough came in 1959, when he brokered a licensing arrangement with Walt Disney to print images of Mickey Mouse and other Disney characters on the backs of playing cards. With distribution to toy stores, Nintendo sold an unprecedented six hundred thousand packs of cards that year.

Eager to expand further, Yamauchi dropped “Karuta” from the company name and rebranded as Nintendo Company, Ltd. However, forays into selling instant rice and managing love hotels, which provide rooms at an hourly rate, typically for trysts, failed to meet his high expectations—though Yamauchi himself was reportedly one of the most reliable customers.

In the mid-nineteen-sixties, Yamauchi charged Gunpei Yokoi, a technician hired to maintain the hanafuda assembly-line machines, with designing a toy in time for Christmas. Yokoi, a keen amateur inventor, showed Yamauchi one of his latest creations, an extendable mechanical arm with a clasping hand on one end. Yamauchi immediately ordered production the Ultra Hand, Nintendo’s first toy, which sold over 1.2 million units. Yokoi established Nintendo’s first research-and-development group, dubbed simply “Games,” in a warehouse in the Kyoto suburb of Uji in 1969. More creative toys followed: the Ultra Machine, a mechanical ball pitcher; the Love Tester, a machine that measured the “current” between a hand-holding couple and offered a pseudo-scientific readout of their attraction; and a series of Beam Gun games, in which players shot beams of light at targets in an amusement arcade and watched as bottles appeared to explode.

Having experienced the commercial potential of games, and after watching the video-game market emerge in America in the late nineteen-seventies, Yamauchi negotiated a license to manufacture and sell the Magnavox Odyssey, one of the first American home-video-game systems, in Japan. Nintendo’s own systems, which played variations of Atari’s Pong, followed, but Yamauchi pressured his engineers to find a new way of designing games—ones not based around tennis. “We must look in different directions,” he said. “Throw away all your old ideas in order to come up with something new.” Yokoi had the solution: a pocket-calculator-sized series of handheld systems called Game & Watch, which each played a single game and could be mass-produced for a relative pittance. Introduced in 1980, Nintendo sold tens of millions of units over the game’s eleven-year lifespan.

Flushed with this success, Yamauchi turned his attention to a more substantial home console, one that could play multiple games via slot-in cartridges. In contrast to Atari’s 2600, with its wood-panelled face and black-plastic-rimmed hood that lifted up to reveal a panel of orange knobs and levers, Yamauchi wanted Nintendo’s console to look like a toy, so that it would appeal to the entire family—a family computer, he instructed: a Famicom. The heart of the machine, based on a Motorola 6502 chip derivative, was nothing unusual, though the system’s controllers, which were hardwired to the console, featured a unique cross-shaped directional pad whose design offered both elegance and functionality. (Three decades later, “d-pads” remain a staple of video-game controllers.)

The Famicom’s real innovation, however, was its business model. In May, 1983, Yamauchi addressed the Shoshin-kai, a Japanese wholesalers group, and told them that Famicom retailers should not expect to see large profits from system sales. His reasoning would change the gaming industry. “Forgo profits on the hardware,” he said. “It is just a tool to sell software. This is where we shall make our money.”

Nintendo’s new system launched on July 15, 1983, and sold for fourteen thousand eight hundred yen, around half the cost of its rivals. Within two months, the system had sold over half a million units. Within six, disaster struck: a faulty chip in the original manufacturing caused certain games to crash. Yamauchi, with typical flourish, recalled every system Nintendo had sold, missing a crucial sales window during the Japanese New Year holiday but protecting the company’s name as a consumer-centric manufacturer.

Yamauchi soon learned that software sold hardware, not vice versa, and appointed Shigeru Miyamoto, then a young artist and the designer of Nintendo’s first global arcade hit, Donkey Kong, to head a new game-design research group called R&D4. Yamauchi recognized that artists, not technicians, made the best games, and filled R&D4 with likeminded creative people. The internal-software division soon established itself as Nintendo’s most successful department, launching Mario Brothers and The Legend of Zelda, successes buoyed by Yokoi’s R&D1 group, which released similarly well-regarded titles such as Metroid, Kid Icarus, and Excitebike.

But success only seemed to isolate Yamauchi. “As I grew to know him more, he seemed to become more isolated, even from his own family,” said Rogers, who tried and failed to convince Yamauchi to attend his own granddaughter’s wedding a few years ago. Nevertheless, the elder statesman of video games maintained a laconic sense of humor. Rogers once shared a flight with Yamauchi on the airline Northwest. “I had no idea he was on the plane,” he recalls. “We met in an aisle when he was stretching his legs, and he complained to me about the service he’d received in first class. He called the airline ‘Northworst.’ ”

Yamauchi retired from his position as president of Nintendo in 2002, but his influence and philosophy continued to be keenly felt; he remained as the chairman of Nintendo’s American board of directors until 2005. He refused to draw a pension from the company, saying that Nintendo could put it to better use—as Japan’s thirteenth richest man, he had a net worth of $2.1 billion.

While Yamauchi maintained that being a non-player gave him an advantageous perspective on the industry, this assertion was only half true, perhaps to maintain the illusion that his business decisions came from his head, not from his heart. “After the release of Tetris on the Game Boy, I’m told he played the game extensively,” said Rogers. “He would call staff members, sometimes in the middle of the night, to ask them questions about the game.”

When Yamauchi left Nintendo entirely, in 2005, the company was a year away from launching Wii, the best-selling console of the so-called Last Generation of video-game hardware. Today, it’s in a somewhat precarious position: its latest console, the Wii-U, is underperforming, and in 2012 the company lost 36.4 billion yen ($366 million), its second consecutive annual loss. But the erstwhile president’s belief in the power of invention, of “throwing away your old ideas,” still characterizes the company’s products, which over the past decade have continued to sidestep the technological arms race that defines the products of its rivals, Sony and Microsoft, in favor of playfulness and novelty. It is a philosophy that, over seven decades, brought Yamauchi and the company he inherited a great deal of success, even if that playfulness, if it was ever within him, rarely made itself known from behind the carapace, one that seems to have been formed in childhood and tempered in business.

A sad day indeed.

Seymour “Ratboy” Hersh has sold out. He has joined the ranks of the fake-left Vichy press personified by the likes of Amy Goodman, Jeremy Scahill and Chris Mathews.

Based on reports from unnamed “former administration officials”, he has crafted what is essentially a complete white-wash of the Obama administration’s involvement in the chemical weapons attack in Syria while simultaneously attempting to set a new “red-line” narrative for a regime change operation in Turkey, a country where the current ruling party just won 48% of the vote in regional elections. It just so happens that Turkey is moving away from E.U. membership. A country that the E.U. is demanding makes structural reforms to their economy and constitution in order to bring them more in line with the way the E.U. does business.

“The financial crisis, the global crisis, the Arab Spring and the events in Syria and Egypt show that the EU needs Turkey more than Turkey does the EU,” Prime Minister Recep Erdoğan, February 2014

After nearly eight months of talks, MEPs (Member of European Parliament) in the foreign affairs committee on Monday (3 March) voted on a resolution on Turkey’s progress towards EU accession.

The carefully scripted document, drafted by Dutch centre-right MEP Ria Oomen-Ruijten, describes Turkey as a “strategic partner” but also says it must initiate urgent reforms and promote political dialogue. EU Observer, April 3, 2014

I wonder what it cost to get Seymour Hersh to do an about face and start carrying water for the Obama administration under cover of his previous agitator reputation that had been well deserved up until this point, in my opinion.

The fact that he is clearly attempting to white-wash the Obama administration’s involvement in the chemical weapons attack in Syria is obvious. The fact that he’s attempting to finger Prime Minister Recep Erdoğan for that attack at a time when (as COINCIDENCE would have it) Turkey is gradually moving away from a partnership with the EU is less obvious but just as disingenuous.

“The foreign policy expert (unnamed source) told me that the account he heard originated with Donilon. (It was later corroborated by a former US official (another unnamed source), who learned of it from a senior Turkish diplomat.) According to the expert, Erdoğan had sought the meeting to demonstrate to Obama that the red line had been crossed, and had brought Fidan along to state the case. When Erdoğan tried to draw Fidan into the conversation, and Fidan began speaking, Obama cut him off and said: ‘We know.’ Erdoğan tried to bring Fidan in a second time, and Obama again cut him off and said: ‘We know.’ At that point, an exasperated Erdoğan said, ‘But your red line has been crossed!’ and, the expert told me, ‘Donilon said Erdoğan “fucking waved his finger at the president inside the White House”.’ Obama then pointed at Fidan and said: ‘We know what you’re doing with the radicals in Syria.’ (Donilon, who joined the Council on Foreign Relations last July, didn’t respond to questions about this story. The Turkish Foreign Ministry didn’t respond to questions about the dinner. A spokesperson for the National Security Council confirmed that the dinner took place and provided a photograph showing Obama, Kerry, Donilon, Erdoğan, Fidan and Davutoglu sitting at a table. ‘Beyond that,’ she said, ‘I’m not going to read out the details of their discussions.’)” Sy Hersh, April 6 2014

Seymour Hersh had an article published yesterday at the London Review of Books, The Red Line and the Rat Line, which utilizes a well established tactic of providing disinformation to the public dressed up with a little truth for credibility’s sake.

In this case, the disinformation is that the Obama administration and U.S. intelligence had nothing to do with the use of chemical weapons in Syria targeting civilians. The attack was committed in order to provide a false flag type event designed to provide Obama’s “red line” pretext to the Shock and Awe type attack they had been planning for months just prior to the event.

“Under White House pressure, the US attack plan evolved into ‘a monster strike’: two wings of B-52 bombers were shifted to airbases close to Syria, and navy submarines and ships equipped with Tomahawk missiles were deployed. ‘Every day the target list was getting longer,’ the former intelligence official told me. ‘The Pentagon planners said we can’t use only Tomahawks to strike at Syria’s missile sites because their warheads are buried too far below ground, so the two B-52 air wings with two-thousand pound bombs were assigned to the mission. Then we’ll need standby search-and-rescue teams to recover downed pilots and drones for target selection. It became huge.’ The new target list was meant to ‘completely eradicate any military capabilities Assad had’, the former intelligence official said. The core targets included electric power grids, oil and gas depots, all known logistic and weapons depots, all known command and control facilities, and all known military and intelligence buildings.” Sy Hersh, April 6 2014

The little truth that Hersh dresses his disinfo up with is that the CIA consulate in Benghazi had one purpose and one purpose only and that was to ship weapons via a “rat line” into Syria, to those very same terrorists we are now talking about arming with “manpads” (shoulder launched heat seeking rockets which the terrorists will undoubtedly use on civilian aircrafts). Those same terrorists who have been backed by the Obama administration since we started the destabilization campaign three years ago. Those same terrorists visited by high ranking U.S. officials. Those same terrorists who used sarin gas on a civilian population so that Obama could attempt to justify another Iraq styled Shock and Awe in Syria.

‘The consulate’s only mission was to provide cover for the moving of arms,’ the former intelligence official (yet another unnamed source), who has read the annex, said. ‘It had no real political role.’ Sy Hersh, April 6 2014

Of course the CIA has a political role in countries that they destabilize and neoliberalize on behalf of the masters of the universe. That’s the whole point of the CIA. This statement, as regurgitated by Ratboy Hersh, would be laughable coming from any CNN hack. From Hersh, it’s damn near tragic.

Hersh goes on to suggest that after the Benghazi attack, the U.S. inexplicably, gave up on the “rat line”, shipping illegal weapons to our terrorist destabilization campaign in Syria. This of course absolves President Peace Prize of any culpability in the chemical weapons false flag attack.

Washington abruptly ended the CIA’s role in the transfer of arms from Libya after the attack on the consulate, but the rat line kept going. ‘The United States was no longer in control of what the Turks were relaying to the jihadists,’ the former intelligence official said. Within weeks, as many as forty portable surface-to-air missile launchers, commonly known as manpads, were in the hands of Syrian rebels. Sy Hersh, April 6 2014

With the narrative set and “Terror Tuesday” Obama absolved of all sin, Ratboy goes in for the kill; it’s all Erdoğan’s fault.

By the end of 2012, it was believed throughout the American intelligence community that the rebels were losing the war. ‘Erdoğan was pissed,’ the former intelligence official said, ‘and felt he was left hanging on the vine. It was his money and the cut-off was seen as a betrayal.’ In spring 2013 US intelligence learned that the Turkish government – through elements of the MIT, its national intelligence agency, and the Gendarmerie, a militarised law-enforcement organisation – was working directly with al-Nusra and its allies to develop a chemical warfare capability. ‘The MIT was running the political liaison with the rebels, and the Gendarmerie handled military logistics, on-the-scene advice and training – including training in chemical warfare,’ the former intelligence official said. ‘Stepping up Turkey’s role in spring 2013 was seen as the key to its problems there. Erdoğan knew that if he stopped his support of the jihadists it would be all over. The Saudis could not support the war because of logistics – the distances involved and the difficulty of moving weapons and supplies. Erdoğan’s hope was to instigate an event that would force the US to cross the red line. But Obama didn’t respond in March and April.’ Sy Hersh, April 6 2014

Notice how Ratboy also clears the Saudis with the same brush-stroke of disinfo provided by yet another unnamed “former intelligence official”.

Mr. Hersh’s effort includes a rather stark and unapologetic review of the purpose behind the CIA consulate in Banghazi without really delving into the particulars of how and more importantly, why, it was attacked. This is supposed to show that Mr. Hersh is being completely forthcoming in his article with the facts, even the painful ones, regarding the Obama administration’s destabilization campaign in Syria.

But that information, that the Benghazi office’s sole purpose was to transfer undocumented weapons to our mercenary terrorists in Syria, was already well established even if it isn’t entirely true (when we neoliberalize a nation via violent means, many times our CIA has to have a presence on the ground helping the illegal regime round up any dissidents or business and political opposition leaders who might make our “structural reforms” more difficult. Assassinations, black-bag ops, disappearances, all of these nifty little “democratic” tricks are part of bringing “stability” to the region and more than likely the Benghazi hub was more than simply a way station for black market weapons being shipped into the next targeted nation.)

So Mr. Hersh wasn’t really offering up any new incriminating evidence.

What he did offer up was a rather unique version of the story of the Syrian chemical weapons false flag attack that completely absolves the Obama administration and even makes the case that the reason they backed off of their plans to Shock and Awe the country back to the stone ages like Bush did to Iraq on similar false claims, was because they came to realize in the nick of time, that it was Erdoğan who was responsible and not Assad.

According to Mr. Hersh, once the Brits discovered that the chemical make-up of the Sarin gas didn’t fit Syria’s they informed the U.S. and steps were taken to stop the brutal Shock and Awe plan of attack, which Mr. Hersh also takes pains to assert would ONLY have targeted military infrastructure.

Ratboy Hersh fails to mention the fact that the same thing was said about Shock and Awe Iraq and Libya while tens of thousands of civilians died. Millions suffered in the aftermath of being “bombed back into the stone ages” due to false claims of WMDs and attacks on their own civilian populations which never happened.

Hersh’s effort is part on an ongoing campaign to destabilize Turkey and make it ready for a regime change operation on behalf of the European Union. Hersh, of course, fails to mention any of the context of that developing story in his blatant propaganda piece.

A month ago, at a time right after Erdoğan openly expressed his disgust with the E.U. in a public statement, suddenly a recording surfaced which purported to prove he had planned a false flag event in Syria. Ratboy did make mention of that recording in the second to the last paragraph of his Judith Milleresque “news” report:

Turkey’s willingness to manipulate events in Syria to its own purposes seemed to be demonstrated late last month, a few days before a round of local elections, when a recording, allegedly of Erdoğan and his associates, was posted to YouTube. It included discussion of a false-flag operation that would justify an incursion by the Turkish military in Syria. Sy Hersh, April 6 2014

“Turkey’s willingness to manipulate events in Syria”? Are you kidding me? Did Turkey spend $5 billion manipulating events in Syria like the U.S. did?

A key clue into Ratboy’s inclination and his lack of intellectual honesty regarding the Syrian destabilization campaign being run by the Obama administration is found in the very last paragraph. It makes it clear that Mr. Sy Hersh can now be afforded the same credibility as Scaghill and Goodman:

Barring a major change in policy by Obama, Turkey’s meddling in the Syrian civil war is likely to go on. ‘I asked my colleagues if there was any way to stop Erdoğan’s continued support for the rebels, especially now that it’s going so wrong,’ the former intelligence official told me. ‘The answer was: “We’re screwed.” Sy Hersh, April 6 2014

While apparently calling for some kind of military intervention, either in Syria or Turkey, Ratboy refers to the destabilization campaign in Syria as a ‘civil war”

It is anything but a civil war. It is a terrorist destabilization effort funded by the U.S. and Saudis, armed by nearly every complicit nation and NGO there is and staffed by a collection of mercenary thugs rounded up by intelligence agencies from the CIA to MI6.

Sy Hersh is certainly aware of that fact. Whomever the creature is who wrote this disinformation screed, he certainly isn’t the old Sy Hersh we came to respect over the decades. It reads like it was written by someone else, full of undisclosed sources and administration talking points.

It’s a sad day in the ever shrinking world of legitimate journalism when Ratboy Hersh starts running regime change propaganda as if it were news while giving the real terrorists a pass.

A sad day indeed.

The Battle of Verdun through June 1916, with a brief look at the civilian life in France at the time.

The Great War is a 26-episode documentary series from 1964 on the First World War. The documentary was a co-production of the Imperial War Museum, the British Broadcasting Corporation, the Canadian Broadcasting Corporation and the Australian Broadcasting Commission. The narrator was Michael Redgrave, with readings by Marius Goring, Ralph Richardson, Cyril Luckham, Sebastian Shaw and Emlyn Williams. Each episode is c. 40 minutes long.

In recent months US President Trump has pointed repeatedly to his role in making the American economy the “best ever.” But behind the extreme highs of the stock market and the official government unemployment data, the US economy is primed for a 1929-style shock, a financial Tsunami that is more influenced by independent Fed actions than by anything that the White House has done since January 2017. At this point the parallels between one-time Republican President Herbert Hoover who presided over the great stock crash and economic depression that was created then by the Fed policies, and Trump in 2019 are looking ominously similar. It underscores that the real power lies with those who control our money, not elected politicians .

Despite proclamations to the contrary, the true state of the US economy is getting more precarious by the day. The Fed policies of Quantitative Easing and Zero Interest Rate Policy (ZIRP) implemented after the 2008 crash, contrary to claims, did little to directly rebuild the real US economy. Instead it funneled trillions to the very banks responsible for the 2007-8 real estate bubble. That “cheap money” in turn flowed to speculative high-return investment around the world. It created speculative bubbles in emerging market debt in countries like Turkey, Argentina, Brazil and even China. It created huge investment in high-risk debt, so called junk bonds, in the US corporate sector in areas like shale oil ventures or companies like Tesla. The Trump campaign promise of rebuilding America’s decaying infrastructure has gone nowhere and a divided Congress is not about to unite for the good of the nation at this point. The real indicator of the health of the real economy where real people struggle to make ends meet lies in the record levels of debt.

Today, fully a decade after the unprecedented actions of three presidents, the US economy is deeper in debt than ever in its history. And debt is controlled by interest rates, interest rates ultimately in the hands of the Fed. Let’s look at some signs of serious trouble which could easily put the economy in a severe recession by this time in 2020.

Ford Motor, GE

On September 25 the corporate bond debt of Ford Motor Co., who unlike GM refused government nationalization in 2008, has just been downgraded to “junk” status by Moody’s, who said Ford faces “considerable operating and market challenges…” It affects $84 billion in company debt.

Junk rating means than most insurance companies or pension funds are banned from holding the risky debt and must sell. Before Moody’s rated Ford bonds at the lowest just prior to junk, BBB. The problem is that over a decade of Fed low interest rates, corporations have taken greater debt risks than ever, and the share of BBB-rated or “at risk of junk” bonds today has risen to more than 50% of all US corporate bonds outstanding. At the start of the crisis in 2008 BBB-rated bonds were only a third of the total. That amounts to more than $3 trillion of corporate debt at risk of downgrade to junk should the economy worsen, up from only $800 billion a decade ago. Ten years of unprecedented ultra-low fed interest rates are responsible. Moody’s estimates that at least 47 other multi-billion US corporations are vulnerable to junk downgrades in a sharp economic downturn or with rising interest rates. The most mentioned are the aerospace and electrical conglomerate GE which among other things makes jet engines for troubled Boeing.

Corporate debt in the USA today is a ticking time bomb, and the Fed controls the clock. Today total corporate debt exceeds $9 trillion, an all-time high, a rise of 40% or $2.5 trillion since 2008 according to the St. Louis Fed. With the ultra-low Fed interest rates since 2008, companies have doubled the debt outstanding but debt cost has risen only 40%. Now in recent months the Fed has been raising interest rates directly and indirectly via Quantitative Tightening. The most recent token .25% rate cut does little to change the grim outlook for the US bond market, the heart of the financial system.

Ford among other problems is being hit hard by the global downturn in the auto sector. In the USA car dealers have become so desperate to sell cars as consumers are choking on record levels of personal debt that they have recently offered 8-year car loans. For the past two years the Fed has been slowly ratcheting interest rates higher. The predictable result has been rising default on household debts, especially car loans. As of April, 2019 a record 7 million Americans were 90-days or more behind in car loans, some 6.5% of all auto loans. More than 107 million Americans have car loans today, up from 80 million in 2008 and an historic record. The rise in defaults parallels the Fed monetary tightening graph.

Both Ford and GM are announcing thousands of job layoffs as the economy slows and consumer debt reaches dangerous levels. Ford is cutting at least 5,000 jobs and GM 4,400 in US operations. Tens of thousands more layoffs are deemed likely in coming months if the economy worsens.

Then the private US Institute for Supply Management just reported that its index of manufacturing industry contracted to the weakest since June 2009, the depth of the economic crisis a decade ago. In the survey companies cited uncertainties related to the China trade war of Trump as the major factor behind depressed hiring and business activity. Trump then attacked the Fed for not moving fast enough to lower rates.

One indicator of the precarious state of the USA real manufacturing economy is the deepening recession this year in the trucking industry, the sector that moves goods through the country. In September 4,200 truck drivers lost their jobs as freight rates plunged owing to lack of goods traffic. In the first six months of 2019 around 640 trucking companies went bankrupt, three times the number a year before when Fed rate impacts were still low and trade war consequences far less clear. In June trucking loads were down more than 50% in June compared with June 2018 in the trucking spot market. Rates also dipped by as much as 18.5% over that same period.

The volume of freight shipped by all modes in the US has been sinking dramatically. Freight shipments within the US by truck, rail, air, and barge fell 5.9% in July 2019, compared to July 2018, the eighth month in a row of year-over-year declines, according to the Cass Freight Index for Shipments, which excludes bulk commodities such as grains. This decline, along with the 6.0% drop in May, were the steepest year-over-year declines in freight shipments since the Financial Crisis of 2008.

Dodgy Home Loans?

Far from realizing the lessons of the US sub-prime housing debt crisis leading to the global crisis of 2007-2008, the banks have quietly moved back into making dodgy loans. Moreover, the two quasi-government mortgage lending guarantee agencies, Fannie Mae and Freddie Mac are in worse shape than during the 2007 sub-prime real estate crisis.

Nonetheless in March, 2019 the President signed a Memorandum calling for steps to end the ten-year Government conservatorship of the two agencies. However, as several officials recently testified, “The U.S. housing finance system is…Worse off today than it was on the cusp of the 2008 financial crisis.” That, despite $190 billion of taxpayer bailout to the two agencies. By a Congressional directive Fannie Mae and Freddie Mac are allowed to hold a loss buffer capital reserve of combined $6 billion. However they own or guarantee almost $5 trillion in mortgage securities. Many of those mortgages are of dubious or dodgy credit quality like before 2007, as banks look for higher interest rate yields. If the overall economy worsens in the coming year in the run-up to November 2020 elections, home mortgage defaults could soar. It has been estimated that

“if just 0.12% of Fannie and Freddie’s mortgages go bad (about one-tenth of 1%), it would wipe them out completely. They’d have no capital left. And without a government bailout, they might cease to exist altogether. That could quickly lead to a new mortgage loan crisis.”

The key to the US economy is debt and debt is at an all-time high for US Government, whose deficit is rising annually at more than $1 trillion, for corporations with record debt and for private households where home mortgage debt, student loan debt and car loan debt all are at record high levels. Student loan debt reached $1.46 trillion by January 2019, with serious delinquency rates much higher than any other debt type. Mortgage debt accounted for $9.12 trillion. Total private household debt was a record $13.5 trillion. If we add to this precarious economic debt the situation in American agriculture where farmers face the worst crisis since the early 1980’s, it is clear that the economic miracle of the Trump era is far from stable.

To wit, one of the most noted features of recent US economic growth, the US shale oil recovery of 2018 that made America the world’s largest oil producer, has all but flattened out this year as world oil prices fall sharply. The fall is threatening many US shale oil producers many of whom borrowed by issuing blow investment of high interest yield junk bonds in hopes of a recovery from the price collapse after 2014. Even an attack on Saudi oil infrastructure and threats of war in Iran and Venezuela have not stopped the price slide in oil in recent weeks. If oil prices continue to fall below $55 a barrel a new wave of bankruptcies and closings in the US energy sector will follow, most likely in 2020 just in time for the US elections.

From 1927 to 1929 the Fed deliberately created then burst a stock bubble using interest rates. Republican President Hoover signed the Smoot-Hawley Tariff act in 1930 to defend American industry, resulting in a trade war that was blamed along with Hoover for the Great Depression that was brought on by an economy bloated with debt and easy money during the Roarin’ Twenties boom. Hoover was blamed and lost re-election to Democrat FDR with his New Deal. Behind all were the actions of the Federal Reserve, the real power. Soon it will be clear if 2020 will be a modern era repeat of the Hoover script, this time with a Democrat whose “New Deal” will likely be green.

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”

Marty (Michael J. Fox) travels back to 1885 and finds himself in the middle of a tribe of Indians on the warpath.
 
The final installment in the Back to the Future trilogy picks up where the second film left off, but it casts off the dizzying time travel of the first two films for mostly routine comedy set in the Old West. Marty McFly (Michael J. Fox) receives a 70-year-old letter from his inventor friend, Doc Brown (Christopher Lloyd), who tells Marty that he has retreated a century in time to live out a relatively quiet life in the Old West. Doc Brown reveals that he hid his DeLorean car/time machine in an abandoned mine outside town, and when Marty does some research and discovers that the Doc died shortly after writing the letter, he decides to find the car, travel back in time, and warn the Doc about his demise. Meanwhile, the Doc, who has fallen in love with a local woman (Mary Steenburgen), realizes he can’t hide in the past from the problems he has caused to the time flow in the previous two adventures. He reluctantly decides to return to the present with Marty, but first, they have to find a way to get the DeLorean up to time-travel velocity with a broken fuel line and no gasoline.