Gerald Celente has chalked up a formidable list of correct forecasts, having predicted all the major market downs for years. He is now predicting an unprecedented economic collapse within the first Obama term.

He is also predicting an imminent tax revolt.

Now perhaps we need to step back and look at the positive side of a down economy:

Nothing less than total collapse will stop people like Rep. Barney Frank, one of the chief culprits in the bank crisis, who accused the critics of Fannie Mae and Freddie Mac’s Democratic policies of alarmism. But now that these GSEs have collapsed and gone into receivership, he and his cohorts, like Sen. Chris Dodd, still sound morally superior to those who favor the free market. Clearly, those who brought us the crash, as well as voters who bought the myth that conservative policies caused it, need an overdose of reality to back them up against the wall. Democrats and RINOs can lie all they want, but who will restore their portfolios? About $6 trillion has been lost so far.

Celente says the reality overdose is on the way, and here is why I believe him.

We now face a Soviet-style state that is taking over ownership of business.

To see how this will end, we need only look backward – at the Soviet Union.

Most think the USSR had a communist economy.

Yet one of the pillars propping up that economy was the black market: capitalism.

Soviet citizens were known to grow melons in places like Azerbaijan and fly them to Moscow to sell at enormous prices that paid for their air travel and left them with a profit.

I participated in that black market in 1970 by selling dollars at up to four times the state-established rate. Almost all foreigners who had extended stays in the USSR did likewise.

Now, conservatives are deathly afraid of what Obama will do. But if the Soviet Union is a model of what Obama wants, then his vision of America will never materialize.

You see, to make the failed system of socialism “work,” the Soviet state relied on propaganda to perpetuate the myth of a functioning economy.

To do this, they had to deny the existence of the black market, because this system was a necessary component of their economy.

So the propaganda machine that propped up communism denied the existence of this capitalist shadow economy.

Of course, the black market was illegal. But ironically, because its very existence had to be denied by state organs of propaganda, it soon became impossible to control the black market.

So the police could not arrest and detain any black marketer without fear of blackmail.

I experienced this on the streets of Moscow. As I was walking to the hotel where I was staying, along with 160 other American students and a few guides from Inturist, a young man approached me and asked if I wanted to exchange money. As we were about to make the exchange, I noticed we were coming up to a police station with an officer stationed outside. I warned the black marketer, who looked over at the police officer, smiled, took my 10 dollars and handed me 40 rubles – all with the officer looking on! Then he offered to sell me an ounce of marijuana, in full view of the officer. I declined, but he was obviously prepared to hand me a pouch of weed right in front of the cop!

I got back to the hotel at lunchtime. Each table was hosted by an Inturist guide. I was as much an in-your-face agitator then as I am now and steered the conversation around to the black market. The guide, predictably, denied that such existed in the USSR. Emboldened by the black marketer I had just met, I said, ” I just now met a black marketer who offered me 40 rubles for a 10-dollar bill, and I accepted it.” The guide said that was impossible because “there is no black market in the USSR.”

I once viewed a Soviet film made in the last years of the Soviet Union, which portrayed a coterie of prostitutes who were routinely picked up by the police, and each time they were detained, they brazenly admitted what they did for a living. The police officers were frustrated by the fact that they couldn’t book any of them, because the going myth was that prostitution did not exist in the workers’ paradise.

So the police tried to charge them with possessing foreign currency (a crime), but the girls then threatened to go public with the story that prostitution is very much alive in the Soviet Union.

They were released each time.

I tell you this to show that socialism is a failure and not only will fail, but must fail by its very nature, particularly in a society that relies heavily on propaganda (political correctness).

But, you say, “America could never have a black market.”

Excuse me, but it already has a thriving one.

I have met many fathers who were charged confiscatory amounts of “child” support (no law in any state actually requires mothers to use the money for the child – in contrast with, for example, Social Security, which makes parents document the use of child payments). What do fathers do who are charged so much money that they can’t afford to live?

The short answer is: the black labor market, the same one 12-20 million illegal aliens have been using successfully for years.

Illegal aliens, persecuted fathers, down-and-outers and criminals have made the black market flourish, printing and using false Social Security cards and false identities, and eking out an existence in an economy that is increasingly being taken over by government. The more the government oppresses, the stronger and freer this shadow economy grows.

The propagandists have it backwards: There is no such thing as socialism.


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