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14 Eye Opening Statistics Which Reveal Just How Dramatically The U.S. Economy Has Collapsed Since 2007

Most Americans have become so accustomed to the “new normal” of continual economic decline that they don’t even remember how good things were just a few short years ago.  Back in 2007, unemployment was very low, good jobs were much easier to get, far fewer Americans were living in poverty or enrolled in welfare programs and government finances were in much better shape.  Of course most of this prosperity was fueled by massive amounts of debt, but at least times were better.  Unfortunately, things have really deteriorated over the last several years.  Since 2007, unemployment has skyrocketed, foreclosures have set new all-time records, personal bankruptcies have soared and U.S. government debt has gotten completely and totally out of control.  Poll after poll has shown that Americans are now far less optimistic about the future than they were in 2007.  It is almost as if the past few years have literally sucked the hope out of millions upon millions of Americans.

Sadly, our economic situation is continually getting worse.  Every month the United States loses more factories.  Every month the United States loses more jobs.  Every month the collective wealth of U.S. citizens continues to decline.  Every month the federal government goes into even more debt.  Every month state and local governments go into even more debt.

Unfortunately, things are going to get even worse in the years ahead.  Right now we look back on 2005, 2006 and 2007 as “good times”, but in a few years we will look back on 2010 and 2011 as “good times”.

We are in the midst of a long-term economic decline, and the very bad economic choices that we have been making as a nation for decades are now starting to really catch up with us.

So as horrible as you may think that things are now, just keep in mind that things are going to continue to deteriorate in the years ahead.

But for the moment, let us remember how far we have fallen over the past few years.  The following are 14 eye opening statistics which reveal just how dramatically the U.S. economy has collapsed since 2007….

#1 In November 2007, the official U.S. unemployment rate was just 4.7 percent.  Today, the official U.S. unemployment rate is 9.4 percent.

#2 In November 2007, 18.8% of unemployed Americans had been out of work for 27 weeks or longer.  Today that percentage is up to 41.9%.

#3 As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer.  Today, there are over 6 million Americans that have been unemployed for half a year or longer.

#4 Nearly 10 million Americans now receive unemployment insurance, which is almost four times as many as were receiving it back in 2007.

#5 More than half of the U.S. labor force (55 percent) has “suffered a spell of unemployment, a cut in pay, a reduction in hours or have become involuntary part-time workers” since the “recession” began in December 2007.

#6 According to one analysis, the United States has lost a total of approximately 10.5 million jobs since 2007.

#7 As 2007 began, only 26 million Americans were on food stamps.  Today, an all-time record of 43.2 million Americans are enrolled in the food stamp program.

#8 In 2007, the U.S. government held a total of $725 billion in mortgage debt.  As of the middle of 2010, the U.S. government held a total of $5.148 trillion in mortgage debt.

#9 In the year prior to the “official” beginning of the most recent recession in 2007, the IRS filed just 684,000 tax liens against U.S. taxpayers.  During 2010, the IRS filed over a million tax liens against U.S. taxpayers.

#10 From the year 2000 through the year 2007, there were 27 bank failures in the United States.  From 2008 through 2010, there were 314 bank failures in the United States.

#11 According to the U.S. Department of Housing and Urban Development, the number of U.S. families with children living in homeless shelters increased from 131,000 to 170,000 between 2007 and 2009.

#12 In 2007, one poll found that 43 percent of Americans were living “paycheck to paycheck”.  Sadly, according to a survey released very close to the end of 2010, approximately 55 percent of all Americans are now living paycheck to paycheck.

#13 In 2007, the “official” federal budget deficit was just 161 billion dollars.  In 2010, the “official” federal budget deficit was approximately 1.3 trillion dollars.

#14 As 2007 began, the U.S. national debt was just under 8.7 trillion dollars.  Today, the U.S. national debt has just surpassed 14 trillion dollars and it continues to soar into the stratosphere.

So is there any hope that we can turn all of this around?

Unfortunately, the massive amount of debt that we have piled up as a society over the last several decades has made that impossible.

If you add up all forms of debt (government debt, business debt, individual debt), it comes to approximately 360 percent of GDP.  It is the biggest debt bubble in the history of the world.

If the federal government and our state governments stop borrowing and spending so much money, our economy would collapse.  But if they keep borrowing and spending so much money they will continually make the eventual economic collapse even worse.

We are in the terminal stages of the most horrific debt spiral the world has ever seen, and when the debt spiral gets stopped the house of cards is going to finally come down for good.

So enjoy these times while you still have them.  Yes, today is not nearly as prosperous as 2007 was, but today is most definitely a whole lot better than 2015 or 2020 is going to be.

Sadly, we could have avoided this financial disaster completely if only we had listened more carefully to those that founded this nation.  Once upon a time, Thomas Jefferson said the following….

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.

 

Rick Wiles Issues An Extremely Ominous Warning: “The Alarms Are Ringing Again”

What you are about to read is going to absolutely shock you.  Rick Wiles has done outstanding work over at TruNews for well over a decade, and now just days before the August 21st solar eclipse he has issued his most ominous warning ever.  His warning is not directly related to the eclipse, but I find it extremely interesting that it is coming at approximately the same time, because many consider the eclipse itself to be some sort of warning.  I was a TruNews listener way before I ever started The Economic Collapse Blog, and I know Rick’s track record.  So I would take what follows very, very seriously.

In 1998, a very unusual series of events resulted in Rick meeting a wonderful Christian lady named Leah Mandell at a conference.  Three years later, Leah made a very strange phone call to Rick on August 11th, 2001, which was precisely one month before the 9/11 attacks.  When Rick answered his phone, Leah began telling him that “the alarms are ringing”

She said, “Rick, something very odd is happening today. Alarm bells, everywhere I go today there are alarms ringing, car alarms, burglar alarms, fire alarms, even oven alarms, every place I go, I hear alarms ringing. What’s really strange is people are having trouble turning the alarms off. I go into stores, the alarm is ringing. I go into an office, the alarm is ringing. And they can’t get the things to turn off. The Lord told me, ‘Call Rick Wiles and tell him, “The alarms are ringing, and this time, they will not be turned off.”’”

The moment she said that, Rick’s seatbelt alarm started ringing even though his seatbelt was fastened.

One month later was September 11, 2001.

Exactly 16 years later, on August 11th, 2017, Leah called Rick again.  She called to tell him that “the alarms are ringing” again and that she was seeing dead birds fall out of the sky everywhere

Three days ago on August 11 2017, Rick was driving to his church when suddenly a dead bird fell from the sky and smashed into his windshield. The bird did not fly into his path, but fell out of the sky like it was already dead. Then he received a phone call from Leah Mandell saying, “Rick, the alarms are ringing. Everywhere I go today, alarms are ringing. And there’s something else, dead birds. I’m seeing dead birds. It seems like everywhere I go, there’s a dead bird.”

Then he realized the date was August 11, the same date when Leah had called him sixteen years earlier with a similar warning.

You can dismiss this if you want, but how are you going to explain away what happened 16 years ago?

I don’t know what all of this could mean, but I am definitely concerned about all of the pivotal events that are going to happen over a 40 day period beginning with the solar eclipse on August 21st.  Many believe that a turning point for America is right around the corner, and without a doubt the mood of the nation is turning quite sour.  Anger and frustration are growing everywhere you look, and it isn’t going to take much to cause a major explosion.

Earlier today, I came across a New Yorker article entitled “Is America Headed for a New Kind of Civil War?”  In that article, it was revealed that many top national security experts believe that there is a significant chance that civil war will erupt in the United States within the next 10 to 15 years…

America’s stability is increasingly an undercurrent in political discourse. Earlier this year, I began a conversation with Keith Mines about America’s turmoil. Mines has spent his career—in the U.S. Army Special Forces, the United Nations, and now the State Department—navigating civil wars in other countries, including Afghanistan, Colombia, El Salvador, Iraq, Somalia, and Sudan. He returned to Washington after sixteen years to find conditions that he had seen nurture conflict abroad now visible at home. It haunts him. In March, Mines was one of several national-security experts whom Foreign Policy asked to evaluate the risks of a second civil war—with percentages. Mines concluded that the United States faces a sixty-percent chance of civil war over the next ten to fifteen years. Other experts’ predictions ranged from five per cent to ninety-five per cent. The sobering consensus was thirty-five percent. And that was five months before Charlottesville.

I found this to be absolutely fascinating, because I have been repeatedly warning about the exact same thing.

Just look at what is happening today even though the economy is still relatively stable.  Once we get to the point where unemployment is rampant and millions of people don’t know where their next meal is coming from, chaos and violence are going to spiral completely out of control.

On Saturday and Sunday, Pastor Benjamin Faircloth and I are going to be jointly ministering at the “What’s Next Prophecy Conference” at his church in Lavonia.  One of the phrases that has been coming up in my heart over and over again in recent weeks is this – “If America Does Not Turn Back To God, There Isn’t Going To Be An America”.  This is one of the reasons why the ominous warning that Rick Wiles just issued immediately got my attention.  I believe that we are entering very troubled times, and yet most Americans appear to be completely oblivious to what is about to happen.

You can hear Rick Wiles talk about his recent phone call with Leah Mandell right here.  I am so thankful for Rick and my other friends over at TruNews.  They are good people, and they often report things that nobody else will.

Yes, I understand that some of you may think that this article has been a bit unusual.  But the truth is that we are living in very strange times and they are getting stranger by the day.

As I always say, let us hope for the best, but let us also get prepared for the worst.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

 

Why Does The Left Hate Us So Much?

Have you ever asked yourself this question? Ever since I decided to run for Congress, I have spent quite a bit of time thinking about how divided our nation is.  Donald Trump has become the most hated person in America, earlier this year a gunman tried to kill as many Republican members of Congress as possible at a baseball field in Virginia, and the mainstream media is fueling more hatred for conservatives on a daily basis.  I think that I was more than a bit naive in thinking that I wouldn’t be caught up in all of this when I decided to run for public office.  It has only been about a month, and so far I have been slandered repeatedly, my wife and daughter have been called all sorts of names, and even our faith has been attacked.  I have never seen the left so energized in my entire lifetime, but meanwhile those of us that are trying to move the United States in a more conservative direction are facing an uphill battle when it comes to raising funds.  If you believe that people like me should be running for Congress, I hope that you will support my campaign financially.  Since there is no incumbent running in my district, the race is completely wide open, and if I raise enough money I will win because I have the strongest message by a very wide margin.

So far we have created a tremendous amount of buzz all over the district.  On Friday I was down in Coeur d’Alene, and there are some wonderful conservative people down there that are super excited that I am running.  Everywhere we go we are finding that voters are resonating with my extremely conservative message, and if I have enough resources to get this message to every voter in the district, there is no way that I should lose this race.

But of course not everybody is pleased by all the buzz I am creating.

If I win this election, I am very rapidly going to become one of the most hated members of Congress in the entire country.  And the reason why I will be hated so much is because I will be what the left fears the most – a conservative with a backbone.

In the end, this is not a battle about tax rates, the size of government or how to fix our economy.  All of those are very important issues, but at the core this is a fight for the soul of our nation.

Over the past 100 years, we have seen big government leftists take power all over the world.  The “progressives” of today are driven by the same philosophies and are using the same tactics as the communists of the USSR, the brownshirts of Nazi Germany (Nazi: National Socialists), and the Maoists of Red China.  At this moment the “progressives” dominate most of the political systems on the entire planet, and they would love to fully take control of the United States as well, but there are enough of us that still love liberty and freedom to stand in their way.

In leftist societies, big government rapidly becomes the centerpiece of society.  And that is one reason why so many of these big government systems are so godless, because government essentially takes the place of God over time.

Two diametrically opposed worldviews are clashing in our country right now, and eventually one of those worldviews will be vanquished by the other.

For those of us that still believe in life, liberty and the pursuit of happiness, the “progressives” of today are an existential threat.  If the left gets enough power, they will criminalize what we believe by making it “hate speech”.  Sadly, this is already starting to happen in local communities all over America.  And online, a number of social media companies have been making a renewed effort to censor conservative voices in the aftermath of Donald Trump’s surprise election victory last November.  They see how powerful the alternative media has become and they want to shut us up.

Unfortunately, I am seeing a lot of apathy among conservatives right now.  They seem to think that the battle is over because we got Donald Trump into the White House.  What they don’t understand is that the battle is just beginning.  We need people to stand up and fight like never before, and this is something that I talk about in my brand new book entitled “Living A Life That Really Matters”.  If America does not change direction immediately, there isn’t going to be an America.

And actually that is going to be one of my major themes when I speak at Pastor Benjamin Faircloth’s church in Lavonia, Georgia later in August.  The “What’s Next Prophecy Conference” will be held on Saturday, August 19th and Sunday, August 20th, and it will also be available online for those that are not able to make it in person…

If you live anywhere near Lavonia, I hope that you will come and join us.  This is going to be one of my very few opportunities to travel out of state in the near future, because I am going to be spending almost all of my time traveling all over Idaho for my campaign.

You know, I have actually been criticized by certain Christians for moving into the world of politics.  They seem to believe that “ministry” can only be done in a “church”, and that therefore trying to take my message to a national platform in Washington D.C. must be a “mistake”.

But all I can tell them is that I must do what I feel like God is leading me to do.  And thankfully so many others out there have rallied to my cause and have donated to my campaign.  So far, the leading fundraiser in this race is an attorney from the Boise area named Dave Leroy, and in just four weeks I have already had far more donors than he did during the entire second quarter.  But because he is getting those big $1000 and $2000 checks and I am raising money $10 and $20 at a time, I have a gap to make up.

If you believe in what I am trying to do, I would like to ask for your help.  I am the most conservative candidate in this race by a very wide margin, and it is absolutely imperative that we fill this open seat with a very strong conservative that will relentlessly fight for liberty and freedom.

Most people don’t understand that you do not just vote at the ballot box.  The truth is that you also vote when you decide who to support financially.  So many Americans wouldn’t think twice about spending 20 bucks at a fast food place, but they will never even consider contributing that much toward the fight for the future of our nation.

Every generation of Americans has had to fight for liberty and freedom, and now it is our turn.  My family is putting so much on the line in this race, but there is no possible way that we will be successful without your help.  If you would like to contribute to this fight, you can do so right here or by using a contribution form on my website.  Thank you so much for standing with me, and if we all work together I believe that we will be able to accomplish truly great things…

 

Former Fed Chairman Alan Greenspan Ominously Warns That The Biggest Bond Bubble In History Is About To Burst

Are we right on the verge of one of the greatest financial collapses in American history?  I have been repeatedly warning that our ridiculously over-inflated stock market bubble could burst at any time, but former Federal Reserve Chairman Alan Greenspan believes that the bond bubble actually presents an even greater danger.  When you look at the long-term charts, you will see that an epic bond bubble has been growing since the early 1980s, and when it finally collapses the financial carnage is going to be unlike anything we have ever seen before.

Since the last financial crisis, global central banks have purchased trillions of dollars worth of bonds, and this has pushed interest rates to absurdly low levels.  But of course this state of affairs cannot go on indefinitely, and Greenspan is extremely concerned about what will happen when interest rates start going in the other direction…

Former Federal Reserve Chairman Alan Greenspan issued a bold warning Friday that the bond market is on the cusp of a collapse that also will threaten stock prices.

In a CNBC interview, the longtime central bank chief said the prolonged period of low interest rates is about to end and, with it, a bull market in fixed income that has lasted more than three decades.

“The current level of interest rates is abnormally low and there’s only one direction in which they can go, and when they start they will be rather rapid,” Greenspan said on “Squawk Box.”

And of course Greenspan is far from alone.  In recent months there have been a whole host of prominent voices warning about the devastation that will take place when the bond market begins to shift.  For example, the following comes from Nasdaq.com

Advisors and investors beware, the long-swelling bubble in the bond market looks set to pop. Major bond investors are as worried as they have ever been, mostly because of the reduction in easing that is finally coming to markets. Central banks are letting off the gas pedal for the first time in almost a decade, which could have a devastating effect on the bond market. According to the head of fixed income at JP Morgan Asset Management, who oversees almost half a trillion in AUM, “The next 18 months are going to be incredibly challenging. I am not an equity investor, but I can just imagine how equity investors felt in 1999, during the dotcom bubble”. He continued, “Right now, central banks are printing money at a rate of around $1.5tn per year. That is a lot of money going into bonds. By this time next year, we think this will turn negative”.

So how will we know when a crisis is imminent?

Some analysts are telling us to watch the 30-year yield.  When it finally moves above its “mega moving average” and stays there, that will be a major red flag

It’s still too soon to tell, but this could be the beginning of a realignment with both rates getting in sync again. This will not be confirmed, however, until the 30-year yield rises and stays above its mega moving average, currently at 3.18%.

As you know, this moving average is super important.

It’s identified and confirmed the mega downtrend in long-term interest rates ever since the 1980s. In other words, it doesn’t change often. So, if this trend were to change and turn up, it would be a huge deal.

Today, the 30-year yield moved up to 2.83 percent, and so we aren’t too far away.

There are so many prominent voices that are warning of imminent financial disaster, but there are others that believe that we have absolutely nothing to be concerned about.  In fact, Jim Paulsen just told CNBC that he believes that this current bull market “could continue to forever”…

The stock market “has an awful good gig going,” with the economic recovery reaching all corners of the globe and U.S. inflation and interest rates still at historic lows, Leuthold Chief Investment Strategist Jim Paulsen told CNBC on Friday.

“We’ve got a fully employed economy, rising real wages. We restarted the corporate earnings cycle. We’ve got strong confidence among business and consumers,” he said on “Squawk Box.”

“The kick is we can do all of this without aggravating inflation and interest rates,” he said. “If that’s going to continue, I think the bull market could continue to forever.”

I think that Paulsen will end up deeply regretting those words.

No bull market lasts forever, and analysts at Goldman Sachs are warning that there is a 99 percent chance that stock market returns will be sub-optimal over the next decade.

But most people believe what they want to believe no matter what the facts may say, and Paulsen apparently wants to believe that things will never be bad for the financial markets ever again.

In the aftermath of the financial crisis of 2008, the powers that be decided to patch the old system up.  Instead of addressing the root causes of the crisis, they chose to paper over our problems instead, and now we are in the terminal phase of the biggest financial bubble in history.

This time around, it is absolutely imperative that we do things differently.  The Federal Reserve is the primary reason why our economy is on an endless roller coaster ride.  We have had 18 distinct recessions or depressions since 1913, and now another one is about to begin.  By endlessly manipulating the system, they have caused these cycles of booms and busts, and it is time to get off of this roller coaster once and for all.

Like Ron Paul, I believe that we need to shut down the Federal Reserve and get our banks under control.  I also believe that we should abolish the federal income tax and go to a much fairer system.  From 1872 to 1913, there was no central bank and no federal income tax, and it was the greatest period of economic growth in U.S. history.  If we rebuild our financial system on sound principles, we could actually have a shot at a prosperous future.  If not, the long-term future for our economy looks exceedingly bleak.

If you believe in what I am trying to do, I would like to ask for your help.  I am running for Congress in Idaho’s First Congressional District, and since there is no incumbent running for this seat the race is completely wide open.  Every time I share my message, more voters are coming over to my side, and if I am able to get my message out to every voter in this district I will win.

And I would like to encourage like-minded people to run for positions all over the country on the federal, state and local levels.  Individually, there is a limit to what we can do, but if we work together we can build a movement which could turn this nation completely upside down.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

Remember This Milestone: The Dow Jones Industrial Average Hits 22,000 For The First Time In U.S. History

The Dow hit the 22,000 mark for the first time ever on Wednesday, and investors all over the world greatly celebrated.  And without a doubt this is an exceedingly important moment, because I think that this is a milestone that we will be remembering for a very long time.  So far this year the Dow is up over 11 percent, and it has now tripled in value since hitting a low in March 2009.  It has been quite a ride, and if you would have told me a couple of years ago that the Dow would be hitting 22,000 in August 2017 I probably would have laughed at you.  The central bankers have been able to keep this ridiculous stock market bubble going for longer than most experts dreamed possible, and for that they should be congratulated.  But of course the long-term outlook for our financial markets has not changed one bit.

Every other stock market bubble of this magnitude in our history has ended with a crash, and this current bubble is going to suffer the same fate.

But many in the mainstream media are still encouraging people to jump into the market at this late hour.  For example, the following comes from a USA Today article that was published on Wednesday…

“It’s still not too late to get in,” says Jeff Kleintop, chief global investment strategist at Charles Schwab, based in San Francisco. “The gains are firmly rooted in business fundamentals, not false hopes.”

I honestly don’t know how anyone could say such a thing with a straight face.  We have essentially been in a “no growth economy” for the past decade, and signs of a new economic slowdown are all around us.

But even though price/earnings ratios and price/sales ratios are at some of the highest levels in history, some analysts insist that the stock market still has more room to go up

On the flip side, investors with time to ride out any short-term market storm should not rule out getting in the market now. Economies around the globe are improving and are boosting the profitability of corporations in the U.S. and abroad, says Chris Zaccarelli, chief investment officer at Cornerstone Financial Partners in Charlotte, N.C.

Zaccarelli won’t even rule out Dow 25,000 by the end of 2018.

Personally, I believe that it is far more likely that we would see Dow 15,000 by the end of 2018, but over the past couple of years the bulls have been right over and over again.

But the only reason why the bulls have been right is because of unprecedented intervention by global central banks.

Today, the Swiss National Bank owns more than a billion dollars worth of stock in each of the following companies: Apple, Alphabet, Microsoft, Amazon, Exxon Mobil, Johnson & Johnson and Facebook.

So where does a central bank like the Swiss National Bank get the money to purchase all of these equities?

It’s easy – they just print the money out of thin air.  As Robert Wenzel has noted, they simply “print the francs, exchange them for dollars and make the purchases”.

If I could create as much money as I wanted out of thin air and use it to buy stocks I could relentlessly drive up stock prices too.

Our financial markets have become a giant charade, and central bank intervention is the biggest reason why FAANG stocks have vastly outperformed the rest of the market.  The following comes from David Stockman

Needless to say, the drastic market narrowing of the last 30 months has been accompanied by soaring price/earnings (PE) multiples among the handful of big winners. In the case of the so-called FAANGs + M (Facebook, Apple, Amazon, Netflix, Google and Microsoft), the group’s weighted average PE multiple has increased by some 50%.

The degree to which the casino’s speculative mania has been concentrated in the FAANGs + M can also be seen by contrasting them with the other 494 stocks in the S&P 500. The market cap of the index as a whole rose from $17.7 trillion in January 2015 to some $21.2 trillion at present, meaning that the FAANGs + M account for about 40% of the entire gain.

Stated differently, the market cap of the other 494 stocks rose from $16.0 trillion to $18.1 trillion during that 30-month period. That is, 13% versus the 82% gain of the six super-momentum stocks.

If global central banks continue to buy millions of shares with money created out of thin air, they may be able to keep this absurd bubble going for a while longer.

But if the Fed and other central banks start pulling back, we could see a market tantrum of epic proportions.  In fact, almost every single time throughout history when the Federal Reserve has attempted a balance sheet reduction it has resulted in a recession

The Fed has embarked on six such reduction efforts in the past — in 1921-1922, 1928-1930, 1937, 1941, 1948-1950 and 2000.

Of those episodes, five ended in recession, according to research from Michael Darda, chief economist and market strategist at MKM Partners. The balance sheet trend mirrors what has happened much of the time when the Fed has tried to raise rates over a prolonged period of time, with 10 of the last 13 tightening cycles ending in recession.

“Moreover, outside of the 1920s and 1930s, there is no precedent for double-digit annual declines in the balance sheet/base that will likely begin to occur late next year,” Darda said in a note.

President Trump is going to get a lot of credit if the stock market keeps going up and he is going to get a lot of blame if it starts going down.

But the truth is that he actually has very little to do with what is really going on.

This stock market bubble was created by the central banks, and they also have the power to kill it if they desire to do so.

And once this bubble bursts, we may be looking at a crisis that makes 2008 look like a Sunday picnic.

Goldman Sachs and others are already warning that this stock market rally is on borrowed time.  Let’s hope that it can continue at least for a little while longer, but in the end there is no possible way that this story is going to end well.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

Washington D.C. Is Essentially Just A Gigantic Money Machine

If you have ever wondered why our leaders in Washington D.C. seem to act so strangely, the truth is that it almost always comes down to just one thing.  It has been said that “money makes the world go round”, and that is definitely true in Washington.  This year the federal government will spend more than 4 trillion dollars, and that represents well over one-fifth of our national GDP.  With so much money coming in and so much money going out, the stakes are incredibly high, and that is why so much money is poured into political campaigns on the national level.

And it shouldn’t surprise anyone that those that live the closest to this gigantic money machine have benefited greatly.  Forbes just released their brand new rankings for 2017, and they found that five out of the top 10 wealthiest counties in the entire country are suburbs of Washington D.C.

Virginia’s Loudoun County holds the title of the nation’s richest county with a median household income of $125,900. While nearly 10,000 residents commute to the District, according to Forbes, about 11,700 businesses employ 161,000 county residents, with Dulles International Airport, Loudoun County Public Schools and the Department of Homeland Security leading that charge.

The nearby city of Falls Church, Fairfax and Arlington counties in Virginia and Howard County in Maryland also lead the nation based on wealth.

In general, salaries for federal workers are significantly higher than in the private sector, and benefit packages are usually much better.

But in addition to having a very high concentration of federal workers, the D.C. area is also home to hordes of lawyers, lobbyists, defense contractors and other government vendors.  Big government means big business for those guys, and business has been very good in recent years…

The federal government has a lot to do with this: The Capitol and the economy orbiting around it (including lawyers, defense contractors, computer engineers along the Dulles Corridor, and doctors near NIH) attract college graduates who reliably contribute to six-figure households. Crucially, there was a $1.7 billion increase in lobbying between 1998 and 2010, as Dylan Matthews explained. With each $1 million of lobbying “associated with a $3.70 increase in the D.C. wage premium,” the money pouring into Washington wound up in the pockets of its residents.

This certainly isn’t the limited government that our founders intended.

So where did we go wrong?

One of the big turning points came in 1913.  That is the year when the Federal Reserve and the modern version of the income tax were established.  The Federal Reserve was designed by the elite to get the federal government very deeply into debt, and an income tax was needed to help service that debt and to help pay for the much larger government that the progressives were wanting.

Back then, D.C. was nothing like it is today.  In fact, even in the 1970s there were still large farms inside the Beltway.  But the federal government just kept getting bigger and bigger and bigger, and now it is a four trillion dollar monstrosity.

What I believe we should do is to dismantle as much of that monstrosity as we possibly can.  Instead of asking which government agencies we should close, I believe that we should be asking which government agencies we really need to leave open.

A great place to start would be by abolishing the Federal Reserve, the IRS and the income tax.  Those institutions are at the very core of the Washington money machine, and so it would essentially be like tearing the heart out of big government.

And don’t worry, the federal government would still have plenty of money coming in.  The individual income tax only accounts for about 46 percent of all federal revenue, and theoretically we could still have an absolutely enormous federal government without an income tax.  I once wrote an article that listed 97 different ways that various levels of government get money out of us each year, and so getting rid of the federal income tax would still leave 96 ways for the politicians to extract money from us.

As I remind my readers so frequently, the greatest period of economic growth in U.S. history was when there was no income tax and no central bank.  But I know that a lot of people out there love the 1.33 percent average yearly GDP growth rate that we have been experiencing over the past decade and would have a really hard time giving that up.

Unfortunately, it would actually be a very tough transition to a much more limited federal government because so much of our society is geared around the enormous money machine in Washington.  In 2018, more than a billion dollars will be spent on the mid-term elections, and most of that money will be going to incumbents that are committed to maintaining the status quo.

If we ever want things to really start changing in Washington, we have got to start sending people there that haven’t been bought off by the big money interests.

In my congressional district there is no incumbent running in 2018, and nobody else in the race is nearly as conservative as I am.  But since I can’t be bought by the special interests, I am going to have to rely on grassroots support.

Donald Trump showed us that anything is possible in American politics.  When Jeb Bush decided to run for president, he had an extremely long list of endorsements and a hundred million dollars behind him, and he still got trounced by Trump because Trump had a much stronger message.

If we stand united, we can take our government back and there won’t be anything that the establishment will be able to do about it.

But if we sit back and do nothing, the cesspool of corruption in Washington D.C. will just continue to get deeper and deeper.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

Our Disneyland Economy

Disneyland is known as a place “where dreams come true” and where every story always has a happy ending.  But there is going to be no happy ending for the U.S. economy.  Wishful thinking has resulted in one of the greatest stock market rallies in history in recent months, but like all childhood fantasies, it won’t last.  The real economy continues to deteriorate, and we can see this even right outside of the gates of Disneyland.  Every night growing numbers of homeless people sleep on the pavement just steps away from “the happiest place on Earth”.  It can be fun to “play make believe” for a while, but eventually reality always catches up with us.

Without a doubt, the stock market has been on a tremendous run.  Since Donald Trump’s stunning election victory in November, the market has been setting record high after record high, and it is now up a total of 17 percent

The Dow Jones Industrial Average recorded its 23rd all time high of 2017 yesterday closing at 21,532.  There have been a total of 120 days where the markets have closed since President Trump’s inauguration on January 20th.  The ‘DOW’ has closed at all time highs 23 of those days for nearly 20% or one-fifth of the days the market has been open.  The market is up 9% since the inauguration. 

Since the election on November 8th the DOW has closed at record highs an amazing 40 times!   Nearly one-fourth or 24% of the 168 days the markets have closed have been record highs since the November 8th election.  The market is up 17% since the election!

If this surge was supported by hard economic data, that would be something to greatly celebrate, but that has not been the case at all.

Instead, stock prices have become completely disconnected from economic reality, and now we are facing one of the greatest stock bubbles of all time.  As Graham Summers has pointed out, stocks are now trading at price to sales ratios that we haven’t seen since the very height of the dotcom bubble…

Earnings, cash flow, and book value are all financial data points that can be massaged via a variety of gimmicks. As a result of this, valuing stocks based on Price to Earnings, Price to Cash Flow, and Price to Book Value can often lead to inaccurate valuations.

Sales on the other hand are all but impossible to gimmick. Either money came in the door, or it didn’t And, if a company is caught faking its sales numbers, someone is going to jail.

So the fact that stocks are now trading at a P/S ratio that matches the Tech Bubble (the single largest stock bubble in history) tells us that we’re truly trading at astronomical levels: levels associated with staggering levels of excess.

There is no possible way that this is sustainable, and just like before the 2008 crisis a whole host of experts are warning that disaster is imminent.  One of them is John Mauldin

Looking with fresh eyes at the economic numbers and central bankers’ statements convinced me that we will soon be in deep trouble. I now feel that it’s highly likely we will face a major financial crisis, if not later this year, then by the end of 2018 at the latest. Just a few months ago, I thought we could avoid a crisis and muddle through. Now I think we’re past that point. The key decision-makers have (1) done nothing, (2) done the wrong thing, or (3) done the right thing too late.

Having realized this, I’m adjusting my research efforts. I believe a major crisis is coming. The questions now are, how severe will it be, and how will we get through it?

And even though the stock market has been surging deeper and deeper into bubble territory in recent months, the middle class has continued to shrink and poverty has continued to grow all over the country.  In fact, because so many homeless people have been sleeping at bus shelters across from Disneyland lately authorities decided to completely remove the benches that they had been sleeping on

The vanishing benches were Anaheim’s response to complaints about the homeless population around Disneyland. Public work crews removed 20 benches from bus shelters after callers alerted City Hall to reports of vagrants drinking, defecating or smoking pot in the neighborhood near the amusement park’s entrance, officials said.

The situation is part of a larger struggle by Orange County to deal with a rising homeless population. A survey last year placed the number of those without shelter at 15,300 people, compared with 12,700 two years earlier.

But simply removing benches will not make the problem go away.

Homelessness has been growing so rapidly in Los Angeles that the the L.A. City Council actually asked Governor Jerry Brown to formally declare a state of emergency.

And in New York City, street homelessness is up 39 percent over the past year.

This is where the real economy is heading, but a rising stock market makes for much happier headlines.

Many major cities around the nation are passing laws to essentially make it illegal to be homeless.  Forcing homeless people to go somewhere else may mask the problem for a while, but it certainly doesn’t do anything to solve it.  In my new book entitled “Living A Life That Really Matters”, I talk about how real love is not just about loving those that are just like us.  Rather, real love is about caring for people no matter what they look like and no matter what they are going through.

Unfortunately, the economic suffering that we are seeing right now is just the beginning.

Just like in 2008, the major financial crisis that is coming is going to greatly accelerate our economic problems.  And just like last time, millions of people are going to lose their jobs, and millions of people are going to lose their homes.

Homelessness is already worse in many parts of the nation that it was during the depths of the last recession, and what we are going to see during the next economic downturn is going to be absolutely unprecedented.

So don’t look down on those that need a helping hand, because in the not too distant future you may find yourself needing some help.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

They Are Killing Small Business: The Number Of Self-Employed Americans Is Lower Than It Was In 1990

After eight long, bitter years under Obama, will things go better for entrepreneurs and small businesses now that Donald Trump is in the White House?  Once upon a time, America was the best place in the world for those that wanted to work for themselves.  Our free market capitalist system created an environment in which entrepreneurs and small businesses greatly thrived, but today they are being absolutely eviscerated by the control freak bureaucrats that dominate our political system.  Year after year, leftist politicians just keep piling on more rules, more regulations, more red tape and more taxes.  As a result, the number of self-employed Americans is now lower than it was in 1990

In April 1990, 8.7 million Americans were self-employed, but today only 8.4 million Americans are self-employed.

Of course our population has grown much, much larger since that time.  In 1990, there were 249 million people living in the United States, but today there are 321 million people living in this country.

What this means is that the percentage of the population that is self-employed is way down.

In fact, one study found that the percentage of Americans that are self-employed fell by more than 20 percent between 1991 and 2010.

And if you go back even farther, the numbers are even more depressing.  It may be hard to believe, but the percentage of “new entrepreneurs and business owners” declined by a staggering 53 percent between 1977 and 2010.

Sometimes I like to watch a television show called Shark Tank, and on that show they make it seem like entrepreneurship in America is thriving.

But the exact opposite is actually the case.  In a previous article, I discussed how the number of new businesses being created in the United States has been steadily falling over the years.  According to economist Tim Kane, the number of startup jobs per one thousand Americans has been declining for several consecutive presidential administrations

Bush Sr.: 11.3

Clinton: 11.2

Bush Jr.: 10.8

Obama: 7.8

So why is this happening?

As I mentioned at the top of this article, self-employed Americans are being absolutely strangled by oppressive rules, regulations and taxes.

To illustrate this point, I would like to share with you some quotes from an open letter that was authored by a small business owner named Don Chernoff…

#1 I work for myself and have to pay my own medical expenses. Before the “affordable care act” I was paying about $200 per month for a high deductible policy. It was far from perfect but it got so much worse under the “Affordable” care act.

I now pay over $400 a month, my deductible went from $5,000 to over $6,000 and my out of pocket costs for care have skyrocketed.

#2 I have to spend dozens of hours and thousands of dollars for a tax accountant each spring to prepare my taxes because I cannot possibly understand how to do it myself, and I have a master’s degree in engineering.

#3 Many years ago when I quit a perfectly good job to start my own small business, I was shocked to learn that I had to pay both my share and what had been my employer’s share of Social Security.

#4 Between state, federal and local taxes you’ve probably paid 50% or more of your income in taxes, but that’s not enough for politicians.

If you’ve been lucky enough to have created a business you can sell, now you’ll get to enjoy paying another tax on the capital gain from the sale.

This is another reason why we need a conservative revolution in Washington.  We should demand that our members of Congress lower tax rates dramatically, completely eliminate the self-employment tax, greatly simplify the tax code and get rid of as many regulations on small business owners as possible.

In fact, if it was up to me I would abolish a number of federal agencies completely.

What we are doing right now is not working.  Small businesses have traditionally been one of the main engines of economic growth in this country, but thanks to the left they are unable to play that role at the moment.

It isn’t an accident that over the last ten years the U.S. economy has grown at exactly the same rate as it did during the 1930s.

If we want our economy to be great again, we need to go back and start doing the things that made it great in the first place.  If we continue to suffocate our economy, we will continue to get the same results.

And with each passing day, we get more signs that the economy is heading into another major downturn.  For instance, we just learned that Sears is closing 30 more stores on top of the 150 that had already been announced…

Sears Holdings, which wasn’t shy when it announced at the start of the year that it is closing 150 underperforming stores, has quietly added at least 30 more to the list.

Another 12 Sears stores and 18 Kmarts are among the locations that are closing, from Carson, Calif., to Hialeah, Fla., with most scheduled to shut their doors in July, based on calls to the stores, malls and confirmation in local media.

At the start of the year, the retailer pinpointed the 150 stores it said it would close. But it declined this week to provide a list of additional locations that are slated to shut since then, saying that it update store counts each quarter.

In addition, we just learned that new home sales in April were 11.4 percent lower than they were in March

If you’re surprised by the collapse in new home sales in April, then you’re not paying attention.

The 11.4% MoM plunge in new home sales in April was 5 standard deviations below expectations and the biggest since March 2015.

Yes, the stock market is holding up for the moment, but for most Americans the “real economy” just continues to deteriorate.  Just because we are at the end of a giant financial bubble does not mean that everything is going to be okay.

The numbers that I brought up in this article are just another example of our long-term economic decline.  In a healthy economy, entrepreneurs and small businesses would be thriving.  But instead, they are being systematically strangled out of existence by a political system that is wildly out of control.

Over The Last 10 Years The U.S. Economy Has Grown At EXACTLY The Same Rate As It Did During The 1930s

Even though I write about our ongoing long-term economic collapse every day, I didn’t realize that things were this bad.  In this article, I am going to show you that the average rate of growth for the U.S. economy over the past 10 years is exactly equal to the average rate that the U.S. economy grew during the 1930s.  Perhaps this fact shouldn’t be that surprising, because we already knew that Barack Obama was the only president in the entire history of the United States not to have a single year when the economy grew by at least 3 percent.  Of course the mainstream media continues to push the perception that the U.S. economy is in “recovery mode”, but the truth is that this current era has far more in common with the Great Depression than it does with times of great economic prosperity.

Earlier today I came across an article about President Trump’s new budget from Fox News, and in this article the author makes a startling claim…

The hard fact is that the past decade’s $10 trillion in deficit spending has produced the worst economic growth as measured by Gross Domestic Product in our nation’s history.  You read that right, in the past decade our nation’s economy grew slower than even during the Great Depression. This stagnant, new normal, low-growth economy is leaving millions of working age people behind who have given up even trying to participate, and has led to a malaise where many doubt that the American dream is attainable.

When I first read that, I thought that this claim could not possibly be true.  But I was curious, and so I looked up the numbers for myself.

What I found was absolutely astounding.

The following are U.S. GDP growth rates for every year during the 1930s

1930: -8.5%
1931: -6.4%
1932: -12.9%
1933: -1.3%
1934: 10.8%
1935: 8.9%
1936: 12.9%
1937: 5.1%
1938: -3.3%
1939: 8.0%

When you average all of those years together, you get an average rate of economic growth of 1.33 percent.

That is really bad, but it is the kind of number that one would expect from “the Great Depression”.

So then I looked up the numbers for the last ten years

2007: 1.8%
2008: -0.3%
2009: -2.8%
2010: 2.5%
2011: 1.6%
2012: 2.2%
2013: 1.7%
2014: 2.4%
2015: 2.6%
2016: 1.6%

When you average these years together, you get an average rate of economic growth of 1.33 percent.

I thought that was a really strange coincidence, and so I pulled up my calculator and ran all of the numbers again and I got the exact same results.

The 1930s certainly had more big ups and downs, but the average rate of economic growth during that decade was exactly the same as we have seen over the past 10 years.

And of course the early 1940s turned out to be a boom time for the U.S. economy, while it appears that our rate of economic growth is actually slowing down.  As I noted yesterday, U.S. GDP growth during the first quarter of 2017 was just 0.7 percent.

But you don’t hear any talk like this on the mainstream news, do you?

Instead, they tell us that everything is just peachy.

I often wonder what things would be like right now if Barack Obama and his minions in Congress had not added more than 9 trillion dollars to the national debt.  By stealing all of that money from future generations of Americans and spending it now, Obama was able to artificially prop up the U.S. economy.  If we were able to go back and remove 9 trillion dollars of government spending from the economy over the past 8 years, we would be in a rip-roaring economic depression right now.  For an extended analysis of this, please see my previous article entitled “The Shocking Truth About How Barack Obama Was Able To Prop Up The U.S. Economy”

But even though we have been adding more than a trillion dollars to the national debt each year, and even though the Federal Reserve pushed interest rates all the way to the floor during the Obama era, the U.S. economy has not grown by three percent or more on an annual basis since 2005.

When you take an honest look at the numbers, there is no way that anyone can possibly claim that the U.S. economy is doing well.  The best that you can say is that we have been staving off a complete economic meltdown and another Great Depression, but of course the measures that our leaders have been taking to do this have just been making our long-term problems even worse.

I feel bad for President Trump, because he has inherited the biggest economic mess in U.S. history.  When we finally reach the point when it is impossible to artificially prop up the U.S. economy any longer, he is going to get most of the blame, but he won’t deserve it.

It is not going to be possible for Trump or anyone else to fix our system, because it was fundamentally flawed from the very beginning.  The Federal Reserve was designed to create an endless spiral of government debt, and since the day it was created the U.S. national debt has gotten more than 5000 times larger and the value of the U.S. dollar has declined by about 98 percent.

If we truly want to fix the economy, the Federal Reserve must be abolished.  If I was President Trump, I would look to start issuing debt-free U.S. currency just like President Kennedy did in 1963 as soon as possible.

In addition, we need to push tax rates as low as possible.  Personally, I would like to see the day when the personal income tax is completely eliminated and the IRS is shut down.  The greatest period of economic growth in all of U.S. history was when there was no income tax and no Federal Reserve.  America once thrived in such an environment, and I believe that we can do it again.

Of course we need to also dramatically reduce the size and scope of the federal government.  Our founders intended to create a very limited federal government, but instead the left has just kept pushing to make it larger and larger.

Businesses all over America are being strangled to death by mountains of federal regulations, and if we could just get the government off of their backs the business community could start thriving again.  There are quite a few government agencies that could be shut down entirely, and I think that the EPA would be a good place to start.

Once upon a time the United States showed the world the power of free markets and capitalism, and if we want to make America great again, we should go back and do the things that made America great in the first place.

But would the American people be willing to go down that path?

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