The Beginning Of The End
The Beginning Of The End By Michael T. Snyder - Kindle Version

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A Financial Nightmare For Italy: The Yield Curve For Italian Bonds Is Turning Upside Down

What we are all watching unfold right now is a complete and total financial nightmare for Italy.  Italian bond yields are soaring to incredibly dangerous levels, and now the yield curve for Italian bonds is turning upside down.  So what does that mean?  Normally, government debt securities that have a longer maturity pay a higher interest rate.  There is typically more risk when you hold a bond for an extended period of time, so investors normally demand a higher return for holding debt over longer time periods.  But when investors feel as though a major economic downturn or a substantial financial crisis is coming, the yield on short-term bonds will often rise above the yield for long-term bonds.  This happened to Greece, to Ireland and to Portugal and all three of them ended up needing bailouts.  Now it is happening to Italy and Spain may follow shortly, but the EU cannot afford to bail out either of them.  An inverted yield curve is a major red flag.  Unfortunately, there does not seem to be much hope that there is going to be a solution to this European debt crisis any time soon.

We are witnessing a crisis of confidence in the European financial system.  All over Europe bond yields went soaring today.  When I finished my article about the financial crisis in Italy on Tuesday night, the yield on 10 year Italian bonds was at 6.7 percent.  I awoke today to learn that it had risen to 7.2 percent.

But even more importantly, the yield on 5 year Italian bonds is now sitting at about 7.5 percent, and the yield on 2 year Italian bonds is about 7.2 percent.

The yield curve for Italian bonds is in the process of turning upside down.

If you want to see a frightening chart, just look at this chart that shows what has happened to 2 year Italian bonds recently.

Do phrases like "heading straight up" and "going through the roof" come to mind?

This comes despite rampant Italian bond buying by the European Central Bank.  CNBC is reporting that the European Central Bank was aggressively buying up 2 year Italian bonds and 10 year Italian bonds on Wednesday.

So what does it say when even open market manipulation by the European Central Bank is not working?

Of course some in the financial community are saying that the European Central Bank is not going far enough.  Some prominent financial professionals are even calling on the European Central Bank to buy up a trillion euros worth of European bonds in order to soothe the markets.

Part of the reason why Italian bond yields rose so much on Wednesday was that London clearing house LCH Clearnet raised margin requirements on Italian government bonds.

But that doesn't explain why bond yields all over Europe were soaring.

The reality is that bond yields for Spain, Belgium, Austria and France also skyrocketed on Wednesday.

This is a crisis that is rapidly engulfing all of Europe.

But at this point, bond yields in Europe are still way too low.  European leaders shattered confidence when they announced that they were going to ask private Greek bondholders to take a 50% haircut.  So now rational investors have got to be asking themselves why they would want to hold any sovereign European debt at all.

There is no way in the world that any rational investor should invest in European bonds at these levels.

Are you kidding me?

If there is a very good chance that private bondholders will be forced to take huge haircuts on these bonds at some point in the future then they should be demanding much, much higher returns than this.

But if bond yields continue to go up in Europe, we are going to quickly come to a moment of very great crisis.

The following is what Rod Smyth of Riverfront Investment Group recently told his clients about the situation that is unfolding in Italy....

"In our view, 7% is a 'tipping point' for any large debt-laden country and is the level at which Greece, Portugal and Ireland were forced to accept assistance"

Other analysts are speaking of a "point of no return".  For example, check out what a report that was just released by Barclays Capital had to say....

"At this point, Italy may be beyond the point of no return. While reform may be necessary, we doubt that Italian economic reforms alone will be sufficient to rehabilitate the Italian credit and eliminate the possibility of a debilitating confidence crisis that could overwhelm the positive effects of a reform agenda, however well conceived and implemented."

But unlike Greece, Ireland and Portugal, the EU simply cannot afford to bail out Italy.

Italy's national debt is approximately 2.7 times larger than the national debts of Greece, Ireland and Portugal put together.

Plus, as I noted earlier, Spain is heading down the exact same road as Italy.

Europe has simply piled up way, way too much debt and now they are going to pay the price.

Global financial markets are very nervous right now.  You can almost smell the panic in the air.  As a CNBC article posted on Wednesday noted, one prominent think tank actually believes that there is a 65 percent chance that we will see a "banking crisis" by the end of November....

"There is a 65 percent chance of a banking crisis between November 23-26 following a Greek default and a run on the Italian banking system, according to analysts at Exclusive Analysis, a research firm that focuses on global risks."

Personally, I believe that particular think tank is being way too pessimistic, but this just shows how much fear is out there right now.

It seems more likely to me that the European debt crisis will really unravel once we get into 2012.  And when it does, it just won't be a few countries that feel the pain.

For example, when Italy goes down many of their neighbors will be in a massive amount of trouble as well.  As you can see from this chart, France has massive exposure to Italian debt.

Just like we saw a few years ago, a financial crisis can be very much like a game of dominoes.  Once the financial dominoes start tumbling, it will be hard to predict where the damage will end.

Some believe that what is coming is going to be even worse than the financial nightmare of a few years ago.  For example, the following is what renowned investor Jim Rogers recently told CNBC....

"In 2002 it was bad, in 2008 it was worse and 2012 or 2013 is going to be worse still – be careful"

Rogers says that the reason the next crisis is going to be so bad is because debt levels are so much higher than they were back then....

"Last time, America quadrupled its debt. The system is much more extended now, and America cannot quadruple its debt again. Greece cannot double its debt again. The next time around is going to be much worse"

So what is the "endgame" for this crisis?

German Chancellor Angela Merkel is saying that fundamental changes are needed....

"It is time for a breakthrough to a new Europe"

So what kind of a "breakthrough" is she talking about?  Well, Merkel says that the ultimate solution to this crisis is going to require even tighter integration for Europe....

"That will mean more Europe, not less Europe"

As I have written about previously, the political and financial elite of Europe are not going to give up on the EU because of a few bumps in the road.  In fact, at some point they are likely to propose a "United States of Europe" as the ultimate solution to this crisis.

But being more like the United States is not necessarily a solution to anything.

The U.S. is 15 trillion dollars in debt and extreme poverty is spreading like wildfire in this nation.

No, the real problem is government debt and the central banks of the western world which act as perpetual debt machines.

By not objecting to central banks and demanding change, those of us living in the western world have allowed ourselves to become enslaved to gigantic mountains of debt.  Unless something dramatically changes, our children and our grandchildren will suffer under the weight of this debt for as long as they live.

Don't we owe future generations something better than this?

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  • http://www.realityisfree.com/peons.html Clawson

    All over now, folks. Get ready for a bumpy ride on an
    endless trip that you won’t enjoy at all.

    • REED RICHARDS

      Clawson,

      Forget the bumpy ride scenario, people in this country need to start making funeral arrangements for BURIAL…………….

      • OMG!

        Stock up huh? Get ready huh?

        What happens the masses that have kept their heads conveniently shoved up their asses because it felt all nice and comfy know you have supplies?

        It’s nice to play John Wayne in your head but reality is a bitch.

        Stocking up and getting ready is BS. The problems caused by psychopath bankers/brokers and sycophant politicians should’ve been nipped in the bud when there was the chance.

  • McKinley Morganfield

    I think most of us here realize the solution is austerity. Austerity will come about because there will be no alternative. There will be a gigantic contraction (depression) and banks all around the globe, and in some cases sovereign states will collapse. This will happen sometime within the next 6 to 18 months. It is unavoidable simply because the political will to reverse course does not exist. The public for the most part is clueless as to what awaits us. Get ready to face this storm.

    • Ben Dover

      You are right. Austerity will happen, one way or another.

      Remember all the people who pointed to Europe and said “See? THEY can give out all these lavish state freebies. We should be more like them!”?

    • sharonsj

      Austerity for whom? We all know the answer. It’s the 99% who will be asked again to bail out the banks. That’s because the banks went from screwing people to screwing governments, but politicians were getting too rich to care.

      As for Italy, Berlesconi gave them bread and circuses until things fell apart. When the Italians learn what austerity means for them, you’ll be seeing them in the streets too.

  • mondobeyondo

    2-year Italian bonds are at 7.2 percent now?!?
    Mamma Mia! That’s a spicy meat-balla!

    Wonder if Italy has crossed the threshold… and has arrived at the PONR (Point Of No Return). Italy isn’t some little pipsqueak country, it’s the 8th largest economy in the world (according to CNN).

    In other words, at 7.2 percent, Italy won’t be able to pay their bills, they will default, and the world’s 8th largest economy will go down the drain. And then goes Greece, and Spain, and Ireland, and France, and…. This is why stock markets worldwide are slumping, by the way.

    I see London, I see France! I see the E.U.’s underpants! Don’t worry, the U.S. isn’t too far behind. $15 trillion debt (wink, wink)

    • mondobeyondo

      “Ohhhh, but the U.S. is a Superpower!!” you say.
      Our debt and overspending will prove to be our kryptonite.

    • Ben Dover

      All of the protesters in Italy are just mad that Amanda Knox was freed upon appeal.

  • Geoffrey

    The modern heavily-interlocked financial network reminds me of the “Triple Alliance” and “Triple Entente” of pre-World War I. They were *intended* to spread the risk of a war starting by making sure that anyone who started it would be dealing with a powerful alliance. So, the reasoning went, there would be no war.

    However, the downside, obviously, was that once ONE country was engaged, ALL of them ended up suffering as they were dragged into somebody else’s fight.

    Here it’s debt, and once again, measures meant to spread risk are simply creating a financial black hole, into which all of the world’s economies are being tugged.

    • Michael

      Good point

      Michael

  • Christian for Israel

    I don’t understand the stock market, it rallies hundreds of points one day because investors see some hope for debt ridden Europe and then a few days later the markets are selling off hundreds of points because it looks like Europe is about to collapse and it goes back and forth. Are Investor’s so naive they cant see the END GAME for Europe and the US. The stock market shouldn’t be this high with the economy the way it is and unemployment so high. I think it is just pure greed.

    • 007

      It appears there is some serious market manipulation going on. No one in their right mind is invested in this volatile stock market. I can’t prove it, but I suspect Bernanke is stepping in more and more, through third parties, buying stocks. The micro second traders are just going on for the ride trying to make money on the momentum changes. However, you are seeing more and more of the big boys being killed in this market. Goldman Sachs was down almost 10% today.

    • Leah

      The market is manipulated – by our government. So are the prices of gold & silver. the market should be lower, g&s should be much higher.

    • denny

      What was Jesus Christ doing in the temple that day? Perhaps he was reacting like any outraged bondholder or investor would have.

    • REED RICHARDS

      Christian for Israel,

      Try market manipulation………….

    • James

      The short-traders are making a killing right now. Did anyone see that trader on the BBC say he dreams of another recession?

      If not, look it up. He also said governments don’t control the world, Goldman-Sachs does.

  • Gay Veteran

    we can save the people or the banksters

    the political elites will try and save the banksters, they will fail (but only after much suffering for the people)

  • Pauly

    The solution will be to kill off most of the population.

    • D

      That’s their plan. It’s easier to control us that way. WWIII (nuclear war) is on the horizon whether we want to believe it or not. First, however, the financial collapse must ensue.

    • Emily

      Pauly please don’t start down that road. Did you know that the world’s population could fit into the state of Texas? It would be a tight fit but it shows that just the number of humans is not the real problem. It’s what we humans do that is the problem. I am not a communist but I do believe there is enough food and energy for all humans, we just have to stop trying to starve people in order to control them. This is beyond greed, the powers that be are trying to play GOD and decide who lives and who dies. Well guess what, WE may be the ones they decide should die!

      • GreenMountain

        Emily– The state of Texas?? It’s even more hyperbolic than that.

        When the population was at around 5 or 5 and a half billion, EVERYONE on the planet could fit into Jacksonville Florida with each person having 4 square feet!

        And that’s a fact. The Texas stat, I believe, was everyone in the UNITED STATES (not including all of the illegal aliens)could fit in Texas with half an acre per person.

        So population in and of itself is not the problem. It’s resources and how we manage them that is the problem.

  • DaytoDay

    Great article Michael.

    I know there is a lot of talk and speculation of a complete financial, global collapse.

    What does that mean exactly? What hapens when a country, say the US economy completely collapses? I mean, what are we looking at?

    Complete anarchy and lawness. Or just a change in government and economic policies. What does a true economic collapse mean, and what will be the consequences of it?

    Stay Strong and Keep Up the Good Work!

    • Michael

      DaytoDay:

      I think it is going to look different as we progress through the stages of it.

      I know that some people believe that we will go from the status quo to “Mad Max” virtually overnight, but I believe that it will be more of a progression.

      Michael

    • Macnasty

      go to u tube punch weinmar germany,then look to argentina,then go to zimbabwe should give you some insite to what may happen.

    • David M

      IMHO, when the banks close, that will be it. Most people shop with their ATM cards and will be SOL. If the food distribution centers stay open. It will be cash only and then the stores will be emptied in hours. Riots will spread.

      Many, maybe most truckers will be stranded when their gas card stops working. Also, with Cell phones, CB’s, Internet, and talk radio. All the truckers STILL with gas will know that where they are heading has food riots and the gas stations are empty. Those that can, will turn around and head home. Why deliver your load only to be stranded far from home?

      With JIT(Just in time) infrastructure. And the medium of exchange being removed. It will all come crashing down.

      I pray that I’m wrong. But having spent two years reading up and following the Prepper sites and financial sites. There’s no way out without some kind of severe disruptions.

      Stock up while you can.

  • Vino

    Question: what will happen, how CAN you be prepared? Yes we will fall into a great depression or will it be a great change?

  • Barn Cat

    The end game for the huge piles of American, Japanese, and European debt is creating a crisis large enough to create a one-world government. I believe it will be the one prophesied in Revelation.

  • Garyisacommiepinko

    Hey, I know, I will quote my pal Gary- “Let’s tax the rich and give it to the poor.” Oh wait, the stupid ************* already tried that and it has failed. Oh well, back to the drawing board…

    • Paul

      The opposite of what you suggest has done well, but the poor now have nothing left to tax.

  • michelle

    future generations will have a different system, this one is finished – well, almost!!

  • Colin

    This crisis is not limited to the western world. The whole world is impacted by this crisis which is becoming more entrenched and intractable.

  • Ken

    Wake up America, our day of reckoning is coming also. If the government does not start living within it’s means, the economy will eventually collapse. I hate to think it, but only someone blind to reality cannot see the train wreck coming

    • Paul

      The option of your Government doing so has passed.

  • http://EconomicCollapse Already Gone

    Get Out The Cameras And Get Ready To Take Pictures Of What Is Coming Down The Road, Besides Memories This Will Be The Only Thing To Show Children And/Or GrandChildren Of What The American Dream Was. Like MadMax Beyond Thunderdome WhenHe Was Handed the ViewFinder And The Pictures Of What Was, And Tells The Kids “It Is No Longer There” The Same Will Be Done Here In The U.S Of A.

  • A.S.

    Won’t be long before this hits U.S. shores. Start stocking up on food, guns and other supplies asap. Hey, by doing so you may be considered a terrorist by the FBI/CIA, but you cares?!

    • http://www.youtube.com/safearmsreview SafearmsReview

      Your right but if one is just starting now, they are behind the power curve. We have 2 years worth of food, guns, ammo, etc & it costs a LOT of $$$ to get prepared. Most do not have the means but those that did prepare a little each month are ready.

      I just hope the worst does not happen but it seems that will not be the case.

      Oh well hold on & prep while you can.

      :)

    • knightowl77

      I agree we need to prepare…But I’m thinking if you read this blog or post on it you may be considered a terrorist by DHS….

      “See Something – Say Something” LOL

      • DownWithLibs

        Yeah, I saw those “nanny-state” commercials too. My head was swimming the thoughts of the end-game on that one.

  • Colin

    This week, Jefferson County in Alabama declared bankruptcy. This county’s largest city is Birmingham. With this bankruptcy, the county entered the history books as the largest municipal bankruptcy in our country’s history.

    See here –
    http://money.cnn.com/2011/11/09/news/economy/jefferson_county_bankruptcy/

    Wikipedia article on Jefferson County, AL –
    http://en.wikipedia.org/wiki/Jefferson_County,_Alabama

  • Carax

    The problem with Italy is more a political than an economic crisis. Few nations have confidence in the bunga-bunga Berlesconi administration. The media makes the economy of Italy a lot worse than it is.

    • Highspeed

      It is a mess politically, but the worst problems are definately the economy. They need a trilloin and a half dollar bailout. They can replace Berlosconi a lot easier than they can borrow that kind of cash.

  • planning4acrash

    What are one year Italian bonds doing? Yields are totally inverted in Greece, for example, with 1yr bonds around 235% and two year bonds at 107%.

    But Bloomberg and others do not quote the one year bond yields for Italy.

    Of course, there is a solution, default.

  • http://lnx-bsp.net/ Tel

    “So what does it say when even open market manipulation by the European Central Bank is not working?”

    The whole idea of market manipulation is that you don’t do it openly. If that’s too difficult for the ECB to understand then we wait around until they are replaced by someone who knows what they are doing.

  • Glenn

    When would be a good time to bow out of the market totally? That’s the million dollar question. I’ve diversified my investments amongst stocks, bonds and good ‘ole hard cash. Me thinks I should exit before Christmas on my Roth IRA items, but leave the 401(k) stuff alone (so as not to take a financial hit).

    • Highspeed

      Me, I am all cash and precious metals in my investments. And, maybe a few extra groceries. wink wink.

  • John

    Our national debt is mathematically unsustainable. Default is the only answer. Everything they are doing is just re-arranging the deck chairs on the Titanic.

  • Pingback: A Financial Nightmare For Italy: The Yield Curve For Italian Bonds Is Turning Upside Down | RevolutionRadio.org

  • jox

    I think you can be wrong here. Europe can stop the problem of debt whenever it wants. It only has to start printing money as mad, like the US and UK.

    I think the European measures to the excess of debt are wiser: the effort is being distributed among the countries (the taxpayers actually), the investors and banks, that are losing money, and the BCE who prints money. It’s going to be bumpy and hard, but in a couple of years Europe can have solved the problem.

    On the other hand, look at US and UK: the only trick is to print more money and to postpone the problem. What will happen in the end? There is not a silver bullet, but I prefer the European way.

    • Bone Idle

      There is no mechanism for “Europe” to start printing money. There is no “central Bank” such as the fed or the Bank of E.
      The Germans are totally opposed to printing money – they fear a repeat of the Weimar Republic hyper inflation that followed W.W.I. (and rightly so).
      The french are fearful of a downgrade of their credit rating if money is printed.
      Printing of money by the ECB is illegal according to the “Euro” statutes.

      That’s the probvlem with their great solution put forward last week – raise the bailout fund to one Trillion Euros. – There are no Euro’s to put into the bailout – they don’t exist. And. No other country or entity will lend the ECSF one trillion.

      Printing money is a mirror of exactly the situation that caused the Great Depression in the thirties.

    • 007

      That definately seems to be their grand plan. Printing money for government debt has always resulted in inflation, recession and horrible misallocations of capital and eventual economic disaster. But that does seem to be the plan.

  • mondobeyondo

    “This is the end, beautiful friend…
    This is the end, my only friend, the end
    Of all our hopes and plans, the end
    Of everything that stands, the end
    No safety or surprise, the end
    I’ll never look into your eyes…. again…”

    “The End”, The Doors, 1968
    ——————-
    Wonder if Jim Morrison was on to something.

  • Harold Crews

    No our children and grandchildren won’t be on the line for the debt of the US empire. There won’t be a United States within ten years or so.

  • Ken

    The more things fall apart in the world, the more apparent it will be that the DOW’s five figure value is a hoax – inflated by borrowed bogus money. Taxpayer fiat dollars enter the wormhole in DC, are laundered, and emerge in Wall Street. How else to explain a 15 trillion dollar debt and stock index increases based on this plan or that bailout instead of an increase in new productive capacity?

  • http://militantjeffersonian.com Republicae

    @Jox
    …sure they can just print, print, print, but with such printing comes an even more dangerous problem, one that Germany should be familiar with concerning their history: Hyper-inflation.

    • http://YAHOO RICHARD

      I HAVE HEARD THAT GERMANY IS ALREADY PRINTING THERE OWN CURRENCY, AND PREPARING FOR THE COLLAPSE OF THE EURO.

    • 007

      That’s the funny part. The FED and other central banks can control the inflation through various financial actions. They are in denial that there is any inflation. Truth is if they ever tried selling bonds no one would buy them without interest rates spiking. When interest rates spike here the game is over. So we will go on pretending that there is any inflation.

  • Max

    Well, there are a lot of funny comments in here. Good article but, did you know that Italy is used to be up and down from the pass 60 decades? So, in a way or in an other Italy will turn North again… of course with some type of new invention (I mean “debts”)… and everything will be ok again for the happiness of the World! Any way, this is just a financial market speculation just to get out the current parliament majority (Berlusconi and company) so as soon they get out if you want to invest to Italian Bounds (any type)do it! They will be fine! :-)

  • Max

    Just a simple question for the “moderator” who wrote this article?… my grandpa? :-) I don’t see no author name in here!!

    • Highspeed

      All articles are written by Michael Snyder. Click on contact at the top of page for more info.

  • Kathy Smith

    The key word Micheal gives us all almost every day is prepare. My husband & I have been stocking up for about 1 year now. Maybe the real end is near but until then we need to PREPARE !

  • Antonio Gonzalez

    Total financial nightmare for Italy. Yes, and for wall street bank.

  • Concerned American

    Um, after the 50% haircut with no derivatives being activated, buyers of euro debt have figured out there’s no way to hedge with credit default swaps. Natually, the interest on Italian bonds, Spanish bonds and since France is so exposed to Italian risk… they’re all going through the roof.

    They’re kicking a can they have to kick more and more quickly due to the consequences of their last failed attempt to mask or decieve the public to the real danger of the end game.

    Yep, I think it will all fall apart but, not before they use EVERY measure to save it. I don’t think it’s a matter of weeks… remember, the ones that got us here just change the rules when it’s about to split at the seams.

    The credit default swaps are a good example of this… they bascially just called it voluntary ( who would take a 50% loss and call it voluntary?!?! )…. they’ll keep doing this until it can’t be done anymore.

    Look for them to print… They can’t do it now based on their law but, with no other alternatives, they’ll print… count on it. Just another can kick but, they’ll print… they always do…. one big race to the bottom.

    We’ll all be there at the end of it but, I don’t think like a lot of others that it’s in the next month or two…

    I do prep, however….

  • WeHaveASoul

    I’d like to quote myself, August 9th:


    It’s well known that QE billions are flooding not American but world economy with Extra liquidity, paralizing the banking system. It seems, more i feel like Bernanke will continue his QE’st over Euro until it falls first. It would ensure there is no safe deposits and no investment can be made, no hideout to survive a perfect storm. Whatever seemed stable before, it shakes, every local currency, yuan, euro, pound, everything. So, what is the plan? I mean i can’t believe that is just a falling, it is so naive. It does not really look like a free fall, it looks like it detonate at will, it explode to ensure everything will fall flat down. Don’t call me a tin foil guy but i’m sure some of the disasters was triggered by a paper ink. It’s all was well masked in the panic. To ensure the fall, to make it unprecedent, to take off media attention until it would be too late. I’ve remind the China recently asked for a hard currency, world backed currency. It was suddenly snip my ear and made me thought of a global dollar reset. Likewise the dollar was not really the American currency or at least not national, whatever printed on the note. It was designed to be a global currency and the plan has to be fulfilled soon.

    I’m still insist the game of the world elite is not yet over. I warn you to not go into panic mode. Be as real as you can, wake up, look sharp – you are under control. What you think the collapse is, this is really a clever illusion, power gathering game.

  • El Pollo de Oro

    Here’s a sobering European figure: in Spain, the unemployment rate among young people in the 18-25 age group is a whopping 45%. Think about it: one in two college-age Spaniards is unemployed. But as Michael T. Snyder correctly points out, “Being more like the United States is not necessarily a solution to anything. The U.S. is 15 trillion dollars in debt, and extreme poverty is spreading like wildfire in this nation.” Well said. I’ve done a considerable amount of traveling in Europe and have a lot of friends and business contacts overseas, and I can tell you that the days when so many Europeans looked to the United States as a symbol of hope and prosperity are long gone. Now, they see The Banana Republic of America (formerly the USA) for what it is: a crumbling, rotting, decaying, collapsing empire. And Europeans, contrary to what the neocon imperialist reactionaries would have us believe, take absolutely no pleasure in that because they realize that the BRA’s downfall will have serious consequences for Europe. Likewise, the problems in Greece, Italy and Spain can only add to the misery and suffering in the BRA.

    “When people get hungry and desperate, things get ugly.”—Gerald Celente

    “Prices are going up. Unemployment is continuing to go up. And we have not had the necessary correction for the financial bubble created by our federal reserve system.” —Ron Paul

    “The new poverty figures came out, and they’re astounding. One out of 15 people is living in dire poverty. This is not what America is supposed to be.”—Gerald Celente

    “There’s no doubt that we’re in a depression, and the globalists have been covering it up.” —Alex Jones

    “Some elements of Occupy Wall Street can legitimately be criticized as collectivist or whatever. But overall, this is just a movement of people who are upset about Wall Street taking over Washington and then inducing them to gives us tens of trillions of our tax money. And then, all these fake conservatives get up and criticize anyone who wants to shut down the corruption on Wall Street as communist when it’s the opposite. There’s this ‘let them eat cake’ attitude, and it just gets crazier and crazier by the minute. How far can this go?”—Alex Jones

    These are incredibly dark and perilous times we’re living in, and things will only get worse. Come si dice in italiano, che dio chi aiuti. E come si dice in inglese……we’re seriously screwed.

    • El Pollo de Oro

      And here’s another thing that Europeans can look forward to if they decide to become more like The Banana Republic of America: a lot of violent crime. My experience has been that while European cities can be really bad when it comes to pickpockets, con artists and non-violent crime, BRA cities are way ahead when it comes to carjacking, armed robberies and violent muggings (and don’t even get me started about crime in Latin America). The only European city I’ve visited that made me nervous was Napoli, the place that italiani di Milano, Firenze, Roma e Venezia urge you to avoid. The BRA, as Ron Paul as pointed out, incarcerates more people per capita than any other major developed country (assuming we’re still part of the developed world), but many of our major cities are insanely dangerous.

      Police states aren’t necessarily safe, only oppressive.

  • JM

    Guns, food, water.
    You are a fool if you don’t stock up.

    • El Pollo de Oro

      “These are Gerald Celente’s three Gs: gold, guns and a getaway plan. If you want to keep bombing other countries—if you want to keep expanding your global reach in wars—then as we used to say in the Bronx, payback’s a bitch.”—Gerald Celente

  • RSteiner
  • sm

    Solution = cancel all debt world wide … now!

  • JMorcan

    The underlying problem is not the debt itself, but rather the fact that we’re not generating the growth revenues to pay it off. No amount of tax increases or spending cuts can fix that. Growth requires jobs, and jobs can only be created if we’re not competing against hundreds of millions of Chinese and Indian workers earning $0.50/hr. It may not be politically correct to suggest banning products from third-world countries and authoritarian regimes, but that is the only logical solution to our problems.

    • lmao rednecks

      You do realize that if imports stopped from outside North America, the US would last about a week before imploding into civil war, right?

      In case you didn’t get it: China and Russia, put together, are Fortress Eurasia. These 2 countries have the food, the water, the minerals, don’t have peak oil (US since 1970′s, while US is still the 3rd largest oil pumper in the world, foolishly depleting its supplies. So called “oil dependent” Iran pumps only half the oil US does), have the population, the land, the industries, the trade routes, and the nuclear arsenals to defend them.

      The US dollar is propped up with the full faith and backing of the US military. Anyone who is too weak and doesn’t take the dollar is bombed back to the stone age. Anyone who is strong and doesn’t take the dollar, would get surrounded by a ring of hostile countries and anti-ballistic missile sites, sanctioned, and totally isolated. China buckled in 1979 and started taking the USD. Russia buckled in 1991 and did the same. After 20 or so years of being slaves to the US dollar, they got back on their feet.

      When the US military was strong, the USD was strong, which made gave the military more money and made it even stronger, etc etc. The only thing that could derail this would be the growing debt (which happened) and the decreasing marginal return of further military investment (which also happened). Now that the US military is becoming relatively weaker, the USD is declining, resulting in a vicious reverse cycle. Once the US military cannot force other countries to accept the USD or else, people will see the USD for what it is (green toilet paper) and dump it. The dollars in the outside flooding back into the US would result in hyperinflation and the total collapse of the US as a nation-state.

  • http://www.jeanettemohr.de grace

    I have to say that this financial crisis has gone on too long now, why can’t we just get it started.

  • William

    All this panic and terrible financial situation in Europe and gold is relatively stable and low-priced. I don’t understand it.

  • http://www.annamaria-bort.de/ katie

    I really am not suprised that there is such an outcry everywhere. It is always the working man that suffers not the bankers at the top that put us in this mess.

  • http://www.ragnamoeller.de ava

    Writing off debts is not easy, especially in this day and age. Plus you need money to be able to write them off in the first place and how many of us have than nowadays.

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