Commentary

The Collapse Of Bitcoin

Bitcoin is a virtual currency that has no intrinsic value. The only thing giving bitcoin value is the faith that people have in it, and now that faith has been shattered. This week, the most prominent bitcoin exchange in the entire world, Mt. Gox, totally collapsed. At one time, Mt. Gox boasted more than a million accounts and it accounted for approximately 25 percent of all global bitcoin trading. But now the website has been taken down, there are rumors of catastrophic losses, and many investors are concerned that they will lose all of their money. In fact, according to one report, investors could be facing total losses of up to 367 million dollars. The collapse of Mt. Gox is also affecting other bitcoin exchanges. As I write this, the market value of bitcoin had fallen to about $470, but just three months ago it was trading close to $1,200. Needless to say, a lot of bitcoin investors are going to be licking their wounds tonight.

I have never written much about bitcoin because I never believed in it. Personally, I have always preferred to stick to silver and gold. But I can’t blame people for wanting to create a monetary system that worked outside of the central bank-controlled paradigm that we have today.

I just didn’t have any faith in bitcoin. I considered it something of a Ponzi scheme. That is why I never recommended it to anyone. Those that got in early and got out at the peak of the market made a killing. Good for them. But most investors are going to end up taking a bath – especially those that got in at the very end.

When you have an imaginary currency that has no intrinsic worth that is being managed and traded by organizations that have very little regulation or accountability, bad things can happen. And we saw a perfect example of this on Tuesday…

A major bitcoin exchange has gone bust after secretly racking up catastrophic losses, other virtual currency companies said Tuesday — a potentially fatal blow for the exotic new form of money.

The website of Tokyo-based Mt. Gox was returning a blank page Tuesday. The disappearance of the site follows the resignation Sunday of Mt. Gox CEO Mark Karpeles from the board of the Bitcoin Foundation, a group seeking legitimacy for the currency, and a withdrawal ban imposed at the exchange earlier this month.

A lot of people out there are insisting that bitcoin can still overcome this and that it is still a sound currency system. More power to them. I certainly wish them no ill will. I just don’t agree with them.

Others are being far more blunt about the matter. Just consider what Gary North had to say about the collapse of bitcoin…

The biggest Bitcoins exchange has gone bye-bye. It took with it the money that the investors thought was safe.

Reuters reports: “Mt. Gox had $174 million in liabilities against $32.75 million in assets. It was not possible to verify the document or the exchange’s financial situation.”

I say: “A fool and his digital money are soon parted.”

How will the investors prove in a Japanese bankruptcy court that they deserve a part of the supposed $32.75 million? After all, the transactions are all secret.

Anyone that invests in bitcoin needs to realize that they could lose everything. There is no deposit insurance. There is very little regulation. Nobody is going to bail you out if some corrupt businessman takes all of your bitcoins and drops off the map.

It is truly like the wild West.

The amount of money that some bitcoin investors stand to lose from the collapse of Mt. Gox is staggering.

Coinapult and SatoshiDice founder Erik Voorhees says that he may lose about $285,000.

Bitcoin trader Kolin Burgess fears that he may lose about $320,000.

Some people are going to go from being “bitcoin millionaires” to paupers almost overnight.

Yes, I know that there are a lot of people out there that are fervently insisting that this is not the death of bitcoin.

You never know, they may be right. In the aftermath of the collapse of Mt. Gox, six major bitcoin organizations issued a joint statement. The following is an excerpt from that statement…

The purpose of this document is to summarize a joint statement to the Bitcoin community regarding the insolvency of Mt.Gox.

This tragic violation of the trust of users of Mt.Gox was the result of one company’s actions and does not reflect the resilience or value of bitcoin and the digital currency industry. There are hundreds of trustworthy and responsible companies involved in bitcoin. These companies will continue to build the future of money by making bitcoin more secure and easy to use for consumers and merchants. As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today.

We are confident, however, that strong Bitcoin companies, led by highly competent teams and backed by credible investors, will continue to thrive, and to fulfill the promise that bitcoin offers as the future of payment in the Internet age.

So will the bitcoin community bounce back and be stronger than ever?

You never know. I certainly wish them the best. I simply do not plan to participate.

It isn’t just that bitcoin and other alternative currencies are very unstable and offer no protection. It is also that governments and central banks around the world are starting to crack down on something that they see as a potential threat. For example, this comes from a Fox News article that was published just this week…

Authorities have been taking an increasingly hard look at Bitcoin and related virtual currencies including Litecoin, Namecoin, Ripple, and countless others. Some countries, including Russia, have effectively banned the currency. In other jurisdictions, authorities are weighing whether to try to tame the marketplace through licenses or other mechanisms.

It is entirely possible that the collapse of Mt. Gox could have been manufactured by a government or a central bank.

Considering the other things that have been revealed over the past couple of years, it would be naive to think that governments and central banks are unwilling to engage in such subterfuge.

In addition, consider what would happen to the other exchanges if the U.S. or the EU publicly announced a complete ban on bitcoin someday.

There are just too many risks.

Like I said, I wish those well that are involved in bitcoin or any of the other alternative virtual currencies that are floating around out there.

Hopefully some of those virtual currencies will succeed.

But most average American families simply cannot afford to put their hard-earned money into schemes that could evaporate literally overnight.

So what do you think about bitcoin?

Please feel free to share your thoughts by posting a comment below…

What Is Happening In Ukraine Is Far More Important Than Most People Realize

What the people of Ukraine are being put through is absolutely horrible. They are caught in the middle of a massive tug of war between the East and the West, and they are paying a great price for it. Ultimately, Ukraine will end up either being dominated by Russia (a bad outcome) or by the EU and the United States (another bad outcome). Most Ukrainians just want to be free and want to be able to build a better future for themselves and their families, but it is extremely unlikely that they will be able to escape the specter of foreign domination. Meanwhile, the violence in Ukraine is planting the seeds for a potentially much larger conflict down the road. The days of “friendly relations” between the United States and Russia are now gone. Russia is absolutely furious that the U.S. has fueled a violent revolution on its own border, and it is something that Russian officials will not forget for a very long time. In return, U.S. officials are taking an increasingly harsh stance toward Russia. In the end, the seeds that are being planted right now could ultimately blossom into a full-blown conflict between the superpowers in the years to come.

Let there be no mistake – the United States is heavily involved in what is going on in Ukraine. Even the New York Times admits this. And the U.S. Ambassador to Ukraine and the Assistant Secretary of State have been caught on tape discussing their next moves in getting a new government installed in Ukraine.

In addition, a number of non-governmental organizations inside the United States have allegedly been assisting and organizing the revolution in Ukraine for a long time. At least a few of these organizations have ties to George Soros. This is something that I discussed in a previous article.

Some of the “progressive” NGOs that have been accused of fueling the violent revolution in Ukraine include the National Endowment for Democracy, Freedom House, and the Open Society Foundations (formerly known as the Open Society Institute).

Please don’t misunderstand me. I am not taking sides. I am just pointing out that both sides in Ukraine are controlled. If I was living in Ukraine, I would want both Russia and the United States to go away and leave Ukraine alone.

Instead, Ukraine is being used as a battleground to fight a proxy war between the East and the West. Now that the opposition has gained the upper hand, it does not appear that Russian officials are in any mood to recognize the new “government”…

Prime Minister Dmitry Medvedev on Monday said Russia had grave doubts about the legitimacy of those in power in Ukraine following President Viktor Yanukovich’s ouster, saying their recognition by some states was an “aberration”.

Medvedev also stated that he has “big doubts about the legitimacy of a whole series of organs of power that are now functioning there.”

Last Friday, an agreement was signed by the two sides in Ukraine that was supposed to bring about a peaceful resolution to all of this. But the revolutionaries reneged on the deal and toppled the government instead. Needless to say, Russia was quite horrified by this…

The Russian Foreign Ministry criticized the West for turning a blind eye to what Moscow described as the opposition reneging on its agreement signed Friday to form a unity government and aiming to “suppress dissent in various regions of Ukraine with dictatorial and, sometimes, even terrorist methods.”

So what does Russia plan to do?

That is the big question that everyone is asking.

They are not doing much of anything just yet. But there have been rumors that we could potentially see some economic blowback…

Russia and the Customs Union could temporarily limit increased-risk food imports from Ukraine, given fears of loose safety control, said Sergei Dankvert, head of the Russian veterinary and phytosanitary oversight service Rosselkhoznadzor.

“My Belarusian colleague and I are extremely concerned about the situation in Ukraine. We do not rule out that curbs could be introduced on the imports of products of high veterinary and phytosanitary risks from Ukraine,” Dankvert told Interfax after talks with his Belarusian counterpart Yury Pivovarchik in Bryansk, and telephone talks with Ukraine’s Deputy Agrarian Policy Minister Ivan Bisyuk.

Of course what the U.S. government is most concerned about is any military action that Russia might take.

National Security Adviser Susan Rice says that what has happened in Ukraine reflects “the will of the Ukrainian people and the interests of the United States and Europe” and that it would be a “grave mistake” for Russia to get militarily involved.

But whatever happens over the next few days, nobody should think that the Russians are simply going to abandon their interests in Ukraine. Russia has a very important military base down in the Crimea, and the eastern half of the country is very pro-Russian.

So the struggle between East and West in Ukraine is likely to continue for quite some time to come. The following is an excerpt from a recent WND article…

The issue with Ukraine is whether it will join the E.U. or Putin’s Eurasian Union. The country is roughly divided on this issue between eastern and western Ukraine. The eastern portion wants to remain with Russia while the western side wants to move closer with the West.

In southern Ukraine, where the Crimea is located, Russian influence remains strong.

Because demonstrators who want to see Ukraine lean westward have become emboldened with their immediate success of ousting Yanukovich, it could make it more difficult for them to come to terms with any settlement agreement to reunify the country.

Moscow has a large naval military facility in Sevastopol in the Crimea and recently received a 25-year lease extension to 2042, with another five-year renewal option until 2047. In exchange, Ukraine received a multiyear discounted contract for much-needed natural gas.

And the pro-Russian eastern half of the country is actually the stronger of the two halves economically. So this will likely complicate matters for the EU and the U.S. as they try to bring Ukraine into their sphere of influence…

Seven of Ukraine’s 10 largest private companies by revenue are either headquartered or maintain the majority of their operations in eastern Ukraine. These firms are owned by some of Ukraine’s wealthiest and most influential individuals. Three of these 10 corporations — mining and steel company Metinvest, energy firm DTEK and its subsidiary Donetskstal — are based in the eastern industrial city of Donetsk and are owned by Ukraine’s wealthiest man, Rinat Akhmetov. Interpipe, the company that controls 10 percent of the world market share of railway wheels and more than 11 percent of the world market share of manganese ferroalloys, is based in Dnipropetrovsk and belongs to businessman and politician Victor Pinchuk.

The country’s most important businessmen are embedded in the east, where their businesses make disproportionately high contributions to the Ukrainian economy and national budget.

In the end, this proxy war between the East and the West has left Ukraine with a collapsed economy and on the brink of civil war.

And what has happened in Ukraine has caused permanent damage in the relationship between the United States and Russia.

It won’t happen this month or even this year, but someday the U.S. may end up bitterly regretting antagonizing the Russian Bear.

At least that is what I think.

So what do you think?

Please feel free to share your thoughts by posting a comment below…

China Starts To Make A Power Move Against The U.S. Dollar

In order for our current level of debt-fueled prosperity to continue, the rest of the world must continue to use our dollars to trade with one another and must continue to buy our debt at ridiculously low interest rates. Of course the number one foreign nation that we depend on to participate in our system is China. China accounts for more global trade than anyone else on the planet (including the United States), and most of that trade is conducted in U.S. dollars. This keeps demand for our dollars very high, and it ensures that we can import massive quantities of goods from overseas at very low cost. As a major exporting nation, China ends up with gigantic piles of our dollars. They lend many of those dollars back to us at ridiculously low interest rates. At this point, China owns more of our national debt than any other country does. But if China was to decide to quit playing our game and started moving away from U.S. dollars and U.S. debt, our economic prosperity could disappear very rapidly. Demand for the U.S. dollar would fall and prices would go up. And interest rates on our debt and everything else in our financial system would go up to crippling levels. So it is absolutely critical to our financial future that China continues to play our game.

Unfortunately, there are signs that China has now decided to start looking for a smooth exit from the game. In November, I wrote about how the central bank of China has announced that it is “no longer in China’s favor to accumulate foreign-exchange reserves”. That means that the pile of U.S. dollars that China is sitting on is not going to get any higher.

In addition, China has signed a whole host of international currency agreements with other nations during the past couple of years which are going to result in less U.S. dollars being used in international trade. You can read about many of these agreements in this article.

This week, we learned that China started to dump U.S. debt during the month of December. Many have imagined that China would try to dump a flood of our debt on to the market all of a sudden once they decided to exit, but that simply does not make sense. Instead, it makes sense for China to dump a bit of debt at a time so that the market will not panic and so that they can get close to full value for the paper that they are holding.

As Bloomberg reported the other day, China dumped nearly 50 billion dollars of U.S. debt during the month of December…

China, the largest foreign U.S. creditor, reduced holdings of U.S. Treasury debt in December by the most in two years as the Federal Reserve announced plans to slow asset purchases.

The nation pared its position in U.S. government bonds by $47.8 billion, or 3.6 percent, to $1.27 trillion, the largest decline since December 2011, according to U.S. Treasury Department data released yesterday.

This is how I would do it if I was China. I would try to dump 30, 40 or 50 billion dollars a month. I would try to make a smooth exit and try to get as much for my U.S. debt paper as I could.

So if China is not going to stockpile U.S. dollars or U.S. debt any longer, what is it going to stockpile?

It is going to stockpile gold of course. In fact, China has been voraciously stockpiling gold for quite some time, and their hunger for gold appears to be growing.

According to Bloomberg, more than 80 percent of the gold that was exported from Switzerland last month went to Asia…

Switzerland sent more than 80 percent of its gold and silver bullion and coin exports to Asia last month, the Swiss Federal Customs Administration said today in an e-mailed report. It imported most from the U.K.

Hong Kong was the top destination at 44 percent on a value basis, with India at 14 percent, the Bern-based customs agency said in its first breakdown of the gold trade data since 1980. Singapore accounted for 8.6 percent of exports, the United Arab Emirates 7.9 percent and China 6.3 percent.

When China imports gold, most of it goes through Hong Kong. We know that imports of gold from Hong Kong into China are at an all-time record high, but we don’t know exactly how much gold China has accumulated at this point because they quit reporting that to the rest of the world a number of years ago.

When it comes to global finance, China is playing chess and the United States is playing checkers. China knows that gold is a universal currency that will hold value over the long-term. As the paper currencies of the world race toward collapse, China could end up holding most of the real money and that would be a huge game changer when they finally reveal that fact…

The announcement of China’s new gold hoard will send shockwaves through the financial markets, and make China and the Chinese yuan (their national currency) even bigger players at the international table.

International banking expert James Rickards compared it to a game of Texas Hold ‘Em poker:

“You want a big pile of chips. The U.S. has a big pile of chips, Europe has a big pile of chips. The U.S. has 8,000 tonnes [metric tons] of gold, 17 members of the euro system have 10,000 tonnes. China at 1,000 tonnes is not a player, but at 5,000 tonnes, they are a player.”

There are some really good points made in the quote above, but I do take exception with a couple of things. First of all, I believe that China now has far more than 5,000 tons of gold. Secondly, I seriously doubt that the U.S. still actually has 8,000 tons of gold or that Europe still actually has 10,000 tons of gold.

As China (and eventually the rest of the world) moves away from a U.S.-based financial system, the consequences are going to be dramatic.

For instance, right now the average rate of interest that the U.S. government pays on debt is just 2.477 percent. That is ridiculously low and it is way below the real rate of inflation. It is simply not rational for anyone to lend the U.S. government money so cheaply, and at some point we are going to see a dramatic shift.

When that day arrives, interest rates are going to rise dramatically. And if the average rate of interest on U.S. government debt rises to just 6 percent (and it has been much higher than that in the past), we will be paying out more than a trillion dollars a year just in interest on the national debt.

Even more frightening is what a rapidly changing interest rate environment would mean for our banking system. There are four large U.S. banks that each have exposure to derivatives in excess of 40 trillion dollars. You can find the identity of those banks right here. Interest rate derivatives make up the biggest chunk of those derivatives contracts. As John Embry told King World News just the other day, when that bubble bursts the carnage is going to be unprecedented…

“Stockman brought up a brilliant point, the fact that we have hundreds of trillions of dollars of interest rate swaps, which are polluting the world’s banking system. If we see growing volatility in interest rates, and I think that’s inevitable with what’s going on, that would cause spasms in the financial system. And if something goes wrong in the derivatives market, Heaven help us because the leverage that is imparted to the banking system through these derivatives is unholy.”

Unfortunately, very few of the “experts” will ever see this crash coming.

Very few of them saw it coming in 2000.

Very few of them saw it coming in 2008.

And very few of them will see it coming this time.

I really like what Paul B. Farrell had to say about this…

Early warnings of a crash are dismissed over and over (“just a temporary correction”). They gradually numb us about the inevitable. Time after time we forget history’s lessons. Until finally a big surprise catches us totally off-guard. Financial historian Niall Ferguson put it this way: Before the crash, our world seems almost stationary, deceptively so, balanced, at a set point. So that when the crash finally hits — as inevitably it will — everyone seems surprised. And our brains keep telling us it’s not time for a crash.

Till then, life just goes along quietly, hypnotizing us, making us vulnerable, till a shocker like Lehman Brothers upsets the balance. Then, says Ferguson, the crash is “accelerating suddenly, like a sports car … like a thief in the night.” It hits. Shocks us wide awake.

Don’t let the upcoming crash take you by surprise.

The warning signs are very clear.

Get ready while you still can.

29 Percent Of All U.S. Adults Under The Age Of 35 Are Living With Their Parents

Why are so many young adults in America living with their parents? According to a stunning Gallup survey that was recently released, nearly three out of every ten adults in the United States under the age of 35 are still living at home with Mom and Dad. This closely lines up with a Pew Research Center analysis of Census data that looked at a younger sample of Americans which found that 36 percent of Americans 18 to 31 years old were still living with their parents. That was the highest level that had ever been recorded. Overall, approximately 25 million U.S. adults are currently living at home with their parents according to Time Magazine. So what is causing all of this? Well, there are certainly a lot of factors. Overwhelming student loan debt, a depressing lack of jobs and the high cost of living are all definitely playing a role. But many would argue that what we are witnessing goes far beyond temporary economic conditions. There are many that believe that we have fundamentally failed our young people and have neglected to equip them with the skills and values that they need to be successful in the real world.

More Americans than ever before seem to be living in a state of “perpetual adolescence”. As Gallup noted, one of the keys to adulthood is to be able to establish independence from your parents…

An important milestone in adulthood is establishing independence from one’s parents, including finding a job, a place to live and, for most, a spouse or partner, and starting one’s own family. However, there are potential roadblocks on the path to independence that may force young adults to live with their parents longer, including a weak job market, the high cost of living, significant college debt, and helping care for an elderly or disabled parent.

Unfortunately, it is becoming increasingly difficult for young people to become financially independent. While they are in high school, we endlessly pound into their heads the need to go to college. Then we urge them to take out whatever loans that they will need to pay for it, ensuring them that they will be able to get “good jobs” which will enable them to pay off those loans when they graduate.

Of course a very large percentage of them find that there aren’t any “good jobs” waiting for them when they graduate. But because of the crippling loans that they have accumulated, they quickly realize that they have decades of debt slavery ahead of them.

Just consider the following numbers about the growth of student loan debt in the United States…

-The total amount of student loan debt in the United States has risen to a brand new all-time record of 1.08 trillion dollars.

-Student loan debt accounted for 3.1 percent of all consumer debt in 2003. Today, it accounts for 9.4 percent of all consumer debt.

-In the third quarter of 2007, the student loan delinquency rate was 7.6 percent. Today, it is up to 11.5 percent.

This is a student loan debt bubble unlike anything that we have ever seen before, and it seems to get worse with each passing year.

So when is the bubble going to finally burst?

Meanwhile, our young adults are still really struggling to find jobs.

For those in the 18 to 29-year-old age bracket, it is getting even harder to find full-time employment. In June 2012, 47 percent of those in that entire age group had a full-time job. One year later, in June 2013, only 43.6 percent of that entire age group had a full-time job.

And in many ways, things are far tougher for those that didn’t finish college than for those that did. In fact, the unemployment rate for 27-year-old college dropouts is nearly three times as high as the unemployment rate for those that finished college.

In addition, since Barack Obama has been president close to 40 percent of all 27-year-olds have spent at least some time unemployed.

So it should be no surprise that 27-year-olds are really struggling financially. Only about one out of every five 27-year-olds owns a home at this point, and an astounding 80 percent of all 27-year-olds are in debt.

Even if a young adult is able to find a job, that does not mean that it will be enough to survive on. The quality of jobs in America continues to go downhill and so do wages.

The ratio of what men in the 18 to 29-year-old age bracket are earning compared to what the general population is earning is at an all-time low, and American families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.

No wonder so many young people are living at home. Trying to survive in the real world is not easy.

Many of those that are trying to make it on their own are really struggling to do so. Just consider the case of Kevin Burgos. He earns $10.50 an hour working as an assistant manager at a Dunkin Donuts location in Hartford, Connecticut. According to CNN, he can’t seem to make enough to support his family no matter how hard he works…

He works 35 hours each week to support his family of three young children. All told, Burgos makes about $1,800 each month.

But his bills for basic necessities, including rent for his two-bedroom apartment, gas for his car, diapers and visits to the doctor, add up to $2,400. To cover these expenses without falling short, Burgos would need to make at least $17 per hour.

“I am always worried about what I’m going to do for tomorrow,” Burgos said.

There are millions of young people out there that are pounding their heads against the wall month after month trying to work hard and do the right thing. Sometimes they get so frustrated that they snap. Just consider the following example…

Health officials have temporarily shut down a southern West Virginia pizza restaurant after a district manager was caught on surveillance video urinating into a sink.

Local media reported that the Mingo County health department ordered the Pizza Hut in Kermit, about 85 miles southwest of Charleston, to shut down.

But as I mentioned earlier, instead of blaming young people for their failures, perhaps we need to take a good, long look at how we have raised them.

The truth is that our public schools are a joke, SAT scores are at an all-time low, and we have pushed nearly all discussion of morality, values and faith out of the public square.

No wonder most of our young people are dumb as a rock and seem to have no moral compass.

Or could it be possible that I am being too hard on them?

Please feel free to share what you think by posting a comment below…

15 Reasons Why Your Food Bill Is Going To Start SOARING

Did you know that the U.S. state that produces the most vegetables is going through the worst drought it has ever experienced and that the size of the total U.S. cattle herd is now the smallest that it has been since 1951? Just the other day, a CBS News article boldly declared that “food prices soar as incomes stand still“, but the truth is that this is only just the beginning. If the drought that has been devastating farmers and ranchers out west continues, we are going to see prices for meat, fruits and vegetables soar into the stratosphere. Already, the federal government has declared portions of 11 states to be “disaster areas”, and California farmers are going to leave half a million acres sitting idle this year because of the extremely dry conditions. Sadly, experts are telling us that things are probably going to get worse before they get better (if they ever do). As you will read about below, one expert recently told National Geographic that throughout history it has been quite common for that region of North America to experience severe droughts that last for decades. In fact, one drought actually lasted for about 200 years. So there is the possibility that the drought that has begun in the state of California may not end during your entire lifetime.

This drought has gotten so bad that it is starting to get national attention. Barack Obama visited the Fresno region on Friday, and he declared that “this is going to be a very challenging situation this year, and frankly, the trend lines are such where it’s going to be a challenging situation for some time to come.”

According to NBC News, businesses across the region are shutting down, large numbers of workers are leaving to search for other work, and things are already so bad that it “calls to mind the Dust Bowl of the 1930s“…

In the state’s Central Valley — where nearly 40 percent of all jobs are tied to agriculture production and related processing — the pain has already trickled down. Businesses across a wide swath of the region have shuttered, casting countless workers adrift in a downturn that calls to mind the Dust Bowl of the 1930s.

If you will recall, there have been warnings that Dust Bowl conditions were going to return to the western half of the country for quite some time.

Now the mainstream media is finally starting to catch up.

And of course these extremely dry conditions are going to severely affect food prices. The following are 15 reasons why your food bill is going to start soaring…

#1 2013 was the driest year on record for the state of California, and 2014 has been exceptionally dry so far as well.

#2 According to the U.S. Drought Monitor, 91.6 percent of the entire state of California is experiencing “severe to exceptional drought” even as you read this article.

#3 According to CNBC, it is being projected that California farmers are going to let half a million acres of farmland sit idle this year because of the crippling drought.

#4 Celeste Cantu, the general manager for the Santa Ana Watershed Project Authority, says that this drought could have a “cataclysmic” impact on food prices…

Given that California is one of the largest agricultural regions in the world, the effects of any drought, never mind one that could last for centuries, are huge. About 80 percent of California’s freshwater supply is used for agriculture. The cost of fruits and vegetables could soar, says Cantu. “There will be cataclysmic impacts.”

#5 Mike Wade, the executive director of the California Farm Water Coalition, recently explained which crops he believes will be hit the hardest…

Hardest hit would be such annual row crops as tomatoes, broccoli, lettuce, cantaloupes, garlic, peppers and corn. Wade said consumers can also expect higher prices and reduced selection at grocery stores, particularly for products such as almonds, raisins, walnuts and olives.

#6 As I discussed in a previous article, the rest of the nation is extremely dependent on the fruits and vegetables grown in California. Just consider the following statistics regarding what percentage of our produce is grown in the state…

–99 percent of the artichokes

–44 percent of asparagus

–two-thirds of carrots

–half of bell peppers

–89 percent of cauliflower

–94 percent of broccoli

–95 percent of celery

–90 percent of the leaf lettuce

–83 percent of Romaine lettuce

–83 percent of fresh spinach

–a third of the fresh tomatoes

–86 percent of lemons

–90 percent of avocados

–84 percent of peaches

–88 percent of fresh strawberries

–97 percent of fresh plums

#7 Of course it isn’t just agriculture which will be affected by this drought. Just consider this chilling statement by Tim Quinn, the executive director of the Association of California Water Agencies…

“There are places in California that if we don’t do something about it, tens of thousands of people could turn on their water faucets and nothing would come out.”

#8 The Sierra Nevada snowpack is only about 15 percent of what it normally is. As the New York Times recently explained, this is going to be absolutely devastating for Californians when the warmer months arrive…

Experts offer dire warnings. The current drought has already eclipsed previous water crises, like the one in 1977, which a meteorologist friend, translating into language we understand as historians, likened to the “Great Depression” of droughts. Most Californians depend on the Sierra Nevada for their water supply, but the snowpack there was just 15 percent of normal in early February.

#9 The underground aquifers that so many California farmers depend upon are being drained at a staggering rate…

Pumping from aquifers is so intense that the ground in parts of the valley is sinking about a foot a year. Once aquifers compress, they can never fill with water again. It’s no surprise Tom Willey wakes every morning with a lump in his throat. When we ask which farmers will survive the summer, he responds quite simply: those who dig the deepest and pump the hardest.

#10 According to an expert interviewed by National Geographic, the current drought in the state of California could potentially last for 200 years or more as some mega-droughts in the region have done in the past…

California is experiencing its worst drought since record-keeping began in the mid 19th century, and scientists say this may be just the beginning. B. Lynn Ingram, a paleoclimatologist at the University of California at Berkeley, thinks that California needs to brace itself for a megadrought—one that could last for 200 years or more.

#11 Much of the western U.S. has been exceedingly dry for an extended period of time, and this is hurting huge numbers of farmers and ranchers all the way from Texas to the west coast…

The western United States has been in a drought that has been building for more than a decade, according to climatologist Bill Patzert of NASA’s Jet Propulsion Laboratory.

“Ranchers in the West are selling off their livestock,” Patzert said. “Farmers all over the Southwest, from Texas to Oregon, are fallowing in their fields because of a lack of water. For farmers and ranchers, this is a painful drought.”

#12 The size of the U.S. cattle herd has been shrinking for seven years in a row, and it is now the smallest that it has been since 1951. But our population has more than doubled since then.

#13 Extremely unusual weather patterns are playing havoc with crops all over the planet right now. The following is an excerpt from a recent article by Lizzie Bennett…

Peru, Venezuela, and Bolivia have experienced rainfall heavy enough to flood fields and rot crops where they stand. Volcanic eruptions in Ecuador are also creating problems due to cattle ingesting ash with their feed leading to a slow and painful death.

Parts of Australia have been in drought for years affecting cattle and agricultural production.

Rice production in China has been affected by record low temperatures.

Large parts of the UK are underwater, and much of that water is sea water which is poisoning the soil. So wet is the UK that groundwater is so high it is actually coming out of the ground and adding to the water from rivers and the sea. With the official assessment being that groundwater flooding will continue until MAY, and that’s if it doesn’t rain again between now and then. The River Thames is 65 feet higher than normal in some areas, flooding town after town as it heads to the sea.

#14 As food prices rise, our incomes are staying about the same. The following is from a CBS News article entitled “Food prices soar as incomes stand still“…

While the government says prices are up 6.4 percent since 2011, chicken is up 18.4 percent, ground beef is up 16.8 percent and bacon has skyrocketed up 22.8 percent, making it a holiday when it’s on sale.

#15 As I have written about previously, median household income has fallen for five years in a row. So average Americans are going to have to make their food budgets stretch more than they ever have before as this drought drags on.

If the drought does continue to get worse, small agricultural towns all over California are going to die off.

For instance, consider what is already happening to the little town of Mendota…

The farms in and around Mendota are dying of thirst. The signs are everywhere. Orchards with trees lying on their sides, as if shot. Former farm fields given over to tumbleweeds. Land and cattle for sale, cheap.

Large numbers of agricultural workers continue to hang on, hoping that somehow there will be enough work for them. But as Evelyn Nieves recently observed, panic is starting to set in…

Off-season, by mid-February, idled workers are clearly anxious. Farmworkers and everyone else who waits out the winter for work (truckers, diesel providers, packing suppliers and the like) are nearing the end of the savings they squirrel away during the season. The season starts again in March, April at the latest, but no one knows who will get work when the season begins, or how much.

People are scared, panicked even.

I did not write this article so that you would panic.

Yes, incredibly hard times are coming. If you will recall, the 1930s were also a time when the United States experienced extraordinarily dry weather conditions and a tremendous amount of financial turmoil. We could very well be entering a similar time period.

Worrying about this drought is not going to change anything. Instead of worrying, we should all be doing what we can to store some things up while food is still relatively cheap. Our grandparents and our great-grandparents that lived during the days of the Great Depression knew the wisdom of having a well-stocked food pantry, and it would be wise to follow their examples.

Please share this article with as many people as you can. The United States has never faced anything like this during most of our lifetimes. We need to shake people out of their “normalcy bias” and get them to understand that big changes are coming.

It Doesn’t Take Much For People To Start Behaving Like Crazed Lunatics

If an ice storm can cause this much panic in our major cities, what will a real crisis look like? The biggest news story in the United States right now is the “historic ice storm” that is hammering the South. Travel will be a nightmare, schools and businesses will be closed, and hundreds of thousands of people will lose power. In fact, it is being projected that some people could be without power for up to a week. But at the end of the day, the truth is that this ice storm is just an inconvenience. Yes, the lives of millions of Americans will be disrupted for a few days, but soon the ice will melt and life will be back to normal. Unfortunately, it doesn’t take much for people to start behaving like crazed lunatics. As you will see below, the winter weather is causing average Americans to ransack grocery stores, fight over food items and even pull guns on one another. If this is how people will behave during a temporary weather emergency, how will they behave when we are facing a real disaster?

This is a perfect example that shows why it is wise to always have emergency food supplies on hand. According to CNN, all that is left on the shelves of some grocery stores in Atlanta is “corn and asparagus”…

As the skies turned heavy, Atlantans cleaned stores out of loaves of bread, gallons of milk, bundles of firewood and cans of beans and beer. In some stores, all that was left were the apparently less-popular corn and asparagus.

And according to an Infowars report, some people down in Atlanta were actually getting into fights over basic essentials such as milk and bread…

Atlanta residents ransacked neighborhood grocery stores in frantic preparation for their second major snowstorm of the year, waging fights over food items and leaving destruction and empty shelves in their wake, a stunning precursor to what will ensue once a major crisis impacts the U.S.

After three inches of snow shut the city down two weeks ago, causing major havoc and leaving miles of cars stranded on immobile roadways, the residents of Atlanta took heed and shopped early.

According to people who Tweeted photos of barren store shelves, residents went crazy over essentials like milk, bread, water and eggs, and in some cases “people were fighting. Yes fighting,” alleges one user.

The photo that I have shared below was posted to Twitter by Kris Muir. It shows what the bread aisle at a Kroger in the Atlanta area looked like as the storm approached…

So what would happen if this was an extended crisis and you had not stored up any emergency supplies for your own family?

That is something to think about.

And just like during the last major winter storm in the South, there are reports of hundreds of vehicles being abandoned on the side of the road in major cities. For example, just check out what has been happening in Raleigh, North Carolina…

“I live and work in downtown. I was able to get from my office back home. My wife works in Morrisville, about 25 minutes away. She left the office at 12 p.m. and is still on the road. I am coaching her home with Google Maps. It appears that, from WRAL TV, the ramp from Wade Avenue to 440 is blocked by abandoned cars. That is a HUGE ramp (downtown Raleigh to highway).”

We are also seeing quite a few reports of “snow rage” as this cold, snowy winter drags on. In fact, on Sunday someone actually pulled out a shotgun and threatened to shoot a snow plow driver on Long Island…

As CBS 2’s Carolyn Gusoff reported Tuesday, people have found themselves fed up with the hassle of plowing, shoveling and salting. In fact, they have been pushed to the edge, to the point where they have been taking out their frustrations on plow drivers.

Eric Ramirez, a snow plow driver on Long Island, said an irate man went so far as to rack a shotgun Sunday and threaten to shoot him because he was piling snow in front of the man’s Manorhaven home.

And a similar incident involving a pistol was recently reported in Union Township…

The incident happened Monday afternoon along Underwood Street in Union Township.

Police say Eckert became angry when the self-employed driver, John Abraham, accidentally pushed some snow into his yard while cleaning a neighbor’s driveway.

“I went like this to put it in park and there was a gun right here in my face,” Abraham said.

Eckert is then accused of taking a .22-calibur pistol out of his coat, and pressing it against Abraham’s cheek, telling him to remove the snow.

As I write about so frequently, the thin veneer of civilization that we all take for granted is starting to disappear. A whole host of surveys and opinion polls have shown that Americans are angrier and more frustrated than ever. Our society has become a ticking time bomb, and it isn’t going to take much for it to explode.

When it does explode, most people are going to be depending on the government or someone else to take care of them. The following is a brief excerpt from a recent article by Mac Slavo…

Despite warnings from FEMA, as well as the prevalence of popular preparedness TV shows, Americans still don’t seem to understand how susceptible we are to a complete destabilization of life as we know it. It boggles the mind that most people seem to think that when disasters strikes they’ll be able to depend on someone else to provide them with assistance.

Fortunately, at least a few people seem to be learning some lessons about the importance of being prepared from these winter storms…

“Last time I was totally unprepared, I was completely blindsided,” said Lisa Nadir, of Acworth, who sat in traffic for 13 hours and then spent the night in her car when the storm hit Jan. 28. “I’m going to be prepared from now on for the rest of my life.”

What about you?

Are you prepared?

We live at a time when our world is becoming increasingly unstable, and it doesn’t take much to imagine a bunch of scenarios in which this nation would be facing a major crisis for an extended period of time…

-A major eruption of Mt. Rainier or the Yellowstone supervolcano

-The “Big One” hits California

-A massive earthquake along the New Madrid fault line

-A highly infectious pandemic that kills tens of millions of Americans

-Hackers bring down the Internet or crash the banking system

-A massive tsunami hits either the east coast or the west coast destroying numerous major cities

-A major war erupts in the Middle East and the United States gets involved

-A crisis involving North Korea sparks a major war in Asia

-A terror attack that specifically targets our power grid

-A terror attack involving a weapon of mass destruction in one of our major cities

-A terror attack or a major natural disaster causes one or more nuclear facilities in the heart of the United States to experience a “Fukushima-like crisis”

-A massive EMP blast that fries our electrical grid and our communications systems

-Last but certainly not least, a massive economic collapse that fundamentally changes life in America on a permanent basis

So what do you think?

Are there additional scenarios that you would add to the list above?

Please feel free to share what you think by posting a comment below…

No Janet Yellen, The Economy Is NOT “Getting Better”

On Tuesday, new Federal Reserve Chairman Janet Yellen went before Congress and confidently declared that “the economic recovery gained greater traction in the second half of last year” and that “substantial progress has been made in restoring the economy to health”. This resulted in glowing headlines throughout the mainstream media such as this one from USA Today: “Yellen: Economy is improving at moderate pace“. Sadly, tens of millions of Americans are going to believe what the mainstream media is telling them. But it isn’t the truth. As you will see below, there are all sorts of signs that the economy is taking a turn for the worse. And when the next great economic crisis does strike, most Americans will be completely and totally unprepared because they trusted our “leaders” when they told us that everything would be just fine.

It is amazing how deceived people can be. Just consider the case of 56-year-old Brian Perry. He is a former law clerk that has applied for nearly 1,500 jobs since 2008 without any success. But he says that he is “optimistic” that he will get another job soon because he believes that the economy is recovering…

By his own count, Brian Perry has applied for nearly 1,500 jobs since being let go as a law clerk in 2008. The 56-year old Perry lives in Rhode Island, where the 9.1 percent unemployment rate is 2.5 percentage points above the national average.

Perry remains optimistic that a job is forthcoming. He thinks a more robust economy would create better opportunities for the long-term unemployed like him.

Let us certainly hope that Perry does find a new job soon. But if he does, it won’t be because we are experiencing an “economic recovery”. Just consider the following facts…

-In January, we were told that the U.S. economy “created” 113,000 new jobs. But that figure was arrived at only after adding a massive seasonal adjustment. In reality, the U.S. economy actually lost 2.87 million jobs in January. During the past decade, the only time the U.S. economy has lost more jobs in January was during 2009. At that time, the U.S. economy was suffering through the peak of the worst economic downturn since the Great Depression.

-Prominent retailers are closing hundreds of stores all over the United States. Things have gotten so bad that some are calling this a “retail apocalypse“…

JC Penney, which lost $586 million in three months in 2013, is planning to close 33 stores in 19 states and lay off 2,000 people. JC Penney’s stock has lost 84 percent of its value since February 2012.
Sears has decided to shut down its flagship store in Downtown Chicago, and it has closed 300 stores in the United States since 2010. Stock analyst Brian Sozzi noted that Sear’s inventory levels have fallen by 23.7 percent since 2006. He also noted that Sears had $4.4 billion in cash and equivalents in 2005 but $609 million in cash and equivalents in 2012. Sozzi, who calls himself a guerrilla analyst, has a blog full of disturbing pictures of empty Sears stores.
Macy’s, one of the few retail success stories, is planning to close five stores and eliminate 2,500 jobs.
Radio Shack is preparing to close 500 stores, according to The Wall Street Journal.
Best Buy recently closed 50 stores and eliminated 950 jobs at stores in Canada.
Target announced plans to eliminate 475 jobs and not fill 700 empty positions to reduce costs.
Aeropostale is planning to close 175 stores.
Blockbuster has closed down all of its stores.

-McDonald’s is reporting that sales at established U.S. locations were down 3.3 percent in January.

-In January, real disposable income in the U.S. experienced the largest year over year decline that we have seen since 1974.

-As I wrote about the other day, the number of “planned job cuts” in January was 12 percent higher than 12 months earlier, and it was actually 47 percent higher than in December.

-Only 35 percent of all Americans say that they are better off financially than they were a year ago.

-What is happening to the U.S. stock market right now very closely resembles what happened to the U.S. stock market just before the horrific stock market crash of 1929. Just check out the chart in this article.

For dozens more statistics that show that the U.S. economy is not improving, please see this article and this article.

Meanwhile, things continue to unravel all around the rest of the globe as well.

In previous articles, I have detailed how the reckless money printing by the Federal Reserve has inflated massive financial bubbles in emerging markets all over the planet. Now that the Fed is “tapering”, those bubbles are starting to burst and we are witnessing a tremendous amount of economic chaos. Here are three more examples…

#1 Ghana:

Ghanaian Economist Dr. Theo Richardson says Ghana’s economy will crash by June this year if the Bank of Ghana continues with its kneejerk measures to rescue the cedi.

“The government is facing liquidity problems and if we don’t get the appropriate remedies to address the issues at hand the situation may worsen and by June the economy may crash,” Dr. Richardson said.

#2 Kazakhstan:

With only $24.5 billion left in FX reserves after valiantly defending major capital outflows since the Fed’s Taper announcement, the Kazakhstan central bank has devalued the currency (Tenge) by 19% – its largest adjustment since 2009. At 185 KZT to the USD, this is the weakest the currency has ever been as the central bank cites weakness in the Russian Ruble and “speculation” against its currency as drivers of the outflows (which will be “exhausted” by this devaluation according to the bank). The new level will improve the country’s competitiveness (they are potassium heavy) but one wonders whether, unless Yellen folds whether it will help the outflows at all.

#3 India:

In the wake of a global stock market sell-off driven by worries over slower growth in emerging markets, the head of India’s central bank, Raghuram Rajan, criticized the U.S. Federal Reserve as it pressed on with plans to dial back its monthly bond purchases: “International monetary co-operation has broken down,” said Rajan, who added that “the U.S. should worry about the effects of its polices on the rest of the world.”

We have reached a “turning point” for the global financial system. Things are beginning to fall apart both in the United States and all around the world.

But at least the dogs at the White House are eating well. Just consider the following photo that was recently tweeted by Michelle Obama…

22 Facts About The Coming Demographic Tsunami That Could Destroy Our Economy All By Itself

Today, more than 10,000 Baby Boomers will retire. This is going to happen day after day, month after month, year after year until 2030. It is the greatest demographic tsunami in the history of the United States, and we are woefully unprepared for it. We have made financial promises to the Baby Boomers worth tens of trillions of dollars that we simply are not going to be able to keep. Even if we didn’t have all of the other massive economic problems that we are currently dealing with, this retirement crisis would be enough to destroy our economy all by itself. During the first half of this century, the number of senior citizens in the United States is being projected to more than double. As a nation, we are already drowning in debt. So where in the world are we going to get the money to take care of all of these elderly people?

The Baby Boomer generation is so massive that it has fundamentally changed America with each stage that it has gone through. When the Baby Boomers were young, sales of diapers and toys absolutely skyrocketed. When they became young adults, they pioneered social changes that permanently altered our society. Much of the time, these changes were for the worse.

According to the New York Post, overall household spending peaks when we reach the age of 46. And guess what year the peak of the Baby Boom generation reached that age?…

People tend, for instance, to buy houses at about the same age — age 31 or so. Around age 53 is when people tend to buy their luxury cars — after the kids have finished college, before old age sets in. Demographics can even tell us when your household spending on potato chips is likely to peak — when the head of it is about 42.

Ultimately the size of the US economy is simply the total of what we’re all spending. Overall household spending hits a high when we’re about 46. So the peak of the Baby Boom (1961) plus 46 suggests that a high point in the US economy should be about 2007, with a long, slow decline to follow for years to come.

And according to that same article, the Congressional Budget Office is also projecting that an aging population will lead to diminished economic growth in the years ahead…

Lost in the discussion of this week’s Congressional Budget Office report (which said 2.5 million fewer Americans would be working because of Obamacare) was its prediction that aging will be a major drag on growth: “Beyond 2017,” said the report, “CBO expects that economic growth will diminish to a pace that is well below the average seen over the past several decades [due in large part to] slower growth in the labor force because of the aging of the population.”

So we have a problem. Our population is rapidly aging, and an immense amount of economic resources is going to be required to care for them all.

Unfortunately, this is happening at a time when our economy is steadily declining.

The following are some of the hard numbers about the demographic tsunami which is now beginning to overtake us…

1. Right now, there are somewhere around 40 million senior citizens in the United States. By 2050 that number is projected to skyrocket to 89 million.

2. According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.

3. One poll discovered that 26 percent of all Americans in the 46 to 64-year-old age bracket have no personal savings whatsoever.

4. According to a survey conducted by the Employee Benefit Research Institute, “60 percent of American workers said the total value of their savings and investments is less than $25,000″.

5. 67 percent of all American workers believe that they “are a little or a lot behind schedule on saving for retirement”.

6. A study conducted by Boston College’s Center for Retirement Research found that American workers are $6.6 trillion short of what they need to retire comfortably.

7. Back in 1991, half of all American workers planned to retire before they reached the age of 65. Today, that number has declined to 23 percent.

8. According to one recent survey, 70 percent of all American workers expect to continue working once they are “retired”.

9. A poll conducted by CESI Debt Solutions found that 56 percent of American retirees still had outstanding debts when they retired.

10. A study by a law professor at the University of Michigan found that Americans that are 55 years of age or older now account for 20 percent of all bankruptcies in the United States. Back in 2001, they only accounted for 12 percent of all bankruptcies.

11. Today, only 10 percent of private companies in the U.S. provide guaranteed lifelong pensions for their employees.

12. According to Northwestern University Professor John Rauh, the total amount of unfunded pension and healthcare obligations for retirees that state and local governments across the United States have accumulated is 4.4 trillion dollars.

13. Right now, the American people spend approximately 2.8 trillion dollars on health care, and it is being projected that due to our aging population health care spending will rise to an astounding 4.5 trillion dollars in 2019.

14. Incredibly, the United States spends more on health care than China, Japan, Germany, France, the U.K., Italy, Canada, Brazil, Spain and Australia combined.

15. If the U.S. health care system was a country, it would be the 6th largest economy on the entire planet.

16. When Medicare was first established, we were told that it would cost about $12 billion a year by the time 1990 rolled around. Instead, the federal government ended up spending $110 billion on the program in 1990, and the federal government spent approximately $600 billion on the program in 2013.

17. It is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.

18. At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years. That comes to approximately $328,404 for every single household in the United States.

19. In 1945, there were 42 workers for every retiree receiving Social Security benefits. Today, that number has fallen to 2.5 workers, and if you eliminate all government workers, that leaves only 1.6 private sector workers for every retiree receiving Social Security benefits.

20. Right now, there are approximately 63 million Americans collecting Social Security benefits. By 2035, that number is projected to soar to an astounding 91 million.

21. Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.

22. The U.S. government is facing a total of 222 trillion dollars in unfunded liabilities during the years ahead. Social Security and Medicare make up the bulk of that.

So where are we going to get the money?

That is a very good question.

The generations following the Baby Boomers are going to have to try to figure out a way to navigate this crisis. The bright future that they were supposed to have has been destroyed by our foolishness and our reckless accumulation of debt.

But do they actually deserve a “bright future”? Perhaps they deserve to spend their years slaving away to support previous generations during their golden years. Young people today tend to be extremely greedy, self-centered and lacking in compassion. They start blogs with titles such as “Selfies With Homeless People“. Here is one example from that blog…

Of course not all young people are like that. Some are shining examples of what young Americans should be.

Unfortunately, those that are on the right path are a relatively small minority.

In the end, it is our choices that define us, and ultimately America may get exactly what it deserves.

221 Percent Increase In One Year? Why Are So Many People Renouncing American Citizenship?

The number of Americans that renounced their citizenship was 221 percent higher in 2013 than it was in 2012. That is a staggering figure, and it is symptomatic of a larger trend. In recent years, a lot of really good people with very deep roots in this country have made the difficult decision to say goodbye to the United States permanently. A few actually go to the trouble to renounce their citizenship, and that is mostly done for tax purposes. But most willingly choose to leave America for other reasons. Some were very serious when they said they would leave the U.S. if Barack Obama got a second term, some (such as Jesse Ventura) are dismayed at how our freedoms and liberties are eroding and are alarmed at the rise of the Big Brother police state, some are absolutely disgusted by the social and moral decay that is eating away at the foundations of our society, and there are yet others that consider “the grass to be greener” on the other side of the planet. Personally, I have a number of friends that have made the very hard decision to relocate their families thousands of miles away because they see what is coming to America and they believe that there isn’t any hope of turning things around at this point. I also have a lot of friends that are determined to stay in the United States no matter what. When it comes to the future of America, almost everyone has a very strong opinion, and these are discussions that we need to start having.

Once upon a time, the United States was seen as “the land of opportunity” all over the globe and it seemed like everyone wanted to come here.

But now that is all changing. As we have abandoned the principles that this country was founded upon, our economy has gone steadily downhill.

As I wrote about the other day, the middle class in America is slowly dying. As millions of good paying jobs have been shipped out of the country, the competition for the remaining jobs has become quite intense. At this point, there is even tremendous competition for minimum wage jobs.

Compared to exactly six years ago, 1,154,000 fewer Americans have jobs. Meanwhile, our population has gotten significantly larger since then. There simply are not enough jobs for everyone, and we continue to fall even farther behind. In January, the economy only added 113,000 jobs and in December the economy only added 75,000 jobs. Both of those figures are well below what we need just to keep up with population growth.

Looking ahead, things look even more troubling.

The number of “planned job cuts” in January was 12 percent higher than 12 months earlier, and it was actually 47 percent higher than in December.

The competition for jobs has also resulted in an extended period of declining incomes in the United States.

As I mention frequently, median household income in the United States has fallen for five years in a row, and the rate of homeownership in the United States has fallen for eight years in a row.

Those that read my articles regularly probably have those facts memorized by now.

In addition, a study that just came out has shown that the number of “low-wage breadwinners” in the United States is at an all-time high…

A staggering number of American households are relying on low-wage jobs as their leading or sole source of income.

Meet the low-wage breadwinner. There were about 21 million of them in the United States in 2011, according to a forthcoming study by University of Massachusetts Boston economists Randy Albelda and Michael Carr.

Unlike other studies which often focus just on low-wage workers, the researchers looked at those who also live in low-income households. This way, they were able to strip out the teenager making $8 an hour flipping burgers but still living comfortably with his parents. Or the mom who works a part-time job in retail to supplement her husband’s otherwise ample salary.

For tens of millions of average American families, there simply is not enough money left at the end of each month.

That is why many of them turn to debt to try to make up the difference. Consumer credit is increasing at an alarming pace once again, and when the next great economic shock arrives many of those families are going to be in for a tremendous amount of financial pain.

In this type of economic environment, it should not be a surprise that anger, frustration and desperation are rising to very dangerous levels.

It was desperation and a fear of losing everything that he had ever worked for that drove one 80-year-old man to become a methamphetamine courier.

It was intense anger and frustration that drove a 58-year-old military veteran to package up cat feces and send it to employers that had turned him down…

Rather than simply grumble to himself or complain to others, a St. Louis man aggrieved by a company’s failure to hire him took another approach.

Jevons Brown packaged up cat feces and sent it through the mail.

Brown, 58, was sentenced Friday to two years of probation after pleading guilty in August to a misdemeanor charge of mailing injurious articles.

The plea says Brown, a veteran, became frustrated with his lack of employment opportunities and lashed out at employees of companies that failed to hire him.

This is just the tip of the iceberg.

In the years ahead, we are going to see much, much worse.

And if you do lose everything, don’t expect anyone to care very much. There is already a frightening lack of compassion for those that are down on their luck in the United States today. For example, in Pensacola, Florida it is actually illegal for homeless people to use blankets or cardboard boxes to shield themselves from the cold…

So there I was with my wife and three kids, all of us huddled under blankets with the fireplace roaring, watching the temperature continue to drop from a comfortable 65 degrees down to 45. But outside it was 17 degrees and raining and sleeting, and if you were homeless, you had to consider that if you used a blanket to shield yourself from the elements, that you might be hauled off to jail for a violation of a local ordinance prohibiting using blankets, cardboard, or newspaper to cover yourself.

Once you lose everything, society just wants you to go away.

And this lack of compassion is going to get a whole lot worse during the very hard times that are coming.

So it is easy to understand why many Americans would want to get out of this country while they still can.

However, the truth is that the grass is not necessarily greener on the other side.

For instance, you may be dreaming of moving to a tropical paradise where you can enjoy the sand and the sun every single day.

In the past, many Americans considered Puerto Rico a good place to relocate to. After all, it is a United States territory and if you only speak English you can still get around pretty well.

But you wouldn’t want to move down to Puerto Rico these days. Right now it is in the middle of a full-blown economic collapse…

Puerto Rico’s slow-motion economic crisis skidded to a new low last week when both Standard & Poor’s and Moody’s downgraded its debt to junk status, brushing aside a series of austerity measures taken by the new governor, including increasing taxes and rebalancing pensions. But that is only the latest in a sharp decline leading to widespread fears about Puerto Rico’s future. In the past eight years, Puerto Rico’s ticker tape of woes has stretched unabated: $70 billion in debt, a 15.4 percent unemployment rate, a soaring cost of living, pervasive crime, crumbling schools and a worrisome exodus of professionals and middle-class Puerto Ricans who have moved to places like Florida and Texas.

In fact, Puerto Rico is a preview of the kind of societal chaos that we could be seeing inside the United States in just a few years…

Schools sit shuttered either because of disrepair or because of a dwindling number of students. In this typically convivial capital, communities have erected gates and bars to help thwart carjackers and home invaders. Illegal drugs, including high-level narcotrafficking, are one of the few growth industries.

Well, what about South America?

In recent years, South America has been an extremely popular destination for those wishing to leave the United States.

Unfortunately, many areas of South America are experiencing full-blown economic collapse right now as well. As I wrote about recently, deteriorating economic conditions have resulted in widespread crime, looting, violence, blackouts, shortages of basic supplies, and runs on the banks in Argentina and Venezuela. The following is an excerpt from a recent interview with Fernando Aguirre who actually lives down in Argentina…

Chris Martenson: Okay. Bring us up to date. What is happening in Argentina right now with respect to its currency, the peso?

Fernando Aguirre: Well, actually pretty recently, January 22, the peso lost 15% of its value. It has devalued quite a bit. It ended up losing 20% of its value that week, and it has been pretty crazy since then. Inflation has been rampant in some sectors, going up to 100% in food, grocery stores 20%, 30% in some cases. So it has been pretty complicated. Lots of stores don’t want to be selling stuff until they get updated prices. Suppliers holding on, waiting to see how things go, which is something that we are familiar with because that happened back in 2001 when everything went down as we know it did.

Chris Martenson: So 100%, 20% inflation; are those yearly numbers?

Fernando Aguirre: Those are our numbers in a matter of days. In just one day, for example, cement in Balcarce, one of the towns in Southern Argentina, went up 100% overnight, doubling in price. Grocery stores in Córdoba, even in Buenos Aires, people are talking about increase of prices of 20, 30% just these days. I actually have family in Argentina that are telling me that they go to a hardware store and they aren’t even able to buy stuff from there because stores want to hold on and see how prices unfold in the following days.

Well, what about Europe?

Isn’t Europe a lot more stable?

Unfortunately, that is not necessarily true. In recent years we have seen rioting, civil unrest and Depression-like conditions in Ukraine, Greece, Spain, Italy and Portugal.

And now you can add Bosnia to that list…

More than 150 people were wounded in Bosnia on Friday in the worst civil unrest in the country since the 1992-95 war as anger over the dire state of the economy and political inertia boiled over.

Angry protesters set fire to part of the presidential palace in Sarajevo in protests over unemployment and corruption, as well as government buildings in the capital Sarajevo, Tuzla and Zenica.

Just because you move out of the United States does not necessarily mean that you will avoid what is coming.

We are heading for a global economic collapse, and the pain is going to be felt to the farthest corners of the planet.

But of course there are many that will end up leaving the United States and will ultimately thrive.

So what do you think?

Is now a time for people to consider leaving the United States permanently?

Please feel free to share what you think by posting a comment below…