Commentary

Shut Down The Federal Reserve, Break Up The Big Banks And 16 Other Ideas Barack Obama Could Have Proposed If He Actually Wanted To Fix The Economy

How do we fix the economy? That is a question that tens of millions of Americans are asking right now. Republicans are harshly criticizing the empty economic proposals being put forward by Barack Obama and the Democrats, but the Republicans don’t seem to have any real solutions either. There is talk of cutting taxes a little bit more, reducing federal spending a little bit and getting rid of a few useless federal regulations but doing any of those things would essentially be like spitting into Niagara Falls – the effect would not really be noticeable at all. As this column has documented over and over and over, the economic and financial problems that we are facing are so enormous that radical solutions are needed. In essence, what we need is not an “economic bandage” or two – what we need is major reconstructive surgery. If dramatic action is not taken, our economy is going to completely collapse.

Is anything that Barack Obama is currently proposing going to help fix the economy? No, of course not. As I wrote about the other day, Obama’s address to the nation was packed with empty promises and a whole lot of inspirational nonsense. There were no real solutions to the very real problems we are facing.

So is there anything that we could do to actually start fixing things?

Yes, but the solutions are radical. They would cause quite a bit of chaos. They would not be easy for people to accept.

But the truth is that our economy and our financial system have terminal cancer. If something radical is not done quickly we are going to lose the patient.

The following are 16 ideas that Barack Obama could have proposed if he actually wanted to fix the economy….

#1 We Must Shut Down The Federal Reserve

If you are not willing to accept this, you may as well not read the rest of the solutions. The truth is that the U.S. government will never be able to solve the national debt problem until the Federal Reserve is shut down. The U.S. government should nationalize all Federal Reserve assets and start issuing currency that is completely and totally debt-free.

Under such a system, it is conceivable that U.S. budget deficits could be eliminated entirely and that over time the entire U.S. government debt could be retired.

One of the biggest threats of going to such a system would be inflation, but remember, the United States has only had a major, ongoing problem with inflation since the Federal Reserve was created back in 1913. The U.S. dollar has lost well over 95 percent of its value since the Federal Reserve was created, and so it is hard to imagine that we would do even worse without the Federal Reserve.

In any event, it is the fundamental right of any sovereign nation to be able to issue and control its own currency. This right was given to the U.S. government by the U.S. Constitution and it is time for the U.S. government to reclaim that right.

#2 We Must End Trade With All Nations That Allow Their Citizens To Be Paid Slave Labor Wages Or That Do Not Respect Basic Human Rights

This would dramatically reduce the “outsourcing” of our jobs and our industries almost overnight. The truth is that it was never a good idea to put American workers in direct competition with hundreds of millions of workers that are making slave labor wages on the other side of the globe.

Trading with nations that have a similar wage structure to ours and that respect basic human rights (Canada, for example) is a very good thing. However, all of the “free trade” agreements that politicians from both parties have been pushing down our throats for decades are literally wrecking the U.S. economy.

Since 2001, over 42,000 factories have been shut down in the United States. This proposal would go a long way towards stopping the bleeding, and if some of these countries are willing to raise their wage levels significantly then we would be able to resume trade with them in the future on a much more level playing field.

#3 We Must Radically Reduce The Size Of The Federal Government

Our big, fat government is a big, fat drain on our economy. We have millions of paper pushers that don’t contribute much of anything of real value.

Not only that, but some of the things that the U.S. government wastes money on are absolutely mind blowing. There is a reason why our founders insisted that we have a very limited government. It is time to get back to those principles.

The Congressional Budget Office is projecting that the U.S. government budget deficit for this year will be nearly $1.5 trillion.

Talk about ridiculous!

I estimate that we could easily cut the size of government in half without hampering how effective it is.

We could start by abolishing the Department of Education. After that, there are several dozen other government agencies and institutions which are worthy candidates for elimination.

#4 We Must Provide Temporary Jobs For The American People During The Economic Transition

If the Federal Reserve is shut down and the size of the federal government is cut in half, it would cause quite a bit of economic chaos. During this transition it will be important to help people survive.

Instead of just passing out a bunch of handouts, a better alternative would be getting the American people working on something constructive.

During this time, the U.S. government could use all of the untapped labor of the unemployed to build massive infrastructure projects.

According to the American Society of Civil Engineers, we need to spend approximately $2.2 trillion on infrastructure repairs and upgrades just to bring our existing infrastructure up to “good condition”.

So there is certainly a lot to do.

These jobs would just be temporary until new manufacturing facilities are set up and jobs in private industry are plentiful again.

Having the American people produce something of value is better than just handing them endless unemployment checks.

#5 We Must Ban All Short Selling

When you allow greedy individuals the opportunity to make lots of money by betting against the U.S. economy, it gives those individuals an incentive to make sure that those bets pay off.

Yes, this proposal is controversial, but it just makes sense. If people want to make money, it should be because a company is doing well and not because someone is failing.

#6 We Must Ban Virtually All Derivatives

Once upon a time, derivatives were for hedging risk, but that is not what they are primarily being used for anymore.

Now derivatives are being used to bet on almost anything that you can possibly imagine.

Our financial markets have been turned into a gigantic financial casino.

The derivatives bubble is somewhere in the neighborhood of one quadrillion dollars and it could burst at any moment.

These weapons of financial mass destruction must be banned.

#7 We Must Break Up The Big Wall Street Banks

The big Wall Street banks have far too much power and far too much control. They have come to dominate our entire financial system.

In a capitalist system, too much power concentrated in too few hands is not a good thing. The corruption that has gone on at many of these institutions is absolutely unbelievable.

These banks need to be broken up into much smaller pieces for the good of our country.

#8 We Must Initiate A Massive Law Enforcement Crackdown On Our Financial Markets

As noted above, the corruption that has been going on down on Wall Street has been absolutely sickening. We need a massive law enforcement crackdown on all of this fraud in order to restore faith in the financial system.

Just one small example of this corruption happened during the recent housing crash. Goldman Sachs sold mortgage-related securities that were absolute junk to trusting clients at vastly overinflated prices and then made huge profits betting against those exact same securities.

So do you think that Goldman Sachs or any of the other major players on Wall Street will ever receive more than a slap on the wrist for all the things that have gone on in recent years?

Of course they won’t – unless the American people start demanding it.

#9 We Must Order U.S. Oil Companies To Use Untapped Oil Reserves In The United States And We Must Aggressively Develop Alternative Energy Sources

Right now, the price of oil is pushing up towards 100 dollars a barrel. If oil passes that mark, it is going to put tremendous inflationary pressure on the entire global economy.

Sadly, there is no need for such a high price for oil. There are vast, vast reserves of oil that are virtually untapped inside the United States. These are mostly in the western states and up in Alaska. We have enough to supply very cheap oil to the entire country for decades.

The U.S. government needs to order these oil companies to quit playing games and to start pumping this oil.

However, it is undeniable that we also need to develop alternative energy sources. In fact, we should set up a “Manhattan Project”-style team to aggressively pursue this goal.

In the past, U.S. oil and car companies have blatantly repressed alternative energy projects. The U.S. government should tell U.S. corporate executives that if they ever even think of doing such a thing again that they will be locked away so fast that it will make their heads swim.

#10 We Must Stop Paying Farmers Not To Grow Food

Instead of paying farmers not to grow food, we need to find ways to encourage them to grow as much food as possible. A horrible global food crisis is coming and we are going to need huge stockpiles of everything.

#11 We Must Secure The U.S. border With Mexico

Illegal immigration costs the U.S. economy tens of billions of dollars (conservatively) every single year. We need to secure the border and make sure that all of our immigrants are coming through the “front door”.

#12 We Must Shut Down The IRS

Did you know that the United States has only had an income tax for less than 100 years? For most of our history, the U.S. government got along just fine without taxing personal income.

The IRS is massive waste of time, energy and resources. There are many alternatives that could easily replace the income tax and the ridiculous tax code that we have right now.

For example, a flat tax or a national sales tax could both potentially work, although both have their problems.

Personally, I am convinced that we could have a system that would not require any taxation of income by the U.S. government whatsoever.

Just imagine how much time, how much energy and how many resources would be saved!

#13 We Must Slash Red Tape And The Miles Of Ridiculous Regulations

In the United States today, you almost have to be insane to start up a new business. When you consider all sources of taxation, U.S. businesses face one of the highest overall levels of taxation in the entire world. Not only that, but U.S. businesses face miles and miles of absolutely ridiculous regulations and red tape.

As I wrote about in a previous article, if you want to do business in the United States today, you better be prepared for a regulatory nightmare….

If you plan to start a business in America today, you better get a hold of a good lawyer. In fact, if you want to be safe, you better get a small army of lawyers. You are going to need an expert on the federal regulations that apply to your business, you are going to need an expert on the state regulations that apply to your business and you are going to need an expert on the local regulations that apply to your business.

There are going to literally be thousands of regulations that apply to any business started inside the United States today. There is no way that you will ever be able to learn them all. Not only that, but the truth is that your lawyers will only be aware of a small fraction of them.

Until the regulatory environment in this country dramatically changes, companies are going to continue to be motivated to leave the United States.

#14 We Must Conduct A Massive Law Enforcement Crackdown On The Health Care Industry

It should not cost $30,000 for a one day stay in the hospital in this country.

The truth is that the American people are being ripped off big time.

We need to conduct a massive law enforcement crackdown on all the big hospitals and all the big health care companies.

We need to conduct a massive law enforcement crackdown on all the big health insurance companies.

We need to conduct a massive law enforcement crackdown on all the big pharmaceutical companies.

We also need massive medical malpractice reform.

Not only that, we also should end the monopoly of the AMA immediately. We need to reintroduce honest, legitimate competition back into the medical system.

In addition, we need to make sure that natural health practitioners are able to compete on a fair and equal basis in this country.

As I have written about previously, the health care industry in the United States has become all about making as much money as possible.

That must change.

#15 We Must Stop Trying To Police The World

We will always need a very strong military force, but it is absolutely ridiculous that we have troops stationed in approximately 130 different countries today.

This is a tremendous drain on our national resources and we are spread way too thin militarily. It is about time that many off these other countries started protecting themselves for a while.

#16 We Must Pull Out Of The United Nations And We Must Dramatically Reduce Foreign Aid

The United Nations is a massive waste of time, energy and resources. We should have pulled the plug on that ridiculous globalist organization long before now.

In addition, we need to dramatically cut back on foreign aid until we get our own house in order. We should only help the most desperate nations until we get our own economy back on track.

#17 We Must End All Of The Ridiculous Police State Measures Which Are Chasing Tourists Away From Our Soil

Tourism is a very, very important industry to the United States. But today, all of the incredibly intrusive police state measures that the past few administrations have introduced are chasing millions of tourists away and are ruining our national reputation.

For example, there are many cultures around the globe where it would be unthinkable to have anonymous security goons feel up the private areas of women and children before they are allowed to get on an airplane. Rather than put up with such nonsense, millions of tourists are simply going to choose to spend their money somewhere else.

#18 We Must Seize The Assets Of The Ultra-Wealthy Individuals And International Banks That Have Been Committing Fraud Against The U.S. Government For Decades

Once the Federal Reserve is shut down, it will be important to hold those that have been defrauding the U.S. government responsible. Once a full audit of the Federal Reserve is conducted and evidence of criminal activity is uncovered, those involved should be arrested and all of their assets should be seized and frozen pending trial.

If the things that have been going on inside the Federal Reserve are ever fully exposed, it will make the whole Bernie Madoff scandal look like a nickel and dime operation.

But that is why there has never been a full, comprehensive audit of the Federal Reserve since it was created back in 1913. The American people are not supposed to see what happens inside that institution.

Unfortunately, even though economic times are a little rough, things are still good enough that the vast majority of Americans are not ready to start demanding the kind of radical changes listed above.

Not only that, but the kind of radical changes listed above would be fought against by the establishment every step of the way. Those with money and power are not going to step aside just because “justice” demands it.

What is probably going to happen is that the “establishment politicians” that the establishment has bought and paid for are just going to continue to propose half-baked solutions to our problems as this country continues to tumble towards economic oblivion.

So what do all of you readers think? Is there hope that someday we will see some real economic solutions implemented in this country?

Paper Money Madness: Inflation-Fueled Economic Growth Does Not Indicate That An Economy Is Getting Stronger

If the U.S. economy “grows” by 4 percent in 2011, but by the end of the year we are paying $3.00 for a loaf of bread, $4.00 for a gallon of milk and $5.00 for a gallon of gasoline are the American people going to be better off economically or worse off? The answer is obvious, but most “experts” in the mainstream media continue to insist that as long as U.S. GDP is increasing and as long as the stock market is going up that our economy is improving. But that is just not the case. If the amount of money in circulation was relatively constant, those measurements would be helpful, but unfortunately the U.S. government and the Federal Reserve are dramatically pumping up the money supply right now. Just because larger amounts of paper money are changing hands does not mean that the economy is getting stronger. Of course GDP is going to rise when there is much more money in the system. But economic growth that is fueled by inflation is just an illusion and it is not an indicator of economic health at all.

A very basic example shows this very easily. Imagine if suddenly everyone in the United States had the amount of money they owned instantly doubled. Would the U.S. economy be twice as healthy? Of course not. Very quickly prices would rise to meet the new level of money.

Well, in the United States today our “authorities” are pumping massive amounts of new dollars into the system. That is one reason why so many people are so upset about the Federal Reserve’s “quantitative easing 2″ program. The Federal Reserve is creating money out of thin air and pumping it into the financial system. The first people that get their hands on this new money are Wall Street banks and major financial institutions. The idea is that eventually all of this new money will “trickle down” and will help average Americans, but that just does not seem to be happening.

In addition, when the U.S. government goes into more debt, this also creates more money. The U.S. government has accumulated far more new debt during the last two years than it ever has in any other two year period. When the U.S. government spends all of this money that it borrows it introduces a massive amount of new money into the system.

There are many ways to measure the money supply, and one of the most basic (M1) is displayed below. As you can see, thanks to the actions of the Federal Reserve and the U.S. government, the money supply is rising at an almost exponential rate at this point. The money supply has grown rapidly at various points in the past, but what we are witnessing now is really unprecedented…..

So what happens when you have a lot more money chasing roughly the same number of goods and services?

Well, you have inflation of course.

Are our “leaders” alarmed by any of this?

No, in fact they plan to pump up the money supply even more. The Federal Reserve seems content to continue their “quantitative easing” program and Barack Obama is proposing all kinds of new federal spending which will be funded by more debt.

So the truth is that we had better have some significant “economic growth” during 2011. If this amount of money is pumped into our financial system and we don’t see any “economic growth” then that would be an indication of a major league economic breakdown.

But instead of looking at things rationally, many mainstream economists are hailing the fact that the U.S. economy may grow by a few percentage points in 2011 as a sign that happy days are here again.

According to a recent article in USA Today, economists are becoming increasingly optimistic about 2011, and the consensus seems to be that economic growth in the United States will fall somewhere between 3 and 4 percent….

Economists are more optimistic about the recovery than they were just a few months ago, significantly upgrading their forecasts for 2011 as consumers open their wallets.

Unfortunately, the irrational optimism is not limited to just the United States. As global leaders prepare to descend on the annual meeting of the World Economic Forum in Davos, Switzerland many mainstream media outlets are declaring that the worldwide financial crisis is over and that we are now entering a glorious boom time for the global economy. For example, the following is how one recent article from Bloomberg opened….

For only the third time since the Industrial Revolution, the world may be entering a long-term growth cycle that will lift all economies simultaneously, driving bond yields and commodity prices higher.

People don’t seem to realize that just because more money is changing hands and just because financial markets are going higher that it doesn’t mean that the economic situation is improving.

If a rising GDP and a soaring stock market truly were strong indicators of economic health, then Zimbabwe would have been one of the strongest economies on the planet over the last 10 years.

Inflation changes everything.

Unfortunately, official U.S. government inflation figures have become so manipulated that they are of basically no value at this point. Whenever one particular category starts to experience significant inflation, the U.S. government simply removes that category from the inflation calculations. Over the past 40 years the way that inflation is calculated has been changed way too many times.

If you really want to get a good idea of what is happening with inflation, a good thing to do is to look at the basic commodities that everyone uses around the world.

For example, according to the United Nations, the global price of food hit an all-time high in December. Not only that, but almost every major agricultural commodity that you could possibly name experienced a double-digit percentage increase in price during 2010.

In addition, the price of oil is steamrolling towards $100 a barrel again. In fact, many analysts are convinced that the price of oil will set a new all-time record in 2011.

A recent editorial in Newsweek was not optimistic that we will be able to stem this rising tide of inflation….

The final dam to stopping $150-a-barrel oil and $4-a-gallon gas is being breached, as financial regulation continues its daily erosion into worthlessness.

So what is the answer to these problems?

Well, according to many of the top “economic leaders” in the world, the solution is to create even more money and even more credit.

Between 2000 and 2009, the total amount of credit in the world grew from 57 trillion dollars to 109 trillion dollars. Now the World Economic Forum says that we need to grow the total amount of credit by another 100 trillion dollars over the next ten years to “support” the anticipated amount of “economic growth” around the world that they expect to see.

Does that make any sense?

We have to double the amount of debt in the world so that the world economy can grow?

But this is what the world economic system has become at this point. It is a never ending debt spiral that requires constantly increasing levels of debt and paper money.

That is a huge reason why precious metals such as gold and silver are becoming so popular. Investors are becoming sick and tired of the constantly inflating paper currencies. Gold and silver are both very much in demand right now. For example, the Chinese are voraciously gobbling up gold right now. Also, the Central Bank of Russia has announced plans to purchase 100 metric tons of gold per year in order “to replenish the country’s gold reserves”.

But what about average Americans? What is going to happen to them in a world where prices are rising rapidly?

Well, the answer is very simple. In an environment of rapidly rising prices, the standard of living for most Americans is going to go down.

In this economic environment, employers are simply not going to increase salaries fast enough to keep up with the rising price of food, gas and health care.

In addition, there are tens of millions of Americans that are on fixed incomes. As prices rise, those fixed incomes will simply not go as far.

So the truth is that most Americans are going to find their finances stretched even thinner in the months and years to come.

Inflation is like a thief. When prices rise it means that the purchasing power of all the dollars that we have accumulated goes down.

But for our politicians, inflation can be a helpful thing. They can take inflation-fueled “economic growth” numbers and claim that their policies are working and that the economy is becoming healthier.

A year from now when these jokers trot out their “economic growth” numbers and yet the cost of nearly everything you buy has increased dramatically, don’t you believe their propaganda.

Yes, U.S. economic numbers are most likely going to experience a little bit of inflation-fueled “growth” in 2011.

But it will not mean that our economy is improving.

Economy News Nightmare: 20 Things That You Should Not Read If You Do Not Want To Become Very Angry

Today America is very, very frustrated. In fact, we probably have not seen this level of anger in the country since World War 2 ended. So why are so many Americans so frustrated and so angry right now? Well, for most Americans it comes down to the economy. Very few things are more frustrating than not being able to find a job that will enable you to pay the mortgage and feed your family. Middle class Americans that do have a little bit of money are digging into their savings and investments at a staggering rate as they desperately try to keep their heads above water. Millions of other families that do not have a “safety cushion” are on the verge of losing their homes or have already been callously tossed out onto the streets by big, greedy banks. Meanwhile, our politicians continue to burden us with increasingly larger amounts of government debt and they stand idly by as our jobs and our industries are shipped overseas. So even though the mainstream media seems absolutely puzzled by the growing anger in America, the truth is that it is not a great mystery. The economy is an absolute nightmare, and if it gets even worse people are going to become even more angry.

The mainstream media and our top politicians are running around proclaiming that the economy has turned around, and yet all of the important long-term economic numbers continue to get worse. Do they think that the American people are stupid?

Perhaps they are just trying to be “optimistic” and are trying to get us all to “believe” in the economic recovery.

Well, while it certainly does not hurt to “stay positive” and to “have faith” when there is some basis in reality for doing so, but what the mainstream media is asking us all to do is to stick our heads in the sand and to pretend that all of our horrific economic problems are not even there.

Until we recognize exactly what our problems are and how bad they have gotten we will never be able to come up with the appropriate solutions.

Our economy does not just need a “tweak” or two. Our economy is a total nightmare at this point.

The following are 20 things about our nightmare of an economy that you will not want to read if you do not want to become very, very angry….

#1 Today, millions of American families are digging deep into their savings and investments in a desperate attempt to stay afloat. Over the past two years, U.S. consumers have withdrawn $311 billion more from savings and investment accounts than they have put into them.

#2 15 billion dollars: the total amount of compensation that Goldman Sachs paid out to its employees for 2010.

#3 The number of American families that were booted out of their homes and into the streets set a new all-time record in 2010.

#4 Dozens of packages that we buy in the supermarket have been reduced in size by up to 20%. For example, there are now 2 less slices of cheese in a typical package of Kraft American cheese, and there is now 9 percent less toilet paper in a typical package of Scott toilet paper. So now, you may think that you are paying the same amount for these items that you always have, but the truth is that you have been hit with a large price increase.

#5 One Canadian company is making a ton of money shipping “millions and millions of dollars” worth of manufacturing equipment from factories that are being shut down in the United States over to new factories that are being set up in China.

#6 In America today, the wealthiest 20% own a whopping 93% of all the “financial assets” in the United States.

#7 Only 35 percent of Americans now have enough “emergency savings” to be able to cover three months of living expenses.

#8 47 percent of all Americans now believe that China is the number one economic power in the world.

#9 If the U.S. banking system is healthy, then why does the number of “problem banks” continue to keep increasing? This past week the number of U.S. banks on the unofficial list of problem banks reached 937.

#10 According to former U.S. Labor Secretary Robert Reich, the wealthiest 0.1% of all Americans make as much money as the poorest 120 million.

#11 U.S. housing prices have now fallen further during this economic downturn than they did during the Great Depression of the 1930s.

#12 According to some very disturbing new research, 45 percent of U.S. college students exhibit “no significant gains in learning” after two years in college.

#13 Americans now owe more than $884 billion on student loans, which is a new all-time record.

#14 The United Nations says that the global price of food hit an all-time record high in December, and the price of oil is surging towards $100 a barrel, but the U.S. government continues to insist that we barely have any inflation at all.

#15 The more Americans that are on food stamps the more profits that JP Morgan makes. Today, an all-time record of 43.2 million Americans are on food stamps, and JP Morgan is making a lot of money processing millions of those benefit payments.

#16 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs.

#17 Dozens of U.S. states are either implementing tax increases in 2011 or are considering proposals to raise taxes.

#18 The United States has had a negative trade deficit every single year since 1976.

#19 The U.S. national debt has crossed the $14 trillion mark for the first time, and at some point during 2011 it will cross the $15 trillion mark.

#20 What the U.S. economy really needs is for the government to get off all of our backs, but instead they continue to tighten their grip on us. In fact, the Obama administration is proposing a “universal Internet ID” that would watch, track, monitor and potentially control everything that you do on the Internet.

Huge Numbers Of Dead Animals, Dead Birds And Dead Fish – What In The World Is Happening Out There?

Just what in the world is going on out there? Large groups of animals are keeling over dead, thousands of birds are falling out of the sky dead and millions of dead fish are washing ashore all over the globe. Something is happening. Do any of you know what is causing all this, because I sure don’t. This all seemed to start around the end of December when mass bird deaths and mass fish deaths began to be reported all around the world. Normally “weird” news stories like this kind of fade away after a time, but reports of bird deaths and fish deaths continue to come in and now there are even reports of large groups of land animals suddenly dropping dead. As these reports from all over the globe continue to pile up, it doesn’t take a “conspiracy theorist” to figure out that something very much out of the ordinary is going on. Unfortunately, at this point we have a whole lot more questions than we do answers.

A couple good summaries of the mass bird and fish deaths that we witnessed during the first few weeks of this crisis can be found here and here. Unfortunately, large groups of animals, birds and fish continue to keep dying. The following is just a handful of the reports that have poured in from all over the globe during the past week or so….

-“10,000 Cattle Dead In Vietnam: Cows, Buffalo Part Of Mass Die-Off”

-“Beijing reports mass bird deaths”

-“Hundreds of dead seals in Labrador”

-“55 buffalo die mysteriously on southern Cayuga County farm”

-“Two Million Dead Fish Appear in Chesapeake Bay”

-“Another Massive Bird Kill in the Tennessee Valley”

-“Trapped in ice, ‘thousands’ of fish die in Detroit River”

-“Dead birds from north Ala. being sent to Auburn for testing”

-“40,000 Dead Crabs Wash Ashore in U.K.”

-“371 Dead Birds Fall from Sky on LA’s Sunset Blvd; Similar to California, Arkansas, Louisiana Bird Drops”

-“First Birds & Fish, Now Hundreds of Cows are Dying”

It was easy enough to brush off one or two “mass death” news stories, but when they start coming in day after day after day it really starts to get your attention.

So does anyone know why all of this is happening all of a sudden?

Well, there certainly are a lot of theories being floated around out there. When things like this start happening people start coming up with all sorts of really wild ideas. Posted below is a list of some of the most common theories about these mass death. Some of the theories seem to have some substance to them, while others seem just downright bizarre.

Theories That Have Been Put Forward To Explain The Huge Numbers Of Dead Animals, Dead Birds And Dead Fish Around The Globe

*Changes In The Magnetic Field Of The Earth

*Extreme Weather

*A Pole Shift

*Pesticides

*HAARP

*Other Secret Government Programs

*Cold Weather

*”Global Warming”

*The Approach Of 2012

*Methane Gas

*Loud Noises

*Disease

*UFOs Are Responsible

*Effects Of The BP Oil Spill

*The Second Coming Of Jesus

*Birds Are Dying Because Of Indigestion

*Increased Radiation From The Sun

*Large Groups Of Animals Always Die And This Is All Normal

Now, it must be noted that a couple of the recent “mass death episodes” can actually be explained. For example, the U.S. government has admitted being responsible for the deaths of several hundred birds in South Dakota.

But what about the dozens of other “mass death” reports that have been pouring in from all around the earth? How do we explain all of those?

That is something to think about.

Hopefully all this will end up being nothing.

Hopefully it will turn out that all of this can be easily explained.

We certainly don’t need any more problems right now.

As I wrote about the other day, the entire world financial system is on the verge of collapse. At this point any kind of major event could be the “tipping point” that pushes the global economy into chaos.

The world as we know it can literally change overnight. Today a reader emailed me the following video. It is entitled “The Day After The Dollar Crashes”, and it takes the viewer through what a potential unraveling of the global financial system might look like. As you watch this, keep in mind that any type of “big event” could set off a panic like this….

12 Economic Collapse Scenarios That We Could Potentially See In 2011

What could cause an economic collapse in 2011? Well, unfortunately there are quite a few “nightmare scenarios” that could plunge the entire globe into another massive financial crisis. The United States, Japan and most of the nations in Europe are absolutely drowning in debt. The Federal Reserve continues to play reckless games with the U.S. dollar. The price of oil is skyrocketing and the global price of food just hit a new record high. Food riots are already breaking out all over the world. Meanwhile, the rampant fraud and corruption going on in world financial markets is starting to be exposed and the whole house of cards could come crashing down at any time. Most Americans have no idea that a horrific economic collapse could happen at literally any time. There is no way that all of this debt and all of this financial corruption is sustainable. At some point we are going to reach a moment of “total system failure”.

So will it be soon? Let’s hope not. Let’s certainly hope that it does not happen in 2011. Many of us need more time to prepare. Most of our families and friends need more time to prepare. Once this thing implodes there isn’t going to be an opportunity to have a “do over”. We simply will not be able to put the toothpaste back into the tube again.

So we had all better be getting prepared for hard times. The following are 12 economic collapse scenarios that we could potentially see in 2011….

#1 U.S. debt could become a massive crisis at any moment. China is saying all of the right things at the moment, but many analysts are openly worried about what could happen if China suddenly decides to start dumping all of the U.S. debt that they have accumulated. Right now about the only thing keeping U.S. government finances going is the ability to borrow gigantic amounts of money at extremely low interest rates. If anything upsets that paradigm, it could potentially have enormous consequences for the entire world financial system.

#2 Speaking of threats to the global financial system, it turns out that “quantitative easing 2″ has had the exact opposite effect that Ben Bernanke planned for it to have. Bernanke insisted that the main goal of QE2 was to lower interest rates, but instead all it has done is cause interest rates to go up substantially. If Bernanke this incompetent or is he trying to mess everything up on purpose?

#3 The debt bubble that the entire global economy is based on could burst at any time and throw the whole planet into chaos. According to a new report from the World Economic Forum, the total amount of credit in the world increased from $57 trillion in 2000 to $109 trillion in 2009. The WEF says that now the world is going to need another $100 trillion in credit to support projected “economic growth” over the next decade. So is this how the new “global economy” works? We just keep doubling the total amount of debt every decade?

#4 As the U.S. government and the Federal Reserve continue to pump massive amounts of new dollars into the system, the floor could fall out from underneath the U.S. dollar at any time. The truth is that we are already starting to see inflation really accelerate and everyone pretty much acknowledges that official U.S. governments figures for inflation are an absolute joke. According to one new study, the cost of college tuition has risen 286% over the last 20 years, and the cost of “hospital, nursing-home and adult-day-care services” rose 269% during those same two decades. All of this happened during a period of supposedly “low” inflation. So what are price increases going to look like when we actually have “high” inflation?

#5 One of the primary drivers of global inflation during 2011 could be the price of oil. A large number of economists are now projecting that the price of oil could surge well past $100 dollars a barrel in 2011. If that happens, it is going to put significant pressure on the price of almost everything else in the entire global economy. In fact, as I have explained previously, the higher the price of oil goes, the faster the U.S. economy will decline.

#6 Food inflation is already so bad in some areas of the globe that it is setting off massive food riots in nations such as Tunisia and Algeria. In fact, there have been reports of people setting themselves on fire all over the Middle East as a way to draw attention to how desperate they are. So what is going to happen if global food prices go up another 10 or 20 percent and food riots spread literally all over the globe during 2011?

#7 There are persistent rumors that simply will not go away of massive physical gold and silver shortages. Demand for precious metals has never been higher. So what is going to happen when many investors begin to absolutely insist on physical delivery of their precious metals? What is going to happen when the fact that far, far, far more “paper gold” and “paper silver” has been sold than has ever actually physically existed in the history of the planet starts to come out? What would that do to the price of gold and silver?

#8 The U.S. housing industry could plunge the U.S. economy into another recession at any time. The real estate market is absolutely flooded with homes and virtually nobody is buying. This massive oversupply of homes means that the construction of new homes has fallen off a cliff. In 2010, only 703,000 single family, multi-family and manufactured homes were completed. This was a new record low, and it was down 17% from the previous all-time record which had just been set in 2009.

#9 A combination of extreme weather and disease could make this an absolutely brutal year for U.S. farmers. This winter we have already seen thousands of new cold weather and snowfall records set across the United States. Now there is some very disturbing news emerging out of Florida of an “incurable bacteria” that is ravaging citrus crops all over Florida. Is there a reason why so many bad things are happening all of a sudden?

#10 The municipal bond crisis could go “supernova” at any time. Already, investors are bailing out of bonds at a frightening pace. State and local government debt is now sitting at an all-time high of 22 percent of U.S. GDP. According to Meredith Whitney, the municipal bond crisis that we are facing is a gigantic threat to our financial system….

“It has tentacles as wide as anything I’ve seen. I think next to housing this is the single most important issue in the United States and certainly the largest threat to the U.S. economy.”

Former Los Angeles mayor Richard Riordan is convinced that things are so bad that literally 90% of our states and cities could go bankrupt over the next five years….

#11 Of course on top of everything else, the quadrillion dollar derivatives bubble could burst at any time. Right now we are watching the greatest financial casino in the history of the globe spin around and around and around and everyone is hoping that at some point it doesn’t stop. Today, most money on Wall Street is not made by investing in good business ideas. Rather, most money on Wall Street is now made by making the best bets. Unfortunately, at some point the casino is going to come crashing down and the game will be over.

#12 The biggest wildcard of all is war. The Korean peninsula came closer to war in 2010 than it had in decades. The Middle East could literally explode at any time. We live in a world where a single weapon can take out an entire city in an instant. All it would take is a mid-size war or a couple of weapons of mass destruction to throw the entire global economy into absolute turmoil.

Once again, let us hope that none of these economic collapse scenarios happens in 2011.

However, we have got to realize that we can’t keep dodging these bullets forever.

As bad as 2010 was, the truth is that it went about as good as any of us could have hoped. Things are still pretty stable and times are still pretty good right now.

But instead of using these times to “party”, we should be using them to prepare.

A really, really vicious economic storm is coming and it is going to be a complete and total nightmare. Get ready, hold on tight, and say your prayers.

Food Riots 2011

The stunningly violent food riots in Tunisia and Algeria show just how quickly things can change. Just a few months ago, these two northern Africa nations were considered to be very stable, very peaceful and without any major problems. But now protesters are openly squaring off with police in the streets. Many of the protesters are throwing “fire bombs” or are shooting fireworks at the authorities, and the police are responding with a tremendous amount of violence themselves. In Algeria, several protesters have been killed by police and several others have actually set themselves on fire to protest the economic conditions. In Tunisia, more than 100 people have been killed and the president of that country actually had to flee for his life. But on a global scale, food shortages have not even gotten that bad yet. Yes, food prices are starting to go up and food supplies are a little bit tighter right now, but much worse times than these are coming. So what in the world are the cities of the world going to look like when we have a very serious food shortage?

Just as we saw during the food riots of 2008, when people get to the point where they can’t even feed themselves anymore, they tend to lose it. In the video posted below, you can really feel the desperation of these young Algerians as they riot in the streets….

This next video is of the food riots in Tunisia. You will not want to let any young children watch this video. In fact, if watching police beat and smash protesters laying on the ground upsets you, then you might not want to watch this video either. The massive food riots that have erupted in Tunisia have left many city streets looking like war zones and at this point it is being reported that the violence has left over 100 people dead. The president of Tunisia has left the country because of the rioting, and an interim president has been sworn in. It is hoped that this will help restore order. This video is absolutely stunning….

You see, the truth is that it is not just in the United States that people are becoming angry at government. All over the world, frustration is boiling over. But unlike the United States, where food is still very plentiful, in many areas of the world it is the deteriorating economic conditions that are sparking many of these riots.

According to the FAO, the global price of food hit a new record high in December. For most Americans and Europeans, a rise in the price of food is just an inconvenience. But in many areas of the world, even a relatively small rise in the price of food can mean that the survival of millions is suddenly threatened.

Global authorities are concerned that these food riots might start spreading – especially if the extremely harsh weather all over the globe continues to damage crops.

In fact, there are some signs that economic unrest is already beginning to spread….

*In the nation of Jordan, peaceful demonstrations were held in several locations around the country on Friday to protest rising food prices.

*In Libya, protests about the late completion of government subsidized housing entered their third day on Sunday. Reportedly, hundreds of uncompleted units have been taken over by protesters and so far the police are not taking action to evict them. There is also growing concern that the food riots in neighboring Tunisia will soon pour over into Libya.

*Economic protests also been reported recently in Mozambique, Morocco and Chile.

Sadly, the desperate economic conditions that are sparking these food riots did not develop overnight. Rather, they have been building for decades. The truth is that the new “global economy” is designed to funnel more and more of the wealth of the world into the hands of the wealthiest 0.001% of the global population. Everyone else is left to fight with one another to divide up a pie that is increasingly shrinking.

Just consider the following five facts….

#1 Approximately 1 billion people throughout the world go to bed hungry every single night.

#2 Approximately 28 percent of all children in developing countries are considered to be underweight or have had their growth stunted as a result of malnutrition.

#3 Every 3.6 seconds someone starves to death and three-quarters of them are children under the age of 5.

#4 “Least developed countries” spent 9 billion dollars on food imports in 2002. By 2008, that number had risen to 23 billion dollars.

#5 A study by the World Institute for Development Economics Research discovered that the bottom half of the world population owns approximately 1 percent of all global wealth.

So if things are this bad already, what kind of food riots are we going to see if all of this weird weather continues and global harvests are much lower than anticipated in 2011?

Most Americans have a really hard time even imagining such a thing, but the truth is that we are just one really bad harvest away from mass starvation in many areas of the world.

We are not going to see mass starvation in the United States in 2011, but we could see food prices start to go up significantly. Keep in mind that more than 43 million Americans are already on food stamps. The incredible abundance of food that we have been enjoying for so many decades is not guaranteed to last indefinitely.

Dennis Conley, an agricultural economist at the University of Nebraska, recently told MSNBC that food reserves in the United States are already disturbingly low….

“I haven’t seen numbers this low that I can remember in the last 20 or 30 years.”

So yes, there are legitimate reasons to be concerned.

The world really is on the verge of a major food crisis, and if global harvests are not significantly better than most analysts are currently projecting, then we are likely to see a lot more food riots around the globe before 2011 is over.

Instead Of Using This Period Of Economic Stability To Party We Should Be Using It To Prepare

The fact that the official U.S. government unemployment rate has dipped slightly is good news. However, it is not the “economic turning point” that Barack Obama and others are proclaiming it to be. Rather, what we are in right now is “the calm before the storm”. The massive amount of government spending that the U.S. government has done over the past few years and the massive quantities of new dollars that the Federal Reserve has been pumping into the system has bought us all just a little bit of time. Instead of using this brief period of economic stability to party, we should all be using it to prepare for the very hard economic times that are coming. Please do not get fooled when the short-term economic numbers go up or down a little bit. When evaluating the state of the U.S. economy, the key is to look at the long-term trends. The truth is that when you take a longer-term view, it becomes undeniable that the United States is in the midst of a long-term economic decline from which there is no escape.

But how are most Americans responding to the “good news” that the U.S. economy has stabilized for the moment? Many Americans are running right back out and are spending like it is 1999. Many Americans are viewing the slight improvement in some of the economic numbers as a sign that “happy times are here again” and they are behaving just as they did right before the financial crisis of 2008.

Many of us have family or friends that are taking expensive trips, making huge purchases and partying as if the good times are never going to end.

But is this wise?

The fact that the official government unemployment rate declined to 9.4% in December has got a lot of people excited, including Barack Obama….

“The pace of hiring is beginning to pick up.”

So is the fact that the unemployment rate declined slightly good news?

Yes, it is good news.

However, there are also a whole lot of reasons not to be so excited about this one piece of unemployment data….

*A big part of the reason why the unemployment figure was down in December was because the government considered 260,000 Americans to have dropped out of the labor force.

*Federal Reserve Chairman Ben Bernanke says that unemployment is likely to stay very high for four or five more years.

*The 103,000 jobs that were added in December was actually far below the 140,000 to 178,000 jobs that economists were expecting.

*Gallup numbers tell an entirely different story when it comes to unemployment. According to Gallup, the unemployment rate actually rose to 9.6% at the end of December. This was a significant increase from 9.3% in mid-December and 8.8% at the end of November.

*Not only that, but Gallup also says that the underemployment rate is moving up dramatically. According to Gallup, the underemployment rate in the United States increased to 19.0% during December, which was up substantially from 18.5% in mid-December and 17.2% at the end of November.

*The percentage of Americans participating in the labor force is now the lowest it has been since the early 1980s. In December, the Labor Force Participation Rate fell to 64.3%. Over the last twenty years, the Labor Force Participation Rate has usually been around 66 or 67 percent. So do less Americans want jobs today? Of course not. What has happened is that millions of Americans have become so discouraged about the lack of jobs that they aren’t even actively searching anymore.

*The number of Americans working part-time for “economic reasons” continues to hover around all-time highs.

*According to the Bureau of Labor Statistics, the number of Americans that have been out of work for more than 26 weeks actually increased in December. In November, there were 6.328 Americans in that category, and in December there were 6.441 million Americans in that category.

So, as you can see, there are a whole lot of reasons not to get too excited about the employment numbers.

But has the economic situation in the United States somewhat stabilized in the short-term?

Yes, but this is not going to last forever.

When you look at the longer-term economic trends they just keep getting worse and worse and worse….

#1 Every single month the U.S. government goes into even more debt. The U.S. government is now over 14 trillion dollars in debt and this debt in increasing by about 4 billion dollars every single day.

#2 Even single month state and local governments across the United States go into even more debt. As I have written about previously, our infrastructure is literally crumbling and falling apart from coast to coast but our state and local governments can’t do anything about it because they are drowning in a sea of red ink.

#3 Every single month we are getting poorer as a nation. Every month we consume massive amounts of foreign oil and cheap, foreign-made plastic trinkets and we send the rest of the world hundreds of billions of dollars of our money. Unfortunately, very few of our politicians ever even mention this obscene transfer of wealth.

#4 Every single month we send large numbers of our factories and our jobs overseas. Over the past decade, over 42,000 factories in the United States have shut down permanently and millions of good jobs have been outsourced and offshored. Those jobs and those factories are never coming back and America is rapidly becoming a “post-industrial” nation.

#5 Every single month the United States continues to lose not only factory jobs, but also many other types of good paying “middle class jobs”. In fact, since the year 2000, we have lost 10% of our middle class jobs. In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs. Meanwhile, our population continues to grow larger.

#6 Almost every single month the cost of basics such as food, gasoline and health care goes up faster than our incomes do. Inflation is a brutal “hidden tax” which is destroying the standard of living of middle class Americans.

#7 Confidence in the U.S. dollar and U.S. Treasury bonds is starting to rapidly decline. When global confidence in the U.S. dollar and in U.S. Treasury bonds is totally gone, the entire world financial system will be thrown into total chaos and the U.S. economic system will fall like a house of cards.

#8 We are being constantly looted and pillaged by those at the top of the food chain. Every single month the ultra-wealthy and the international banking elite drain even more money out of the system and transfer it to “offshore” banks. At this point, a third of all the wealth in the world is held in “offshore” banks.

Right now we are still able to enjoy relatively good times because the rest of the world continues to loan the U.S. government massive amounts of cheap money and because the Federal Reserve has so far gotten away with printing gigantic piles of new money out of thin air.

But this “can” cannot be kicked down the road forever. At some point, the greatest debt bubble in the history of the world is going to completely burst and the fallout is going to be nightmarish.

So what should we all be doing?

What we shouldn’t be doing is partying as if the good times are going to last indefinitely.

What we need to be doing is starting to prepare.

So what are some things that we all can do to prepare for hard economic times? Well, the following are just a few of the columns I have authored in the past about prepping….

*What To Do

*Disaster Plan

*20 Things You Will Need To Survive When The Economy Collapses And The Next Great Depression Begins

Use this brief time of economic stability to prepare – once the economy falls apart it will be too late.

Hopefully some of the readers of this column will be willing to share some of their best preparation tips. If you have got some tips and ideas that you would like to share with the rest of us, please feel free to post a comment below….

Almost Everything Is A Crime In America Now: 14 Of The Most Ridiculous Things That Americans Are Being Arrested For

Doesn’t it seem like almost everything is becoming a crime in America now? Americans are being arrested and charged with crimes for doing things like leaving dog poop on the ground, opening up Christmas presents early, not recycling properly, farting in class and having brown lawns. But is it healthy for our society for the police to be involved in such silly things? Every single day the United States inches closer to becoming a totalitarian society. While there are some that would welcome this shift, the truth is that throughout history the societies that have experienced the greatest economic prosperity have all had at least a certain level of freedom. Business thrives when people feel free to live and work. When a government tightens the grip too much many people just start shutting down. Just look at places like North Korea. Even though the rest of the world is sending them huge amounts of food starvation is still quite common in that totalitarian regime. That is why it is so disturbing that it seems like almost everything has become a crime in America now. As we continue to criminalize relatively normal behavior our slide toward becoming a totalitarian state will only accelerate.

We are throwing anyone and everyone in prison these days. It is getting absolutely ridiculous. Today, the United States leads the world in the number of prisoners and in the percentage of the population in prison. The United States has 5% of the world’s population, but approximately 25% of the world’s incarcerated population.

According to the U.S. Bureau of Justice Statistics, as of the end of 2009 a total of 7,225,800 people were either on probation, in prison or on parole in America.

That is a sign of a very, very sick society. Either we have a massive crime problem or the “control grid” that our leaders have erected for us is wildly out of control.

Or both.

But how in the world are we supposed to have a healthy economy if our entire nation is being turned into one gigantic prison?

Sadly, it is not just hardcore criminals that are being rounded up and abused by authorities these days. The following are 14 of the most ridiculous things that Americans are being arrested for….

#1 A Michigan man has been charged with a felony and could face up to 5 years in prison for reading his wife’s email.

#2 A 49-year-old Queens woman had bruises all over her body after she was handcuffed, arrested and brutally beaten by NYPD officers. So what was her offense? The officers thought that her little dog had left some poop that she didn’t clean up.

#3 A 56-year-old woman who was once a rape victim refused to let airport security officials feel her breasts so she was thrown to the floor, put in handcuffs and arrested.

#4 In Milwaukee, one man was recently fined $500 for swearing on a public bus.

#5 Several years ago a 12-year-old boy in South Carolina was actually arrested by police for opening up a Christmas present early against his family’s wishes.

#6 In some areas of the country, it is now a crime to not recycle properly. For example, the city of Cleveland has announced plans to sort through trash cans to ensure that people are actually recycling according to city guidelines.

#7 A 12-year-old girl from Queens was arrested earlier this year and taken out of her school in handcuffs for writing “Lex was here. 2/1/10″ and “I love my friends Abby and Faith” on her desk.

#8 Back in 2008, a 13-year-old boy in Florida was actually arrested by police for farting in class.

#9 The feds recently raided an Amish farmer at 5 AM in the morning because they claimed that he was was engaged in the interstate sale of raw milk in violation of federal law.

#10 A few years ago a 10-year-old girl was arrested and charged with a felony for bringing a small steak knife to school. It turns out that all she wanted to do was to cut up her lunch so that she could eat it.

#11 On June 18th, two Christians decided that they would peacefully pass out copies of the gospel of John on a public sidewalk outside a public Islamic festival in Dearborn, Michigan and within three minutes 8 policemen surrounded them and placed them under arrest.

#12 A U.S. District Court judge slapped a 5oo dollar fine on Massachusetts fisherman Robert J. Eldridge for untangling a giant whale from his nets and setting it free. So what was his crime? Well, according to the court, Eldridge was supposed to call state authorities and wait for them do it.

#13 Once upon a time, a food fight in the cafeteria may have gotten you a detention. Now it may get you locked up. About a year ago, 25 students between the ages of 11 and 15 at a school in Chicago were taken into custody by police for being involved in a huge food fight in the school cafeteria.

#14 A few years ago a 70 year old grandmother was actually put in handcuffs and hauled off to jail for having a brown lawn.

Why in the world would anyone approve of the police arresting ordinary Americans for such things?

It seems like ever since 9/11 the whole country has gotten “security fever”.

Suddenly we need to “get tough” on everyone.

Yes, crime is making a comeback, but once upon a time the police in this country were able to handle crime quite well and be courteous and helpful to ordinary citizens at the same time.

But today it seems like nearly every single encounter with police ends up being negative.

It does not have to be that way.

The rest of the world sees what is going on in this country and many of them are deciding that they simply do not want to spend their tourist dollars here anymore. That is not a good thing for our economy.

As the government continues to get even bigger and exerts even more control over our lives, many of our own people are getting sick of it and are moving abroad.

America used to be the land of the free and the home of the brave.

That is no longer true.

Now we get thrown to the floor, handcuffed, beaten and arrested for things that we did not even know were crimes.

If America continues to move in this direction it is going to ruin our economy, our reputation in the world and our national spirit.

Unfortunately, history has shown us that once a free nation starts to lose that freedom it is hard to reverse that slide. Perhaps we will be different. Perhaps the American people will stand up and demand that we restore the principles of liberty and freedom that this country was founded on.

Do you think that will happen? Feel free to leave a comment with your opinion….

Has The Financial Collapse Of Europe Now Become Inevitable?

What in the world is happening over in Europe? Well, it is actually quite simple. We are witnessing the slow motion collapse of the euro and of the European financial system. At this point, many analysts are convinced that a full-blown financial implosion in Europe has become inevitable. Ireland, Spain, Portugal, Italy, France and Belgium are all drowning in an ocean of unsustainable debt. Meanwhile, Germany and the few other “healthy” members of the EU continue to try to keep all of the balls in the air by bailing everyone out. But can Germany keep bailing the rest of the EU out indefinitely? Are the German people going to continue to be willing to hand out gigantic sacks of cash to fix the problems of other EU nations? The Irish were just bailed out, but their problems are far from over. There are rumors that Greece will soon need another bailout. Spain, Portugal, Italy and France have all entered crisis territory. At the same time, there are a whole host of nations in eastern Europe that are also on the verge of financial collapse. So is there any hope that a major sovereign debt crisis can be averted at this point?

One would like to think that there is always hope, but each month things just seem to keep getting worse. Confidence in European government debt continues to plummet. The yield on 10-year Irish bonds is up to 8.97%. The yield on 10-year Greek bonds is up to an astounding 12.01%. The cost of insuring French debt hit a new record high on December 20th.

Bond ratings all over Europe are being slashed or are being threatened with being slashed. For example, Moody’s Investors Service recently cut Ireland’s bond rating by five levels. Now there is talk that Spain, Belgium and even France could soon all have their debt significantly downgraded as well.

But if the borrowing costs for these troubled nations keep going up, that is just going to add to their financial problems and swell their budget deficits. In turn, larger budget deficits will cause investors to lose even more confidence.

So how far are we away from a major crisis point?

Professor Willem Buiter, the chief economist at Citibank, is warning that quite a few EU nations could financially collapse in the next few months if they are not quickly bailed out….

“The market is not going to wait until March for the EU authorities to get their act together. We could have several sovereign states and banks going under. They are being far too casual.”

Many analysts are even calling for some of these troubled nations to stop using the euro for a while so that they can recover. In fact, Andrew Bosomworth, the head of portfolio management for Pimco in Europe says that Greece, Ireland and Portugal must all quit the euro at least for a little while if they expect to survive….

“Greece, Ireland and Portugal cannot get back on their feet without either their own currency or large transfer payments.”

Sadly, most Americans don’t realize just how bad the situation in Europe is becoming. This is truly a historic crisis that is unfolding.

German Chancellor Angela Merkel declared earlier this year that this is the biggest financial crisis that the EU has ever faced….

“The current crisis facing the euro is the biggest test Europe has faced for decades, even since the Treaty of Rome was signed in 1957.”

So what is the answer?

Well, many are speculating that the EU could actually break up over this whole thing, but another possibility is that we could eventually see much greater integration.

In fact, for the first time the idea that “euro bonds” could be issued is gaining some traction. This would spread the risk of European government debt throughout the European Union. At this point, Andrew Bosomworth says that things have gotten so bad that it now seems inevitable that we will soon see the creation of euro bonds….

“Whether now or later, there is no way around a euro bond.”

So just how bad are things going to get in Europe? Well, earlier this year Anthony Fry, the senior managing director at Evercore Partners had the following to say about the emerging bond crisis in Europe….

“I don’t want to scare anyone but I am considering investing in barbed wire and guns, things are not looking good and rates are heading higher.”

So why should Americans care about all this?

Well, what is happening to these troubled European states is eventually going to happen to us.

If rates on U.S. government debt eventually hit 8 or 12 percent it will literally be financial armageddon in this country. The U.S. government has piled up the biggest mountain of debt in the history of the world, and if we continue piling up debt at the pace that we are, then it will only be a matter of time before the IMF is demanding that we implement our own “austerity measures”.

As I have written about previously, there are already numerous indications that confidence in U.S. Treasuries is dying. If that happens, we could literally see interest costs on the national debt double or even triple.

But it is not just the U.S. government that is in trouble. A bloodbath in the municipal bond market has already started. Hundreds of state and local governments across the United States are on the verge of bankruptcy.

So don’t laugh at what is going on in Ireland or Greece. The next victims could be financially troubled states such as California and Illinois.

In the history of global finance, we have never faced a sovereign debt crisis like we are seeing now. All over the globe governments are being suffocated by absolutely crushing debt loads. Once a couple of dominoes fall, it is going to be really hard to keep the rest of the dominoes from falling.

This is the biggest crisis that the euro has ever faced. At some point Germany will either be unwilling or unable to continuing rescuing the rest of the EU countries from the unsustainable mountains of debt that they have accumulated. When that moment arrives, it is going to throw world financial markets into turmoil.

But this is what happens when we allow long-term debt bubbles to be created. Eventually they always burst.

So keep your eye on the euro, because if a financial collapse does happen in Europe it is going to have a dramatic impact on the United States as well.