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 The “coming economic collapse” has already been happening. You see, the truth is that the economic collapse is not a single event. It has already started, it is happening right now, and it will accelerate during the years ahead. The statistics in this article show very clearly that the U.S. economy has fallen dramatically over the past ten years or so. Unfortunately, there are lots of mockers out there that love to mock the idea of an economic collapse even though one is happening right in front of our eyes. They love to say stuff like this (and I am paraphrasing): “An economic collapse is never going to happen. We can consume far more wealth than we produce forever. We can pile up gigantic mountains of debt forever. There is no way that the party is over. In fact, the party is just getting started. Woo-hoo!” That sounds absolutely ridiculous, but “economists” and “journalists” actually write things that reflect these kinds of sentiments every single day. They do not seem alarmed about the fact that our national debt is nearly 17 times larger than it was 30 years ago. They do not seem alarmed about the fact that the total amount of debt in our country is more than 28 times larger than it was 40 years ago. They do not seem alarmed about the fact that our economic infrastructure is being absolutely gutted and we are steadily becoming poorer as a nation. They just think that the magic formula of print, borrow, spend and consume can go on indefinitely. Unfortunately, the truth is that a massive economic disaster has already started to unfold. We inherited the greatest economic machine in the history of the world, but we totally wrecked it. We have been able to live far, far beyond our means for the last couple of decades thanks to the greatest debt bubble in the history of the planet, but now that debt bubble is getting ready to burst. Anyone with half a brain should be able to see what is coming. Just open your eyes and look at the facts. The following are 40 stats that prove the U.S. economy has already been collapsing over the past decade…
#1 According to the World Bank, U.S. GDP accounted for 31.8 percent of all global economic activity in 2001. That number dropped to 21.6 percent in 2011.
#2 The United States was once ranked #1 in the world in GDP per capita. Today we have slipped to #14.
#3 The United States has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.
#4 Since the year 2000, the size of the U.S. national debt has grown by more than 11 trillion dollars.
#5 Back in the year 2000, our trade deficit with China was 83 billion dollars. Last year, it was 315 billion dollars.
#6 In the year 2000, about 17 million Americans were employed in manufacturing. Today, only about 12 million Americans are employed in manufacturing.
#7 The United States has lost more than 56,000 manufacturing facilities since 2001.
#8 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.
#9 Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost.
#10 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Today, China’s high-tech exports are more than twice the size of U.S. high-tech exports.
#11 In 2002, the United States had a trade deficit in “advanced technology products” of $16 billion with the rest of the world. In 2010, that number skyrocketed to $82 billion.
#12 The United States has lost more than a quarter of all of its high-tech manufacturing jobs since the year 2000.
#13 The number of full-time workers in the United States is nearly 6 million below the old record that was set back in 2007.
#14 The average duration of unemployment in the United States is nearly three times as long as it was back in the year 2000.
#15 Throughout the year 2000, more than 64 percent of all working age Americans had a job. Today, only 58.7 percent of all working age Americans have a job.
#16 The official unemployment rate has been at 7.5 percent or higher for 54 months in a row. That is the longest stretch in U.S. history.
#17 The U.S. government says that the number of Americans “not in the labor force” rose by 17.9 million between 2000 and 2011. During the entire decade of the 1980s, the number of Americans “not in the labor force” rose by only 1.7 million.
#18 The average number of hours worked per employed person per year has fallen by about 100 since the year 2000.
#19 The U.S. economy continues to trade good paying jobs for low paying jobs. 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.
#20 The U.S. economy lost more than 220,000 small businesses during the recent recession.
#21 The percentage of Americans that are self-employed has steadily declined over the past decade and is now at an all-time low.
#22 According to economist Tim Kane, the following is how the number of startup jobs per 1000 Americans breaks down by presidential administration…
Bush Sr.: 11.3
Clinton: 11.2
Bush Jr.: 10.8
Obama: 7.8
#23 In the year 2000, there were only 17 million Americans on food stamps. Today, there are more than 47 million Americans on food stamps.
#24 In the year 2000, the ratio of social welfare benefits to salaries and wages was approximately 21 percent. Today, the ratio of social welfare benefits to salaries and wages is approximately 35 percent.
#25 Since Barack Obama entered the White House, the average price of a gallon of gasoline in the United States has risen from $1.85 to $3.64.
#26 More than twice as many new homes were sold in the United States in 2005 as will be sold in 2013.
#27 Right now there are 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.
#28 The price of ground beef increased by 61 percent between 2002 and 2012.
#29 According to USA Today, water bills have actually tripled over the past 12 years in some areas of the country.
#30 In 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 55.1 percent are covered by employment-based health insurance.
#31 Median household income in the United States has fallen for four years in a row.
#32 As I mentioned recently, the homeownership rate in America is now at its lowest level in nearly 18 years.
#33 Back in the year 2000, the mortgage delinquency rate was about 2 percent. Today, it is nearly 10 percent.
#34 Median household income for families with children dropped by a whopping $6,300 between 2001 and 2011.
#35 Back in 2007, about 28 percent of all working families were considered to be among “the working poor”. Today, that number is up to 32 percent even though our politicians tell us that the economy is supposedly recovering.
#36 According to the Federal Reserve, the median net worth of families in the United States declined “from $126,400 in 2007 to $77,300 in 2010“.
#37 According to the New York Times, the average debt burden for U.S. households that earn $20,000 a year or less “more than doubled to $26,000 between 2001 and 2010“.
#38 Medicare spending increased by 138 percent between 1999 and 2010.
#39 During Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.
#40 Today, more than a million public school students in the United States are homeless. This is the first time that has ever happened in our history. That number has risen by 57 percent since the 2006-2007 school year.
Are there any other items that you would add to this list? Please feel free to join the discussion by posting a comment below…
 Most people have no idea that the U.S. financial system is on the brink of utter disaster. If interest rates continue to rise rapidly, the U.S. economy is going to be facing an economic crisis far greater than the one that erupted back in 2008. At this point, the economic paradigm that the Federal Reserve has constructed only works if interest rates remain super low. If they rise, everything falls apart. Much higher interest rates would mean crippling interest payments on the national debt, much higher borrowing costs for state and local governments, trillions of dollars of losses for bond investors, another devastating real estate crash and the possibility of a multi-trillion dollar derivatives meltdown. Everything depends on interest rates staying low. Unfortunately for the Fed, it only has a certain amount of control over long-term interest rates, and that control appears to be slipping. The yield on 10 year U.S. Treasuries has soared in recent weeks. So have mortgage rates. Fortunately, rates have leveled off for the moment, but if they resume their upward march we could be dealing with a nightmare scenario very, very quickly.
In particular, the yield on 10 year U.S. Treasuries is a very important number to watch. So much else in our financial system depends on that number as CNN recently explained…
Indeed, since May, just before Bernanke announced a probable end to QE3, the yield on 10-year Treasuries has jumped around almost one percentage point, to 2.6%, wiping out more than two years of interest payments. The markets clearly fear that far higher long-term rates are lurking in the absence of exceptional policies to rein them in.
That’s a crucial issue, because those rates are highly influential in determining the future performance of stocks, bonds, and real estate. Investors grant equities higher multiples when long-term rates are lower; both longer-maturity Treasuries and corporate bonds jump when rates decline; and developers pocket more cash flow from their projects when they borrow cheaply, raising the values of office and apartment buildings. When rates reverse course, so do all of those prices the Fed has been endeavoring to swell as a tonic for the economy.
Even though the yield on 10 year U.S. Treasuries has risen substantially, it is still very low. It has a lot more room to go up. In fact, as the chart posted below demonstrates, the yield on 10 year U.S. Treasuries was above 6 percent back in the year 2000…
And the yield on 10 year U.S. Treasuries should rise substantially. It simply is not rational to lend the U.S. government money at less than 3 percent when the real rate of inflation is about 8 percent, the Federal Reserve is rapidly debasing the currency by wildly printing money and the federal government has been piling up debt as if there is no tomorrow…
Anyone that lends the U.S. government money at current rates is being very foolish. You will end up getting back money that has much less purchasing power than you originally invested.
Why would anyone do that?
But if interest rates rise, the U.S. government could be looking at some very hairy interest payments very rapidly. For example, if the average rate of interest on U.S. government debt just gets back to 6 percent (and it has been far higher than that in the past), the federal government will be shelling out a trillion dollars a year just in interest on the national debt.
State and local governments all over the nation could also very rapidly be facing a nightmare scenario.
Detroit is already on the verge of formally declaring the largest municipal bankruptcy in the history of the United States, and there are many other state and local governments from coast to coast that are rapidly heading toward financial disaster even though borrowing costs are super low right now.
If interest rates start rising dramatically, it would cause a huge wave of municipal financial disasters, and municipal bond investors would lose massive amounts of money…
“Muni bond investors are in for the shock of their lives,” said financial advisor Ric Edelman. “For the past 30 years there hasn’t been interest rate risk.”
That risk can be extreme. A one-point rise in the interest rate could cut 10 percent of the value of a municipal bond with a longer duration, he said.
Many retail buyers, though, are not ready for the change and “when it starts, it will be too late for them to react,” he said, adding that he was encouraging investors to look at their portfolio allocation and make changes to protect themselves from interest rate risks now.
In fact, bond investors of all types could be facing monstrous losses if interest rates go up dramatically.
It is being projected that if U.S. Treasury yields rise by an average of 3 percentage points, it will cause bond investors to lose a trillion dollars.
And already we have started to see a race for the exits in the bond market. A total of 80 billion dollars was pulled out of bond funds during the month of June alone. If you want a visual of the flow of money out of the bond market, just check out the chart in this article.
We are witnessing things happen in the financial markets that have not happened in a very, very long time.
And junk bonds will be hit particularly hard. About a decade ago, the average yield on junk bonds was about twice what it is right now. When the junk bond crash comes, there is going to be mass carnage on Wall Street.
But of much greater importance to most Americans is what is happening to mortgage rates. As mortgage rates rise, it becomes much more difficult to sell a house and much more expensive to buy a house.
According to CNBC, there is an increasing amount of concern that the rise in mortgage rates that we are witnessing could throw the real estate market into absolute turmoil…
The housing recovery is in for a major pause due to higher mortgage rates. It is not in the numbers now, and it won’t be for a few months, but it is coming, according to one noted analyst. The market has seen rising rates before, but never so far so fast; there is no precedent for a 45 percent spike in just six weeks. The spike is causing a sense of urgency now, a rush to buy before rates go higher, but that will be short term. Home sales and home prices will both come down if rates don’t return to their lows, and the expectation is that they will not.
We have seen the number of mortgage applications fall for four weeks in a row, and at this point mortgage applications have declined by 28 percent over the past month.
That is an absolutely stunning decline, but it just shows the power of interest rates.
Let’s try to put this into real world terms.
A year ago, the 30 year rate was sitting at 3.66 percent. The monthly payment on a 30 year, $300,000 mortgage at that rate would be $1374.07.
If the 30 year rate rises to 8 percent, the monthly payment on a 30 year, $300,000 mortgage at that rate would be $2201.29.
Does 8 percent sound crazy to you?
It shouldn’t. 8 percent was considered to be normal back in the year 2000…
This is what we are talking about when we talk about the “bubbles” that the Federal Reserve has created. The housing market is now completely and totally dependent on these artificially low mortgage rates. If rates go back to “normal”, the results would be absolutely devastating.
But of course the biggest problem with rapidly rising interest rates is the potential for a derivatives crisis.
There are several major U.S. banks that have tens of trillions of dollars of exposure to derivatives. The following is from one of my previous articles entitled “The Coming Derivatives Panic That Will Destroy Global Financial Markets“…
JPMorgan Chase
Total Assets: $1,812,837,000,000 (just over 1.8 trillion dollars)
Total Exposure To Derivatives: $69,238,349,000,000 (more than 69 trillion dollars)
Citibank
Total Assets: $1,347,841,000,000 (a bit more than 1.3 trillion dollars)
Total Exposure To Derivatives: $52,150,970,000,000 (more than 52 trillion dollars)
Bank Of America
Total Assets: $1,445,093,000,000 (a bit more than 1.4 trillion dollars)
Total Exposure To Derivatives: $44,405,372,000,000 (more than 44 trillion dollars)
Goldman Sachs
Total Assets: $114,693,000,000 (a bit more than 114 billion dollars – yes, you read that correctly)
Total Exposure To Derivatives: $41,580,395,000,000 (more than 41 trillion dollars)
That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 362 times greater than their total assets.
The largest chunk of those derivatives contracts is made up of interest rate derivatives.
I have mentioned this so many times before, but it bears repeating that there are approximately 441 trillion dollars worth of interest rate derivatives sitting out there.
If rapidly rising interest rates suddenly cause trillions of dollars of those bets to start going bad, we could potentially see several of the “too big to fail” banks collapse at the same time.
So what would happen then?
Would the federal government and the Federal Reserve somehow come up with trillions of dollars (or potentially even tens of trillions of dollars) to bail them out?
The Federal Reserve has created a giant mess, and when this current low interest rate bubble ends our financial system is going to slam very violently into a very solid brick wall.
As Graham Summers recently pointed out, entrusting Federal Reserve Chairman Ben Bernanke with control of our financial system is like putting a madman behind the wheel of a speeding vehicle…
Imagine if you were in the car with a driver who was going 85 MPH down a road with a speed limit of 35 MPH (this isn’t a bad metaphor as there is absolutely no evidence that QE creates jobs or GDP growth so there is no reason for the Fed to be doing it in the first place).
The guy is obviously out of control. The dangers of driving this fast are myriad (crashing, running someone over, etc.) while the benefits (you might get where you want to go a little faster assuming you don’t crash) are minimal.
Now imagine that the driver turned to you and said, “I’m thinking about slowing down.” Seems like a great idea doesn’t it? But then a mere two minutes later he says “ we need to continue at 85 MPH for the foreseeable future.”
At this point any sane person would scream, “STOP.” The driver is clearly a madman and shouldn’t be let anywhere near the driver’s seat. Moreover, he’s totally lost all credibility and isn’t to be trusted.
That’s our Fed Chairman.
Sadly, most Americans do not understand any of this.
Most Americans have no idea about the immense economic pain that is going to hit us when interest rates go back to normal levels.
All of this could have been avoided, but instead the American people let the central planners over at the Federal Reserve run wild.
When the bubble finally bursts, the official unemployment rate is going to rocket well up into the double digits, millions of families will lose their homes and America will find itself in the middle of the worst economic crisis in modern U.S. history.
Please share this article with as many people as you can. We need to help people understand what is coming so that they will not be blindsided by it.
 Have you ever seen a disaster movie that is so bad that it is actually good? Well, that is exactly what Syfy’s new television movie entitled “Sharknado” is. In the movie, wild weather patterns actually cause man-eating sharks to come flying out of the sky. It sounds absolutely ridiculous, and it is. You can view the trailer for the movie right here. Unfortunately, we are witnessing something just as ridiculous in the real world right now. In the United States, the mainstream media is breathlessly proclaiming that the U.S. economy is in great shape because job growth is “accelerating” (even though we actually lost 240,000 full-time jobs last month) and because the U.S. stock market set new all-time highs this week. The mainstream media seems to be absolutely oblivious to all of the financial storm clouds that are gathering on the horizon. The conditions for a “perfect storm” are rapidly developing, and by the time this is all over we may be wishing that flying sharks were all that we had to deal with. The following are 10 reasons why the global economy is about to experience its own version of “Sharknado”…
#1 The financial situation in Portugal continues to deteriorate thanks to an emerging political crisis. It all began last week when Portuguese finance minister Vitor Gaspar resigned…
“Mr. Gaspar’s resignation on July 1 has opened a Pandora’s box,” says Nicholas Spiro, managing director of Spiro Sovereign Strategy. “Portuguese politicians from the President down are treating the exit of Mr. Gaspar, the architect of the fiscal and structural reforms demanded by the troika, as a green light for a public debate about the bail-out programme. Yet the manner in which this debate is taking place, with the President undermining the prime minister and the opposition leader seeking to renegotiate the terms of the programme, is spooking markets.”
The general population is becoming increasingly restless as the nation plunges down the exact same path that Greece has gone. Nobody seems to have any solutions as the economic problems continue to escalate. According to Reuters, the president of Portugal has added fuel to the fire by calling for early elections next year…
Portugal’s president threw the bailed-out euro zone country into disarray on Thursday after rejecting a plan to heal a government rift, igniting what critics called a “time bomb” by calling for early elections next year.
Due to all of this instability in Portugal, the yield on Portuguese bonds shot up to 7.51% this week. That is a very bad sign.
#2 The economic depression in Greece continues to deepen, and it is being reported that Greece will not even come close to hitting the austerity targets that it was supposed to hit this year…
A leaked report from the European Commission confirms that Greece will miss its austerity targets yet again by a wide margin. It alleges that Greece lacks the “willingness and capacity” to collect taxes. In fact, Athens is missing targets because the economy is still in freefall and that is because of austerity overkill. The Greek think-tank IOBE expects GDP to fall 5pc this year. It has told journalists privately that the final figure may be -7pc.
Another 7 percent contraction for the Greek economy?
It has already been contracting steadily for years.
At this point, it would be hard to overstate how bad economic conditions inside Greece are. The following is from a recent article by Simon Black…
My friend Illias took a drag of his cigarette as he contemplated my question.
“Our government tells us that this will be a better year. No one really believes them. But all we can do is be optimistic. Too many people are committing suicide.”
His statement probably best sums up the situation in Greece right now. It’s as if the hopelessness has gone stale, and the only thing they have to replace it with is desperate, misguided, faux-optimism. And anger.
There are roughly 11 million people in this country. 3.4 million of them are employed, of which roughly one third work for the government.
1.34 million people are ‘officially’ unemployed. To put this in context, it would be as if there were 36 million officially unemployed in the US.
More startling, if you add the number of ‘inactive’ workers (i.e. those who gave up looking), the total number of unemployed is roughly 57% of the entire Greek work force.
#3 The economic crisis in the third largest country in the eurozone, Italy, has taken another turn for the worse. The unemployment rate in Italy is up to 12.2 percent, which is the highest in 35 years. An average of 134 retail outlets are shutting down in Italy every single day, and the debt of the country has been downgraded again to just above junk status…
Italy’s slow crisis is again flaring up. Its debt trajectory has punched through the danger line over the past two years. The country’s €2.1 trillion (£1.8 trillion) debt – 129pc of GDP – may already be beyond the point of no return for a country without its own currency.
Standard & Poor’s did not say this outright when it downgraded the country to near-junk BBB on Tuesday. But if you read between the lines, it is close to saying the game is up for Italy.
#4 There are rumors that some of the biggest banks in the world are in very serious trouble. For example, Jim Willie (a financial writer who usually puts out really solid information) is insisting that Deutsche Bank is on the verge of collapse…
The best information coming to my desk indicates that three major Western banks are under constant threat of failure overnight, every night, forcing extraordinary measures to avoid failure. They are Deutsche Bank in Germany, Barclays in London, and Citibank in New York. Judging from the ongoing defense from prosecution and cooperation (flipped) with Interpol and distraction of resources, the most likely bank to die next is Deutsche Bank. They are caught with accounting fraud and outright financial fraud over collateral shell games, pertaining to USTreasury Bonds, other sovereign bonds in Southern Europe, and OTC derivatives linked to FOREX currency contracts. D-Bank is a dead man walking.
Time will tell if he is right. But without a doubt the global financial system is extremely vulnerable right now.
Most Americans assume that the problems that caused the financial crash of 2008 were fixed, but that is most definitely NOT the case. In fact, our financial system is far more shaky today than it was just before the last financial crisis. When one major bank goes down, we could start to see others fall like dominoes.
#5 Just before the financial crisis of 2008, the price of oil spiked dramatically. Well, it is starting to happen again. The price of oil hit $106 a barrel on Friday. If the price of oil continues to rise at this pace, it is going to mean big trouble for economies all over the planet.
And as I wrote about recently, every time the average price of a gallon of gasoline in the United States has risen above $3.80 during the past three years, a stock market decline has always followed.
The average price of a gallon of gasoline in the United States reached $3.55 on Friday. This is a number to keep a close eye on.
#6 Mortgage rates are absolutely skyrocketing right now…
The average U.S. rate on the 30-year fixed mortgage rose this week to 4.51%, a two-year high. Rates have been rising on expectations that the Federal Reserve will slow its bond purchases this year.
Mortgage buyer Freddie Mac said Thursday that the average on the 30-year loan jumped from 4.29% the previous week. Just two months ago, it was 3.35% — barely above the record low of 3.31%.
This threatens to throw the U.S. real estate market into a slowdown worse than anything we have seen since the last recession.
#7 This upcoming corporate earnings season is shaping up to be an extremely disappointing one. In fact, the percentage of companies issuing negative earnings guidance for this quarter is at a level that we have never seen before.
So is this a sign that economic activity is starting to slow down significantly?
#8 U.S. stocks are massively overextended right now. In fact, according to Graham Summers, this is the most overextended stocks have been in the past 20 years…
Today, the S&P 500 is sitting a full 30% above its 200-weekly moving average. We have NEVER been this overextended above this line at any point in the last 20 years.
#9 Rapidly rising interest rates are causing the bond market to begin to come apart at the seams. There is concern that the 30 year bull market for bonds is now over and investors are starting to pull their money out of the market at a staggering rate. In fact, 80 billion dollars was pulled out of bond funds during June alone.
#10 Rapidly rising interest rates could cause an implosion of the derivatives market at any moment. As I am so fond of reminding everyone, there are approximately 441 trillion dollars worth of interest rate derivatives out there.
If interest rates continue to soar, we could potentially see a financial disaster that is absolutely unprecedented, and the too big to fail banks would be the most vulnerable.
As USA Today recently reported, there are just five major banks that absolutely dominate derivatives trading in the United States…
Five of the biggest U.S. banks — JPMorgan, Goldman Sachs Group Inc., Bank of America Corp., Citigroup Inc. and Morgan Stanley — account for more than 90% of derivatives contracts. Regulators estimate that nearly half of derivatives are traded outside the United States.
Could you imagine the financial devastation that we would see if several of those banks started to collapse at the same time?
When you hear the mainstream media begin to talk about a “derivatives crisis” involving major banks, that will be a sign that disaster is upon us.
Most Americans don’t realize that Wall Street has been transformed into the largest casino in the history of the world. Most Americans don’t realize that the major banks are literally walking a financial tightrope each and every day.
All it is going to take is one false step and we will be looking at a financial crisis even worse than what happened back in 2008.
So enjoy this little bubble of false prosperity while you can.
It is not going to last for too much longer.
 Is the global economic downturn going to accelerate as we roll into the second half of this year? There is turmoil in the Middle East, we are seeing things happen in the bond markets that we have not seen happen in more than 30 years, and much of Europe has already plunged into a full-blown economic depression. Sadly, most Americans will never understand what is happening until financial disaster strikes them personally. As long as they can go to work during the day and eat frozen pizza and watch reality television at night, most of them will consider everything to be just fine. Unfortunately, the truth is that everything is not fine. The world is becoming increasingly unstable, we are living in the terminal phase of the greatest debt bubble in the history of the planet and the global financial system is even more vulnerable than it was back in 2008. Unfortunately, most people seem to only have a 48 hour attention span at best these days. They don’t have the patience to watch long-term trends develop. And the coming economic collapse is not going to happen all at once. Rather, it is like watching a very, very slow-motion train wreck happen. The coming economic nightmare is going to unfold over a number of years. Yes, there will be moments of great panic, but mostly it will be a steady decline into economic oblivion. And there are a lot of indications that the second half of this year is not going to be as good as the first half was. The following are 19 reasons to be deeply concerned about the global economy as we head into the second half of 2013…
#1 The velocity of money in the United States has plunged to an all-time low. It is extremely difficult to have an “economic recovery” if banks are not lending money and people are not spending it…
#2 The fall of the Egyptian government threatens to bring even more instability to the Middle East. In response to the events in Egypt, the price of oil rose to more than 101 dollars a barrel on Wednesday.
#3 Every time the average price of a gallon of gasoline in the United States has risen over $3.80 in the past three years, a stock market decline has always followed.
#4 As the world becomes increasingly unstable, massive citizen protest movements have been rising all over the globe…
The protests have many different origins. In Brazil people rose up against bus fares, in Turkey against a building project. Indonesians have rejected higher fuel prices, Bulgarians the government’s cronyism.
In the euro zone they march against austerity, and the Arab spring has become a perma-protest against pretty much everything. Each angry demonstration is angry in its own way.
#5 The European sovereign debt crisis is flaring up once again. This time it is Portugal’s turn to take center stage…
From Greece to Cyprus, Slovenia to Spain and Italy, and now most pressingly Portugal, where the finance and foreign ministers resigned in the space of two days, a host of problems is stirring after 10 months of relative calm imposed by the European Central Bank.
Portuguese Prime Minister Pedro Passos Coelho told the nation in an address late on Tuesday that he did not accept the foreign minister’s resignation and would try to go on governing.
If his government does end up collapsing, as is now more likely, it will raise immediate questions about Lisbon’s ability to meet the terms of the 78-billion-euro bailout it agreed with the EU and International Monetary Fund in 2011.
#6 It is being projected that Italy will need a major EU bailout within six months.
#7 Bond investors are starting to panic. In fact, even prominent firms such as Pimco are seeing investors pull massive amounts of money out right now…
In June, investors pulled $9.6bn from Bill Gross’s flagship fund at Pimco, the largest single month of outflows at the fund since Morningstar records began in 1993, the investment research firm said.
The outflows came after investors pulled $1.3bn from the fund in May, which marked the first outflows since December 2011.
Overall, a whopping 80 billion dollars was pulled out of bond funds during June.
#8 Central banks are selling off staggering amounts of U.S. Treasury bonds right now.
#9 U.S. mortgage bonds just suffered their largest quarterly decline in nearly 20 years.
#10 We continue to buy far more from the rest of the world than they buy from us. The U.S. trade deficit for the month of May was 45.0 billion dollars.
#11 The severe drought that the western half of the United States is suffering never seems to end. What will it do to food prices if ranchers and farmers out west have to go through another summer like they did last year?
#12 European car sales have fallen to a 20 year low.
#13 Unemployment in the eurozone is at an all-time high.
#14 Could the paper gold Ponzi scheme be on the verge of crumbling? There are reports that there is now a 100 day delay for gold owners to take physical delivery of their gold from some warehouses owned by the London Metal Exchange…
We’re told that bullion-buyers in London must now wait more than 100 days to take delivery of the bullion for which they have already paid.
The comedic drones at Bloomberg, and officials of the London Metal Exchange itself would have us believe this is due to “warehouse queues.” While precious metals bulls undoubtedly appreciate the imagery implied of a 100-day line-up of armored cars waiting to load their bullion – in the middle of this “bear market” – the implication is fallacious.
In an era of just-in-time inventories; the notion that there can be a 100-day backlog to load bullion into armored cars with the metal already sitting in the warehouse is ludicrous. Clearly what the LME is really reporting here is a greater-than-three-month delay to refine the gold (or silver) being purchased here – and then ship it to their warehouse.
In other words, the “bullion” which traders believe they are purchasing today is in fact merely ore which hasn’t even been dug out of the ground yet.
#15 The number of mortgage applications in the United States is falling at the fastest rate in more than 3 years.
#16 Real disposable income in the United States is falling at the fastest rate in more than 4 years.
#17 The percentage of companies issuing negative earnings guidance for this quarter is at a level that we have never seen before.
#18 Is the dark side of derivatives trading about to be exposed? EU officials claim that 13 major international banks have been colluding to control the trading of derivatives…
The European Commission says many of the world’s largest investment banks appear to have colluded to block attempts by exchanges to trade and offer more transparent prices for financial products known as credit derivatives.
The commission, the executive arm of the European Union, said Monday it has informed 13 banks — including Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley — as well as the industry association for derivatives itself, the International Swaps and Derivatives Association, ISDA, of the preliminary conclusions of an investigation that began in March.
#19 There are 441 trillion dollars of interest rate derivatives sitting out there and interest rates have risen rapidly over the past few weeks. What is going to happen to those derivatives if interest rates keep going higher?
So what do you think?
Are there any items that are missing that you would add to this list?
Please feel free to share what you think by posting a comment below…
 Eventually the money runs out. Much of America was shocked when the city of Detroit defaulted on a $39.7 million debt payment and announced that it was suspending payments on $2.5 billion of unsecured debt, but those who visit my site on a regular basis were probably not too surprised. Anyone with half a brain and a calculator could see this coming from a mile away. But people kept foolishly lending money to the city of Detroit, and now many of them are going to get hit really hard. Detroit Emergency Manager Kevyn Orr has submitted a proposal that would pay unsecured creditors about 10 cents on the dollar. Similar haircuts would be made to underfunded pension and health benefits for retirees. Orr is hoping that the creditors and the unions that he will be negotiating with will accept this package, but he concedes that there is still a “50-50 chance” that the city of Detroit will be forced to formally file for bankruptcy. But what Detroit is facing is not really that unique. In fact, Detroit is a perfect example of what the future of America is going to look like. We live in a nation that is rotting, decaying, drowning in debt and racing toward insolvency. Already there are dozens of other cities across the nation that are poverty-ridden, crime-infested hellholes just like Detroit is, and hundreds of other communities are rapidly heading in that direction. So don’t look down on Detroit. They just got there before the rest of us.
The following are some facts about Detroit that are absolutely mind-blowing…
1 – Detroit was once the fourth-largest city in the United States, and in 1960 Detroit had the highest per-capita income in the entire nation.
2 – Over the past 60 years, the population of Detroit has fallen by 63 percent.
3 – At this point, approximately 40 percent of all the streetlights in the city don’t work.
4 – Some ambulances in the city of Detroit have been used for so long that they have more than 250,000 miles on them.
5 – 210 of the 317 public parks in the city of Detroit have been permanently closed down.
6 – According to the New York Times, there are now approximately 70,000 abandoned buildings in Detroit.
7 – Approximately one-third of Detroit’s 140 square miles is either vacant or derelict.
8 – Less than half of the residents of Detroit over the age of 16 are working at this point.
9 – If you can believe it, 60 percent of all children in the city of Detroit are living in poverty.
10 – According to one very shocking report, 47 percent of the residents of Detroit are functionally illiterate.
11 – Today, police solve less than 10 percent of the crimes that are committed in Detroit.
12 – Ten years ago, there were approximately 5,000 police officers in the city of Detroit. Today, there are only about 2,500 and another 100 are scheduled to be eliminated from the force soon.
13 – Due to budget cutbacks, most police stations in Detroit are now closed to the public for 16 hours a day.
14 – The murder rate in Detroit is 11 times higher than it is in New York City.
15 – Crime has gotten so bad in Detroit that even the police are telling people to “enter Detroit at your own risk“.
16 – Right now, the city of Detroit is facing $20 billion in debt and unfunded liabilities. That breaks down to more than $25,000 per resident.
As Detroit Emergency Manager Kevyn Orr noted last week, it took a very long time for Detroit to get into this condition…
“What the average Detroiter needs to understand is that where we are right now is a culmination of years and years and years of kicking the can down the road,” said Orr, adding that his proposal should not be seen as a “hostile act” but as a step in the right direction.
Does that sound familiar?
It should.
U.S. politicians have also been kicking the can down the road for “years and years and years”.
But eventually you can’t kick the can down the road anymore.
Sometimes it is helpful to step back and look at what we have done to ourselves over the past several decades.
For example, back in 1980 the U.S. national debt was less than one trillion dollars. Today, it is rapidly approaching 17 trillion dollars.
And our debt binge has greatly accelerated under Barack Obama.
During Barack Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.
Isn’t that insane?
In fact, if you started paying off just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.
The following are a lot more facts about our exploding national debt from one of my previous articles entitled “55 Facts About The Debt And U.S. Government Finances That Every American Voter Should Know“…
#1 While Barack Obama has been president, the U.S. government has spent about 11 dollars for every 7 dollars of revenue that it has actually brought in.
#2 During the fiscal year that just ended, the U.S. government took in 2.449 trillion dollars but it spent 3.538 trillion dollars.
#3 During fiscal year 2011, over a trillion dollars of government money was spent on 83 different welfare programs, and those numbers do not even include Social Security or Medicare.
#4 Over the past four years, welfare spending has increased by 32 percent. In inflation-adjusted dollars, spending on those programs has risen by 378 percent over the past 30 years. At this point, more than 100 million Americans are enrolled in at least one welfare program run by the federal government. Once again, these figures do not even include Social Security or Medicare.
#5 Over the past year, the number of Americans getting a free cell phone from the federal government has grown by 43 percent. Now more than 16 million Americans are enjoying what has come to be known as an “Obamaphone”.
#6 When Barack Obama first entered the White House, about 32 million Americans were on food stamps. Now, 47 million Americans are on food stamps. And this has happened during what Obama refers to as “an economic recovery”.
#7 The U.S. government recently spent 27 million dollars on pottery classes in Morocco.
#8 The U.S. Department of Agriculture recently spent $300,000 to encourage Americans to eat caviar at a time when more families than ever are having a really hard time just trying to put any food on the table at all.
#9 During 2012, the National Science Foundation spent $516,000 to support the creation of a video game called “Prom Week”, which apparently simulates “all the social interactions of the event.”
#10 The U.S. Department of Agriculture gave the largest snack food maker in the world (PepsiCo Inc.) a total of 1.3 million dollars in corporate welfare that was used to help build “a Greek yogurt factory in New York.”
#11 The National Science Foundation recently gave researchers at Purdue University $350,000. They used part of that money to help fund a study that discovered that if golfers imagine that a hole is bigger it will help them with their putting.
#12 If you can believe it, $10,000 from the federal government was actually used to purchase talking urinal cakes up in Michigan.
#13 The National Science Foundation recently gave a whopping $697,177 to a New York City-based theater company to produce a musical about climate change.
#14 The National Institutes of Health recently gave $666,905 to a group of researchers that is studying the benefits of watching reruns on television.
#15 The National Science Foundation has given 1.2 million dollars to a team of “scientists” that is spending part of that money on a study that is seeking to determine whether elderly Americans would benefit from playing World of Warcraft or not.
#16 The National Institutes of Health recently gave $548,731 to a team of researchers that concluded that those that drink heavily in their thirties also tend to feel more immature.
#17 The National Science Foundation recently spent $30,000 on a study to determine if “gaydar” actually exists. This is the conclusion that the researchers reached at the end of the study…
“Gaydar is indeed real and… its accuracy is driven by sensitivity to individual facial features”
#18 Back in 2011, the National Institutes of Health spent $592,527 on a study that sought to figure out once and for all why chimpanzees throw poop.
#19 The U.S. government spends more on the military than China, Russia, Japan, India, and the rest of NATO combined. In fact, the United States accounts for 41.0% of all military spending on the planet. China is next with only 8.2%.
#20 In a previous article, I noted that close to 500,000 federal employees now make at least $100,000 a year.
#21 In 2006, only 12 percent of all federal workers made $100,000 or more per year. Now, approximately 22 percent of all federal workers do.
#22 If you can believe it, there are 77,000 federal workers that make more than the governors of their own states do.
#23 During 2010, the average federal employee in the Washington D.C. area received total compensation worth more than $126,000.
#24 The U.S. Department of Defense had just nine civilians earning $170,000 or more back in 2005. When Barack Obama became president, the U.S. Department of Defense had 214 civilians earning $170,000 or more. By June 2010, the U.S. Department of Defense had 994 civilians earning $170,000 or more.
#25 During 2010, compensation for federal employees came to a grand total of approximately 447 billion dollars.
#26 If you can believe it, close to 15,000 retired federal employees are currently collecting federal pensions for life worth at least $100,000 annually. That list includes such names as Newt Gingrich, Bob Dole, Trent Lott, Dick Gephardt and Dick Cheney.
#27 During 2010, the federal government spent $33,387 on the hair care needs of U.S. Senators.
#28 During 2010, U.S. Senators pulled $72,370 out of the “Senate Restaurant Fund”.
#29 During 2010, an average of $4,005,900 of U.S. taxpayer money was spent on “personal” and “office” expenses per Senator.
#30 In 2013, 3.7 million dollars will be spent to support the lavish lifestyles of former presidents such as George W. Bush and Bill Clinton.
#31 During 2011, the federal government spent a total of 1.4 BILLION dollars just on the Obamas.
#32 When you combine all federal government spending, all state government spending and all local government spending, it comes to approximately 41 percent of U.S. GDP. But don’t worry, all of our politicians insist that this is not socialism.
#33 As I have written about previously, less than 30 percent of all Americans lived in a home where at least one person received financial assistance from the federal government back in 1983. Today, that number is sitting at an all-time high of 49 percent.
#34 Back in 1990, the federal government accounted for just 32 percent of all health care spending in America. This year, it is being projected that the federal government will account for more than 50 percent of all health care spending in the United States.
#35 The number of Americans on Medicaid soared from 34 million in 2000 to 54 million in 2011, and it is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
#36 In one of my previous articles, I discussed how 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.
#37 If you can believe it, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years. That comes to approximately $328,404 for each and every household in the United States.
#38 In the United States today, more than 61 million Americans receive some form of Social Security benefits. By 2035, that number is projected to soar to a whopping 91 million.
#39 Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.
#40 When Barack Obama first took office, the U.S. national debt was about 10.6 trillion dollars. Now it is about 16.7 trillion dollars. That is an increase of 6.1 trillion dollars in a little more than 4 years.
#41 The federal government has now run a budget deficit of more than a trillion dollars for four years in a row.
#42 If right this moment you went out and started spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars.
#43 If you were alive when Jesus Christ was born and you spent one million dollars every single day since that point, you still would not have spent one trillion dollars by now.
#44 Some suggest that “taxing the rich” is the answer. Well, if Bill Gates gave every single penny of his entire fortune to the U.S. government, it would only cover the U.S. budget deficit for 15 days.
#45 If the federal government used GAAP accounting standards like publicly traded corporations do, the real federal budget deficit for 2011 would have been 5 trillion dollars instead of 1.3 trillion dollars.
#46 The United States already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain does.
#47 At this point, the United States government is responsible for more than a third of all the government debt in the entire world.
#48 The amount of U.S. government debt held by foreigners is about 5 times larger than it was just a decade ago.
#49 Between 2007 and 2010, U.S. GDP grew by only 4.26%, but the U.S. national debt soared by 61% during that same time period.
#50 The U.S. national debt is now more than 37 times larger than it was when Richard Nixon took us off the gold standard.
#51 The U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was first created.
#52 The U.S. national debt jumped more on the very first day of fiscal year 2013 than it did from 1776 to 1941 combined.
#53 Historically, the interest rate on 10 year U.S. Treasuries has averaged 6.68 percent. If the average interest rate on U.S. government debt rose to that level today, the U.S. government would find itself spending more than a trillion dollars per year just on interest on the national debt.
#54 A recently revised IMF policy paper entitled “An Analysis of U.S. Fiscal and Generational Imbalances: Who Will Pay and How?” projects that U.S. government debt will rise to about 400 percent of GDP by the year 2050.
#55 Boston University economist Laurence Kotlikoff is warning that the U.S. government is facing a gigantic tsunami of unfunded liabilities in the coming years that we are counting on our children and our grandchildren to pay. Kotlikoff speaks of a “fiscal gap” which he defines as “the present value difference between projected future spending and revenue”. His calculations have led him to the conclusion that the federal government is facing a fiscal gap of 222 trillion dollars in the years ahead.
Please share this article with as many people as you can. We are in the process of committing national financial suicide and time is rapidly running out to do anything about it.
Just like Detroit, a day is rapidly approaching when America will not be able to kick the can down the road anymore.
Sadly, our politicians don’t seem inclined to do anything about it and most of the population seems to think that our exploding national debt is not a significant problem.
By the time it becomes clear how wrong they were, it will be far too late to do anything about it.
 A lot of things that have not happened since the last recession are starting to happen again. As you read the list below, you will notice that the year “2009” comes up again and again. There is a reason for that. Many of the same patterns that we witnessed during the last major economic downturn are starting to repeat themselves. In fact, many of the things that are happening right now have not happened in quite a few years. For example, manufacturing activity in the U.S. has contracted for the first time in four years. The inventory to sales ratio is the highest that it has been in four years. Average hourly compensation just experienced the largest decline that we have seen in four years. We also just witnessed the largest decline in the number of mortgage applications that we have seen in four years. After everything that Barack Obama, the U.S. Congress and the Federal Reserve have tried to do, there has been no real economic recovery and now the U.S. economy is suddenly behaving as if it is 2009 all over again. A whole host of recent surveys indicate that the American people are starting to feel a bit better about the economy, but the underlying economic numbers tell an entirely different story. The following are 12 clear signals that the U.S. economy is about to really slow down…
#1 The average interest rate on a 30 year mortgage has risen above 4 percent for the first time in more than a year.
#2 The decline in the number of mortgage applications last week was the largest drop that we have seen since June 2009.
#3 Mark Hanson is reporting that “mass layoffs” have occurred at three large mortgage institutions…
This morning I was made aware that three large private mortgage bankers I follow closely for trends in mortgage finance ALL had mass layoffs last Friday and yesterday to the tune of 25% to 50% of their operations staff (intake, processing, underwriting, document drawing, funding, post-closing).
This obviously means that my reports of refi apps being down 65% to 90% in the past 3 weeks are far more accurate than the lagging MBA index, which is likely on its’ way to print multi-year lows in the next month.
#4 It was just announced that average hourly compensation in the United States experienced its largest drop since 2009 during the first quarter of 2013.
#5 As I wrote about the other day, the Institute for Supply Management manufacturing index declined to 49.0 in May. Any reading below 50 indicates contraction. That was the first contraction in manufacturing activity in the U.S. that we have seen since 2009.
#6 The inventory to sales ratio has hit a level not seen since 2009. That means that there is a lot of inventory sitting out there that people are not buying.
#7 According to the Commerce Department, the demand for computers dropped by a stunning 9 percent during the month of April.
#8 As I noted in a previous article, corporate revenues are falling at Wal-Mart, Proctor and Gamble, Starbucks, AT&T, Safeway, American Express and IBM.
#9 Job growth at small businesses is now at about half the level it was at the beginning of the year.
#10 The stock market is starting to understand that all of these numbers indicate that the U.S. economy is really starting to slow down. The Dow was down 216.95 points on Wednesday, and it dropped below 15,000 for the first time since May 6th.
#11 The S&P 500 has now fallen more than 4 percent since May 22nd. Is this the beginning of a market “correction”, or is this something much bigger than that?
#12 Japanese stocks are now down about 17 percent from the peak of May 22nd. Japan has the third largest economy on the planet and it is one of the most important trading partners for the United States. A major financial crisis in Japan would have very serious implications for the U.S. economy.
If we were going to have an “economic recovery”, it should have happened in 2010, 2011 and 2012. Unfortunately, as a recent Los Angeles Times article detailed, an economic recovery never materialized…
Real GDP growth — the value of goods and services produced after adjusting for inflation — is 15.4% below the 3% growth trend of past recoveries, wrote Edward Leamer, director of the UCLA Anderson Forecast. More robust growth will be necessary to bring this recovery in line with previous ones.
“It’s not a recovery,” he wrote. “It’s not even normal growth. It’s bad.”
Now we are rapidly approaching another major economic downturn.
But poverty in America has continued to experience explosive growth since the end of the last recession and dependence on the federal government is already at an all-time high.
How much worse can things get?
Sadly, they are going to get much, much worse.
What the U.S. economy is experiencing right now is not just a cyclical downturn. Rather, we are in the midst of a long-term economic decline that is the result of decades of very foolish decisions by our leaders.
It is imperative that we get the American people educated about what is happening. If people do not understand what is happening, they are not going to get prepared for the hard years that are coming.
If you have a family member or a friend that does not understand the long-term economic collapse that is unfolding all around us, please show them my article entitled “40 Statistics About The Fall Of The U.S. Economy That Are Almost Too Crazy To Believe“. It goes a good job of pointing out many of the reasons why we are heading for complete and total economic disaster.
And the point is not to fill people with fear. Rather, there is a lot of hope in understanding what is happening and in getting prepared. As we have seen over in Europe, those that get blindsided by economic problems often become totally consumed with despair. Suicide rates have soared in economically-troubled nations such as Greece, Spain and Italy.
And the same thing is going to happen in the United States too. In fact, the suicide rate in the United States has already been rising according to the New York Times…
From 1999 to 2010, the suicide rate among Americans ages 35 to 64 rose by nearly 30 percent, to 17.6 deaths per 100,000 people, up from 13.7.
In fact, today more Americans are killed by suicide than by car accidents.
Isn’t that crazy?
Unfortunately, this is only just the beginning. When the system fails, millions of Americans are going to be convinced that their lives are over. A lot of them are going to do some very stupid things. We want to try to prevent as much of that as possible.
Thanks to decades of incredibly foolish decisions by our leaders, an economic collapse is inevitable. This is especially true considering the fact that our leaders in Washington D.C. and elsewhere will not even consider many of the potential solutions which could help start turning our economic problems around.
So since there are no solutions on the horizon, we need to explain to people what is happening and help them to get as prepared as possible.
The years ahead are going to be very hard, but we have a choice as to how we will respond to the challenges in front of us.
We can face those challenges with fear, or we can face them with courage.
Choose wisely.
 This is no time to be complacent. Massive economic problems are erupting all over the globe, but most people seem to believe that everything is going to be just fine. In fact, a whole bunch of recent polls and surveys show that the American people are starting to feel much better about how the U.S. economy is performing. Unfortunately, the false prosperity that we are currently enjoying is not going to last much longer. Just look at what is happening in Europe. The eurozone is now in the midst of the longest recession that it has ever experienced. Just look at what is happening over in Asia. Economic growth in India is the lowest that it has been in a decade and the Japanese financial system is beginning to spin wildly out of control. One of the only places on the entire planet where serious economic problems have not already erupted is in the United States, and that is only because we have “kicked the can down the road” by recklessly printing money and by borrowing money at an unprecedented rate. Unfortunately, the “sugar high” produced by those foolish measures is starting to wear off. We are going to experience a massive amount of economic pain along with the rest of the world – it is just a matter of time.
But for the moment, there are a lot of skeptics out there.
For the moment, there are a lot of people that are declaring that the problems of the past have been fixed and that we are heading for incredibly bright economic times ahead.
Unfortunately, those people appear to be purposely ignoring the economic horror that is breaking out all over the globe.
The following are 18 signs that massive economic problems are erupting all over the planet…
#1 The eurozone is now in the midst of its longest recession ever. Economic activity in the eurozone has declined for six quarters in a row.
#2 Italy’s economy has now been contracting for seven quarters in a row.
#3 Industrial production in Italy has fallen for 15 months in a row. It has now fallen to its lowest level in about 25 years.
#4 The number of people that are considered to be “seriously deprived” in Italy has doubled over the past two years.
#5 Consumer confidence in France has just hit a new all-time low.
#6 The number of unemployed workers seeking a job in France has hit a brand new all-time record high. Many unemployed workers in France are utterly frustrated at this point…
“I’ve sent CVs everywhere, I come to the unemployment agency every day, for 3 or 4 hours to look for work as a truck driver and there’s never anything,” said 42-year old Djamel Sami, who has been unemployed for a year, leaving a job agency in Paris.
#7 Unemployment in the eurozone as a whole has just hit a brand new all-time record high of 12.2 percent.
#8 Youth unemployment continues to soar to unprecedented heights in Europe. The following is from an article that was recently posted on the website of the Guardian that detailed how bad things are getting in some of the worst countries…
In Greece, 62.5% of young people are out of work, in Spain it’s 56.4%, then Portugal with 42.5%, and then Italy with 40.5%.
#9 Youth unemployment is being partially blamed for the worst rioting that Sweden has seen in many years. The following is how the Daily Mail described the riots…
Sweden is reeling after a third night of rioting in largely run-down immigrant areas of the capital Stockholm.
In the last 48 hours violence has spread to at least ten suburbs with mobs of youths torching hundreds of cars and clashing with police.
It is Sweden’s worst disorder in years and has shocked the country and provoked a debate on how Sweden is coping with youth unemployment and an influx of immigrants.
#10 An astounding 10 percent of all banking deposits were pulled out of banks in Cyprus during the month of April alone.
#11 Economic growth in India is the slowest that it has been in an entire decade.
#12 Suddenly Australia is experiencing some tremendous economic challenges. The following quotes are from a recent Zero Hedge article…
-“We’re seeing a much sharper contraction in the Australian economy than we’d anticipated four or five months ago”. Coffey MD, John Douglas. The engineering group has seen its shares, which traded above $4 in 2007, hit 10c last week.
-“By 10am, the Fitness First gym in the city is packed full of brokers who’ve had a gutful of sitting at their desk doing nothing – salary cuts are starting and next it will be jobs” Perth broker
-“Oh mate, the funding market is dead. You are now seeing a few deeply discounted rights issues for those that are reaching desperate levels ….. liquidity has completely disappeared” Perth broker
#13 The financial system in Japan is beginning to spin wildly out of control. The Japanese stock market has now declined about 15 percent from the peak, and many believe that the yen will continue to get weaker and that interest rates in Japan will start to rise significantly.
#14 Global cash flow is declining at a rate not seen since the last recession. This indicates that we could be headed for a global credit crunch.
#15 Real wages continue to decline in the United States. Even though we are being told that the U.S. is experiencing an “economy recovery”, real weekly earnings have declined from $297.79 in 2010 to $295.49 in 2011 to $294.83 in 2012. (The preceding calculation is based on 1982-1984 dollars)
#16 Wall Street is buzzing about the fact that “the Hindenburg Omen” appeared at the end of last week. So exactly what is “the Hindenburg Omen”? The following are the criteria that are used to determine whether it has appeared or not…
1. The daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 2.2 percent of total NYSE issues traded that day.
2. The smaller of these numbers is greater than or equal to 69 (68.772 is 2.2% of 3126). This is not a rule but more like a checksum. This condition is a function of the 2.2% of the total issues.
3. That the NYSE 10 Week moving average is rising.
4. That the McClellan Oscillator ( a market breadth indicator used to evaluate the rate of money entering or leaving the market and interpretively indicate overbought or oversold conditions of the market)is negative on that same day.
5. That new 52 Week Highs cannot be more than twice the new 52 Week Lows (however it is fine for new 52 Week Lows to be more than double new 52 Week Highs).
When the Hindenburg Omen makes an appearance, it supposedly means that the U.S. stock market is likely to experience a serious decline within the next 40 days.
#17 As I wrote about the other day, the SentimenTrader Smart/Dumb Money Index is now the lowest that it has been in more than two years. That means that lots of “smart money” has been getting out of the market and lots of “dumb money” has been pouring in.
#18 Margin debt on the New York Stock Exchange has set a new all-time high. The following is from a recent Market Oracle article…
Margin debt—that’s the amount of money borrowed to purchase stocks—on the New York Stock Exchange (NYSE) reached its all-time high in April. Margin debt on the NYSE registered at $384.3 billion as the key stock indices hit new record-highs. (Source: New York Stock Exchange web site, last accessed May 29, 2013.) The highest margin debt ever reached prior to this was in July of 2007, when it stood just above $381.0 billion. At that time, just like today, the key stock indices were near their peaks and “buy now before it’s too late” was the prominent theme of the day
Whenever margin debt spikes like this, a stock market crash almost always follows. If you doubt this, just check out the chart in this article.
Wall Street has had a good couple of years, but it has been a “false prosperity” that has been pumped up by reckless money printing by the Federal Reserve. Just like all of the other stock market bubbles that we have seen in recent years, this one is going to burst too. And as Marc Faber recently pointed out, this bubble has been particularly beneficial to the wealthy…
The Fed has been flooding the system with money. The problem is the money doesn’t flow into the system evenly. It doesn’t increase economic activity and asset prices in concert. Instead, it creates dangerous excesses in countries and asset classes. Money-printing fueled the colossal stock-market bubble of 1999-2000, when the Nasdaq more than doubled, becoming disconnected from economic reality. It fueled the housing bubble, which burst in 2008, and the commodities bubble. Now money is flowing into the high-end asset market – things like stocks, bonds, art, wine, jewelry, and luxury real estate.
Money-printing boosts the economy of the people closest to the money flow. But it doesn’t help the worker in Detroit, or the vast majority of the middle class. It leads to a widening wealth gap. The majority loses, and the minority wins.
The fact that the U.S. stock market has set new all-time record high after new all-time record high in recent months means very little. At this point, the stock market has become completely divorced from economic reality. When this current bubble bursts, the adjustment is going to be very painful. Wall Street will likely whine and complain and ask for more bailouts, but they may find that authorities are not nearly as sympathetic this time.
Much of the rest of the world is already experiencing the next major wave of the economic collapse. Reckless money printing by the Fed and reckless borrowing and spending by the federal government may have delayed the inevitable in the United States for a little while, but those measures have also made our long-term problems even worse.
There was one piece of advice that Ben Bernanke included in his commencement speech to students at Princeton recently that I thought was particularly ironic…
“Don’t be afraid to let the drama play out.”
Will he take his own advice when the next great financial crisis strikes the United States?
That seems very unlikely.
Unfortunately, things are not going to be so easy to fix this next time.
What happened back in 2008 was just a preview.
What is coming next is going to absolutely shock the world.
 If you know someone that actually believes that the U.S. economy is in good shape, just show them the statistics in this article. When you step back and look at the long-term trends, it is undeniable what is happening to us. We are in the midst of a horrifying economic decline that is the result of decades of very bad decisions. 30 years ago, the U.S. national debt was about one trillion dollars. Today, it is almost 17 trillion dollars. 40 years ago, the total amount of debt in the United States was about 2 trillion dollars. Today, it is more than 56 trillion dollars. At the same time that we have been running up all of this debt, our economic infrastructure and our ability to produce wealth has been absolutely gutted. Since 2001, the United States has lost more than 56,000 manufacturing facilities and millions of good jobs have been shipped overseas. Our share of global GDP declined from 31.8 percent in 2001 to 21.6 percent in 2011. The percentage of Americans that are self-employed is at a record low, and the percentage of Americans that are dependent on the government is at a record high. The U.S. economy is a complete and total mess, and it is time that we faced the truth.
The following are 40 statistics about the fall of the U.S. economy that are almost too crazy to believe…
#1 Back in 1980, the U.S. national debt was less than one trillion dollars. Today, it is rapidly approaching 17 trillion dollars…
#2 During Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.
#3 The U.S. national debt is now more than 23 times larger than it was when Jimmy Carter became president.
#4 If you started paying off just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.
#5 The federal government is stealing more than 100 million dollars from our children and our grandchildren every single hour of every single day.
#6 Back in 1970, the total amount of debt in the United States (government debt + business debt + consumer debt, etc.) was less than 2 trillion dollars. Today it is over 56 trillion dollars…
#7 According to the World Bank, U.S. GDP accounted for 31.8 percent of all global economic activity in 2001. That number dropped to 21.6 percent in 2011.
#8 The United States has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.
#9 According to The Economist, the United States was the best place in the world to be born into back in 1988. Today, the United States is only tied for 16th place.
#10 Incredibly, more than 56,000 manufacturing facilities in the United States have been permanently shut down since 2001.
#11 There are less Americans working in manufacturing today than there was in 1950 even though the population of the country has more than doubled since then.
#12 According to the New York Times, there are now approximately 70,000 abandoned buildings in Detroit.
#13 When NAFTA was pushed through Congress in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars. By 2010, we had a trade deficit with Mexico of 61.6 billion dollars.
#14 Back in 1985, our trade deficit with China was approximately 6 million dollars (million with a little “m”) for the entire year. In 2012, our trade deficit with China was 315 billion dollars. That was the largest trade deficit that one nation has had with another nation in the history of the world.
#15 Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975.
#16 According to the Economic Policy Institute, the United States is losing half a million jobs to China every single year.
#17 Back in 1950, more than 80 percent of all men in the United States had jobs. Today, less than 65 percent of all men in the United States have jobs.
#18 At this point, an astounding 53 percent of all American workers make less than $30,000 a year.
#19 Small business is rapidly dying in America. At this point, only about 7 percent of all non-farm workers in the United States are self-employed. That is an all-time record low.
#20 Back in 1983, the bottom 95 percent of all income earners in the United States had 62 cents of debt for every dollar that they earned. By 2007, that figure had soared to $1.48.
#21 In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.
#22 According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.
#23 The six heirs of Wal-Mart founder Sam Walton have as much wealth as the bottom one-third of all Americans combined.
#24 According to the U.S. Census Bureau, more than 146 million Americans are either “poor” or “low income”.
#25 According to the U.S. Census Bureau, 49 percent of all Americans live in a home that receives direct monetary benefits from the federal government. Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.
#26 Overall, the federal government runs nearly 80 different “means-tested welfare programs”, and at this point more than 100 million Americans are enrolled in at least one of them.
#27 Back in 1965, only one out of every 50 Americans was on Medicaid. Today, one out of every 6 Americans is on Medicaid, and things are about to get a whole lot worse. It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
#28 As I wrote recently, 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.
#29 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.
#30 Right now, there are approximately 56 million Americans collecting Social Security benefits. By 2035, that number is projected to soar to an astounding 91 million.
#31 Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.
#32 Today, the number of Americans on Social Security Disability now exceeds the entire population of Greece, and the number of Americans on food stamps now exceeds the entire population of Spain.
#33 According to a report recently issued by the Pew Research Center, on average Americans over the age of 65 have 47 times as much wealth as Americans under the age of 35.
#34 U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
#35 As I mentioned recently, the homeownership rate in America is now at its lowest level in nearly 18 years.
#36 There are now 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.
#37 45 percent of all children are living in poverty in Miami, more than 50 percent of all children are living in poverty in Cleveland, and about 60 percent of all children are living in poverty in Detroit.
#38 Today, more than a million public school students in the United States are homeless. This is the first time that has ever happened in our history.
#39 When Barack Obama first entered the White House, about 32 million Americans were on food stamps. Now, more than 47 million Americans are on food stamps.
#40 According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”
 Is the coming financial collapse going to be inflationary or deflationary? Are we headed for rampant inflation or crippling deflation? This is a subject that is hotly debated by economists all over the country. Some insist that the wild money printing that the Federal Reserve is doing combined with out of control government spending will eventually result in hyperinflation. Others point to all of the deflationary factors in our economy and argue that we will experience tremendous deflation when the bubble economy that we are currently living in bursts. So what is the truth? Well, for the reasons listed below, I believe that we will see both. The next major financial panic will cause a substantial deflationary wave first, and after that we will see unprecedented inflation as the central bankers and our politicians respond to the financial crisis. This will happen so quickly that many will get “financial whiplash” as they try to figure out what to do with their money. We are moving toward a time of extreme financial instability, and different strategies will be called for at different times.
So why will we see deflation first? The following are some of the major deflationary forces that are affecting our economy right now…
The Velocity Of Money Is At A 50 Year Low
The rate at which money circulates in our economy is the lowest that it has been in more than 50 years. It has been steadily falling since the late 1990s, and this is a clear sign that economic activity is slowing down. The shaded areas in the chart represent recessions, and as you can see, the velocity of money always slows down during a recession. But even though the government is telling us that we are not in a recession right now, the velocity of money continues to drop like a rock. This is one of the factors that is putting a tremendous amount of deflationary pressure on our economy…
The Trade Deficit
Even single month, far more money leaves this country than comes into it. In fact, the amount going out exceeds the amount coming in by about half a trillion dollars each year. This is extremely deflationary. Our system is constantly bleeding cash, and this is one of the reasons why the federal government has felt a need to run such huge budget deficits and why the Federal Reserve has felt a need to print so much money. They are trying to pump money back into a system that is constantly bleeding massive amounts of cash. Since 1975, the amount of money leaving the United States has exceeded the amount of money coming into the country by more than 8 trillion dollars. The trade deficit is one of our biggest economic problems, and yet most Americans do not even understand what it is. As you can see below, our trade deficit really started getting bad in the late 1990s…
Wages And Salaries As A Percentage Of GDP
One of the primary drivers of inflation is consumer spending. But consumers cannot spend money if they do not have it. And right now, wages and salaries as a percentage of GDP are near a record low. This is a very deflationary state of affairs. The percentage of low paying jobs in the U.S. economy continues to increase, and we have witnessed an explosion in the ranks of the “working poor” in recent years. For consumer prices to rise significantly, more money is going to have to get into the hands of average American consumers first…
When The Debt Bubble Bursts
Right now, we are living in the greatest debt bubble in the history of the world. When a debt bubble bursts, fear and panic typically cause the flow of money and the flow of credit to really tighten up. We saw that happen at the beginning of the Great Depression of the 1930s, we saw that happen back in 2008, and we will see it happen again. Deleveraging is deflationary by nature, and it can cause economic activity to grind to a standstill very rapidly.
During the next major wave of the economic collapse, there will be times when it will seem like hardly anyone has any money. The “easy credit” of the past will be long gone, and large numbers of individuals and small businesses will find it very difficult to get loans.
When the debt bubble bursts, cash will be king – at least for a short period of time. Those that do not have any savings at all will really be hurting.
And some of the financial elite seem to be positioning themselves for what is coming. For example, even though he has been making public statements about how great stocks are right now, the truth is that Warren Buffett is currently sitting on $49 billion in cash. That is the most that he has ever had sitting in cash.
Does he know something?
Of course there will be a tremendous amount of pressure on the U.S. government and the Federal Reserve to do something once a financial crash happens. The response by the federal government and the Federal Reserve will likely be extremely inflationary as they try to resuscitate the system. It will probably be far more dramatic than anything we have seen so far.
So cash will not be king for long. In fact, eventually cash will be trash. The actions of the U.S. government and the Federal Reserve in response to the coming financial crisis will greatly upset much of the rest of the world and cause the death of the U.S. dollar.
That is why gold, silver and other hard assets are going to be so good to have in the long-term. In the short-term they will experience wild swings in price, but if you can handle the ride you will be smiling in the end.
In the coming years, we are going to experience both inflation and deflation, and neither one will be pleasant at all.
Get prepared while you still can, because time is running out.
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40 Statistics About The Fall Of The U.S. Economy That Are Almost Too Crazy To Believe
The following are 40 statistics about the fall of the U.S. economy that are almost too crazy to believe…
#1 Back in 1980, the U.S. national debt was less than one trillion dollars. Today, it is rapidly approaching 17 trillion dollars…
#2 During Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.
#3 The U.S. national debt is now more than 23 times larger than it was when Jimmy Carter became president.
#4 If you started paying off just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.
#5 The federal government is stealing more than 100 million dollars from our children and our grandchildren every single hour of every single day.
#6 Back in 1970, the total amount of debt in the United States (government debt + business debt + consumer debt, etc.) was less than 2 trillion dollars. Today it is over 56 trillion dollars…
#7 According to the World Bank, U.S. GDP accounted for 31.8 percent of all global economic activity in 2001. That number dropped to 21.6 percent in 2011.
#8 The United States has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.
#9 According to The Economist, the United States was the best place in the world to be born into back in 1988. Today, the United States is only tied for 16th place.
#10 Incredibly, more than 56,000 manufacturing facilities in the United States have been permanently shut down since 2001.
#11 There are less Americans working in manufacturing today than there was in 1950 even though the population of the country has more than doubled since then.
#12 According to the New York Times, there are now approximately 70,000 abandoned buildings in Detroit.
#13 When NAFTA was pushed through Congress in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars. By 2010, we had a trade deficit with Mexico of 61.6 billion dollars.
#14 Back in 1985, our trade deficit with China was approximately 6 million dollars (million with a little “m”) for the entire year. In 2012, our trade deficit with China was 315 billion dollars. That was the largest trade deficit that one nation has had with another nation in the history of the world.
#15 Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975.
#16 According to the Economic Policy Institute, the United States is losing half a million jobs to China every single year.
#17 Back in 1950, more than 80 percent of all men in the United States had jobs. Today, less than 65 percent of all men in the United States have jobs.
#18 At this point, an astounding 53 percent of all American workers make less than $30,000 a year.
#19 Small business is rapidly dying in America. At this point, only about 7 percent of all non-farm workers in the United States are self-employed. That is an all-time record low.
#20 Back in 1983, the bottom 95 percent of all income earners in the United States had 62 cents of debt for every dollar that they earned. By 2007, that figure had soared to $1.48.
#21 In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.
#22 According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.
#23 The six heirs of Wal-Mart founder Sam Walton have as much wealth as the bottom one-third of all Americans combined.
#24 According to the U.S. Census Bureau, more than 146 million Americans are either “poor” or “low income”.
#25 According to the U.S. Census Bureau, 49 percent of all Americans live in a home that receives direct monetary benefits from the federal government. Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.
#26 Overall, the federal government runs nearly 80 different “means-tested welfare programs”, and at this point more than 100 million Americans are enrolled in at least one of them.
#27 Back in 1965, only one out of every 50 Americans was on Medicaid. Today, one out of every 6 Americans is on Medicaid, and things are about to get a whole lot worse. It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
#28 As I wrote recently, 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.
#29 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.
#30 Right now, there are approximately 56 million Americans collecting Social Security benefits. By 2035, that number is projected to soar to an astounding 91 million.
#31 Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.
#32 Today, the number of Americans on Social Security Disability now exceeds the entire population of Greece, and the number of Americans on food stamps now exceeds the entire population of Spain.
#33 According to a report recently issued by the Pew Research Center, on average Americans over the age of 65 have 47 times as much wealth as Americans under the age of 35.
#34 U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
#35 As I mentioned recently, the homeownership rate in America is now at its lowest level in nearly 18 years.
#36 There are now 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.
#37 45 percent of all children are living in poverty in Miami, more than 50 percent of all children are living in poverty in Cleveland, and about 60 percent of all children are living in poverty in Detroit.
#38 Today, more than a million public school students in the United States are homeless. This is the first time that has ever happened in our history.
#39 When Barack Obama first entered the White House, about 32 million Americans were on food stamps. Now, more than 47 million Americans are on food stamps.
#40 According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”