Is the U.S. economy about to experience a major downturn? Unfortunately, there are a whole bunch of signs that economic activity in the United States is really slowing down right now. Freight volumes and freight expenditures are way down, consumer confidence has declined sharply, major retail chains all over America are closing hundreds of stores, and the “sequester” threatens to give the American people their first significant opportunity to experience what “austerity” tastes like. Gas prices are going up rapidly, corporate insiders are dumping massive amounts of stock and there are high profile corporate bankruptcies in the news almost every single day now. In many ways, what we are going through right now feels very similar to 2008 before the crash happened. Back then the warning signs of economic trouble were very obvious, but our politicians and the mainstream media insisted that everything was just fine, and the stock market was very much detached from reality. When the stock market did finally catch up with reality, it happened very, very rapidly. Sadly, most people do not appear to have learned any lessons from the crisis of 2008. Americans continue to rack up staggering amounts of debt, and Wall Street is more reckless than ever. As a society, we seem to have concluded that 2008 was just a temporary malfunction rather than an indication that our entire system was fundamentally flawed. In the end, we will pay a great price for our overconfidence and our recklessness.
So what will the rest of 2013 bring?
Hopefully the economy will remain stable for as long as possible, but right now things do not look particularly promising.
The following are 20 signs that the U.S. economy is heading for big trouble in the months ahead…
#1 Freight shipment volumes have hit their lowest level in two years, and freight expenditures have gone negative for the first time since the last recession.
#2 The average price of a gallon of gasoline has risen by more than 50 cents over the past two months. This is making things tougher on our economy, because nearly every form of economic activity involves moving people or goods around.
#4 Atlantic City’s newest casino, Revel, has just filed for bankruptcy. It had been hoped that Revel would help lead a turnaround for Atlantic City.
#5 A state-appointed review board has determined that there is “no satisfactory plan” to solve Detroit’s financial emergency, and many believe that bankruptcy is imminent. If Detroit does declare bankruptcy, it will be the largest municipal bankruptcy in U.S. history.
#6 David Gallagher, the CEO of Town Sports International, recently said that his company is struggling right now because consumers simply do not have as much disposable income anymore…
“As we moved into January membership trends were tracking to expectations in the first half of the month, but fell off track and did not meet our expectations in the second half of the month. We believe the driver of this was the rapid decline in consumer sentiment that has been reported and is connected to the reduction in net pay consumers earn given the changes in tax rates that went into effect in January.“
#7 According to the Conference Board, consumer confidence in the U.S. has hit its lowest level in more than a year.
#8 Sales of the Apple iPhone have been slower than projected, and as a result Chinese manufacturing giant FoxConn has instituted a hiring freeze. The following is from a CNET report that was posted on Wednesday…
The Financial Times noted that it was the first time since a 2009 downturn that the company opted to halt hiring in all of its facilities across the country. The publication talked to multiple recruiters.
The actions taken by Foxconn fuel the concern over the perceived weakened demand for the iPhone 5 and slumping sentiment around Apple in general, with production activity a leading indicator of interest in the product.
#9 In 2012, global cell phone sales posted their first decline since the end of the last recession.
#10 We appear to be in the midst of a “retail apocalypse“. It is being projected that Sears, J.C. Penney, Best Buy and RadioShack will also close hundreds of stores by the end of 2013.
#11 An internal memo authored by a Wal-Mart executive that was recently leaked to the press said that February sales were a “total disaster” and that the beginning of February was the “worst start to a month I have seen in my ~7 years with the company.”
#12 If Congress does not do anything and “sequestration” goes into effect on March 1st, the Pentagon says that approximately 800,000 civilian employees will be facing mandatory furloughs.
#13 Barack Obama is admitting that the “sequester” could have a crippling impact on the U.S. economy. The following is from a recent CNBC article…
Obama cautioned that if the $85 billion in immediate cuts — known as the sequester — occur, the full range of government would feel the effects. Among those he listed: furloughed FBI agents, reductions in spending for communities to pay police and fire personnel and teachers, and decreased ability to respond to threats around the world.
He said the consequences would be felt across the economy.
“People will lose their jobs,” he said. “The unemployment rate might tick up again.”
#14 If the “sequester” is allowed to go into effect, the CBO is projecting that it will cause U.S. GDP growth to go down by at least 0.6 percent and that it will “reduce job growth by 750,000 jobs“.
#15 According to a recent Gallup survey, 65 percent of all Americans believe that 2013 will be a year of “economic difficulty“, and 50 percent of all Americans believe that the “best days” of America are now in the past.
#16 U.S. GDP actually contracted at an annual rate of 0.1 percent during the fourth quarter of 2012. This was the first GDP contraction that the official numbers have shown in more than three years.
#17 For the entire year of 2012, U.S. GDP growth was only about 1.5 percent. According to Art Cashin, every time GDP growth has fallen this low for an entire year, the U.S. economy has always ended up going into a recession.
The world’s richest countries saw their economies contract for the first time in almost four years during the final three months of 2012, the Organisation for Economic Co-operation and Development said.
The Paris-based thinktank said gross domestic product across its 34 member states fell by 0.2% – breaking a period of rising activity stretching back to a 2.3% slump in output in the first quarter of 2009.
All the major economies of the OECD – the US, Japan, Germany, France, Italy and the UK – have already reported falls in output at the end of 2012, with the thinktank noting that the steepest declines had been seen in the European Union, where GDP fell by 0.5%. Canada is the only member of the G7 currently on course to register an increase in national output.
#20 Even some of the biggest names on Wall Street are warning that we are heading for an economic collapse. For example, Seth Klarman, one of the most respected investors on Wall Street, said in his year-end letter that the collapse of the U.S. financial system could happen at any time…
“Investing today may well be harder than it has been at any time in our three decades of existence,” writes Seth Klarman in his year-end letter. The Fed’s “relentless interventions and manipulations” have left few purchase targets for Baupost, he laments. “(The) underpinnings of our economy and financial system are so precarious that the un-abating risks of collapse dwarf all other factors.”
So what do you think is going to happen to the U.S. economy in the months ahead?
Please feel free to express your opinion by leaving a comment below…
If you still have a good job, you might want to hold on to it very tightly because there are a whole bunch of signs that unemployment in the United States is about to start getting worse again. Over the past several weeks, a substantial number of large corporations have announced disappointing earnings for the third quarter. Many of those large corporations are also loaded up with huge amounts of debt. So what is the solution? Well, the favorite solution on Wall Street these days seems to be to lay off workers. In fact, it is almost turning into a feeding frenzy. Since September 1st, we have seen more job cuts announced than during any other two month period since the start of 2010. These announcements represent future layoffs and job losses which are not even showing up in the unemployment numbers yet. So needless to say, things don’t look very promising for the end of 2012 or for the beginning of 2013. If this race to eliminate jobs becomes a stampede, will we see the bottom fall out of the employment market?
If you are concerned about whether or not you will still have a job 12 months from now, you might find the numbers posted below to be quite alarming. We have not seen layoff announcements come this fast and this furious since the gloomy days of the last recession.
According to Bloomberg, job cuts are well ahead of the pace set last year…
North American companies have announced plans to eliminate more than 62,600 positions at home and abroad since Sept. 1, the biggest two-month drop since the start of 2010, according to data compiled by Bloomberg. Firings total 158,100 so far this year, more than the 129,000 job cuts in the same period in 2011.
So what happens if the economy really starts sliding rapidly and this loss of jobs becomes an avalanche?
Can the U.S. economy and the American people handle another major economic downturn?
Some of the biggest names in the business world have announced job cuts in recent weeks. The following are 15 signs that layoffs and job losses are skyrocketing…
1. Dow Chemical has announced that it will be closing about 20 plants and will be letting about 2,400 workers go.
2. Colgate-Palmolive has announced that they will be eliminating about 2,300 jobs.
8. Electronics manufacturer Sharp reportedly plans to eliminate 11,000 jobs.
9. Engine maker Cummins Inc. has announced that they plan to get rid of about 1,500 jobs by the end of 2012.
10. Earlier this month Applied Materials announced a plan that will eliminate up to 1,300 jobs.
11. Zynga (known for making video games for Facebook such as FarmVille) has announced that they are reducing their workforce by about 5 percent.
12. Lattice Semiconductor has announced plans to eliminate about 13 percent of their jobs.
13. Alcatel-Lucent recently announced a plan to eliminate more than 5000 jobs all over the globe.
14. Siemens AG has announced that the number of positions being eliminated may reach 10,000 by the end of the year.
15. Banking giant UBS plans to eliminate up to 5,000 jobs.
Please keep in mind that these job cuts do not show up in the unemployment numbers yet. When big corporations announce the elimination of jobs, it often takes a while before those job losses actually take place.
Sadly, I believe that this is just the tip of the iceberg. I am convinced that the layoffs and the job losses are going to get a lot worse.
Those of you that read my articles regularly already know that our economic system is becoming increasingly unstable. We could literally plunge into another major recession at any moment.
Not that we need any more economic trouble. Tens of millions of American families are having to fight tooth and nail just to make it from month to month right now.
There aren’t enough jobs and the middle class is rapidly shrinking. Even if you do have a job, that does not mean that you are doing okay. About a quarter of all jobs do not even pay enough to lift a family of four above the poverty level, and entry level wages for those with just a high school education have been steadily declining over the past 40 years. If you doubt this, just check out this chart.
So what is going to happen if we do have another avalanche of job losses like we saw back in 2008 and 2009?
Will even more of us end up dependent on the government?
We are told that we are in the midst of an “economic recovery”, but the number of Americans that are dependent on the government just continues to soar. In fact, at this point it is at an all-time high.
If the economy is getting better, then why does the number of Americans on food stamps just keep going up? To get an idea of just how massive the food stamp program has become, just check out this infographic.
One of the most frightening things about the possibility of another major economic downturn is the loss of hope that it could bring.
At this point, most Americans still believe that things will get better eventually.
But what is going to happen when large segments of our population lose all hope?
How desperate will they become?
When people become desperate, they tend to do desperate things.
Just check out what happened to a family down in Woodstock, Georgia the other day. They had just lost their home to foreclosure, and they were getting ready to move out. So they posted an ad on Craigslist for people to come over and get some things that they were planning to get rid of. What happened next is a glimpse into the kind of desperate behavior that we may see during the next major economic downturn…
Their online post was just a well-meaning ad for a giveaway in their driveway outside the small house, a giveaway scheduled to begin at 10 a.m. Wednesday.
But big crowds showed up and ended up taking practically everything inside the house, too.
Wednesday night, Michael Vercher walked 11Alive’s Jon Shirek through his family’s almost empty soon-to-be former home.
“Well, when we got to the house, I mean, pretty much — this,” he said as he stepped from the foyer into the living room.
Their home — ransacked, ravaged, raked over.
Almost everything inside — gone.
My wife and I once used Craigslist quite a bit, but incidents like this make one question the wisdom of inviting strangers to come to your home.
Sadly, the truth is that society is rapidly decaying, and the worse unemployment becomes the more desperate people are going to get.
So what do you think about all of this?
Do you have any stories that you would like to share?
Please feel free to post a comment with your thoughts below…
The U.S. economy is in a massive amount of trouble. There aren’t enough jobs. There isn’t enough money to go around. Business activity is slowing down again. Household wealth has been falling. Food prices have been rising. Many state and local governments all over the country are flat broke and are drowning in debt. The federal government has been rolling up unprecedented amounts of debt in an attempt to keep things going, but everyone knows that kind of borrowing is simply unsustainable. So where do we go from here? We consume far more than we produce and we use debt to make up the difference. 40 years ago the total amount of debt in America (government, business and consumer) was less than 2 trillion dollars. Today it is nearly 55 trillion dollars. How in the world did we let the total amount of debt in the United States grow more than 27 times larger over the past 40 years? Our economic system is fundamentally broken, but most Americans don’t realize it yet because times are still relatively good.
However, the next great economic crisis is going to wake a whole lot of Americans up.
And when they realize what has happened to our future, they are going to be really, really angry.
Enjoy the good times while they last. The next recession is rapidly approaching, and it will not be pleasant.
The following are 20 signs that all point to the exact same thing….
#1 The unemployment rate in the U.S. has been above 8 percent for 40 months in a row, and 42 percent of all unemployed Americans have been out of work for at least half a year. As I wrote about recently, there are never going to be enough jobs in America ever again. As bad as things are right now, they are about to get even worse. So what is our country going to look like once the unemployment rate starts shooting up rapidly once again?
#2 35 percent of all unemployed workers have had to dip into retirement savings in order to make ends meet over the past year.
#3 Since 2008, the U.S. economy has lost 1.3 million jobs while at the same time 3.6 million more Americans have been added to Social Security’s disability insurance program.
#4 A recent survey conducted by the National Association for Business Economics found that only 23 percent of all U.S. companies plan to hire more workers over the next 6 months. When the same question was asked a few months ago that number was at 39 percent.
#5 An important measure of U.S. manufacturing activity has fallen to its lowest level since June 2009.
#6 Hundreds of thousands of federal jobs at civilian agencies will likely be lost if Congress allows the automatic federal budget cuts to go into effect next year. The following is from a recent article posted on federalnewsradio.com….
A report released Tuesday suggests that several hundred thousand federal jobs at civilian agencies would be on the chopping block within the next year if Congress lets the automatic budget cutting process known as sequestration go into effect.
The study, authored by George Mason University professor Stephen Fuller, adds a new dimension to a budget debate that’s so far been centered on sequestration’s effects on the military.
#7 The teen unemployment rate in Washington D.C. right now is 51.7 percent.
#8 Gallup’s U.S. Economic Confidence Index is now the lowest that it has been since January.
#9 The median net worth of U.S. households in 2007 was $126,400. By 2010, it had fallen to just $77,300.
#13 The percentage of U.S. households that are spending more than half their incomes on housing is at an all-time high.
#14 For the first time in modern history, Canadian households are wealthier than American households are.
#15 One recent poll found that 42 percent of all Americans believe that China is the leading economic power in the world while only 36 percent believe that the U.S. is still the leading economic power in the world.
#16 According to the federal government, the price of food rose much faster than the general rate of inflation did during 2011. Just check out these rates of food inflation for 2011….
Oils and Fats: +9.3%
If that happened during a somewhat “normal year”, what will food prices look like after we are done with the drought of 2012?
#17 The price of a bushel of corn has risen by 54 percent since mid-June.
#18 According to one survey, 42 percent of all American workers are living paycheck to paycheck.
#19 A different survey found that 28 percent of all Americans have absolutely no emergency savings at all right now.
#20 Federal Reserve Chairman Ben Bernanke made the following statement to Congress on Tuesday: “At this point we don’t see a double dip recession. We see continued moderate growth.”
Do you remember that old Seinfeld episode when George Costanza decided that he would “do the opposite” of everything that his instincts were telling him to do and everything started working out great for him?
Well, when it comes to Federal Reserve Chairman Ben Bernanke, the key is to “believe the opposite” of everything that he says.
And since Bernanke does not believe that a double dip recession is going to happen, that probably means that we are about to hit another recession.
If you doubt this theory about Bernanke, just go back and check out his track record.
Okay, so if our economy is in big trouble shouldn’t our leaders be doing something about it?
Well, it is election season now so I wouldn’t expect too much from Barack Obama. He is too busy raising money in France and in China.
I wouldn’t expect too much from Obama’s economic advisers either. In fact, Obama’s much-ballyhooed “jobs council” has not even met in six months.
Not that the “jobs council” was ever going to do anything substantive anyway.
The truth is that it was just for show and most of the CEOs on the council have been sending jobs overseas anyway.
Well, what about the SEC?
Shouldn’t they be doing something to fix the financial system?
In recent days, New York Times economist Paul Krugman has been doing a whole bunch of interviews in which he has declared that the solution to our economic problems is very easy. Krugman says that all we need to do to get the global economy going again is for the governments of the world to start spending a lot more money. Krugman believes that austerity is only going to cause the economies of the industrialized world to slow down even further and therefore he says that it is the wrong approach. And you know what? Krugman is partly right about all of this. The false prosperity that the United States and Europe have been enjoying has been fueled by unprecedented amounts of debt, and in order to maintain that level of false prosperity we are going to need even larger amounts of debt. But there are several reasons why Krugman is mostly wrong. First of all, we have not seen any real “austerity” yet. Even though there have been some significant spending cuts and tax increases over in Europe, the truth is that nearly every European government is still piling up more debt at a frightening pace. Here in the United States, the federal government continues to spend more than a trillion dollars a year more than it brings in. If the United States were to go to a balanced federal budget, that would be austerity. What we have now is wild spending by the federal government beyond anything that John Maynard Keynes ever dreamed of. Secondly, Krugman focuses all of his attention on making things more comfortable for all of us in the short-term without even mentioning what we might be doing to future generations. Yes, more government debt would give us a short-term economic boost, but it would also make the long-term financial problems that we are passing on to our children even worse.
It is important to understand that Paul Krugman is a hardcore Keynesian. He believes that national governments can solve most economic problems simply by spending more money. His prescription for the U.S. economy in 2012 was summarized in a recent Rolling Stone article….
The basic issue, says Krugman, is a lack of demand. American consumers and businesses, aren’t spending enough, and efforts to get them to open their wallets have gone nowhere. Krugman’s solution: The federal government needs to step in and spend. A lot. On debt relief for struggling homeowners; on infrastructure projects; on aid to states and localities; on safety-net programs. Call it “stimulus” if you like. Call it Keynesian economics, after the great economic thinker (and Krugman idol) John Maynard Keynes, who first championed the idea that government has an essential role in saving the free market from its own excesses.
So is Krugman right?
Would the U.S. economy improve if the federal government borrowed and spent an extra half a trillion dollars this year for example?
Yes, it would.
But it would also get us half a trillion dollars closer to bankruptcy as a nation.
Krugman claims that “austerity” has failed, but the truth is that we have not even seen any real “austerity” yet.
When a government spends more than it brings in, that is not real austerity.
People talk about the “austerity” that we have seen in places such as Greece and Spain, but the truth is that both nations are still piling up huge amounts of new debt.
So let’s not pretend that the western world is serious about austerity.
The goal for most European nations at this point is to get their debts down to “sustainable” levels.
But for economists such as Krugman, this is a very bad idea. Krugman insists that cutting government spending during a recession is a very stupid thing to do. The following is from one of his recent articles in the New York Times….
For the past two years most policy makers in Europe and many politicians and pundits in America have been in thrall to a destructive economic doctrine. According to this doctrine, governments should respond to a severely depressed economy not the way the textbooks say they should — by spending more to offset falling private demand — but with fiscal austerity, slashing spending in an effort to balance their budgets.
Critics warned from the beginning that austerity in the face of depression would only make that depression worse. But the “austerians” insisted that the reverse would happen. Why? Confidence! “Confidence-inspiring policies will foster and not hamper economic recovery,” declared Jean-Claude Trichet, the former president of the European Central Bank — a claim echoed by Republicans in Congress here. Or as I put it way back when, the idea was that the confidence fairy would come in and reward policy makers for their fiscal virtue.
Yes, Krugman is correct that government austerity measures will only make a recession worse.
Just look at what has happened in Greece. Wave after wave of austerity measures has pushed Greece into an economic depression. If you want to see what austerity has done to the unemployment rate in Greece, just check out this chart.
As other nations across Europe have taken measures to get debt under control, we have seen similar economic results all across the continent.
But Paul Krugman does not consider this to be a major problem.
The Obama administration is currently stealing approximately 150 million dollars from our children and our grandchildren every single hour to finance our reckless spending, but for Paul Krugman that is not nearly good enough.
To Krugman, the only thing that is important is what is happening right now. Apparently the future can be thrown into the toilet as far as he is concerned.
The founder of PIMCO, Bill Gross, told CNBC on Tuesday that the U.S. government is likely to be hit with another credit rating downgrade this year if something is not done about our exploding debt.
The United States already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain does.
But Krugman insists that the solution to our economic problems is even more debt and even more spending.
In a previous article, I detailed how we are doomed if the U.S. government keeps spending money wildly like this and we are doomed if the U.S. governments stops spending money wildly like this.
If we keep running trillion dollar deficits every year, at some point our financial system will collapse, the U.S. dollar will fail, and we will essentially be facing national bankruptcy.
But if the federal government stops borrowing and spending money like this, our debt-fueled prosperity will rapidly disappear, unemployment will shoot well up into double digits, and we will soon have mass rioting in major U.S. cities.
The truth is that we have already been following Paul Krugman’s economic prescription for the nation for decades. Our 15 trillion dollar party has funded a standard of living unlike anything the world has ever seen, but the party is coming to an end.
The Federal Reserve is trying to keep the party going by buying up huge amounts of government debt. The Fed actually purchased approximately 61 percent of all government debt issued by the U.S. Treasury Department in 2011.
It is a shell game that cannot go on for too much longer.
The national debt crisis can be delayed for a while, but at some point the house of cards is going to come crashing down on top of us all.
If Paul Krugman wanted to talk about real solutions he could talk about shutting down the Federal Reserve and he could talk about going to an entirely debt-free currency.
But we all know that is not going to happen, don’t we?
As I have written about before, the Federal Reserve was designed to be a perpetual government debt machine. The system was designed to have the amount of money and the amount of government debt constantly expand.
And it has been working quite well in that regard. At this point, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was first created.
But Paul Krugman is not going to talk about the real issues. Instead, he is just going to keep running around declaring that more government spending and more government debt will solve all of our problems.
It is a very big lie, but millions of people are going to believe it.
Once upon a time, anyone that was relatively competent and willing to work hard could go out and easily get a job that would enable that person to financially support a family. Unfortunately, that is simply no longer true anymore. Well paying “middle income jobs” are being rapidly replaced with “low income jobs” and part-time jobs. As the economy crumbles, it is becoming increasingly difficult for the typical American worker to survive from month to month. The number of companies that provide benefits such as health insurance has fallen steadily over the past ten years, and paychecks have not been keeping up with the rising prices of food and gas. Average American families are seeing their budgets squeezed like never before, and many of them are going into huge amounts of debt in order to make up the difference. Sadly, this is a problem that has developed over an extended period of time and that is not going to be reversed overnight. Over the past four decades, the ratio of wages and salaries to GDP in America has fallen dramatically. The typical American worker is not as valued as much as he or she used to be, and if current trends continue even more of us will be working part-time jobs or “low income jobs” in the years ahead.
In America today there is a great deal of focus on the unemployed, but there are also millions upon millions of Americans that are working part-time jobs because that is all that they can find.
It can be absolutely soul crushing to go all the way through school getting good grades, spend a ton of money on an education, and then work for 8 bucks an hour doing meaningless work for some predator corporation that simply does not care about how talented you are.
Today, an astounding 48 percent of all Americans are considered to be either “low income” or are living in poverty.
According to the New York Times, approximately 100 million Americans are either living in poverty or in “the fretful zone just above it”.
A lot of those people actually do have jobs. Unfortunately, a part-time job that pays 8 or 9 dollars an hour just will not get you anywhere close to getting over the poverty line.
This is not the way that the U.S. economy used to work. Back in the old days, good paying jobs that would allow you to live “the American Dream” were plentiful.
But now millions upon millions of Americans are scrambling for anything that they can get. According to a recent survey conducted by Gallup, the percentage of Americans that are working part-time jobs but that would like full-time jobs is now higher than it has been at any other time in the last two years.
In this economy, a good paying full-time job is incredibly precious. If you still have one, you should consider yourself to be very fortunate.
Check out the following chart. It is a chart that shows the level of wages and salaries as a percentage of GDP in the United States since the late 1940s. As you can see, the slice of the pie being taken home by American workers has been dropping like a rock since about 1970….
Is that a clear trend or what?
And it is going to continue year after year as long as we continue to pursue the same foolish economic policies.
As our politicians continue to allow millions of American jobs to be shipped overseas, competition for the jobs that remain inside this country is becoming extremely intense.
Back in 1967, 97 percent of all U.S. men with a high school degree between the ages of 30 and 50 had jobs. Today, that figure is down to 76 percent.
As you read this, there are hordes of hard working American workers sitting at home staring at their televisions as they wonder why nobody will hire them.
But even if you do have a job that does not mean that you are in good shape. The percentage of “low income jobs” just continues to climb. Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.
Many Americans work as hard as they can and still find that they must turn to the government for financial assistance. According to author Paul Osterman, about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.
And that number is just going to keep climbing unless we change what we are doing as a nation.
Perhaps you are working a “low income job” right now. Most of us have worked a job like that at least once in our lives. Hopefully you will find the following list amusing. Yes, I have exaggerated a few things slightly, but I think you will get the point.
The following are 20 signs you might be a typical American worker….
#1 If you are working three jobs and you still don’t have enough money at the end of the month, you might be a typical American worker.
#2 If your job involves asking the question “Would you like fries with that?”, you might be a typical American worker.
#3 If you shop at the dollar store because Wal-Mart is too expensive, you might be a typical American worker.
#4 If your job requires you to wear a smock, a brightly colored polo shirt or lots of “flair”, you might be a typical American worker.
#5 If people are constantly asking you where the restroom is while you are at work, you might be a typical American worker.
#6 If your employer hires extra part-time workers in order to avoid giving anyone full-time hours, you might be a typical American worker.
#7 If you are required to watch a mindless “training video” after being hired, you might be a typical American worker.
#8 If the company you work for is owned by someone on the other side of the world, you might be a typical American worker.
#9 If a trained seal could do your job and you feel like your expensive education is going to waste, you might be at typical American worker.
#10 If you don’t have any health insurance at all, you might be a typical American worker. Only about 25 percent of all part-time workers in the United States receive employee benefits such as health insurance or paid sick leave.
#11 If your car is older than your kids are, you might be a typical American worker.
#12 If you can’t afford to buy the things that you are selling to the public, you might be a typical American worker.
#13 If the balances on your credit cards are larger than your bank accounts are, you might be a typical American worker.
#14 If going to Burger King is your idea of “fine dining”, then you might be a typical American worker.
#15 If it costs more to fill up your car with gas than you will make at your job today, you might be a typical American worker. The price of gasoline has increased by 83 percent since Barack Obama first took office, and the average cost of a gallon of gas in the United States is now up to $3.52.
#16 If you eat your cereal with a fork so that you can save milk, you might be a typical American worker.
#17 If your electricity bill keeps going up but your paycheck never does, you might be a typical American worker.
#18 If it feels like you are losing an organ every time you pay for health insurance each month, you might be a typical American worker.
#19 If you feel like your employer is constantly tempted to replace you with someone younger and cheaper, then you might be a typical American worker.
#20 If you are so poor that you cannot even afford to pay attention, you might be a typical American worker.
Unfortunately, a lot more Americans are going to be forced into working these kinds of jobs if current trends continue.
Since the year 2000, we have lost 10% of our middle class jobs even though our population has increased by more than 30 million since then. 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.
The lack of good jobs in America has some very real consequences. In particular, our young adults are really feeling the pain of not being able to find quality employment.
According to a recent poll conducted by Generation Opportunity, huge numbers of Americans in the 18 to 29 year old age bracket are delaying major life decisions due to the poor economy….
-44% are delaying buying a home
-28% are delaying saving for retirement
-27% are delaying paying off student loans or other debt
-27% are delaying going back to school or getting more education
-23% are delaying starting a family
-18% are delaying getting married
All of those things take a lot of money, and if you simply don’t have the money it makes things really tough.
Sadly, the economy is about to get even worse.
As I have written about previously, what is going on in Greece right now is a warning sign for the rest of the world, and we are on the precipice of another major global financial crisis.
There are an increasing number of voices in the financial world that believe that we are going to see a Greek default in March. So will this actually happen? I certainly don’t know. But what some folks are currently saying about the situation sure does make for interesting reading.
In the old days, you could graduate from college, get a good job, work for the same company for 30 years, save up for retirement and count on a comfortable life in your old age.
That paradigm is now totally shattered. The entire global economic system is in a state of chaos and things change faster today than they ever have before.
If you have a job today, it may be gone tomorrow.
The financial institution or insurance company that you are working with today may be out of business by next month.
We live in a world that is becoming increasingly unstable. That is why it is imperative to try to become more self-sufficient and less dependent on the system.
It is tough to plan in such an environment, but one thing is for sure – tough times are coming and things are not going to get any easier than they are now.
If you increased your credit card spending by a couple thousand dollars per month would your lifestyle improve? Of course it would. By going into large amounts of debt, it is possible to live a lifestyle that you can’t really afford, at least for a while. But if you keep racking up huge amounts of credit card debt every single month, eventually it gets to a point where it is extremely difficult to even keep up with the minimum monthly payments and the credit card companies will not lend you any more money. Well, on a larger scale it is the same thing with government debt. Right now, the U.S. government is spending more than a trillion dollars more than it takes in every year. Even if the U.S. government spends all of that money on incredibly stupid stuff, it still gets into the pockets of ordinary Americans. In turn, those ordinary Americans use that money to pay the mortgage, buy food, shop at the mall, etc. All of this borrowing and spending by the U.S. government has created a “false prosperity” bubble that is not real. It may feel real to you right now, but it is unsustainable by definition. If the U.S. government suddenly started spending only the money that it actually brought in every year, our economy would be doomed and all of this “false prosperity” would rapidly disappear. But if the U.S. government continues to rack up debt at this pace we are doomed as well. In fact, every dollar that gets borrowed makes our eventual collapse ever worse. We are heading down the exact same road that Greece has gone. Eventually the rest of the world is not going to lend us gigantic mountains of super cheap money anymore. When the flow of cheap money stops, it can be extremely painful. Anyone that has ever seen the interest rates on their credit cards go above 20 percent knows how this feels. If we had addressed these problems as a nation a decade or two ago, perhaps we could have found a solution. But now there is no way out under our current financial system and a devastating economic collapse is on the horizon no matter what we do.
If there was a Hollywood movie where some crooks successfully stole 150 million dollars, what would you think of those crooks?
Would you have admiration for them?
Would you be disgusted with them?
Would you feel like your intelligence was insulted because nobody could ever steal 150 million dollars and get away with it?
Well, right now the federal government is stealing approximately 150 million dollars from our children and our grandchildren every single hour.
That’s right – the U.S. government is borrowing an astounding 150 million dollars an hour that our children and our grandchildren will be expected to deal with.
It is a theft so vast that it is almost unimaginable.
So what should be done?
A lot of people out there think that our problems would be solved if the government would just quit borrowing so much money.
Well, it is just not that simple.
Look at Greece. They were forced by the EU and the IMF to dramatically reduce government spending. But when Greece reduced government spending, that caused the economy to shrink rapidly and it caused tax receipts to go down more than expected. So Greek budget deficits were even larger than anticipated and so Greece was forced to cut spending even more. But that created even more economic problems.
A recent article by John Mauldin described the nightmarish effect that this cycle has had on Greece….
And as Greece began shake and bake its way to “austerity,” the very act of cutting deficits pushed the country into recession, which lowered tax revenues and increased expenses, putting the elusive goal of a balanced budget even further off. We should quickly note that this is not just a Greek problem. Spain’s “draconian” cuts have meant that its 6% deficit target for the year has this week been raised to a more likely 8%, making it harder to get back to even.
For country after country, this is the Endgame. It is the end of the Debt Supercycle. Debt has grown to the size that it cannot be sustained. The market will not lend any more money on terms that can be afforded, and any efforts to cut spending and raise taxes will result in an even worse economy, in various degrees of recession, with falling revenues and rising costs.
This is what happens when a country that has been spending far beyond its means is forced to dramatically cut back.
Those that are convinced that balancing the federal budget in the United States will be relatively painless should take a close look at what is happening in Greece.
As I have written about previously, the Greek economy has been plunged into a 21st century “Great Depression”. In Greece, 20 percent of all retail stores have already shut down, the unemployment rate for those under the age of 24 is sitting at 39 percent, and one third of the entire nation is living in poverty.
And this is only just the beginning for Greece.
Things are going to get even worse.
Unfortunately, many believe that the United States is destined to experience far worse pain than Greece is currently experiencing.
For example, Peter Schiff insists that the United States is in worse financial shape than Europe at this point. Just check out this video….
Anyone that attempts to downplay the U.S. debt problem is making a serious mistake. Yes, we are still able to borrow trillions of dollars for next to nothing, but that is going to come to an end.
Remember all of those “suckers” that signed up for mortgages at “teaser rates” that later got jacked up dramatically?
Of course you do.
So what happened to them?
When the rates went up many of them ended up losing everything.
Well, we have gotten ourselves into the exact same kind of a position. All of this cheap money has enabled us to live very nicely for now, but when the cheap money ends the nightmare will begin.
Right now, our debt is growing much, much faster than our economy is. 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.
What would your household finances look like if your total debt grew by 61 percent next year but your income only grew by 4 percent?
When I was a little boy, the U.S. national debt was considered to be a huge national crisis. Politicians from both major political parties were promising that they would fix things.
But it is not just the federal government that has been living a fantasy.
The chart posted below shows the growth of total debt in America over the past several decades. Consumers, businesses and government officials have been on a debt binge that is absolutely unprecedented….
The scary thing is that even with all of this borrowed money, our economy is still in the dumps.
So what in the world is it going to look like when the debt bubble totally bursts?
Even with all of this “borrowed prosperity”, anger at the government is rapidly growing. A recent Gallup poll found that “satisfaction with government” in the United States is now at an all-time record low of 29 percent.
So how angry will the American people be when all of this “borrowed prosperity” disappears?
When this whole thing comes tumbling down, a lot of people are going to blame our problems on “capitalism”.
In fact, it is already happening. Just check out what the founder of the World Economic Forum is saying….
“We have a general morality gap, we are over-leveraged, we have neglected to invest in the future, we have undermined social coherence, and we are in danger of completely losing the confidence of future generations,” said Klaus Schwab, host and founder of the annual World Economic Forum.
“Solving problems in the context of outdated and crumbling models will only dig us deeper into the hole.
“We are in an era of profound change that urgently requires new ways of thinking instead of more business-as-usual,” the 73-year-old said, adding that “capitalism in its current form, has no place in the world around us.”
But capitalism is not the problem. Capitalism has produced the greatest eras of prosperity that the world has ever seen.
No, the real problem is our debt-based financial system that is managed and run by the central banks of the world.
You see, debt-based central banking is not capitalism. But way too many people equate the two.
A lot of people cannot even imagine this, but theoretically you could have capitalism without any debt whatsoever.
But what we have today is a financial system that has debt as the very foundation. And such a system is inevitably going to fail someday.
As I have written about so many times before, the Federal Reserve is at the very heart of our economic problems here in the United States.
The Federal Reserve was designed to be a perpetual debt machine. And it has performed that task very well. The U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was first created.
So yes, even though things seem somewhat “stable” for the moment, there are all kinds of reasons to be concerned about the viability of our economy and our financial system in the years ahead.
The other day, I was quoted in a Reuters article about our coming economic problems….
“Most people have a gut feeling that something has gone terribly wrong, but that doesn’t mean that they understand what is happening,” he said. “A lot of Americans sense that a massive economic storm is coming and they want to be prepared for it.”
Of course the Reuters reporter did not even bother to spell my name correctly, but at least he got the quote right.
A great economic storm is coming.
Don’t let this false prosperity and this “calm before the storm” fool you.
We are living in the greatest debt bubble the world has ever seen, and no matter how it plays out there is going to be a massive amount of pain.
You might want to get yourself and your family prepared for that.
In order for a society to function, there has to be a certain level of trust. Each day when we leave our homes, we take for granted that most people are not going to attack us for no reason, that there will only be isolated incidents of theft in our community and that rioting and violence are not going to erupt in the streets. Whether we realize it or not, we depend on the fact that the vast majority of the people around us are going to act in a civilized manner. Unfortunately, the thin veneer of civilization that we all take for granted is starting to disappear. When I was growing up, I was taught that challenging times reveal our true character. There are many that believe that the declining economy is causing a lot of the chaos that we are now witnessing, but perhaps what is going on is that these challenging economic times are simply revealing the character that has been there all along. For decades, a “false prosperity” that was fueled by unprecedented amounts of debt has masked a lot of the internal rot that has taken hold in America. But now that our prosperity is crumbling, our lack of values is becoming startlingly clear.
Greed, corruption and extreme self-centeredness have deeply infected our society. We see this on Wall Street and in Congress, and we see this among those that are trying to survive on the mean streets of our largest cities.
Our nation is breaking down on every level. If by some miracle we were able to fix our economy, that would mask our problems for a while, but it would not solve them.
Unfortunately, as I write about nearly every day, there are a whole host of indications that our economy is about to get even worse. When it does, millions of Americans will become even more desperate, and as we are now seeing all over this country, desperate people do desperate things.
The following are 22 signs that the thin veneer of civilization that we all take for granted is starting to disappear….
#1 In Detroit, 100 bus drivers recently refused to drive their routes out of fear for their own personal safety. An article posted on the website of the CBS affiliate in Detroit is quoting the head of the bus drivers union, Henry Gaffney, as saying that the drivers are “scared for their lives”….
“Our drivers are scared, they’re scared for their lives. This has been an ongoing situation about security. I think yesterday kind of just topped it off, when one of my drivers was beat up by some teenagers down in the middle of Rosa Parks and it took the police almost 30 minutes to get there, in downtown Detroit,” said Gaffney.
#2 In Wilmington, Delaware recently, a man offered to help someone carry a television down the street, but quickly realized that it was his own television which had just been stolen out of his house….
A Wilmington resident who stopped home for lunch about noon today saw a man carrying a flat screen TV down the street and asked the man if he needed help.
He then recognized the television as his own, looked up and saw the door to his home ajar, said Master Sgt. Adam Ringle.
#3 Shocking video has surfaced of a young thug walking up to a defenseless elderly man in a Chicago subway station and knocking him out cold. In the video, the friends of the young man are cheering him on and laughing at how easy it was to knock the old man out cold.
#4 Beating up old people for no reason seems to be catching on all over the country. Just check out the following report from a recent article posted on philly.com….
AN 84-YEAR-OLD ex-university official savagely attacked by four young punks during a walk in Wissahickon Valley Park earlier this week theorizes that the beating he endured was a cruel game of “get the old geezer.”
Jim Shea, a former vice president of university relations for Temple, from 1968 to 1983, walks up to five miles on Forbidden Drive, in Fairmount Park, three times a week, but that type of stamina wasn’t enough to stave off the lowlifes who not only beat him bloody, but dealt a blow to one of the things he holds most dear – his pride.
#5 All over the United States, police are brutalizing Occupy Wall Street protesters and spraying pepper spray directly in their faces. Whatever you may think of the Occupy Wall Street protests, the reality is that this is not a sign that things are becoming “more stable” in America. You can see video of one very disturbing confrontation right here.
#6 Clashes between police and protesters in Oakland, California recently became so violent that at one point the streets of Oakland resembled a war zone.
#7 Unfortunately, as the American people become increasingly frustrated with out system many of them are actually starting to consider violence as a solution. According to one recent survey, 31 percent of all Occupy Wall Street protesters “would support violence to advance their agenda”.
#8 In New York recently, a confrontation between two female customers and a frustrated cashier ended with the cashier beating the living daylights out of them with a metal rod. The following is how a local CBS affiliate in New York described this incident….
It appeared to have started when two female customers argued and yelled obscenities at the cashier when he questioned a $50 bill they gave him.
One of the female customers then slapped the cashier. A woman is then seen jumping over the counter while the other woman goes behind the register.
That’s when the cashier can be seen on the video disappearing into the back of the fast-food restaurant. He comes back with a metal rod and begins hitting the women.
You can see video of this violent confrontation right here.
#9 These days, many Americans are so “on edge” that just about anything will make them snap. For example, a 60-year-old woman in New Mexico recently repeatedly stabbed her boyfriend because she thought that he was cheating during a game of Monopoly.
#10 If you thought that the above example was crazy, just check out what one man down in Georgia did recently. He actually firebombed a Taco Bell because they did not put enough meat in his Chalupa.
#11 In Cleveland last week, a 49-year-old man was sent to the hospital after a poll monitor working for the Cuyahoga County Board of Elections tried to bite his nose off.
#12 Not only do TSA agents make us feel like dehumanized cattle as we go through airport security, some of them are evening making fun of us at the same time. For example, one TSA agent recently scribbled “GET YOUR FREAK ON GIRL” on a TSA inspection notice after discovering a sex toy in the luggage of one female traveler.
#13 Identity theft is rising to very alarming levels all over the United States. For example, a recent article in the Palm Beach Post described what has been going on down in Florida this year….
In the first half of this year, the Federal Trade Commission received more than 20,000 complaints from Floridians whose identities had been stolen — nearly as many as in all of 2010. More than half of those reporting their Social Security numbers or other personal information had been ripped off and used to commit fraud or theft were in South Florida, with heavy concentrations in parts of Fort Lauderdale, Hollywood and Hallandale Beach.
“That kind of increase is really shocking,” said Vance Luce, deputy special agent in charge of the U.S. Secret Service in South Florida, which investigates identity theft and financial crimes. “The fact that it’s on the upturn doesn’t surprise me at all, but that’s pretty alarming.”
#14 In the Seattle area, an elderly couple in their eighties was recently brutally attacked by a 31-year-old man armed with a crossbow and a hatchet. The following description of this brutal crime comes from King 5 News….
Prosecutors say 31-year-old John Chase was walking down the highway when he saw Ralph Aldrich, 88, in his back yard. Detectives say Chase shot and killed Aldrich with a crossbow and then went inside the home and repeatedly hit 83-year-old June Aldrich with a hatchet.
#15 As America falls apart, more of us than ever are taking medication for depression. At this point, more than 1 out of every 10 Americans over the age of 12 is taking prescription antidepressants.
#16 In some areas of the country, people have been literally tearing apart their own cities in an attempt to find things to sell. I recently discussed this phenomenon on The American Dream Blog….
In Fresno, California the damage caused by thieves stealing copper wire from city street lights is costing the city about $50,000 a month. So far, about 2,500 street lights have been stripped of their wiring.
#17 As people become more desperate, we are starting to see some truly bizarre crimes in many parts of the nation. In northern Alabama, one team of crooks has been using a forklift to pull entire ATM machines out of the ground.
#18 Most Americans don’t realize this, but all over the U.S. livestock is being stolen from ranchers in unprecedented numbers. The following is from a recent Associated Press article….
While the brazenness may be unusual, the theft isn’t. High beef prices have made cattle attractive as a quick score for people struggling in the sluggish economy, and other livestock are being taken too. Six thousand lambs were stolen from a feedlot in Texas, and nearly 1,000 hogs have been stolen in recent weeks from farms in Iowa and Minnesota. The thefts add up to millions of dollars in losses for U.S. ranches.
Authorities say today’s thieves are sophisticated compared to the horseback bandits of the rugged Old West. They pull up livestock trailers in the middle of the night and know how to coax the animals inside. Investigators suspect it’s then a quick trip across state lines to sell the animals at auction barns.
#19 At this point, thieves are becoming so bold that they will steal literally anything that they are able to cart away. For example, in the San Francisco area a while back thieves actually stole a copper bell that weighs 2.7 tons.
#20 According to the FBI, the number of gang members in the United States has increased by a staggering 40 percent since 2009. Right now, there are 1.4 million gang members terrorizing citizens on the streets of America.
#21 Down in Miami, thieves have become so bold that they have actually been breaking into parked police cruisers and stealing guns and ammo out of them. Many of those guns undoubtedly are ending up in the hands of gangs members.
#22 Be careful who you befriend online. They might just hold you captive and use you as part of a Satanic sex ritual. The following description of an incident that recently happened in Milwaukee comes from thesmokinggun.com….
Two young Milwaukee women were arrested this week after an 18-year-old Arizona man–who traveled to Wisconsin by bus after meeting one of the suspects online–told cops that he was held captive in the duo’s apartment for two days and slashed and stabbed more than 300 times as part of an apparent satanic sex ritual.
Anger and frustration are growing to unprecedented levels in this country, and all of this anger and frustration is manifesting in thousands of different ways.
As I have written about previously, the rioting, the crime and the violence that we are seeing now is only just the beginning of what is coming.
Unless a miracle happens, our country is going to keep heading down the road toward societal collapse. For even more examples that show that our country is starting to come apart at the seams, please see the following articles that I have authored previously….
It won’t happen all at once, but unless our nation changes direction dramatically, we will see things get progressively worse and worse.
Instead of teaching our children to love and care for one another, we have taught them to be incredibly self-involved. Today, way too many Americans deeply love themselves, deeply love money and are deeply addicted to entertainment. Each new generation seems to be even more prideful, even more arrogant and even more violent. As a nation, we are losing our empathy for others, our compassion for the needy and our respect for the elderly. Our family units are breaking down and thousands of our communities are being transformed into hellholes.
What in the world is happening to America?
If you have a thought on this topic, please feel free to share your opinion by leaving a comment below….