The Federal Reserve Is Systematically Destroying Social Security And The Retirement Plans Of Millions Of Americans

Last week the mainstream media hailed QE3 as the “quick fix” that the U.S. economy desperately needs, but the truth is that the policies that the Federal Reserve is pursuing are going to be absolutely devastating for our senior citizens.  By keeping interest rates at exceptionally low levels, the Federal Reserve is absolutely crushing savers and is systematically destroying Social Security.  Meanwhile, the inflation that QE3 will cause is going to be absolutely crippling for the millions upon millions of retired Americans that are on a fixed income.  Sadly, most elderly Americans have no idea what the Federal Reserve is doing to their financial futures.  Most Americans that are approaching retirement age have not adequately saved for retirement, and the Social Security system that they are depending on is going to completely and totally collapse in the coming years.  Right now, approximately 56 million Americans are collecting Social Security benefits.  By 2035, that number is projected to grow to a whopping 91 million.  By law, the Social Security trust fund must be invested in U.S. government securities.  But thanks to the low interest rate policies of the Federal Reserve, the average interest rate on those securities just keeps dropping and dropping.  The trustees of the Social Security system had projected that the Social Security trust fund would be completely gone by 2033, but because of the Fed policy of keeping interest rates exceptionally low for the foreseeable future it is now being projected by some analysts that Social Security will be bankrupt by 2023.  Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.  Yes, you read that correctly.  The collapse of Social Security is inevitable, and the foolish policies of the Federal Reserve are going to make that collapse happen much more rapidly.

The only way that the Social Security system is going to be able to stay solvent is for the Social Security trust fund to earn a healthy level of interest.

By law, all money deposited in the Social Security trust fund must be invested in U.S. government securities.  The following is from the official website of the Social Security Administration….

By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are “special issues” of the United States Treasury. Such securities are available only to the trust funds.

In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash.

So in order for the Social Security Ponzi scheme to work, those investments in government securities need to produce healthy returns.

Unfortunately, the ultra-low interest rate policy of the Federal Reserve is making this impossible.

The average rate of interest earned by the Social Security trust fund has declined from 6.1 percent in January 2003 to 3.9 percent today, and it is going to continue to go even lower as long as the Fed continues to keep interest rates super low.

A recent article by Bruce Krasting detailed how this works.  Just check out the following example….

$135 billion of old bonds matured this year. This money was rolled over into new bonds with a yield of only 1.375%. The average yield on the maturing securities was 5.64%. The drop in yield on the new securities lowers SSA’s income by $5.7B annually. Over the fifteen year term of the investments, that comes to a lumpy $86 billion.

So what happens when the Social Security trust fund runs dry?

As Bruce Krasting also noted, all Social Security payments would immediately be cut by 25 percent…..

Anyone who is 55 or older should be worried about this. Based on current law, all SS benefit payments must be cut by (approximately) 25% when the TF is exhausted. This will affect 72 million people. The economic consequences will be severe.

In other words, it would be a complete and total nightmare.

Sadly, the truth is that the Social Security trust fund might not even make it into the next decade.  Most Social Security trust fund projections assume that there will be no recessions and that there will be a very healthy rate of growth for the U.S. economy over the next decade.

So what happens if we have another major recession or worse?

And most Americans know that something is up with Social Security.  According to a Gallup survey, 67 percent of all Americans believe that there will be a Social Security crisis within 10 years.

Part of the problem is that there are way too many people retiring and not nearly enough workers to support them.

Back in 1950, each retiree’s Social Security benefit was paid for by 16 U.S. workers.  But now things are much different.  According to new data from the U.S. Bureau of Labor Statistics, there are now only 1.75 full-time private sector workers for each person that is receiving Social Security benefits in the United States.

And remember, the number of Americans drawing on Social Security will increase by another 35 million by the year 2035.

Another factor that is rapidly becoming a major problem is the growth of the Social Security disability program.

Since 2008, 3.6 million more Americans have been added to the rolls of the Social Security disability insurance program.

Today, more than 8.7 million Americans are collecting Social Security disability payments.

So how does this compare to the past?

Back in August 1967, there were approximately 65 workers for each American that was collecting Social Security disability payments.

Today, there are only 16.2 workers for each American that is collecting Social Security disability payments.

The Social Security Ponzi scheme is rapidly approaching a crisis point.

Sadly, the Federal Reserve has made it incredibly difficult to save for your own retirement.

Millions upon millions of Baby Boomers that diligently saved money for retirement are finding that their savings accounts are paying out next to nothing thanks to the ultra-low interest rate policies of the Federal Reserve.

The following is one example of how the low interest rate policies of the Fed have completely devastated the retirement plans of many elderly Americans….

You can understand the impact of the invisible tax on the elderly by watching the decline of interest income from $50,000 invested in a five-year Treasury obligation. As recently as 2000, this would have yielded about 6.15 percent and an interest income of $3,075 a year. Now the same obligation is yielding 0.7 percent and an interest income of $350 a year. This is the lowest yield on this maturity of Treasury debt since the Federal Reserve started keeping an index of the yields in 1953.

But it’s more than a low interest rate. It’s an income decline of nearly 89 percent in just 12 years.

And after you account for inflation, those that put money into savings accounts today are actually losing money.

Of course most Americans have not saved up much money for retirement anyway.  According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.

Overall, a study conducted by Boston College’s Center for Retirement Research discovered that American workers are $6.6 trillion short of what they need to retire comfortably.

So needless to say, we have a major problem.

Baby Boomers are just starting to retire and the Social Security system is still solvent at the moment, and yet the number of elderly Americans that are experiencing financial problems is already soaring.

For example, between 1991 and 2007 the number of Americans between the ages of 65 and 74 that filed for bankruptcy rose by a staggering 178 percent.

Also, at this point one out of every six elderly Americans is already living below the federal poverty line.

So how bad are things going to be when Social Security collapses?

That is frightening to think about.

In the short-term, millions upon millions of retired Americans that are living on fixed incomes are going to be absolutely crushed by the inflation that QE3 is going to cause.

Just like we saw with QE1 and QE2, a lot of the money from QE3 is going to end up in agricultural commodities and oil.  That means that retirees (and all the rest of us) are going to end up paying more for food at the supermarket and gasoline at the pump.

But those on fixed incomes are not going to see a corresponding increase in their incomes.  That means that their standards of living will go down.

Things are tough for retirees right now, but they are going to get a lot tougher.

Right now, there are somewhere around 40 million senior citizens.  By 2050 that number is projected to increase to 89 million.

So how will our society cope with more than twice as many senior citizens?

Sadly, we will likely never get to find out.

The truth is that our system is almost certainly going to totally collapse long before then.

We are rapidly approaching a financial crisis unlike anything we have ever seen before in U.S. history, and the foolish policies of the Federal Reserve just keep making things even worse.

Barack Obama Is Wrong: 18 Facts Which Prove That Illegal Immigration Is An Absolute Nightmare For The U.S. Economy

Barack Obama has declared that “immigration reform is an economic imperative“, and is promising to do his best to get an immigration bill pushed through Congress this year.  But will “legalizing” all of the illegal immigration that has taken place over the last several decades improve the struggling U.S. economy or will it actually make our economic problems worse?  One of the favorite tricks of top politicians is to promise that the economy is going to improve if we just support what it is that they are currently pushing.  Hopefully the Americans people will not buy the nonsense that Obama is spewing.  The truth is that Barack Obama is wrong about the economic impact of illegal immigration.  Illegal immigrants don’t do jobs that Americans “don’t want” to do.  A million Americans recently showed up to apply for a job at McDonald’s.  That is how desperate Americans are for work these days.  Please don’t try to tell me that there aren’t millions of Americans out there that would not pick fruit for minimum wage.  The millions upon millions of illegal immigrants in this country are stealing jobs, they are depressing wages in a whole host of industries and they are a huge factor in the erosion of the middle class.  Millions of middle class American families can’t afford to provide for their families anymore and are losing their homes, drowning in debt or going bankrupt.  Rather than what Barack Obama is proposing (which is to essentially “legalize” illegal immigration), we need an immigration policy that makes sense and that protects American jobs.

Before we go any further, it is important for me to make a few points.  It is not a bad thing that people want to come to this nation from another country.  A lot of people that want to come to the United States are really hard working and have really solid character.  This nation has a long tradition of immigrants arriving to build a better life here. At different times this country will need different levels of immigration, but we will always need new immigrants.  People on one side of a border are not more “valuable” than people on another side of a border.  There is a reason why our founding fathers believed that “all men are created equal”.  In every nation on earth there are really wonderful people.  We should love all men, women and children no matter where they were born and no matter what they look like.  God created us all and He loves us all dearly.

The reason I went into all that is because of the way politics is played in America in 2011.  The moment that anyone suggests that there might be a problem with illegal immigration they are immediately branded with all kinds of horrible labels.  To put a horrible label on someone that is completely and totally untrue just to score political points is absolutely despicable.

The funny thing is that some of the organizations that denounce others the loudest should actually be examining themselves.  For example, one of the largest pro-illegal immigration organizations is called “La Raza”, which literally means “The Race” (as if we all couldn’t figure it out).  Perhaps it is time for them to come up with a new name.

Look, we all have to start learning to love each other.  If not, our society is going to continue to break down.

A majority of the American people (yes, that is what the polls show) are not against illegal immigration because they “hate” another group of people.  Rather, they just want all immigrants to go through the “front door” and they want the government to be sensitive to changing economic conditions.

The sad truth is that the U.S. government has absolutely refused to secure the U.S. border with Mexico for decades, and this has allowed millions upon millions of criminals, drug dealers and gang members to cross freely into the United States.  In addition, by refusing to secure the border we have allowed new diseases to spread unchecked into this country.

Meanwhile, the law abiding people that would like to get into this country legally are put through absolute hell.  I used to practice law and I have filled out immigration forms.  The process is a complete and total nightmare.

So we have been making it really easy for law breakers to sneak in the back door of our country and we have been making it really hard for law abiding people to get in the front door.

What in the world could be wrong about wanting to fix that?

Once many illegal immigrants arrive in the United States they either try to make a living legally (by directly competing with blue collar American workers  for jobs and driving their wages down) or illegally by selling drugs or being involved in other kinds of criminal activity.

Apparently Barack Obama believes that this kind of behavior should be rewarded with a “path to citizenship”.

The vast majority of illegal immigrants pay absolutely no federal or state income taxes and they never intend to.  At the same time, they seem more than happy to take advantage of the free social services and benefits offered to them.  In fact, stories of how “good” life in America is just encourages more and more immigrants to come to the United States illegally.

We need an immigration policy that insists that everyone come in through the front door.

Is there anyone out there that cannot agree with that?

We also need to set immigration levels that our economy can handle.

Right now our economy is struggling.  Millions upon millions of Americans are out of work.  44 million Americans are on food stamps.  47 million Americans are living in poverty.  We just can’t take in a whole lot of extra workers right now.

You would think that would just be common sense.

But instead, Barack Obama wants to grant amnesty to all of the illegal immigrants that are already here and put them on a path to citizenship.

Wow – do you think that might embolden millions more illegal immigrants to come flooding in?

Barack Obama is against a border fence.  He says we don’t need it.

Meanwhile, thousands more illegal immigrants pour into this country every single day.

Barack Obama supports all of the “sanctuary cities” that have openly declared that they are not going to enforce our immigration laws.

So where do you think illegal immigrants are going to flock to?  The truth is that word about these “sanctuary cities” gets around really fast.  If you live in one of these cities, then you probably know all about it.

If Barack Obama gets his way, nobody will be breaking our immigration laws because essentially there will not be any more immigration laws.

Not that George W. Bush was any better.  He was an absolute disaster on immigration as well.

The truth is that our immigration policy has been slowly eroding the U.S. middle class for many decades.

But according to Barack Obama, we desperately need to implement his “immigration reform” plan for the good of the middle class….

“One way to strengthen the middle class in America is to reform the immigration system, so that there is no longer a massive underground economy that exploits a cheap source of labor while depressing wages for everybody else.”

What a joke.  The reality is that illegal immigration hurts that U.S. middle class and it is severely damaging to the U.S. economy.  Because of illegal immigration, every single day wages are lost, taxes don’t get collected, hospitals provide “free health care” for which they are never paid, huge criminal gangs of foreigners are roaming our streets and the cost of providing social services to illegal aliens is slowly bankrupting state and local governments.

The following are 18 facts which prove that illegal immigration is an absolute nightmare for the U.S. economy….

#1 Illegal immigrants take jobs away from American citizens. According to a review of U.S. Bureau of Labor Statistics and Census Bureau data, legal and illegal immigrants gained over a million additional jobs between 2008 and 2010 even as millions of American citizens were losing their jobs during that same time period.

#2 The majority of our immigrants now sneak in through the “back door” that the federal government purposely leaves open.  Thanks to the negligence of the federal government, far more people move into the United States illegally than come in through the legal immigration process.  This has got to change.

#3 Illegal immigrants generally don’t pay taxes.  The vast majority of illegal aliens would never even dream of paying income taxes, but Mexicans living in America send billions upon billions of dollars out of the United States and back to Mexico every single year.

#4 Although illegal aliens pay next to nothing in taxes, they have no problem receiving tens of billions of dollars worth of free education benefits, free health care benefits, free housing assistance and free food stamp benefits.  Many communities in the United States now openly advertise that they will help illegal aliens with these things.

#5 The cost of educating the children of illegal immigrants is staggering. It is estimated that U.S. taxpayers spend $12,000,000,000 a year on primary and secondary school education for the children of illegal immigrants.

#6 Thanks to illegal immigration, California’s overstretched health care system is on the verge of collapse.  Dozens of California hospitals and emergency rooms have shut down over the last decade because they could not afford to stay open after being endlessly swamped by illegal immigrants who were simply not able to pay for the services that they were receiving.  As a result, the remainder of the health care system in the state of California is now beyond overloaded.  This had led to brutally long waits, diverted ambulances and even unnecessary patient deaths.  Sadly, the state of California now ranks dead last out of all 50 states in the number of emergency rooms per million people.

#7 It was estimated that there were approximately 7.7 million illegal aliens employed by U.S. employers during 2008.  How much better would our economy look if all of those jobs were being filled by American workers?

#8 The region along the U.S./Mexico border is now an open war zone. Just across the U.S. border, the city of Juarez, Mexico is considered to be one of the most dangerous cities on the entire planet because of the brutal drug war being waged there. In fact, Juarez has now become the murder capital of the western hemisphere.  Much of that violence has begun to spill over into areas of the southwestern United States.

For example, a while back NPR described one incident in the Juarez Valley that involved American citizens….

A couple of weeks ago, gunmen in the Juarez Valley killed the Mexican relative of a Fort Hancock high school student. When the student’s family in Fort Hancock heard about it, they crossed the border at 10 a.m. to see the body, and took the student with them.

“By 10:30, they had stabbed the relatives that went with him, which included his grandparents, with an ice pick,” says school superintendent Jose Franco. “My understanding is that the gentleman is like 90 years old, and they poked his eyes out with an ice pick. I believe those people are still in intensive care here in a hospital in the U.S.”

#9 A substantial percentage of young illegal immigrants end up in gangs.  U.S. authorities say that there are now over 1 million members of criminal gangs operating inside the United States. According to federal statistics, these 1 million gang members are responsible for up to 80% of the violent crimes committed in the U.S. each year.  Latino gangs made up primarily of illegal aliens are responsible for much of this violence.

According to the Center for Immigration Studies, some of the most notorious gangs in the country are made up almost entirely of illegal immigrants….

“Gang investigators in Virginia estimate that 90% of the members of MS-13, the most notorious immigrant gang, are illegal immigrants.”

#10 The “18th Street Gang” is certainly giving MS-13 a run for their money.  It is believed that the 18th Street Gang has thousands of members in the city of Los Angeles alone. In fact, the gang has become so notorious that there are even rumors that some police officers in Los Angeles simply will not venture into the areas most heavily controlled by the 18th Street gang.

The following is what Wikipedia says about the 18th Street Gang….

A US Justice Department report from 2009 estimates that the 18th Street gang has a membership of some 30,000 to 50,000 with 80% of them being illegal aliens from Mexico and Central America and is active in 44 cities in 20 states. Its main source of income is street-level distribution of cocaine and marijuana and, to a lesser extent, heroin and methamphetamine. Gang members also commit assault, auto theft, carjacking, drive-by shootings, extortion, homicide, identification fraud, and robbery.

#11 The “drug war” in northern Mexico is one gigantic bloodbath. The Mexican government says that as many as 28,000 people have been slaughtered by the drug cartels since 2007.  A very significant percentage of those deaths have happened in areas right along the U.S. border, and yet our federal government still sees no reason to get serious about border security.

#12 It is an open secret that Mexican drug cartels are openly conducting military operations inside the United States.  The handful of border patrol agents that we have guarding the border are massively outgunned and outmanned.

One agent who patrols the border and who asked to remain anonymous told Fox News the following….

“To say that this area is out of control is an understatement.”

A different federal agent put it this way in an email to Fox News….

“Every night we’re getting beaten like a pinata at a birthday party by drug, alien smugglers.”

#13 Federal border officials say that Mexican drug cartels have not only set up shop on U.S. soil, but they are actually maintaining lookout bases in strategic locations in the hills of southern Arizona.  If you go to Arizona today, there are actually signs that have been put up by the federal government warning American citizens not to venture into certain wilderness routes that are used by Mexican drug cartels to bring in drugs.

#14 The drug war being waged on both sides of the border is so violent that it is almost unimaginable.  For example, one very prominent Mexican assassin known as “the soupmaker” has confessed that he made approximately 300 bodies disappear by dissolving them in acid baths.  But right now there is essentially nothing that is preventing the next “soupmaker” from crossing the U.S. border and moving into your neighborhood.

#15 Arizona police are being openly warned by the Mexican drug cartels that if they try to interfere with the drug traffic in their area that they will be “taken out” by drug cartel snipers.

#16 While the U.S. military endlessly hunts for “members of al-Qaeda” in the caves of Afghanistan and on the streets of Iraqi cities, a very real threat has been building just south of the border.  Over the past 15 to 20 years, Hezbollah has set up operations all over Mexico, Central America and South America.  Hezbollah is reportedly making a lot of money in the drug trade and in trafficking illegal aliens.  Sadly, our government is largely ignoring this.

#17 Each year, it costs the states billions of dollars to incarcerate illegal immigrant criminals that should have never been allowed into the country in the first place. It is estimated that illegal aliens make up approximately 30 percent of the population in federal, state and local prisons and that the total cost of incarcerating them is more than $1.6 billion annually.

#18 The drug cartels and the gangs always seem to be a couple steps ahead of our agents along the border. Approximately 75 tunnels along the U.S. border with Mexico have been discovered by law enforcement authorities in the last four years alone.

How much do you think all of this crime, gang violence and drug cartel activity is costing our economy?

Why won’t the federal government do what the Constitution requires and secure the border?

Oh, but Barack Obama says that he has a plan.

He says that he is going to save the day.

The following is how Barack Obama describes his plan…

“We are not going to ship back 12 million people, we’re not going to do it as a practical matter. We would have to take all our law enforcement that we have available and we would have to use it and put people on buses, and rip families apart, and that’s not who we are, that’s not what America is about. So what I’ve proposed… is you say we’re going to bring these folks out of the shadows. We’re going to make them pay a fine, they are going to have to learn English, they are going to have to go to the back of the line…but they will have a pathway to citizenship over the course of 10 years.”

So how many illegal immigrants do you think are going to step forward to pay a fine?

One percent?

How many of them do you think are going to show up for English classes?

Who is going to make them do it?

Obama?

Are we going to have law enforcement officials running around trying to collect fines from illegal immigrants and trying to get them to attend their English lessons?

According to Obama, the millions upon millions of illegal immigrants that are in this country are going to be glad to willingly do the following….

1) Admit they broke the law

2) Pay back taxes and a fine

3) Learn English

4) Be willing to undergo background checks before starting the legalization process

Those four points are taken directly from Obama’s plan.

So what are illegal immigrants going to do when this plan is passed?

99 percent of them are going to laugh and they are just going to keep on doing what they have been doing.

Large numbers of illegal immigrants are already enjoying the “high life” in the dozens of “sanctuary cities” across the United States.

The following is how the Ohio Jobs & Justice PAC defines sanctuary cities….

Generally, sanctuary policies instruct city employees not to notify the federal government of the presence of illegal aliens living in their communities. The policies also end the distinction between legal resident aliens and illegal aliens–so illegal aliens often benefit from taxpayer funded government services and programs too.

Sounds like a good deal to me.

Can I sign up for that plan?

After all, who wouldn’t want to earn all income tax-free and yet enjoy unlimited government services?

Today we are being told that we need to make life as comfortable as possible for the waves of illegal immigrants that are coming in.  In fact, Barack Obama says that all of us need to make sure that our kids are learning how to speak Spanish….

“I don’t understand when people are going around worrying about, we need to have English only. They want to pass a law, we just, we want English only…Now, I agree that immigrants should learn English, I agree with this. But understand this, instead of worrying about whether immigrants can learn English, they’ll learn English, you need to make sure your child can speak Spanish.”

All of this is utter insanity.

The cold, hard reality of the matter is that we have tightly secured the border between South Korea and North Korea for over 50 years and we could secure our own borders if we really wanted to.

But instead, we continue to leave our border with Mexico completely wide open. Thousands of criminals, gang members and drug pushers continue to come in completely unchecked every single day.

Meanwhile, the rest of us have to subject ourselves to some of the most humiliating “security measures” imaginable before we are even allowed to get on to an airplane.

It doesn’t make a whole lot of sense, does it?

The Greek Debt Crisis Escalates: Is Greece Threatening To Leave The Euro?

Is the Greek debt crisis about to explode out of control?  According to Der Spiegel, the government of Greece is considering leaving the Euro and reestablishing its own currency.  If that happened, it would throw global financial markets into chaos and it might mean the end of the euro as a pan-European currency.  But the Greek government has to do something about all of these debts.  At this point Greece is literally drowning in debt.  The yield on 10-year Greek bonds has now reached an astounding 15.51%.  There is no way that is sustainable even for the short-term.  Greece is rapidly going bankrupt.  Even with absolutely brutal austerity measures in place, the debt just continues to explode.  There are protests against the government almost daily and Greece is in a state of chaos.  Unfortunately, because Greece is part of the euro they can’t just start printing lots of money as a way to get out of this crisis.  Now there are persistent rumors that Greece really is thinking about leaving the euro, and that could potentially mean big trouble for the world financial system.

It was a new article in Der Spiegel that brought these rumors to the forefront again.  Der Spiegel says that it possesses secret Greek government documents that discuss plans to leave the euro.  Der Spiegel also claims that a secret crisis meeting was held in Luxembourg on Friday night to discuss this crisis.

The following is a brief excerpt from the Der Spiegel article that caused the financial community in Europe to be in such an uproar today….

“The debt crisis in Greece has taken on a dramatic new twist. Sources with information about the government’s actions have informed SPIEGEL ONLINE that Athens is considering withdrawing from the euro zone. The common currency area’s finance ministers and representatives of the European Commission are holding a secret crisis meeting in Luxembourg on Friday night.”

So was there such a meeting in Luxembourg on Friday night?

Well, it turns out that there was a meeting of a small group of European finance ministers.  But according to German government spokesman Steffen Seibert, this meeting was planned well in advance and had nothing to do with Greece leaving the euro….

“There is a meeting of some finance ministers that has long been planned. Greece exiting the Eurozone is not on the agenda of that meeting, and it has never been.”

So is Greece actually thinking about leaving the euro?  All over Europe this notion is being denied.

Perhaps the strongest denial was issued by the Greek Finance Ministry….

“The report on an imminent Greek exit from the eurozone, as well as being untrue, has been written with incomprehensible levity despite the fact that this has been repeatedly denied by the Greek government, and the governments of other EU member states.”

What was probably being discussed at this meeting of European finance ministers is a restructuring of Greek debt.  This is something that Germany has apparently wanted for quite some time according to a recent article posted on Business Insider….

For weeks, German officials have been hinting that they want a Greek restructuring to happen. German economic advisor Lars Feld recently said that the restructuring should happen “sooner than later.” He’s previously also said “restructuring is the only road to take.”

So what would a restructuring of this debt look like?  A recent article on CNBC gives us some clues….

More importantly, tonight’s finance ministers meeting might lay the groundwork for “extending the maturities” on those loans — giving Athens a little more oxygen until it probably ends up restructuring its $470 billion existing debt by either extending maturities or exchanging Greek bonds, at a discount, for EU-guaranteed bonds, Brady Bond-style from the 1980s.

What Germany does not want is for Greece to even think about leaving the euro.  According to the article on Der Spiegel, German Finance Minister Wolfgang Schäuble is ready to play hardball with the Greeks.  Der Spiegel says that a report has been prepared that would lay out for the Greeks the severe consequences of leaving the euro….

“It would lead to a considerable devaluation of the new (Greek) domestic currency against the euro,” the paper states. According to German Finance Ministry estimates, the currency could lose as much as 50 percent of its value, leading to a drastic increase in Greek national debt. Schäuble’s staff have calculated that Greece’s national deficit would rise to 200 percent of gross domestic product after such a devaluation. “A debt restructuring would be inevitable,” his experts warn in the paper. In other words: Greece would go bankrupt.

Greece is really in a tough position.  They are going to go bankrupt if they stay with the euro and they are going to go bankrupt if they leave the euro.

Meanwhile, the anti-government protests continue.  The Greek people are not happy.  The Greek economy is coming apart like a 20 dollar suit.  Greece could end up being the spark that sets off a massive financial panic in Europe.

As I have written about previously, the European debt crisis is on the verge of spinning wildly out of control.  It is not just Greece that is facing a horrific debt crisis.  The financial problems in Europe literally span the entire continent.

A lot of Americans are obsessed with the death of the U.S. dollar, but the truth is that there is a strong possibility that the euro could end up collapsing before the dollar does.

Keep an eye on Europe.  The European debt crisis could plunge the entire global financial system into chaos at any time.  Things are not nearly as stable as they seem.

20 Shocking New Economic Records That Were Set In 2010

2010 was quite a year, wasn’t it?  2010 will be remembered for a lot of things, but for those living in the United States, one of the main things that last year will be remembered for is economic decline.  The number of foreclosure filings set a new record, the number of home repossessions set a new record, the number of bankruptcies went up again, the number of Americans that became so discouraged that they simply quit looking for work reached a new all-time high and the number of Americans on food stamps kept setting a brand new record every single month.  Meanwhile, U.S. government debt reached record highs, state government debt reached record highs and local government debt reached record highs.  What a mess!  In fact, even many of the “good” economic records that were set during 2010 were indications of underlying economic weakness.  For example, the price of gold set an all-time record during 2010, but one of the primary reasons for the increase in the price of gold was that the U.S. dollar was rapidly losing value.  Most Americans had been hoping that 2010 would be the beginning of better times, but unfortunately economic conditions just kept getting worse.

So will things improve in 2011?  That would be nice, but at this point there are not a whole lot of reasons to be optimistic about the economy.  The truth is that we are trapped in a period of long-term economic decline and we are now paying the price for decades of horrible decisions.

Amazingly, many of our politicians and many in the mainstream media have declared that “the recession is over” and that the U.S. economy is steadily improving now.

Well, if anyone tries to tell you that the economy got better in 2010, just show them the statistics below.  That should shut them up for a while.

The following are 20 new economic records that were set during 2010….

#1 An all-time record of 2.87 million U.S. households received a foreclosure filing in 2010.

#2 The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.

#3 The price of gold moved above $1400 an ounce for the first time ever during 2010.

#4 According to the American Bankruptcy Institute, approximately 1.53 million consumer bankruptcy petitions were filed in 2010, which was up 9 percent from 1.41 million in 2009.  This was the highest number of personal bankruptcies we have seen since the U.S. Congress substantially tightened U.S. bankruptcy law several years ago.

#5 At one point during 2010, the average time needed to find a job in the United States had risen to an all-time record of 35.2 weeks.

#6 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs, which is believed to be a new record low.

#7 The number of Americans working part-time jobs “for economic reasons” was the highest it has been in at least five decades during 2010.

#8 The number of American workers that are so discouraged that they have given up searching for work reached an all-time high near the end of 2010.

#9 Government spending continues to set new all-time records.  In fact, at the moment the U.S. government is spending approximately 6.85 million dollars every single minute.

#10 The number of Americans on food stamps surpassed 43 million by the end of 2010.  This was a new all-time record, and government officials fully expect the number of Americans enrolled in the program to continue to increase throughout 2011.

#11 The number of Americans on Medicaid surpassed 50 million for the first time ever in 2010.

#12 The U.S. Census Bureau originally announced that 43.6 million Americans are now living in poverty and according to them that was the highest number of Americans living in poverty that they had ever recorded in 51 years of record-keeping.  But now the Census Bureau says that they miscalculated and that the real number of poor Americans is actually 47.8 million.

#13 According to the FDIC, 157 banks failed during 2010.  That was the highest number of bank failures that the United States has experienced in any single year during the past decade.

#14 The Federal Reserve brought in a record $80.9 billion in profits during 2010.  They returned $78.4 billion of that to the U.S. Treasury, but the real story is that thanks to the Federal Reserve’s continual debasement of our currency, the U.S. dollar was worth less in 2010 than it ever had been before.

#15 It is projected that the major financial firms on Wall Street will pay out an all-time record of $144 billion in compensation for 2010.

#16 Americans now owe more than $881 billion on student loans, which is a new all-time record.

#17 In July, sales of new homes in the United States declined to the lowest level ever recorded.

#18 According to Zillow, U.S. housing prices have now declined a whopping 26 percent since their peak in June 2006.  Amazingly, this is even farther than house prices fell during the Great Depression.  From 1928 to 1933, U.S. housing prices only fell 25.9 percent.

#19 State and local government debt reached at an all-time record of 22 percent of U.S. GDP during 2010.

#20 The U.S. national debt has surpassed the 14 trillion dollar mark for the first time ever and it is being projected that it will soar well past 15 trillion during 2011.

There are some people that have a hard time really grasping what statistics actually mean.  For people like that, often pictures and charts are much more effective.  Well, that is one reason I like to include pictures and graphs in many of my articles, and below I have posted my favorite chart from this past year.  It shows the growth of the U.S. national debt from 1940 until today.  I honestly don’t know how anyone can look at this chart and still be convinced that our nation is not headed for a complete financial meltdown….

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