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ISIS Is Taking Over Iraq Using Captured American Weapons

The Caliphate On The March - ISIS Media HubISIS is marching through city after city in Iraq, and they are doing it with American weapons.  Thanks to a series of stunning victories in recent months, ISIS has captured a vast array of U.S. military equipment including trucks, Humvees, rockets, artillery pieces and Stinger missiles.  When the U.S. was pulling out of Iraq, we were extremely generous to the new Iraqi army.  We basically armed them to the teeth with equipment that U.S. taxpayers paid for.  But now that the new Iraqi army is folding like a 20 dollar suit in the face of ISIS jihadists, vast quantities of that military equipment are falling into the hands of some of the most radical jihadists the world has ever seen.  And considering the fact that ISIS also recently seized the equivalent of nearly $500 million in cash from a bank in Mosul, the leadership of ISIS won’t be having much problem buying anything else that they might need either.  ISIS is getting stronger with each passing day, and they are not going to be satisfied until the Iraqi government has been toppled.  It is a geopolitical mess of epic proportions, and there don’t seem to be any easy solutions on the horizon.

To say that the new Iraqi army has been incompetent would be a massive understatement.  Not only have they run away like scared kittens from these jihadists, they have also left behind staggering amounts of weaponry for them.  According to the Los Angeles Times, ISIS has captured “the weapons stores of the 2nd and 3rd [Iraqi army] divisions in Mosul, the 4th division in Salah al Din, the 12th division in the areas near Kirkuk, and another division in Diyala”.  And we aren’t just talking about rifles and ammunition.  We are talking about some pretty impressive hardware

Government forces retreated en masse from the onslaught, leaving behind a military hardware bonanza, including the U.S.-made armored Humvees as well as trucks, rockets, artillery pieces, rifles, ammunition, even a helicopter. Some of the seized materiel was old or otherwise non-functioning; but a lot was promptly put to use on the battlefield.

Pictures of grinning Islamist warriors cruising in U.S. Humvees bedecked with white-on-black militant flags flooded the Internet and became the signature image of the ISIS rampage.

ISIS social-media enthusiasts even mocked the global #BringBackOurGirls Twitter campaign, referring to girls kidnapped by an Al Qaeda offshoot in Nigeria. ISIS sympathizers began tweeting #BringBackOurHumvee.

One of the most popular photos mocking the Obamas and the U.S. military under the #BringBackOurHumvee hashtag is posted below…

BringBackOurHumvee

We have become a laughingstock to ISIS.  They know that we are not going to invade Iraq again.  So they are laughing at us as they use our own equipment to take over the country.

It is estimated that the military equipment that ISIS has captured so far could equip an army of 200,000 soldiers.  No wonder ISIS is recruiting more fighters so vigorously.

But wait, there’s more.

As WND has documented, members of ISIS were actually trained by U.S. personnel at a secret base in Jordan back in 2012…

Members of the Islamic State of Iraq and the Levant, or ISIS, were trained in 2012 by U.S. instructors working at a secret base in Jordan, according to informed Jordanian officials.

The officials said dozens of ISIS members were trained at the time as part of covert aid to the insurgents targeting the regime of Syrian President Bashar al-Assad in Syria. The officials said the training was not meant to be used for any future campaign in Iraq.

The Jordanian officials said all ISIS members who received U.S. training to fight in Syria were first vetted for any links to extremist groups like al-Qaida.

So U.S. taxpayers have not just paid for their weapons.

We have also paid for their training.

Not only that, but ISIS has also captured the Al Muthanna chemical weapons facility.

According to WND, some officials are concerned that ISIS may be able to use that sarin gas production facility to start churning out poison gas…

And they also may be working with a man who’s known for his expertise in making sarin, a manmade toxin that was developed in Germany and can, according to the Centers for Disease Control, produce loss of consciousness, convulsions, paralysis and death in victims who are exposed.

The revelations comes as the State Department acknowledged that ISIS has captured a stockpile of old chemical weapons at the Al Muthanna chemical weapons production complex as its fighters sweep through Iraq’s Sunni- controlled region.

The access to a sarin poison gas production facility, and the man with the expertise to operate it, is the result of a new alliance between the brutal jihadist fighters and Izzat Ibrahim al-Douri, who was a top military commander and vice president to the deposed Saddam Hussein.

And the folks running ISIS are crazy enough to do just about anything.  They are stone cold killers that will go to extreme lengths to advance their cause.  If you are not very familiar with ISIS yet, the YouTube documentary posted below contains some footage from some of their recent triumphs…

Iraq is literally being torn to pieces by this conflict, and even young boys are getting swept up into the fighting.

For example, check out this excerpt from a recent Daily Beast article

It was a surprising sight. The customers standing in Haj Hamdoun’s store in central Mosul watched as a masked child came into the shop, bought what he wanted without saying a word and then left again, carrying a bag containing candies and milk in one hand and a heavy machine gun, which was just about as big as him, in the other.

This was Abdullah, who appears to be the city’s youngest volunteer with the Sunni extremist group, the Islamic State of Iraq and al-Sham, or ISIS, that took control of Mosul over two weeks ago.

Abdullah is not yet 11 years old. But his older brother and his father, who was a senior member of ISIS, were killed in fighting between the group and Iraqi security forces in 2013. That’s why Abdullah joined ISIS, although he is far from the only child in its ranks.

And the photo of a 13-year-old ISIS fighter below comes from the ISIS Media Hub on Twitter

13 Year Old Jihadist - ISIS Media Hub

So where does all of this end?

For ISIS, the conquest of Iraq and Syria would just be the beginning.  Ultimately, ISIS intends to establish a caliphate that will rule the entire Middle East (and eventually the entire world).

And who is going to stop them from taking over Iraq?  These radicals are more than willing to die for what they believe in, and the Iraqi army has been pretty pathetic so far.

The United States seems to have very little interest in another Iraq war, and other nations would probably be extremely hesitant to intervene as well.

So who is going to stop ISIS?

And is there a larger geopolitical agenda at work here?

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

Words Of Warning: Get Your Money Out Of European Banks

Words Of Warning: Get Your Money Out Of European Banks - Photo by Julien JorgeIf you still have money in European banks, you need to get it out.  This is particularly true if you have money in southern European banks.  As I write this, the final details of the Cyprus bailout are being worked out, but one thing has become abundantly clear: at least some depositors are going to lose a substantial amount of money.  Personally, I never dreamed that they would go after private bank accounts in Europe, but now that this precedent has been set it should be apparent to everyone that no bank account will ever be considered 100% safe ever again.  Without trust, a banking system simply cannot function, and right now there are prominent voices on both sides of the Atlantic that are loudly warning that trust in the European banking system has been shattered and that people need to get their money out of those banks as rapidly as they can.  Even if you don’t end up losing a significant chunk of your money, you could still end up dealing with very serious capital controls that greatly restrict what you are able to do with your money.  Just look at what is already happening in Cyprus.  Cash withdrawals through ATMs have now been limited to 100 euros per day, and when the banks finally do reopen there will be strict limits on financial transactions in order to prevent a full-blown bank run.  And of course anyone with half a brain will be trying to get as much of their money as they can out of those banks once they do reopen.  So the truth is that the problems for Cyprus banks are just beginning.  The size of the “bailout” that will be needed to keep those banks afloat will just keep getting larger and larger the more money that is withdrawn.  Cyprus is heading for a complete and total banking meltdown, and because the economy of the island is so dependent on banking that means that the economy of the entire nation is going to collapse.  Sadly, similar scenarios will soon start playing out all over Europe.

So if you hear that a “deal” has been reached to “bail out” Cyprus, please keep in mind that the economy of Cyprus is going to collapse no matter what happens.  It is just a matter of apportioning the pain at this point.

According to the New York Times, it looks like much of the pain is going to be placed on the backs of those with deposits of over 100,000 euros…

The revised terms under discussion would assess a one-time tax  of 20 percent on deposits above 100,000 euros at the Bank of Cyprus, which has the largest number of savings accounts on the island. Because the Bank of Cyprus suffered huge losses on bets that it took on Greek bonds, the government appears to be taking  depositors’ money to help plug the hole.

A separate tax of 4 percent would be assessed on uninsured deposits at all other banks, including the 26 foreign banks that operate in Cyprus.

Does that sound bad to you?

Well, if a deal is not reached, there is a possibility that those with uninsured deposits could lose everything.  According to Ekathimerini, EU officials are telling Cyprus to choose between a “bad scenario” and a “very bad scenario”…

The main question surrounds the future of the island’s largest lender, Bank of Cyprus. If unsecured deposits (above 100,000 euros) at all Cypriot banks are taxed then large savings at Bank of Cyprus are likely to be taxed between 20 and 25 percent. If the levy is not imposed on deposits at other lenders, the haircut for Bank of Cyprus customers will be much larger.

The option of a full bail in of Bank of Cyprus depositors is still on the table. As with the Popular Bank of Cyprus (Laiki), which is to go through a resolution process, the full bail in option could lead to deposits above 100,000 euros being lost. The only compensation for unsecured depositors will be shares in the “good” bank that will be created by a possible merger between the “healthy” Laiki and Bank of Cyprus entities.

When asked by Kathimerini how the Cypriot economy will survive if all company and personal deposits above 100,000 euros disappear from the country’s two biggest lenders, the EU official said: “Unfortunately, Cyprus’s choices are between a bad scenario and a very bad scenario.”

So what percentage of the deposits in Cyprus are uninsured deposits?

Well, nobody knows for sure, but according to JPMorgan close to half of the total amount of money on deposit in EU banks as a whole is uninsured.

Do you think that some of those people will start moving their money to safer locations after watching how things are going down in Cyprus?

They would be crazy if they didn’t.

And if you think that “deposit insurance” will keep you safe, you are just being delusional.

According to CNBC, very strict capital controls are coming to Cyprus.  These rules will apply even to accounts that contain less than 100,000 euros…

Financial controls are coming. Depositors with less than 100,000 euros may not lose their money outright, but they won’t like the restrictions–no matter how much they have in the bank. Limits on withdrawals, limits on check cashing, and perhaps even outright conversion of checking accounts into fixed term deposits are coming (translation: you don’t have a checking account, you have a bond from the bank).

A lot of people are going to lose a lot of money in Cyprus banks, and a significant percentage of them are going to be Russian.

And as I wrote about the other day, you don’t want to have the Russians mad at you.

According to the Guardian, Moscow is already considering various ways that it might “punish” the EU…

However, with Russian investors having an estimated €30bn (£26bn) deposited in banks on the island, the growing optimism about a deal was accompanied by fears of retaliation from Moscow. Alexander Nekrassov, a former Kremlin adviser, said: “If it is the case that there will be a 25% levy on deposits greater than €100,000 then some Russians will suffer very badly.

“Then, of course, Moscow will be looking for ways to punish the EU. There are a number of large German companies operating in Russia. You could possibly look at freezing assets or taxing assets. The Kremlin is adopting a wait and see policy.”

Could this be the start of a bit of “economic warfare” between east and west?

One thing is for sure – the Russians simply do not allow people to walk all over them.

Meanwhile, things in Cyprus are getting more desperate with each passing day.  Because they cannot get money out of the banks, many retail stores find themselves running low on cash.  In a few more days many of them may not be able to function at all…

Retailers, facing cash-on-delivery demands from suppliers, warned stocks were running low. “At the moment, supplies will last another two or three days,” said Adamos Hadijadamou, head of Cyprus’s Association of Supermarkets. “We’ll have a problem if this is not resolved by next week.”

But do you know who was able to get their money out in time?

The insiders.

According to the Daily Mail, the President of Cyprus actually warned “close friends” about what was going to happen and told them to get their money out Cyprus…

Cypriot president Nikos Anastasiades ‘warned’ close friends of the financial crisis about to engulf his country so they could move their money abroad, it was claimed on Friday.

Overall, approximately 4.5 billion euros was moved out of Cyprus during the week just before the crisis struck.

Wouldn’t you like to get advance warning like that?

Well, at this point it does not take a genius to figure out what to do about any money that you may have in European banks.  The following is from a recent Forbes article by economist Laurence Kotlikoff…

Whatever happens, no one is going to trust or use Cypriot banks.  This will shut down the country’s financial highway and flip Cyprus’ economy to a truly awful equilibrium in a replay of our own country’s Great Depression, which was kicked off by the failure of one-in-three U.S. banks.

Cyprus is a small country.  Still, the failure of its banks could trigger massive bank runs in Greece.  After all, if the European Central Bank is abandoning Cypriot depositors, they may abandon Greek depositors next.  A run on Greek banks could then spread to Portugal, Ireland, Spain, and Italy and from there to Belgium and France and, you get the picture, to other countries around the globe, including, drum roll, the U.S.   Every bank in each of these countries has made promises they can’t keep were push come to shove, i.e., if all depositors demand their money back immediately.

We’ve seen this movie before.  And not just in real life.  Every Christmas our tellys show It’s a Wonderful Life in which banker Jimmy Stewart barely saves his small town from economic ruin arising from a banking panic.

Others are being even more blunt with their warnings.  For example, Nigel Farage, a member of the European Parliament, is warning everyone to get their money out of southern European banks while they still can…

The appalling events in Cyprus over the course of the past week have surpassed even my direst of predictions.

Even I didn’t think that they would stoop to stealing money from people’s bank accounts. I find that astonishing.

There are 750,000 British people who own properties, or who live, many of them in retirement down in Spain.

Our message to expats now that the EU has crossed this line, must be: Get your money out of there while you’ve still got a chance.

And Martin Sibileau is proclaiming that if you still have an unsecured deposit in a eurozone bank that you should have your head examined…

What are depositors of Euros faced with today? Anything but a clean bet! They don’t know what the expected loss on their capital will be, because it will be decided over a weekend by politicians who don’t even represent them.  They don’t really know where their deposits went to and they also ignore what jurisdiction they really belong to. Finally, depositors are paid mere basis points for their trust in the system vs. the 20% p.a. Argentina offered in 2001 (thanks to the zero-interest rate policies of the 21st century). In light of all this, I can only conclude that anyone still having an unsecured deposit in a Euro zone bank should get his/her head examined!

So where should you put your money?

I don’t know that there is anywhere that is 100% safe at this point.  But many are pointing to hard assets such as gold and silver.  The following is what trends forecaster Gerald Celente had to say during one recent interview

“People always say to me, ‘Mr. Celente you are always talking about gold.  What are you going to do with gold when everything collapses and there is no money?’  Well, let’s say you are a Cypriot and all of the ATM machines are out of money and the banks are closed?  Do you think those pieces of silver are going to buy you what you need?  Do you think that ounce of gold is going to get you what you want?

That’s the real money.  There is no other money.  When it all comes down, gold and silver are the only things you have to buy what you need, get what you want, or even get out if you need to.”

I used to tell people that putting their money in U.S. banks was safer than putting it other places because U.S. bank deposits are covered by deposit insurance up to a certain amount.

But now we see that deposit insurance means absolutely nothing.  If they decide to “tax” (i.e. steal) your money from your bank accounts they will just go ahead and do it.

So what should we all do?

Personally, I think that not having all of your eggs in one basket is a wise approach.  If you have your wealth a bunch of different places and in several different forms, I think that will help.

But as the global financial system falls apart, there will be no such thing as 100% safety.  So if you are looking for that you can stop trying.

Our world is becoming a very unstable place, and things are going to get a lot worse.  We are all going to have to adjust to this new paradigm and do the best that we can.

The Euro Is Falling

Mass Panic In Cyprus: The Banks Are Collapsing And ATMs Are Running Out Of Money

Cyprus ATM - Photo Via @ImeldaflatteryEuropean officials are openly admitting that the two largest banks in Cyprus are “insolvent“, and it is now being reported that Cyprus Popular Bank only has “enough liquidity to cover the next few hours“.  Of course all banks in Cyprus are officially closed until Tuesday at the earliest, but there have been long lines at ATMs all over Cyprus as people scramble to get whatever money they can out of the banks.  Unfortunately, some ATMs appear to be “malfunctioning” and others appear to have already run out of cash.  You can see some photos of huge lines at one ATM in Cyprus right here.  Some businesses are now even refusing to take credit card payments.  This is creating an atmosphere of panic on the streets of Cyprus.  Meanwhile, the EU is holding a gun to the head of the Cyprus financial system.  Either Cyprus meets EU demands by Monday, or liquidity for the banks will be totally cut off and Cyprus will be forced out of the euro.  It is being reported that European officials believe that the “economy is going to tank in Cyprus no matter what“, and that it would be okay to let the financial system of Cyprus crash and burn if politicians in Cyprus are not willing to do what they have been ordered to do.  Apparently European officials are very confident that the situation in Cyprus can be contained and that it will not spread to other European nations.

Unfortunately, European officials are losing sight of the bigger picture.  If the largest banks in Cyprus are allowed to fail, it will be another “Lehman Brothers moment“.  The faith that people have in banks all over Europe will be called into question, and everyone will be wondering what major European banks will be allowed to fail next.

Meanwhile, European officials have already completely shattered confidence in deposit insurance at this point.  Everyone now knows that when there is a major bank failure that depositors will be expected to share in the pain.  Expect to see “bank jogs” all over southern Europe over the coming weeks.

The banks in Cyprus had been scheduled to reopen on Tuesday, but very few people expect that to actually happen at this point.  In fact, Bloomberg is reporting that EU officials are actually thinking about shutting down the two biggest banks in Cyprus and freezing their assets…

Finance ministers for the 17 euro countries are considering a plan to shutter the two biggest banks in Cyprus and freeze the assets of uninsured depositors, said the four officials, who asked not to be named because the talks are ongoing. The ministers are holding a teleconference tonight.

Cyprus Popular Bank Pcl (CPB) and the Bank of Cyprus Plc would be split to create a so-called bad bank, one of the officials said. Insured deposits — below the European Union ceiling of 100,000 euros ($129,000) — would go into a so-called good bank and not sustain any losses, while uninsured deposits would go into the bad bank and be frozen until assets could be sold, said the four officials.

Losses to unsecured creditors, including uninsured depositors, could reach 40 percent under the plan, which has support from the International Monetary Fund and the European Central Bank. The proposal, a version of which was rejected last week, is considered a better option than taxing insured deposits or allowing Cypriot banks to collapse in a disorderly fashion if they lose access to ECB aid, the officials said.

Such a scenario would be an utter disaster.

How would you feel if you woke up someday and 40 percent of your life savings was suddenly gone?

According to Greek newspaper Kathimerini, European officials are also openly discussing the possibility of a Cyprus exit from the eurozone if a suitable bailout agreement is not worked out…

The possibility of Cyprus exiting the eurozone was discussed during teleconference involving technocrats from the Euro Working Group on Wednesday, Kathimerini understands.

A reliable source told Kathimerini that the technical implications of a euro exit, as well as the adoption of capital controls were debated by the Euro Working Group officials during the teleconference.

As I mentioned above, European officials seemed resigned to the fact that there will be an economic collapse in Cyprus “no matter what”, and so letting Cyprus leave the euro would not make that much of a difference.  Either way, the banks are going to have to be “reorganized” and capital controls will be imposed…

In detailed notes of the call seen by Reuters, the group’s chair Austria’s Thomas Wieser said: “The economy is going to tank in Cyprus no matter what. Restrictions on capital will probably be imposed.”

Never before have we seen European officials impose such a harsh ultimatum with such a short deadline.  It is almost as if they want to boot Cyprus out of the euro.  The following comes from a recent CNBC report…

In stark twin warnings on Thursday, the European Central Bank said it would cut off liquidity to Cypriot banks and a senior EU official made clear to Reuters that the bloc was ready to see the bankrupt island banished from the euro in the belief it could then contain damage to the wider European economy.

And European officials are even publicly talking about the possibility that Cyprus will soon need to start using “their own currency”…

In Brussels, a senior European Union official told Reuters that an ECB withdrawal would mean Cyprus’s biggest banks being wound up, wiping out the large deposits it has sought to protect, and probably forcing the country to abandon the euro.

“If the financial sector collapses, then they simply have to face a very significant devaluation and faced with that situation, they would have no other way but to start having their own currency,” the EU official said.

This is absolutely shocking.  Everyone always thought that Greece would be the first to leave the euro, but now it looks like it might be Cyprus.

However, there is still a chance that Cyprus may find a way to comply with EU demands.  Politicians in Cyprus are frantically searching for a way to raise the needed cash without raiding private bank accounts.  The following is what CNN is saying about the latest efforts…

Leaders of Cyprus’ political parties agreed Thursday to create an “investment solidarity fund,” which would issue bonds backed by state and church assets.

The plan was due to be discussed by the Cypriot government and parliament on Thursday evening, but few details were available and it was not clear how much the fund would be worth.

According to Reuters, other proposals have been under consideration as well…

The government said a “Plan B” was in the works.

Officials said it could include: an option to nationalize pension funds of semi-government corporations, which hold between 2 billion and 3 billion euros; issuing an emergency bond linked to future natural gas revenues; and possibly reviving the levy on bank deposits, though at a lower level than originally planned and maybe excluding savers with less than 100,000 euros.

At this point it is unclear whether any of those proposals will turn out to be acceptable to European officials.

In fact, the tone of European officials has noticeably changed from previous bailout efforts.  They now seem much more willing to play hardball.  For example, just check out what German Finance Minister Wolfgang Schaeuble is saying about the situation in Cyprus…

German finance minister Wolfgang Schaeuble told the ZDF public broadcaster on Tuesday night (19 March) he “took note with regret” of the Cypriot parliament’s rejection of the bailout deal, but insisted that the terms will stay the same.

Asked if the eurozone was willing to let Cyprus go bust, he answered: “Well, we are much more stable in the eurozone – we took measures to protect ourselves from the risks of contagion … but I don’t want to have any of this.”

He added: “It is a serious situation, but this cannot lead to a decision that makes absolutely no sense, to rescue a business model that has failed. Cyprus has a banking sector that is totally oversized and this made Cyprus insolvent. And nobody outside Cyprus is to blame for it.”

Schaeuble knows that the EU is holding all of the cards and that Cyprus is doomed without their help…

“The Cypriot state cannot fund itself on the markets. Its two largest banks are insolvent and are being kept afloat with emergency funding from the ECB, but only on the condition that there will be a long-term rescue programme. If this condition is no longer met, Cyprus will no longer be solvent and this is something Cypriot decision makers must know”

But the truth is that the EU can’t really afford to allow major banks to fail or for a single member to leave the eurozone.  If either of those things happen, the confidence game that has been holding the European financial system together will begin to rapidly evaporate.

If the EU thinks that they can abandon Cyprus without the crisis spreading to the rest of southern Europe they are just being delusional.

At least there are a few politicians in Europe that understand what is happening.  Nigel Farage, a very outspoken member of the European Parliament, is telling people to get their money out of banks in southern Europe as quickly as they can.  He is warning that a great collapse of the European financial system is coming and that people need to get prepared for it…

So what do you think?

Do you believe that we are on the verge of a major financial collapse in Europe?

Please feel free to post a comment with your thoughts below…

Cyprus Bank Run - Photo Via @jkozakou

Bankrupt, Decaying And Nearly Dead: 24 Facts About The City Of Detroit That Will Shock You

Bankrupt, Decaying And Nearly Dead: 24 Facts About The City Of Detroit That Will Shock You - Photo by Angelique DuLongIf you want to know what the future of America is going to be like, just look at the city of Detroit.  Once upon a time it was a symbol of everything that America was doing right, but today it has been transformed into a rotting, decaying, post-apocalyptic hellhole.  Detroit was once the fourth-largest city in the United States, and in 1960 Detroit had the highest per-capita income in the entire nation.  It was the greatest manufacturing city the world had ever seen, and the rest of the globe looked at Detroit with a sense of awe and wonder.  But now the city of Detroit has become a bad joke to the rest of the world.  Unemployment is rampant, 60 percent of the children are living in poverty and the city government is on the verge of bankruptcy.  They say that Detroit is just a matter of “weeks or months” away from running out of cash, and when Detroit does declare bankruptcy it will be the largest municipal bankruptcy in the history of the United States.  But don’t look down on Detroit, because the truth is that Detroit is really a metaphor for what is happening to America as a whole.  In the United States today, our manufacturing infrastructure has been gutted, poverty is absolutely exploding and we are rapidly approaching national bankruptcy.  Detroit may have gotten there first, but the rest of the country will follow soon enough.

Back during the boom years, Detroit was known for making great cars.  Today, it is known for scenes of desolation and decay.  It is full of vandalized homes, abandoned schools and empty factories.  The following description of what Detroit looks like at this point is from an article by Barry Yeoman

It’s hard to describe the city’s physical landscape without producing what Detroiters call “ruin porn.” Brick houses with bays and turrets sit windowless or boarded up. Whole blocks, even clusters of blocks, have been bulldozed. Retail strips have been reduced to a dollar store here, a storefront church there, and a whole lot of plywood in between. Not a single chain supermarket remains.

So what caused the downfall of one of the greatest cities on earth?

Well, here is a hint…

Between December 2000 and December 2010, 48 percent of the manufacturing jobs in Michigan were lost.

When you are a manufacturing area, and you lose half of your manufacturing jobs over the course of a single decade, of course things are going to get really, really bad.

So just how bad have things gotten in Detroit?

The following are 24 facts about the city of Detroit that will shock you…

#1 Detroit was once the fourth-largest city in the United States, and it was once home to close to 2 million people.  But over the last several decades people have been fleeing in droves.  According to the 2010 census, only 713,000 people now live in Detroit, and city officials admit that the population has probably slipped under 700,000 at this point.

#2 The population of Detroit has declined by about 25 percent over the past decade.  The last time the population of Detroit was this low was all the way back in 1910.

#3 Today, Detroit is only the 18th-largest city in America.  It is now smaller than Austin, Texas and Charlotte, North Carolina.

#4 Back in 1960, the city of Detroit had the highest per-capita income in the United States.

#5 Today, the unemployment rate in Detroit is more than 18 percent, which is more than twice as high as the nation as a whole.

#6 According to a report that was just recently released, approximately 60 percent of all children in Detroit live in poverty.

#7 Approximately one-third of Detroit’s 140 square miles are either vacant or derelict.

#8 The city government of Detroit has closed dozens of schools and has decided to cut off public services to the “heavily blighted areas“.

#9 According to one estimate, there are 33,500 empty houses and 91,000 vacant residential lots in the city of Detroit today.

#10 The median price of a home in Detroit is just $9,000, and there are some areas of Detroit where you can still buy a house for $100.

#11 There are more than 85,000 streetlights in Detroit, but thieves have stripped so much copper wiring out of the lights that more than half of them are not working.

#12 Mayor Bing has announced a plan to reduce the number of streetlights in the city of Detroit to just 46,000.

#13 According to one very shocking report, 47 percent of all people living in the city of Detroit are functionally illiterate at this point..

#14 The murder rate in Detroit is 11 times higher than it is in New York City.

#15 There were 377 homicides in Detroit in 2011.  In 2012, that number rose to 411.

#16 Justifiable homicide in Detroit rose by an astounding 79 percent during 2011.

#17 In one recent year, the rate of self-defense killings in the city of Detroit was 2200% above the national average.

#18 Ten years ago, there were approximately 5,000 police officers in the city of Detroit.  Today, there are only about 2,500 and another 100 are scheduled to be eliminated from the force soon.

#19 Due to budget cutbacks, most police stations in Detroit are now closed to the public for 16 hours a day.

#20 Crime has gotten so bad in Detroit that even the police are are telling people to “enter Detroit at your own risk“.

#21 At one point, 100 bus drivers in Detroit refused to drive their routes because they were afraid of being attacked out on the streets in broad daylight.  The head of the bus drivers union, Henry Gaffney, said that the drivers were literally “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.

#22 There have been reports that gangs of young men with AK-47s have been terrorizing gas stations all over Detroit.

#23 Detroit was once known for making some of the greatest cars in the world.  Now, it is known around the world as a dumping ground for the dead

From the street, the two decomposing bodies were nearly invisible, concealed in an overgrown lot alongside worn-out car tires and a moldy sofa. The teenagers had been shot, stripped to their underwear and left on a deserted block.

They were just the latest victims of foul play whose remains went undiscovered for days after being hidden deep inside Detroit’s vast urban wilderness — a crumbling wasteland rarely visited by outsiders and infrequently patrolled by police.

#24 Detroit’s public schools are an absolute nightmare.  The following is from one of my readers that actually attended one of the “best” public schools in Detroit…

The school was a new seven story building just a couple of years old. The bathrooms would often lack toilet paper & soap beyond the second floor (the main floor), the bathroom sinks would often not work. The water fountains on north side of the building on from the third floor & up did not work. The elevators would constantly break down. I even got stuck on the elevator before. I almost tripped down a half a flight of stairs because the elastic seal (it was the metal bar at the front of a treader of I don’t know the name of it.) the stairs was not properly installed.

Students would often have sex on the stairs & throughout the school. Parents actually called the school many times & reported kids having sex on the stairs because all of them had glass windows 270 degrees.

Even over in Europe they write stories about the dramatic decline of Detroit.  For example, the following is how one British reporter described his visit to Detroit

Much of Detroit is horribly dangerous for its own residents, who in many cases only stay because they have nowhere else to go. Property crime is double the American average, violent crime triple. The isolated, peeling homes, the flooded roads, the clunky, rusted old cars and the neglected front yards amid trees and groin-high grassland make you think you are in rural Alabama, not in one of the greatest industrial cities that ever existed.

For those that want to read even more about the horrifying downfall of Detroit, there are some amazing charts that graphically show the decline of Detroit right here.

So what is the solution?

How can we fix Detroit?

Well, why don’t we just build a monorail!  Of course that sounds ridiculous, but the federal government has actually committed $25 million to construct “a streetcar line” that nobody really wants and that very few people would probably actually use.  Perhaps they could be excused for wasting so much money on a bad idea if there had not already been 24 failed attempts to develop a successful public transit system in Detroit over the past four decades.

Well, why don’t we just build a bunch of theme parks instead?  After all, tourists would just flock to Detroit, right?

It has been suggested that Detroit would be ideal for an “automotive theme park”, and there is actually one group of investors that wants to turn some of the worst areas of Detroit into a “zombie theme park”.

What will they think of next?

Actually, a much better idea would have been to not allow millions of our good paying manufacturing jobs to be shipped to the other side of the world, but it is too late for that at this point.

But once again, please do not look down on the city of Detroit.  Instead, let the city of Detroit serve as a warning for the rest of us.

The truth is that the entire U.S. economy is in an advanced state of decline…

-The percentage of the civilian labor force in the United States that is employed has been steadily declining every single year since 2006.

-An astounding 53 percent of all American workers make less than $30,000 a year.

-Amazingly, there are hundreds of thousands of Americans with either Master’s degrees or Ph.D.s that are enrolled in the food stamp program at this point.

We are a nation that consumes far more wealth than we produce, we are a nation that is constantly bleeding jobs, businesses and wealth, and we are a nation that is going deeper into debt with each passing day.

Yes, Detroit may have gone over the edge into economic oblivion first, but the rest of the nation is steamrolling down the exact same path that Detroit has gone.

Is it too late for us to change direction?

Please feel free to share your thoughts on that question by leaving a comment below…

Detroit - Photo by Albert duce

They Are Going To Make It Nearly Impossible To Pass On A Farm Or A Business To Your Children

If you have a farm or a small business, would you like to pass it on to your children when you die?  Well, unless Congress does something, it is going to become much, much harder to do that starting next year.  Right now, there is a 5 million dollar estate tax exemption and anything above that is taxed at 35 percent.  But on January 1st, the exemption will go down to 1 million dollars and the tax rate will go up to 55 percent.  A lot of liberals are very excited about this, because they believe that the government will be soaking wealthy people like Warren Buffett and Bill Gates.  But the truth is that a lot of farms, ranches and small businesses will be absolutely devastated by this change in the tax law.  There are many farmers and ranchers out there today that do not make much money but are sitting on tracts of land that are worth millions of dollars.  According to the American Farm Bureau, approximately 97 percent of all farms and ranches in the United States would be subject to the estate tax if the exemption was reduced to just a million dollars.  That means that the children of these farmers and ranchers would be faced with a very cruel choice when it is time to inherit these farms and ranches.  Either they come up with enough money to pay the government about half of what the farm or ranch is worth, or they sell the farm or ranch that may have been in their family for generations.  Needless to say, most farm and ranch families do not have that kind of cash lying around.  Most of them are just barely making it from year to year.  So this change in the tax law is going to greatly accelerate the death of the family farm in America.  This is also going to devastate many family-owned small businesses.  Many small businesses don’t make much money, but they have buildings or land or assets worth millions of dollars.  Children that may have wanted to continue the family legacy will be forced to sell because of the massive tax bill that they get from Uncle Sam.  This is an insidious cruelty, and it shows just how broken our system has become.

The desire to leave the wealth that you have worked so hard to accumulate all your life to your children is something that is common to virtually all human societies.  We want to know that future generations will be taken care of.

It is simply immoral for the federal government to swoop in and tax farms, ranches and small businesses that were intended to be passed down from parents to their children at a 55 percent tax rate.

A lot of the people that are going to be affected by this change are not “wealthy” at all.  A recent Fox News report examined what this change in the law is going to mean for rancher Kevin Kester and his family…

Rancher Kevin Kester works dawn to dusk, drives a 12-year-old pick-up truck and earns less than a typical bureaucrat in Washington D.C., yet the federal government considers him rich enough to pay the estate tax — also known as the “death tax.”

Kester told Fox News that he has no doubt that his ranch will have to be sold when he dies just to pay the tax bill…

“There is no way financially my kids can pay what the IRS is going to demand from them nine months after death and keep this ranch intact for their generation and future generations,” said Kester, of the Bear Valley Ranch in Central California.

Two decades ago, Kester paid the IRS $2 million when he inherited a 22,000-acre cattle ranch from his grandfather. Come January, the tax burden on his children will be more than $13 million.

Reading that should make you angry.  Every single year, thousands upon thousands of farms, ranches and small businesses are going to be lost to the federal tax monster.

It is almost as if the federal government does not want income-producing assets to remain in the hands of the “little guy”.

What in the world are we supposed to do?

It isn’t as if all of those farmers and ranchers can go off to the big cities and find good jobs.  As I wrote about yesterday, our politicians are standing aside as millions of our good jobs are shipped out of the country.

The cold, hard truth is that our system does not work for average Americans any longer.  Those that roll out of bed every morning, work hard and never complain always seem to get the short end of the stick.

The people that are the backbone of America are the ones that the government is always the hardest on.

Unfortunately, we have gotten to a point where the government is searching for more “revenue” from anywhere it can because it desperately needs more money.  U.S. government finances are a complete and total mess and we are drowning in the biggest ocean of debt the world has ever seen.

We are more than 16 trillion dollars in debt and there are more than 100 million Americans that are enrolled in at least one welfare program.

Someday has to pay for all this.

Middle class Americans are already hit with dozens of different taxes each year, and you can be certain that our politicians will continue to invent ways to extract even more “revenue” out of us.

And of course our politicians will never stop their wild spending.  Despite all of the negotiations that have taken place over the past couple of years, our spending problems just continue to grow.  For example, the federal budget deficit for the month of October was $120 billion, which was more than 20 percent larger than the federal budget deficit for October 2011 was.

So what is the solution?

Well, Treasury Secretary Timothy Geithner now says that he wants to eliminate the debt ceiling entirely.  He says that we should just have no limit and that the federal government should just be able to go into debt as much as it wants.

In the end, all of this debt is going to absolutely crush us.  We have literally destroyed the future of America, and yet most of the country still seems clueless about all of this.  The blind are leading the blind, and we are headed straight for complete and utter disaster.

One day, when people look back on this period in American history, what do you think people are going to say about us?

55 Reasons Why You Should Buy Products That Are Made In America

This is the time of the year when Americans run out to their favorite retail stores and fill up their shopping carts with lots of cheap plastic crap made by workers in foreign countries where it is legal to pay slave labor wages.  By doing this, the American people are actively participating in the destruction of the U.S. economy.  You see, buying products that are made in America is not just a matter of national pride.  It is a matter of national survival.  If we do not support American workers, they are going to continue to see their jobs shipped out of the country.  If we do not support American businesses, they are going to continue to die off at a staggering rate.  Last year, the United States had a trade deficit with the rest of the world of 558 billion dollars.  More than half a trillion dollars that could have gone into the pockets of U.S. workers and U.S. businesses went overseas instead.  If that money had stayed in the country, taxes would have been paid on that mountain of cash and our local, state and federal government debt problems would not be as severe.  As a result of our massive trade imbalance, we have lost tens of thousands of businesses, millions of jobs and trillions of dollars of national wealth.  Both major political parties have sold us out on these issues, and we are getting poorer as a nation with each passing day.  We desperately need a resurgence of economic patriotism in the United States before it is too late.

Yes, I know that it is very tempting to buy foreign-made products.  After all, they are almost always cheaper.

But most people don’t often think about why they are cheaper.

Unfortunately, in the name of “free trade” American workers have been merged into a global labor pool where they have to compete directly for jobs with workers on the other side of the globe that live in countries where it is legal to pay slave labor wages.  This makes employing American workers a tremendous liability.

If a company hires you and pays you 10 to 15 dollars an hour with benefits, how is it going to compete with another company that pays workers a dollar an hour with no benefits on the other side of the planet?

Both major political parties are pushing this emerging “one world economic system“, but it is absolutely killing American jobs.  We have already seen a mass exodus of jobs and businesses out of this country, and wages for the jobs that remain in the United States are being forced down because there are hordes of unemployed workers that are willing to take just about any decent job they can find.

It has become painfully obvious that our politicians are not going to do anything to help us on these issues, so what we need is a mass awakening among the American people.

We need to educate people that buying things that are made in America is good for the economy and that buying things that are made elsewhere is bad for the economy.

But for now, most Americans are clueless.  They will line up on Black Friday morning and trample one another in a desperate attempt to save a few bucks on cheap plastic devices that were made on the other side of the planet.

And they will pay for much of this “shopping” with credit cards.

Credit card debt is on the rise once again.  In fact, average credit card debt per borrower was 4.9 percent higher in the third quarter of 2012 than it was in the third quarter of 2011.  It looks like most of us didn’t learn our lessons from the last financial crisis.

But not all Americans enjoy the shopping that is typically involved with this time of the year.  One recent survey found that approximately 45 percent of all Americans think that there is so much financial pressure associated with the holidays that they wouldn’t mind skipping them completely.

That same poll found that approximately 41 percent of all Americans would only be able to survive for two weeks without a paycheck.  Many Americans are up to their eyeballs in debt, their incomes are not keeping up with rising prices, and they find themselves scratching and clawing just to make it from month to month.

Meanwhile, we continue to destroy our own jobs and businesses by spending our money on products that have been made outside the country.

The following are 55 reasons why you should buy products that are made in America this holiday season…

1. When you buy products that are made in America you support American workers.

2. When you buy products that are made in America you support companies that are doing business in America.

3. In 2000, there were more than 17 million Americans working in manufacturing, but now there are less than 12 million.

4. The United States has a trade imbalance that is more than 7 times larger than any other nation on earth has.

5. Our trade deficit with China in 2011 was $295.5 billion.  That was the largest trade deficit that one country has had with another country in the history of the planet.

6. In 2011, our trade deficit with China was 28 times larger than it was back in 1990 and more than 49,000 times larger than it was back in 1985.

7. When NAFTA was passed in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars.  In 2010, we had a trade deficit with Mexico of 61.6 billion dollars.

8. One professor has estimated that cutting the U.S. trade deficit in half would create 5 million more jobs in the United States.

9. Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the globe since 1975.  That 8 trillion dollars could have gone to support U.S. businesses and pay the wages of U.S. workers.  Federal, state and local taxes would also have been paid on that 8 trillion dollars if it had stayed in the United States.

10. According to the Economic Policy Institute, America is losing half a million jobs to China every single year.

11. The United States has lost an average of approximately 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001.

12. According to U.S. Representative Betty Sutton, the United States has lost an average of 15 manufacturing facilities a day over the last 10 years.

13. During 2010 alone, an average of 23 manufacturing facilities permanently shut down in the United States every single day.

14. Overall, the United States has lost more than 56,000 manufacturing facilities since 2001.

15. The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

16. Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost.

17. As I have written about previously, 95 percent of the jobs lost during the last recession were middle class jobs.

18. Due in part to the globalization of the labor pool, only about 24 percent of all jobs in the United States are “good jobs” at this point.

19. Right now, more than 41 percent of all working age Americans do not have a job, and the vast majority of the new jobs that are being created are low paying jobs.

20. The United States now has 10 percent fewer “middle class jobs” than it did just ten years ago.

21. According to the Economic Policy Institute, the U.S. economy loses approximately 9,000 jobs for every $1 billion of goods that are imported from overseas.

22. As our economic infrastructure is gutted, formerly great manufacturing cities all over America are being transformed into festering hellholes.

23. Between 2001 and 2007, the value of products that Wal-Mart imported from China grew from $9 billion to $27 billion.

24. In 2001, American consumers spent 102 billion dollars on products made in China.  In 2011, American consumers spent 399 billion dollars on products made in China.

25. The United States spends about 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.

26. Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Today, China’s high-tech exports are more than twice the size of U.S. high-tech exports.

27. In 2002, the United States had a trade deficit in “advanced technology products” of $16 billion with the rest of the world.  In 2010, that number skyrocketed to $82 billion.

28. The United States has lost more than a quarter of all of its high-tech manufacturing jobs over the past ten years.

29. Manufacturing employment in the U.S. computer industry was actually lower in 2010 than it was in 1975.

30. The Chinese undervalue their currency by about 40 percent in order to gain a critical advantage over foreign competitors.  This means that many Chinese companies are able to absolutely thrive while their competition in the United States goes out of business.

31. According to the New York Times, a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China thanks to all the tariffs.

32. In 2010, China produced more than twice as many automobiles as the United States did.

33. Since the auto industry bailout, approximately 70 percent of all GM vehicles have been built outside the United States.

34. Do you remember when the United States was the dominant manufacturer of automobiles and trucks on the globe?  Well, in 2010 the U.S. ran a trade deficit in automobiles, trucks and parts of $110 billion.

35. In 2010, South Korea exported 12 times as many automobiles, trucks and parts to us as we exported to them.

36. In 2010, China produced 627 million metric tons of steel.  The United States only produced 80 million metric tons of steel.

37. In 2010, China produced 7.3 million metric tons of cotton.  The United States only produced 3.4 million metric tons of cotton.

38. Today, China produces nearly twice as much beer as the United States does.

39. 85 percent of all artificial Christmas trees are made in China.

40. Right now, China is producing more than three times as much coal as the United States does.

41. China is now the number one supplier of components that are critical to the operation of U.S. defense systems.  How stupid can we possibly be?

42. According to author Clyde Prestowitz, China’s number one export to the U.S. is computer equipment.  According to an article in U.S. News & World Report, during 2010 the number one U.S. export to China was “scrap and trash”.

43. All over the United States, road and bridge projects are being outsourced to Chinese firms.  Just check out the following excerpt from a recent ABC News article….

In New York there is a $400 million renovation project on the Alexander Hamilton Bridge.

In California, there is a $7.2 billion project to rebuild the Bay Bridge connecting San Francisco and Oakland.

In Alaska, there is a proposal for a $190 million bridge project.

These projects sound like steps in the right direction, but much of the work is going to Chinese government-owned firms.

“When we subsidize jobs in China, we’re not creating any wealth in the United States,” said Scott Paul, executive director for the Alliance for American Manufacturing.

44. The new World Trade Center tower is going to include glass that has been imported from China.

45. The new Martin Luther King memorial on the National Mall was made in China.

46. The Chinese economy has grown 7 times faster than the U.S. economy has over the past decade.

47. The Chinese economy is projected to be larger than the U.S. economy by 2016.

48. One economist is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040.

49. In recent years the U.S. economy has embraced “free trade” and the emerging one world economy like never before.  Instead of increasing the number of jobs in our economy, it has resulted in the worst stretch of job creation in the United States in modern history….

If any single number captures the state of the American economy over the last decade, it is zero. That was the net gain in jobs between 1999 and 2009—nada, nil, zip. By painful contrast, from the 1940s through the 1990s, recessions came and went, but no decade ended without at least a 20 percent increase in the number of jobs.

50. If you gathered together all of the workers that are “officially” unemployed in the United States today, they would constitute the 68th largest country in the world.

51. China now holds approximately more than a trillion dollars of U.S. government debt.  If you were alive back when Jesus was born and you had spent a million dollars every single day since then, you still would not have spent that much money by now.

52. Jeffrey Immelt, the head of Barack Obama’s highly touted “Jobs Council”, has shipped tens of thousands of good jobs out of the United States.

53. Without enough good jobs, more Americans than ever before are falling into poverty.  Today, more than 100 million Americans are enrolled in at least one welfare program run by the federal government.

54. According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades if current trends continue.

55. If U.S. consumers do not start supporting U.S. workers and U.S. businesses, eventually we will all be so poor that very few of us will be able to afford to buy any gifts during the holiday season.

17 Reasons Why Those Hoping For A Recession In 2012 Just Got Their Wish

If you were hoping for a recession in 2012, then you are going to be very happy with the numbers you are about to see.  The U.S. economy is heading downhill just in time for the 2012 election.  Retail sales have fallen for three months in a row for the first time since 2008, manufacturing activity is dropping like a rock, sales of new homes are declining again, consumer confidence has moved significantly lower and a depressingly small percentage of businesses anticipate hiring more workers in the coming months.  Even though the Federal Reserve has been wildly pumping money into the financial system and even though the federal government has been injecting gigantic piles of borrowed cash into the economy, we still haven’t seen an economic recovery.  In fact, we appear to be on the verge of yet another major downturn.  In California the other night, Barack Obama told supporters that “we tried our plan — and it worked“, but only those that are still drinking the Obama kool-aid would believe something so preposterous.  The truth is that the U.S. economy has been steadily declining for many years and now we have reached another very painful recession.

And don’t let the second quarter GDP number on Friday fool you.  Analysts are expecting to see GDP growth of about 1.4 percent for the second quarter, but the only reason for our very small amount of “economic growth” is because the economy has been flooded with new dollars.

Let me give you an example.  If I could go out overnight and magically double the bank accounts of every single American, would we all be twice as wealthy?

No, because there would be twice as many dollars now chasing the same amount of goods and services.  The price of those goods and services would soon rise dramatically to reflect this new reality.

With all of those new dollars spinning around in the economy it would look like “economic growth” was going through the roof, but in reality the amount of real economic activity would be about the same.

So whenever we talk about GDP, we need to properly adjust it for inflation.  That means using accurate inflation figures and not the highly manipulated inflation figures that the U.S. government is putting out these days.

And as I noted the other day, after properly adjusting for inflation the U.S. economy has been continually experiencing negative economic growth since about 2005.

So let’s not deceive ourselves.  The U.S. economy has been declining for a long time.

But soon even the GDP number that the government gives us will turn negative.  We will probably see a slightly positive number for the second quarter, and the number will likely go negative either in the third quarter or the fourth quarter.

Economists will debate when this new recession officially “began” just like they do with every recession, but it doesn’t take a genius to figure out what is happening to our economy right now.

The following are 17 reasons why those hoping for a recession in 2012 just got their wish….

1. U.S. retail sales have declined for three months in a row.  This is the first time this has happened since 2008.  Every other time this has happened in U.S. history (except for once) this has signaled that the U.S. economy was either already in a recession or was about to enter one.

2. The Philadelphia Fed index of manufacturing activity contracted for the third month in a row during July.  According to the Financial Post, this is a very bad sign….

Seven out of eight times when the average reading has been that low (-11.8) for that long the U.S. economy has tipped into recession.

3. Manufacturing activity in the mid-Atlantic region has also declined for three months in a row.  In fact, the only time in the past decade when manufacturing activity in the mid-Atlantic has fallen more dramatically was during the last recession.

4. A factory index calculated by the Institute for Supply Management has fallen to its lowest level since June 2009.

5. The Conference Board index of leading economic indicators has fallen for two of the past three months.

6. According to a recent survey conducted by the Conference Board, only 17 percent of CEOs had a positive view of the economy during the second quarter of 2012.  During the first quarter of 2012, 67 percent did.

7. Gallup’s U.S. Economic Confidence Index is now the lowest that it has been since January.

8. Optimism among small business owners has declined in three of the last four months and is now at its lowest level since last October.

9. Believe it or not, the amount of waste being carted around on trains in the United States has an 82 percent correlation with U.S. economic growth.  Unfortunately, right now the number of garbage carloads on trains is falling dramatically.

10. Sales of previously occupied homes dropped by 5.4 percent during June.

11. Sales of new homes declined by 8.4 percent during June.  At this point new home sales are less than a third of what they were during the boom years.

12. An increasing number of Americans are relying on high interest “payday loans” to pay the rent and put food on the table.

13. Far more companies are defaulting on their debts this year than last year.

14. According to the U.S. Labor Department, the unemployment rate fell in 11 states and Washington, D.C. last month, but it rose in 27 states.

15. The unemployment rate in New York City is now back up to 10 percent.  That equals the peak unemployment rate in New York City during the last recession.

16. The teen unemployment rate in Washington D.C. right now is 51.7 percent.

17. 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.

All of those are very powerful pieces of evidence that a new recession has started.

But do you want to know one of my favorite indicators that the U.S. economy is sliding into recession?

In a previous article, I noted that Federal Reserve Chairman Ben Bernanke made the following statement to Congress recently: “At this point we don’t see a double dip recession. We see continued moderate growth.”

As I mentioned the other day, Bernanke has a track record of failure that is absolutely embarrassing.  Back on January 10, 2008 Bernanke made the following statement….

“The Federal Reserve is not currently forecasting a recession.”

That turned out to be a great call, didn’t it?

On June 10, 2008 he doubled down on his call that the U.S. economy was going to avoid a recession….

“The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.”

Just before Fannie Mae and Freddie Mac collapsed Bernanke made this statement….

“The GSEs are adequately capitalized. They are in no danger of failing.”

And there are dozens of other examples just like these.

This is the guy running our economic system.

I am very critical of the Federal Reserve, but there are very good reasons for this.

The Federal Reserve is running our economy into the ground, and we need to pound this into the heads of the American people so that they will wake up and demand change.

Perhaps this next recession will be painful enough to wake people up.

The Wall Street Journal is already even using the “D word” to describe what we are experiencing.  Just today, the Wall Street Journal ran an article that asked this question: “Do Two Recessions Equal One Depression?

Sadly, this is just the leading edge of what is coming.  By the time 2014 or 2015 rolls around, we are going to look back and long for the “good old days” of 2011 and 2012.

Over the next few years, the unemployment rate is going to skyrocket and poverty in the United States is going to get a whole lot worse.

Now is not the time to goof off.  Now is the time to work really hard to get yourself and your family into the best position that you can for the storm that is coming.

Nothing is going to stop the terrible economic crisis that is coming, but at least we can get prepared for it.

There is hope in being prepared.

Sadly, most people will never even see the next crisis coming until they get blindsided by it.

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