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Obamacare: The Final Nail In The Coffin For The Middle Class

CoffinIf there were any shreds of hope left that the stunning decline of the middle class could be turned around, Obamacare has absolutely destroyed them.  Over the past decade or so, the middle class in the United States has been absolutely eviscerated.  The number of working age Americans without a job has increased by 27 million since the year 2000, median household income in the U.S. has fallen for five years in a row, and the poverty numbers in this country are spiraling out of control.  And now here comes Obamacare.  As you will see below, Obamacare is causing millions of Americans to lose their current health insurance policies, it is causing health insurance premiums to explode to absolutely ridiculous levels, and it is systematically killing jobs even though the employer mandate has been delayed for a while.  All of this is creating a tremendous amount of stress for millions of middle class families that are already stretched extremely thin financially.  According to CNN, a survey that was conducted earlier this year found that 76 percent of all Americans are living paycheck to paycheck.  Most of those families simply cannot afford to pay much higher health insurance premiums for new policies that also come with much larger deductibles and significantly increased out-of-pocket costs.  Millions of those families will ultimately end up choosing to do without health insurance altogether, and that will create a whole host of new problems.  This is a disaster that is so enormous that it is really hard to put into words.  If the U.S. health care system was a separate country, it would be the 6th largest economy on the entire globe all by itself.  And now Obamacare is going to bring the entire U.S. health care system to its knees.

Obamacare: Since October 1st, The Number Of Americans With Health Insurance Has Fallen By Nearly 4 Million

Last week, Barack Obama decided to allow Americans to keep their current health insurance plans for one more year.

Isn’t that generous of him?  Especially considering the fact that he promised us over and over that if we liked our current health insurance policies that we would be able to keep them permanently.

The funny thing is that Obama is not actually changing the law.  So if your health insurance company allows you to stay on your current health insurance plan that does not meet the requirements of Obamacare, it is technically breaking the law.

And if you continue to stay on that current health insurance plan that does not meet the requirements of Obamacare, you are technically breaking the law.

It is just that Obama has promised not to enforce what the law says for one year.

For a president to just blatantly disregard the rule of law is a very dangerous precedent.  Do we really want the president to have the power to decide what laws are going to be enforced and what laws are not going to be enforced?

That sounds dangerously close to a dictatorship to me.

And in any event, there are many Americans that are not going to be able to keep their current policies no matter what Obama says.  For example, just two hours after Obama announced his plan last week, the state of Washington announced that they would not be allowing insurance companies to extend their old health insurance plans if they don’t comply with Obamacare under any circumstances…

State Insurance Commissioner Mike Kreidler has rejected President Obama’s proposal to allow insurance companies to extend health insurance policies for people who have received notices that their policies will be cancelled at the end of the year.

Within two hours of President Obama’s news conference announcing the proposed administrative fix for Americans upset by their policy cancellations, Kreidler issued a statement rejecting the proposal.

“I understand that many people are upset by the notices they have recently received from their health plans and they may not need the new benefits [in the Affordable Care Act] today,” he said. “But I have serious concerns about how President Obama’s proposal would be implemented and more significantly, its potential impact on the overall stability of our health insurance market.”

“I do not believe his proposal is a good deal for the state of Washington,” Kreidler’s statement continued. “We will not be allowing insurance companies to extend their policies.”

How do you think the people of the state of Washington will respond to that?

Things are getting crazy out there, and the number of people that are losing their health insurance policies is absolutely stunning.

According to the Wall Street Journal, so far 106,185 Americans have enrolled in Obamacare since October 1st.  Most of those that have successfully enrolled have done so through the state insurance exchanges.  So far, only 26,794 Americans have signed up for health insurance using the federally run exchanges on HealthCare.gov.

Meanwhile, during that same time frame, 4.02 million Americans have had their health insurance policies cancelled.

So that means that the number of Americans with health insurance has actually decreased by 3,918,205 since October 1st.

Wasn’t Obamacare supposed to result in more Americans being covered?

And according to U.S. Senator Rand Paul, Obama not only knew that this would happen, he actually wrote the regulation that caused this to happen…

“I’m still learning about it. It’s 20,000 pages of regulations. The Bill was 2,000 pages and I didn’t realize this until this week, the whole idea of you losing or getting your insurance cancelled wasn’t in the original Obamacare. It was a regulation WRITTEN BY PRESIDENT OBAMA, three months later. So we had a vote, this is before I got up there. The Republicans had a vote to try to cancel that regulation so you COULDN’T BE CANCELLED, to grandfather everybody in. You know what the vote was? Straight party line. EVERY DEMOCRAT VOTED TO KEEP THE RULE THAT CANCELS YOUR INSURANCE.”

So now millions of Americans, including women battling cancer, are losing health insurance plans that they were depending upon.

Thanks Obama?

Obamacare: Skyrocketing Health Insurance Premiums

How much more are you willing to pay for health insurance than you are paying right now?

10 percent?

20 percent?

30 percent?

Well, according to one study health insurance premiums for men are going to go up by an average of 99 percent under Obamacare and health insurance premiums for women are going to go up by an average of 62 percent under Obamacare.

And of course some groups are going to see increases that are much larger than that.  For example, it is being projected that health insurance premiums for healthy 30-year-old men will rise by an average of 260 percent.

Ouch.

And there are some families out there that have already been hit with health insurance premium increases that are absolutely jaw-dropping.  In a previous article, I included the example of one family down in Texas that has been hit with a 539% rate increase…

Obamacare is named the “Affordable Care Act,” after all, and the President promised the rates would be “as low as a phone bill.” But I just received a confirmed letter from a friend in Texas showing a 539% rate increase on an existing policy that’s been in good standing for years.

As the letter reveals (see below), the cost for this couple’s policy under Humana is increasing from $212.10 per month to $1,356.60 per month. This is for a couple in good health whose combined income is less than $70K — a middle-class family, in other words.

Obamacare: Enormous Deductibles And Huge Out-Of-Pocket Expenses For All

It isn’t just health insurance premiums that are going up either.  Deductibles are going up too.  In fact, just check out what one survey of Americans living in seven different states recently discovered

Expenses for some policies can reach $6,350 for a single person and $12,700 per family, the most allowed by the health-care law, according to a survey by HealthPocket Inc. of seven states, including California and Ohio. That’s 26 percent higher than the average deductible in the seven states, and a scenario likely repeated across the country, said Kev Coleman, head of research and data at Sunnyvale, California-based HealthPocket.

That same article has a great quote from an elderly New Jersey resident.  82-year-old Larry Saphire thinks that if you have to pay a $5,000 deductible up front, “you might as well not have any insurance at all”…

“If you have to pay $5,000 upfront” when illness hits, “you might as well not have any insurance at all,” said Larry Saphire, 82, of West Orange, New Jersey, who shopped for coverage for his wife and two children, ages 16 and 21. “That’s not insurance.”

On California’s state-run exchange site, the standard low-premium “bronze” plan carries a $5,000 deductible per person, a $60 co-pay to see a doctor and a 30 percent fee, known as coinsurance, on hospital care. In Rhode Island, Blue Cross Blue Shield’s bronze plan has a $5,800 deductible while Missouri’s U.S.-run exchange offers plans by Anthem Blue Cross with the maximum-allowable $6,350 in out-of-pocket costs.

Obamacare: The Quality Of Care Is Going To Go Into The Toilet

A lot of Americans that are signing up for Obamacare are going to be in for a huge shock.  Many of the best hospitals and many of the best doctors are not covered by their plans

Meanwhile, sometime between March and June, the other shoe drops: People who bought exchange policies realize that the restricted networks insurers created to keep the premium costs low cut out the best hospitals and doctors. A newly insured child with cancer cannot get into a top pediatric hospital because her insurance has zero coverage for out-of-network emergency care. Tearful Mom goes on the evening news and says that she thought when they went on Obamacare, that meant they were safe, and why can’t I take my baby to Philadelphia Children’s Hospital, Mr. President?

Can you imagine being a parent in that situation?

In response, some hospitals are already filing suit over this.  For instance, check out what is happening over in Seattle

Seattle Children’s Hospital filed suit against Washington State’s Office of the Insurance Commissioner this week, after Obamacare implementation caused the hospital to be cut from four of the six insurance plans offered by the new Washington Health Benefit Exchange.

And even if you are on Medicare that does not mean that the quality of your care is going to stay the same either.  As Reuters just reported, UnitedHealth is dumping “thousands of doctors” from their Medicare Advantage plans for the elderly because of Obamacare…

UnitedHealth Group dropped thousands of doctors from its networks in recent weeks, leaving many elderly patients unsure whether they need to switch plans to continue seeing their doctors, the Wall Street Journal reported on Friday.

The insurer said in October that underfunding of Medicare Advantage plans for the elderly could not be fully offset by the company’s other healthcare business. The company also reported spending more healthcare premiums on medical claims in the third quarter, due mainly to government cuts to payments for Medicare Advantage services.

In the United States, we already pay much more for health care than everyone else in the world, and we typically have to wait longer to see a doctor than most of the rest of the industrialized world does.

Now Obamacare is going to make all of this even worse, and the quality of the care that we receive is going to go downhill fast.

Obamacare: The Jobs Killer

A while back, Obama unilaterally made the decision to delay the implementation of the employer mandate until 2015.

That was probably a good political decision, because it would have been a huge political issue in the 2014 elections.

But the truth is that we won’t have to wait until 2015 for Obamacare to start killing jobs.  In fact, according to CNBC it is already happening…

Approximately one-third of business decision-makers at companies with between 40 and 500 employees, say the health-care law has already increased their costs due to hikes in both the cost of insurance and compliance, according to a recent report from political-research firm Public Opinion Strategies. As a result, many business leaders say they are already making personnel decisions based on the Affordable Care Act.

Among franchised businesses, 27 percent report their company has replaced full-time workers with part-time workers and 31 percent have reduced worker hours. Among non-franchised businesses, 12 percent are replacing full-time workers with part-time workers or reducing hours. This is happening now, with more than a year before the mandate goes into effect; and undoubtedly, these numbers will rise as we approach next July’s “look back” period for tabulating workers’ hours.

It is kind of startling that we are already seeing employers make such big changes even though the employer mandate does not come into effect until 2015.  You can find a very long list of some of the employers that have already either eliminated jobs or cut hours because of Obamacare right here.

Remember, this is just the tip of the iceberg.  Once we get closer to the deadline things are going to get much, much worse.

At a time when the middle class desperately needs jobs, Obamacare is going to slaughter them.

And even if you are able to keep your current job, that does not mean that your health plan will remain the same.  In fact, Forbes is projecting that a staggering 51 percent of all employment-based health insurance plans will be canceled and replaced with new ones.

Overall, Forbes is projecting that an astounding 93 million Americans will eventually lose their current health insurance policies due to Obamacare.

Obamacare: Providing Huge Incentives For Many Americans To Work Less And Make Less Money

Did you know that Obamacare is going to cause millions of Americans to want to keep their incomes under certain levels?

If you make too much money under Obamacare, you will miss out on some absolutely massive health care subsidies.  The following is an excerpt from one of my previous articles

—–

The figures that you are about to see were calculated using the Kaiser Family Foundation subsidy calculator.  These numbers apply to a husband and a wife that are both 62 years old.

A non-smoking, married couple living in San Francisco, California earning $63,000 a year will have to pay $20,318 a year for a silver plan under Obamacare and $12,647 a year for a bronze plan.

At $63,000, that couple would be making too much money to be eligible for a subsidy, so that couple will have to pay the total cost of whatever plan they choose by themselves.

But if that couple only made $62,000 a year, things would dramatically change.

The plans would still cost the same, but the couple would now be eligible for an Obamacare subsidy of $14,428.

So a silver plan would end up costing them only $5,890, and they would ultimately pay nothing for a bronze plan.

In other words, by reducing their income by $1,000, that couple would save $14,428 if they got a silver plan or they would save $12,647 if they got a bronze plan.

Isn’t that bizarre?

—–

In the end, millions upon millions of middle class families will decide to go without health insurance entirely for one reason or another.

This will work great until they get into an accident or become seriously ill.

As I have discussed previously, approximately 60 percent of all personal bankruptcies in the United States are related to medical bills.  And most of those bankruptcies actually happen to people that are supposedly “covered” by health insurance.

Obamacare is going to make all of this so much worse.  Millions of middle class families will end up with no health insurance at all, and because so many of them are living paycheck to paycheck a single health emergency will be enough to send them hurtling down the path to financial oblivion.

If you get into an accident, a visit to the emergency room and a single night in the hospital can easily cost tens of thousands of dollars in many areas of the country.

If you get a serious illness such as cancer, the medical bills can be absolutely astronomical.  For instance, there are many cancer patients that rack up medical bills well in excess of a million dollars by the time that they die.

Something desperately needs to be done about our horrible health care system.  Unfortunately, Obamacare is going to make just about everything that is bad about our current system much, much worse.

And the American people are becoming increasingly disgusted and frustrated with Obamacare.  According to Real Clear Politics, an average of recent opinion polls shows that the American people are opposed to Obamacare by an average margin of 14.2 percentage points.

So what do you think about Obamacare?

Please feel free to share your opinion by posting a comment below, and please share this information with as many people as you possibly can.

Coffin

11 International Agreements That Are Nails In The Coffin Of The Petrodollar

Is the petrodollar dead?  Well, not yet, but the nails are being hammered into the coffin even as you read this.  For decades, most of the nations of the world have used the U.S. dollar to buy oil and to trade with each other.  In essence, the U.S. dollar has been acting as a true global currency.  Virtually every country on the face of the earth has needed big piles of U.S. dollars for international trade.  This has ensured a huge demand for U.S. dollars and U.S. government debt.  This demand for dollars has kept prices and interest rates low, and it has given the U.S. government an incredible amount of power and leverage around the globe.  Right now, U.S. dollars make up more than 60 percent of all foreign currency reserves in the world.  But times are changing.  Over the past couple of years there has been a whole bunch of international agreements that have made the U.S. dollar less important in international trade.  The mainstream media in the United States has been strangely quiet about all of these agreements, but the truth is that they are setting the stage for a fundamental shift in the way that trade is conducted around the globe.  When the petrodollar dies, it is going to have an absolutely devastating impact on the U.S. economy.  Sadly, most Americans are totally clueless regarding what is about to happen to the dollar.

One of the reasons the Federal Reserve has been able to get away with flooding the financial system with U.S. dollars is because the rest of the world has been soaking a lot of those dollars up.  The rest of the world has needed giant piles of dollars to trade with, but what is going to happen when they don’t need dollars anymore?

Could we see a tsunami of inflation as demand for the dollar plummets like a rock?

The power of the U.S. dollar has been one of the few things holding up our economy.  Once that leg gets kicked out from under us we are going to be in a whole lot of trouble.

The following are 11 international agreements that are nails in the coffin of the petrodollar….

#1 China And Russia

China and Russia have decided to start using their own currencies when trading with each other.  The following is from a China Daily article about this important agreement….

China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.

Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies.

“About trade settlement, we have decided to use our own currencies,” Putin said at a joint news conference with Wen in St. Petersburg.

The two countries were accustomed to using other currencies, especially the dollar, for bilateral trade. Since the financial crisis, however, high-ranking officials on both sides began to explore other possibilities.

#2 China And Brazil

Did you know that Brazil conducts more trade with China than with anyone else?

The largest economy in South America has just agreed to a huge currency swap deal with the largest economy in Asia.  The following is from a recent BBC article….

China and Brazil have agreed a currency swap deal in a bid to safeguard against any global financial crisis and strengthen their trade ties.

It will allow their respective central banks to exchange local currencies worth up to 60bn reais or 190bn yuan ($30bn; £19bn).

The amount can be used to shore up reserves in times of crisis or put towards boosting bilateral trade.

#3 China And Australia

Did you know that Australia conducts more trade with China than with anyone else?

Australia also recently agreed to a huge currency swap deal with China.  The following is from a recent Financial Express article….

The central banks of China and Australia signed a A$30 billion ($31.2 billion) currency-swap agreement to ensure the availability of capital between the trading partners, the Reserve Bank of Australia said.

“The main purposes of the swap agreement are to support trade and investment between Australia and China, particularly in local-currency terms, and to strengthen bilateral financial cooperation,” the RBA said in a statement on its website. “The agreement reflects the increasing opportunities available to settle trade between the two countries in Chinese renminbi and to make RMB-denominated investments.”

China has been expanding currency-swap accords as it promotes the international use of the yuan, and the accord with Australia follows similar deals with nations including South Korea, Turkey and Kazakhstan. China is Australia’s biggest trading partner and accounts for about a quarter of the nation’s merchandise sales abroad.

#4 China And Japan

The second and third largest economies on the entire planet have decided that they should start moving toward using their own currencies when trading with each other.  This agreement was incredibly important but it was almost totally ignored by the U.S. media.

According to Bloomberg, it is anticipated that this agreement will strengthen ties between these two Asian giants….

Japan and China will promote direct trading of the yen and yuan without using dollars and will encourage the development of a market for companies involved in the exchanges, the Japanese government said.

Japan will also apply to buy Chinese bonds next year, allowing the investment of renminbi that leaves China during the transactions, the Japanese government said in a statement after a meeting between Prime Minister Yoshihiko Noda and Chinese Premier Wen Jiabao in Beijing yesterday. Encouraging direct yen- yuan settlement should reduce currency risks and trading costs, the Japanese and Chinese governments said.

China is Japan’s biggest trading partner with 26.5 trillion yen ($340 billion) in two-way transactions last year, from 9.2 trillion yen a decade earlier.

#5 India And Japan

It is not just China making these kinds of currency agreements.  According to Reuters, India and Japan have also agreed to a very large currency swap deal….

India and Japan have agreed to a $15 billion currency swap line, Japan’s Prime Minister Yoshihiko Noda said on Wednesday, in a positive move for the troubled Indian rupee, Asia’s worst-performing currency this year.

#6 “Junk For Oil”: How India And China Are Buying Oil From Iran

Iran is still selling lots of oil.  They just aren’t exchanging that oil for U.S. dollars as much these days.

So how is Iran selling their oil without using dollars?

A Bloomberg article recently detailed what countries such as China and India are exchanging for Iranian oil….

Iran and its leading oil buyers, China and India, are finding ways to skirt U.S. and European Union financial sanctions on the Islamic republic by agreeing to trade oil for local currencies and goods including wheat, soybean meal and consumer products.

India, the second-biggest importer of Iran’s oil, has set up a rupee account at a state-owned bank to settle as much as much as 45 percent of its bill, according to Indian officials. China, Iran’s largest oil customer, already settles some of its oil debts through barter, Mahmoud Bahmani, Iran’s central bank governor, said Feb. 28. Iran also has sought to trade oil for wheat from Pakistan and Russia, according to media reports from the two countries.

#7 Iran And Russia

According to Bloomberg, Iran and Russia have decided to discard the U.S. dollar and use their own currencies when trading with each other….

Iran and Russia replaced the U.S. dollar with their national currencies in bilateral trade, Iran’s state-run Fars news agency reported, citing Seyed Reza Sajjadi, the Iranian ambassador in Moscow.

The proposal to switch to the ruble and the rial was raised by Russian President Dmitry Medvedev at a meeting with his Iranian counterpart, Mahmoud Ahmadinejad, in Astana, Kazakhstan, of the Shanghai Cooperation Organization, the ambassador said.

#8 China And Chile

China and Chile recently signed a new agreement that will dramatically expand trade between the two nations and that is also likely to lead to significant currency swaps between the two countries….

The following is from a recent report that described this new agreement between China and Chile….

Wen called on the two nations to expand trade in goods, promote trade in services and mutual investment, and double bilateral trade in three years.

The Chinese leader also said the two countries should enhance cooperation in mining, expand farm product trade, and promote cooperation in farm product production and processing and agricultural technology.

China would like to be actively engaged in Chile’s infrastructure construction and work with Chile to promote the development of transportation networks in Latin America, said Wen.

Meanwhile, Wen suggested that the two sides launch currency swaps and expand settlement in China’s renminbi.

#9 China And The United Arab Emirates

According to CNN, China and the United Arab Emirates recently agreed to a very large currency swap deal….

In January, Chinese Premier Wen Jiabao visited the United Arab Emirates and signed a $5.5 billion currency swap deal to boost trade and investments between the two countries.

#10 China And Africa

Did you know that China is now Africa’s biggest trading partner?

For many years the U.S. dollar was dominant in Africa, but now that is changing.  A report from Africa’s largest bank, Standard Bank, says the following….

“We expect at least $100 billion (about R768 billion) in Sino-African trade – more than the total bilateral trade between China and Africa in 2010 – to be settled in the renminbi by 2015.”

#11 Brazil, Russia, India, China And South Africa

The BRICS (Brazil, Russia, India, China and South Africa) continue to become a larger factor in the global economy.

A recent agreement between those nations sets the stage for them to increasingly use their own national currencies when trading with each other rather than the U.S. dollar.  The following is from a news source in India….

The five major emerging economies of BRICS — Brazil, Russia, India, China and South Africa — are set to inject greater economic momentum into their grouping by signing two pacts for promoting intra-BRICS trade at the fourth summit of their leaders here Thursday.

The two agreements that will enable credit facility in local currency for businesses of BRICS countries will be signed in the presence of the leaders of the five countries, Sudhir Vyas, secretary (economic relations) in the external affairs ministry, told reporters here.

The pacts are expected to scale up intra-BRICS trade which has been growing at the rate of 28 percent over the last few years, but at $230 billion, remains much below the potential of the five economic powerhouses.

So what does all of this mean?

It means that the days of the U.S. dollar being the de facto reserve currency of the world are numbered.

So why is this important?

In a previous article, I quoted an outstanding article by Marin Katusa that detailed many of the important benefits that the petrodollar system has had for the U.S. economy….

The “petrodollar” system was a brilliant political and economic move. It forced the world’s oil money to flow through the US Federal Reserve, creating ever-growing international demand for both US dollars and US debt, while essentially letting the US pretty much own the world’s oil for free, since oil’s value is denominated in a currency that America controls and prints. The petrodollar system spread beyond oil: the majority of international trade is done in US dollars. That means that from Russia to China, Brazil to South Korea, every country aims to maximize the US-dollar surplus garnered from its export trade to buy oil.

The US has reaped many rewards. As oil usage increased in the 1980s, demand for the US dollar rose with it, lifting the US economy to new heights. But even without economic success at home the US dollar would have soared, because the petrodollar system created consistent international demand for US dollars, which in turn gained in value. A strong US dollar allowed Americans to buy imported goods at a massive discount – the petrodollar system essentially creating a subsidy for US consumers at the expense of the rest of the world. Here, finally, the US hit on a downside: The availability of cheap imports hit the US manufacturing industry hard, and the disappearance of manufacturing jobs remains one of the biggest challenges in resurrecting the US economy today.

So what happens when the petrodollar dies?

The following are some of the things we are likely to see….

-Oil will cost a lot more.

-Everything will cost a lot more.

-There will be a lot less foreign demand for U.S. government debt.

-Interest rates on U.S. government debt will rise.

-Interest rates on just about everything in the U.S. economy will rise.

And that is just for starters.

As I wrote about earlier today, the Federal Reserve is not going to save us.  Ben Bernanke is not somehow going to pull a rabbit out of a hat that will magically make everything okay.  Fundamental changes to the global financial system are happening right now that are impossible for Bernanke to stop.

We should have never gone into so much debt.  Up until now we have gotten away with it, but when demand for U.S. dollars and U.S. debt dries up we are going to experience a massive amount of pain.

Keep your eyes and ears open for more news stories like the ones referenced above.  The end of the petrodollar is going to be a very significant landmark on the road toward the total collapse of the U.S. economy.

So what do you think the fate of the U.S. dollar is going to be in the years ahead?

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

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