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The Global Famine Begins: UN Announces That The Worst Food Crisis Since World War II Is Happening Right Now

Horse Famine - Public DomainWe always knew that this would start happening.  Earlier this month, I wrote about the severe economic problems that are plaguing South America, but up to this point I have neglected to discuss the horrific famines that are breaking out all over Africa.  Right now there is a desperate need for food in South Sudan, Somalia, northeast Nigeria, Eritrea and Kenya.  And Yemen, even though it is not technically part of Africa, is being affected by many of the same factors that are crippling nations all over eastern Africa.  The United Nations says that more than 20 million people could die from starvation and disease if nothing is done.  When I write about economic collapse, this is the kind of thing that I am talking about, and we are starting to see alarming conditions spread across the globe.  Many believe that we could never possibly face this kind of food crisis in the western world, but unfortunately wishful thinking will only get you so far.

The United Nations was formed in 1945, and the UN has just announced that what we are facing this year is “the largest humanitarian crisis since the creation of the UN”.  The following comes from a CNN article entitled “20 million at risk of starvation in world’s largest crisis since 1945, UN says“…

“We stand at a critical point in history. Already at the beginning of the year we are facing the largest humanitarian crisis since the creation of the UN,” UN humanitarian chief Stephen O’Brien said Friday.

Now, more than 20 million people across four countries face starvation and famine. Without collective and coordinated global efforts, people will simply starve to death. Many more will suffer and die from disease.”

It would be hard to overstate the level of human suffering that we are witnessing in many parts of Africa at this moment.  In Somalia, the UN estimates that more than 6 million people are in desperate need of food aid

As Somalia inches closer to a calamitous famine, the prospect of utter devastation and colossal loss of human life is once again becoming an imminent reality. The humanitarian situation in Somalia is deteriorating by the day with up to 6.2 million people in need of urgent aid. People across Somalia have been forced to walk hundreds of miles in search of food, water and shelter- with women and children disproportionately affected. Over 300,000 children under the age of five are severely malnourished, with over 200,000 more children at risk of acute malnutrition.

In South Sudan, close to half the population is in dire need of assistance, and things have gotten so bad there that people will literally eat grass if they can find it

Across South Sudan more than one million children are believed to be acutely malnourished and UNICEF have said that if urgent aid does not reach them, many of them will die. “There is no food, we eat anything we can find,” one South Sudanese mother told ITV. “We will find grass, we will eat it. That’s just the way it us for us now.”

Over in Yemen, there are about seven million people in need of food help, and authorities are warning that if nothing is done “millions of children” could starve to death

“The numbers affected are absolutely extraordinary,” said Mark Kaye, Save the Children’s Yemen spokesperson.

“We keep on talking about a country that’s on the brink of famine, but for me these numbers highlight that we’re at the point of no return. If things are not done now we are going to be looking back on this and millions of children will have starved to death, and we’ll all have been aware of this for some time. That will shame us as an international community for years to come.

Eritrea was not specifically included in the recent UN alert, but it should have been.  Much of the country has been hit by a crippling drought, and approximately half of all children in Eritrea are stunted

But we cannot understand why Eritrea is not included in the appeal. Unicef has confirmed what we know from our friends and families inside the country. In a report in January, the agency said that the El Niño drought has hit half of all Eritrea’s regions. Acute malnutrition is widespread. As Unicef put it: “Malnutrition rates already exceeded emergency levels, with 22,700 children under five projected to suffer from severe acute malnutrition in 2017 … Half of all children in Eritrea are stunted, and as a result, these children are even more vulnerable to malnutrition and disease outbreaks.

We have been warned that there would be famines in diverse places in these times.  But here in the western world we tend to be lulled into a false sense of security by our comfortable lives, not realizing that the massively inflated standard of living that we have been enjoying has been fueled by the largest mountain of debt in the history of the planet.

In Kenya, a national emergency has been declared due to drought and famine.  For those of you that are parents, what would you do if your children were crying out for food but you didn’t have anything to give them?  The following story from Kenya is beyond heartbreaking…

Emmanuel Ayapar is three years old and can no longer walk. The flesh on his legs, which dangle from his mother’s hip as she carries him around, is wasting away.

He seems listless and sad, tongue flicking repeatedly in and out of his mouth.

‘We do not have enough food,’ said Veronica, his 28-year-old mother. ‘We eat only once a day.’

The little boy is suffering from severe malnutrition and is at risk of starving to death. He weighs just 15lb – half the typical weight for a boy of his age.

I don’t even know what to say after that.

In the western world we can be so incredibly self-absorbed that we don’t even realize that children are literally starving to death on the other side of the planet.

Hopefully those of us that live in “wealthy” western countries will step up to the plate and aid those in need, and hopefully this crisis will also help us to understand that we need to prepare for the day when things get difficult in our own nations too.

The Debt Ceiling Deadline Has Passed, And Now The Biggest Test Of Donald Trump’s Presidency Begins…

Trump First Weekly Address - Public DomainOn Wednesday, the temporary suspension of the debt ceiling ended, and so now the federal government is not going to be able to go into any more debt until the debt ceiling is raised.  For the moment, the Trump administration can implement “emergency measures” to stay under the debt limit, but it won’t be too long before we get to a major crisis point because the federal government is quickly running out of cash.  Already, the U.S. Treasury has less cash on hand than Apple or Google, and that cash balance is going to keep on dropping until the debt ceiling is finally lifted.

You may remember that the debt ceiling became a major issue a couple of times during the Obama years.  Last time around, Barack Obama and the Republicans in Congress agreed to a horrendous deal which suspended the debt ceiling until several months after the 2016 election

Since President Barack Obama signed the “Bipartisan Budget Act” on Nov. 2, 2015 there had been no legal limit on the amount of money the federal government could borrow until now. That law included a section entitled “Temporary Extension of Public Debt Limit.” It said that the law imposing a limit on the federal debt “shall not apply for the period beginning on the date of the enactment of this Act and ending on March 15, 2017.”

During the 16 and a half months between the signing of that deal and today, the U.S. national debt rose by a whopping $1,414,397,000,000.

But now the U.S. national debt will not be allowed to rise by another penny until the debt ceiling is raised or suspended once again.

The Trump administration is pushing hard to get the debt ceiling raised, and this is a complete reversal from how Donald Trump felt about the debt ceiling back in 2013.  The following comes from the L.A. Times

Trump sided with hard-liners in 2013, publicly opposing an increase. “I cannot believe the Republicans are extending the debt ceiling — I am a Republican & I am embarrassed!” he tweeted then.

Trump was actually right about the debt ceiling in 2013, and he is wrong now.

We simply cannot afford to keep adding trillions of dollars to the national debt.  What we are doing to future generations of Americans is beyond criminal, because we are literally destroying their future just so that we can enjoy an inflated standard of living that we do not deserve today.

Treasury Secretary Steven Mnuchin has already begun to implement “extraordinary measures” to keep us under the debt ceiling.  The first step that was taken was the suspension of the sale of SLGS securities

“Today,” Mnuchin wrote, “Treasury is announcing that it will suspend the sale of State and Local Government Series (SLGS) securities. SLGS are special-purpose Treasury securities issued to states and municipalities to assist them in conforming to certain tax rules. These securities count against the debt limit. The suspension of SLGS sales will commence on March 15, 2017, and continue until the debt limit is either raised or suspended. As in the past, it is likely Treasury will utilize additional extraordinary measures.”

The federal government will be able to keep going for a little while by implementing such “extraordinary measures”, but the Treasury cash balance is going to continue to dwindle and at some point a major squeeze is going to happen.

As things get tighter and tighter, the Trump administration will become increasingly desperate to get the debt ceiling raised.  As I wrote about yesterday, the key for Trump is going to be finding 218 votes in the House of Representatives that will be willing to go along with him.

You would think that since Republicans control the House that this should be easy, but the truth is that there are a lot of conservative Republicans that are not inclined to agree to a debt ceiling increase without substantial accompanying budget cuts.

The proposed budget that Trump released this week is getting a lot of criticism from the left for cuts to social programs, but the truth is that it actually doesn’t reduce the deficit at all

President Trump’s “skinny” budget blueprint for 2018 features a proposed $54 billion increase in defense spending and an equal number of spending cuts from the smallest part of the federal budget.

That means his changes won’t add to next year’s projected $487 billion deficit. But they won’t reduce it, either.

And remember, that “$487 billion” figure is just for show.  During the Obama years the U.S. national debt increased by an average of well over a trillion dollars a year, and that is almost certainly going to continue for years to come as long as the debt ceiling is raised.

Republicans are supposed to be the party of fiscal responsibility.

So now is their big test.

If they raise the debt ceiling and continue adding more than a trillion dollars a year to the national debt, they will lose all credibility with conservative voters on fiscal issues.

But if they try to force the federal government to start living within its means that is going to severely harm the economy in the short-term.

Donald Trump is going to have to try to figure out a way to navigate this crisis.  He has already promised that he will not touch Social Security and Medicare, and those are the two biggest drivers of our budget deficits.  In fact, it is being projected that entitlement spending and interest on the debt will eat up every single penny that the federal government takes in within 20 years.

So if Trump won’t touch the big entitlement programs, where will he possibly find enough cuts to satisfy the fiscal conservatives in Congress?

Without them, Trump does not have enough votes to raise the debt ceiling.

In addition, many of the conservatives in Congress absolutely hate the new Republican health care plan, and they hope to use this debt ceiling crisis as leverage to change the bill.

If Trump can’t work out something with conservatives, perhaps he could turn to the Democrats.  But most Democrats are extremely resistant to work with him on anything after all that has been said and done, and so for Trump to get a deal with them he would have to make extreme concessions.

This represents the biggest political test for the Trump presidency so far, and if we get down the road a couple of months and nothing gets done, this debt ceiling crisis could spark the kind of financial crisis that I describe in my novel entitled “The Beginning Of The End“.

Barack Obama pushed things right to the brink a couple of times, but he was savvy enough politically to never let things go over the edge.

Now it is Trump’s turn, and somehow he has got to find a way to get the debt ceiling raised without making extremely deep compromises that would gut the rest of his agenda.

And he had better get to work on this quickly, because time is running out and the clock is ticking…

12 Reasons Why The Federal Reserve May Have Just Made The Biggest Economic Mistake Since The Last Financial Crisis

Wrong Way Signs - Public DomainHas the Federal Reserve gone completely insane?  On Wednesday, the Fed raised interest rates for the second time in three months, and it signaled that more rate hikes are coming in the months ahead.  When the Federal Reserve lowers interest rates, it becomes less expensive to borrow money and that tends to stimulate more economic activity.  But when the Federal Reserve raises rates , that makes it more expensive to borrow money and that tends to slow down economic activity.  So why in the world is the Fed raising rates when the U.S. economy is already showing signs of slowing down dramatically?  The following are 12 reasons why the Federal Reserve may have just made the biggest economic mistake since the last financial crisis…

#1 Just hours before the Fed announced this rate hike, the Federal Reserve Bank of Atlanta’s projection for U.S. GDP growth in the first quarter fell to just 0.9 percent.  If that projection turns out to be accurate, this will be the weakest quarter of economic growth during which rates were hiked in 37 years.

#2 The flow of credit is more critical to our economy than ever before, and higher rates will mean higher interest payments on adjustable rate mortgages, auto loans and credit card debt.  Needless to say, this is going to slow the economy down substantially

The Federal Reserve decision Wednesday to lift its benchmark short-term interest rate by a quarter percentage point is likely to have a domino effect across the economy as it gradually pushes up rates for everything from mortgages and credit card rates to small business loans.

Consumers with credit card debt, adjustable-rate mortgages and home equity lines of credit are the most likely to be affected by a rate hike, says Greg McBride, chief analyst at Bankrate.com. He says it’s the cumulative effect that’s important, especially since the Fed already raised rates in December 2015 and December 2016.

#3 Speaking of auto loans, the number of people that are defaulting on them had already been rising even before this rate hike by the Fed…

The number of Americans who have stopped paying their car loans appears to be increasing — a development that has the potential to send ripple effects through the US economy.

Losses on subprime auto loans have spiked in the last few months, according to Steven Ricchiuto, Mizuho’s chief US economist. They jumped to 9.1% in January, up from 7.9% in January 2016.

“Recoveries on subprime auto loans also fell to just 34.8%, the worst performance in over seven years,” he said in a note.

#4 Higher rates will likely accelerate the ongoing “retail apocalypse“, and we just recently learned that department store sales are crashing “by the most on record“.

#5 We also recently learned that the number of “distressed retailers” in the United States is now at the highest level that we have seen since the last recession.

#6 We have just been through “the worst financial recovery in 65 years“, and now the Fed’s actions threaten to plunge us into a brand new crisis.

#7 U.S. consumers certainly aren’t thriving, and so an economic slowdown will hit many of them extremely hard.  In fact, about half of all Americans could not even write a $500 check for an unexpected emergency expense if they had to do so right now.

#8 The bond market is already crashing.  Most casual observers only watch stocks, but the truth is that a bond crash almost always comes before a stock market crash.  Bonds have been falling like a rock since Donald Trump’s election victory, and we are not too far away from a full-blown crisis.  If you follow my work on a regular basis you know this is a hot button issue for me, and if bonds continue to plummet I will be writing quite a bit about this in the weeks ahead.

#9 On top of everything else, we could soon be facing a new debt ceiling crisis.  The suspension of the debt ceiling has ended, and Donald Trump could have a very hard time finding the votes that he needs to raise it.  The following comes from Bloomberg

In particular, the markets seem to be ignoring two vital numbers, which together could have profound consequences for global markets: 218 and $189 billion. In order to raise or suspend the debt ceiling (which will technically be reinstated on March 16), 218 votes are needed in the House of Representatives. The Treasury’s cash balance will need to last until this happens, or the U.S. will default.

The opening cash balance this month was $189 billion, and Treasury is burning an average of $2 billion per day – with the ability to issue new debt. Net redemptions of existing debt not held by the government are running north of $100 billion a month. Treasury Secretary Steven Mnuchin has acknowledged the coming deadline, encouraging Congress last week to raise the limit immediately.

If something is not done soon, the federal government could be out of cash around the beginning of the summer, and this could create a political crisis of unprecedented proportions.

#10 And even if the debt ceiling is raised, that does not mean that everything is okay.  It is being reported that U.S. government revenues just experienced their largest decline since the last financial crisis.

#11 What do corporate insiders know that the rest of us do not?  Stock purchases by corporate insiders are at the lowest level that we have seen in three decades

It’s usually a good sign when the CEO of a major company is buying shares; s/he is an insider and knows what’s going on, so their confidence is a positive sign.

Well, according to public data filed with the Securities and Exchange Commission, insider buying is at its LOWEST level in THREE DECADES.

In other words, the people at the top of the corporate food chain who have privileged information about their businesses are NOT buying.

#12 A survey that was just released found that corporate executives are extremely concerned that Donald Trump’s policies could trigger a trade war

As business leaders are nearly split over the effectiveness of Washington’s new leadership, they are in unison when it comes to fears over trade and immigration. Nearly all CFOs surveyed are concerned that the Trump administration’s policies could trigger a trade war between the United States and China.

A decline in global trade could deepen the economic downturns that are already going on all over the planet.  For example, Brazil is already experiencing “its longest and deepest recession in recorded history“, and right next door people are literally starving in Venezuela.

After everything that you just read, would you say that the economy is “doing well”?

Of course not.

But after raising rates on Wednesday, that is precisely what Federal Reserve Chair Janet Yellen told the press

“The simple message is — the economy is doing well.” Federal Reserve Chair Janet Yellen said at a news conference. “The unemployment rate has moved way down and many more people are feeling more optimistic about their labor prospects.”

However, after she was challenged with some hard economic data by a reporter, Yellen seemed to change her tune somewhat

Well, look, our policy is not set in stone. It is data- dependent and we’re — we’re not locked into any particular policy path. Our — you know, as you said, the data have not notably strengthened. I — there’s noise always in the data from quarter to quarter. But we haven’t changed our view of the outlook. We think we’re on the same path, not — we haven’t boosted the outlook, projected faster growth. We think we’re moving along the same course we’ve been on, but it is one that involves gradual tightening in the labor market.

Just like in 2008, the Federal Reserve really doesn’t understand the economic environment.  At that time, Federal Reserve Chair Ben Bernanke assured everyone that there was not going to be a recession, but when he made that statement a recession was actually already underway.

And as I have said before, I wouldn’t be surprised in the least if it is ultimately announced that GDP growth for the first quarter of 2017 was negative.

Whether it happens now or a bit later, the truth is that the U.S. economy is heading for a new recession, and the Federal Reserve has just given us a major shove in that direction.

Is the Fed really so clueless about the true state of the economy, or could it be possible that they are raising rates just to hurt Donald Trump?

I don’t know the answer to that question, but clearly something very strange is going on…

$21,714 For Every Man, Woman And Child In The World – This Global Debt Bomb Is Ready To Explode

Debt Bomb Globe - Public DomainAccording to the International Monetary Fund, global debt has grown to a staggering grand total of 152 trillion dollars.  Other estimates put that figure closer to 200 trillion dollars, but for the purposes of this article let’s use the more conservative number.  If you take 152 trillion dollars and divide it by the seven billion people living on the planet, you get $21,714, which would be the share of that debt for every man, woman and child in the world if it was divided up equally.

So if you have a family of four, your family’s share of the global debt load would be $86,856.

Very few families could write a check for that amount today, and we also must remember that we live in some of the wealthiest areas on the globe.  Considering the fact that more than 3 billion people around the world live on two dollars a day or less, the truth is that about half the planet would not be capable of contributing toward the repayment of our 152 trillion dollar debt at all.  So they should probably be excluded from these calculations entirely, and that would mean that your family’s share of the debt would ultimately be far, far higher.

Of course global debt repayment will never actually be apportioned by family.  The reason why I am sharing this example is to show you that it is literally impossible for all of this debt to ever be repaid.

We are living during the greatest debt bubble in the history of the world, and our financial engineers have got to keep figuring out ways to keep it growing much faster than global GDP because if it ever stops growing it will burst and destroy the entire global financial system.

Bill Gross, one of the most highly respected financial minds on the entire planet, recently observed that “our highly levered financial system is like a truckload of nitro glycerin on a bumpy road”.

And he is precisely correct.  Everything might seem fine for a while, but one day we are going to hit the wrong bump at the wrong time and the whole thing is going to go KA-BOOM.

The financial crisis of 2008 represented an opportunity to learn from our mistakes, but instead we just papered over our errors and cranked up the global debt creation machine to levels never seen before.  Here is more from Bill Gross

My lesson continued but the crux of it was that in 2017, the global economy has created more credit relative to GDP than that at the beginning of 2008’s disaster. In the U.S., credit of $65 trillion is roughly 350% of annual GDP and the ratio is rising. In China, the ratio has more than doubled in the past decade to nearly 300%. Since 2007, China has added $24 trillion worth of debt to its collective balance sheet. Over the same period, the U.S. and Europe only added $12 trillion each. Capitalism, with its adopted fractional reserve banking system, depends on credit expansion and the printing of additional reserves by central banks, which in turn are re-lent by private banks to create pizza stores, cell phones and a myriad of other products and business enterprises. But the credit creation has limits and the cost of credit (interest rates) must be carefully monitored so that borrowers (think subprime) can pay back the monthly servicing costs. If rates are too high (and credit as a % of GDP too high as well), then potential Lehman black swans can occur. On the other hand, if rates are too low (and credit as a % of GDP declines), then the system breaks down, as savers, pension funds and insurance companies become unable to earn a rate of return high enough to match and service their liabilities.

There is always a price to be paid for going into debt.  It mystifies me that so many Americans seem to not understand this very basic principle.

On an individual level, you could live like a Trump (at least for a while) by getting a whole bunch of credit cards and maxing all of them out.

But eventually a day of reckoning would come.

The same thing happens on a national level.  In recent years we have seen examples in Greece, Cyprus, Zimbabwe, Venezuela and various other European nations.

Here in the United States, more than 9 trillion dollars was added to the national debt during the Obama years.  If we had not taken more than 9 trillion dollars of consumption and brought it into the present, we would most assuredly be in the midst of an epic economic depression right now.

Instead of taking our pain in the short-term, we have sold future generations of Americans as debt slaves, and if they get the chance someday they will look back and curse us for what we have done to them.

Many believe that Donald Trump can make short-term economic conditions even better than Obama did, but how in the world is he going to do that?

Is he going to borrow another 9 trillion dollars?

A big test is coming up.  A while back, Barack Obama and the Republican Congress colluded to suspend the debt ceiling until March 15th, 2017, and this week we are going to hit that deadline.

The U.S. Treasury will be able to implement “emergency measures” for a while, but if the debt ceiling is not raised the U.S. government will not be able to borrow more money and will run out of cash very quickly.  The following comes from David Stockman

The Treasury will likely be out of cash shortly after Memorial Day. That is, the White House will be in the mother of all debt ceiling battles before the Donald and his team even see it coming.

With just $66 billion on hand it is now going to run out of cash before even the bloody battle over Obamacare Lite now underway in the House has been completed. That means that there will not be even a glimmer of hope for the vaunted Trump tax cut stimulus and economic rebound on the horizon.

Trump is going to find it quite challenging to find the votes to raise the debt ceiling.  After everything that has happened, very few Democrats are willing to help Trump with anything, and many Republicans are absolutely against raising the debt ceiling without major spending cut concessions.

So we shall see what happens.

If the debt ceiling is not raised, it will almost certainly mean that a major political crisis and a severe economic downturn are imminent.

But if the debt ceiling is raised, it will mean that Donald Trump and the Republicans in Congress are willingly complicit in the destruction of this country’s long-term economic future.

When you go into debt there are consequences.

And when the greatest debt bubble in human history finally bursts, the consequences will be exceedingly severe.

The best that our leaders can do for now is to keep the bubble alive for as long as possible, because what comes after the bubble is gone will be absolutely unthinkable.

16 Reasons Why You Shouldn’t Live In California

San Francisco Skyline - Public DomainIt has been said that “as California goes, so goes the nation”.  That is why it is such a shame what is happening to that once great state.  At one time, California seemed to be the epicenter of the American Dream.  Featuring some of the most beautiful natural landscapes in the entire world, the gorgeous weather and booming economy of the state inspired people from all over the world to move to the state.  But now people are moving out of the state by the millions, because life in California has literally become a nightmare for so many people.

I certainly don’t have anything against the state personally.  My brother and sister were both born there, and I spent a number of my childhood years in stunning northern California.  When I was younger I would sometimes dream of getting a place on the coast eventually, but for reasons I will discuss below I no longer think that would be advisable.

In fact, if I was living in California today I would be immediately looking for a way to move out of the state unless I specifically felt called to stay.  The following are 16 reasons why you shouldn’t live in California…

#1 The entire California coastline is part of the “Ring of Fire” seismic zone that roughly encircles the Pacific Ocean.  The San Andreas Fault has been described as a “time bomb“, and at some point there will be a catastrophic earthquake that absolutely devastates the entire region.  In fact, a study that was just released says that a “major earthquake” on the San Andreas Fault “is way overdue”

A recently published study reveals new evidence that a major earthquake is way overdue on a 100 mile stretch of the San Andreas Fault from the Antelope Valley to the Tejon Pass and beyond.

Researchers with the U.S. Geological Survey released the results of the years-long study warning a major earthquake could strike soon.

#2 Out of all 50 states, the state of California has been ranked as the worst state for business for 12 years in a row

In what is sounding like a broken record, California once again ranked dead last in Chief Executive magazine’s annual Best and Worst States for Business survey of CEOs – as it has all 12 years the survey has been conducted. Texas, meanwhile, earned the top spot for the 12th straight year.

Among the survey’s subcategories, the 513 CEOs from across the nation ranked California 50th in taxation and regulation, 35th in workforce quality and 26th in living environment, which includes cost of living, the education system and state and local attitudes toward business. Notably, California placed worst among the nine states in the Western region in all three categories.

#3 California has the highest state income tax rates in the entire nation.  For many Americans, the difference between what you would have to pay if you lived in California and what you would have to pay if you lived in Texas could literally buy a car every single year.

#4 The state government in Sacramento seems to go a little bit more insane with each passing session.  This time around, they are talking about going to a single-payer healthcare system for the entire state that would cost California taxpayers 40 billion dollars a year

On Friday, State Senator Ricardo Lara introduced legislation that would transition California’s healthcare into a single-payer system. (RELATED: Read what a retired colonel said about the real purpose of Obamacare). The system would be very similar to the healthcare system currently in place in Canada and would cost California taxpayers roughly $40 billion for the first year alone. Given the poor economic climate California has already created for itself, this will no doubt be just one more burden on the people of California, and one step closer towards total bankruptcy.

Micah Weinberg, the president of the Economic Institute at the Bay Area Council, raised concerns over the financial consequences of the proposed legislation. “Where are they going to come up with the $40 billion?” he asked. He went on to suggest that adopting a state level single-payer system is “just not feasible to do as a state.”

#5 The traffic in the major cities just keeps getting worse and worse.  According to USA Today, Los Angeles now has the worst traffic in the entire world, and San Francisco is not far behind.

#6 A lot of money is being made in Silicon Valley these days (at least for now), but poverty is also exploding in the state.  In desperation, homeless people are banding together to create large tent cities all over the state, and the L.A. City Council recently asked Governor Jerry Brown “to declare homelessness a statewide emergency“.

#7 Thanks to unchecked illegal immigration, crime is on the rise in many California cities.  The drug war that has been raging for years in Mexico is increasingly spilling over the border, and many families have moved out of the state for this reason alone.

#8 California is one of the most litigious states in the entire nation.  According to the U.S. Chamber Institute for Legal Reform, the “lawsuit climate” in California is ranked 47th out of all 50 states.

#9 Every year wildfires and mudslides wreak havoc in the state.  Erosion is particularly bad along the coast, and I have previously written about how some portions of the California coastline are literally falling into the ocean.

#10 California has some of the most ridiculous housing prices in the entire country.  Due to a lack of affordable housing rents have soared to wild extremes in San Francisco, where one poor engineer was actually paying $1,400 a month to live in a closet.

#11 All over the state, key infrastructure is literally falling to pieces.  Governor Jerry Brown recently issued a list of key projects that needed to be done as soon as possible, and the total price tag for that list was 100 billion dollars.  Of course that list didn’t even include the Oroville Dam, and we all saw what happened there.

#12 Radiation from the ongoing Fukushima nuclear disaster continues to cross the ocean and wash up along the California coastline.  The impact of this crisis on the health of those living along the west coast could potentially be felt for generations.

#13 Illegal drug use in the state is on the rise again, and emergency rooms are being flooded by heroin overdose victims.

#14 On top of everything else, it is being reported that Russia is “quietly ‘seeding’ the U.S. shoreline with nuclear ‘mole’ missiles”.  The following comes from retired colonel and former Russian defense ministry spokesman Viktor Baranetz

“What are these mysterious ‘asymmetrical responses’ that our politicians and generals speak about so often? Maybe it’s a myth or a pretty turn of phrase? No! Our asymmetrical response is nuclear warheads that can modify their course and height so that no computer can calculate their trajectory. Or, for example, the Americans are deploying their tanks, airplanes and special forces battalions along the Russian border. And we are quietly ‘seeding’ the U.S. shoreline with nuclear ‘mole’ missiles (they dig themselves in and ‘sleep’ until they are given the command)[…]

“Oh, it seems I’ve said too much. I should hold my tongue.”

Hopefully what Baranetz is claiming is not accurate, because if it is even partly true the implications are absolutely staggering.

#15 North Korea is a major nuclear threat as well.  It is being reported that the North Koreans are developing an ICBM that could potentially reach the west coast of the United States…

Defense officials have warned that North Korea is on the brink of producing an ICBM that could target the United States. North Korean leader Kim Jong Un announced in January during his New Year’s address that Pyongyang had “entered the final stage of preparations to test-launch” an ICBM that could reach parts of the United States.

#16 Someday a very large earthquake will produce a major tsunami on the west coast.  According to the Los Angeles Times, one study found that a magnitude 9.0 earthquake along the Cascadia fault could potentially produce a massive tsunami that would “wash away coastal towns”…

If a 9.0 earthquake were to strike along California’s sparsely populated North Coast, it would have a catastrophic ripple effect.

A giant tsunami created by the quake would wash away coastal towns, destroy U.S. 101 and cause $70 billion in damage over a large swath of the Pacific coast. More than 100 bridges would be lost, power lines toppled and coastal towns isolated. Residents would have as few as 15 minutes notice to flee to higher ground, and as many as 10,000 would perish.

Scientists last year published this grim scenario for a massive rupture along the Cascadia fault system, which runs 700 miles off shore from Northern California to Vancouver Island.

Over the past decade, approximately five million people have moved away from California.

After reading this article, perhaps you have a better understanding why so many people are getting out while they still can.

To me, one of the greatest concerns is the rise in seismic activity that we are seeing all over the world.  In my latest book I express my belief that the United States will be greatly affected by this increase in seismic activity, and California is going to get hit harder than just about anywhere else.

Once again, I don’t have anything against California or the people that live there.  It is such a beautiful place, and it once held so much promise.

Unfortunately that promise has been shattered, and there is a mass exodus out of the state as families flee the horrific nightmare that California is in the process of becoming.

11 Quotes From Trump’s Speech To Congress That Show That The U.S. Economy Is In A State Of Collapse

Donald Trump's Speech To A Joint Session Of Congress - Public DomainAfter Tuesday night, nobody should have any more doubt that the U.S. economy has been in the process of collapsing.  Donald Trump’s speech to a joint session of Congress is being hailed as his best speech ever.  Even CNN’s Van Jones praised Trump, which shocked many observers.  Jones said that when Trump honored the widow of slain Navy Seal Ryan Owens that it “was one of the most extraordinary moments you have ever seen in American politics”, and Jones believes that Trump “became President of the United States in that moment”.  But Trump’s speech is not just being praised for that one moment.  He detailed many of the most important problems that our nation is facing, and he explained his prescription for addressing those problems.

Hopefully Trump’s words helped people to understand that our problems did not get fixed just because he got elected.  It is going to take extraordinary action to fix those problems, because our problems run very deep.  In particular, Trump made an exceedingly strong case that the U.S. economy has been badly deteriorating for a very long period of time.  The following are 11 quotes from Trump’s speech to Congress that show that the U.S. economy is in a state of collapse…

#1 “Ninety-four million Americans are out of the labor force”

#2 “Over 43 million people are now living in poverty”

#3 “Over 43 million Americans are on food stamps”

#4 “More than one in five people in their prime working years are not working”

#5 “We have the worst financial recovery in 65 years”

#6 “In the last eight years, the past administration has put on more new debt than nearly all of the other Presidents combined”

#7 “We’ve lost more than one-fourth of our manufacturing jobs since NAFTA was approved”

#8 “We’ve lost 60,000 factories since China joined the World Trade Organization in 2001″

#9 “Our trade deficit in goods with the world last year was nearly 800 billion dollars”

#10 “Obamacare premiums nationwide have increased by double and triple digits. As an example, Arizona went up 116 percent last year alone.”

#11  “We’ve spent trillions and trillions of dollars overseas, while our infrastructure at home has so badly crumbled”

All of these quotes come from the transcript of the speech that was posted on the official White House website.

So many of the economic themes that Trump touched on are things that I have been writing about recently.  For example, I recently published an article entitled “11 Deeply Alarming Facts About America’s Crumbling Infrastructure” in which I discussed the horrific state of our roads, bridges, ports, dams, water systems and airports.  I greatly applaud Trump for wanting to do something about this growing national crisis, but I just don’t know where the money is going to come from.

Just over a week ago I also wrote a major article about Obamacare.  We have zero hope of turning our economy in a positive direction until we do something to fix our dramatically failing healthcare system, but at the moment Republicans in Congress seem extremely hesitant to take action.  Instead, many Republican leaders are now talking about trying to “fix Obamacare“, and that simply is not going to work.

You can’t “fix” a steaming pile of garbage.

All of the other facts that Trump listed about the economy were right on point too.  I have been screaming for seven years about our nightmarish trade deficit and the fact that tens of thousands of businesses and millions of good paying jobs were leaving the country.  It is refreshing to finally have a president that understands how badly America has been hurt by imbalanced trade agreements, and my hope is that he will start to take constructive action in this regard.

So much damage to the economy has already been done, and there are all kinds of indications that we are about to officially slide into yet another recession.  Yesterday we learned that the number of “distressed retailers” in this country is the highest that it has been since the last recession, and in recent weeks major retailers across the nation have announced the closing of hundreds of stores.  Lending standards are tightening, bankruptcies are rising, and employment growth at companies listed on the S&P 500 has gone negative for the first time since the last recession.

It is being projected that GDP growth for the first quarter of 2017 will be barely above zero, but it wouldn’t surprise me at all if we actually had a negative reading.

If we indeed are heading into a new recession, Trump and his supporters need it to happen as soon as possible so that they can blame it on Obama.  If a recession begins a year from now, everyone will blame it on Trump even if it is not his fault.  But if a recession begins now, Trump and his supporters can pin responsibility for it on Obama and then take credit if and when a recovery occurs.

Trump’s speech on Tuesday night was very optimistic, and he seemed quite confident that every issue that we are facing as a nation can be fixed

Everything that is broken in our country can be fixed. Every problem can be solved. And every hurting family can find healing and hope.

I hope that Trump is right, but I also know that the federal government is already 20 trillion dollars in debt, U.S. consumers are already more than 12 trillion dollars in debt, and corporate debt has approximately doubled since the last financial crisis.

You can’t squeeze blood out of an apple, and you can’t get out of a debt bubble by going into a lot more debt.

I understand that there are so many people out there right now that are deeply optimistic about the future, but the truth is that we have no hope of a positive future unless we fundamentally change our ways as a nation.  I wish that someone could show me evidence that this is happening, because I would be very glad to see it.  As it stands, we continue to steamroll toward the kind of apocalyptic future for this country that I have been warning about for a very long time.

It will take a lot more than words to fix America, and I think that Donald Trump understands this.

Hopefully many of his followers will start to get the message as well.

March 2017: The End Of A 100 Year Global Debt Super Cycle Is Way Overdue

Global Debt Super Cycle - Public DomainFor more than 100 years global debt levels have been rising, and now we are potentially facing the greatest debt crisis in all of human history.  Never before have we seen such a level of debt saturation all over the planet, and pretty much everyone understands that this is going to end very, very badly at some point.  The only real question is when it will happen.  Many believe that the current global debt super cycle began when the Federal Reserve was established in 1913.  Central banks are designed to create debt, and since 1913 the U.S. national debt has gotten more than 6800 times larger.  But of course it is not just the United States that is in this sort of predicament.  At this point more than 99 percent of the population of the entire planet lives in a nation that has a debt-creating central bank, and as a result the whole world is drowning in debt.

When people tell me that things are going to “get better” in 2017 and beyond, I find it difficult not to roll my eyes.  The truth is that the only way we can even continue to maintain our current ridiculously high debt-fueled standard of living is to grow debt at a much faster pace than the economy is growing.  We may be able to do that for a brief period of time, but giant financial bubbles like this always end and we will not be any exception.

Barack Obama and his team understood what was happening, and they were able to keep us out of a horrifying economic depression by stealing more than nine trillion dollars from future generations of Americans and pumping that money into the U.S. economy.  As a result, the federal government is now 20 trillion dollars in debt, and that means that the eventual crash is going to be far, far worse than it would have been if we would have lived within our means all this time.

Corporations and households have been going into absolutely enormous amounts of debt as well.  Corporate debt has approximately doubled since the last financial crisis, and U.S. consumers are now more than 12 trillion dollars in debt.

When you add all forms of debt together, America’s debt to GDP ratio is now about 352 percent.  I think that the following illustration does a pretty good job of showing how absolutely insane that is

If your brother earns $100,000 in annual income and borrowed $10,000 on his credit card, he could consume $110,000 worth of stuff.  In this example, his debt to his personal GDP is just 10%.  But what if he could get more credit year after year and reached a point where his total debt reached $352,000 but his income remained the same.  His personal debt-to-GDP ratio would now be 352%.

If he could borrow at super low interest rates, maybe he could sustain the monthly loan payments. Maybe?  But how much more could he possibly borrow?  What lender would lend him more?  And what if those low rates began to rise?  How much debt can his $100,000 income cover?  Essentially, he has reached the end of his own debt cycle.

The United States is certainly not alone in this regard.  When you look all over the industrialized world, you see similar triple digit debt to GDP figures.

When this current debt super cycle ultimately ends, it is going to create economic pain on a scale that will be unlike anything that we have ever seen before.  The following comes from King World News

That is the inevitable consequence of 100 years of credit expansion from virtually nothing to $250 trillion, plus global unfunded liabilities of roughly $500 trillion, plus derivatives of $1.5 quadrillion. This is a staggering total of $2.25 quadrillion. Therefore, the question is not what could go wrong since it is guaranteed that all these liabilities will implode at some point. And when they do, it will bring misery to the world of a magnitude that no one could ever imagine. It is of course very difficult to forecast the end of a major cycle. As this is unlikely to be a mere 100-year cycle but possibly a 2000-year cycle. It is also impossible to forecast how long the decline will take. Will it be gradual like the Dark Ages, which took 500 years after the fall of the Roman Empire? Or will the fall be much faster this time due to the implosion of the biggest credit bubble in world history? The latter is more likely, especially since the bubble will become a lot bigger before it implodes.

And there are certainly lots of signs that a global slowdown is already beginning.  For example, global trade growth has fallen below 2 percent for only the third time since the year 2000.  On each of the other occasions, we witnessed a horrible recession take place.  For more signs that economic conditions are deteriorating, please see my previous article entitled “Recession 2017? Things Are Happening That Usually Never Happen Unless A New Recession Is Beginning“.

Of course much of the globe is already in the midst of a horrible economic crisis.  Brazil is in the middle of their worst recession ever, and people are literally starving in Venezuela.  A new round of debt problems has erupted in Europe, with Greece, Portugal and Italy being the latest flashpoints.

Just like in 2007, many are mocking the idea that the a major economic downturn is coming to the United States.  They believe that the ridiculously high stock market valuations of today can stick around indefinitely, and they are putting their faith in politicians.

But it won’t be too long before a new economic crisis begins in America and the kind of civil unrest that I portray in “The Beginning Of The End” erupts all across the country.

I just don’t understand why more people cannot see this.  Government debt, corporate debt and consumer debt have all been growing much, much faster than the overall economy.  Can someone please explain to me how that could possibly be sustainable in the long-term?

Someone that I considered to be a mentor but that has since passed away once said that things would seem like they would be getting better for a little while before the next crash comes.

And it turned out that he was precisely correct.  We are in a season of time when economic conditions have appeared to be getting a little bit better in the United States, and this has blinded so many people to the truth of what is about to happen to us.

Retail Apocalypse Gains Momentum As David Stockman Warns ‘Everything Will Grind To A Halt’ After March 15th

Retail Apocalypse 2017 - Public DomainJ.C. Penney and Family Christian Stores are the latest retail giants to announce widespread store closings. As you will see below, J.C. Penney plans to close between 130 and 140 stores, and Family Christian is closing all of their 240 stores. In recent months the stock market has been absolutely soaring, and so most people have simply assumed that the “real economy” must be doing well. But that is not the case at all. In fact, the retail apocalypse that I have been documenting for quite some time appears to be gaining momentum.

J.C. Penney is not in as rough shape as Sears is just yet, but it is definitely on a similar trajectory. In the end, they are both headed for bankruptcy. That is why it wasn’t too much of a surprise when J.C. Penney announced that they are getting rid of about 6,000 workers and closing at least 130 stores

J.C. Penney (JCP) plans to close 130 to 140 stores and offer buyouts to 6,000 workers as the department-store industry sags in competition with online sellers and nimble niche retailers.

The company said Friday that it would shutter 13% to 14% of its locations and introduce new goods and services aimed at the shifting preferences of its customer base.

Meanwhile, many observers were quite surprised when Family Christian Stores decided to fold up shop for good. They were known as the largest Christian retailer on the entire planet, but now after 85 years they are going out of business forever

Family Christian, which bills itself as the “world’s largest retailer of Christian-themed merchandise,” announced Thursday it is closing after 85 years.

The non-profit company, employing more than 3,000 people in 240 stores in 36 states, said in a brief statement that the retailer had been facing declining sales since filing for bankruptcy protection in 2015 and had no choice but to shut down.

These two announcements are part of larger trend that we have been witnessing all over the country. As I have documented previously, Macy’s announced that it would be closing 100 stores earlier this year, and about the same time Sears said that it would be closing another 150 stores.

Back in 2010, Sears had a staggering 3,555 stores.

Before their recent announcement, Sears was down to 1,503 stores, and now this latest round of cuts will leave them with somewhere around 1,350.

Of course it won’t be too long before Sears has zero stores, and my regular readers know that I have been talking about the demise of Sears for a very long time.

The cold, hard truth of the matter is that the “real economy” is a total mess, and that is one of the primary reasons why these ridiculous stock market valuations that we are seeing right now are not sustainable.

One expert that agrees with my assessment is former Reagan Administration White House Budget Director David Stockman. In a recent interview, he explained why he believes that “everything will grind to a halt” after March 15th…

Stockman, who wrote a book titled “Trumped” predicting a Trump victory in 2016, says, “I don’t think there is a snowball’s chance in the hot place that’s going to happen. This is delusional. This is the greatest suckers’ rally of all time. It is based on pure hopium and not any analysis at all as what it will take to push through a big tax cut. Donald Trump is in a trap. Today the debt is $20 trillion. It’s 106% of GDP. . . .Trump is inheriting a built-in deficit of $10 trillion over the next decade under current policies that are built in. Yet, he wants more defense spending, not less. He wants drastic sweeping tax cuts for corporations and individuals. He wants to spend more money on border security and law enforcement. He’s going to do more for the veterans. He wants this big trillion dollar infrastructure program. You put all that together and it’s madness. It doesn’t even begin to add up, and it won’t happen when you are struggling with the $10 trillion of debt that’s coming down the pike and the $20 trillion that’s already on the books.”

Then, Stockman drops this bomb and says:

“I think what people are missing is this date, March 15th 2017. That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015. That holiday expires. The debt ceiling will freeze in at $20 trillion. It will then be law. It will be a hard stop. The Treasury will have roughly $200 billion in cash. We are burning cash at a $75 billion a month rate. By summer, they will be out of cash. Then we will be in the mother of all debt ceiling crises. Everything will grind to a halt. I think we will have a government shutdown. There will not be Obama Care repeal and replace. There will be no tax cut. There will be no infrastructure stimulus. There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.”

In that same interview, Stockman also predicted that “markets will easily correct by 20% and probably a lot more“, and he noted the glaring disconnect between current stock prices and how the U.S. economy is actually performing

“The S&P 500 has been trading at 26 times earnings while earnings have been dropping for the past six or seven quarters. There is no booming recovery coming. There is going to be a recession and there will be no stimulus baton to bail it out. That is the new fact that neither Trump nor the Wall Street gamblers remotely understand.”

It is very difficult to argue with Stockman on this.

There are some people out there that seem to think that Donald Trump can miraculously turn the U.S. economy around just because he is Donald Trump.

It doesn’t work that way.

We are 20 trillion dollars in debt, and we are currently adding about a trillion dollars a year to that total. There is no possible way that Trump can cut taxes, increase military spending, build a border wall, spend much more on veterans and spend an extra trillion dollars on rebuilding our crumbling infrastructure.

We are flat broke as a nation and there simply is not money available to do everything that Donald Trump wants to do.

So we shall see what happens after March 15th.  Unfortunately, I happen to agree with Stockman that economic reality is about to come knocking and Trump and his supporters are about to get a very rude wake up call.

Why Is NASA Using The Discovery Of 7 New Earth-Sized Planets To Promote The Idea That Alien Life May Exist?

TRAPPIST-1f - Photo by NASANASA told us in advance that there would be a huge announcement on Wednesday, and it certainly was not a disappointment.  NASA’s declaration that 7 new Earth-sized planets had been discovered approximately 40 light years away from our sun made headlines all over the globe, and the Internet immediately started buzzing with lots of discussions about the possibility that these newly discovered worlds may have life on them.  This isn’t the kind of thing that I normally write about on The Economic Collapse Blog, but some of the things that were being said by the scientists involved in this discovery seemed quite odd.  It is one thing to say that some new planets have been found, but it is another thing entirely to start speculating about life on those planets.  With each new discovery that is made, why does it always seem like NASA is trying to promote the idea that alien life may exist somewhere out there?  Could it be possible that they are trying to mentally prepare us for something?

After the announcement was made on Wednesday, I went to the official NASA website, and sure enough in the article that had just been posted about this new discovery there was discussion about the possibility of alien life

NASA’s Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water.

The discovery sets a new record for greatest number of habitable-zone planets found around a single star outside our solar system. All of these seven planets could have liquid water – key to life as we know it – under the right atmospheric conditions, but the chances are highest with the three in the habitable zone.

“This discovery could be a significant piece in the puzzle of finding habitable environments, places that are conducive to life,” said Thomas Zurbuchen, associate administrator of the agency’s Science Mission Directorate in Washington. “Answering the question ‘are we alone’ is a top science priority and finding so many planets like these for the first time in the habitable zone is a remarkable step forward toward that goal.”

If this discovery is confirmed, it is definitely quite remarkable.

But why engage in speculation about whether or not we are alone in the universe?

You can view a YouTube video from NASA about this new discovery right here.  As you can see from the video, the scientists involved in this project are extremely excited…

Of course we must acknowledge that nobody has actually seen any of these planets.  Based on data that astronomers have been able to observe, they assume that those seven planets must be there.  The following comes from Smithsonian Magazine

To detect these other worlds, Gillon and his team used the so-called “transit” method, one of several techniques for hunting planets. Other techniques include measuring the wobble of a star caused by a planet’s gravitational pull, observing how light from a distant star bends around a planet or capturing a direct image of the planet.

The power of the transit method comes from its simplicity: Astronomers measure the level of light from a star, and look for any dips in brightness that could be the result of a planet passing between the star and Earth. By seeing how much and how often the level of light is reduced during each “transit” of the planet in front of the star, astronomers can then estimate its size and orbit.

So it is entirely possible that scientists may be misinterpreting the data.

Someday we may find out that there are more planets in the system, or we may discover that there aren’t any planets there at all.

But assuming that those planets are actually there, what has astronomers buzzing more than anything else is the possibility that they may contain “life”

“Looking for life elsewhere, this system is probably our best bet as of today,” study co-author Brice-Olivier Demory, a professor at the Center for Space and Habitability at the University of Bern in Switzerland, said in a statement.

The key is that these planets appear to have the right conditions for water to exist.  Without water, it is generally assumed that a planet would not be able to support life.  The following comes from an article posted on the website of The Independent entitled “Nasa’s ‘holy grail': Entire new solar system that could support alien life discovered“…

No other star system has ever been found to contain so many Earth-sized and rocky planets, of the kind thought to be necessary to contain aliens.

The researchers might soon be able to find evidence of life on the planets, they have said. British astronomer Dr Chris Copperwheat, from Liverpool John Moores University, who was part of the international team, said: “The discovery of multiple rocky planets with surface temperatures which allow for liquid water make this amazing system an exciting future target in the search for life.”

And of course NASA is not just looking at these planets in their obsessive search for alien life.

In fact, NASA is sending a probe to one of Jupiter’s moons named Europa specifically to search for alien life

NASA believes there’s a gigantic ocean locked beneath its frozen surface and is planning to send a robotic craft to see if aliens are swimming in it.

This week, the space agency has revealed its three goals for the upcoming search for life.

It wrote: “The primary goal is to search for evidence of life on Europa.

“The other goals are to assess the habitability of Europa by directly analyzing material from the surface, and to characterize the surface and subsurface to support future robotic exploration of Europa and its ocean.”

So why is NASA so sure that alien life must be out there somewhere?

Do they know things that they aren’t disclosing to the rest of us?

As a society, we are constantly being conditioned to the idea that “alien life” must exist.  This is one of the major themes in our movies, our television shows and our video games.

And now the scientific community has fully embraced this idea.

Could it be possible that the stage is being set for “the great deception” that authors such as L.A. Marzulli are constantly warning us about?

If someday a big announcement is made that “we are not alone” in the universe, humanity will already have been heavily conditioned to accept it as the truth.

Unfortunately, we live at a time when deception is running rampant, and that is why it is absolutely critical to not let someone else do your thinking for you.

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