Get Prepared Now

New DVDs By Michael Snyder

Economic Collapse DVD
The Regathering Of Israel
Gold Buying Guide: Golden Eagle Coins
Buy Trees & Shrubs Online at The Tree Center

Recent Posts

Archives

Hopium: How Far Can Irrational Optimism Take The U.S. Economy?

Thought Bubble - Public DomainIf enough people truly believe that things will get better, will that actually cause them to get better?  There is certainly something to be said for being positive and thinking that anything is possible.  And as Americans, optimism seems to come naturally for us.  However, no amount of positive thinking is ever going to turn the sun into a block of wood or turn the moon into a block of cheese.  Any good counselor will tell you that one of the first steps toward recovery is to stop being delusional and to come to grips with how bad things really are.  When we deny reality and engage in irrational wishful thinking, we are engaging in something called “hopium”.  This is a difficult term to define, but the favorite definition of hopium that I have come across so far goes like this: “The irrational belief that, despite all evidence to the contrary, things will turn out for the best.”  In hundreds of articles, I have documented how the U.S. economy is mired in a long-term decline which is about to get a lot worse.  But most Americans see things very differently.  In fact, according to a brand new CNN/ORC poll, 52 percent of Americans describe the U.S. economy as “very” or “somewhat good”, and more than two-thirds of all Americans believe that the U.S. economy will be in “good shape” a year from right now.  But if you asked most of those people why they are so optimistic, they would probably mumble something about “Obama” or about how “we’re Americans and we always bounce back” or some other such gibberish.  Well, it’s wonderful that so many people are feeling good and looking forward to the future, but are those beliefs rational?

We witnessed a perfect example of this “hopium” on Wednesday.  Sales at McDonald’s restaurants have been in decline for quite a while, and the numbers for the first quarter of 2015 were just abysmal

The ubiquitous burger-and-fries chain said US sales, the largest share of global income, fell 2.6 percent from a year ago for comparable outlets.

Sales in the Asia-Pacific and Middle East region dropped 8.3 percent, helping bring overall global sales down 2.3 percent, “reflecting negative guest traffic in all segments,” the company said.

Total revenue sank 11 percent to $5.96 billion in the quarter to March 31, and net income plunged 32.6 percent to $812 million, or 84 cents a share (-31 percent).

So you would think that the stock price would have tanked on Wednesday, right?

Wrong.

Thanks to news that a “turnaround plan” would be announced on May 4th, McDonald’s stock actually skyrocketed

McDonald’s closed up 3.13 percent after spiking more than 4.5 percent in early trade as investors cheered a turnaround plan expected on May 4. However, the fast food chain’s earnings missed on both the top and bottom lines.

This is pure hopium.  Why don’t McDonald’s executives just tell us what the plan is now?  But instead, the mystery of a “secret turnaround plan” gives people just enough hope to keep the stock from tumbling – at least for the moment.

And of course there are all sorts of other stocks that are being massively inflated by hopium right now.

Many years ago, when I was an undergraduate, I was taught that a price to earnings ratio of more than 20 was really, really high.

But these days that is the norm on Wall Street, and at the moment there are quite a few stocks that actually have price to earnings ratios that are greater than 100

There are 10 stocks in the Standard & Poor’s 500, including industrial giant General Electric, video-streamer Netflix and oil and gas explorer Cabot Oil & Gas that are trading for 100 times their diluted earnings the past 12 months excluding extraordinary items, according to a USA TODAY analysis of data from S&P Capital IQ.

And if you can believe it, General Electric has a PE on its training earnings of more than 200

Take General Electric, the industrial giant that’s swiftly selling off banking assets so it can return to its manufacturing roots. GE sports a PE on its trailing earnings of 227, says S&P Capital IQ.

This is completely and totally irrational.  General Electric is a giant mess and is being very badly mismanaged.  But investors continue to pay a massive premium for GE stock because they hope that things will turn around eventually.

Look, hope will get you a lot of things in life, but it won’t put money in your pockets or dinner on the table.

Our politicians and the mainstream media continue to sell us hard on the idea that things are getting better in America, but meanwhile our economic infrastructure continues to decay.  Just check out what is happening in the steel industry

United States Steel Corporation issued layoff notices to 1,404 workers in the latest sign of struggle for the American steel industry. The missives went out in recent days to workers producing pipe and tube products that are used in the oil and gas sector. Job cuts could come as early as June for 17 to 579 employees at a plant in Lone Star, Texas, 166 at a factory in Houston, 255 at a mill in Pine Bluff, Arkansas, and 404 managers across the company’s tubular operations nationwide.

Since last June, the company has informed 7,800 employees of potential job cuts, a tally from Pittsburgh Business Times indicated. U.S. Steel spokeswoman Sarah Cassella said the ongoing layoffs are the result of “challenging market conditions and global influences in the market including a high level of imports, reduced prices for oil and natural gas and reduced steel prices.”

A little over a month ago, I published an article entitled “10 Charts Which Show We Are Much Worse Off Than Just Before The Last Economic Crisis” in which I demonstrated that we are in far worse economic shape than we were just prior to the last recession, and now another great economic crisis is at our door.

Unfortunately, most Americans have no idea what is going on out there.  Most of them get their news from the giant propaganda matrix that very tightly controls the flow of ideas and information in this country.  This is something that I explain on my new DVD.  Six colossal corporations control over 90 percent of the news, information and entertainment that Americans consume, and that gives them an awesome amount of power.

And right now that propaganda matrix is assuring the American people that everything is going to be just fine.

Well, they better be right.  Because if not, they are going to have millions of people extremely angry with them when things really start falling to pieces.

11 Quotes That Show How Worried The Financial World Is About Europe Right Now

The recent elections in France and in Greece have thrown the global financial system into an uproar.  Fear and worry are everywhere and nobody is quite sure what is going to happen next.  All of the financial deals that Greece has made over the past few years may be null and void.  Nobody is going to know for sure until a new government is formed, and at this point it looks like that is not going to happen and that there will need to be new elections in June.  All of the financial deals that France has made over the past few years may be null and void as well.  New French President Francois Hollande seems determined to take France on a path away from austerity.  But can France really afford to keep spending money that it does not have?  France has already lost its AAA credit rating and French bond yields have started to move up toward dangerous territory.  And Greek politicians are delusional if they think they have any other choice other than austerity.  Without European bailout money (which they won’t get if they don’t honor their current agreements), nobody is going to want to lend Greece a dime.

And all of this talk about “austerity” is kind of silly anyway.  It isn’t as if either France or Greece was going to have a balanced budget any time soon.  Both nations were still running up huge amounts of debt even under the “austerity” budgets.

But the citizens of both nations have sent a clear message that they are not going to tolerate even a slowdown in government spending.  They want to go back to the debt-fueled prosperity of the last several decades, even if it makes their long-term financial problems a lot worse.

Unfortunately, as I mentioned earlier, Greece does not have that option.  Without the bailout money that they are scheduled to get, Greece does not have a prayer of avoiding a disorderly default.  Private investors would have to be insane to lend Greece money if the bailout deal falls apart.  Greece desperately needs the help of the EU, the ECB and the IMF and the only way they are going to get it is if they abide by the terms of the agreements that have already been reached.

The only way that Greece can avoid austerity at this point would be to leave the euro.  Nobody would want to lend money to Greece under that scenario either, but Greece could choose to print huge amounts of their own national currency if they wanted to.

The situation is different in France.  Investors are still willing to lend to France at reasonable interest rates, but if France chooses to run up huge amounts of additional debt at some point they will end up just like Greece.

What is even more important in the short-term is the crumbling of the French/German alliance on European fiscal matters.  Angela Merkel and Nicolas Sarkozy were a united front, but now Merkel and Hollande are likely to have conflict after conflict.

Instead of moving in one clear direction, the eurozone is now fractured and tensions are rising.

So what comes next?

Well, investors are not certain what comes next and that has many of them deeply concerned.

The following are 11 quotes that show how worried the financial world is about Europe right now….

#1 Tres Knippa of Kenai Capital Management: “What is going on in Europe is an absolute disaster…the risk-on trade is not the place to be. I want to be out of equities and very, very defensive because the situation in Europe just got worse after those elections.”

#2 Mark McCormick, currency strategist at Brown Brothers Harriman: “We’re going to have higher tensions, more uncertainty and most likely a weaker euro.”

#3 Nick Stamenkovic, investment strategist at RIA Capital Markets in Edinburgh: “Investors are questioning whether Greece will be a part of the single currency at the end of this year.”

#4 Jörg Asmussen, a European Central Bank executive board member: “Greece needs to be aware that there is no alternative to the agreed reform program if it wants to remain a member of the eurozone”

#5 Tristan Cooper, sovereign debt analyst at Fidelity Worldwide Investment: “A Greek eurozone exit is on the cards although the probability and timing of such an event is uncertain.”

#6 Art Cashin: “Here’s the outlook on Greece from Wall Street watering holes. If a coalition government is formed or looks to be formed, global markets may rally. Any coalition is unlikely to make progress on goals, since austerity is political suicide. There will likely be another election around June 10/17. A workable majority/plurality remains unlikely, so back to square one. Therefore, Greece will be unable to attain goals by the deadline (June 30). Lacking aid funds, pensions are suspended and government workers are laid off. Protestors take to the streets and government is forced to revert to drachma to avoid social chaos. Pass the peanuts, please.”

#7 John Noonan, Senior Forex Analyst with Thomson Reuters in Sydney: “Sentiment is very bearish, The euro is under a lot of pressure right now. I get the feeling that it’s going to be a nasty move lower for the euro finally”

#8 Kenneth S. Rogoff, a professor of economics at Harvard: “A Greek exit would underscore that there’s no realistic long-term plan for Europe, and it would lead to a chaotic endgame for the rest of the euro zone.”

#9 Chris Tinker of Libra Investment Services: “It’s a binary decision. If Greece gets itself to the point where the European administration says, ‘We can’t play this game anymore,’ that starts a domino effect”

#10 Nicolas Véron, a senior fellow at Bruegel: “France has very limited fiscal space and actually has to engage in fiscal consolidation”

#11 80-year-old Greek citizen Panagiota Makri: “I’m confused. I feel numb and confused. Only God can save us now”

All of this comes at a time when much of Europe is already descending into a new recession.  Economies all over Europe are contracting and unemployment rates are skyrocketing.  Until things start improving, there is going to continue to be a lot of civil unrest across Europe.

Meanwhile, things are not so great in the United States either.

JPMorgan Chase CEO Jamie Dimon claims that the U.S. economy is holding a “royal straight flush“, but the only part of that he got right was the “flush” part.

There are 100 million working age Americans that do not have jobs, the middle class continues to shrink, the rising cost of food and the rising cost of gas are severely stretching the budgets of millions of American families and the federal government continues to run up gigantic amounts of debt.

When Europe descends into financial chaos, the United States is not going to escape it.  The financial crisis of 2008 deeply affected the entire globe, and so will the next great financial crisis.

Let us hope that we still have a little bit more time before the next great financial crisis strikes, but things in Europe are rapidly unraveling and at some point the dominoes are going to begin to fall.

20 Signs That We Are Witnessing The Complete Collapse Of Common Sense In America

What do you do when an entire nation begins to lose the capacity to think rationally?  Many Americans spend a great deal of time criticizing the government, and there is certainly a lot to complain about, but it is not just the government that is the problem.  All over America, people appear to be going insane.  It is almost as if we have been cursed with stupidity.  Sadly, this applies from the very top of our society all the way down to the very bottom.  A lot of us find ourselves asking the following question much more frequently these days: “How could they be so stupid?”  Unfortunately, we are witnessing a complete collapse of common sense all over America.  Many people seem to believe that if we could just get Obama out of office or if we could just reform our economic system that our problems as a nation would be solved, but that is simply not true.  Our problems run much deeper than that.  The societal decay that is plaguing our country is very deep and it is everywhere.  We are a nation that is full of people that do not care about others and that just want to do what is right in their own eyes.  We hold ourselves out to the rest of the world as “the greatest nation on earth” and an example that everyone else should follow, and yet our own house is rotting all around us.  The words “crazy”, “insane” and “deluded” are not nearly strong enough to describe our frame of mind as a country.  America has become a sad, delusional old man that can’t even think straight anymore.  The evidence of our mental illness is everywhere.

The following are 20 signs that we are witnessing the complete collapse of common sense in America….

#1 According to Wired Magazine, FBI agents have been taught that they can “bend or suspend the law” as they pursue criminals and terrorists.  But when they break the law they become criminals themselves.

#2 A TSA manager (not just an agent) at Dulles International Airport was recently discovered to be running a prostitution ring out of a local hotel room.  TSA agents have been charged with crime after crime after crime and yet we continue to allow them to be in charge of airport security.

#3 CBS News is reporting that approximately 200 pieces of luggage a day are being stolen by employees at John F. Kennedy International Airport and authorities still have not been able to stop it.

#4 Visitors to the United States must now pay $14 to complete an online form that asks them a series of really bizarre questions.  For example, one of the questions asks visitors to the U.S. if they ever “collaborated with the Nazis”.

#5 The U.S. military is buying huge amounts of electronic parts from China (mistake number one) and a government investigation has uncovered the fact that a large percentage of these parts are counterfeit.  Yet the U.S.military continues to buy huge amounts of electronic parts from China (mistake number two).

#6 A high school senior in Indiana was recently expelled from school for cussing on Twitter.

#7 Police in Chicago apparently believe that our “First Amendment rights can be terminated” at their discretion.

#8 Americans are becoming very cruel to one another.  This is especially true when it comes to the weak and the elderly.  For example, two “caregivers” down in Georgia were recently charged with waterboarding an 89-year-old woman that had been entrusted to their care….

Police charge two caregivers at a Jonesboro facility with waterboarding an 89-year-old woman.

Clayton County police said Jermeller Steed and Cicely Reed held down Anna Foley after an argument that started over ice cream.

#9 An increasing number of American families are taking out student loans in order to pay for their children’s kindergarten tuition.

#10 One town in Massachusetts plans to distribute free condoms to children as young as 12 years of age.

#11 Children in America are exposed to enormous amounts of sexual material on television these days, but we are always so shocked when they try to act out on it.  The following is one very disturbing example that happened recently in Ohio….

Authorities in southwest Ohio have charged a 13-year-old boy with raping a 5-year-old girl at a McDonald’s play area.

The Hamilton County Sheriff’s Office said Monday that the alleged assault occurred Oct. 29 at a McDonald’s in the Cincinnati suburb of Anderson Township. Sheriff’s spokesman Steve Barnett says the girl’s grandmother was nearby in the restaurant at the time.

#12 The following is another example from Indiana of how our sexualized society is affecting our young children….

Fishers police said an 8-year-old girl and a 13-year-old boy were caught in a sexual act on a school bus.

The girl’s parents are now trying to determine if the February incident was a rape or molestation.

In a statement, police said a bus aid caught the girl and the boy “trying to have intercourse,” and that the “bus aid immediately separated the juveniles and informed the bus driver.”

#13 According to Natural News, the Michigan state government intends to raid private farms and kill pigs that have “the wrong hair color” even though some of these farmers have been raising these pigs for decades.

#14 An executive order recently updated by the Obama administration would give the federal government complete control over all food, all energy, all health resources, all transportation resources and “all other materials, services, and facilities” at the discretion of Barack Obama.  The wording of the executive order has been changed so that this can now be done even in “non-emergency” situations.  Very few Americans seem concerned by this.

#15 These days many Americans are very hesitant to get involved with helping out anyone else.  For example, an 86-year-old World War II veteran living near Detroit was recently brutally carjacked in broad daylight at a gas station.  He could not walk after the attack because his leg was shattered so he began to crawl across the concrete pavement to get help.  Sadly, many people walked past and drove past as if he was not even there.

#16 At one airport in Hawaii, TSA agents recently required one new mother to go to a public restroom and fill up the empty baby bottles she was carrying with her own breast milk before they would allow her to get on to her flight.  The following is how one local news station described the incident….

She claims agents told her she couldn’t take the pump on the plane because the bottles in her carry-on were empty.

“I asked him if there was a private place I could pump and he said no, you can go in the women’s bathroom. I had to stand in front of the mirrors and the sinks and pump my breast in front of every tourist that walked into that bathroom. I was embarrassed and humiliated and then angry that I was treated this way.

When the bottles were full, she was allowed back on the plane.

#17 Massive brawls have been erupting at Chuck E. Cheese restaurants all over the nation.  Police responded to violence at one particular Chuck E. Cheese restaurant in Pennsylvania 17 times in just one recent 18 month time period.

#18 Thieves in New Jersey have become so desperate for scrap metal that they have started breaking into churches and ripping the copper piping right out of the walls.

#19 Tide detergent has become an alternative form of currency on the streets of America and there has been an epidemic of Tide thefts all over the nation.  The following is from a recent article in The Daily….

Theft of Tide detergent has become so rampant that authorities from New York to Oregon are keeping tabs on the soap spree, and some cities are setting up special task forces to stop it. And retailers like CVS are taking special security precautions to lock down the liquid. 

One Tide taker in West St. Paul, Minn., made off with $25,000 in the product over 15 months before he was busted last year.

“That was unique that he stole so much soap,” said West St. Paul Police Chief Bud Shaver. “The name brand is [all] Tide. Amazing, huh?”

Tide has become a form of currency on the streets. The retail price is steadily high — roughly $10 to $20 a bottle — and it’s a staple in households across socioeconomic classes.

#20 New federal rules will severely restrict the kind of work that children can do on farms in America.  Kids will be banned from doing many of the most basic kinds of farm chores under the new regulations.  Perhaps the children can just sit inside and watch television while the adults do all the work.

As mentioned earlier, what America is experiencing is not just an economic collapse.  The truth is that our entire society is collapsing.

For many years our great prosperity masked much of our decline, but now our great economic strength is rapidly fading and it is becoming very difficult to deny how far we have fallen as a nation.

You can find more examples of how American society is decaying right here and right here.  Anyone with half a brain can see what is happening to the United States.  It really is sad, because America was once a truly great nation.

So is there any hope of a recovery?

Not if we keep going down the same path.

In the end, the choice is up to you America.

DVDs By Michael

Economic Collapse DVD
Shocking Forecast
Worse Than Putin
High Blood Pressure?
FINCA BAYANO

Silver.com

Fish_300x250_A(2)
Economic Collapse Investing
Seeds Of The Month Club
Lifesilver
Thrive Banner
How To Reverse Arthritis
The Day Of The Lord Is At Hand
Panama Relocation Tours
The 1 Must Own Gold Stock
ProphecyHour
JatoProducts-banner
Print Friendly and PDF
Facebook Twitter More...