If the economy is improving, then why are many of the largest retail chains in America closing hundreds of stores? When I was growing up, Sears, J.C. Penney, Best Buy and RadioShack were all considered to be unstoppable retail powerhouses. But now it is being projected that all of them will close hundreds of stores before the end of 2013. Even Wal-Mart is running into problems. A recent internal Wal-Mart memo that was leaked to Bloomberg described February sales as a “total disaster”. So why is this happening? Why are major retail chains all over America collapsing? Is the “retail apocalypse” upon us? Well, the truth is that this is just another sign that the U.S. economy is falling apart right in front of our eyes. Incomes are declining, taxes are going up, government dependence is at an all-time high, and according to the Bureau of Labor Statistics the percentage of the U.S. labor force that is employed has been steadily falling since 2006. The top 10% of all income earners in the U.S. are still doing very well, but most U.S. consumers are either flat broke or are drowning in debt. The large disposable incomes that the big retail chains have depended upon in the past simply are not there anymore. So retail chains all over the United States are now closing up unprofitable stores. This is especially true in low income areas.
When you step back and take a look at the bigger picture, the rapid decline of some of our largest retail chains really is stunning.
It is happening already in some areas, but soon half empty malls and boarded up storefronts will litter the landscapes of cities all over America.
Just check out some of these store closing numbers for 2013. These numbers are from a recent Yahoo Finance article…
Forecast store closings: 200 to 250
Sears Holding Corp.
Forecast store closings: Kmart 175 to 225, Sears 100 to 125
Forecast store closings: 300 to 350
Forecast store closings: 125 to 150
Barnes & Noble
Forecast store closings: 190 to 240, per company comments
Forecast store closings: 500 to 600
Forecast store closings: 150 to 175
Forecast store closings: 450 to 550
The RadioShack in a nearby town just closed up where I live. This is all happening so fast that it is hard to believe.
But the truth is that those store closings are not the entire story. When you dig deeper you find a lot more retailers that are in trouble.
For example, Blockbuster recently announced that this year they will be closing about 300 stores and eliminating about 3,000 jobs.
Toy manufacturer Hasbro recently announced that they will be reducing the size of their workforce by about 10 percent.
Even Wal-Mart is going through a tough stretch right now. According to documents that were leaked to Bloomberg, Wal-Mart is having an absolutely disastrous February…
Wal-Mart Stores Inc. had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News.
“In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal- Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my ~7 years with the company.”
So what in the world is going on here?
The mainstream media continues to proclaim that we are experiencing a robust “economic recovery”, but at the same time there are a whole host of indications that things are continually getting worse.
Even global cell phone sales actually declined slightly in 2012. That was the first time that has happened since the last recession.
Perhaps it is time that we faced the truth. The middle class is shrinking, incomes are declining and there are not nearly as many jobs as there used to be.
Mort Zuckerman pointed this out in a recent article in the Wall Street Journal…
The U.S. labor market, which peaked in November 2007 when there were 139,143,000 jobs, now encompasses only 132,705,000 workers, a drop of 6.4 million jobs from the peak. The only work that has increased is part-time, and that is because it allows employers to reduce costs through a diminished benefit package or none at all.
So how can the mainstream media be talking about how “good” things are if we still have 6.4 million fewer jobs than we had back in November 2007?
And sadly, things may soon be getting a lot worse. If Congress does not do anything about the “sequester”, millions of federal workers may shortly be facing some very painful furloughs according to CNN…
Federal workers could start facing furloughs as early as April, according to federal agencies trying to prepare for the worst.
Unless Congress steps in, some $85 billion in massive spending reductions will hit the federal government, doling out furloughs to much of the nation’s 2.1 million federal workforce, experts say.
If you still live in an area of the country where the stores and the restaurants are booming, you should be very thankful because that is not the reality for most of the country.
I often write about the stunning economic decline of major cities such as Detroit, but there are huge sections of rural America that are in even worse shape than Detroit in many ways.
For example, many Indian reservations all over America have been shamefully neglected by the federal government and have become hotbeds for crime, drugs and poverty.
Business Insider recently profiled the Wind River Indian reservation in western Wyoming. The following is a brief excerpt from that outstanding article…
The Wind River Indian Reservation is not an easy place to get to, but I had to see it for myself.
Thirty-five-hundred square miles of prairie and mountains in western Wyoming, the reservation is home to bitter ancestral enemies: the Eastern Shoshone and Northern Arapaho tribes.
Even among reservations, it’s renowned for brutal crime, widespread drug use, and legal dumping of toxic waste.
You can see some amazing photos of the Wind River Indian reservation right here.
It is hard to believe that there are places like that in America, but the truth is that conditions like that are spreading to more U.S. communities with each passing day.
We are a nation that is in an advanced state of decline. But as long as the financial markets are okay, our leaders don’t seem too concerned about the suffering that everyone else is going through.
In fact, former Federal Reserve Chairman Alan Greenspan essentially admitted as much during a recent interview with CNBC. The following is how a Zero Hedge article summarized that interview…
Starting at around 1:50, Greenspan states the odds of sequester occurring are very high – in fact, the playdough-faced ex-Chair-head notes, “I find it very difficult to find a scenario in which [the sequester] doesn’t happen” But when asked how this will affect the economy, Awkward Alan is unusually clearly spoken – “the issue is how does it affect the stock market.”
While not so many of our leaders have taken the path to direct truthiness, Greenspan somewhat shocks a Botox’d and babbling Bartiromo when he admits “the stock market is the key player in the game of economic growth.”
Bartiromo shifts uncomfortably in her seat, strokes her imaginary beard and stares blankly as Greenspan explains that while the sequester will have a real effect on the real economy, “if the stock market can hold up through this, then the effect will be rather minor.”
Do you see?
As long as the stock market is moving higher they think that everything is just fine and dandy.
And the Obama administration?
They continue to pursue the same policies that got us into this mess.
Their idea of “economic reform” is to threaten to sue businesses that do not hire ex-convicts.
And of course now that Obama has been re-elected he is putting a tremendous amount of effort into “stimulating the economy”.
For example, he spent this weekend golfing in Florida, and the Obamas recently spent about 20 million taxpayer dollars vacationing in Hawaii.
Meanwhile, the U.S. economy is getting worse with each passing day.
If you doubt that economic conditions are getting worse, please read this article: “Show This To Anyone That Believes That ‘Things Are Getting Better’ In America“.
When you look at the cold, hard numbers, it is undeniable what is happening to America.
And our leaders are not doing anything to fix our problems. In fact, most of the time they are just making things worse.
So buckle up and get prepared. We are in for very bumpy ride, and this is only just the beginning.
Does a shadowy group of obscenely wealthy elitists control the world? Do men and women with enormous amounts of money really run the world from behind the scenes? The answer might surprise you. Most of us tend to think of money as a convenient way to conduct transactions, but the truth is that it also represents power and control. And today we live in a neo-fuedalist system in which the super rich pull all the strings. When I am talking about the ultra-wealthy, I am not just talking about people that have a few million dollars. As you will see later in this article, the ultra-wealthy have enough money sitting in offshore banks to buy all of the goods and services produced in the United States during the course of an entire year and still be able to pay off the entire U.S. national debt. That is an amount of money so large that it is almost incomprehensible. Under this ne0-feudalist system, all the rest of us are debt slaves, including our own governments. Just look around – everyone is drowning in debt, and all of that debt is making the ultra-wealthy even wealthier. But the ultra-wealthy don’t just sit on all of that wealth. They use some of it to dominate the affairs of the nations. The ultra-wealthy own virtually every major bank and every major corporation on the planet. They use a vast network of secret societies, think tanks and charitable organizations to advance their agendas and to keep their members in line. They control how we view the world through their ownership of the media and their dominance over our education system. They fund the campaigns of most of our politicians and they exert a tremendous amount of influence over international organizations such as the United Nations, the IMF, the World Bank and the WTO. When you step back and take a look at the big picture, there is little doubt about who runs the world. It is just that most people don’t want to admit the truth.
The ultra-wealthy don’t run down and put their money in the local bank like you and I do. Instead, they tend to stash their assets in places where they won’t be taxed such as the Cayman Islands. According to a report that was released last summer, the global elite have up to 32 TRILLION dollars stashed in offshore banks around the globe.
U.S. GDP for 2011 was about 15 trillion dollars, and the U.S. national debt is sitting at about 16 trillion dollars, so you could add them both together and you still wouldn’t hit 32 trillion dollars.
And of course that does not even count the money that is stashed in other locations that the study did not account for, and it does not count all of the wealth that the global elite have in hard assets such as real estate, precious metals, art, yachts, etc.
The global elite have really hoarded an incredible amount of wealth in these troubled times. The following is from an article on the Huffington Post website…
Rich individuals and their families have as much as $32 trillion of hidden financial assets in offshore tax havens, representing up to $280 billion in lost income tax revenues, according to research published on Sunday.
The study estimating the extent of global private financial wealth held in offshore accounts – excluding non-financial assets such as real estate, gold, yachts and racehorses – puts the sum at between $21 and $32 trillion.
The research was carried out for pressure group Tax Justice Network, which campaigns against tax havens, by James Henry, former chief economist at consultants McKinsey & Co.
He used data from the World Bank, International Monetary Fund, United Nations and central banks.
But as I mentioned previously, the global elite just don’t have a lot of money. They also basically own just about every major bank and every major corporation on the entire planet.
According to an outstanding NewScientist article, a study of more than 40,000 transnational corporations conducted by the Swiss Federal Institute of Technology in Zurich discovered that a very small core group of huge banks and giant predator corporations dominate the entire global economic system…
An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.
The researchers found that this core group consists of just 147 very tightly knit companies…
When the team further untangled the web of ownership, it found much of it tracked back to a “super-entity” of 147 even more tightly knit companies – all of their ownership was held by other members of the super-entity – that controlled 40 per cent of the total wealth in the network. “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network,” says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.
The following are the top 25 banks and corporations at the heart of this “super-entity”. You will recognize many of the names on the list…
1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
5. State Street Corporation
6. JP Morgan Chase & Co
7. Legal & General Group plc
8. Vanguard Group Inc
9. UBS AG
10. Merrill Lynch & Co Inc
11. Wellington Management Co LLP
12. Deutsche Bank AG
13. Franklin Resources Inc
14. Credit Suisse Group
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
18. Goldman Sachs Group Inc
19. T Rowe Price Group Inc
20. Legg Mason Inc
21. Morgan Stanley
22. Mitsubishi UFJ Financial Group Inc
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation
The ultra-wealthy elite often hide behind layers and layers of ownership, but the truth is that thanks to interlocking corporate relationships, the elite basically control almost every Fortune 500 corporation.
The amount of power and control that this gives them is hard to describe.
Unfortunately, this same group of people have been running things for a very long time. For example, New York City Mayor John F. Hylan said the following during a speech all the way back in 1922…
The real menace of our Republic is the invisible government, which like a giant octopus sprawls its slimy legs over our cities, states and nation. To depart from mere generalizations, let me say that at the head of this octopus are the Rockefeller-Standard Oil interests and a small group of powerful banking houses generally referred to as the international bankers. The little coterie of powerful international bankers virtually run the United States government for their own selfish purposes.
They practically control both parties, write political platforms, make catspaws of party leaders, use the leading men of private organizations, and resort to every device to place in nomination for high public office only such candidates as will be amenable to the dictates of corrupt big business.
These international bankers and Rockefeller-Standard Oil interests control the majority of the newspapers and magazines in this country. They use the columns of these papers to club into submission or drive out of office public officials who refuse to do the bidding of the powerful corrupt cliques which compose the invisible government. It operates under cover of a self-created screen [and] seizes our executive officers, legislative bodies, schools, courts, newspapers and every agency created for the public protection.
These international bankers created the central banks of the world (including the Federal Reserve), and they use those central banks to get the governments of the world ensnared in endless cycles of debt from which there is no escape. Government debt is a way to “legitimately” take money from all of us, transfer it to the government, and then transfer it into the pockets of the ultra-wealthy.
Today, Barack Obama and almost all members of Congress absolutely refuse to criticize the Fed, but in the past there have been some brave members of Congress that have been willing to take a stand. For example, the following quote is from a speech that Congressman Louis T. McFadden delivered to the U.S. House of Representatives on June 10, 1932…
Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks. The Federal Reserve Board, a Government board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt. The depredations and iniquities of the Federal Reserve Board has cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States, has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it.
Sadly, most Americans still believe that the Federal Reserve is a “federal agency”, but that is simply not correct. The following comes from factcheck.org…
The stockholders in the 12 regional Federal Reserve Banks are the privately owned banks that fall under the Federal Reserve System. These include all national banks (chartered by the federal government) and those state-chartered banks that wish to join and meet certain requirements. About 38 percent of the nation’s more than 8,000 banks are members of the system, and thus own the Fed banks.
According to researchers that have looked into the ownership of the big Wall Street banks that dominate the Fed, the same names keep coming up over and over: the Rockefellers, the Rothschilds, the Warburgs, the Lazards, the Schiffs and the royal families of Europe.
But ultra-wealthy international bankers have not just done this kind of thing in the United States. Their goal was to create a global financial system that they would dominate and control. Just check out what Georgetown University history professor Carroll Quigley once wrote…
[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.
Sadly, most Americans have never even heard of the Bank for International Settlements, but it is at the very heart of the global financial system. The following is from Wikipedia…
As an organization of central banks, the BIS seeks to make monetary policy more predictable and transparent among its 58 member central banks. While monetary policy is determined by each sovereign nation, it is subject to central and private banking scrutiny and potentially to speculation that affects foreign exchange rates and especially the fate of export economies. Failures to keep monetary policy in line with reality and make monetary reforms in time, preferably as a simultaneous policy among all 58 member banks and also involving the International Monetary Fund, have historically led to losses in the billions as banks try to maintain a policy using open market methods that have proven to be based on unrealistic assumptions.
The ultra-wealthy have also played a major role in establishing other important international institutions such as the United Nations, the IMF, the World Bank and the WTO. In fact, the land for the United Nations headquarters in New York City was purchased and donated by John D. Rockefeller.
The international bankers are “internationalists” and they are very proud of that fact.
The elite also dominate the education system in the United States. Over the years, the Rockefeller Foundation and other elitist organizations have poured massive amounts of money into Ivy League schools. Today, Ivy League schools are considered to be the standard against which all other colleges and universities in America are measured, and the last four U.S. presidents were educated at Ivy League schools.
The elite also exert a tremendous amount of influence through various secret societies (Skull and Bones, the Freemasons, etc.), through some very powerful think tanks and social clubs (the Council on Foreign Relations, the Trilateral Commission, the Bilderberg Group, the Bohemian Grove, Chatham House, etc.), and through a vast network of charities and non-governmental organizations (the Rockefeller Foundation, the Ford Foundation, the World Wildlife Fund, etc.).
But for a moment, I want to focus on the power the elite have over the media. In a previous article, I detailed how just six monolithic corporate giants control most of what we watch, hear and read every single day. These giant corporations own television networks, cable channels, movie studios, newspapers, magazines, publishing houses, music labels and even many of our favorite websites.
Considering the fact that the average American watches 153 hours of television a month, the influence of these six giant corporations should not be underestimated. The following are just some of the media companies that these corporate giants own…
Home Box Office (HBO)
Turner Broadcasting System, Inc.
Warner Bros. Entertainment Inc.
CW Network (partial ownership)
New Line Cinema
Time Warner Cable
ABC Television Network
Buena Vista Home Entertainment
Buena Vista Theatrical Productions
Buena Vista Records
Walt Disney Pictures
Pixar Animation Studios
Buena Vista Games
Paramount Home Entertainment
Black Entertainment Television (BET)
Country Music Television (CMT)
Nick at Nite
The Movie Channel
Dow Jones & Company, Inc.
Fox Television Stations
The New York Post
Fox Searchlight Pictures
Fox Business Network
Fox Kids Europe
Fox News Channel
Fox Sports Net
Fox Television Network
My Network TV
News Limited News
Phoenix InfoNews Channel
Phoenix Movies Channel
STAR TV India
STAR TV Taiwan
Times Higher Education Supplement Magazine
Times Literary Supplement Magazine
Times of London
20th Century Fox Home Entertainment
20th Century Fox International
20th Century Fox Studios
20th Century Fox Television
The Wall Street Journal
Fox Broadcasting Company
Fox Interactive Media
The National Geographic Channel
National Rugby League
Sky Radio Denmark
Sky Radio Germany
Sky Radio Netherlands
CBS Television Network
CBS Radio Inc. (130 stations)
CBS Consumer Products
CW Network (50% ownership)
Simon & Schuster (Pocket Books, Scribner)
Westwood One Radio Network
NBC Television Network
Syfy (Sci Fi Channel)
NBC Universal Television Distribution
NBC Universal Television Studio
Paxson Communications (partial ownership)
Universal Parks & Resorts
Universal Studio Home Video
And of course the elite own most of our politicians as well. The following is a quote from journalist Lewis Lapham…
“The shaping of the will of Congress and the choosing of the American president has become a privilege reserved to the country’s equestrian classes, a.k.a. the 20% of the population that holds 93% of the wealth, the happy few who run the corporations and the banks, own and operate the news and entertainment media, compose the laws and govern the universities, control the philanthropic foundations, the policy institutes, the casinos, and the sports arenas.”
Have you ever wondered why things never seem to change in Washington D.C. no matter who we vote for?
Well, it is because both parties are owned by the establishment.
It would be nice to think that the American people are in control of who runs things in the U.S., but that is not how it works in the real world.
In the real world, the politician that raises more money wins more than 80 percent of the time in national races.
Our politicians are not stupid – they are going to be very good to the people that can give them the giant piles of money that they need for their campaigns. And the people that can do that are the ultra-wealthy and the giant corporations that the ultra-wealthy control.
Are you starting to get the picture?
There is a reason why the ultra-wealthy are referred to as “the establishment”. They have set up a system that greatly benefits them and that allows them to pull the strings.
So who runs the world?
They do. In fact, they even admit as much.
David Rockefeller wrote the following in his 2003 book entitled “Memoirs”…
“For more than a century, ideological extremists at either end of the political spectrum have seized upon well-publicized incidents such as my encounter with Castro to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure — one world, if you will. If that is the charge, I stand guilty, and I am proud of it.”
There is so much more that could be said about all of this. In fact, an entire library of books could be written about the power and the influence of the ultra-wealthy international bankers that run the world.
But hopefully this is enough to at least get some conversations started.
So what do you think about all of this? Please feel free to post a comment with your thoughts below…
Why are so many politicians around the world declaring that the debt crisis is “over” when debt to GDP ratios all over the planet continue to skyrocket? The global economy has never seen anything like the sovereign debt bubble that we are experiencing today. The United States, Japan, and nearly every major nation in Europe are absolutely drowning in debt. We have heard a lot about “austerity” over in Europe in recent years, but debt to GDP ratios continue to rise in Greece, Spain, Italy, Ireland and Portugal. In general, most economists consider a debt to GDP ratio of 100% to be a “danger level”, and most of the economies of the western world have either already surpassed that level or are rapidly approaching it. Of course the biggest debt offender of all in many ways is the United States. The U.S. debt to GDP ratio has risen from 66.6 percent to 103 percent since 2007, and the U.S. government accumulated more new debt during Barack Obama’s first term than it did under the first 42 U.S. presidents combined. This insane sovereign debt bubble will continue to expand until a day of reckoning arrives and the system implodes. Nobody knows exactly when that moment will be reached, but without a doubt it is coming.
But if you listen to the mainstream media in the United States, you would be tempted to think that this giant bubble of debt is not much of a concern at all. For example, in a recent article in the Washington Post entitled “The case for deficit optimism“, Ezra Klein wrote the following…
“Here’s a secret: For all the sound and fury, Washington’s actually making real progress on debt.”
How many times have we heard that before?
About a decade ago, government officials were projecting that we would be swimming in gigantic government surpluses by now.
Instead, we are running trillion dollar deficits.
But right now there is a lot of optimism about the economy. The stock market recently hit a 5 year high and the business community is loving all of the false prosperity that all of this debt is buying us.
Even Warren Buffett does not really seem concerned about the exploding U.S. government debt. He recently made the following statement…
“It is not a good thing to have it going up in relation to GDP. That should be stabilized. But the debt itself is not a problem.”
A debt of 16 trillion dollars “is not a problem”?
Perhaps we should all run our finances that way.
Why don’t we all go out and open up 20 different credit cards, run them all up to the max, and then tell the credit card companies that we can’t pay them back but that it “is not a problem”.
Of course real life does not work that way.
The truth is that government debt is becoming a monstrous problem all over the globe. Just check out how debt to GDP ratios all over the planet have grown over the past five years…
Debt to GDP ratio in 2007: 66.6 percent
Debt to GDP ratio in 2012: 103 percent
Debt to GDP ratio in 2007: 43.4 percent
Debt to GDP ratio in 2012: 85.0 percent
Debt to GDP ratio in 2007: 63.7 percent
Debt to GDP ratio in 2012: 86 percent
Debt to GDP ratio in 2007: 67.6 percent
Debt to GDP ratio in 2012: 80.5 percent
Debt to GDP ratio in 2007: 39.6 percent
Debt to GDP ratio in 2012: 69.3 percent
Debt to GDP ratio in 2007: 24.8 percent
Debt to GDP ratio in 2012: 106.4 percent
Debt to GDP ratio in 2007: 63.9 percent
Debt to GDP ratio in 2012: 108.1 percent
Debt to GDP ratio in 2007: 106.6 percent
Debt to GDP ratio in 2012: 120.7 percent
Debt to GDP ratio in 2007: 106.1 percent
Debt to GDP ratio in 2012: 170.6 percent
The Eurozone As A Whole
Debt to GDP ratio in 2007: 68.4 percent
Debt to GDP ratio in 2012: 87.3 percent
Debt to GDP ratio in 2007: 172.1 percent
Debt to GDP ratio in 2012: 211.7 percent
So how does all of this end?
Well, it is going to be messy, but it is very difficult to say exactly when the system will collapse under the weight of too much debt. Some nations, such as Japan, are able to handle very high debt loads because they have a very high level of domestic saving. Up to this point, an astounding 95 percent of all Japanese government bonds have been purchased domestically. But other nations collapse under the weight of government debt even before they reach a debt to GDP ratio of 100%. The following is an excerpt from a recent Congressional Research Service report…
It is hard to predict at what point bond holders would deem it to be unsustainable. A few other advanced economies have debt-to-GDP ratios higher than that of the United States. Some of those countries in Europe have recently seen their financing costs rise to the point that they are unable to finance their deficits solely through private markets. But Japan has the highest debt-to-GDP ratio of any advanced economy, and it has continued to be able to finance its debt at extremely low costs.
When a government runs up massive amounts of debt, it is playing with fire. You can pile up mountains of government debt for a while, but eventually it catches up with you.
Over the past 10 years, the U.S. national debt has grown by an average of 9.3 percent per year, but the overall U.S. economy has only grown by an average of just 1.8 percent per year. That is unsustainable by definition.
There is going to be a tremendous price to pay for the debt binge that the U.S. government has indulged in over the past decade. During Barack Obama’s first term, the amount of new debt accumulated by the federal government breaks down to about $50,521 for every single household in the United States. That is utter insanity.
If you can believe it, we have accumulated more new government debt under Obama than we did from the inauguration of George Washington to the end of the Clinton administration.
And most Americans realize that something is seriously wrong. One recent poll found that only 34 percent of all Americans believe that the country is heading in the right direction, and 60 percent of all Americans believe that the country is heading in the wrong direction.
If we keep piling up so much debt, at some point a moment of great crisis will arrive. When that moment arrives, we could see havoc throughout the entire global financial system. For instance, most people don’t really understand the key role that U.S. Treasuries play in the derivatives market. The following is from a recent article posted on Zero Hedge…
This time around, things will be far worse if nothing is solved. If the US loses another AAA rating, then the financial markets could face systemic risk. The reason for this is that US Treasuries are one of the senior most forms of collateral used by the banks to backstop the $600+ trillion derivatives market.
As any trader who trades on margin can tell you, when the value of your collateral is called into question, those on the other side of the trade come looking for you to put up more capital on your trades. This can result in assets being sold en masse (similar to what happened after Lehman failed) and things can get very ugly very fast.
For much more on the danger that derivatives pose to our financial system, please see this article: “The Coming Derivatives Panic That Will Destroy Global Financial Markets“.
Once again, nobody knows exactly when the sovereign debt bubble will burst, but if we continue down the path that we are currently on, it will inevitably happen at some point.
And according to Professor Carmen Reinhart, when this bubble does burst things could unravel very rapidly…
“These processes are not linear,” warns Prof. Reinhart. “You can increase debt for a while and nothing happens. Then you hit the wall, and—bang!—what seem to be minor shocks that the markets would shrug off in other circumstances suddenly become big.”
At some point the global financial system will hit the wall that Professor Reinhart has warned about.
Are you ready?
The number of Americans receiving money directly from the federal government has grown from 94 million in the year 2000 to over 128 million today. A shocking new research paper by Patrick Tyrrell and William W. Beach contains that statistic and a whole bunch of other very revealing numbers. According to their research, the federal government hands out money to 41.3 percent of the entire population of the United States each month. Overall, more than 70 percent of all federal spending goes to what they call “dependence-creating programs”. It is the most massive wealth redistribution scheme in the history of the world, and it continues to grow at a very rapid pace with each passing month. But can we really afford this? Of course we never want to see a single person go without food to eat or a roof to sleep under, but can the federal government really afford to support 128 million Americans every month? If millions more Americans keep jumping on to the “safety net” each year, how long will it be before it breaks and it is not there for anyone? The federal government is already drowning in debt. This year the U.S. national debt will easily blow past the 17 trillion dollar mark and we are rapidly heading toward financial oblivion. We are stealing more than 100 million dollars from our children and our grandchildren every single hour of every single day with no end in sight. If we don’t get our finances in order as a nation, what will the end result be?
According to Tyrrell and Beach, federal spending on entitlement programs has been rising more than 6 times as fast as population growth has in recent years…
Between 1988 and 2011, spending on dependence-creating federal government programs has increased 180 percent versus “only” a 62 percent increase in the number of people who are enrolled in federal government programs, and a 27 percent increase in the population. Not only are more people enrolled in government programs than ever before, but more US taxpayer dollars are being spent on each recipient every year.
But even though the numbers that Tyrrell and Beach present in their paper are incredibly shocking, the truth is that they have probably underestimated the true scope of government dependence in America today. Just consider the following numbers…
Back in the year 2000, there were about 17 million Americans on food stamps. That number has exploded to more than 47 million today.
If you can believe it, today more than 70 million Americans are on Medicaid, and it is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
Right now, there are more than 53 million Americans on Social Security, and that number is projected to absolutely explode as huge waves of Baby Boomers retire in the coming years.
As I wrote about in a previous article, the number of Americans on Medicare is expected to grow from 50.7 million in 2012 to 73.2 million in 2025.
And those are only four examples of government programs that have seen their numbers explode in recent years. There are so many more that could be mentioned. Overall, the federal government runs nearly 80 different “means-tested welfare programs“, and almost all of them are experiencing explosive growth.
So is the “128 million” figure that Tyrrell and Beach have come up with actually too low? I believe that it is. But in any event, nobody can deny that the “welfare state” in the U.S. has absolutely mushroomed in size since the turn of the century.
According to one recent poll, 55 percent of all Americans say that they have received money from a safety net program run by the federal government at some point in their lives. We are a nation that has become very comfortable leaning on Uncle Sam for help.
And poor people from all around the globe see how good things are here and they are eager to get a seat at the table. In a previous article, I talked about a federal government website (“WelcomeToUSA.gov“) that actually teaches new immigrants how to apply for welfare once they are able to get into the United States.
Will we all eventually becoming dependent on the government? If that happens will we still be free men and women?
Once someone is dependent on the government, they become forced to do what the government tells them to do in order to survive. If we all eventually become dependent on the federal government, how much power will that give them over us?
That is something to think about.
Another thing to ponder is how the U.S. middle class is rapidly disappearing.
There will always be poor people, and we should always take care of them, but what we should be truly alarmed about is how the middle class in America has been dramatically shrinking in recent years.
One of the biggest reasons why so many Americans are applying for government assistance these days is because there simply aren’t enough jobs for everyone. Politicians from both political parties have fully embraced the one world “free trade” economic agenda of the global elite, and as a result millions of our jobs are being shipped out of the country. Big corporations can either choose to pay U.S. workers a living wage with benefits, or they can choose to set up shop on the other side of the globe where it is legal to pay workers slave labor wages with no benefits. Plus there are much fewer taxes and regulations to deal with typically on the other side of the globe.
As long as this nation pursues this “one world economic agenda”, there will never be enough jobs in the United States ever again. Chronic unemployment will become the new normal. Our formerly great manufacturing cities will continue to degenerate into gang-infested war zones.
Apologists for the current system continue to insist that the answer is “more education”, but the truth is that government dependence is even exploding among those with advanced degrees. The following is a brief excerpt from a recent article on The Chronicle Of Higher Education…
People who don’t finish college are more likely to receive food stamps than are those who go to graduate school. The rolls of people on public assistance are dominated by people with less education. Nevertheless, the percentage of graduate-degree holders who receive food stamps or some other aid more than doubled between 2007 and 2010.
During that three-year period, the number of people with master’s degrees who received food stamps and other aid climbed from 101,682 to 293,029, and the number of people with Ph.D.’s who received assistance rose from 9,776 to 33,655, according to tabulations of microdata done by Austin Nichols, a senior researcher with the Urban Institute. He drew on figures from the 2008 and 2011 Current Population Surveys done by the U.S. Census Bureau and the U.S. Bureau of Labor.
After reading that, does anyone still believe that “more education” is the answer to our problems?
What we need is more jobs, and lots of them. Unfortunately, our politicians continue to pursue policies that absolutely kill American jobs.
So the number of Americans that are forced to turn to the government for assistance will continue to grow, as will our national debt.
Sadly, most Americans still don’t realize what is happening. Most of them are still listening to those in the mainstream media that are insisting that everything is going to be just fine.
For example, the most famous economic journalist in the country, Paul Krugman of the New York Times, recently wrote that the deficit crisis has been “solved”…
True, there are projected problems further down the road, mainly because of the continuing effects of an aging population. But it still comes as something of a shock to realize that at this point reasonable projections do not, repeat do not, show anything resembling the runaway deficit crisis that is a staple of almost everything you hear, including supposedly objective news reporting.
So you heard it here first: while you weren’t looking, and the deficit scolds were doing their scolding, the deficit problem (such as it was) was being mostly solved.
I don’t know how in the world Paul Krugman can get paid to write such nonsense, but the truth is that our government debt problems are only just beginning.
In a previous article, I explained that the unfunded liabilities of the federal government are growing so rapidly that we could not cover them even if we raised the highest tax rate to 100%…
According to Chris Cox and Bill Archer, two men who served on Bill Clinton’s Bipartisan Commission on Entitlement and Tax Reform, there is no way in the world that we could raise taxes high enough to pay for all of the obligations that we are currently taking on. They say that even if we taxed all corporations and all individuals at a 100% tax rate on all income over $66,193, “it wouldn’t be nearly enough to fund the over $8 trillion per year in the growth of U.S. liabilities.“
Yes, Paul Krugman, we do have a spending problem. Even if Bill Gates gave every single penny of his fortune to the federal government, it would only cover the U.S. budget deficit for about 15 days. We simply cannot go on spending money like this.
If anyone out there believes Paul Krugman and is convinced that the federal government is no longer facing a massive debt problem, please read this article: “55 Facts About The Debt And U.S. Government Finances That Every American Voter Should Know“.
But if we can’t afford to do all of this spending, then why are we doing it?
Well, it is because there are a whole lot of people out there that are really hurting. Poverty in the U.S. is absolutely exploding, and the gap between the wealthy and the poor has grown to unprecedented heights.
According to a recent article posted on Economy In Crisis, the bottom 60 percent of all Americans only own 2.3 percent of all the financial wealth in the nation combined.
That is astounding.
If you live in a wealthy area of the country, you may look around and things may look really good to you. But in many other areas of the country things are worse than they have ever been in the post-World War II era. For the first time ever, more than a million public school students in the United States are homeless. That number has risen by 57 percent since the 2006-2007 school year.
Can you imagine that? We have over a million kids that are attending our public schools that do not have a home to go back to at night.
Our economy desperately needs more jobs, but we just continue to lose more of them. On Thursday, it was announced that American Express is eliminating 5,400 more jobs. More announcements like this come out just about every day now. 65 percent of all Americans expect 2013 to be a year of “economic difficulty”, and there aren’t a whole lot of reasons to be optimistic about things at this point.
When you lose your job, it can feel like your entire life is falling apart. The competition for jobs is absolutely fierce, and a lot of workers have fallen through the cracks. In this rough economic environment, there are millions of Americans that have never been able to put the pieces of their lives back together. A recent CNN article profiled a 42-year-old woman up in Oregon named Lynette who has had her life totally turned upside down by unemployment…
I’m a single mom with a son in high school.
Three years ago, I was laid off from a job working at a propane company. I had just gotten back on my feet after battling breast cancer, then cervical cancer, but the economy tanked, and I was the first to go.
I am now 42, and the cancer is gone. But it appears my employability is also gone.
She used to work in a position that helped others find government assistance, but now she is the one who has been forced to seek it…
Before I was diagnosed with cancer, I worked for the state of Oregon and was the number one service manager for the Department of Human Services. My job was to help low income families find work and get food stamps and insurance. Now, I cannot even get a job at McDonalds, and I’m the one living on social assistance.
Does anyone out there have a similar story to share? If so, please feel free to share it below…
America is rapidly becoming a nation of takers. An increasing number of Americans expect the government to take care of them from the cradle to the grave, and they expect the government to dig into the pockets of others in order to pay for it all. This philosophy can be very seductive, but what happens when the number of takers eventually outnumbers the number of producers? In 11 different U.S. states, the number of government dependents exceeds the number of private sector workers. This list of states includes some of the biggest states in the country: California, New York, Illinois, Ohio, Maine, Kentucky, South Carolina, Mississippi, Alabama, New Mexico and Hawaii. It is interesting to note that seven of those states were won by Barack Obama on election night. In California, there are 139 “takers” for every 100 private sector workers. That is crazy! The American people have become absolutely addicted to government money, and it gets worse with each passing year. If you can believe it, entitlements accounted for 62 percent of all federal spending in fiscal year 2012. It would be one thing if we could afford all of this spending, but unfortunately we simply cannot. We are drowning in debt, and we are stealing more than a hundred million more dollars from future generations with each passing hour. No bank robber in history can match that kind of theft.
Yes, we will always need a safety net. There are many people out there that simply cannot take care of themselves. We certainly don’t want to see anyone sleeping in the streets or starving to death.
But if the number of people jumping on to the safety net continues to grow at the current pace, the net will break and it will not be available for any of us.
For example, the number of Americans on food stamps grew from about 17 million in 2000 to more than 47 million today. It nearly tripled in just 12 years.
What will happen if it nearly triples again over the next 12 years?
The federal government even has a website (benefits.gov) that guides people through the process of figuring out what welfare programs they can take advantage of.
Overall, the federal government runs nearly 80 different “means-tested welfare programs” and more than 100 million Americans are already enrolled in at least one of those programs.
Yes, I realize that figure is very hard to believe. I had a hard time believing it when I first came across it.
And it is even more shocking when you realize that the figure of 100 million Americans does not even include those who only receive Social Security or Medicare.
Today, there are 56.76 million Americans on Social Security.
To support all of those Americans on Social Security, there are only about 94.75 million full-time private sector workers.
So there are just 1.67 full-time private sector workers to support each American that is on Social Security.
Medicare is also growing like crazy. As I wrote about the other day, the number of Americans on Medicare is expected to grow from 50.7 million in 2012 to 73.2 million in 2025.
How much farther can we push things before the entire system collapses?
In order to support this exploding entitlement system, we need a lot more Americans to be working good paying jobs.
Unfortunately, millions of good paying jobs continue to be shipped overseas and they aren’t coming back.
We are even losing good jobs to our own prisoners. The United States has the largest prison population in the world by far, and the exploitation of that low wage labor pool has become a boom industry in America. Even Microsoft and Boeing are using prison labor now. Just check out this video.
Meanwhile, there are millions upon millions of law-abiding Americans that cannot find jobs and that cannot take care of their families.
So poverty and dependence on the government are absolutely exploding. We have a system that is so messed up that it is hard to even put it into words. The middle class is being viciously shredded, and most Americans just continue to applaud the politicians from both parties that are doing this to us.
Our economy is being gutted at the same time that the welfare state is experiencing unprecedented growth. Instead of giving us real answers, our “leaders” just continue to borrow, spend and print more money. We are about to hit the debt limit again, and the Obama administration is saying that we should just do away with the debt limit permanently.
Most of our politicians don’t seem to understand that they are systematically destroying our economy and the bright futures that our children and our grandchildren were supposed to have.
But there are some politicians out there that get it. Unfortunately, many of them live in other countries. For example, Canadian MP Pierre Poilievre seems to have a firm grasp on what debt is doing to the United States. The following are some excerpts from one of his speeches…
“By 2020, the US Government will be spending more annually on debt interest than the total combined military budgets of China, Britain, France, Russia, Japan, Germany, Saudi Arabia, India, Italy, South Korea, Brazil, Canada, Australia, Spain, Turkey, and Israel.”
“Through government spending the indulgence of one is the burden of another; through government borrowing, the excess of one generation becomes the yoke of the next; through international bailouts, one nation’s extravagance becomes another nation’s debt”
“Everyone takes, nobody makes, work doesn’t pay, indulgence doesn’t cost, money is free, and money is worthless.”
You can see his entire speech right here.
And if we continue down this path it is most definitely true that our money will eventually become worthless at some point. Just today I was down at the grocery store, and a can of chili that I was able to get on sale for 75 cents a couple of years ago now has a “sale price” of $1.69. If the Federal Reserve keeps recklessly printing dollars, eventually we will be fortunate to get a can of chili for 10 bucks. Things cost too much already, and the Fed seems absolutely determined to cut the legs out from under the U.S. dollar.
Unfortunately, printing money is the only way that we are going to be able to service the gigantic amounts of debt that we are accumulating.
According to Chris Cox and Bill Archer, two men who served on Bill Clinton’s Bipartisan Commission on Entitlement and Tax Reform, there is no way in the world that we could raise taxes high enough to pay for all of the obligations that we are currently taking on. They say that even if we taxed all corporations and all individuals at a 100% tax rate on all income over $66,193, “it wouldn’t be nearly enough to fund the over $8 trillion per year in the growth of U.S. liabilities.”
Are you starting to get an idea of how much trouble we are in?
We don’t have enough money to pay for all of this.
We are broke.
Our current economy is a debt-induced illusion, and we will soon be waking up to a tremendous amount of pain.
Are you ready?
Why in the world would anyone want to live in the state of California at this point? The entire state is rapidly becoming a bright, shining example of everything that is wrong with America. It is so sad to watch our most populated state implode right in front of our eyes. Like millions of Americans, I was quite enamored with the state of California when I was younger. The warm weather, the beaches, the great natural beauty of the state and the mystique of Hollywood all really appealed to me. At one point I even thought that I wanted to move there. But today, hordes of Californians are racing to get out of the state because it has become a total nightmare. It is the worst state in the country in which to do business, taxes were just raised even higher, unemployment is more than 20 percent higher than the national average and the state government is drowning in debt. Meanwhile, poverty, gang activity and crime just seem to get worse with each passing year. On top of everything else, the insane politicians in Sacramento just keep on passing more laws that make the problems that the state is facing even worse. Unfortunately, what is happening in California may be a preview of what is coming to the entire nation. The old adage, “as California goes, so goes the nation”, has been proven to be true way too many times.
In dozens of different ways, the state of California is showing the rest of us what not to do. Will we learn from their mistakes, or will we follow them into oblivion? Please share the list below with as many people as you can. In addition to a large amount of new research, this list also pulled heavily from one of my previous articles and from outstanding research done by Richard Rider. The following are 55 reasons why California is the worst state in America…
1. One survey of business executives has ranked California as the worst state in America to do business for 8 years in a row.
2. In 2011, the state of California ranked 50th out of all 50 states in new business creation.
3. According to one recent study, California is the worst-governed state in the entire country.
4. Thanks to Proposition 30, California now boasts the highest state income tax rate in the nation.
5. Even though California just raised taxes dramatically on the wealthy, state revenues are falling like a rock. State revenue for November 2012 was 10.8 percent below projections.
6. California has the highest sales tax rate in the United States.
7. California has the 8th highest corporate income tax rate in the country.
8. California has the highest “minimum corporate tax” in the country. Each corporation must pay at least $800 to the state even if a corporation does not make a single dollar of profit.
9. California is tied with New York for the highest gasoline tax rate in the country.
10. California is the only state in America that taxes carbon emissions.
11. The state of California issues some of the most expensive traffic tickets in the nation. This is another form of taxation.
12. As of October, only Nevada and Rhode Island had higher unemployment rates than California.
13. The unemployment rate in California is more than 20 percent higher than the overall unemployment rate for the rest of the nation.
14. The state of California requires licenses for 177 different occupations (the most in the nation). The national average is only 92.
15. California teachers are the highest paid in the nation, but California students rank 48th in math and 49th in reading.
16. California accounts for 12 percent of the U.S. population, but a whopping 33 percent of Americans that receive TANF (Temporary Assistance for Needy Families) live there.
17. Only the state of Illinois has a lower bond rating than the state of California does.
18. Including unfunded pension liabilities, the state of California has more than twice as much debt as any other state does.
19. Average pay for California state workers has risen by more than 100 percent since 2005. That is good news for those state employees, but it is bad news for the taxpayers that have to pay their salaries.
20. More than 5,000 California state troopers made more than $100,000 last year.
21. One highway patrol officer ended up bringing home almost $484,000 in 2011.
22. One state psychiatrist in California was paid $822,000 in 2011.
23. Since 2007, the number of children living in poverty in the state of California has increased by 30 percent.
24. Sadly, an astounding 60 percent of all students attending California public schools now qualify for free or reduced-price school lunches.
25. The American Tort Reform Association has ranked the state of California as the worst “judicial hellhole” in America.
26. Businesses all over the state of California are being absolutely suffocated to death by ridiculous regulations.
27. According to the Milken Institute, operating costs for California businesses are 23 percent higher than the national average.
28. According to CNN, the state of California had the worst “small business failure rate” in America in 2010. It was 69 percent higher than the national average.
29. The number of people unemployed in the state of California is roughly equivalent to the populations of Nevada, New Hampshire and Vermont combined.
30. Residential customers in California pay about 29 percent more for electricity than the national average.
31. So many poor people and illegal aliens have taken advantage of the “free” healthcare at emergency rooms that many of them have been forced to shut down in California. As a result, the state of California now ranks dead last out of all 50 states in the number of emergency rooms per million people.
32. Political correctness is totally out of control in California.
33. One California town is actually considering making it illegal to smoke in your own backyard.
34. The traffic around the big cities is horrific.
35. Los Angeles
36. San Francisco
40. The rampant gang activity in the state gets even worse with each passing year.
41. Crime continues to rise all over the state.
42. Just recently, the city attorney of San Bernardino, California told citizens to “lock their doors and load their guns” because there is not enough money to pay for adequate police protection any longer.
43. The murder rate in San Bernardino is up 50 percent this year.
44. In Oakland, burglaries are up 43 percent so far this year.
45. Today, Oakland is considered the 5th most violent city in the United States.
46. There have been more than 250 gold chain robberies in Stockton, California just since the month of April.
47. In Stockton, the police budget cuts got so bad that the police union put up a billboard at one point with the following message: “Welcome to the 2nd most dangerous city in California. Stop laying off cops.”
48. Jerry Brown.
49. The absolutely insane California state legislature.
52. The state of California lies directly along the infamous “Ring of Fire“. Approximately 90 percent of all the earthquakes in the entire world happen along the Ring of Fire and the “Big One” could hit the state at any moment.
53. According to the U.S. Census Bureau, approximately 100,000 more people moved out of the state of California in 2011 than moved into it.
54. During 2011, more than 58,000 people moved from California to the state of Texas.
55. Overall, the state of California has experienced a net loss of about four million residents to other states over the past 20 years.
Why are Greece, Spain, Italy, Portugal and so many other countries experiencing depression-like conditions right now? It is because they have too much debt. Why do they have too much debt? It is because they allowed themselves to become enslaved to the bankers. Borrowing money from the bankers can allow a nation to have a higher standard of living in the short-term, but it always results in a lower standard of living in the long-term. Why is that? It is because you always have to pay back more money than you borrowed. And when you get to the point of having a debt to GDP ratio in excess of 100%, you are basically drowning in debt. Huge amounts of money that could be going to providing essential services and stimulating your economy are now going to service your horrific debt. Today, citizens in Greece, Spain, Portugal and Italy are experiencing a standard of living far below what they should be because the bankers have trapped them in endless debt spirals. Sadly, the vast majority of the people living in those countries have absolutely no idea what is at the root cause of their problems.
The truth is that no sovereign nation on earth ever has to borrow a single penny from anyone.
In theory, there is nothing stopping a government from printing up debt-free money and spending it into circulation.
But that is not the way our world works.
Instead, our national governments borrow money that has been zapped into existence out of thin air by central banks.
Now what kind of sense does that make?
Why don’t our governments just create the money themselves?
If the government of Greece had been directly issuing debt-free Greek currency all these years, they would have a national debt of zero and they would not be in the middle of a deep depression today.
So why isn’t anyone proposing that they go to such a system?
Instead, everyone is trying to figure out a way that the Greeks can muddle through this depression and keep paying on their unsustainable debts.
It is such a tragedy what has happened to Greece. The city of Boston has a larger economy than the entire nation of Greece at this point.
But this is what happens when you allow the bankers to trap your country in debt. The central banking systems of the world are designed to be endless debt spirals that systematically transfer wealth from the people through the governments and into the hands of the ultra-wealthy.
Just look at what is happening in the United States. The U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was first created.
Greece, Spain, Italy, Portugal and the rest of the nations of the western world did not get into all this debt by accident.
This happened by design.
And we can see what happens when the system starts to unravel by looking at what is happening in Greece and in Spain right now.
The following are 11 things that can happen when you allow your country to become enslaved to the bankers….
#1 At some point nations that are drowning in debt must implement “austerity measures” in an attempt to stay solvent.
This causes economic slowdown and unemployment skyrockets. We are seeing this happen in Greece, Spain and a whole bunch of other nations right now.
Over the past four years, the Greek economy has contracted by close to 25 percent. Just this week it was announced that the unemployment rate in Greece has risen to 23.1 percent.
A year ago it was just 16.8 percent
In Spain, the unemployment rate is even higher. It has hit 24.6 percent, and some analysts expect it to eventually reach 30 percent.
This would have never happened if these nations had not gotten into so much debt.
#2 Economic progress can actually go backwards in a debt-based system.
In Greece, a very large number of citizens have actually been giving up their cars and have gone back to riding bikes….
The high cost of road tax, fuel and repairs is forcing Greeks to ditch their cars in huge numbers. According to the government’s statistics office, the number of cars on Greek roads declined by more than 40 percent in each of the last two years. Meanwhile, more than 200,000 bikes were sold in 2011, up about a quarter from the previous year.
#3 Your banking system will inevitably melt down at some point.
Every debt bubble eventually bursts, and authorities all over Europe are desperately trying to keep the European banking system from completely imploding.
But despite their efforts, people are pulling money out of banks in southern Europe at a staggering pace. Just check out the slow motion bank run that is unfolding in Spain….
Capital outflows from Spain more than quadrupled in May to €41.3 billion ($50.7 billion) compared with May 2011, according to figures released on Tuesday by the Spanish central bank.
In the first five months of 2012, a total of €163 billion left the country, the figures indicate. During the same period a year earlier, Spain recorded a net inflow of €14.6 billion.
#4 In all countries with a debt-based system, eventually your taxes will be raised to ridiculous levels.
When the income tax was introduced in the United States back in 1913, the vast majority of Americans were in the 1 percent tax bracket.
Throughout the years there have been countless promises that taxes would be limited, but those promises always end up getting broken.
Even when they give us “tax cuts” with one hand, they usually end up raising taxes ten different ways with the other hand.
In the United States today, we are literally taxed in dozens and dozens of different ways.
Our politicians love to come up with new and inventive ways to tax us without us really even feeling it.
In the end, they are going to take as much away from us as they can possibly get away with.
Just look at what is happening in France.
The newly elected socialist president of France says that his party plans to raise the top tax rate in France to 75 percent.
But even though our politicians tax us to death, they still manage to run up gigantic mountains of debt on top of that.
#5 Your currency slowly but steadily becomes worthless.
Most people don’t realize that inflation is a tax. Every dollar you currently have in the bank is constantly losing value. That is because in a debt-based system like we have, the total amount of money and the total amount of debt is supposed to keep perpetually expanding.
Since the Federal Reserve was created, the U.S. dollar has declined in value by well over 95 percent.
This did not happen by accident. Every other major currency around the globe has been steadily declining in value as well.
#6 When things get bad enough, there will be rioting in the streets.
A few weeks ago, a total of more than a million public employees took to the streets in more than 80 different Spanish cities. You can view footage of some of the violent clashes with police that took place right here.
#7 When a debt-based economy crashes, money becomes very tight and shortages tend to happen.
Just look at what is happening in Greece. Medicine shortages have become a tremendous problem. The following is from a recent Bloomberg article….
Mina Mavrou, who runs a pharmacy in a middle-class Athens suburb, spends hours each day pleading with drugmakers, wholesalers and colleagues to hunt down medicines for clients. Life-saving drugs such as Sanofi (SAN)’s blood-thinner Clexane and GlaxoSmithKline Plc (GSK)’s asthma inhaler Flixotide often appear as lines of crimson data on pharmacists’ computer screens, meaning the products aren’t in stock or that pharmacists can’t order as many units as they need.
“When we see red, we want to cry,” Mavrou said. “The situation is worsening day by day.”
The 12,000 pharmacies that dot almost every street corner in Greek cities are the damaged capillaries of a complex system for getting treatment to patients. The Panhellenic Association of Pharmacists reports shortages of almost half the country’s 500 most-used medicines.
#8 Your population will eventually become so desperate that they will start banding together to loot food and supplies from stores.
When people have no work and they cannot feed their families they often find themselves doing things that they never imagined that they would do. Just check out what is happening in Spain right now….
Unemployed fieldworkers and other members of the union went to two supermarkets, one in Ecija (Sevilla) and one in Arcos de la Frontera (Cadiz) and loaded up trolleys with basic necessities. They said that the people were being expropriated and they planned to “expropriate the expropriators”.
The foodstuffs, including milk, sugar, chickpeas, pasta and rice, have been given to charities to distribute, who say they are unable to cope with all the requests for help they receive. Unemployment in the Sierra de Cadiz is now 40%.
#9 If things get bad enough, even essential services may start shutting down.
Authorities in Greece are legitimately concerned that there may be interruptions in the supply of natural gas and electricity. Suppliers are leaving bills unpaid for extended periods of time, and one day millions of Greeks may wake up to find that the power to their homes has been cut off….
Greece’s power regulator RAE told Reuters on Friday it was calling an emergency meeting next week to avert a collapse of the debt-stricken country’s electricity and natural gas system.
“RAE is taking crisis initiatives throughout next week to avert the collapse of the natural gas and electricity system,” the regulator’s chief Nikos Vasilakos told Reuters.
RAE took the decision after receiving a letter from Greece’s natural gas company DEPA, which threatened to cut supplies to electricity producers if they failed to settle their arrears with the company.
#10 In an economic depression, many people begin to totally lose hope.
An increasing number of parents in southern Europe are facing such desperate situations that they are actually abandoning their babies.
The following is from a recent CNBC article….
According to SOS Villages, a European charity that attempts to help families in financial hardship before abandonment occurs, in the last year alone 1,200 children in Greece and 750 in Italy have been abandoned. That is almost double the 400 children abandoned in Italy a year ago, and up from 114 children abandoned in Greece in 2003.
#11 Just like we saw during the Great Depression of the 1930s, there is a spike in suicides when an economy crashes.
Greece has never seen anything like what is happening now. The suicide rate has been absolutely soaring.
The following is from a Reuters article back in April….
On Monday, a 38-year-old geology lecturer hanged himself from a lamp post in Athens and on the same day a 35-year-old priest jumped to his death off his balcony in northern Greece. On Wednesday, a 23-year-old student shot himself in the head.
In a country that has had one of the lowest suicide rates in the world, a surge in the number of suicides in the wake of an economic crisis has shocked and gripped the Mediterranean nation – and its media – before a May 6 election.
If you live in the United States, you need to watch what is happening in Europe very closely, because similar conditions will come to the United States soon enough.
Just like Europe, we have allowed ourselves to become enslaved to the bankers, and now we will suffer the consequences.
Sadly, most Americans do not even realize how we got into this mess. The following is from a recent article by Professor Steven Yates….
It should have been clear that the country—indeed, Western civilization itself—was on the wrong trajectory as governments and central banks, working in tandem, severed ties between their currencies and precious metals, allowing massive credit expansion to run rampant and the national debt to skyrocket—making, e.g., the pseudo-prosperity of the roaring 1990s possible. Nixon had “closed the gold window” on August 15, 1971; our national debt was around $400 billion. Slightly over ten years later, the debt crossed the $1 trillion threshold. Ten years after that, it reached $6 trillion. When George W. Bush left office having been the biggest spending Republican in U.S. history, it had risen to over $11 trillion. Today, under the watch of the catastrophic Obama presidency, by the time this reaches print the national debt might have surmounted $16 trillion with no end in sight.
The United States has accumulated the greatest mountain of debt in the history of the world and it will totally crush us at some point.
Unfortunately, the vast majority of Americans are living paycheck to paycheck and are totally unprepared for the economic chaos that is coming.
One study found that 64 percent of all Americans have less than $1000 in the bank.
Can you believe that?
Even though we could be on the verge of another global food crisis, most Americans do not have enough food in their homes to last a single month.
Even though the U.S. economy is on the verge of another recession, most Americans are still running out and buying toys that they don’t need and paying for them with credit cards that they should not be using.
If you want to see where we are headed, just look at Greece and Spain.
They are going through economic hell, and we will be joining them soon enough.
Get ready while you can.
The U.S. economy is in a massive amount of trouble. There aren’t enough jobs. There isn’t enough money to go around. Business activity is slowing down again. Household wealth has been falling. Food prices have been rising. Many state and local governments all over the country are flat broke and are drowning in debt. The federal government has been rolling up unprecedented amounts of debt in an attempt to keep things going, but everyone knows that kind of borrowing is simply unsustainable. So where do we go from here? We consume far more than we produce and we use debt to make up the difference. 40 years ago the total amount of debt in America (government, business and consumer) was less than 2 trillion dollars. Today it is nearly 55 trillion dollars. How in the world did we let the total amount of debt in the United States grow more than 27 times larger over the past 40 years? Our economic system is fundamentally broken, but most Americans don’t realize it yet because times are still relatively good.
However, the next great economic crisis is going to wake a whole lot of Americans up.
And when they realize what has happened to our future, they are going to be really, really angry.
Enjoy the good times while they last. The next recession is rapidly approaching, and it will not be pleasant.
The following are 20 signs that all point to the exact same thing….
#1 The unemployment rate in the U.S. has been above 8 percent for 40 months in a row, and 42 percent of all unemployed Americans have been out of work for at least half a year. As I wrote about recently, there are never going to be enough jobs in America ever again. As bad as things are right now, they are about to get even worse. So what is our country going to look like once the unemployment rate starts shooting up rapidly once again?
#2 35 percent of all unemployed workers have had to dip into retirement savings in order to make ends meet over the past year.
#3 Since 2008, the U.S. economy has lost 1.3 million jobs while at the same time 3.6 million more Americans have been added to Social Security’s disability insurance program.
#4 A recent survey conducted by the National Association for Business Economics found that only 23 percent of all U.S. companies plan to hire more workers over the next 6 months. When the same question was asked a few months ago that number was at 39 percent.
#5 An important measure of U.S. manufacturing activity has fallen to its lowest level since June 2009.
#6 Hundreds of thousands of federal jobs at civilian agencies will likely be lost if Congress allows the automatic federal budget cuts to go into effect next year. The following is from a recent article posted on federalnewsradio.com….
A report released Tuesday suggests that several hundred thousand federal jobs at civilian agencies would be on the chopping block within the next year if Congress lets the automatic budget cutting process known as sequestration go into effect.
The study, authored by George Mason University professor Stephen Fuller, adds a new dimension to a budget debate that’s so far been centered on sequestration’s effects on the military.
#7 The teen unemployment rate in Washington D.C. right now is 51.7 percent.
#8 Gallup’s U.S. Economic Confidence Index is now the lowest that it has been since January.
#9 The median net worth of U.S. households in 2007 was $126,400. By 2010, it had fallen to just $77,300.
#10 Pensions at S&P 500 companies are more under-funded than they have ever been before.
#11 According to the New York Times, state and local governments across America “shortchanged their pension plans by more than $50 billion” between 2007 and 2011.
#12 The city of Compton, California is evaluating whether or not it should declare bankruptcy. If it did, it would become the fourth California city to declare bankruptcy this year.
#13 The percentage of U.S. households that are spending more than half their incomes on housing is at an all-time high.
#14 For the first time in modern history, Canadian households are wealthier than American households are.
#15 One recent poll found that 42 percent of all Americans believe that China is the leading economic power in the world while only 36 percent believe that the U.S. is still the leading economic power in the world.
#16 According to the federal government, the price of food rose much faster than the general rate of inflation did during 2011. Just check out these rates of food inflation for 2011….
- Beef: +10.2%
- Pork: +8.5%
- Fish: +7.1%
- Eggs: +9.2%
- Dairy: +6.8%
- Oils and Fats: +9.3%
If that happened during a somewhat “normal year”, what will food prices look like after we are done with the drought of 2012?
#17 The price of a bushel of corn has risen by 54 percent since mid-June.
#18 According to one survey, 42 percent of all American workers are living paycheck to paycheck.
#19 A different survey found that 28 percent of all Americans have absolutely no emergency savings at all right now.
#20 Federal Reserve Chairman Ben Bernanke made the following statement to Congress on Tuesday: “At this point we don’t see a double dip recession. We see continued moderate growth.”
Do you remember that old Seinfeld episode when George Costanza decided that he would “do the opposite” of everything that his instincts were telling him to do and everything started working out great for him?
Well, when it comes to Federal Reserve Chairman Ben Bernanke, the key is to “believe the opposite” of everything that he says.
And since Bernanke does not believe that a double dip recession is going to happen, that probably means that we are about to hit another recession.
If you doubt this theory about Bernanke, just go back and check out his track record.
Okay, so if our economy is in big trouble shouldn’t our leaders be doing something about it?
Well, it is election season now so I wouldn’t expect too much from Barack Obama. He is too busy raising money in France and in China.
I wouldn’t expect too much from Obama’s economic advisers either. In fact, Obama’s much-ballyhooed “jobs council” has not even met in six months.
Not that the “jobs council” was ever going to do anything substantive anyway.
The truth is that it was just for show and most of the CEOs on the council have been sending jobs overseas anyway.
Well, what about the SEC?
Shouldn’t they be doing something to fix the financial system?
No, they are too busy investigating the Amish.
It looks like we are on our own.
Soon, even more parts of the country will start looking like Detroit or Baltimore or Cleveland.
This country is rapidly falling apart, and the federal government is not going to save us.
That is why we need to focus on preparing to weather the coming storm on a family and community level.
There is hope in being prepared. The coming economic crisis will wipe out many Americans because they will never even see it coming. But that does not have to happen to you.
If you work really hard right now to prepare your family for the storm that is on the horizon, then you will have a much better chance of making it through to the other side.
It has been said that there are two ways to conquer and enslave a nation. One way is by using the sword, and the other is by using debt. Fortunately, America is not in danger of being conquered by the sword right now, but America is being conquered by debt. The borrower is the servant of the lender, and today we owe China more than a trillion dollars. By running a gigantic trade deficit with us, China has been able to become incredibly wealthy. We have begged them to lend us back some of the money that we have sent them and this has made them even wealthier. Now China is gobbling up U.S. real estate and U.S. assets at an astounding pace. In fact, some cities are in danger of becoming completely dominated by Chinese ownership. One of those cities is Toledo, Ohio. In many “rust belt” areas, real estate can be had for a song, and the Chinese are taking full advantage of this. America was once the wealthiest nation on earth, but now we are drowning in debt and we are being sold off in chunks to the highest bidder. Is this the legacy that we are going to leave for future generations?
According to a recent Fortune article, Chinese investors have been very busy purchasing distressed commercial real estate in Toledo lately….
In March 2011, Chinese investors paid $2.15 million cash for a restaurant complex on the Maumee River in Toledo, Ohio. Soon they put down another $3.8 million on 69 acres of newly decontaminated land in the city’s Marina District, promising to invest $200 million in a new residential-commercial development. That September, another Chinese firm spent $3 million for an aging hotel across a nearby bridge with a view of the minor league ballpark.
Toledo is being promoted to Chinese investors as a “5-star logistics region“. From Toledo it is very easy to get to Chicago, Detroit, Cleveland, Pittsburgh, Columbus and Indianapolis.
With a population of 287,000, Toledo is only the fourth largest city in Ohio, but it lies at the junction of two important highways — I-75 and I-80/90. “My vision is to make Toledo a true international city,” Toledo’s Mayor Mike Bell told the Toledo Blade.
For some reason the Chinese seem to be very interested in that area of the country. Last month, I wrote about how one Chinese group plans to develop a 200 acre “China city” just 40 minutes away from Toledo….
A Chinese group known as “Sino-Michigan Properties LLC” has bought up 200 acres of land near the town of Milan, Michigan. Their plan is to construct a “China City” with artificial lakes, a Chinese cultural center and hundreds of housing units for Chinese citizens. Essentially, it would be a little slice of communist China dropped right into the heartland of America. This “China City” would be located about 40 minutes from both Detroit and Toledo, and it would be marketed to Chinese business people that want to start businesses in the United States.
But it is not just the rust belt that is being bought up by the Chinese. A recent Forbes article documented several of the huge real estate deals that the Chinese are doing in New York right now….
According to a recent report in the New York Times, investors from China are “snapping up luxury apartments” and are planning to spend hundreds of millions of dollars on commercial and residential projects like Atlantic Yards in Brooklyn. Chinese companies also have signed major leases at the Empire State Building and at 1 World Trade Center, the report said.
In addition to real estate, the Chinese are also buying up businesses and natural resources all over the United States.
For example, the Dalian Wanda Group recently bought U.S. movie theater chain AMC Entertainment for 2.6 billion dollars.
Also, the Obama administration has been allowing companies owned by the Chinese government to gobble up U.S. oil and gas deposits worth billions of dollars.
On top of all that, the Federal Reserve recently announced that it will now allow Chinese banks to start buying up American banks.
So how in the world did we come to be so completely and totally dominated by China?
Well, the key to all of this is the trade deficit.
Most Americans can’t even tell you what a trade deficit is, but it is at the very heart of our economic problems.
Basically, we buy far, far more from other countries than they buy from us.
Most Americans don’t realize this, but the truth is that the United States has a trade imbalance that is more than 5 times larger than any other nation on earth has.
Overall, the U.S. has run a trade deficit of more than 8 trillion dollars with the rest of the globe since 1975.
If you go into a Wal-Mart of a dollar store today and you start looking at product labels, you will notice that hundreds of products say “made in China” and very few of them say that they were made in this country.
Every single month, China sends us gigantic mountains of plastic crap to sell in our stores and we send them gigantic mountains of our money.
The U.S. trade deficit with China during 2011 was $295.4 billion. That was the largest trade deficit that one country has had with another country in the history of the planet.
Sadly, so far our trade deficit with China in 2012 is about 12 percent larger than it was last year.
So things are getting even worse.
To get an idea of how far things have come, let us take a look back at the 1980s for a moment.
Back in 1985, the U.S. trade deficit with China was only 6 million dollars for the entire year.
All of this imbalanced trade is absolutely killing us.
Today, the United States spends about 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.
So why doesn’t China buy more stuff from us?
Well, there are a whole lot of reasons. One of the main reasons is that they slap huge tariffs on many American-made goods.
For example, according to the New York Times a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China thanks to all the tariffs.
So why do we allow China to keep doing this to us?
That is a very good question.
Meanwhile, China is continually getting wealthier and we are continually getting poorer.
All of the money that is leaving this country and going to China could be going to U.S. businesses and U.S. workers instead. In turn, those businesses and workers would pay taxes on that money to support the government.
Instead, we have to go beg China to lend us the money that we just sent to them.
At this point, China now holds approximately 1.17 trillion dollars of U.S. government debt.
None of this ever had to happen.
But it did happen because we were stupid.
Now China has mountains of money to literally buy us up.
But China is not the only country that we have an imbalanced trading relationship with.
For example, the new “free trade agreement” between the United States and South Korea that Barack Obama has been touting went into full effect on March 15, 2012.
So how has that “free trade agreement” turned out so far? The following is from a recent article by Pat Buchanan….
The U.S. trade deficit with Korea tripled in one month. Imports from South Korea jumped 15 percent to $5.5 billion in April, while U.S. exports to South Korea fell 12 percent to $3.7 billion. Suddenly, the U.S. trade deficit with Seoul surged to an annual rate of $22 billion.
Shades of NAFTA. When it passed in 1993, we had a $1.6 billion trade surplus with Mexico. By 2010, our trade deficit with Mexico had reached $61.6 billion.
The truth is that these free trade agreements are not fair and balanced.
U.S. workers end up competing for jobs with workers in countries where it is legal to pay slave labor wages. And other countries often have far fewer rules and regulations to follow as well. In his recent article, Buchanan described why all Americans should be economic nationalists….
Global free trade means U.S. workers compete with Asian and Latin American workers whose wages are a fraction of our own and whose benefits may be nonexistent. Global free trade means U.S factories that relocate to Indonesia or India need not observe U.S. laws on health, safety, pollution or paying a minimum wage.
Global free trade means that companies that move factories outside the United States can send their products back to the United States free of charge and undercut businessmen who retain their American workers and live within American laws.
Free trade makes suckers and fools out of patriots.
Unfortunately, both major political parties in the United States are absolutely married to the one world economic agenda that the elite are pushing.
So we will continue to bleed wealth, businesses and jobs at an astounding pace.
You can get a really good idea of the horrific manufacturing job losses in the United States over the past 40 years by checking out this map right here.
Overall, the United States has lost a total of more than 56,000 manufacturing facilities since 2001.
According to the Economic Policy Institute, since 2001 America has lost approximately 2.8 million jobs due to our trade deficit with China alone.
There seems to be absolutely no concern with protecting American jobs these days.
If you can believe it, Chinese corporations are even building our bridges. The following is a brief excerpt from a recent ABC News article….
In New York there is a $400 million renovation project on the Alexander Hamilton Bridge.
In California, there is a $7.2 billion project to rebuild the Bay Bridge connecting San Francisco and Oakland.
In Alaska, there is a proposal for a $190 million bridge project.
These projects sound like steps in the right direction, but much of the work is going to Chinese government-owned firms.
“When we subsidize jobs in China, we’re not creating any wealth in the United States,” said Scott Paul, executive director for the Alliance for American Manufacturing.
Americans need to start understanding that our trade deficit is causing us to lose massive numbers of businesses and jobs and that this is making us poorer as a nation.
As I wrote about the other day, the median net worth of families in the United States declined “from $126,400 in 2007 to $77,300 in 2010” according to the Federal Reserve.
Even if you take away the effect of the housing collapse, household net worth still declined by 25 percent between 2005 and 2010.
A lot of that decline in wealth was due to the recent recession, but the point I am trying to make is that we are getting poorer as a nation.
A decade ago, the United States was ranked number one in average wealth per adult. By 2010, the United States had fallen to seventh.
And when you factor in our debts, we are a complete and total mess. U.S. consumers are more than 11 trillion dollars in debt and the federal government is nearly 16 trillion dollars in debt.
We are getting deeper in debt at the same time that our ability to service that debt is declining.
The reality is that our economy is completely falling apart and it no longer produces enough jobs for everyone.
In fact, it isn’t even close.
Right now there are about 3.7 workers that are “officially” unemployed for every single job opening.
So what we are doing right now is clearly not working.
We need to fundamentally change direction as a nation.
Unfortunately, that is not going to happen any time soon.
So where do we go from here?