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Ultra-Secrecy Surrounds Barack Obama’s New Global Economic Treaty

Obama SelfieBarack Obama is secretly negotiating a global economic treaty which would destroy thousands of American businesses and millions of good paying American jobs.  In other words, it would be the final nail in the coffin for America’s economic infrastructure.  Obama knows that if the American people actually knew what was in this treaty that they would be screaming mad, so the negotiations are being done in secret.  The only people that are allowed to look at the treaty are members of Congress, and even they are being banned from saying anything to the public.  American workers are about to be brutally stabbed in the back, and thanks to all of this secrecy and paranoia they won’t even see it coming.

The name of this new treaty is “the Trans-Pacific Partnership”, and it is being touted as perhaps the most important trade agreement in history.  But very few people in this country are talking about it, because none of us are allowed to see it.  An article that was just released by Politico detailed the extreme secrecy that is surrounding this trade agreement…

If you want to hear the details of the Trans-Pacific Partnership trade deal the Obama administration is hoping to pass, you’ve got to be a member of Congress, and you’ve got to go to classified briefings and leave your staff and cellphone at the door.

If you’re a member who wants to read the text, you’ve got to go to a room in the basement of the Capitol Visitor Center and be handed it one section at a time, watched over as you read, and forced to hand over any notes you make before leaving.

And no matter what, you can’t discuss the details of what you’ve read.

This treaty is going to affect the lives of every man, woman and child living in this nation, and yet it is deemed so “important” that none of us can know what is in it?

Are you sure that we still live in a Republic?

This treaty will cover 40 percent of the global economy, and U.S. officials hope that the EU, China and India will become members eventually as well

Right now, there are 12 countries that are part of the negotiations: the United States, Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.  These nations have a combined population of 792 million people and account for an astounding 40 percent of the global economy.  And it is hoped that the EU, China and India will eventually join as well.  This is potentially the most dangerous economic treaty of our lifetimes, and yet there is very little political debate about it in this country.

If the EU, China and India did eventually join the treaty, that would essentially make it a trade agreement for the entire planet.

This is a really big deal, and it should be openly debated by the American people.  But instead, Barack Obama has chosen to shroud the entire process with as much secrecy as possible.  Not only that, he also wants Congress to give him fast track negotiating authority.  If Congress does that, they would essentially be saying that they blindly trust Obama to negotiate a good treaty for us.  At the end of the process, Congress would be able to vote the treaty up or down, but would not be able to amend it.

That sounds insane, right?  Well, if you can believe it, Republicans in the Senate are quite eager to give Barack Obama this authority.

And this is not just an economic treaty.  The following is an excerpt from one of my previous articles

It is basically a gigantic end run around Congress.  Thanks to leaks, we have learned that so many of the things that Obama has deeply wanted for years are in this treaty.  If adopted, this treaty will fundamentally change our laws regarding Internet freedom, healthcare, copyright and patent protection, food safety, environmental standards, civil liberties and so much more.  This treaty includes many of the rules that alarmed Internet activists so much when SOPA was being debated, it would essentially ban all “Buy American” laws, it would give Wall Street banks much more freedom to trade risky derivatives and it would force even more domestic manufacturing offshore.

We can’t consume our way to prosperity, and we can’t borrow and spend our way to prosperity.  In order to be prosperous as a nation, we have got to create at least as much wealth as we consume.  But instead, we are doing just the opposite.  We are consuming wealth like mad even while our economic infrastructure is being absolutely gutted.  We have lost thousands of businesses and millions of jobs already, and this new treaty will make things much worse.

And of course eventually even the ultra-cheap labor on the other side of the planet will be replaced.  This is something that is already happening in China.  Just today there was a news story about a new manufacturing facility in China that will use only robots

Construction work has begun on the first factory in China’s manufacturing hub of Dongguan to use only robots for production, the official Xinhua news agency reported.

A total of 1,000 robots would be introduced at the factory initially, run by Shenzhen Evenwin Precision Technology Co, with the aim of reducing the current workforce of 1,800 by 90 percent to only about 200, Chen Xingqi, the chairman of the company’s board, was quoted as saying in the report.

The company did not give a figure for the investment in the factory, but said its production capacity could reach a value of 2 billion yuan (US$322 million) annually.

All of this is very bad news for American workers.  Whether it is ultra-cheap labor on the other side of the globe or new technology, big corporations are constantly looking for ways to produce things less expensively.

But in order to have a middle class, we have got to have middle class jobs.  The middle class in the United States is steadily disappearing, and neither political party seems very concerned about this at all.

Even without this new trade treaty, our trade deficit with the rest of the planet continues to grow even larger.  We just learned that the monthly U.S. trade deficit for March rose to $51.4 billion.  That was the largest monthly trade deficit since October 2008.  If you will remember, in October 2008 we were experiencing the worst financial crisis since the days of the Great Depression.

And if you take oil out of the number, our trade deficit for the month of March would be the worst ever recorded.

Thank you Barack Obama.  Your trade policies are really “working”.

Because the trade deficit was much worse than expected, that is going to push the GDP number for the first quarter into negative territory

Greg Daco of Oxford Economics says he expects the wider than expected trade deficit to prompt the government to revise its estimate of 0.2% growth in U.S. gross domestic product for the first quarter to a 0.5% contraction.

That means that if we have another contraction in the second quarter, we will officially be in a recession.

In fact, we could be in a recession right now (according to the official government definition) and not even know it yet.

One of the biggest reasons why the U.S. economy has been struggling so much in recent years is due to our trade policies.  If we had balanced trade with other nations, our cumulative economic growth since mid-2009 would have been nearly 20 percent higher

Since rising trade balances subtract from economic growth, the increase in this real non-oil goods deficit has now cut cumulative U.S. economic growth after inflation by a stunning 19.49 percent since the recovery technically began in mid-2009.

Are you starting to see why I get so fired up about trade?

But instead of encouraging big corporations to do what is right for the American people, our system greatly rewards companies like Apple that proudly send jobs offshore.  The following is an excerpt from an outstanding article by Andrew Zatlin

Nine years, a trillion dollars in sales, and almost no taxes paid. That’s just the starting point for wondering about Apple’s actual contribution to the US economy.

Apple’s success drags down the US GDP.  The behemoth that is Apple sold almost 200M phones last year, none of which were made in the US or used components made here. Instead of exporting $100B in iPhones, the US imported $50B. That $150B swing matters in terms of balance of trade, GDP and jobs. If you wanted to improve the US economy, there’s no better place to start than with Apple and smartphones.

Apple undermines the US manufacturing base. Assembly matters and manufacturing matters more. There was a time when Apple could have assembled phones and tablets in the US, but that would mean spending an extra $5 per phone since that’s approximately the extra labor cost to build that $700 phone here instead of in Vietnam or China. Assembly may not be a competitive, value-add step but it does employ a lot of people.

Unfortunately, it would also cut Apple’s profits by $1B, shrinking the company’s annual net income from $45B to $44B. Apple wouldn’t notice a drop in profits of $1B because it’s not putting its cash to use: Apple has $200B in cash conveniently parked outside of the US, not doing anything. On the other hand, assembling in the US would employ tens of thousands of people.

You can read the rest of that great article right here.

Our trade policies matter.  Decades of incredibly foolish decisions have ripped our economic infrastructure to shreds, and we are slowly but steadily committing national economic suicide.

Now, Barack Obama is absolutely determined to deliver the finishing blow, and it is all being done in secret.

When are you going to wake up and start getting angry America?

Major U.S. Retailers Are Closing More Than 6,000 Stores

Closed - Public DomainIf the U.S. economy really is improving, then why are big U.S. retailers permanently shutting down thousands of stores?  The “retail apocalypse” that I have written about so frequently appears to be accelerating.  As you will see below, major U.S. retailers have announced that they are closing more than 6,000 locations, but economic conditions in this country are still fairly stable.  So if this is happening already, what are things going to look like once the next recession strikes?  For a long time, I have been pointing to 2015 as a major “turning point” for the U.S. economy, and I still feel that way.  And since I started The Economic Collapse Blog at the end of 2009, I have never seen as many indications that we are headed into another major economic downturn as I do right now.  If retailers are closing this many stores already, what are our malls and shopping centers going to look like a few years from now?

The list below comes from information compiled by About.com, but I have only included major retailers that have announced plans to close at least 10 stores.  Most of these closures will take place this year, but in some instances the closures are scheduled to be phased in over a number of years.  As you can see, the number of stores that are being permanently shut down is absolutely staggering…

180 Abercrombie & Fitch (by 2015)

75 Aeropostale (through January 2015)

150 American Eagle Outfitters (through 2017)

223 Barnes & Noble (through 2023)

265 Body Central / Body Shop

66 Bottom Dollar Food

25 Build-A-Bear (through 2015)

32 C. Wonder

21 Cache

120 Chico’s (through 2017)

200 Children’s Place (through 2017)

17 Christopher & Banks

70 Coach (fiscal 2015)

70 Coco’s /Carrows

300 Deb Shops

92 Delia’s

340 Dollar Tree/Family Dollar

39 Einstein Bros. Bagels

50 Express (through 2015)

31 Frederick’s of Hollywood

50 Fresh & Easy Grocey Stores

14 Friendly’s

65 Future Shop (Best Buy Canada)

54 Golf Galaxy (by 2016)

50 Guess (through 2015)

26 Gymboree

40 JCPenney

127 Jones New York Outlet

10 Just Baked

28 Kate Spade Saturday & Jack Spade

14 Macy’s

400 Office Depot/Office Max (by 2016)

63 Pep Boys (“in the coming years”)

100 Pier One (by 2017)

20 Pick ’n Save (by 2017)

1,784 Radio Shack

13 Ruby Tuesday

77 Sears

10 SpartanNash Grocery Stores

55 Staples (2015)

133 Target, Canada (bankruptcy)

31 Tiger Direct

200 Walgreens (by 2017)

10 West Marine

338 Wet Seal

80 Wolverine World Wide (2015 – Stride Rite & Keds)

So why is this happening?

Without a doubt, Internet retailing is taking a huge toll on brick and mortar stores, and this is a trend that is not going to end any time soon.

But as Thad Beversdorf has pointed out, we have also seen a stunning decline in true discretionary consumer spending over the past six months…

What we find is that over the past 6 months we had a tremendous drop in true discretionary consumer spending. Within the overall downtrend we do see a bit of a rally in February but quite ominously that rally failed and the bottom absolutely fell out. Again the importance is it confirms the fundamental theory that consumer spending is showing the initial signs of a severe pull back. A worrying signal to be certain as we would expect this pull back to begin impacting other areas of consumer spending. The reason is that American consumers typically do not voluntarily pull back like that on spending but do so because they have run out of credit. And if credit is running thin it will surely be felt in all spending.

The truth is that middle class U.S. consumers are tapped out.  Most families are just scraping by financially from month to month.  For most Americans, there simply is not a whole lot of extra money left over to go shopping with these days.

In fact, at this point approximately one out of every four Americans spend at least half of their incomes just on rent

More than one in four Americans are spending at least half of their family income on rent – leaving little money left to purchase groceries, buy clothing or put gas in the car, new figures have revealed.

A staggering 11.25 million households consume 50 percent or more of their income on housing and utilities, according to an analysis of Census data by nonprofit firm, Enterprise Community Partners.

And 1.8 million of these households spend at least 70 percent of their paychecks on rent.

The surging cost of rental housing has affected a rising number of families since the Great Recession hit in 2007. Officials define housing costs in excess of 30 percent of income as burdensome.

For decades, the U.S. economy was powered by a free spending middle class that had plenty of discretionary income to throw around.  But now that the middle class is being systematically destroyed, that paradigm is changing.  Americans families simply do not have the same resources that they once did, and that spells big trouble for retailers.

As you read this article, the United States still has more retail space per person than any other nation on the planet.  But as stores close by the thousands, “space available” signs are going to be popping up everywhere.  This is especially going to be true in poor and lower middle class neighborhoods.  Especially after what we just witnessed in Baltimore, many retailers are not going to hesitate to shut down underperforming locations in impoverished areas.

And remember, the next major economic crisis has not even arrived yet.  Once it does, the business environment in this country is going to change dramatically, and a few years from now America is going to look far different than it does right now.

 

Civil Unrest Has Begun In Baltimore And This Is Only Just The Start Of Something MUCH Bigger

Baltimore Riots - YouTube ScreenshotOn Saturday night, the city of Baltimore resembled a warzone as protests over the death of Freddie Gray turned wildly violent.  One eyewitness reported watching the streets around him and his friend “turn into madness” as they left a baseball game between the Boston Red Sox and the Baltimore Orioles.  Car windows were smashed, stores were robbed, chairs were thrown and large numbers of random bystanders were attacked.  One prominent Democrat claims that those committing the violence were “mainly from out of town“, but how would he know that?  Today, there are approximately 2.7 million people living in the Baltimore metropolitan area.  It is an area that has been known for poverty, crime and drugs for many years, and as racial tensions continue to increase in this country it is a powder keg that could erupt at literally any time.  We got a preview of what can happen on Saturday night.  If this is how people will act while economic conditions are still relatively stable in this country, what in the world is going to happen when things really start falling apart?

On Saturday, April 11th, I delivered a presentation down in Dallas, Texas in which I warned about the rioting and civil unrest that are soon coming to this nation.  On slide number 145 of the presentation, I specifically named the city of Baltimore as one of the cities where this would happen.  But I had no idea that the rioting in Baltimore would begin so quickly.  And the violence that we saw on Saturday night was at a level that was quite shocking.  The following is how the Daily Mail described some of the chaos that ensued…

Local news captured live footage of a man throwing a flaming trash can at the police line.

A group of roughly 100 protesters broke out a window of a department store with a chair they got at a restaurant across the street at The Gallery, a downtown shopping mall.

The same group broke the windows of restaurants including a Subway sandwich shop near Camden Yards, tossing chairs and tables through the glass.

Protesters also engaged with a group of Orioles fans at Slider’s Bar and Grille and began fighting with patrons.

This kind of thing is not supposed to happen in America.

But it is happening.  Ferguson set the precedent, and now this is going to spread all over the country.

You can see some excellent photographs of the chaos that happened in Baltimore right here, and in the video posted below several young thugs smash out the front window of a police cruiser as dozens of onlookers cheer them on…

I also want to share with you another video, but I need to warn you about it first.  This YouTube video strings together a bunch of clips of some of the worst of the violence, but it also contains some very graphic language.  So please don’t let any young children watch this.  I felt that it was important to share this because we need to really understand what is happening to our cities.  America is changing, and not for the better.  This is what social decay looks like…

Are you starting to get the picture?

Things were so bad outside of the stadium where the Baltimore Orioles play that some of the Orioles actually thought about spending the night inside the clubhouse.

One of the things that is being ignored by many in the mainstream media is that fact that one of the key organizers of the Baltimore protests is a former national chairman of the New Black Panther Party named Malik Shabazz.  These days, he is the president of an organization known as “Black Lawyers for Justice”, but he is definitely still up to his old tricks.  The following is an excerpt from an article about the Baltimore riots in the New York Times

There, Malik Shabazz, president of Black Lawyers for Justice, a Washington, D.C.-based group that called for the demonstration and advertised it on social media, told the crowd that he would release them in an hour, adding: “Shut it down if you want to! Shut it down!

Mr. Shabazz said in a later interview that his rhetoric was intended only to encourage civil disobedience — not violence — but added that he was “not surprised” by the scattered angry outbursts because people here “haven’t received justice.”

If you are marching for “justice”, you don’t throw objects at random bystanders, loot stores or attack vehicles that are just driving through the area.  But all of those things happened on Saturday night.  The following is how an eyewitness described one of the most harrowing attacks…

The crowd of protesters then stopped a blue station wagon carrying a white family as they tried to drive past Pickles, Bullpen and Sliders along a narrow one-way stretch between the bars and the main road. As a horde of them smashed their open and closed fists on the hood of the car—while impeding them by standing in front of them—the driver backed up on the one way pass in a desperate attempt to get out of dodge. Then, stopped on the other side with nowhere to go, protesters ripped open the passenger door of the car and began reaching around inside the vehicle. As hundreds of people looked on, including several police officers who didn’t engage the violent protesters, the white woman in the front seat—middle-aged and a little heavyset with dark hair—was visibly terrified. The group of black men who ripped open the car door suddenly realized they were separated from the larger group of protesters and abandoned their quest to seemingly either carjack the station wagon or rob the people inside in front of hundreds, driving out of the one-way street back onto the main road and presumably out of dodge.

Of course all of this did not just erupt out of a vacuum.  Racial tensions on all sides have been stirred up by the mainstream media, by our politicians, and by other prominent national leaders for years.  At this point, even pastors are inflaming the tensions

Activist Jamal Bryant, pastor of Empowerment Temple AME Church, told his congregation Sunday that “somebody is going to have to pay” for Gray’s death, the Associated Press reported.

If “you’re black in America, your life is always under threat,” Bryant said.

Why can’t we all just learn to love one another, forgive one another, and peacefully come up with some solutions that are going to work for all of us?

Sadly, all of this hate and anger is just another sign of the social decay that is eating away at the foundations of our society like a cancer.

And if people are willing to act like this when our economy is still relatively stable and things are still relatively good in this nation, what are they going to do when they don’t have any money in their pockets and they don’t know where their next meal is going to come from?

What we witnessed in Baltimore on Saturday night is just the beginning.

Much worse is coming, and eventually we are going to see tremendous civil unrest and rioting all over this nation.

So what do you think about all of this?  Please feel free to share your opinion by posting a comment below…

11 Signs That We Are Entering The Next Phase Of The Global Economic Crisis

Earth Puzzle - Public DomainWell, the Nasdaq finally did it.  It has climbed all the way back to where it was at the peak of the dotcom bubble.  Back in March 2000, the Nasdaq set an all-time record high of 5,048.62.  On Thursday, after all these years, that all-time record was finally eclipsed.  The Nasdaq closed at 5056.06, and Wall Street greatly rejoiced.  So if you invested in the Nasdaq at the peak of the dotcom bubble, you are just finally breaking even 15 years later.  Unfortunately, the truth is that stocks have not been soaring because the U.S. economy is fundamentally strong.  Just like the last two times, what we are witnessing is an irrational financial bubble.  Sometimes these irrational bubbles can last for a surprisingly long time, but in the end they always burst.  And even now there are signs of economic trouble bubbling to the surface all around us.  The following are 11 signs that we are entering the next phase of the global economic crisis…

#1 It is being projected that half of all fracking companies in the United States will be “dead or sold” by the end of this year.

#2 The rig count just continues to fall as the U.S. oil industry implodes.  Incredibly, the number of rigs in operation in the United States has fallen for 19 weeks in a row.

#3 McDonald’s has announced that it will be closing 700 “poor performing” restaurants in 2015.  Why would McDonald’s be doing this if the economy was actually getting better?

#4 As I wrote about the other day, we could be right on the verge of a Greek debt default.  In fact, we learned on Thursday that the Greek government has been “running on empty” for months…

Greece warned it will go bankrupt next week after failing to stump up enough cash to pay millions of public sector workers and its international debts.

Deputy finance minister Dimitras Mardas set alarm bells ringing yesterday when he declared the country had been ‘running on empty’ since February.

With a debt repayment deadline looming on May 1, Greece faces the deeply damaging prospect of having to snub its own employees to make a €200m payment to the International Monetary Fund.

#5 Coal accounts for approximately 40 percent of all electrical generation on the entire planet.  When the price of coal starts to drop, that is a sign that economic activity is slowing down.  Just prior to the last financial crisis in 2008, the price of coal shot up dramatically and then crashed really hard.  Well, guess what?  The price of coal has been crashing again, and it is already lower than it was at any point during the last recession.

#6 The price of iron ore has been crashing as well.  It is down 35 percent in the last nine months, and David Stockman believes that this is because of a major deflationary crisis that is brewing in China…

There is no better measure of the true contraction underway in China than the price of iron ore. The Wall Street stock peddlers will tell you not to be troubled by the 70% plunge from the 2012 highs and the 35% drop just in the last nine months. According to them, its all the fault of the big global miners who went overboard opening up massive new iron ore pits and mining infrastructure.

#7 At this point, China accounts for more total global trade than anyone else in the world.  That is why it is so alarming that Chinese imports and exports are both absolutely collapsing

China’s monthly trade data shows exports fell in March from a year ago by 14.6% in yuan terms, compared to expectations for a rise of more than 8%.

Imports meanwhile fell 12.3% in yuan terms compared to forecasts for a fall of more than 11%.

#8 The number of publicly traded companies in the United States that filed for bankruptcy during the first quarter of 2015 was more than double the number that filed for bankruptcy during the first quarter of 2014.

#9 New home sales in the United States just declined at their fastest pace in almost two years.

#10 U.S. manufacturing data has been shockingly weak lately…

On the heels of weak PMIs from Europe and Asia, Markit’s US Manufacturing PMI plunged to 54.2 in April (from 55.7). Against expectations of a rise to 55.6, this is the biggest miss on record. Of course, this is ‘post-weather’ so talking-heads will need to find another excuse as New Orders declined for the first time since Nov 2014.

#11 When priced according to “the average blue-collar hourly wage“, U.S. stocks are the most expensive that they have ever been in history right now.  To say that this financial bubble is overdue to burst is a massive understatement.

For a long time, I have been pointing to 2015 as a major “turning point” for the global financial system, and I still feel that way.

But for the first four months of this year, things have been surprisingly quiet – at least on the surface.

So what is going on?

Well, I believe that what we are experiencing right now is the proverbial “calm before the storm”.  There is all sorts of turmoil brewing just beneath the surface, but for the moment things seem like they are running along just fine to most people.  Unfortunately, this period of quiet is not going to last much longer.

And those that are “in the know” are already moving their money in anticipation of what is coming.  For example, consider the words of  Snapchat founder and CEO Evan Spiegel

Fed has created abnormal market conditions by printing money and keeping interest rates low. Investors are looking for growth anywhere they can find it and tech companies are good targets – at these values, however, all tech stocks are expensive – even looking at 5+ years of revenue growth down the road. This means that most value-driven investors have left the market and the remaining 5-10%+ increase in market value will be driven by momentum investors. At some point there won’t be any momentum investors left buying at higher prices, and the market begins to tumble. May be 10-20% correction or something more significant, especially in tech stocks.

It may not happen next week, or even next month, but big financial trouble is coming.

And when it finally arrives, it is going to shock the world, even though anyone with any sense can see the coming crisis approaching from a mile away.

The Global Liquidity Squeeze Has Begun

Squeeze Globe - Public DomainGet ready for another major worldwide credit crunch.  Today, the entire global financial system resembles a colossal spiral of debt.  Just about all economic activity involves the flow of credit in some way, and so the only way to have “economic growth” is to introduce even more debt into the system.  When the system started to fail back in 2008, global authorities responded by pumping this debt spiral back up and getting it to spin even faster than ever.  If you can believe it, the total amount of global debt has risen by $35 trillion since the last crisis.  Unfortunately, any system based on debt is going to break down eventually, and there are signs that it is starting to happen once again.  For example, just a few days ago the IMF warned regulators to prepare for a global “liquidity shock“.  And on Friday, Chinese authorities announced a ban on certain types of financing for margin trades on over-the-counter stocks, and we learned that preparations are being made behind the scenes in Europe for a Greek debt default and a Greek exit from the eurozone.  On top of everything else, we just witnessed the biggest spike in credit application rejections ever recorded in the United States.  All of these are signs that credit conditions are tightening, and once a “liquidity squeeze” begins, it can create a lot of fear.

Over the past six months, the Chinese stock market has exploded upward even as the overall Chinese economy has started to slow down.  Investors have been using something called “umbrella trusts” to finance a lot of these stock purchases, and these umbrella trusts have given them the ability to have much more leverage than normal brokerage financing would allow.  This works great as long as stocks go up.  Once they start going down, the losses can be absolutely staggering.

That is why Chinese authorities are stepping in before this bubble gets even worse.  Here is more about what has been going on in China from Bloomberg

China’s trusts boosted their investments in equities by 28 percent to 552 billion yuan ($89.1 billion) in the fourth quarter. The higher leverage allowed by the products exposes individuals to larger losses in the event of stock-market drops, which can be exaggerated as investors scramble to repay debt during a selloff.

In umbrella trusts, private investors take up the junior tranche, while cash from trusts and banks’ wealth-management products form the senior tranches. The latter receive fixed returns while the former take the rest, so private investors are effectively borrowing from trusts and banks.

Margin debt on the Shanghai Stock Exchange climbed to a record 1.16 trillion yuan on Thursday. In a margin trade, investors use their own money for just a portion of their stock purchase, borrowing the rest. The loans are backed by the investors’ equity holdings, meaning that they may be compelled to sell when prices fall to repay their debt.

Overall, China has seen more debt growth than any other major industrialized nation since the last recession.  This debt growth has been so dramatic that it has gotten the attention of authorities all over the planet

Wolfgang Schaeuble, Germany’s finance minister says that “debt levels in the global economy continue to give cause for concern.”

Singling out China in particular, Schaeuble noted that “debt has nearly quadrupled since 2007″, adding that it’s “growth appears to be built on debt, driven by a real estate boom and shadow banks.”

According to McKinsey’s research, total outstanding debt in China increased from $US7.4 trillion in 2007 to $US28.2 trillion in 2014. That figure, expressed as a percentage of GDP, equates to 282% of total output, higher than the likes of other G20 nations such as the US, Canada, Germany, South Korea and Australia.

This credit boom in China has been one of the primary engines for “global growth” in recent years, but now conditions are changing.  Eventually, the impact of what is going on in China right now is going to be felt all over the planet.

Over in Europe, the Greek debt crisis is finally coming to a breaking point.  For years, authorities have continued to kick the can down the road and have continued to lend Greece even more money.

But now it appears that patience with Greece has run out.

For instance, the head of the IMF says that no delay will be allowed on the repayment of IMF loans that are due next month…

IMF Managing Director Christine Lagarde roiled currency and bond markets on Thursday as reports came out of her opening press conference saying that she had denied any payment delay to Greece on IMF loans falling due next month.

Unless Greece concludes its negotiations for a further round of bailout money from the European Union, however, it is not likely to have the money to repay the IMF.

And we are getting reports that things are happening behind the scenes in Europe to prepare for the inevitable moment when Greece will finally leave the euro and go back to their own currency.

For example, consider what Art Cashin told CNBC on Friday

First, “there were reports in the media [saying] that the ECB and/or banking authorities suggested to banks to get rid of any sovereign Greek debt they had, which suggests that maybe the next step will be Greece exiting,” Cashin told CNBC.

Also, one of Greece’s largest newspapers is reporting that neighboring countries are forcing subsidiaries of Greek banks that operate inside their borders to reduce their risk to a Greek debt default to zero

According to a report from Kathimerini, one of Greece’s largest newspapers, central banks in Albania, Bulgaria, Cyprus, Romania, Serbia, Turkey and the Former Yugoslav Republic of Macedonia have all forced the subsidiaries of Greek banks operating in those countries to bring their exposure to Greek risk — including bonds, treasury bills, deposits to Greek banks, and loans — down to zero.

Once Greece leaves the euro, that is going to create a tremendous credit crunch in Europe as fear begins to spread like wildfire.  Everyone will be wondering which nation will be “the next Greece”, and investors will want to pull their money out of perceived danger zones before they get hammered.

In the past, other European nations have been willing to bend over backwards to accommodate Greece and avoid this kind of mess, but those days appear to be finished.  In fact, the finance minister of France openly admits that the French “are not sympathetic to Greece”

Greece isn’t winning much sympathy from its debt-wracked European counterparts as the country draws closer to default for failing to make bailout repayments.

“We are not sympathetic to Greece,” French Finance Minister Michael Sapin said in an interview at the International Monetary Fund-World Bank spring meetings here.

“We are demanding because Greece must comply with the European (rules) that apply to all countries,” Sapin said.

Yes, it is possible that another short-term deal could be reached which could kick the can down the road for a few more months.

But either way, things in Europe are going to continue to get worse.

Meanwhile, very disappointing earnings reports in the U.S. are starting to really rattle investors.

For example, we just learned that GE lost 13.6 billion dollars in the first quarter…

One week following the announcement that it would dismantle most of its GE Capital financing operations to instead focus on its industrial roots, General Electric reported a first quarter loss of $13.6 billion.

The results were impacted by charges relating to the conglomerate’s strategic shift. A year ago GE reported a first quarter profit of $3 billion.

That is a lot of money.

How in the world does a company lose 13.6 billion dollars in a single quarter during an “economic recovery”?

Other big firms are reporting disappointing earnings numbers too

In earnings news, American Express Co. late Thursday said its results were hurt by the strong U.S. dollar, which reduced revenue booked in other countries. Chief Executive Kenneth Chenault reiterated the company’s forecast that 2015 earnings will be flat to modestly down year over year. Shares fell 4.6%.

Advanced Micro Devices Inc. said its first-quarter loss widened as revenue slumped. The company said it was exiting its dense server systems business, effective immediately. Revenue and the loss excluding items missed expectations, pushing shares down 13%.

And just like we saw just before the financial crisis of 2008, Americans are increasingly having difficulty meeting their financial obligations.

For instance, the delinquency rate on student loans has reached a very frightening level

More borrowers are failing to make payments on their student loans five years after leaving college, painting a grim picture for borrowers, according to the Federal Reserve Bank of New York.

Student debt continues to increase, especially for people who took out loans years ago. Those who left school in the Great Recession, which ended in 2009, had particular difficulty with repayment, with many defaulting, becoming seriously delinquent or not being able to reduce their balances, the New York Fed said today.

Only 37 percent of borrowers are current on their loans and are actively paying them down, and 17 percent are in default or in delinquency.

At this point, the American consumer is pretty well tapped out.  If you can believe it, 56 percent of all Americans have subprime credit today, and as I mentioned above, we just witnessed the biggest spike in credit application rejections ever recorded.

We have reached a point of debt saturation, and the credit crunch that is going to follow is going to be extremely painful.

Of course the biggest provider of global liquidity in recent years has been the Federal Reserve.  But with the Fed pulling back on QE, this is creating some tremendous challenges all over the globe.  The following is an excerpt from a recent article in the Telegraph

The big worry is what will happen to Russia, Brazil and developing economies in Asia that borrowed most heavily in dollars when the Fed was still flooding the world with cheap liquidity. Emerging markets account to roughly half of the $9 trillion of offshore dollar debt outside US jurisdiction.

The IMF warned that a big chunk of the debt owed by companies is in the non-tradeable sector. These firms lack “natural revenue hedges” that can shield them against a double blow from rising borrowing costs and a further surge in the dollar.

So what is the bottom line to all of this?

The bottom line is that we are starting to see the early phases of a liquidity squeeze.

The flow of credit is going to begin to get tighter, and that means that global economic activity is going to slow down.

This happened during the last financial crisis, and during this next financial crisis the credit crunch is going to be even worse.

This is why it is so important to have an emergency fund.  During this type of crisis, you may have to be the source of your own liquidity.  At a time when it seems like nobody has any cash, those that do have some will be way ahead of the game.

Flat Broke, Living In A Moldy Basement And Relying On Food Stamps And Medicaid

Lock In The Rain - Public DomainCould you imagine being a single parent and trying to survive in America today on $10.50 an hour?  For a moment, I want you to imagine that you are living in a moldy apartment that is so badly maintained that rain seeps in whenever it rains.  You are employed, but you are completely dependent on government programs such as food stamps and Medicaid in order to make ends meet.  Sometimes you would really like to take your small child somewhere fun, like a movie theater, but you can’t really afford the gas money.  You are working as hard as you can, but you never seem to get anywhere, and you feel trapped because nobody seems to want to hire you for a better job.  What I have just described for you is real life for a 22-year-old single mother from Chicago named Adriana Alvarez, but there are tens of millions of other Americans that have similar stories.  If every day seems like it is a soul-crushing struggle for you, I want you to know that you are not alone.  The long-term economic collapse that I chronicle on my website is not just about facts and figures.  It is about real people that are quietly leading lives of silent desperation, and by now it has becoming exceedingly apparent that our politicians, the mainstream media and the gigantic corporations that dominate our economy do not really care much about the rest of us at all.

Life fundamentally changes once you become a parent.  Instead of living just for yourself, all of a sudden you have a precious little child that is completely and totally dependent on you.  And it is absolutely heartbreaking for any parent to look into the eyes of a little child and try to explain why there is not enough food or why they can’t afford a better place to live.

With that in mind, I want you to read an excerpt from Adriana’s recent blog post entitled “What It’s Really Like To Support Yourself On McDonald’s Pay“…

I’m a single mom with a three-year-old son named Manny. To support him, I work full-time as a cashier at a McDonald’s in Chicago.

I’ve worked at McDonald’s for five years, but still make only $10.50 an hour. The only way my son and I can make it is with food stamps, Medicaid, and a child care subsidy. Most of my coworkers are in the same boat, no matter how long they’ve held their jobs.

With child care, transportation to work, food, rent, and our other basic expenses, there’s no money left over for living. Every time I think about taking Manny somewhere fun, like to a movie, I have to think about whether we can really afford the gas.

When you only make $10.50 an hour and you have a child to take care of, you are obviously very limited as far as where you can live, and where Adriana lives sounds extremely depressing

We live in a basement apartment, because it’s all I can afford. When it rains, water seeps into the apartment. This wetness brings mold, and I can’t get rid of the smell. We can’t even leave anything on the floor, which is tough with a three-year-old. Toys or anything else on the floor may get ruined when the water comes in.

So what is the solution for Adriana?

Well, she is taking part in nationwide strikes to try to force McDonald’s to pay workers like her a livable wage.

Unfortunately, that simply is not going to happen.  McDonald’s restaurants are already experiencing a sales downturn, and if they raise wages substantially they will get crushed by the competition.

And of course those jobs were never meant for people that are trying to raise families.  When I was growing up, it was teenagers and senior citizens that worked at McDonald’s.  I know, because I was one of those teenagers.

But now millions upon millions of Americans in their prime working years are doing these kinds of jobs.  As good jobs have disappeared from our economy, the competition for the jobs that remain has become extremely intense.  It is really easy to tell Adriana that she should “get a better job”, but that can be extremely difficult in this economy, especially if you don’t have much education.

I know a lot of sharp, talented, responsible people that have been unemployed for a very long time or that are working at places like McDonald’s because nobody else will hire them.  I am amazed that there is not a place for their talents and abilities in the “greatest economy on Earth”.  But you know what?  Things are about to get a whole lot worse out there.

A few months ago, I wrote that the crashing price of oil was going to cause massive job losses in the energy industry, and now it is happening.

According to Yahoo, more than 100,000 layoffs have already been announced, and this could be just the tip of the iceberg…

Since crude prices began tumbling last year, energy companies have announced plans to lay off more than 100,000 workers around the world. At least 91,000 layoffs have already materialized, with the majority coming in oil-field-services and drilling companies, according to research by Graves & Co., a Houston consulting firm.

And remember, these are not $10.50 an hour jobs.  Many of these jobs pay well into the six figures annually.  These are exactly the kinds of jobs that the U.S. economy simply cannot afford to lose.

Meanwhile, Barack Obama is colluding with Congress to push through the next great job killing trade agreement.  The following was in the Wall Street Journal on Thursday…

Lawmakers introduced fast-track trade legislation into the House and Senate Thursday that could pave the way for President Barack Obama to conclude a major agreement with 11 nations around the Pacific.

This agreement is called “The Trans-Pacific Partnership”, and it would result in millions more good jobs being sent overseas.  For much more about this shocking betrayal of the American people, please see my previous article entitled “Obama’s Secret Treaty Would Be The Most Important Step Toward A One World Economic System“.

What our economy desperately needs is more jobs, not less jobs.

And traditionally, small businesses have been the primary engine of job growth in this country.

Unfortunately, our politicians have been absolutely killing small businesses for decades.  Just look at the chart below.  It comes from the U.S. Census Bureau, and it is extremely alarming.  Back in 1980, nearly half of all firms in America were considered to be “young”, and those young firms accounted for almost half of all job creation.  Since that time, there has been a slow, steady, depressing decline…

 

Share Of Firms That Are Young

And as I discussed the other day, more businesses have closed in the United States than have opened for each of the past six years.

Prior to 2008, that had never happened before in all of American history.

Thank you Barack Obama.

When I talk about our “long-term economic collapse”, I am not exaggerating.

Our economy is literally dying right in front of our eyes, and it is people like Adriana Alvarez that are paying the price.

We desperately need to go back and start doing the things that once made this country so great, but unfortunately we continue running in the other direction as fast as we can.

So in the end, things are going to get much, much worse.

Things did not have to turn out this way, but these are the choices that we have made, and now we get to live with them.

Huge Trouble Is Percolating Just Under The Surface Of The Global Economy

World On Fire - Public DomainDid you know that the number of publicly traded companies declaring bankruptcy has reached a five year high?  And did you know that Chinese exports are absolutely collapsing and that Chinese economic growth in 2014 was the weakest in over 20 years?  Even though things may seem to be okay on the surface for the global economy at the moment, that does not mean that big trouble is not percolating just under the surface.  On Wednesday, investors cheered as stocks soared to new highs, but almost all of the economic news coming in from around the planet has been bad.  The credit rating on Greek debt has been slashed again, global economic trade is really slowing down, and many of the exact same financial patterns that we saw just before the crash of 2008 are repeating once again.  All of this reminds me of the months leading up to the implosion of Lehman Brothers.  Most people were feeling really good about things, but huge trouble was brewing just underneath the surface.  Finally, one day we learned that Lehman Brothers had “suddenly” collapsed, and then all hell broke loose.

If the economy is actually “getting better” like we are being told by the establishment media, then why are so many big companies declaring bankruptcy?  According to CNBC, the number of publicly traded companies declaring bankruptcy has hit a five year high…

The number of bankruptcies among publicly traded U.S. companies has climbed to the highest first-quarter level for five years, according to a Reuters analysis of data from research firm bankruptcompanynews.com.

Plunging prices of crude oil and other commodities is one of the major reasons for the increased filings, and bankruptcy experts said a more aggressive stance by lenders may also be hurting some companies.

It is interesting to note that the price of oil is being named as one of the primary reasons why this is happening.

In an article entitled “Anyone That Believes That Collapsing Oil Prices Are Good For The Economy Is Crazy“, I warned about this.  If the price of oil does not bounce back in a huge way, we are going to see a lot more companies go bankrupt, a lot more people are going to lose their jobs, and a lot more corporate debt is going to go bad.

And of course this oil crash has not just hurt the United States.  All over the world, economic activity is being curtailed because of what has happened to the price of oil…

In the heady days of the commodity boom, oil-rich nations accumulated billions of dollars in reserves they invested in U.S. debt and other securities. They also occasionally bought trophy assets, such as Manhattan skyscrapers, luxury homes in London or Paris Saint-Germain Football Club.

Now that oil prices have dropped by half to $50 a barrel, Saudi Arabia and other commodity-rich nations are fast drawing down those “petrodollar” reserves. Some nations, such as Angola, are burning through their savings at a record pace, removing a source of liquidity from global markets.

If oil and other commodity prices remain depressed, the trend will cut demand for everything from European government debt to U.S. real estate as producing nations seek to fill holes in their domestic budgets.

But it isn’t just oil.  We appear to be moving into a time when things are slowing down all over the place.

In a recent article, Zero Hedge summarized some of the bad economic news that has come in just this week…

Mortgage Apps tumble, Empire Fed slumps, and now Industrial Production plunges… Against expectations of a 0.3% drop MoM, US Factory Output was twice as bad at -0.6% – the worst since August 2012 (and lamost worst since June 2009). This is the 4th miss in a row.

If we are indeed heading into another economic downturn, that is really bad news, because at the moment we are in far worse shape than we were just prior to the last recession.

To help illustrate this, I want to share with you a couple of charts.

This first chart comes from the Federal Reserve Bank of St. Louis, and it shows that after you adjust for inflation, median income for the middle class is the lowest that it has been in decades

Median Income St. Louis Fed

This next chart shows that median net worth for the middle class is also the lowest that it has been in decades after you adjust for inflation…

Median Net Worth St. Louis Fed

The middle class is being systematically destroyed.  For much more on this, please see this recent article that I published.  And now we are on the verge of another major economic slowdown.  That is not what the middle class needs at all.

We are also getting some very disturbing economic news out of China.

In 2014, economic growth in China was the weakest in more than 20 years, and Chinese export numbers are absolutely collapsing

China’s monthly trade data shows exports fell in March from a year ago by 14.6% in yuan terms, compared to expectations for a rise of more than 8%.

Imports meanwhile fell 12.3% in yuan terms compared to forecasts for a fall of more than 11%.

This is a clear sign that global economic activity is slowing down in a big way.

In addition, Chinese home prices are now falling at a faster pace then U.S. home prices fell during the subprime mortgage meltdown

It appeared as though things went from bad to worse nearly overnight; China’s National Bureau of Statistics said that contrary to hopes that there would be a modest rebound, the average new home price in China fell at the fastest pace on record in February, from the previous year.

Reuters reported that average new home prices in China’s 70 major cities fell 5.7 percent, year to year, in February – marking the sixth consecutive drop after January’s decline of 5.1 percent.

Things continue to get worse in Europe as well.

This week we learned that the credit rating for Greek government debt has been slashed once again

Standard & Poor’s has just cut Greece’s credit rating to “CCC+” from “B-” with a negative outlook.

S&P said it expected Greece’s debt to be “unsustainable.” It cited the potential for dissolving liquidity in the government, banks and economy.

And according to the Financial Times, we could actually be on the verge of witnessing a Greek debt default…

Greece is preparing to take the dramatic step of declaring a debt default unless it can reach a deal with its international creditors by the end of April, according to people briefed on the radical leftist government’s thinking.

The government, which is rapidly running out of funds to pay public sector salaries and state pensions, has decided to withhold €2.5bn of payments due to the International Monetary Fund in May and June if no agreement is struck, they said.

So I hope that those that are euphoric about the performance of their stock portfolios are taking their profits while they still can.

Huge trouble is percolating just under the surface of the global economy, and it won’t be too long before the financial markets start feeling the pain.

19 Signs That American Families Are Being Economically Destroyed

19 - Public DomainThe systematic destruction of the American way of life is happening all around us, and yet most people have no idea what is happening.  Once upon a time in America, if you were responsible and hard working you could get a good paying job that could support a middle class lifestyle for an entire family even if you only had a high school education.  Things weren’t perfect, but generally almost everyone in the entire country was able to take care of themselves without government assistance.  We worked hard, we played hard, and our seemingly boundless prosperity was the envy of the entire planet.  But over the past several decades things have completely changed.  We consumed far more wealth than we produced, we shipped millions of good paying jobs overseas, we piled up the biggest mountain of debt in the history of the world, and we kept electing politicians that had absolutely no concern for the long-term future of this nation whatsoever.  So now good jobs are in very short supply, we are drowning in an ocean of red ink, the middle class is rapidly shrinking and dependence on the government is at an all-time high.  Even as we stand at the precipice of the next great economic crisis, we continue to make the same mistakes.  In the end, all of us are going to pay a very great price for decades of incredibly foolish decisions.  Of course a tremendous amount of damage has already been done.  The numbers that I am about to share with you are staggering.  The following are 19 signs that American families are being economically destroyed…

#1 The poorest 40 percent of all Americans now spend more than 50 percent of their incomes just on food and housing.

#2 For those Americans that don’t own a home, 50 percent of them spend more than a third of their incomes just on rent.

#3 The price of school lunches has risen to the 3 dollar mark at many public schools across the nation.

#4 McDonald’s “Dollar Menu & More” now includes items that cost as much as 5 dollars.

#5 The price of ground beef has doubled since 2009.

#6 In 1986, child care expenses for families with employed mothers used up 6.3 percent of all income.  Today, that figure is up to 7.2 percent.

#7 Incomes fell for the bottom 80 percent of all income earners in the United States during the 12 months leading up to June 2014.

#8 At this point, more than 50 percent of all American workers bring home less than $30,000 a year in wages.

#9 After adjusting for inflation, median household income has fallen by nearly $5,000 since 2007.

#10 According to the New York Times, the “typical American household” is now worth 36 percent less than it was worth a decade ago.

#11 47 percent of all Americans do not put a single penny out of their paychecks into savings.

#12 One survey found that 62 percent of all Americans are currently living paycheck to paycheck.

#13 According to the U.S. Department of Education, 33 percent of all Americans with student loans are currently behind on their student loan debt repayments.

#14 According to one recent report, 43 million Americans currently have unpaid medical debt on their credit reports.

#15 The rate of homeownership in the U.S. has been declining for seven years in a row, and it is now the lowest that it has been in 20 years.

#16 For each of the past six years, more businesses have closed in the United States than have opened.  Prior to 2008, this had never happened before in all of U.S. history.

#17 According to the Census Bureau, 65 percent of all children in the United States are living in a home that receives some form of aid from the federal government.

#18 If you have no debt at all, and you also have 10 dollars in your wallet, that you are wealthier than 25 percent of all Americans.

#19 On top of everything else, the average American must work from January 1st to April 24th just to pay all federal, state and local taxes.

All of us know people that once were doing quite well but that are now just struggling to get by from month to month.

Perhaps this has happened to you.

If you have ever been in that position, you probably remember what it feels like to have people look down on you.  Unfortunately, in our society the value that we place on individuals has a tremendous amount to do with how much money they have.

So if you don’t have much money, there are a lot of people out there that will treat you like dirt.  The following excerpt comes from a Washington Post article entitled “The poor are treated like criminals everywhere, even at the grocery store“…

Want to see a look of pure hatred? Pull out an EBT card at the grocery store.

Now that my kids are grown and gone, my Social Security check is enough to keep me from qualifying for government food benefits. But I remember well when we did qualify for a monthly EBT deposit, a whopping $22 — and that was before Congress cut SNAP benefits in November 2013. Like 70 percent of people receiving SNAP benefits, I couldn’t feed my family on that amount. But I remember the comments from middle-class people, the assumptions about me and my disability and what the poor should and shouldn’t be spending money on.

Have you ever seen this?

Have you ever experienced this yourself?

These days, most people on food stamps are not in that situation because they want to be.  Rather, they are victims of our long-term economic collapse.

And this is just the beginning.  When the next major economic crisis strikes, the suffering in this country is going to go to unprecedented levels.

As we enter that time, we are going to need a whole lot more love and compassion than we are exhibiting right now.

As a nation, we have made decades of incredibly bad decisions.  As a result, we are experiencing bad consequences which are going to become increasingly more severe.

The numbers that I just shared with you are not good.  But over the next several years they are going to get a whole lot worse.

Everything that can be shaken will be shaken, and life in America is about to change in a major way.

 

The EMP Threat: All It Would Take Is A Couple Of Explosions To Send America Back To The 1800s

EMP ThreatOur entire way of life can be ended in a single day.  And it wouldn’t even take a nuclear war to do it.  All it would take for a rogue nation or terror organization to bring us to our knees is the explosion of a couple well-placed nuclear devices high up in our atmosphere.  The resulting electromagnetic pulses would fry electronics from coast to coast.  Of course this could also be accomplished without any attack.  Scientists tell us that massive solar storms have hit our planet before, and that it is inevitable that there will be more in the future.  As you will read about below, the most recent example of this was “the Carrington Event” in 1859.  If a similar burst from the sun hit us today, experts tell us that life in America could suddenly resemble life in the 1800s, and the economic damage caused could potentially be in the trillions of dollars.  This is one of the greatest potential threats that we are facing as a nation, and yet Barack Obama has essentially done nothing to get us prepared.

The technology necessary to conduct such an electromagnetic pulse attack against the United States has become much more accessible in recent years.  According to an article in the Wall Street Journal, even rogue nations such as North Korea and Iran either already have or will soon have the capability to hurt us in this way…

Rogue nations such as North Korea (and possibly Iran) will soon match Russia and China and have the primary ingredients for an EMP attack: simple ballistic missiles such as Scuds that could be launched from a freighter near our shores; space-launch vehicles able to loft low-earth-orbit satellites; and simple low-yield nuclear weapons that can generate gamma rays and fireballs.

If a successful, large scale EMP attack ever did take place, it would be a catastrophe beyond anything that the United States has ever seen before.  The EMP Commission, which was established by Congress, says that it is likely that most of us would end up dead

What would a successful EMP attack look like? The EMP Commission, in 2008, estimated that within 12 months of a nationwide blackout, up to 90% of the U.S. population could possibly perish from starvation, disease and societal breakdown.

In 2009 the congressional Commission on the Strategic Posture of the United States, whose co-chairmen were former Secretaries of Defense William Perry and James Schlesinger, concurred with the findings of the EMP Commission and urged immediate action to protect the electric grid. Studies by the National Academy of Sciences, the Department of Energy, the Federal Energy Regulatory Commission and the National Intelligence Council reached similar conclusions.

If you are a terrorist, a dictator or a fanatic that is looking for a “killshot” for the United States, those kinds of numbers would certainly get your attention.

And it was recently reported by WND that the Iranian military has already been playing around with such a scenario…

Peter Vincent Pry, who is executive director of a congressional advisory group called the Task Force on National and Homeland Security, raised the alarm as the agreement is about to be finalized.

He said U.S. military officials have confirmed such an Iranian plan.

“Iranian military documents describe such a scenario – including a recently translated Iranian military textbook that endorses nuclear EMP attack against the United States,” Pry wrote in a recent column in Israel’s main online media network, Aruz Sheva.

“Iran with a small number of nuclear missiles can by EMP attack threaten the existence of modernity and be the death knell of Western principles of international law, humanism and freedom,” he said.

Very chilling stuff.

And of course there are many, many others out there that would love to see the U.S. taken down other than just the Iranians.

Meanwhile, our power grid is far more vulnerable than most Americans would dare to imagine.

In previous articles, I discussed a recent Federal Energy Regulatory Commission report which stated the following…

“Destroy nine interconnection substations and a transformer manufacturer and the entire United States grid would be down for at least 18 months, probably longer.”

Are you starting to get the picture?

Our entire way of life depends upon electricity.  If you take away that electricity, our society is transformed literally overnight.

A successful EMP would be an utter nightmare for this nation.  Just consider what U.S. Representative Scott Perry had to say about a potential attack last year

The consequences of such an attack could be catastrophic; all electronics, power systems, and information systems could be shut down,” Rep. Scott Perry said in prepared remarks during an EMP hearing in May held by the U.S. House Committee on Homeland Security. “This could then cascade into interdependent infrastructures such as water, gas, and telecommunications. While we understand this is an extreme case, we must always be prepared in case a rogue state decides to utilize this technology.”

In essence, suddenly nothing would work and just about everything that we take for granted would suddenly be gone.

In a previous article, I spelled out some of the implications of such an event…

-There would be no heat for your home.
-Water would no longer be pumped into most homes.
-Your computer would not work.
-There would be no Internet.
-Your phones would not work.
-There would be no television.
-There would be no radio.
-ATM machines would be shut down.
-There would be no banking.
-Your debit cards and credit cards would not work.
-Without electricity, most gas stations would not be functioning.
-Most people would be unable to do their jobs without electricity and employment would collapse.
-Commerce would be brought to a standstill.
-Hospitals would not be able to function normally.
-You would quickly start running out of medicine.
-All refrigeration would shut down and frozen foods in our homes and supermarkets would start to go bad.

And as I mentioned above, all of this can happen even without an attack.

A direct hit from a major solar storm can cause the exact same thing.

In fact, NASA says that there is a 12 percent chance that such a storm will hit us during the next ten years…

NASA is warning that there’s a 12 percent chance an extreme solar storm will hit Earth in the next decade, sending out massive shock waves that would knock out grids across the world.

The economic impact of this doomsday scenario could exceed $2 trillion — or 20 times the cost of Hurricane Katrina, according to the National Academy of Sciences.

In recent years, we have been really lucky.

There was a close call in 2012 and another one in 2013.

The following is an excerpt from an upcoming book that I have co-authored with Barbara Fix that will soon be published entitled “Get Prepared Now”…

Most people have absolutely no idea that the Earth barely missed being fried by a massive EMP burst from the sun in 2012 and in 2013. And earlier in 2014 there was another huge solar storm which would have caused tremendous damage if it had been directed at our planet. If any of those storms would have directly hit us, the result would have been catastrophic. Electrical transformers would have burst into flames, power grids would have gone down and much of our technology would have been fried. In essence, life as we know it would have ceased to exist – at least for a time. These kinds of solar storms have hit the Earth many times before, and experts tell us that it is inevitable that it will happen again. The most famous one happened in 1859, and was known as the Carrington Event. But other than the telegraph, humanity had very little dependence on technology at the time. If another Carrington Event happened today, it would be a complete and utter nightmare. A study by Lloyd’s of London has concluded that it would have taken a $2,600,000,000,000 chunk out of the global economy, and it would take up to a decade to repair the damage. Unfortunately, scientists insist that it is going to happen at some point. The only question is when.

So keep an eye on the sun.

The giant ball of fire that we revolve around has started to behave very erratically, and it has the power to end our way of life at any time.

In fact, scientists tell us that we are about to get hit with a “glancing blow” on April 7th…

A filament of magnetism stretching halfway across the sun erupted during the late hours of April 4th (22:00-23:00 UT). The eruption split the sun’s atmosphere, hurling a CME into space and creating a “canyon of fire,” shown in a movie recorded by the Solar Dynamics Observatory: The glowing walls of the canyon trace the original channel where the filament was suspended by magnetic forces above the sun’s surface. From end to end, the structure stretches more than 300,000 km–a real Grand Canyon.

Fragments of the exploding filament formed the core of a CME that raced away from the sun at approximately 900 km/s (2 million mph): image. Most of the CME will miss Earth, but not all. The cloud is expected to deliver a a glancing blow to our planet’s magnetic field could on April 7th. High-latitude sky watchers should be alert for auroras.

The event of April 7th is not going to cause us major problems.  But someday there will be a solar storm that will.

Personally, I cannot even imagine what life would be like without electricity.

Because we have become so deeply dependent on technology, most of us would have absolutely no idea how to live without it.

An electromagnetic pulse attack would be one of the fastest ways to cripple America and end the dominance of the United States in world affairs.  And in this day and age, there are hundreds of millions of people around the planet that would love to see that happen.

So to not take steps to protect our power grid from such an attack is very foolish.  But that is precisely what Barack Obama (and presidents before him) have chosen to do.  We have technology which would mitigate the damage from an electromagnetic pulse, but rather than spend the money Obama has decided to just hope that it will never happen.

Up to this point, we have been fortunate.

But someday, our luck may run out.

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