Is the global economic downturn going to accelerate as we roll into the second half of this year? There is turmoil in the Middle East, we are seeing things happen in the bond markets that we have not seen happen in more than 30 years, and much of Europe has already plunged into a full-blown economic depression. Sadly, most Americans will never understand what is happening until financial disaster strikes them personally. As long as they can go to work during the day and eat frozen pizza and watch reality television at night, most of them will consider everything to be just fine. Unfortunately, the truth is that everything is not fine. The world is becoming increasingly unstable, we are living in the terminal phase of the greatest debt bubble in the history of the planet and the global financial system is even more vulnerable than it was back in 2008. Unfortunately, most people seem to only have a 48 hour attention span at best these days. They don’t have the patience to watch long-term trends develop. And the coming economic collapse is not going to happen all at once. Rather, it is like watching a very, very slow-motion train wreck happen. The coming economic nightmare is going to unfold over a number of years. Yes, there will be moments of great panic, but mostly it will be a steady decline into economic oblivion. And there are a lot of indications that the second half of this year is not going to be as good as the first half was. The following are 19 reasons to be deeply concerned about the global economy as we head into the second half of 2013…
#1 The velocity of money in the United States has plunged to an all-time low. It is extremely difficult to have an “economic recovery” if banks are not lending money and people are not spending it…
#2 The fall of the Egyptian government threatens to bring even more instability to the Middle East. In response to the events in Egypt, the price of oil rose to more than 101 dollars a barrel on Wednesday.
#3 Every time the average price of a gallon of gasoline in the United States has risen over $3.80 in the past three years, a stock market decline has always followed.
#4 As the world becomes increasingly unstable, massive citizen protest movements have been rising all over the globe…
The protests have many different origins. In Brazil people rose up against bus fares, in Turkey against a building project. Indonesians have rejected higher fuel prices, Bulgarians the government’s cronyism.
In the euro zone they march against austerity, and the Arab spring has become a perma-protest against pretty much everything. Each angry demonstration is angry in its own way.
#5 The European sovereign debt crisis is flaring up once again. This time it is Portugal’s turn to take center stage…
From Greece to Cyprus, Slovenia to Spain and Italy, and now most pressingly Portugal, where the finance and foreign ministers resigned in the space of two days, a host of problems is stirring after 10 months of relative calm imposed by the European Central Bank.
Portuguese Prime Minister Pedro Passos Coelho told the nation in an address late on Tuesday that he did not accept the foreign minister’s resignation and would try to go on governing.
If his government does end up collapsing, as is now more likely, it will raise immediate questions about Lisbon’s ability to meet the terms of the 78-billion-euro bailout it agreed with the EU and International Monetary Fund in 2011.
#6 It is being projected that Italy will need a major EU bailout within six months.
#7 Bond investors are starting to panic. In fact, even prominent firms such as Pimco are seeing investors pull massive amounts of money out right now…
In June, investors pulled $9.6bn from Bill Gross’s flagship fund at Pimco, the largest single month of outflows at the fund since Morningstar records began in 1993, the investment research firm said.
The outflows came after investors pulled $1.3bn from the fund in May, which marked the first outflows since December 2011.
Overall, a whopping 80 billion dollars was pulled out of bond funds during June.
#8 Central banks are selling off staggering amounts of U.S. Treasury bonds right now.
#9 U.S. mortgage bonds just suffered their largest quarterly decline in nearly 20 years.
#10 We continue to buy far more from the rest of the world than they buy from us. The U.S. trade deficit for the month of May was 45.0 billion dollars.
#11 The severe drought that the western half of the United States is suffering never seems to end. What will it do to food prices if ranchers and farmers out west have to go through another summer like they did last year?
#12 European car sales have fallen to a 20 year low.
#13 Unemployment in the eurozone is at an all-time high.
#14 Could the paper gold Ponzi scheme be on the verge of crumbling? There are reports that there is now a 100 day delay for gold owners to take physical delivery of their gold from some warehouses owned by the London Metal Exchange…
We’re told that bullion-buyers in London must now wait more than 100 days to take delivery of the bullion for which they have already paid.
The comedic drones at Bloomberg, and officials of the London Metal Exchange itself would have us believe this is due to “warehouse queues.” While precious metals bulls undoubtedly appreciate the imagery implied of a 100-day line-up of armored cars waiting to load their bullion – in the middle of this “bear market” – the implication is fallacious.
In an era of just-in-time inventories; the notion that there can be a 100-day backlog to load bullion into armored cars with the metal already sitting in the warehouse is ludicrous. Clearly what the LME is really reporting here is a greater-than-three-month delay to refine the gold (or silver) being purchased here – and then ship it to their warehouse.
In other words, the “bullion” which traders believe they are purchasing today is in fact merely ore which hasn’t even been dug out of the ground yet.
#15 The number of mortgage applications in the United States is falling at the fastest rate in more than 3 years.
#16 Real disposable income in the United States is falling at the fastest rate in more than 4 years.
#17 The percentage of companies issuing negative earnings guidance for this quarter is at a level that we have never seen before.
#18 Is the dark side of derivatives trading about to be exposed? EU officials claim that 13 major international banks have been colluding to control the trading of derivatives…
The European Commission says many of the world’s largest investment banks appear to have colluded to block attempts by exchanges to trade and offer more transparent prices for financial products known as credit derivatives.
The commission, the executive arm of the European Union, said Monday it has informed 13 banks — including Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley — as well as the industry association for derivatives itself, the International Swaps and Derivatives Association, ISDA, of the preliminary conclusions of an investigation that began in March.
#19 There are 441 trillion dollars of interest rate derivatives sitting out there and interest rates have risen rapidly over the past few weeks. What is going to happen to those derivatives if interest rates keep going higher?
So what do you think?
Are there any items that are missing that you would add to this list?
Please feel free to share what you think by posting a comment below…
The world is heading into a horrific economic nightmare, and an inordinate amount of the suffering is going to fall on innocent children. If you want to get an idea of what America is going to look like in the not too distant future, just check out what is happening in Greece. At this point, Greece is experiencing a full-blown economic depression. As I have written about previously, the unemployment rate in Greece has now risen to 27 percent, which is much higher than the peak unemployment rate that the U.S. economy experienced during the Great Depression of the 1930s. And as you will read about below, child hunger is absolutely exploding in Greece right now. Some families are literally trying to survive on pasta and ketchup. But don’t think for a moment that it can’t happen here. Sadly, the truth is that child hunger is already rising very rapidly in our poverty-stricken cities. Never before have we had so many Americans unable to take care of themselves. Food stamp enrollment and child homelessness have soared to brand new all-time records, and there are actually thousands of Americans that are so poor that they live in tunnels underneath our cities. But for millions of other Americans, the suffering is not quite so dramatic. Instead, they just watch their hopes and their dreams slowly slip away as they struggle to find a way to make it from month to month. There are millions of parents that lead lives that are filled with constant stress and anxiety as they try to figure out how to provide the basics for their children. How do you tell a child that you can’t give them any dinner even though you have been trying as hard as you can? What many families go through on a regular basis is absolutely heartbreaking. Unfortunately, more poor families slip through the cracks with each passing day, and these are supposedly times in which we are experiencing an “economic recovery”. So what are things going to look like when the next major economic downturn strikes?
A recent New York Times article detailed the horrifying child hunger that we are witnessing in Greece right now. At some schools there are reports of children actually begging for food from their classmates…
As an elementary school principal, Leonidas Nikas is used to seeing children play, laugh and dream about the future. But recently he has seen something altogether different, something he thought was impossible in Greece: children picking through school trash cans for food; needy youngsters asking playmates for leftovers; and an 11-year-old boy, Pantelis Petrakis, bent over with hunger pains.
“He had eaten almost nothing at home,” Mr. Nikas said, sitting in his cramped school office near the port of Piraeus, a working-class suburb of Athens, as the sound of a jump rope skittered across the playground. He confronted Pantelis’s parents, who were ashamed and embarrassed but admitted that they had not been able to find work for months. Their savings were gone, and they were living on rations of pasta and ketchup.
Could you imagine that happening to your children or your grandchildren?
Don’t think that it can’t happen. Just a few years ago the Greek middle class was vibrant and thriving.
And we are starting to see hunger explode in other European countries as well. For example, in the UK the number of people receiving emergency food rations has increased by 170 percent over the past year.
This is one of the reasons why I get upset when people say that “things are getting better”. Yes, the stock market has been setting record highs lately, but things are most definitely not getting better.
Even during this false bubble of debt-fueled economic stability that we are enjoying right now, we continue to see hunger and poverty rise dramatically in America.
Since Barack Obama has been president, the number of Americans on food stamps has grown from 32 million to more than 47 million.
Will we all be on food stamps eventually?
Will we all become dependent on the government for our survival at some point?
According to the Boston Herald, even Tamerlan Tsarnaev was receiving government welfare benefits…
Marathon bombings mastermind Tamerlan Tsarnaev was living on taxpayer-funded state welfare benefits even as he was delving deep into the world of radical anti-American Islamism, the Herald has learned.
State officials confirmed last night that Tsarnaev, slain in a raging gun battle with police last Friday, was receiving benefits along with his wife, Katherine Russell Tsarnaev, and their 3-year-old daughter. The state’s Executive Office of Health and Human Services said those benefits ended in 2012 when the couple stopped meeting income eligibility limits.
Isn’t that crazy?
And yes, there are some people out there that are abusing the system. In fact, the cost of food stamp fraud has risen sharply to approximately $750 million in recent years.
But most of the people on these programs really need the help. Thanks to our incredibly foolish economic policies, there are not enough good jobs for everyone and there never will be again. The percentage of Americans that are unable to take care of themselves is going to continue to rise, and the suffering that we are witnessing right now is going to get much, much worse.
Not that things aren’t really, really bad already. Here are some signs that child hunger in America has already started to explode…
#1 Today, approximately 17 million children in the United States are facing food insecurity. In other words, that means that “one in four children in the country is living without consistent access to enough nutritious food to live a healthy life.”
#2 We are told that we live in the “wealthiest nation” on the planet, and yet more than one out of every four children in the United States is enrolled in the food stamp program.
#3 The average food stamp benefit breaks down to approximately $4 per person per day.
#4 It is being projected that approximately 50 percent of all U.S. children will be on food stamps before they reach the age of 18.
#5 It may be hard to believe, but approximately 57 percent of all children in the United States are currently living in homes that are either considered to be either “low income” or impoverished.
#6 The number of children living on $2.00 a day or less in the United States has grown to 2.8 million. That number has increased by 130 percent since 1996.
#7 According to Feeding America, “households with children reported food insecurity at a significantly higher rate than those without children, 20.6 percent compared to 12.2 percent”.
#8 According to a Feeding America hunger study, more than 37 million Americans are now being served by food pantries and soup kitchens.
#9 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.
#10 Approximately 20 million U.S. children rely on school meal programs to keep from going hungry.
#11 One university study estimates that child poverty costs the U.S. economy 500 billion dollars each year.
#12 In Miami, 45 percent of all children are living in poverty.
#13 In Cleveland, more than 50 percent of all children are living in poverty.
#14 According to a recently released report, 60 percent of all children in the city of Detroit are living in poverty.
For many more facts about the dramatic explosion of poverty in this country, please see my previous article entitled “21 Statistics About The Explosive Growth Of Poverty In America That Everyone Should Know“.
Unfortunately, most of the time statistics don’t really tell the whole story. Numbers alone cannot really communicate the soul-crushing despair that millions of American families are enduring on a daily basis at this point.
How can numbers communicate the pain that a child feels when her grandmother does not eat because there is not enough food for everyone in the family? But this is what some families in America actually go through because there is not enough money…
Vanyshia tells about the sacrifices her Grandmother makes so that she and her siblings can eat. “Sometimes my Grandma can’t even eat because she has to feed me and my brother and sister. Sometimes I don’t eat as much as I want to because I leave some for my Grandma because I don’t want her to sit there and starve. Sometimes she doesn’t have enough money to buy food, so she has to go to the bank and borrow money. It makes me feel sad. I don’t want her to be hungry. I just feel sad sometimes,” says Vanyshia.
Things can be particularly tough when you are a single parent. The BBC recently profiled a single mother that is struggling to raise two young children in Iowa…
“We don’t get three meals a day like breakfast, lunch and then dinner,” says Kaylie. “When I feel hungry I feel sad and droopy.”
Kaylie and Tyler live with their mother Barbara, who used to work in a factory. After losing her job, she was entitled to unemployment benefit and food stamps – this comes to $1,480 (£974) a month.
But they were no longer able to afford to live in their house, which along with bills cost $1,326 (£873) a month, leaving little for food or petrol.
Kaylie supplemented their income by collecting cans along the railway track near their old home – earning between two and five cents per can.
For more examples like this one, I encourage everyone to go watch a recent BBC documentary entitled “America’s Poor Kids” that you can see right here.
I wonder why we don’t see more stuff like this on the mainstream news in this country?
Could it be that the mainstream media does not want to admit how bad things have really gotten?
All of this is also a reminder that we need to be generous to those in need. Times are going to get much, much harder than this, and we are all going to need one another.
So do you have any stories of poverty or child hunger from your area of the country to share? Please feel free to share your thoughts by posting a comment below…
Why is the economy going to collapse? Have you ever been asked that question? If so, what did you say? Sometimes it is difficult to communicate dozens of complicated economic and financial concepts in a package that the average person on the street can easily digest. It can be very frustrating to know that something is true but not be able to explain it clearly to someone else. Hopefully many of you out there will find the list below useful. It is a list of 70 numbers that show why we are headed for a national economic nightmare. So why does the title of the article single out Barack Obama? Well, it is because right now he is the biggest cheerleader for the economy. He is attempting to convince all of us that everything is just fine and that the economy is heading in a positive direction. Well, the truth is that everything is not fine and things are about to get a whole lot worse. Certainly others should share in the blame as well. Congress has been steering the economy in the wrong direction for decades, the “too big to fail” banks have turned Wall Street into a pyramid of risk, leverage and debt, and the Federal Reserve has more power over the financial system than anyone else does. Our economy has been in decline for quite a while now, and soon we are going to smash directly into an economic brick wall. Unfortunately, a lot of Americans are in denial about this. A lot of people out there doubt that an economic collapse is coming. Well, if you know someone that believes that the U.S. economy is going to be “just fine”, just show them the list below.
The following are 70 facts that Barack Obama does not want you to see….
$3.59 – When Barack Obama entered the White House, the average price of a gallon of gasoline was $1.85. Today, it is $3.59.
22 – It is hard to believe, but today the poverty rate for children living in the United States is a whopping 22 percent.
23 – According to U.S. Representative Betty Sutton, an average of 23 manufacturing facilities permanently shut down in the United States every single day during 2010.
30 – Back in 2007, about 10 percent of all unemployed Americans had been out of work for 52 weeks or longer. Today, that number is above 30 percent.
32 – The amount of money that the federal government gives directly to Americans has increased by 32 percent since Barack Obama entered the White House.
35 – U.S. housing prices are now down a total of 35 percent from the peak of the housing bubble.
40 – The official U.S. unemployment rate has been above 8 percent for 40 months in a row.
42 – According to one survey, 42 percent of all American workers are currently living paycheck to paycheck.
48 – Shockingly, at this point 48 percent of all Americans are either considered to be “low income” or are living in poverty.
49 – Today, an astounding 49.1 percent of all Americans live in a home where at least one person receives benefits from the government.
53 – Last year, an astounding 53 percent of all U.S. college graduates under the age of 25 were either unemployed or underemployed.
60 – According to a recent Gallup poll, only 60 percent of all Americans say that they have enough money to live comfortably.
61 – At this point the Federal Reserve is essentially monetizing much of the U.S. national debt. For example, the Federal Reserve bought up approximately 61 percent of all government debt issued by the U.S. Treasury Department during 2011.
63 – One recent survey found that 63 percent of all Americans believe that the U.S. economic model is broken.
71 – Today, 71 percent of all small business owners believe that the U.S. economy is still in a recession.
80 – Americans buy 80 percent of the pain pills sold on the entire globe each year.
81 – Credit card debt among Americans in the 25 to 34 year old age bracket has risen by 81 percent since 1989.
85 – 85 percent of all artificial Christmas trees are made in China.
86 – According to one survey, 86 percent of Americans workers in their sixties say that they will continue working past their 65th birthday.
90 – In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.
93 – The United States now ranks 93rd in the world in income inequality.
95 – The middle class continues to shrink – 95 percent of the jobs lost during the last recession were middle class jobs.
107 – Each year, the average American must work 107 days just to make enough money to pay local, state and federal taxes.
350 – The average CEO now makes approximately 350 times as much as the average American worker makes.
400 – According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.
$500 – In some areas of Detroit, Michigan you can buy a three bedroom home for just $500.
627 – In 2010, China produced 627 million metric tons of steel. The United States only produced 80 million metric tons of steel.
877 – 20,000 workers recently applied for just 877 jobs at a Hyundai plant in Montgomery, Alabama.
900 – Auto parts exports from China to the United States have increased by more than 900 percent since the year 2000.
$1580 – When Barack Obama first took office, an ounce of gold was going for about $850. Today an ounce of gold costs more than $1580 an ounce.
1700 – Consumer debt in America has risen by a whopping 1700% since 1971.
2016 – It is being projected that the Chinese economy will be larger than the U.S. economy by the year 2016.
$4155 – The average American household spent a staggering $4,155 on gasoline during 2011.
$4300 – The amount by which real median household income has declined since Barack Obama entered the White House.
$6000 – If you can believe it, the median price of a home in Detroit is now just $6000.
$10,000 – According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.
49,000 – In 2011, our trade deficit with China was more than 49,000 times larger than it was back in 1985.
50,000 – The United States has lost an average of approximately 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001.
56,000 – The United States has lost more than 56,000 manufacturing facilities since 2001.
$85,000 – 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.
$175,587 – The Obama administration spent $175,587 to find out if cocaine causes Japanese quail to engage in sexually risky behavior.
$328,404 – Over the next 75 years, Medicare is facing unfunded liabilities of more than 38 trillion dollars. That comes to $328,404 for each and every household in the United States.
$361,330 – This is what the average banker in New York City made in 2010.
440,00 – If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to totally pay it off.
500,000 – According to the Economic Policy Institute, America is losing half a million jobs to China every single year.
2,000,000 – Family farms are being systematically wiped out of existence in the United States. According to the U.S. Department of Agriculture, the number of farms in the United States has fallen from about 6.8 million in 1935 to only about 2 million today.
$2,000,000 – At this point, the U.S. national debt is rising by more than 2 million dollars every single minute.
2,600,000 – In 2010, 2.6 million more Americans fell into poverty. That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.
5,400,000 – When Barack Obama first took office there were 2.7 million long-term unemployed Americans. Today there are twice as many.
16,000,000 – It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
$20,000,000 – The amount of money the U.S. government was spending to create a version of Sesame Street for children in Pakistan.
25,000,000 – Today, approximately 25 million American adults are living with their parents.
40,000,000 – According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades if current trends continue.
46,405,204 – The number of Americans currently on food stamps. When Barack Obama first entered the White House there were only 32 million Americans on food stamps.
88,000,000 – Today there are more than 88 million working age Americans that are not employed and that are not looking for employment. That is an all-time record high.
100,000,000 – Overall, there are more than 100 million working age Americans that do not currently have jobs.
$150,000,000 – This is approximately the amount of money that the Obama administration and the U.S. Congress are stealing from future generations of Americans every single hour.
$2,000,000,000 – The amount of money that JP Morgan has admitted that it will lose from derivatives trades gone bad. Many analysts are convinced that the real number will actually end up being much higher.
$147,000,000,000 – In the U.S., medical costs related to obesity are estimated to be approximately 147 billion dollars a year.
295,500,000,000 – Our trade deficit with China in 2011 was $295.5 billion. That was the largest trade deficit that one country has had with another country in the history of the planet.
$359,100,000,000 – During the first quarter of 2012, U.S. public debt rose by 359.1 billion dollars. U.S. GDP only rose by 142.4 billion dollars.
$454,000,000,000 – During fiscal 2011, the U.S. government spent over 454 billion dollars just on interest on the national debt.
$1,000,000,000,000 – The total amount of student loan debt in the United States recently surpassed the one trillion dollar mark.
$1,170,000,000,000 – China now holds approximately 1.17 trillion dollars of U.S. government debt. Yet the U.S. government continues to send them millions of dollars in foreign aid every year.
$1,600,000,000,000 – The amount that has been added to the U.S. national debt since the Republicans took control of the U.S. House of Representatives. This is more than the first 97 Congresses added to the national debt combined.
$5,000,000,000,000 – The U.S. national debt has risen by more than 5 trillion dollars since the day that Barack Obama first took office. In a little more than 3 years Obama has added more to the national debt than the first 41 presidents combined.
$5,000,000,000,000 – What the real U.S. budget deficit in 2011 would have been if the federal government had used generally accepted accounting principles.
$11,440,000,000,000 – The total amount of consumer debt in the United States.
$15,734,596,578,458.59 – The U.S. national debt as of June 7, 2012.
$200,000,000,000,000 – Today, the 9 largest banks in the United States have a total of more than 200 trillion dollars of exposure to derivatives. When the derivatives market completely collapses there won’t be enough money in the entire world to fix it.
The economic crisis in Europe continues to get worse and eventually it is going to unravel into a complete economic nightmare. All over Europe, national governments have piled up debts that are completely unsustainable. But whenever they start significantly cutting government spending it results in an economic slowdown. So politicians in Europe are really caught between a rock and a hard place. They can’t keep racking up these unsustainable debts, but if they continue to cut government spending it is going to push their economies into deep recession and their populations will riot. Greece is a perfect example of this. Greece has been going down the austerity road for several years now and they are experiencing a full-blown economic depression, riots have become a way of life in that country and their national budget is still not anywhere close to balanced. Americans should pay close attention to what is going on in Europe, because this is what it looks like when a debt party ends. Most of the nations in the eurozone have just started implementing austerity, and yet unemployment in the eurozone is already the highest it has been since the euro was introduced. It has risen for 10 months in a row and is now up to 10.8 percent. Sadly, it is going to go even higher. As economies across Europe slide into recession, that is going to put even more pressure on the European financial system. Most Americans do not realize this, but the European banking system is absolutely enormous. It is nearly four times the size that the U.S. banking system is. When the European banking system crashes (and it will) it is going to reverberate around the globe. The epicenter of the next great financial crisis is going to be in Europe, and it is getting closer with each passing day.
The following are 27 statistics about the European economic crisis that are almost too crazy to believe….
#1 The Greek economy shrank by 6 percent during 2011, and it has been shrinking for five years in a row.
#2 The average unemployment rate in Greece in 2010 was 12.5 percent. During 2011, the average unemployment rate was 17.3 percent, and now the unemployment rate in Greece is up to 21.8 percent.
#3 The youth unemployment rate in Greece is now over 50 percent.
#4 The unemployment rate in the port town is Perama is about 60 percent.
#5 In Greece, 20 percent of all retail stores have closed down during the economic crisis.
#6 Greece now has a debt to GDP ratio of approximately 160 percent.
#7 Some of the austerity measures that have been implemented in Greece have been absolutely brutal. For example, Greek civil servants have had their incomes slashed by about 40 percent since 2010.
#8 Despite all of the austerity measures, it is being projected that Greece will still have a budget deficit equivalent to 7 percent of GDP in 2012.
#9 Greece is still facing unfunded liabilities in future years that are equivalent to approximately 800 percent of GDP.
#10 In the midst of all the poverty in Greece, several serious diseases are making a major comeback. The following comes from a recent article in the Guardian….
The incidence of HIV/Aids among intravenous drug users in central Athens soared by 1,250% in the first 10 months of 2011 compared with the same period the previous year, according to the head of Médecins sans Frontières Greece, while malaria is becoming endemic in the south for the first time since the rule of the colonels, which ended in the 1970s.
#11 The unemployment rate in Spain is now up to 23.6 percent.
#12 The youth unemployment rate in Spain is now over 50 percent.
#13 The total value of all toxic loans in Spain is equivalent to approximately 13 percent of Spanish GDP.
#14 The GDP of Spain is about 1.4 trillion dollars. The three largest Spanish banks have approximately 2.7 trillion dollars in assets and they are all on the verge of failing.
#15 Home prices in Spain fell by 11.2 percent during 2011.
#16 The number of property repossessions in Spain rose by 32 percent during 2011.
#17 The ratio of government debt to GDP in Spain will rise by more than 11 percent during 2012.
#18 On top of everything else, Spain is dealing with the worst drought it has seen in 70 years.
#19 The unemployment rate in Portugal is up to 15 percent.
#20 The youth unemployment rate in Portugal is now over 35 percent.
#21 Banks in Portugal borrowed a record 56.3 billion euros from the European Central Bank in March.
#22 It is being projected that the Portuguese economy will shrink by 5.7 percent during 2012.
#23 When you add up all forms of debt in Portugal (government, business and consumer) the total is equivalent to approximately 360 percent of GDP.
#24 Youth unemployment in Italy is up to 31.9 percent – the highest level ever.
#25 Italy’s national debt is approximately 2.7 times larger than the national debts of Greece, Ireland and Portugal put together.
#26 If you add the maturing debt that the Italian government must roll over in 2012 to the projected budget deficit, it comes to approximately 23.1 percent of Italy’s GDP.
#27 Italy now has a debt to GDP ratio of approximately 120 percent.
So why hasn’t Europe crashed already?
Well, the powers that be are pulling out all their tricks.
For example, the European Central Bank decided to start loaning gigantic mountains of money to European banks. That accomplished two things….
1) It kept those European banks from collapsing.
2) European banks used that money to buy up sovereign bonds and that kept interest rates down.
Unfortunately, all of this game playing has also put the European Central Bank in a very vulnerable position.
The balance sheet of the European Central Bank has expanded by more than 1 trillion dollars over the past nine months. The balance sheet of the European Central Bank is now larger than the entire GDP of Germany and the ECB is now leveraged 36 to 1.
So just how far can you stretch the rubberband before it snaps?
Perhaps we are about to find out.
The European financial system is leveraged like crazy right now. Even banking systems in countries that you think of as “stable” are leveraged to extremes.
For example, major German banks are leveraged 32 to 1, and those banks are holding a massive amount of European sovereign debt.
When Lehman Brothers finally collapsed, it was only leveraged 30 to 1.
You can’t solve a debt crisis with more debt. But the European Central Bank has been able to use more debt to kick the can down the road a few more months.
At some point the sovereign debt bubble is going to burst.
All financial bubbles eventually burst.
What goes up must come down.
Right now, the major industrialized nations of the world are approximately 55 trillion dollars in debt.
It has been a fun ride, but this fraudulent pyramid of risk, debt and leverage is going to come crashing down at some point.
It is only a matter of time.
Already, there are a whole bunch of signs that some very serious economic trouble is on the horizon.
Hopefully we still have a few more months until it hits.
But in this day and age nothing is guaranteed.
What does seem abundantly clear is that the current global financial system is inevitably going to fail.
When it does, what “solutions” will our leaders try to impose upon us?
That is something to think about.
If the U.S. dollar is being devalued so rapidly, then why does it sometimes increase in value against other global currencies? Well, it is because everybody is recklessly printing money now. The 6 charts which you are about to see below prove this. The truth is that it is not just the U.S. Federal Reserve which has been printing money like there is no tomorrow. Out of control money printing has also been happening in the UK, in the EU, in Japan, in China and in India. There are times when one particular global currency will fall faster than the others, but the reality is that they are all being rapidly devalued. Unfortunately, this is a recipe for a global economic nightmare.
Right now you can almost smell the panic as it rises in global financial markets. Investors all over the world are racing to get out of paper and to get into hard assets. Just about anything that is “real” and “tangible” is hot right now. Gold hit a record high last year and it is on the rise again. In fact, it just hit a new five-week high. Demand for silver is becoming absolutely ridiculous right now. Oil is marching up towards $100 a barrel again. Agricultural commodities have exploded in price over the past year. Many investors are even gobbling up art and other collectibles.
Paper money is no longer considered to be safe. All over the globe investors are watching all of the reckless money printing that has been going on and they are becoming alarmed. An increasing number of investors and financial institutions are putting their wealth into hard assets that are real and tangible in an effort to preserve their wealth.
The other day, a reader of this column named James sent me some charts that he had put together. I thought they were so good that I asked him if I could include them in an article. These charts show how central banks all over the globe have been recklessly printing money. Over the last 30 years virtually the entire world has developed a great love affair with fiat currency….
So is everyone printing money?
The U.S. is printing lots of money…..
Source, The St. Louis Fed
The Bank of England is printing lots of money…..
Source: The BoE
The EU is printing lots of money….
Source: The ECB
Japan is printing lots of money…..
Source: The BoJ
China is printing lots of money…..
Source: The People’s Bank of China
India is printing lots of money…..
Source: Reserve Bank of India
Of course anyone with half a brain can see where all of this is ultimately headed. In the end, inflation is going to spiral out of control and we are going to witness financial implosion on a global scale.
So why don’t these nations just adopt sound money?
Well, it turns out that if you are a member of the IMF, you are specifically prohibited from having gold-backed currency.
Yes, you read that correctly.
In fact, U.S. Representative Ron Paul once sent an open letter to the U.S. Treasury and the Federal Reserve asking about this and he received no response. The following is the content of that letter….
I am writing regarding Article 4, Section 2b of the International Monetary Fund (IMF)’s Articles of Agreement. As you may be aware, this language prohibits countries who are members of the IMF from linking their currency to gold. Thus, the IMF is forbidding countries suffering from an erratic monetary policy from adopting the most effective means of stabilizing their currency. This policy could delay a country’s recovery from an economic crisis and retard economic growth, thus furthering economic and political instability.
I would greatly appreciate an explanation from both the Treasury and the Federal Reserve of the reasons the United States has continued to acquiesce in this misguided policy. Please contact Mr. Norman Singleton, my legislative director, if you require any further information regarding this request. Thank you for your cooperation in this matter.
U.S. House of Representatives
Sadly, the truth is that the global elite don’t want nations to start adopting gold-backed currencies. They want countries to use fiat currencies that they can openly manipulate for their own benefit.
At this point, every nation on earth (to the best of my knowledge) uses a fiat currency. All of the major global currencies are being continually devalued. In fact, there are times when counties will purposely devalue their currencies even more rapidly in order to gain a competitive advantage in world trade.
This is why so many investors now have such an aversion to paper currency. It starts losing value the moment you take possession of it.
In some areas of the world, “gold fever” is absolutely exploding. For example, China imported five times as much gold in 2010 as it did in 2009. On the Shanghai Gold Exchange, trading volume soared 43 percent during the first 10 months of 2010.
Gold, silver and other precious metals are now seen as a great hedge against inflation worldwide. Investors all over the globe are demonstrating a strong preference for “real money” over “paper money”.
So what does all of this mean?
It means that some tremendous imbalances are being built up in the global financial system. The central banks of the world must continue to inflate these bubbles with constantly increasing amounts of paper money and debt in order to keep the game going. If at some point the reckless money printing comes to a screeching halt it is going to unleash hell on global financial markets.
But if all of this reckless money printing continues we are eventually going to see horrific inflation all over the planet. In fact, we are already seeing significant inflation happening in many areas of the globe. Almost every single day a new headline about inflation in China seems to pop up in the financial news. Rising food prices are sparking unrest in the Middle East and elsewhere. Even U.S. consumers are starting to see some uncomfortable price increases at the gas pump and in the supermarket.
So it is not just Federal Reserve Chairman Ben Bernanke that is off his rocker. The whole world is going crazy with money printing.
Hopefully this whole thing is not going to end as badly as many of us fear that it will. But right now the central banks of the world are pumping unprecedented amounts of cash into the global financial system, and those in the global financial system are funneling a very large percentage of that cash into hard assets. Unless something changes, that is going to mean that prices for basic necessities such as food and gas are going to continue to rise.
This is quite a fine mess that we are in.
Does anyone see a way out?
For decades, most Americans have enjoyed an extremely high standard of living. In fact, most of us have been “enjoying the high life” and “living the dream” for so long that we have assumed that it is just always going to be that way. But now a rapidly growing percentage of Americans is getting the chance to experience some very serious economic pain. Today, over 40 million Americans are on food stamps and over 20 million U.S. children are living in poverty. Tens of millions of Americans are unemployed, and personal bankruptcies and foreclosures continue to set all-time records. For many people, all of this economic turmoil was completely unexpected. Millions of people now can’t sleep at night because they are constantly stressed about finances. More couples than ever are being torn about by arguments over money. Unprecedented numbers of Americans have experienced a sinking feeling in the pit of their stomachs upon the realization that they are going to lose the homes that they have been raising their families in. Money may not buy happiness, but as tens of millions of Americans are finding out, the lack of it can bring a whole lot of pain.
Now, the truth is that there have always been a small percentage of Americans that have struggled to get by, but today we are seeing more Americans who are “down on their luck” than at any other time in recent memory. According to one shocking new survey, 28% of all U.S. households have at least one member that is looking for a full-time job.
It seems like almost everyone has a family member or a close friend who is looking for a job. The truth is that there are not enough jobs for everyone, and there certainly are not nearly enough good jobs.
A recent Pew Research survey found that 55 percent of the U.S. labor force has experienced either unemployment, a pay decrease, a reduction in hours or an involuntary move to part-time work since the recession began.
That is incredible.
That means that over half of all American workers have been unemployed or have been forced to take a reduction in pay since the recession started.
Things are getting really tough out there.
Millions of Americans are wondering why their husbands or wives suddenly can’t find jobs.
In fact, the average duration of unemployment in the United States has risen to an all-time high. The declining economy has created a new class of chronically unemployed Americans who would love to work but can’t seem to find anyone to hire them.
Millions of Americans have been forced to turn to part-time work. In fact, one recent survey found that approximately 8.6 million American workers are working part time because they can’t get full-time jobs.
In this economic environment, there is significant competition for even the lowest paying jobs.
You never know – this holiday season the friendly gentleman greeting you down at the local Wal-Mart may actually have several advanced degrees but just cannot find anyone else who will hire him.
As the economic situation continues to deteriorate, record numbers of Americans are going bankrupt and are losing their homes. In fact, banks repossessed a record number of U.S. homes during the second quarter of 2010.
So it is really no wonder why so many Americans are feeling so negative about the economy.
According to one new survey, U.S. consumer sentiment weakened in early July to its lowest in 11 months. In addition, one recent poll found that 76 percent of Americans believe that the U.S. economy is still in a recession.
But sometimes what gets lost in all the numbers are the individual stories of the very real pain that so many Americans are going through. Today, I thought that I would share just a few of the stories of economic pain that my readers have been sharing with me.
A reader of my column on The American Dream blog named Kate recently graduated from college but now finds that she can’t even get a retail job….
I just graduated college in May… Moved to a new state and am now living with my boyfriend who should not and cannot continue to have to pay everything because i just plain can’t get a job.
I’m over qualified for retail survivor jobs… so I lie on my application. But then retail stores just plain don’t hire full time. So even if I could get a job as a cashier someplace… I’d only work enough hours to maybe pay for my car payment/ car insurance/ gas…. and my half of rent/electric and such is out of the question… not to mention charged to the limit credit cards from being unemployed and student loans that will hit in just a matter of months.
Any other jobs either don’t exist or they just ALL want 5 years professional experience…. which is impossible for someone who just graduated and has been working part time retail jobs since high school.
AND internships are unpaid or only for college students so thats out of the question….
But the fact of the matter is that jobs don’t care about education in the least bit if you don’t have the real professional work experience to back it up.
A reader of this column named David ended up taking a very low paying job overseas because he simply couldn’t find anything here in the United States….
I have been looking for a job since June 2009. I am a prior Army officer who knows four foreign languages and has lived around the world. I have sent out over 100 resumes over the past year. Finally, I got a job offer to teach English in Russia for $720 per month. Yes, $720 per month. Luckily my housing is paid for. So, I took my tax return and left for Russia to teach English. The American economy is broken and it will get worse. We are in the early stages of a total meltdown in America. Yes, if you are an American, you better prepare yourself for the worst is still to come.
But even those who do have jobs are facing some very difficult circumstances as one of my readers named Ana recently described….
I am a cop’s wife. My husband currently works for a Sheriff’s office who is extremely understaffed and the county wastes money like there is no tomorrow. They threaten the Sheriff with more layoffs if they don’t write more tickets on the highway. My husband has often had to patrol the entire county by himself for a full 12 hour shift. It is a bad situation for everyone.
The truth is that there are millions of stories like the ones above. Economic pain is everywhere, and the American people are becoming increasingly frustrated. Most Americans don’t understand why the economy is suddenly in the toilet – all most of them know is that things are broken and they desperately want someone to fix things.
A lot of this frustration is coming out as anger towards the government. People are waking up and are starting to realize that the American ruling class has been doing an incredibly bad job of running things. The American people are hungry for a real change. In fact, a new Rasmussen Reports national telephone survey found that just 23% of voters nationwide believe that the U.S. government has the consent of the governed.
But will we start to see some real changes in the years ahead?
Unfortunately, that is quite doubtful. The reality is that the American ruling class has a stranglehold on both political parties, and they are not going to release their grip easily.
Meanwhile, our leaders continue to perpetuate the same failed policies that got us into this mess in the first place. But unless some fundamental changes are made soon, the economic pain that Americans are experiencing is going to continue to get even worse.
So do you have a story of economic pain to share? Feel free to share your thoughts in the comments section below….
As the Gulf of Mexico oil spill crisis enters a third month, the economic impact of this environmental nightmare is starting to become clearer. The truth is that the “oil volcano” spewing massive amounts of oil into the Gulf has absolutely decimated the seafood, tourism and real estate industries along the Gulf coast. Not only that, but energy industry insiders are now warning that the chilling effect that this crisis will have on offshore drilling could precipitate a new 1970s-style energy crisis. Considering the fact that the U.S. economy was already on incredibly shaky ground even before the oil leak, the last thing we needed was a disaster of this magnitude. But it has happened, and the reality is that the long-term effects of this crisis are potentially going to reverberate for decades.
The American people certainly have a negative view on the impact that this oil spill will have on the economy. According to a new poll, about eight out of every 10 Americans expect the oil spill to damage the U.S. economy and drive up the cost of gas and food.
But is a new 1970s-style energy crisis really a possibility?
Could we actually soon be headed for blackouts and gas lines?
Well, former Shell executive John Hofmeister believes that is exactly what we are headed for….
“Within a decade I predict the energy abyss looks like brownouts, blackouts and gas lines.”
In fact, Hofmeister claims that some of his fellow energy industry insiders expect things to be even worse than he is projecting in the years ahead.
Hofmeister says that the problem is the U.S. government….
“Our federal government, when it comes to energy and the environment, is dysfunctional, it’s broken, and it’s unfixable in its current form.”
Without a doubt, the oil spill will have a chilling effect on offshore drilling. But does that mean that we are going to be facing a shortage of oil in the future?
Well, that is what the advocates of peak oil would have us believe.
But the truth is that there are actually a TON of untapped reserves throughout the United States that could provide everything that we need for decades and more.
Nobody is really supposed to talk about it, but the reality is that there are massive deposits of oil in Alaska, the Colorado Rockies and in the Bakken formation in Montana and the Dakotas that are larger than anything found in Saudi Arabia.
So we will only have an “energy crisis” if that is what oil industry insiders and the U.S. government want.
You see, the oil industry likes to keep the supply of oil down because it means much larger profits for them, and these days the folks in Washington D.C. like anything that causes the U.S. public to use less oil, so higher energy prices are just fine with them.
In fact, rather than focusing on getting the crisis in the Gulf solved, Barack Obama has been exploiting this oil spill to really push his economy-killing climate bill. It seems like Barack Obama would do just about anything to foist his “cap and trade” carbon tax scheme on the American people.
Energy issues aside, the impact that this oil spill is having on other areas of the Gulf coast economy is very significant.
For example, the Gulf oil spill is absolutely playing havoc with real estate prices in the region.
Real estate agent Linda Henderson recently put it this way….
“I can tell you that things have pretty much dropped to dead.”
After all, who is going to pay top dollar for beachfront property down there at this point?
Not only that, but obviously the oil spill is devastating the seafood industry in the Gulf as well.
The Wall Street Journal recently reported that the average wholesale price for Gulf brown shrimp has jumped by more than half since the crisis began.
In addition, oyster prices are up 33% since the beginning of the oil spill, and as oil continues to spew into the Gulf of Mexico the price increases are only going to become more dramatic.
In fact, many are wondering if the seafood industry in the Gulf will ever recover from all of this.
The truth is that fishermen in Cordova, Alaska are still struggling 21 years after the 1989 Exxon Valdez oil spill devastated the fishing industry in that area.
Some local shrimpers in Louisiana are already predicting that it will be seven years before they can set to sea again, but even that actually may prove to be too optimistic.
Some scientists are warning that the massive quantities of methane that are being spewed into the Gulf of Mexico from the “oil volcano” could create “dead zones” where oxygen is so depleted that literally nothing lives.
So if the oil continues to flow for several more months could very large portions of the Gulf of Mexico become dead zones?
That is a legitimate question at this point.
In addition, the oil spill in the Gulf of Mexico is completely destroying tourism along the Gulf coast.
The truth is that nobody wants to visit places where the beaches are coated with oil and where breathing the air makes your kids want to gag.
Public Service Commissioner Benjamin Stevens recently described what this is going to mean for beaches in his area….
“You get hit by a hurricane and you can rebuild. But when that stuff washes up on the white sands of Pensacola Beach, you can’t just go and get more white sand.”
Hotel Owner Dodie Vegas was even more blunt in describing what this crisis means for her business….
“It’s just going to kill us. It’s going to destroy us.”
But not everyone has been ruined economically by this oil spill.
In fact, it turns out that BP CEO Tony Hayward cashed in about a third of his BP stock one month before the well on the Deepwater Horizon exploded.
Not only that, it has been revealed that Goldman Sachs sold 58% of its shares in BP between January and March of this year.
Isn’t it amazing how the elite always seem to have such perfect timing?
Even if Tony Hayward resigns as a result of this crisis, he is going to get a 10.8 million pound ($16 million) golden parachute.
No, the true losers in all of this are going to be those living along the Gulf of Mexico who have had their lives, their businesses and the beautiful environment around them destroyed.
We are literally watching an entire region of America slowly die, and Barack Obama still refuses to accept any of the international assistance that is being offered.
If what is happening in the Gulf of Mexico is not enough to get the American people angry, then what will? This crisis has been so badly mismanaged that it is absolutely mind blowing. Let’s just hope that someone can find a way to stop the oil soon.
As the crisis in the Gulf of Mexico enters a third month, many are now asking how in the world Barack Obama can keep refusing offers from other countries to help clean up the oil spill. The truth is that cleaning up oil spills is not rocket science. There have been massive oil spills in other areas of the world before and there are some folks that have some real expertise when it comes to cleaning them up. But Barack Obama and BP have been stumbling around as if they are trying to reinvent the wheel. So exactly what in the world is going on here? When it comes to Obama’s approach to this crisis, there are really two options. Either this is one of the most extreme examples of presidential incompetence in modern American history, or Barack Obama is using this crisis for a particular purpose (such as advancing a particular agenda). In either event, Obama’s actions during this crisis have been completely and totally unconscionable.
The truth is that 13 different countries have offered to help clean up the oil in the Gulf of Mexico.
Barack Obama turned all 13 of them down.
So let’s get this straight….
We are dealing with the greatest environmental disaster in U.S. history by far, and yet we completely refuse any assistance?
What kind of insanity is that?
In fact, it is being reported that just three days after the Deepwater Horizon sank to the floor of the Gulf of Mexico the Dutch government contacted Barack Obama and offered to loan BP ships outfitted with special oil-skimming booms. In addition, the Dutch had a plan to quickly build sand barriers to protect the vulnerable marshlands along the Louisiana coast.
Needless to say, those plans were not implemented.
According to one Dutch newspaper, the European oil companies that offered to help said that they could have completely cleaned all of the oil from the Gulf of Mexico in just four months.
But now Obama is telling us that the crisis in the Gulf of Mexico could last for years.
So what would keep Barack Obama from accepting international offers of help?
Well, Obama is using something called “the Jones Act” as an excuse.
Howard Portnoy recently described what is going on this way….
In order to accept the offers, which have come from Belgian, Dutch, and Norwegian firms that claim to possess some of the world’s most advanced oil skimming ships, Obama would need to waive the Merchant Marine Act of 1920 (P.L. 66-261). Also known as the Jones Act, the law requires essentially that all commercial acts conducted in U.S.-controlled waters be performed by “U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens and U.S. permanent residents.”
So why not simply waive the act? Other presidents have under similar circumstances. George W. Bush waived the Jones Act following Hurricane Katrina, allowing foreign ships into Gulf waters to aid in the relief effort.
The truth is that the Jones Act is not a barrier to receiving assistance at all and Barack Obama knows this.
There would be absolutely no problem with waiving the Jones Act in these circumstances.
So Barack Obama has no excuse.
Either he is completely and totally incompetent or he has been trying to make this crisis worse than it should be.
You see, this is not the first catastrophic oil spill in the history of the world. There have been others, and we have learned quite a bit about cleaning up oil from those events. Anthony G. Martin recently described what happened during one particularly brutal oil spill in 1993 and 1994….
In 1993 and ’94 the Saudis faced an oil spill of historic proportions in the Arabian Gulf as four leaking tankers and two oil gushers threatened to spur a catastrophic event that was 65 times worse than the Exxon-Valdez spill.
An American engineer, Nick Pozzi, was part of a task force charged with developing a solution to the looming disaster.
Pozzi had used various methods to clean up oil spills prior to this event. However, the time was short, and an effective solution was needed post-haste.
That’s when Pozzi decided that the huge, empty oil tankers, sitting in the dock, could be used to simply vacuum up the oil right off of the top of the water.
The result was that 85% of the oil was recovered.
In a recent interview with Esquire, Pozzi explained that cleaning up the oil in the Gulf of Mexico should not be that complicated….
Keep in mind that what supertankers typically do is they sit in the middle of the ocean waiting for all the traders to come up with the right price. When they feel that the price is right, the tankers that are full, they take off, and they can be anywhere in the world in a few days. Right now there are probably 25 supertankers, waiting for orders, full of oil. So all they got to do is come to Texas, in the Gulf, unload the oil, and then turn around and suck up all this other stuff and pump it onto shore into on-shore storage. It’s not rocket science. It’s so simple.
So why won’t Barack Obama and BP implement the “supertanker method”?
When asked about it they just brush it off.
Are they that incompetent?
Or is something else going on?
If this crisis had been handled properly, oil would not currently be blanketing our pristine Gulf coast beaches.
An increasing number of Gulf coast residents have become so frustrated that they have decided to take it upon themselves to stop the oil that is headed towards their homes and businesses.
But BP and the Obama administration have been running around trying to keep anyone else other than themselves from doing anything about this oil spill. In fact, Barack Obama has authorized the deployment of more than 17,000 National Guard members along the Gulf coast to be used “as needed” by state governors, and BP is being allowed to use private security contractors to keep the American people away from the oil cleanup sites.
If they used as much energy cleaning up the oil as they are in keeping the American people away from the spill they might actually be accomplishing something.
Meanwhile, CBS News is reporting that there could be as much as 1 billion barrels of oil under the damaged BP oil well in the Gulf of Mexico and that it could keep flowing for more than a decade.
Apparently BP made one of the biggest oil discoveries in history, but the problem is that oil is now coming out of there at such high pressure that we simply do not have the technology to control it.
In addition, experts have discovered a massive gas bubble which is estimated to be 15 to 20 miles across and “tens of feet high” under the floor of the Gulf of Mexico.
So what in the world is going to happen if that thing blows?
Also, there are reports of fissures and cracks appearing on the ocean floor around the damaged wellhead.
If this thing goes from a “leak” to an “eruption” it could be a catastrophe beyond anything any of us could even imagine.
So let’s hope that nothing like that happens.
But there is another very serious threat that we need to keep an eye on.
Some environmentalists are now warning that North America could be facing years of toxic rain because of the highly toxic chemical dispersants that BP is using to control the Gulf of Mexico oil spill. Because it is so poisonous, the UK’s Marine Management Organization has completely banned Corexit 9500, so if there was a major oil spill in the UK’s North Sea, BP would not be able to use it. So BP really needs to start explaining why they are dumping so much of it into the Gulf of Mexico – especially since so much of it could end up raining down on us.
Meanwhile, Barack Obama and Joe Biden are busy playing golf and BP chief executive Tony Hayward has been busy watching his yacht race.
Well, considering the fact that Tony Hayward is set for a massive 10.8 million pound ($16 million) payout if he chooses to step down, perhaps he is not too concerned about exactly how things turn out.
As for Barack Obama, his main concern in all this seems to be advancing his climate agenda. During a recent interview, Obama directly compared the current crisis in the Gulf to 9/11, and indicated that he believed that it would fundamentally change the way that we all look at energy issues from now on. But the truth is that cleaning up the oil in the Gulf has nothing to do with the “cap and trade” carbon tax scheme that Obama is trying to foist on all of us.
What Obama needs to do is to accept all the help that is being offered, get everybody working together on cleaning up this mess, and find a way to stop all that oil from coming out of the ground.
Until he makes some progress on those things, the American people are not likely to want to hear the first thing about all of the new taxes, rules and regulations that he is so eager to impose on all of us.
The Gulf of Mexico is literally being destroyed, and already this disaster has been so horrific that the effects will be felt for decades. If Barack Obama cares one ounce about the American people he needs to start doing his job instead of playing politics with this crisis.
There is one question that I would really like an answer to. Who died and made BP king of the Gulf of Mexico? In recent weeks, BP has almost seemed more interested in keeping the American people away from the oil spill than in actually cleaning it up. Journalists are being pushed around and denied access, disaster workers are being intimidated and abused and now BP has even go so far as to hire an army of private mercenaries to enforce their will along the Gulf coast. Are we suddenly living in occupied Iraq? How in the world did a foreign oil company get the right to start pointing guns at the American people? The last time I checked, BP did not own the Gulf of Mexico and did not have the right to tell the American people where they can and cannot go. The truth is that BP could have avoided all of this by running an open, honest and transparent operation from the start. They could have welcomed help from all sources, they could have tried to be open with the media, and they could have tried to be fair with the volunteers and rescue workers. But instead BP has been conducting this whole thing as if we are living in a totalitarian dictatorship and they are the dictators.
Over the last several weeks, members of the mainstream media attempting to cover the oil spill in the Gulf of Mexico have been yelled at, harassed, kicked off public beaches and threatened with arrest. The Obama administration keeps promising “to improve media access”, but so far their promises haven’t seemed to make much difference. In fact, a recent AP report detailed several recent highly disturbing incidents of journalist intimidation….
On June 5, sheriff’s deputies in Grand Isle threatened an AP photographer with arrest for criminal trespassing after he spoke to BP employees and took pictures of cleanup workers on a public beach.
On June 6, an AP reporter was in a boat near an island in Barataria Bay when a man in another boat identifying himself as a U.S. Fish and Wildlife employee ordered the reporter to leave the area. When the reporter asked to see identification, the man refused, saying “My name doesn’t matter, you need to go.”
According to a June 10 CNN video, one of the network’s news crews was told by a bird rescue worker that he signed a contract with BP stating that he would not talk to the media. The crew was also turned away by BP contractors working at a bird triage area — despite having permission from the U.S. Fish and Wildlife Service to enter the facility.
On June 11 and 12, private security guards patrolling in the Grand Isle area attempted repeatedly to prevent a crew from New Orleans television station WDSU from walking on a public beach and speaking with cleanup workers.
But it is not just the media that are being pushed around. The Louisiana Environmental Action Network is reporting that BP is actually threatening to fire fishermen hired to help with the oil spill cleanup for using respirators and other safety equipment that wasn’t provided by the company.
The workers say that they are only using their own safety equipment because BP has not provided what they need. It is a fact that a large number of rescue workers have already gotten sick enough to be admitted to the hospital, so it certainly makes sense that those working to clean up the oil would want to do whatever they can to stay safe.
But no, BP has to be a bunch of jerks about the whole thing.
Even the EPA says that workers need to be careful. Hugh Kaufman, a senior policy analyst at the EPA’s office of solid waste and emergency response, made the following statement during an interview on Thursday….
“There’s no way you can be working in that toxic soup without getting exposures.”
It’s not just the oil that is the problem. The chemical dispersants that BP is using in the Gulf are even more toxic than the oil. In fact, because it is so extremely toxic, the UK’s Marine Management Organization has completely banned Corexit 9500, so if there was a major oil spill in the North Sea, BP would not be able to use it.
But the Obama administration has allowed BP to dump over a million gallons of Corexit 9500, Corexit 9527 and other highly toxic dispersants into the Gulf of Mexico.
Apparently the truth is that BP would rather disperse the oil so that the spill doesn’t look so bad even if it means creating an ecological disaster of nightmarish proportions.
You see, these days BP does what it wants, and anyone who doesn’t like it gets pushed out of the way.
Monique Harden, the co-director and attorney at the New Orleans-based Advocates for Environmental Human Rights, is so outraged over BP’s behavior that she recently made the following statement….
“BP should not be running the Gulf region like a prison warden, and we’ve got to stop that.”
But rather than becoming more open and taking responsibility for their actions, BP has now hired private security contractors to keep the American people away from the oil cleanup sites.
In other words, BP has brought in a horde of private mercenaries (just like the U.S. uses in Iraq and Afghanistan) to muscle the American people around.
Yeah, we are really going to appreciate that.
Doesn’t BP understand that the American people do not respond well to this kind of nonsense?
In fact, it is being alleged that BP has actually attempted to manipulate the search results on sites like Google and Yahoo.
They seem absolutely obsessed with controlling what we see and think.
Perhaps what BP should be obsessed with is stopping the oil from shooting out of the ground.
Meanwhile, BP execs are busy testifying in front of Congress and making half-hearted apologies.
Carl-Henric Svanberg, the BP chairman, has even apologized for referring to those affected by the Gulf of Mexico oil spill as “small people”.
Isn’t that nice of him?
While all of this is going on, BP is already trying to ensure that things go their way legally. Back in May, BP requested that one particular judge be assigned to preside over all lawsuits related to the spill. Well, it turns out that this particular judge gets tens of thousands of dollars a year in oil royalties and is paid travel expenses to attend oil industry conferences.
Isn’t that convenient?
But that is how the game is played these days.
Meanwhile, the “oil volcano” on the bottom of the Gulf of Mexico continues to pump out a nightmarish amount of oil every single day. BP is even admitting that oil is escaping from the leak at such high pressure that if they try to cap it the entire well may blow.
So this crisis may keep getting worse for months.
By the time this is over, will anything in the Gulf be left alive?
Even now, hordes of dolphins, fish, sharks, crabs, rays and other sea creatures find themselves trapped between the rapidly advancing oil and the shore. Unprecedented numbers are showing up just off the Gulf coast in an attempt to escape certain death, but once the oil reaches shore there will be nowhere else for them to go. The tragedy will be unspeakable.
Things did not have to turn out this way. BP and the Obama administration could have done things much differently. But they didn’t.
Now we all have to live with the results.