Barack Obama has issued a brand new executive order that establishes a White House Rural Council. This Rural Council has been given the task of developing “public-private partnerships” that will seek to bring the “economic prosperity” of our big cities to rural America. In other words, the U.S. government and the big corporations are going to team up to dominate the economies of our small towns and rural communities just like they dominate the economies of all of our big cities. So should those that live in rural America be excited about this? After all, the U.S. government and the big corporations have done such a great job of bringing “economic prosperity” to places like Detroit, Michigan and Camden, New Jersey. Won’t it be great to have the federal government come in and tell rural communities how they should be doing things?
The chair of the White House Rural Council will be Agriculture Secretary Tom Vilsack. Vilsack is a former governor of Iowa and a Democrat. Swing states like Iowa will be key in 2012, and so perhaps Obama is trying to show that he really cares for middle America.
But it is really hard to forget the remarks that Obama made about rural Americans during the 2008 campaign.
In particular, the following quote about the “bitterness” of those living in rural America got a lot of attention at the time….
“And it’s not surprising then they get bitter, they cling to guns or religion or antipathy to people who aren’t like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations.”
Look, the vast majority of the people who live in rural America do not want to hear that they need to let go of their guns or their religion.
And most of them certainly do not want the federal government to come in and tell them how to run their local economies.
Though rural communities face numerous challenges, they also present enormous economic potential. The Federal Government has an important role to play in order to expand access to the capital necessary for economic growth, promote innovation, improve access to health care and education, and expand outdoor recreational activities on public lands.
To many Americans, all of this will sound really great. The federal government is going to come in and help the “backwoods folk” catch up with the rest of us. What could be wrong with that?
Well, the truth is that whenever the federal government gets its fingers into something it tends to really mess it up. Many of the biggest problems our country is facing today can be traced directly back to Washington D.C.
Many small towns and rural communities are doing just fine without the interference of the federal government. In fact, large numbers of Americans have purposely moved out to rural areas because they don’t want the interference of the federal government in their lives.
But according to this new executive order, the Obama administration plans to stick its itchy little fingers into just about every aspect of rural life. One of the stated goals of the White House Rural Council is to do the following….
coordinate and increase the effectiveness of Federal engagement with rural stakeholders, including agricultural organizations, small businesses, education and training institutions, health-care providers, telecommunications services providers, research and land grant institutions, law enforcement, State, local, and tribal governments, and nongovernmental organizations regarding the needs of rural America
This is yet another example of how we are rapidly becoming a centrally-planned economy.
Today, there are way too many Americans that expect the federal government to solve all their problems and take care of them from birth to death.
But that is not what our founding fathers intended, and our federal government has become so corrupt and so incompetent that it could not do those things even if we wanted it to.
Before the federal government “fixes” the problems of rural America, perhaps it should focus on “fixing” many of the other problems it has created first….
*Growing numbers of military veterans cannot find jobs once they leave the U.S. military. In fiscal 2008, the Pentagon spent $450 million on unemployment benefits for military vets. In fiscal 2010, the Pentagon spent almost twice as much – $882 million. According to the U.S. Bureau of Labor Statistics, the unemployment rate for military veterans between the ages of 18 and 24 is more than 30%.
*The housing collapse that the Federal Reserve and the U.S. government caused is a nightmare that never seems to end. According to the New York Times, at the current pace it will take 62 years for the banks to repossess all of the homes that are in severe default or foreclosure in the state of New York.
*The recent commodity price increases caused by the Federal Reserve have resulted in much higher prices at the gas pump and at the grocery store. These higher prices are hitting the poor and the lower middle class much harder than they are hitting the wealthy.
*The federal government has piled up the biggest debt in the history of the world and the U.S. dollar is dying. Standard & Poor’s has altered its outlook on U.S. government debt from “stable” to “negative” and is warning that the U.S. could soon lose its prized AAA rating. Russian presidential economic adviser Arkady Dvorkovich says that his nation is going to keep dumping U.S. government debt. China has been dumping U.S. government debt. The entire U.S. financial system is on the verge of financial collapse and the federal government seems to be powerless to make any meaningful changes.
But instead of fixing the glaring problems that are staring them directly in the face, the control freaks and the bureaucrats in Washington D.C. seem obsessed with figuring out more ways to interfere in our lives.
Over the past couple of months, bad economic news has been pouring in almost constantly. Our economy appears to be in danger of breaking apart. We are in the midst of a horrific economic crisis and nobody is sure what is going to happen next.
So please excuse the good folks of rural America if they are not in the mood to put up with federal government interference in their communities.
The federal government has failed so dramatically so many times before that it is really hard to have any faith that the federal government can do much of anything right at this point.
Well, it’s official. U.S. stock prices have fallen for six weeks in a row. So will next week make it seven? The last time stocks declined for seven weeks in a row was back in May 2001 when the “dot-com” bubble was bursting. At this point, the Dow has declined by approximately 5 percent since the beginning of June. Things don’t look good. So exactly what is going on here? Well, it is undeniable that the recent mini-bubble in stocks has been too good to be true. The S&P 500 had surged nearly 30 percent since last September. Much of this has been fueled by the Federal Reserve’s latest round of quantitative easing, but now that is coming to an end in a few weeks and investors are a bit spooked. Meanwhile, wars and revolutions are sweeping the Middle East, Japan is dealing with the damage caused by the tsunami and by Fukushima, Europe is trying to figure out how to bail out Greece again and the U.S. debt crisis is continually getting worse. In addition, wave after wave of bad economic news is certainly not helping the mood on Wall Street. In many ways, a “perfect storm” is developing and many are now extremely concerned about what the rest of 2011 is going to bring for Wall Street.
QE2 is slated to conclude at the end of June, and many investors are deeply disappointed that it does not appear that we are not going to see QE3 right away. Many fear that the end of quantitative easing will pop the current mini-bubble in stocks and commodities. At the moment, financial markets are more jittery than they have been in a long time.
“There’s a lot of emotion in this market at the moment, and the conversations among traders are nearly all leaning toward the bear side”
So what are some of the signs that this downturn on Wall Street may turn into a full-blown crash?
Well, according to the Wall Street Journal, junk bonds are being sold off at an alarming rate right now. Does the following quote from the Journal remind anyone of 2008 at least a little bit?….
A steep decline in prices of bonds backed by subprime mortgages has spread through the riskiest segments of the credit markets, ending rallies in high-yield corporate bonds and commercial real-estate debt.
Also, many of the big Wall Street banks are already laying off workers. In a previous article I wrote about the potential for Wall Street to go into “panic mode“, I noted that Goldman Sachs, Bank of America, JPMorgan Chase and Morgan Stanley are all laying people off or are considering staff cuts.
The truth is that the big banks on Wall Street are not nearly as stable as most people think that they are. Moody’s recently warned that it may downgrade the debt ratings of Bank of America, Citigroup and Wells Fargo.
Another major story on Wall Street right now is oil. OPEC recently announced that oil production levels will not be raised, even though the price of oil has been hovering around $100 a barrel.
World oil supplies are very tight right now. In fact, the globe actually consumed 5 million barrels per day more oil than it produced during 2010. This was possible because the difference was apparently made up by drawing down reserves.
But if oil supplies are this tight already, what is going to happen if a major war (as opposed to all of the minor wars that are already happening) erupts in the Middle East?
The world is sitting on the edge of a financial disaster.
It is important to keep in mind that Europe is also in far worse financial condition than it was just prior to the financial collapse of 2008.
It is being reported that German finance minister Wolfgang Schaeuble is convinced that a “full-blown” financial meltdown by Greece is a very real possibility. The cost of insuring Greek debt has soared to a brand new record high, and officials all over Europe are in panic mode.
But financial problems are not just happening in Greece. The largest bank in France has just cut in half the amount of cash that customers can withdraw from ATMs each week.
Most Americans don’t spend much time thinking about the financial condition of Europe, but the truth is that what happens in Europe is going to play a major role in the months and years ahead.
Of course most Americans already know that the U.S. government is a financial mess.
As the “debt ceiling deadline” of August 2nd draws closer, the U.S. government has been raiding retirement funds in order to stay under the debt limit.
Many investors are quite nervous about what may happen if the U.S. government actually does start defaulting on debt on August 2nd.
Others claim that the U.S. government is already in default.
The only Chinese agency that gives credit ratings on sovereign debt says that the U.S. government “has already been defaulting” and the Chinese government has been repeatedly warning that the U.S. needs to get its finances in order.
In any event, this debt ceiling drama will get resolved one way or another.
The bigger question is this….
How is the U.S. government going to respond when the next financial crash happens?
Back in 2008, the Federal Reserve and the U.S. government took unprecedented steps to prop up Wall Street.
But can they really do that again if we see another major crash in 2011 or 2012?
Many believe that things will be totally different this time around. Just check out what Jim Rogers recently told CNBC….
“The debts that are in this country are skyrocketing,” he said. “In the last three years the government has spent staggering amounts of money and the Federal Reserve is taking on staggering amounts of debt.
“When the problems arise next time…what are they going to do? They can’t quadruple the debt again. They cannot print that much more money. It’s gonna be worse the next time around.”
Jim Rogers is right about that.
The next time we see a collapse on the scale of 2008 it is going to be a much bigger mess.
Global financial markets are extremely vulnerable right now and there are a whole host of potential “tipping points” which could push them over the edge.
The Federal Reserve and the U.S. government more or less used up all of their ammunition on the 2008 crisis.
If we see another collapse in 2011 or 2012 there is not going to be much of a safety net available.
The entire world financial system is simply swamped with way too much debt. The world has never seen anything even remotely close to the gigantic mountains of debt that have been accumulated around the world today.
The current global financial system is not sustainable. More crashes are inevitable. A lot of people are going to get steamrolled.
As the U.S. economy collapses, the thin veneer of civilization that we all take for granted is going to begin to disappear. In fact, there are already an increasing number of signs that the collapse of society is accelerating. In cities such as Chicago, roving packs of young people are “mob robbing” local businesses, randomly assaulting tourists and shoppers and are even pulling people out of vehicles. This isn’t just happening in the “bad areas” anymore. Over the past couple of months this type of crime has been common in some of the wealthiest areas of Chicago. In fact, many Chicago residents are now referring to “the Magnificent Mile” as “the Mug Mile”. But it isn’t just in Chicago that this is happening. During this past Memorial Day weekend, cities all over the United States experienced a stunning wave of mass violence. We are supposed to be an “example” for the rest of the world, but as our economic wealth crumbles we are witnessing the collapse of society all around us. So what is going to happen when the economy gets even worse?
The United States used to be a fairly civilized society. But now very few people seem to care how they treat others. That is even the case with our own government. As you will see below, the government is now sending SWAT teams in and dragging people out of their homes over unpaid student loans.
So if the government is going to be so brutal, what kind of message does that send to our young people?
Today our young people are facing a future that looks incredibly bleak. It is hard to have faith in the “system” when the “system” simply does not work any longer.
What are you supposed to say to a young person when you know very well that there are no jobs and that there is very little hope?
Most Americans don’t understand what is causing the collapse of the economy, but most of them do have a sinking feeling that something has seriously gone wrong.
For the last few years the American people have waited patiently for our politicians to “fix things”, but they have not gotten the job done.
Instead, our economic situation is still declining.
So now frustration is starting to boil over, and it is only going to get worse.
The following are 18 signs that the collapse of society is accelerating….
#1 In a brand new article, Janet Tavakoli has vividly described the wave of shocking violence that is currently sweeping the city of Chicago. What she says is happening to Chicago right now is beyond alarming….
This year, all hell has broken loose in downtown Chicago. Years of under-hiring have resulted in a police force that is unprepared for wildings and gang violence. Moreover, concealed carry in Chicago is illegal, unless one follows the Constitution.
Tourists and residents have been attacked by mobs of youths on buses, on beaches, on bicycle paths, near the shops of the Magnificent Mile, and outside their homes. Mobs of shoplifters plagued “Mug Mile” stores.
Terror has descended on many of the wealthiest areas of Chicago. Some are even calling on Chicago residents to completely avoid areas like the Magnificent Mile during the weekends until more police are brought in.
Mobs of young people are “swarming” retail stores, assaulting shoppers and pedestrians and even pulling people out of their cars.
The following is one eyewitness account of the “wildings” in Chicago that Tavakoli included in her recent article….
At about 11pm last Friday night, June 3rd, I heard shouting, screaming, horns blaring and tires screeching from my apartment…When I looked out my window to the street below I saw a crowd of about 20 young people…directly across the street from the entrance to my building. They were leaning on parked cars and clogging the street. They were screaming at people walking and driving by. I watched them stop vehicles, including taxi cabs, and pull people from the vehicles…It was a frightening scene and I was sure someone was going to be hurt.
#2 If you don’t pay your student loans you may find yourself getting dragged out of your home by a SWAT team.
You doubt this?
The following is how an article in The Daily Mail recently described one recent SWAT team raid in California that was apparently ordered by the Department of Education….
A father was dragged from his home and handcuffed in front of his children by a SWAT team looking for his estranged wife – to collect her unpaid student loans.
A stunned Kenneth Wright had his front door kicked in by the raiding party at 6 am yesterday before being dragged onto his front porch, handcuffed and led to a police car with his three children.
He says he was then detained for six hours while officers looked for his wife – who no longer lives at the house.
#3 One town in Connecticut was forced to shut down a beautiful new fountain because too many people were using it as a toilet.
#4 This most recent Memorial Day weekend, cities all over America literally turned into war zones. There were reports of mass violence in Miami, New York, Chicago, Charlotte, Myrtle Beach, Nashville and Boston among other places.
If you want to see video of some of the violence in Miami as it was happening, you can view it here. The video is quite disturbing so please don’t let any small children view it.
#5 One of the hottest books in America right now is a “children’s book” entitled “Go The F*k To Sleep“.
#7 In New York City, one 32-year-old man was recently charged with sexually assaulting an 85-year-old woman.
#8 Democratic strategist James Carville recently made national headlines when he told talk show host Don Imus the following….
“You know, look — this is a humanitarian — you know, you’re smart enough to see this . . . People, you know, if it continues, we’re going to start to see civil unrest in this country. I hate to say that, but I think it’s imminently possible.”
#9According to one new study, the percentage of U.S. households that contain a married couple with children has fallen from 44.3% in 1960 to 20.2% today.
#10 In Atlanta, two dozen teens recently violently assaulted two Delta flight attendants on a train for no apparent reason. The following is how a local Atlanta newspaper described the attacks….
Their “Clockwork Orange” style blitz was over soon after it began. The teens boarded the train, headed to Hartsfield-Jackson International Airport, at the Garnett station a little after midnight seemingly intent on instilling fear. They succeeded.
“There was blood everywhere, people were hollering and screaming,” a witness told Channel 2 Action News. “We were intimidated. People were terrified. People were trying to run. But there was nowhere to run.”
#11 Federal prosecutors in Indianapolis have announced that they have broken up one of the largest child pornography rings ever discovered. It was based in Bloomington, Indiana.
Are any small towns still safe?
#12 Barack Obama’s food safety chief is defending armed raids of raw milk producers (including a raid on an Amish farmer) and he says that the FDA will “keep doing our public health job“.
#13 In Florida, a 45-year-old Polk County sheriff’s deputy has been charged with strapping children to a desk and spanking them with sex toys.
#14 In Sioux City, Iowa a 41 year old man recently walked into the office where his boss worked and beat the living daylights out of him. The boss suffered four chipped teeth and needed surgery to repair his nose. Apparently the boss was planning to fire the man.
#15 A 20-year-old woman in Oklahoma has been charged with killing the family cat and using the blood as part of a costume she planned to wear to a Lady Gaga concert.
#16 McDonald’s recently held a “National Hiring Day” and about a million Americans showed up to apply for jobs at McDonald’s restaurants all around the nation. Well, in Cleveland a horrible fight broke out between some girls and it ended up with three people being run over by a car. You can view video of this incident right here. Please do not watch the video if you are sensitive to graphic violence.
#17 All over the United States, vicious restaurant brawls have been erupting with alarming frequency and many of them are being posted up on YouTube for the world to see. You can see one example of this phenomenon right here.
#18 From coast to coast, “mob robbing” has become a very disturbing trend.
So what is a “mob robbing”?
Well, basically dozens of young people storm into a store together, grab whatever they want, and storm back out again.
So does anyone still doubt that we are starting to see the collapse of society?
Sadly, things are going to get a whole lot worse.
In response to a recent article entitled “The Coming Economic Hell For American Families“, a frequent commenter on my site known as “El Pollo De Oro” left the following comment about the collapse of society that is beginning to unfold….
Yes, it’s going to be VERY violent in The Banana Republic of America. Carjacking, kidnapping, drug trafficking, armed robbery and murder for hire will be major growth industries in the BRA when millions of formerly middle class Americans, now the neo-poor/neo-peasants, become increasingly desperate. The horrifying violence in Mexico will become a fact of life on this side of the border, the brutal kidnappings of the Philippines and Papua New Guinea will plague the BRA as well. Formerly middle class Americans who find themselves living in shantytown slums won’t like their new accommodations, and many of them will turn to violent crime in the hope of improving their miserable circumstances.
The truth is that about the only thing keeping our society together has been the unprecedented affluence that we have been enjoying over the past few decades.
Once that affluence is gone, the true character of the American people will come out, and we may not like what we see.
That is one reason why I pound on the economic crisis this nation is facing day after day. Once our wealth is gone, there is going to be chaos in the streets of America.
So what are you seeing in your area of the country? Do you see signs that the collapse of society is accelerating where you live? Please feel free to leave a comment with your opinion below….
Tens of millions of American families are about to go through economic hell and most of them don’t even realize it. Most Americans don’t spend a whole lot of time thinking about things like “monetary policy” or “economic cycles”. The vast majority of people just want to be able to get up in the morning, go to work and provide for their families. Most Americans realize that things seem “harder” these days, but most of them also have faith that things will eventually get better. Unfortunately, things aren’t going to get any better. The number of good jobs continues to decline, the number of Americans losing their homes continues to go up, people are having a much more difficult time paying their bills and our federal government is drowning in debt. Sadly, this is only just the beginning.
Since the financial collapse of 2008, the Federal Reserve and the U.S. government have taken unprecedented steps to stimulate the economy. But even with all of those efforts, we are still living in an economic wasteland.
So what is going to happen when the next wave of the economic crisis hits?
If you look at the economic relapse that’s going on right now, look at Friday’s abysmal job numbers, look at the housing numbers, understand that all of this is taking place with record monetary and fiscal stimulus. What happens if we remove those supports?
At the end of June, the Federal Reserve’s quantitative easing program is slated to end. The U.S. Congress and state legislatures from coast to coast are talking about budget cuts. The amount of borrowing and spending that has been going on is clearly unsustainable, but will the U.S. economy start shrinking again once the current “financial sugar high” has worn off?
Already, all sorts of bad economic news has been coming out and all kinds of economic indicators are turning south. The American people are becoming increasingly restless. One new poll has found that 59 percent of the American people disapprove of Barack Obama’s handling of the economy (which is a new high). According to another recent poll, 63% of Americans say that they feel “not good” or “bad” about how the U.S. economy is performing.
If most Americans had good jobs, could afford their mortgages and could pay their bills, the economy would not be such a big issue.
Unfortunately, times are really tough for American families right now and they are about to get a lot tougher.
*Jobs*
The official unemployment rate just went up to 9.1 percent, but that figure only tells part of the picture.
There are some areas of the country where it seems nearly impossible to find a decent job. Millions of Americans have fallen into depression as they find themselves unable to provide for their families.
According to CBS News, 45.1 percent of all unemployed Americans have been out of work for at least six months. That is a higher percentage than at any point during the Great Depression.
Just two years ago, the number of “long-term unemployed” in the United States was only 2.6 million. Today, that number is up to 6.2 million.
Can you imagine being out of work for 6 months or more?
How would you survive?
Just look at the chart below. What we are going through now is really unprecedented. The average duration of unemployment in this country is now close to 40 weeks….
So will things get any better soon? Well, there were only about 3 million job openings in the United States during the month of April. Normally there should be about 4.5 million job openings. The economy is slowing down once again. Good jobs are going to become even more rare.
There are millions of other Americans that are “underemployed”. All over the United States you will find hard working Americans that are flipping burgers or working in retail stores because that is all they can get right now.
Most temp jobs and most part-time jobs don’t pay enough to be able to provide for a family. But there are not nearly enough full-time jobs for everyone.
Sadly, the number of “middle class jobs” is about 10 percent lower than a decade ago. There are simply less tickets to the “good life” than there used to be.
*Homes*
But without good jobs, the American people cannot afford to buy homes.
Without good jobs, the American people cannot even afford the homes that they are in now.
U.S. home prices have fallen 33 percent since the peak of the housing bubble. That is more than they fell during the Great Depression.
This decline in housing prices has caused a lot of problems.
28 percent of all homes with a mortgage in the United States are in negative equity at this point. There are millions of American families that are now paying on mortgages that are for far more than their homes are worth.
Millions of American families literally feel trapped in their homes. They can’t afford to sell their homes, and if they simply walk away nobody will approve them for new home loans for many years to come.
Many Americans are sticking it out and are staying in their homes until they simply can’t pay for them anymore.
As the number of good jobs continues to decline, the number of Americans that are losing their homes continues to rise.
If the economy slows down once again and millions more Americans lose their jobs this problem is going to get a lot worse.
*Bills*
Even if they aren’t losing their homes yet, millions of other Americans families are finding it increasingly difficult to pay the bills.
Wages have been very flat over the past few years and yet the cost of most of the basics just seems to keep going up and up.
According to Brent Meyer, a senior economic analyst at the Federal Reserve Bank of Cleveland, the cost of food and the cost of energy have risen at an annualized rate of 17 percent over the past six months.
Have your wages gone up by 17 percent over the past six months?
As 2009 began, the average price of a gallon of gasoline in the United States was $1.83. Today it is $3.77.
American families are finding that their paychecks are going a lot less farther than they used to, but Ben Bernanke keeps insisting that we have very little inflation in 2011.
Most Americans don’t care much about economic statistics – they just want to be able to do basic things like take their children to the doctor.
According to one recent survey, 26 percent of Americans have put off doctor visits because of the economy.
Sadly, soon a lot more American families will not be able to afford to go to the doctor.
According to one recent survey, 30 percent of all U.S. employers will “definitely or probably” quit offering employer-sponsored health coverage once Obamacare is fully implemented in 2014.
As the economic situation has unraveled, an increasing number of people are being forced to turn to the federal government for assistance.
So these days when American families can’t feed themselves what do they do?
They turn to the federal government of course.
At the moment, approximately 44 million Americans are on food stamps.
But our federal government cannot afford to spend money like this forever.
According to a recent USA Today analysis, the U.S. federal government took on $5.3 trillion in new financial obligations during 2010. USA Today says that the U.S. government now has $61.6 trillion in financial obligations that have not been paid for yet.
Wow!
Who is going to end up paying that bill?
So with so much bad news, are our leaders alarmed?
Others are not so sure that everything is going to turn out okay.
Recently, James Carville warned that we could literally see rioting in the streets if the economic situation does not turn around soon. Just check out the last part of the video below….
The truth is that America is in decline. Just like with all of the great empires of the past, our empire is starting to crumble too.
A recent article in the Guardian touched on some of the reasons for America’s decline….
The experience of both Rome and Britain suggests that it is hard to stop the rot once it has set in, so here are the a few of the warning signs of trouble ahead: military overstretch, a widening gulf between rich and poor, a hollowed-out economy, citizens using debt to live beyond their means, and once-effective policies no longer working. The high levels of violent crime, epidemic of obesity, addiction to pornography and excessive use of energy may be telling us something: the US is in an advanced state of cultural decadence.
The economic news is only part of the puzzle. This country has rejected the ancient wisdom that was passed down to us and we have rejected the principles of our founding fathers.
We have piled up the biggest mountain of debt in the history of the world and yet somehow we expected that everything would turn out okay.
Well, everything is not going to turn out okay.
All of this debt is going to come down on us like a ton of bricks and the U.S. economy is going to continue to fall apart. Millions of American families are going to lose their jobs and their homes.
The global economy has become so incredibly unstable at this point that it is not going to take much to plunge the world into a horrific economic nightmare. The foundations of the world economic system are so decayed and so corrupted that even a stiff breeze could potentially topple the entire structure over. Over the past couple of months a constant parade of bad economic news has come streaming in from Europe, Asia and the United States. Signs of an impending economic slowdown are everywhere. So what “tipping point” will trigger the next global economic downturn? Nobody knows for sure, but potential tipping points are all around us.
Today, the global economic system is even more vulnerable than it was back in 2008. Virtually none of the systemic problems that contributed to the 2008 collapse have been fixed.
“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis.”
The “financial reform” law that Barack Obama and the Congress passed a while back was a complete and total joke. They might as well have written the law on toilet paper for all the good that it is doing.
We did not learn from our mistakes and our future economic lessons are going to be even more painful.
The world is drowning in a mountain of debt, the global financial system is packed to the gills with toxic derivatives, everyone is leveraged to the hilt and the dominoes could start falling at any time.
I am not the only one that is warning that another financial collapse is coming. In fact, a whole lot of people have been warning about the next financial collapse lately.
So what will the tipping point for the next collapse be?
The following are some potential nominees….
Tipping Point #1: Syria
Syria is a situation to watch very, very closely. The Syrian government is in a lot of trouble right now. Sadly, the instability inside Syria probably makes war with Israel even more likely.
Make no mistake – a war between Israel and Syria has been brewing for a long, long time and at some point it will happen. When it happens, the entire Middle East may erupt in warfare.
Just the other day, a very troubling incident happened in the area around the Golan Heights. The following is an excerpt from a report by The Daily Mail about the incident….
“About 20 pro-Palestinian demonstrators were killed and 325 injured yesterday when Israeli forces opened fire on them as they crossed the border from Syria into occupied territories, according to reports.”
At this point, the Syrian government is probably glad that the attention has been taken off of them at least for a while. The Syrian government has been getting a lot of bad press lately. The following is an excerpt from a recent report by Human Rights Watch about the treatment of protesters inside Syria….
“The methods of torture included prolonged beatings with sticks, twisted wires, and other devices; electric shocks administered with Tasers and electric batons; use of improvised metal and wooden ‘racks'; and, in at least one case documented by Human Rights Watch, the rape of a male detainee with a baton.
“Interrogators and guards also subjected detainees to various forms of humiliating treatment, such as urinating on the detainees, stepping on their faces, and making them kiss the officers’ shoes. Several detainees said they were repeatedly threatened with imminent execution.”
So in light of the “precedent” that we recently set in Libya, does this mean that we will be “forced” to conduct a “humanitarian mission” inside Syria as well?
Syria is one tipping point that we all need to keep a close eye on.
Tipping Point #2: Iran
The Iranian nuclear program is in the news again. A new report by RAND Corporation researcher Gregory S. Jones claims that Iran could have a nuclear weapon within 2 months. His report is based on recent findings by the International Atomic Energy Agency. According to Jones, airstrikes alone would be incapable of stopping Iran’s nuclear weapons program at this point. Instead, Jones says that a “military occupation” would be required.
It is a minor miracle that a war with Iran has not erupted yet. It seems almost inevitable that at some point either the United States or Israel will use military force to try to stop Iran’s nuclear program.
When that happens, it is going to cause a major shock to the global economy.
Tipping Point #3: Libya
NATO has made it abundantly clear that Moammar Gadhafi will no longer be tolerated. In fact, NATO apparently plans to reduce Tripoli to a heap of smoking ruins if that is what it takes to bring about the fall of Gadhafi.
What a “humanitarian mission” we have going in Libya, eh? It turns out that NATO believes that the United Nations gave it permission to bomb television stations and to make attack runs with helicopters.
Russian Deputy Prime Minister Sergei Ivanov recently said that by using attack helicopters, NATO has moved dangerously close to turning the Libya operation into a ground invasion….
“Using attack helicopters, in my view, is the last but one step before the land operation.”
So why is Libya a potential tipping point?
It isn’t because Gadhafi is a threat. He is toast.
It is because the rest of the world is watching what is happening in Libya, and that is raising global tensions.
Even if Gadhafi falls, the Libyan operation will still be a failure because it has brought us all significantly closer to World War III.
Tipping Point #4: More Revolutions In The Middle East
The revolutions throughout the Middle East earlier this year sent oil prices absolutely skyrocketing and they have remained at elevated levels.
And in case you haven’t noticed, revolutions continue to sweep the Middle East.
Have you seen what has been happening in Yemen lately?
Yemeni President Ali Abdullah Saleh has burns over 40% of his body and he has suffered a collapsed lung as a result of a recent attack.
If violence and protests throughout the Middle East become even more intense as the weather warms up this summer that could have a very significant impact on world financial markets.
Tipping Point #5: Fukushima
The mainstream news has gotten a bit tired of covering it, but the situation at Fukushima is still a complete and total disaster.
Japan’s Nuclear Emergency Response Headquarters admitted on Monday that three reactors experienced “full meltdowns” in the aftermath of the earthquake and tsunami in March.
Did it really take them nearly three months to figure this out, or were they lying to the rest of the world all of this time?
The economic impact of the Fukushima disaster is going to continue to unfold over an extended period of time. It turns out that Japan is now officially in a recession. Their economy contracted at a 3.7 percent annualized rate during the first quarter.
Look for more bad economic numbers to come out of Japan for the rest of the year. Considering the fact that the Japanese economy is the third largest economy in the world, the fact that they are struggling so badly right now is not a good sign for the rest of us.
Tipping Point #6: Oil Prices
The price of oil is going to continue to be one of the biggest economic stories for the rest of this year and for 2012 as well.
The last time U.S. energy expenditures were over 9 percent of GDP was in 2008 and we quickly plunged into the deepest economic downturn since the Great Depression.
Well, we have reached the significant 9 percent figure once again in 2011, and many fear that once again high oil prices will cause another major economic decline.
Tipping Point #7: Government Austerity
In the United States, it is not just the federal government that is drowning in debt.
All over America, there are state and local governments that are financial basket cases.
I don’t always agree with the time frames that Meredith Whitney puts out there, but she is absolutely correct that we are going to see a massive municipal bond crisis. The following is an excerpt from a recent report about Whitney’s predictions on CNN….
“Meredith Whitney is issuing a fresh warning to mutual funds, banks, and politicians: The state of state finances is far worse than what you think, or at least than what you’ve been willing to tell the investors and taxpayers who will eventually carry the burden.”
Many state and local governments are attempting to get their budgets balanced by making huge budget cuts. But most of the time these austerity programs also include the elimination of a lot of government jobs.
UBS Investment Research is projecting that state and local governments will combine to slash a whopping 450,000 jobs by the end of next year.
So where will the half a million good jobs come from to replace all of those lost jobs?
Tipping Point #8: The European Sovereign Debt Crisis
Greece is just the tip of the iceberg in Europe.
Moody’s downgraded Greek debt again last Wednesday. This time Moody’s downgraded Greek debt by three levels all the way down to Caa1. At this point, the yield on 10-year Greek bonds is over 15 percent.
The EU has been going crazy trying to deal with the Greek debt crisis. The truth is that a default by the Greek government would be absolutely catastrophic. If you do not understand the kind of chaos a Greek default would set off on world financial markets, just read this editorial.
But Greece is not the only major European nation with a massive debt problem.
Portugal, Spain and Italy are also on the verge of collapse.
So will the EU bail all of these nations out for years and years to come?
At some point will the whole house of cards come crashing down?
Everyone needs to keep watching what is going on in Europe. The status quo is not sustainable and it cannot go on forever.
Tipping Point #9: The Dying U.S. Dollar
The euro is not the only major currency that is in trouble.
The U.S. dollar is also slowly dying.
On April 18th, Standard & Poor’s altered its outlook on U.S. government debt from “stable” to “negative” and warned that the U.S. could soon lose its prized AAA rating.
The sad truth is that faith in the U.S. dollar and in U.S. Treasuries is rapidly declining. The mainstream news is not reporting on it much, but right now the Chinese are rapidly dumping U.S. government debt.
As the dollar declines, so will the purchasing power of average Americans. We are already seeing a tremendous amount of inflation in 2011.
But this is just the beginning.
A lot worse is going to be coming down the road.
Tipping Point #10: Drought
A lot of people that read my articles doubt that we will ever see a major global food crisis.
But one is coming.
It is just a matter of time.
Even now, many areas of the world are experiencing very serious droughts. The following is from a recent Bloomberg article….
Parts of China, the biggest grower, had the least rain in a century, some European regions are the driest in 50 years and almost half the winter-wheat crop in the U.S., the largest exporter, is rated poor or worse. Inventory is dropping 8.8 percent, the most in five years, Rabobank International says. Prices will advance 20 percent to as high as $9.25 a bushel by Dec. 31, a Bloomberg survey of 14 analysts and traders shows.
Are you concerned yet?
You should be.
But if you prefer some mindless pablum that will make you feel better, we have some of that for you too.
“We definitely hit a slower patch, but I think the basic fact that the terrible financial strains we had are abating, remains in place, and I expect this recovery to continue for a substantial period of time.”
Does that make you feel better?
Larry Summers says that everything is going to be okay.
It would be great if Summers was actually right, but sadly he is not.
In fact, the worst economic times that America has ever seen are ahead.
The following is a brief excerpt from a recent interview with Dmitry Orlov about the coming economic collapse that was posted on shtfplan.com….
First you have financial collapse, which is basically the volume of debt that has to be taken on in order for the economy to continue functioning, cannot continue. We’re seeing that right now in Greece, we’re probably going to see that in Japan, we’re definitely at a point now in the United States where even if you raised the income tax to 100 percent, there’s absolutely no way of covering the liabilities of the U.S. federal government. So, we’re at that point now but the workout of the financial collapse is not all quite there. We don’t quite have a worthless currency but that’s in the works.
That, of course, is followed by commercial collapse especially in a country like the United States that imports two thirds of its oil. A lot of that is on credit and if a little bit of that oil goes missing then the economy starts to fall apart because nothing moves unless you burn oil in the United States and, of course, a lot of goods that are sold everywhere are imported again, on credit.
When the U.S. dollar dies and our financial system collapses we are not going to be able to get all of the things that we need from the rest of the world so cheaply any longer.
That is going to cause fundamental changes inside the United States.
Right now, the economic news just seems to get worse and worse, but this is just the beginning.
What is eventually going to happen in this country is going to be so nightmarish that most Americans could not even imagine it right now.
So are our leaders doing anything to prepare for the coming economic crisis?
No, they are too busy with other things.
The big political news of the day was U.S. Representative Anthony Weiner finally admitting that he sent out lewd photos of himself over Twitter to women that he was not married to.
We have become the laughingstock of the world and the economic collapse has not even happened yet.
So many economists and financial pundits seem absolutely shocked that the U.S. economy is slowing down again. It is as if this latest wave of bad economic data has caught them completely by surprise. Now, in the mainstream media we are seeing all kinds of headlines declaring that the U.S. economy is headed for disaster. But anyone with half a brain could have seen this coming. This year alone, we have seen the worst tsunami in Japanese history, the worst U.S. tornado season in recent memory and the worst Mississippi River flooding in decades. In addition, chaos in the Middle East has pushed the price of oil up to very high levels. Of course all of those things were going to have an effect on the economy. In addition, all of the long-term trends that have been destroying the U.S. economy for decades have not been taken a breather. In fact, the truth is that all of our long-term economic problems have been accelerating. So yes, the sky is falling, it is time to panic and the U.S. economy really has fallen and it really can’t get up. It is just that everyone in the mainstream media seems to have believed that Ben Bernanke and Barack Obama would just sprinkle a bunch of fairy dust on the economy and everything would just magically get better. Well, in the real world things simply do not work that way.
Despite an unprecedented debt binge by the federal government and nightmarish money printing by the Federal Reserve, the economic downturn continues to drag on. Andrew Barber, a strategist at Waverly Advisors in Corning, New York recently told CNN the following….
“People are starting to see that this sort of malaise is not just going to go away no matter what you do.”
And “malaise” is a really good word for what we have been experiencing. For those that remember the late 1970s, what we are going through today is similar in a lot of ways.
In particular, we are starting to see some real signs of instability in the financial markets.
When Moody’s downgraded Greek debt again on Wednesday all the way down to Caa1, I was only moderately alarmed. The truth is that everyone knows Greece is a basket case so a debt downgrade wasn’t really all that surprising.
When Moody’s announced that it plans to review the U.S. government’s AAA debt rating “if there is no progress on increasing the statutory debt limit in coming weeks” that got the attention of a lot of people around the world, but it was not totally unexpected. Moody’s is telling Congress that they better raise the debt ceiling or else. A lot more pressure will be applied to Congress before this is over.
Do you all remember what set off the financial panic in 2008?
Do the names “Bear Stearns” and “Lehman Brothers” ring a bell?
Well, right now there are some frightening indications that we may see more trouble at some “too big to fail” institutions.
But will there be any willingness to do more bailouts this time?
Right now the financial markets are closely mirroring their performance just prior to the financial collapse of 2008. One great example of this is these charts which were recently posted by the Financial Armageddon blog. It looks like bank stocks may once again be leading the way down.
Hopefully the financial system can hold together and we won’t have a repeat of 2008 right now, because if it happens it is going to be really messy.
But even without a “financial collapse” we already have all of the economic problems that we can handle.
Robert Brusca, the chief economist at FAO Economics, is being quoted by CNN as saying the following….
“We’ve had a poor economic recovery to begin with, and now it appears to be segueing into an end.”
At this point, U.S. consumer confidence is already lower than it was back in September 2008 when Lehman Brothers collapsed. U.S. consumers are holding on to their money more tightly these days and that is not a good sign for an economy that is so highly dependent on consumer spending.
The latest manufacturing numbers have also been very distressing. Measures of manufacturing activity all over the world are indicating that we have now entered an economic slowdown. This is also similar to what we saw a few years ago.
We should all feel really bad for anyone that is entering the workforce right now. We are in the midst of graduation season, and the only thing that our new graduates have to look forward to is an economic crisis that never seems to end.
I feel sad for yet another year of graduates entering a horrible job market. I recently read, and I think it was in the mainstream media, that only half the 2010 college grads have found jobs of any kind, only half of those have found jobs requiring a college education, and that 85 percent of all grads moved right back in with their parents. The job growth rate is so low that we keep employing fewer and fewer people as a percentage of our adult population. Why isn’t that still a recession?
What a future our college graduates have to look forward to, eh? Moving back in with your parents, a crappy job (if you can find one) and a pile of student loan debt that will crush you financially for decades.
We are always told that “more education” is the answer, but even many of our most highly educated young people can’t find jobs. In fact, it turns out that a third of last year’s law school graduates aren’t even practicing law….
The law school class of 2010 is making news for all the wrong reasons. The budding legal minds who managed to find employment last year have set a new record–only 68.4 percent of them are in jobs that require them to pass the bar exam, the lowest share since the Association for Legal Professionals began collecting data.
Now it looks like the economy is going to starting heading downhill once again.
What is that going to do to the job market?
Last year, only 45.4% of Americans had jobs. That was the lowest figure since 1983.
In some states it was even worse than that. In states like California, Arizona and Mississippi only about 37 percent of people had a job last year.
The economic news just seems to get worse and worse and worse. The American people have been relatively calm over the past several years as they have waited for the promised “economic recovery”, but what do you think is going to happen if we have another major economic downturn and unemployment spikes back up by several more percentage points?
And what in the world can our “leaders” really do to “help” the economy if we do have a repeat of 2008?
We are already running trillion dollar deficits.
The Federal Reserve is already printing money like it is going out of style.
So what would their next moves be?
Most Americans have no idea how fragile our financial system and our economy really are.
Let us hope and pray that things can hold together for as long as possible, because when the next wave of the economic collapse happens it is going to be really, really messy.
As the U.S. economy starts to slow down once again, global financial markets are beginning to tremble. Over the past couple of weeks, all kinds of bad economic news has been pouring in. The ADP jobs report was a “disaster”, the housing numbers are dismal, manufacturing has slowed way down and consumer confidence is dropping like a rock. The Democrats and the Republicans are bickering over the debt ceiling and this is causing a lot of uncertainty as well. All of this bad news is starting to spook investors. On Wednesday, the Dow was down 279 points and the NASDAQ was down 65 points. It was the worst day of the year for the Dow, and many are wondering what is going to happen next if we see even more bad economic data. QE2 is slated to end at the end of the month, and already the bond markets seem to be anticipating QE3. If the U.S. economy enters another significant downturn during the second half of 2011, it seems quite likely that the Federal Reserve would attempt to do something to stimulate the economy and that would probably mean more money printing.
This article is essentially the second part to an article I wrote yesterday about how we are seeing warnings about the next financial collapse all over the place right now. Panic is building and a lot of investors are trying to figure out where to put their money. Suddenly everyone seems a whole lot less optimistic than they were a couple of months ago.
Michael Sheldon, the chief market strategist at RDM Financial, believes that all of the bad economic news we are seeing right now is clear evidence that we are entering an “economic slump”….
“Initially, we just had bad news from the weekly jobless claims data, but now we’re starting to see a broad-based economic slump.”
So what are some of the numbers that have investors so concerned?
Mike Riddell, a fund manager at M&G Investments in London, recently explained to CNBC why he is so alarmed right now….
“US house prices have fallen by more than 5 percent year on year, pending home sales have collapsed and existing home sales disappointed, the trend of improving jobless claims has arrested, first quarter GDP wasn’t revised upwards by the 0.4 percent forecast, durables goods orders shrank, manufacturing surveys from Philadelphia Fed, Richmond Fed and Chicago Fed were all very disappointing.”
The bad economic news just keeps rolling in. It is almost as if someone has slammed on the economic brakes.
The following are a few more examples of the bad economic numbers that have come out over the past couple of days….
*According to the latest ADP Employment Services report, private employers in the United States only added 38,000 jobs last month. That number had been expected to be somewhere around 175,000. This jobs report is being called a “disaster“.
*Manufacturing activity in May was much lower than most economists were projecting. The following is how CNBC described the newest numbers from ISM….
The Institute for Supply Management (ISM) said its index of national factory activity fell to 53.5 in May from 60.4 the month before. The reading missed economists’ expectations for 57.7.
*Moody’s downgraded Greek debt again on Wednesday, and stated that they believe that there is a 50/50 chance that Greece will default. This time Moody’s downgraded Greek debt by three levels all the way down to Caa1, and that caused the euro to fall like a rock.
To get an idea of just how imbalanced the European financial system has become at this point, just check out this article.
*As I mentioned yesterday, the consumer confidence index fell from 66 in April to 60.8 in May.
So what is causing all of this?
Well, the truth is that the “sugar high” that the U.S. economy has been enjoying is coming to an end.
QE2 is almost over and the vast majority of the federal “stimulus money” has been spent. Now the federal government is talking about getting spending under control and we are seeing austerity programs being implemented on the state and local level from coast to coast.
But without massive intervention by the Federal Reserve and by the U.S. government will the U.S. economy be able to stand?
Douglas Borthwick, a managing director with Faros Trading in Stamford, Connecticut is not optimistic….
“The sugar high that has buoyed the U.S. economy over the past six months is wearing out, and there is little in economic growth or foundation to show for it.”
The truth is that the Fed and the U.S. government went all-out in an attempt to keep the economy from falling into a total depression. The U.S. government has been running budget deficits well in excess of a trillion dollars and the Fed has been printing money like mad. If these measures are removed, the economic crisis we are experiencing might just get a whole lot worse.
How much worse?
Well, just check out what Peter Yastrow, a market strategist for Yastrow Origer, recently told CNBC….
“Interest rates are amazingly low and that, thanks to Ben Bernanke, is driving everything,” Yastrow said. “We’re on the verge of a great, great depression. The [Federal Reserve] knows it.”
Ben Bernanke and Barack Obama keep talking about the “economic recovery” but most Americans know better.
According to one new poll, 66% of Americans believe that we are still in a recession.
Perhaps this is a sign that the American people are starting to wake up to the new economic realities that we are facing.
The U.S. economy is being ripped apart and shredded. Thanks to our short-sighted trade policies, the Chinese economy has roared to life while the U.S. economy continues to ship jobs and factories overseas.
But instead of facing up to our economic problems and coming up with some solutions, our nation has been on a horrific debt binge over the last couple of decades in a desperate attempt to maintain our standard of living.
One of the reasons why I pound on the economic news day after day is so that more people will really understand what is going on and will start to wake up.
Look, even Barack Obama says that the present state of affairs is “unsustainable” and that changes have to be made.
But if the U.S. government decided that it was going to go to a balanced budget tomorrow, that would suck approximately a trillion and a half dollars out of the economy.
What do you think would happen if that came to pass?
Of course by going into even more debt we are destroying the economic future of our children and our grandchildren.
We have piled up the biggest mountain of debt in the history of the world and we expect future generations to pay it off.
It is absolutely disgusting what we have done and it is thievery on the highest level.
Everyone knows that we are living in the greatest debt bubble in the history of the world and that at some point it is going to pop.
Perhaps the best we can hope for at this point is for a little bit more time before economic disaster strikes.
Unfortunately, all of the latest economic news seems to be pointing toward another economic slowdown.
Are we about to see a repeat of 2008 (or something even worse)? Suddenly all kinds of people are coming out of the woodwork and warning that we could be on the verge of the next major financial collapse. Of course many economists and financial pundits just enjoy hearing themselves talk, and sometimes they will make outrageous claims just to get attention, but when so many ominous warnings come out all at once it does tend to make one sit up and take notice. The truth is that global financial markets are even more vulnerable today than they were in 2008, and all over the globe we are seeing trouble signs. Japan is trying to recover from the worst natural disaster that they have ever seen and they are dealing with a nuclear crisis that never seems to end. The Europeans are trying to put another bailout package for Greece together and about a half dozen more European nations that are drowning in debt will need bailouts after that. In the U.S., there are all kinds of signs pointing to the collapse of the economy and the politicians in Washington D.C. continue to “kick the can down the road” and hope that our economic problems will somehow fix themselves. Oil prices are incredibly high and turmoil is sweeping the globe. Conditions are certainly developing that could bring about a “perfect storm” and cause another global financial collapse.
The following is just a sampling of the financial warnings that we have seen in recent days from some prominent voices….
*Economist Nouriel Roubini: “I think right now we’re on the tipping point of a market correction. Data from the U.S., from Europe, from Japan, from China are suggesting an economic slowdown.”
*Jim Rogers: “I would expect to see some serious problems in the foreseeable future….By 2011, 2012, 2013, 2013, I don’t know when, we’re going to have an economic slowdown again.”
*Mark Mobius, the executive chairman of Templeton Asset Management’s emerging markets group: “There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis.”
*David M. Blitzer, Chairman of the Index Committee at S&P Indices: “Home prices continue on their downward spiral with no relief in sight.”
*Jeffrey Gundlach, CEO of DoubleLine Capital: “I think we’re looking at some type of echo in the credit crisis coming up here. That’s what I’m afraid of.”
*Carl Icahn: “I do think that there could be another major problem. Now, will it happen next week, next year, i don’t know and certainly nobody knows, but i don’t think that the system is working properly. I really find it amazing that we’re almost back to where it was, where there’s so much leverage going on in the investment banks today. There’s just way too much leverage and way too much risk-taking, with other people’s money.”
Sadly, the world really did not seem to learn much of anything from 2008. Global financial markets are still pretty much operating the same way that they did before the last crisis.
But back before the crisis in 2008 things were much more stable around the globe.
When the horrible earthquake and tsunami struck Japan earlier this year, most economists brushed it off and believed that Japan would be “resilient” and would bounce back very quickly.
Well, it turns out that Japan is now officially in a recession. Their economy contracted at a 3.7 percent annualized rate during the first quarter.
As bad as that number is, just remember that the tsunami did not even hit until March 11th.
So what is the 2nd quarter number going to look like?
There is often a lag between a disaster and the economic effects of the disaster. The economic impact of this nightmare is going to be felt in Japan for many years to come. In fact, it is going to be very interesting to see what kind of earnings reports we seeing coming out of Japan in the months ahead.
The economic problems in Japan are also really starting to be felt around the rest of the globe. The other day, USA Today published an article with the following headline: “U.S. economy damaged more than thought by Japan quake“.
Amazingly, everyone seems to be really surprised that the worst tsunami in modern history is having a significant economic impact.
Meanwhile, the crisis at Fukushima just continues to get worse.
In case you haven’t noticed, the Japanese are not even close to finding a solution to this crisis.
The mainstream media has been doing their best to downplay the crisis at Fukushima, but the truth is that it is now a worse disaster than Chernobyl and life in that region will never be the same again.
Conditions are also ripe in Europe for another financial collapse.
Have you been watching what has been going on in Greece?
It’s crazy. Without another bailout the Greek government will soon start defaulting on their debts.
The EU and the IMF don’t want to give Greece more bailout money unless there are some significant “strings” attached. But they also know that if Greece is not bailed out it will cause complete chaos in the financial markets.
The Greek population does not want more bailouts and more austerity. There have been protests all over the country. Greek citizens have been pulling billions out of Greek banks as the country descends into chaos.
In the end, another bailout deal will get pushed through and the can will be kicked down the road a little while longer.
But what about all of the other European nations that need bailouts?
Portugal, Spain and Italy (along with several other European nations) are also teetering on the brink of financial disaster.
Most Americans do not realize it, but the European sovereign debt crisis really could set off another global financial crash. Everyone really should be watching Europe. It is going to be a very interesting summer.
Of course the United States continues to be an economic basket case.
More depressing housing data came out today. U.S. home prices are now 5.1% lower than they were a year ago and they have fallen back to mid-2002 levels. CNN is declaring that a housing “double-dip” has been confirmed.
Also, the consumer confidence index fell from 66 in April to 60.8 this month.
Americans are becoming more pessimistic about the economy.
According to Gallup, 41 percent of Americans believed that the economy was “getting better” at this time last year. Today, that number is at just 27 percent.
We are seeing a tremendous about of inflation in 2011, but incomes are not rising. Unemployment is still rampant and very few jobs are being created. What is even sadder is that a very high percentage of the jobs that are being created are part-time or temporary jobs.
But this was supposed to be the “recovery”. Barack Obama and the Congress pushed through “stimulus package” after “stimulus package”. We added trillions to our national debt. The Federal Reserve has been printing money like crazy. An all-out effort was made to pump up the U.S. economy in the short-term.
So after all of that, is this what the “recovery” is going to look like?
Meanwhile, all of those efforts have also made our long-term economic problems even worse.
Because of our exploding national debt and the reckless money printing by the Federal Reserve, faith in the U.S. dollar is dying. Even the United Nations is warning of a potential dollar collapse.
We are in big, big trouble.
This is about as good as things are going to get for the U.S. economy. Despite unprecedented efforts, the U.S. economy is still struggling mightily and our long-term economic problems are scarier than ever.
Sadly, most Americans still believe that wonderful economic times are on the way. Most believe that this downturn is just temporary and that things will soon be better than ever.
How do you think they are going to feel when they find out the truth?
Even in the midst of a horrific economic decline, there are tools that all of us can use to make the most of our limited resources. This includes doing some things that many of us never imagined that we would do. A couple of months ago I never would have imagined that I would be doing an article on coupons. But in these desperate economic times you have to look for any economic edge that you can get. Did you know that it is possible to get $500 worth of groceries for less than 10 dollars? I didn’t know that either until I started watching a show called “Extreme Couponing” on cable television. I was amazed as I watched person after person get over 95 percent off on their groceries. Personally, I have always thought that clipping coupons was a waste of time. Sure, you might save a few bucks, but I really didn’t think it was worth the time or the effort. Well, my opinion has changed. There are a growing number of people out there that are using coupons to provide all of the groceries that their families need almost for free. In an economic environment where incomes are going down but food prices continue to go up, “extreme couponing” is a financial weapon that virtually anyone can use.
Yes, not everyone can take it to the extent that many of these “extreme couponers” do. There are some women that spend 40, 50 or even 60 hours a week on their couponing. Most people cannot afford to do that.
But even if you just spend a couple of hours a week you can still save significant money. At a time when many family budgets are tighter than ever, saving 50 or 100 bucks at the grocery store can mean a world of difference.
Not only that, but “extreme couponing” is a great way to build up your stockpile of emergency food. Everyone should have enough food in their homes to feed their families for at least a year. Unfortunately, many people don’t have that kind of money. That is where “extreme couponing” comes in.
If you are willing to put a little hard work in, you can build a stockpile of emergency food for pennies on the dollar.
Extreme couponing is not complicated and thanks to the new TLC show it is becoming extremely popular. The following is how a recent article on MSNBC describes these “extreme couponers”….
Hard-core couponers are in it to win it — for free, if at all humanly possible. They plot their grocery-store trips with the precision of military commanders. They load up three or four shopping carts at a time. They test the mettle — and the congeniality — of cashiers by having them tally dozens of discounts on their behalf.
And what do they get in exchange? Hundreds of dollars’ worth of merchandise for as little as $5 to $10, the applause of onlookers — and a surge of adrenaline that can be downright addicting.
If you have never seen the show, you should check it out at least once. The following is a very brief preview of “Extreme Couponing”….
Yes, people are actually doing this. In fact, some of my readers are actually doing this.
On a recent article entitled “Inflation 2011: Honey – They Shrunk Our Paychecks” one of my regular readers named Maria shared that her and her circle of friends have adopted extreme couponing as a way to fight back against the bad economy….
In the last six months, I have seen a complete attitude adjustment in many of our friends and family. As a result, a resource sharing group has formed amongst us. We share work, ideas and tips on everything from budgeting to gardening. All of us have curtailed the “luxuries” like gym memberships, expensive clothing, latte’s and mochas from those expensive little stops on the way to work, dining at restaurants, first run movies at the theater, and a myriad of other little things.
Our latest discovery is the world of couponing. Anyone interested in dramatically cutting their household and grocery expenses should take a serious look at TheKrazyCouponLady.com and read their book, Pick Another Checkout Lane, Honey. I never understood how couponing could make a difference until I read this book. Our group now looks at coupons almost as a tax free source of income, because it is saving us hundreds of dollars a month…no exaggeration.
I admit, I am not as diligent as the others about using coupons, but even with my minimal efforts I saved 60% on my meat purchases last month. That was huge for my family of 6. Our home is out in the country near a rural community, and the only grocery store in town is Safeway. I never shopped there before, because it was too expensive. I drove into the big city once every three months to do our grocery shopping at the “discount” stores. Now, using coupons on sale items, I can shop at the local Safeway and save more money on food and gas.
Sadly, this extreme couponing phenomenon will not be around forever. As thousands more pile on to the bandwagon, it is inevitable that food producers and retailers will start changing the rules. So take advantage of extreme couponing while you can.
Look, I never imagined that I would be recommending that people should start clipping coupons. But when any of us are presented with solid evidence that we are wrong about something, we need to be willing to change.
Personally, I am not an expert on coupons.
Thankfully, there are some people out there that are, and they have shared their knowledge for free on the Internet. The following are some of the best extreme couponing sites around if you are interested in learning more….
People are always urging me to write more about solutions. Well, extreme couponing is a solution. A lot of us men might not like the idea of “extreme couponing” because it may not seem like a very “manly” thing to do, but the truth is that it works. In these desperate economic times, you have got to do what you have got to do. Today, one out of every four American children is on food stamps. An increasing number of children are falling into poverty. If it takes clipping coupons in order to survive, then that is just what we are going to have to do.
As mentioned above, all of this exposure on television is going to mean that “extreme couponing” is not going to be around forever. When too many people start jumping on a boat it is inevitable that it is going to sink.
But while this tool still exists, why not use it?
In particular, this is a great way to build up your emergency food stockpile for a fraction of the cost.
So what do all of you think about extreme couponing? Do you think it is a good tool? Do you have other tools that you would suggest for saving money in this tough economy? Feel free to leave a comment with your thoughts below….
Well, it’s official. U.S. stock prices have fallen for six weeks in a row. So will next week make it seven? The last time stocks declined for seven weeks in a row was back in May 2001 when the “dot-com” bubble was bursting. At this point, the Dow has declined by approximately 5 percent since the beginning of June. Things don’t look good. So exactly what is going on here? Well, it is undeniable that the recent mini-bubble in stocks has been too good to be true. The S&P 500 had surged nearly 30 percent since last September. Much of this has been fueled by the Federal Reserve’s latest round of quantitative easing, but now that is coming to an end in a few weeks and investors are a bit spooked. Meanwhile, wars and revolutions are sweeping the Middle East, Japan is dealing with the damage caused by the tsunami and by Fukushima, Europe is trying to figure out how to bail out Greece again and the U.S. debt crisis is continually getting worse. In addition, wave after wave of bad economic news is certainly not helping the mood on Wall Street. In many ways, a “perfect storm” is developing and many are now extremely concerned about what the rest of 2011 is going to bring for Wall Street.
Barack Obama’s White House Rural Council: Central Economic Planning For America’s Heartland
The chair of the White House Rural Council will be Agriculture Secretary Tom Vilsack. Vilsack is a former governor of Iowa and a Democrat. Swing states like Iowa will be key in 2012, and so perhaps Obama is trying to show that he really cares for middle America.
But it is really hard to forget the remarks that Obama made about rural Americans during the 2008 campaign.
In particular, the following quote about the “bitterness” of those living in rural America got a lot of attention at the time….
Look, the vast majority of the people who live in rural America do not want to hear that they need to let go of their guns or their religion.
And most of them certainly do not want the federal government to come in and tell them how to run their local economies.
But according to Obama, the U.S. government “has an important role to play” in managing the economies of rural communities. The following is a direct quote from the executive order establishing the White House Rural Council….
To many Americans, all of this will sound really great. The federal government is going to come in and help the “backwoods folk” catch up with the rest of us. What could be wrong with that?
Well, the truth is that whenever the federal government gets its fingers into something it tends to really mess it up. Many of the biggest problems our country is facing today can be traced directly back to Washington D.C.
Many small towns and rural communities are doing just fine without the interference of the federal government. In fact, large numbers of Americans have purposely moved out to rural areas because they don’t want the interference of the federal government in their lives.
But according to this new executive order, the Obama administration plans to stick its itchy little fingers into just about every aspect of rural life. One of the stated goals of the White House Rural Council is to do the following….
This is yet another example of how we are rapidly becoming a centrally-planned economy.
Today, there are way too many Americans that expect the federal government to solve all their problems and take care of them from birth to death.
But that is not what our founding fathers intended, and our federal government has become so corrupt and so incompetent that it could not do those things even if we wanted it to.
Before the federal government “fixes” the problems of rural America, perhaps it should focus on “fixing” many of the other problems it has created first….
*Growing numbers of military veterans cannot find jobs once they leave the U.S. military. In fiscal 2008, the Pentagon spent $450 million on unemployment benefits for military vets. In fiscal 2010, the Pentagon spent almost twice as much – $882 million. According to the U.S. Bureau of Labor Statistics, the unemployment rate for military veterans between the ages of 18 and 24 is more than 30%.
*The housing collapse that the Federal Reserve and the U.S. government caused is a nightmare that never seems to end. According to the New York Times, at the current pace it will take 62 years for the banks to repossess all of the homes that are in severe default or foreclosure in the state of New York.
*The recent commodity price increases caused by the Federal Reserve have resulted in much higher prices at the gas pump and at the grocery store. These higher prices are hitting the poor and the lower middle class much harder than they are hitting the wealthy.
*The federal government has piled up the biggest debt in the history of the world and the U.S. dollar is dying. Standard & Poor’s has altered its outlook on U.S. government debt from “stable” to “negative” and is warning that the U.S. could soon lose its prized AAA rating. Russian presidential economic adviser Arkady Dvorkovich says that his nation is going to keep dumping U.S. government debt. China has been dumping U.S. government debt. The entire U.S. financial system is on the verge of financial collapse and the federal government seems to be powerless to make any meaningful changes.
But instead of fixing the glaring problems that are staring them directly in the face, the control freaks and the bureaucrats in Washington D.C. seem obsessed with figuring out more ways to interfere in our lives.
Over the past couple of months, bad economic news has been pouring in almost constantly. Our economy appears to be in danger of breaking apart. We are in the midst of a horrific economic crisis and nobody is sure what is going to happen next.
So please excuse the good folks of rural America if they are not in the mood to put up with federal government interference in their communities.
The federal government has failed so dramatically so many times before that it is really hard to have any faith that the federal government can do much of anything right at this point.