Any financial system that is based on debt is doomed to fail. Today, we are living in the greatest debt bubble that the world has ever seen, and if all of a sudden people could not use credit to buy things our economy would immediately ground to a halt. Unfortunately, no debt bubble can last forever. When this current debt bubble finally bursts, faith in the financial system is going to disappear, credit is going to freeze up and there is going to be a massive wave of bank failures. Right now, Greece is a warning sign for the world. Nobody wants to lend money to Greece, the Greek banking system is dying, one out of every four businesses has already shut down, unemployment is soaring and the Greek economy has now been in recession for five years in a row. Sadly, the economic implosion in Greece is rapidly accelerating. The Greek economy shrunk at a 7 percent annual rate during the 4th quarter of 2011. That wasn’t supposed to happen. Things were supposed to be getting better in Greece by now. But instead the Greek depression is getting even worse, and very soon the rest of the world is going to be going through what Greece is currently experiencing.
Unfortunately, most in the mainstream media are treating what is happening in Greece as an “isolated incident” rather than as a very serious warning sign for the world.
Thankfully, there are at least a few reporters out there that are realizing the gravity of the situation. The following is how one reporter from the New York Times recently described what life is like in Greece now….
By many indicators, Greece is devolving into something unprecedented in modern Western experience. A quarter of all Greek companies have gone out of business since 2009, and half of all small businesses in the country say they are unable to meet payroll. The suicide rate increased by 40 percent in the first half of 2011. A barter economy has sprung up, as people try to work around a broken financial system. Nearly half the population under 25 is unemployed. Last September, organizers of a government-sponsored seminar on emigrating to Australia, an event that drew 42 people a year earlier, were overwhelmed when 12,000 people signed up. Greek bankers told me that people had taken about one-third of their money out of their accounts; many, it seems, were keeping what savings they had under their beds or buried in their backyards. One banker, part of whose job these days is persuading people to keep their money in the bank, said to me, “Who would trust a Greek bank?”
Can you imagine?
Greece is experiencing a full-blown economic collapse and nobody can see a light at the end of the tunnel at this point.
As I have written about previously, the overall rate of unemployment in Greece has now risen above 20 percent and the youth unemployment rate in Greece has soared to an astounding 48 percent.
Deleveraging can be an extremely painful process. Greece has been forced to try to reduce the size of its budget deficit, but every time it cuts government spending that causes economic activity (and thus government revenues) to slow down as well.
Now the EU and the IMF are demanding that even more very painful austerity measures be implemented in Greece even though Greece is already experiencing a full-blown depression.
The EU and the IMF are demanding that Greece fire 15,000 more government workers immediately and a total of 150,000 government workers by 2015.
The EU and the IMF are demanding that wages for government workers be cut by another 20 percent.
The EU and the IMF are demanding that the minimum wage be slashed by more than 20 percent.
The EU and the IMF are also demanding significant reductions in unemployment benefits and pension benefits.
Of course all of those cuts are going to make the short-term economic conditions in Greece even worse.
The rioting, looting and burning of buildings that we are witnessing right now in Greece is likely to continue for quite some time as exasperated citizens attempt to express their frustrations to politicians that simply do not seem to care.
According to the National Confederation of Greek Commerce, recent rioting resulted in damage to 153 businesses in Athens. 45 of those businesses were totally destroyed.
You can view some stunning footage of the current rioting in Greece right here.
Despite all of the austerity measures that have already been implemented, the truth is that Greece is very likely to default soon anyway.
There is a very good chance that the new austerity agreement that the Greek parliament just approved will never be implemented. There are new elections scheduled for April and the current party in power is polling in the single digits.
The new Greek government is likely to look much different from the current one, and nobody knows for sure if the new government will follow through on any of the promises being made by the current government.
In addition, the German parliament must approve this new deal with Greece, and the German parliament is not scheduled to vote on it until February 27th. Considering the mood in Germany right now, approval is not guaranteed.
So there are all kinds of things that could go wrong with the “deals” that are currently being discussed. The truth is that a Greek default in the coming months seems to become more likely by the day.
Some in the financial world almost seem eager for a Greek default. The following is what Jon Moulton, the chairman of Better Capital, recently told CNBC….
“If I was Greek, I wouldn’t be going for these measures, I’d be going for default and getting it over with. Would you like two to three years of pain or 20?”
But a disorderly Greek default would not be a pleasant thing for the global economy at all. A recent article in the Guardian detailed what some of the consequences of a Greek default and exit from the eurozone might be….
But default and “re-drachmatisation” would be a costly and chaotic process. In the long term the euro might be strengthened if some of its weaker members headed for the door. But in the short term banks across the eurozone might have to be closed to prevent a run on the single currency as investors speculated about which country might be next. A new wave of bank nationalisations would be likely to follow as lenders counted their losses on now worthless Greek debt.
Capital controls would have to be imposed and borders shut to stop money flooding out of Greece. Portugal, Italy and Spain would come under intense pressure from investors wary about the risk of another victim. Banks everywhere, already reluctant to lend, would cut back hard, nervous about their exposure to the bonds of all Europe’s crisis-hit states.
And the financial crisis in Europe is going to continue to spread well beyond Greece. Moody’s Investors Service just downgraded the credit ratings of six European nations. The following is how Bloomberg described the downgrades….
Spain was downgraded to A3 from A1 with a negative outlook, Italy was downgraded to A3 from A2 with a negative outlook and Portugal was downgraded to Ba3 from Ba2 with a negative outlook, Moody’s said. It also reduced the ratings of Slovakia, Slovenia and Malta.
Countries such as Italy, Spain, Portugal, Ireland and Hungary are heading down the exact same road that Greece has gone. Greece was the first one to experience a full-blown depression, but soon Greece will have a lot of company.
Greece is most definitely a warning sign for the world. If you keep recklessly piling up debt, eventually a day of reckoning comes. It is inevitable.
But Barack Obama does not seem to understand this. He continues to pile another 150 million dollars on to our national debt every single hour. He knows that cutting spending significantly right now would hurt the economy and that would significantly hurt his chances for another term.
Needless to say, Barack Obama is not likely to do anything that is going to significantly hurt his chances for another four years in the White House.
So we continue to roll on toward disaster.
The U.S. financial system is like a car with no brakes that is heading straight toward a 5,000 foot drop at 100 miles an hour.
It is all going to seem like fun and games to some people until we hit the canyon floor.
Do you want to know what the future of America is going to look like? Just check out what is happening to Detroit. The city of Detroit was once one of the greatest industrial cities in the history of the world, but today it is a rotting, decaying, post-apocalyptic hellhole. Nearly half the men are unemployed, nearly half the population is functionally illiterate, more than half of the children are living in poverty and the city government is drowning in debt. As economic conditions have gotten worse, crime has absolutely exploded. Every single night in Detroit there are frightening confrontations between desperate criminals and exasperated homeowners. Unfortunately, the police force in Detroit has been dramatically reduced in size. When the police in Detroit are called, they often show up very late if they even show up at all. Detroit has become a lawless hellhole where violence is the currency of the streets. If you want to survive in Detroit, you better be ready to fight because there are hordes of desperate criminals that are quite eager to take literally everything that you have got. But don’t look down on Detroit too much, because what is happening in Detroit will soon be happening all over America.
The following are 20 things we can learn about the future of America from the death of Detroit….
#1 People don’t want to live where the stench of failure and decay is constantly in the air. Back in the 1950s, Detroit was a teeming metropolis of approximately 2 million people. According to the 2010 census, only 713,000 people live in Detroit today. The U.S. Census Bureau says that Detroit lost a resident every 22 minutes during the first decade of this century.
#2 When the economy falls apart, desperate people will do desperate things and many homeowners will fight back. Justifiable homicide in Detroit rose by a staggering 79 percent during 2011.
#3 In major cities where people are scrambling just to survive, any confrontation can quickly escalate into a life or death affair. The rate of self-defense killings in Detroit is currently 2200% above the national average.
#4 When there is not enough money to go around, a lot of local governments will choose to cut back on police protection. Ten years ago, there were approximately 5,000 police for the city of Detroit. Today, there are less than 3,000.
#5 The essential social services that you are enjoying today will not always be there in the future. Officials in Detroit recently announced that due to budget constraints, all police stations will be closed to the public for 16 hours a day.
#6 Economic decay is a breeding ground for chaos and violence. Last Friday and Saturday, a total of nine shootings were reported in the city of Detroit.
#7 More Americans than ever are realizing the benefits of self-defense. The following is what 73-year-old Julia Brown recently told the Daily….
The last time Brown, 73, called the Detroit police, they didn’t show up until the next day. So she applied for a permit to carry a handgun and says she’s prepared to use it against the young thugs who have taken over her neighborhood, burglarizing entire blocks, opening fire at will and terrorizing the elderly with impunity.
#8 When crime gets go bad that the police are powerless to stop it, vigilante groups begin to form….
In fact, crime has gotten so bad and the citizens are so frustrated by the lack of police assistance that they have resorted to forming their own organizations to fight back. One group, known as “Detroit 300″, was formed after a 90-year-old woman on Detroit’s northwest side was brutally raped in August.
#9 When criminals become desperate, they will steal literally anything that is not bolted down. In Detroit today, thieves have stripped so much copper wiring out of the street lights that half of all the lights in some neighborhoods no longer work.
#10 As things fall apart, eventually a time comes when it is not even safe to drive down the road in the middle of the day. 100 bus drivers in Detroit recently refused to drive their routes out of fear of being attacked on the streets. The head of the bus drivers union, Henry Gaffney, said that the drivers were literally “scared for their lives“….
“Our drivers are scared, they’re scared for their lives. This has been an ongoing situation about security. I think yesterday kind of just topped it off, when one of my drivers was beat up by some teenagers down in the middle of Rosa Parks and it took the police almost 30 minutes to get there, in downtown Detroit,” said Gaffney.
#11 One of the clearest signs of decline in America is the state of our education system. Only 25 percent of all students in Detroit end up graduating from high school. Many other major cities will soon have graduation rates similar to Detroit.
#12 When local governments run out of money they are forced to make tough choices. After already shutting down dozens of schools, officials in Detroit have announced plans to close down 16 more schools.
#13 A growing percentage of Americans cannot even read or write. This is a very frightening indication of what the future of America could look like. According to one stunning report, 47 percent of all people living in the city of Detroit are functionally illiterate.
#14 Sadly, child poverty is absolutely exploding all over the United States. Today, 53.6 percent of all children that live in Detroit are living below the poverty line.
#15 The employment situation in America is a lot worse than the government is telling us. An analysis of census figures found that 48.5% of all men living in Detroit from age 20 to age 64 did not have a job in 2008.
#16 When a major city becomes a hellhole, home prices fall like a rock. The median price of a home in Detroit is now just $6000.
#17 When crime and looting become commonplace, homes in an area can become absolutely worthless. Some homes in Detroit have been sold for a single dollar.
#18 When depression-like conditions exist in an area for a number of years, large numbers of people will move on to greener pastures. As of a few years ago, there were more than 40,000 vacant properties in the city of Detroit.
#19 Just because we have a high standard of living today does not mean that will always be the case. Detroit is just a rotting shell of what it once was, and what is happening to Detroit will happen to much of the rest of America very soon. The following is what one British reporter found during his visit to Detroit….
Much of Detroit is horribly dangerous for its own residents, who in many cases only stay because they have nowhere else to go. Property crime is double the American average, violent crime triple. The isolated, peeling homes, the flooded roads, the clunky, rusted old cars and the neglected front yards amid trees and groin-high grassland make you think you are in rural Alabama, not in one of the greatest industrial cities that ever existed.
#20 When government finances collapse, politicians look for things to sell off and “privatize”. Unfortunately, the Detroit city government is so broke that it is now considering selling off some of its most famous assets….
Now, the city of Detroit’s most venerable assets — from Belle Isle to the Detroit-Windsor Tunnel — could end up on the auction block as the city fights for its financial life.
Facing mounting debt and the prospect of a state-appointed emergency manager, the city is looking at all options to shed expenses and raise revenue. If city officials can’t come up with a viable budget plan, an emergency manager would have the power to sell assets as part of a financial takeover of Detroit.
But Detroit is not alone.
Lots of other cities all over America are flat broke and out of options.
Mayor Christopher Doherty is blunt when asked about a court order forcing his Pennsylvania city to pay about $30 million in wages withheld from police and firefighters under a state-approved fiscal recovery plan.
“I don’t have the money,” said Doherty, 53. As for the chance of borrowing the cash, more than half of the city’s projected general-fund revenue, he added, “there’s no financial institution that’s going to give me $30 million to pay it.”
The U.S. economy never recovered from the last major financial crisis, and now another one is on the way.
As the economy crumbles, so will the fabric of our society.
The American people are terribly spoiled and they do not possess the character to handle depression-like conditions with grace and dignity.
In the years ahead, we are going to see rampant rioting and looting in our major cities. The crime sprees that we will witness in future years will be absolutely unprecedented.
Things did not have to turn out this way, but unfortunately the consequences of decades of really bad decisions are starting to catch up with us.
So what do you think the future of America will look like? Feel free to leave a comment with your opinion below….
Do you want to see what a 21st century economic depression looks like? Just look at Greece. Once upon a time, the Greek economy was thriving, the Greek government was borrowing money like there was no tomorrow and Greek citizens were thoroughly enjoying the bubble of false prosperity that all that debt created. Those that warned that Greece was headed for a financial collapse were laughed at and were called “doom and gloomers”. Well, nobody is laughing now. You see, the truth is that debt is a very cruel master. Greeks were able to live way beyond their means for many, many years but eventually a day of reckoning arrived. At this point, the Greek economy has been in a recession for five years in a row, and the economic crisis in that country is rapidly getting even worse. It was just recently announced that the overall rate of unemployment in Greece has soared above 20 percent and the youth unemployment rate has risen to an astounding 48 percent. One out of every five retail stores has been shut down and parents are literally abandoning children in the streets. The frightening thing is that this is just the beginning. Things are going to get a lot worse in Greece. And in case you haven’t been paying attention, these kinds of conditions are coming to the United States as well. We are heading down the exact same road as Greece went down, and the economic pain that this country is eventually going to suffer is going to be beyond anything that most Americans would dare to imagine.
All debt spirals eventually come to an end. For years, Greece borrowed huge amounts of very cheap money, but there came a point when the debt became absolutely strangling and the rest of the world refused to lend the Greek government money at such cheap rates anymore.
Greece would have defaulted long before now if the EU and the IMF had not stepped in to bail them out. But along with those bailouts came strings. The EU and the IMF insisted that the Greek government cut spending and raise taxes.
Well, those spending cuts and tax increases caused the economy to slow down. Tax revenues decreased and deficit reduction targets were missed. So the EU and the IMF insisted on even more spending cuts and tax increases.
Even after all of the spending cuts and all of the tax increases that we have seen, the debt to GDP ratio in Greece is still higher than it was before the crisis began. Today, the Greek national debt is sitting at 142 percent of GDP.
Now the EU and the IMF are demanding even more austerity measures before they will release any more bailout money.
Needless to say, the Greek people are pretty much exasperated by all of this. They created this mess by going into so much debt, but they certainly don’t like the solutions that are being imposed upon them.
Protesters in Greece are absolutely outraged that the EU and the IMF are now demanding a 22 percent reduction in the minimum wage.
Most families in Greece are just barely surviving at this point. Unfortunately, Greece is probably looking at depression conditions for many years to come.
Over the past three years, the size of the Greek economy has shrunk by 16 percent.
In 2012, it is being projected that the Greek economy will shrink by another 5 percent.
Sadly, that projection is probably way too optimistic.
Over the past couple of months, it has been like someone has pulled the rug out from under the Greek economy. Just check out the following numbers from an article in the Telegraph by Ambrose Evans-Pritchard….
Another normal day at the Hellenic Statistical Authority.
We learn that:
Greece’s manufacturing output contracted by 15.5pc in December from a year earlier.
Industrial output fell 11.3pc, compared to minus 7.8pc in November.
Unemployment jumped to 20.9pc in November, up from 18.2pc a month earlier.
I have little further to add. This is what a death spiral looks like.
Can you imagine unemployment going up by 2.7 percent in one month?
This is what a 21st century economic depression looks like.
And needless to say, civil unrest is rampant in Greece.
The following is how a USA Today article described some of the protests that we saw in Greece this week….
Scores of youths, in hoods and gas masks, used sledge hammers to smash up marble paving stones in Athens’ main Syntagma Square before hurling the rubble at riot police.
The country’s two biggest labor unions stopped railway, ferry and public transport schedules, and hospitals worked on skeleton staff while most public services were disrupted. Unions were planning protests in Athens and other cities around midday.
Greek citizens are exasperated by the endless rounds of austerity that are being imposed upon them. They wonder how far all of this is going to go.
Greece has the third highest rate of VAT in Europe, second highest gas/petrol tax, third highest tax on social insurance contributions, fifth highest VAT on alcohol, highest property tax and one of the worst corporate tax rates, without the quality of living or competitiveness to match.
How much farther can government pay be cut? Greek civil servants have had their incomes slashed by about 40 percent since 2010.
How would you feel if your pay was reduced by 40 percent?
Large numbers of Greeks are rapidly reaching the end of their ropes. The following is from a recent article in the Independent….
“People are scared and haven’t really realised what’s happening yet,” George Pantsios, an electrician for the country’s public power corporation, said. He has only been receiving half of his €850 monthly wage since August. “But once we all lose our jobs and can’t feed our kids, that’s when it’ll go boom and we’ll turn into Tahrir Square.”
Instead of turning violent, others are simply giving in to despair. According to the Daily Mail, large numbers of Greek children are being abandoned because their parents simply cannot afford to take care of them anymore. The note that one mother left with her little toddler was absolutely heartbreaking….
One mother, it said, ran away after handing over her two-year-old daughter Natasha.
Four-year-old Anna was found by a teacher clutching a note that read: ‘I will not be coming to pick up Anna today because I cannot afford to look after her. Please take good care of her. Sorry.’
Sadly, there are an increasing number of Greeks that are giving up on life entirely. The number of suicides in Greece rose by 40 percent during just one recent 12 month time period.
But we haven’t even seen the worst in Greece yet. The worst is still yet to come.
And the people of Greece are going to get angrier and angrier and angrier.
According to one recent poll, about 90 percent all of Greeks are unhappy with the interim government led by Prime Minister Lucas Papademos.
This week, that government has started to fall apart. Over just the past few days, 6 members of the 48-member government cabinet have resigned. Not only is there real doubt if the new austerity measures will be approved, there is very real doubt if this government will be able to hold together much longer.
Frustration with the EU and the IMF has reached a fever pitch in Greece. Just check out what Reuters is reporting….
In a letter obtained by Reuters on Friday, the Federation of Greek Police accused the officials of “…blackmail, covertly abolishing or eroding democracy and national sovereignty” and said one target of its warrants would be the IMF’s top official for Greece, Poul Thomsen.
So what is going to happen next in Greece?
The truth is that nobody knows.
But whatever kind of “deals” are reached, the reality is that nothing is going to keep Greece from continuing to experience depression-like conditions for quite some time.
Unfortunately, Greece is not an isolated case.
Portugal, Ireland, Italy and Spain are all going down the same path and Europe does not have enough money to bail all of them out.
To get an idea of how much money it would take to bail out the financially troubled nations of Europe, just check out this infographic that was recently posted on ZeroHedge.
A day of reckoning is coming for the United States as well. As CNBC recently noted, the U.S. debt problem is far worse than the European debt problem is.
If the global economy is not heading for a recession, then why is global shipping slowing down so dramatically? Many economists believe that measures of global shipping such as the Baltic Dry Index are leading economic indicators. In other words, they change before the overall economic picture changes. For example, back in early 2008 the Baltic Dry Index began falling dramatically. There were those that warned that such a rapid decline in the Baltic Dry Index meant that a significant recession was coming, and it turned out that they were right. Well, the Baltic Dry Index is falling very rapidly once again. In fact, on February 3rd the Baltic Dry Index reached a low that had not been seen since August 1986. Some economists say that there are unique reasons for this (there are too many ships, etc.), but when you add this to all of the other indicators that Europe is heading into a recession, a very frightening picture emerges. We appear to be staring a global economic slowdown right in the face, and we all need to start getting prepared for that.
If you don’t read about economics much, you might not know what the Baltic Dry Index actually is.
Investopedia defines the Baltic Dry Index this way….
A shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea.
When the global economy is booming, the demand for shipping tends to go up. When the global economy is slowing down, the demand for shipping tends to decline.
And right now, global shipping is slowing way, way down.
In fact, recently there have been reports of negative shipping rates.
According to a recent Bloomberg article, one company recently booked a ship at the ridiculous rate of negative $2,000 a day….
Glencore International Plc paid nothing to hire a dry-bulk ship with the vessel’s operator paying $2,000 a day of the trader’s fuel costs after freight rates plunged to all-time lows.
Glencore chartered the vessel, operated by Global Maritime Investments Ltd., a Cyprus-based company with offices in London, Steve Rodley, GMI’s U.K. managing director, said by phone today. The daily payments last the first 60 days of the charter, Rodley said. The vessel will haul a cargo of grains to Europe, putting the carrier in a better position for its next shipment, he said.
So why would anyone agree to ship goods at negative rates?
“They’re doing this because you can’t just have ships sitting. If they sit too long, then that’s hard on the ships. They have to keep them loaded and moving from port to port,” said Darin Newsom, senior commodities analyst at DTN.
If the owner of a ship can get someone to at least pay for part of the fuel and the journey will get the ship closer to its next destination, then that is better than having the ship just sit there.
But just a few short years ago (before the last recession) negative shipping rates would have been unthinkable.
Asian shipping is really slowing down as well. The following comes from a recent article in the Telegraph….
Shanghai shipping volumes contracted sharply in January as Europe’s debt crisis curbed demand for Asian goods, stoking fresh doubts about the strength of the Chinese economy.
Container traffic through the Port of Shanghai in January fell by more than a million tons from a year earlier.
So this is something we are seeing all over the globe.
Another indicator that is troubling economists right now is petroleum usage. It turns out that petroleum usage is really starting to slow down as well.
As I have been telling you recently, there is some unprecedented data coming out in petroleum distillates, and they slap me in the face and tell me we have some very bad economic trends going on, totally out of line with such things as the hopium market – I mean stock market.
This past week I actually had to reformat my graphs as the drop off peak exceeded my bottom number for reporting off peak – a drop of ALMOST 4,000,000 BARRELS PER DAY off the peak usage in our past for this week of the year.
I would encourage you to go check out the charts that were posted in that article. You can find them right here. Often a picture is worth a thousand words, and those charts are quite frightening.
Over the past few days, I have been trying to make the point that nothing got fixed after the financial crisis of 2008 and that an even bigger crisis is on the way.
Yes, the stock market is flying high right now.
Yes, even “Dr. Doom” Nouriel Roubini is convinced that the stock market will go even higher.
But this rally will not last that much longer.
Wherever you look, global economic activity is slowing down. The UK economy and the German economy both actually shrank a bit in the fourth quarter of 2011. About half of all global trade involves Europe in one form or another. As Europe slows down, it is going to affect the entire planet.
Many thought that the German economy was so strong that it would not be significantly affected by the problems the rest of Europe is having, but that is turning out not to be the case.
German industrial production fell 2.9 percent in December from the month before, according to official data released Tuesday, suggesting the country’s economic slowdown could be worse than expected.
So don’t believe all the recent hype about an “economic recovery”. Europe is heading into a recession, Asia is slowing down and the U.S. will not be immune.
Despite what you hear from the mainstream media, the truth is that the U.S. economy is not improving and incredibly tough times are ahead.
Thankfully, those of us that are aware of what is happening can make preparations for the economic storm that is coming.
The people out there that believe that the U.S. economy is experiencing a permanent recovery and that very bright days are ahead for us should have their heads examined. Unfortunately, what we are going through right now is simply just a period of “hopetimism” between two financial crashes. Things may seem relatively stable right now, but it won’t last long. The truth is that the financial crisis of 2008 was just a warm up act for the economic horror show that is coming. Nothing really got fixed after the crash of 2008. We are living in the biggest debt bubble in the history of the world, and it has gotten even bigger since then. The “too big to fail” banks are larger now than they have ever been. Americans continue to run up credit card balances like there is no tomorrow. Tens of thousands of manufacturing facilities and millions of jobs continue to leave the country. We continue to consume far more than we produce and we continue to become poorer as a nation. None of the problems that caused the crisis of 2008 have been solved and we are even weaker financially than we were back then. So why in the world are so many people so optimistic about the economy right now?
Just take a look at the chart posted below. It shows the growth of total debt in the United States. During the financial crisis of 2008 there was a little “hiccup”, but the truth is that not much deleveraging really took place at all. And since the recession “ended”, total credit market debt has gone on to even greater heights….
So what does this mean for the future?
Well, if a small “hiccup” in the debt bubble caused so much chaos back in 2008, what is going to happen when this debt bubble finally bursts?
That is something to think about.
Sadly, most Americans seem oblivious to all of this.
If you go out to malls in the wealthy areas of America today, people are charging up a storm. In all, Americans charged a whopping 2.5 trillion dollars on their credit cards during 2011. Way too many people have already forgotten the lessons that we all learned back in 2008.
Of course some Americans pay off their credit cards every month, but way too many Americans are not doing that. Today, Americans are carrying 793 billion dollars in revolving credit balances.
And student loan debt is an even bigger bubble than credit card debt is. As I have written about previously, total student loan debt in America is rapidly approaching a trillion dollars.
So it looks like U.S. consumers have not learned to stay away from debt.
That is not good.
Well, what about the banks?
Has the financial system learned any lessons since 2008?
No, not really.
Sadly, the “too big to fail” banks are now even bigger than ever. The total assets of the six largest U.S. banks increased by 39 percent between September 30, 2006 and September 30, 2011. If they were to fail today, they would be even more of a threat to our financial system than they were back in 2008.
And our major banks continue to be very highly leveraged. In fact, major banks all over the world are absolutely swamped with debt.
These are insane levels of leverage, and they are just inviting another major financial crisis.
Do you all remember Lehman Brothers? The fact that they were leveraged so highly is what did them in back in 2008. When the value of their holdings declined by just a little bit they were totally wiped out.
Well, during this next financial crisis large financial institutions are going to be wiped out all over the world. Major banks all over the globe are going to be crying out for more bailouts when things take a turn against them.
They are making the exact same mistakes that they made before, and they are going to be expecting more government handouts when things go bad.
Will we ever learn?
So obviously the banking system has not learned any lessons.
What about the federal government?
Well, if you follow my blog regularly, you know that I love to write about how horrific U.S. government debt is.
Unfortunately, over the past four years things have gotten so much worse.
Back in 2008, the U.S. national debt crossed the 10 trillion dollar mark.
Just recently, it crossed the 15 trillion dollar mark.
So now we are in a much weaker position financially to respond to another major financial crisis.
Just check out the chart posted below. This is a recipe for national financial suicide….
During fiscal 2011, the Obama administration stole close to 150 million dollars from our children and our grandchildren every single hour.
At the moment, the legacy of debt that we are passing on to future generations is sitting a grand total of $15,351,406,294,640.49.
But keep in mind that it is going up every single hour.
Meanwhile, our ability to service that debt is declining. We are rapidly getting poorer as a nation.
During 2011, the amount of money that left the United States exceeded the amount of money that entered the United States by more than a half a trillion dollars.
This gap is called a trade deficit, and it is absolutely ripping our economy to shreds.
For a moment, imagine Uncle Sam standing next to a giant pile of money on a map of the United States. Then imagine a half a trillion dollars being taken out of that pile every single year.
So why haven’t we totally run out of money yet?
Well, it is because we borrow those dollars back. In order to maintain our false standard of living, our federal government, our state governments and our local governments have to go out and beg the rest of the world to lend us our dollars back.
Sadly, our government schools have “dumbed-down” the population so much that most of them don’t even know what a “trade deficit” is anymore.
Meanwhile, our economic infrastructure is being gutted like a fish.
Look, I know that I go over this point over and over and over, but it is absolutely imperative that we all understand this.
The half a trillion dollars a year that leaves this country every year could have gone to support businesses and jobs inside the United States.
But instead it is going to support businesses and jobs on the other side of the world.
The consequences of this are absolutely devastating.
According to U.S. Representative Betty Sutton, an average of 23 manufacturing facilities a day closed down in the United States during 2010. Overall, more than 56,000 manufacturing facilities in the United States have shut down since 2001.
Even many so-called “American companies” have been bought up by the rest of the world. The following comes from a recent article posted on Economy In Crisis….
RCA is now a French company, Zenith is a Korean company. Frigidaire is a Swedish company. IBM’s Personal Computer Division—with its 500 patents—is now a Chinese company. Westinghouse Nuclear Energy’s major shareholder is Toshiba—a Japanese Company. Lucent Technologies, a former research division of AT&T, along with all the patents acquired from the beginning of the phone system, is now a French company. In 2008, Brazilian-Belgian brewing company InBev purchased the iconic American brewer Anheuser-Busch, makers of Budweiser. With the sale of these manufacturing companies, the future profit and technologies all belong to foreign entities.
We once had the greatest economic machine in the history of the world.
Now it is being dismantled and bought up by foreigners.
When America’s economic infrastructure declines, that means that there are less jobs available for all of us.
As I wrote about the other day, the employment situation in this country is not getting better and we have never even come close to recovering from the recession that started back in 2008.
During 2008 and 2009, the U.S. economy lost millions of jobs. Since the beginning of 2010, the percentage of the U.S. population that has had a job has remained very stable….
Normally, when a recession ends the percentage of Americans that have a job bounces back pretty dramatically.
So considering the fact that the employment situation has never recovered from the last financial crisis, what is going to happen when the next financial crisis hits?
And most of the jobs that have been “created” during this so-called “recovery” have been low income jobs. In fact, if you look closely at the employment numbers that were released last Friday, you will find that the vast majority of the “new jobs” were part-time jobs.
But you cannot pay a mortgage and support a family on a part-time job.
Sadly, the truth is that median household income in America has been steadily dropping over the past several years. Tens of millions of American families are deeply struggling and more Americans than ever are falling into poverty.
Back in the year 2000, about one out of every nine Americans was living in poverty. Today, about one out of every seven Americans is living in poverty.
All of this is causing a great deal of anxiety in America today. Large numbers of Americans know that something has fundamentally changed, even if they don’t understand the specifics. That is one reason why sites such as this one have become so popular. People want some answers.
And once people get some answers about what is really happening, they tend to want to prepare for the hard times that are coming.
In a few days, a new series on National Geographic entitled “Doomsday Preppers” premieres. The mainstream media is starting to take notice of the growing “prepper” movement in America today. It is estimated that there are at least 2 million “preppers” in the United States at this point. Of course people are “prepping” for a whole host of reasons, but the number one concern among most groups of preppers is the economy.
As the economy crumbles, more Americans than ever have decided that it is not a good thing to be 100% dependent on the system.
Back in 2008 and 2009, millions of Americans suddenly lost their jobs. Because they did not have any finances stored up, large numbers of them also lost their homes. Many went from being solidly middle class to being out on the street in a matter of months.
That doesn’t have to happen to you. Instead of blowing your money on frivolous things, do what you can to set something aside for the difficult times that are on the horizon.
A lot of those “in the know” are quietly making their own preparations. For example, legendary film director James Cameron (Avatar, Titanic and Terminator) has purchased more than 2600 acres of farmland in New Zealand and he is getting out of the U.S. for good apparently.
Unfortunately, most of us do not have the resources for something like that. But what most of us can do is we can change our priorities and start focusing on the things that will help us survive the hard times that are coming.
On Friday, the entire financial world celebrated when it was announced that the unemployment rate in the United States had fallen to 8.3 percent. That is the lowest it has been since February 2009, and it came as an unexpected surprise for financial markets that are hungry for some good news. According to the Bureau of Labor Statistics, nonfarm payrolls jumped by 243,000 during the month of January. You can read the full employment report right here. Based on this news, pundits all over the world were declaring that the U.S. economy is back. Stocks continued to rise on Friday and the Dow is hovering near a 4 year high. So does this mean that our economic problems are over? Of course not. A closer look at the numbers reveals just how fraudulent these employment statistics really are. Between December 2011 and January 2012, the number of Americans “not in the labor force” increased by a whopping 1.2 million. That was the largest increase ever in that category for a single month. That is how the federal government is getting the unemployment rate to go down. The government is simply pretending that huge numbers of unemployed Americans don’t want to be part of the labor force anymore. As you will see below, the employment situation in America is not improving. Yet everyone in the mainstream media is dancing around as if the economic crisis has been cancelled. I can’t take it anymore! It is beyond ridiculous that so many intelligent people continue to buy in to such fraudulent numbers.
The truth is that the labor force participation rate declined dramatically in January. For those unfamiliar with this statistic, the labor force participation rate is the percentage of working age Americans that are either employed or that are unemployed and considered to be looking for a job.
As you can see from the chart posted below, the labor force participation rate rose steadily between 1970 and 2000. That happened because large numbers of women were entering the labor force for the first time.
The labor force participation rate peaked at a little more then 67 percent in the late 90s. Between 2000 and the start of the recent recession, it declined slightly to about 66 percent.
Since then, it has been dropping like a rock. The chart below does not even include the latest data. In January, the labor force participation rate was only 63.7 percent. That is the lowest that is has been since May 1983. So keep that in mind as you view the chart.
In reality, the percentage of men and women in the United States that would like to have jobs is almost certainly about the same as it was back in 2007 or 2008. There has been no major social change that would cause large numbers of men or women to want to give up their careers. So there is something very, very fishy with this chart….
The federal government has been pretending that millions of unemployed Americans have decided that they simply do not want jobs anymore.
This does not make sense at all.
The truth is that unemployment is not really declining at all. The percentage of Americans that are working is not increasing. The civilian employment-population ratio dropped like a rock during 2008 and 2009 and it has held very steady since that time.
In January, the civilian employment-population ratio once again held steady at 58.5 percent. This is about where it has been for most of the last two years….
Does that chart look like an “economic recovery” to you?
Of course not.
If the percentage of people that are employed is about the same as it was two years ago, does that represent an improvement?
Of course not.
If the employment situation in America was getting better, the civilian employment-population ratio would be bouncing back.
We should be thankful that our economy is not free falling like it was during 2008 and 2009, but we also need to understand why things have stabilized.
The federal government is spending money like there is no tomorrow. During 2011, the Obama administration stole an average of about 150 million dollars an hour from our children and our grandchildren and pumped it into the economy. Even though the Obama administration spent that money on a lot of frivolous things, it still got into the pockets of average Americans who in turn went out and spent it on food, gas, clothes and other things.
Without all of this reckless government spending, we would not be able to continue to live way above our means and our economic problems would be a lot worse.
But even with the federal government borrowing and spending unprecedented amount of money, and even with interest rates at record lows, our economy is still deeply struggling. Just consider the following facts….
-New home sales in the United States hit a brand new all-time record low during 2011.
-According to the Census Bureau, an all-time record 49 percent of all Americans live in a home that gets direct monetary benefits from the federal government. Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.
So let’s not get too excited about the economy.
Yes, things have somewhat stabilized. The percentage of Americans that have jobs is about the same as it was two years ago. Considering how rapidly jobs are being shipped out of the United States, that is a good thing.
Enjoy this false bubble of hope while you can. Things are about to get a lot worse.
Do you remember how rapidly things fell apart after the financial crisis of 2008?
Well, another major financial crisis is on the way. This time it is going to be centered in Europe initially, but it is going to spread all around the globe just like the last one did.
As the charts above show, we have never even come close to recovering from the last recession, and another one is on the way.
So how bad are things going to get after the next wave of the financial crisis hits us?
That is something that we should all be thinking about.
The United Nations says that the earth is in great danger and that the way you and I are living is the problem. In a shocking new report entitled, “Resilient People, Resilient Planet: A Future Worth Choosing” the UN declares that the entire way that we currently approach economics needs to be changed. Instead of focusing on things like “economic growth”, the UN is encouraging nations all over the world to start basing measurements of economic success on the goal of achieving “sustainable development”. But there is a huge problem with that. The UN says that what we are doing right now is “unsustainable” by definition, and the major industrialized nations of the western world are the biggest culprits. According to the UN, since we are the ones that create the most carbon emissions and the most pollution, we are the ones that should make the biggest sacrifices. In addition, since we have the most money, we should also be willing to finance the transition of the developing world to a “sustainable development” economy as well. As you will see detailed in the rest of this article, the United Nations basically wants to crash the world economy in order to save the environment. Considering the fact that the U.S. and Europe are in the midst of a horrible economic crisis and are already drowning in debt, this is something that we simply cannot afford.
There is certainly nothing wrong with taking care of the environment. But what the United Nations wants is a fundamental restructuring of the global economy based on flawed science.
In this new UN report, we find the following statement….
Achieving sustainability requires us to transform the global economy. Tinkering on the margins will not do the job.
This is absolutely crucial to understand.
The folks over at the UN don’t just want to change things a little.
Their goal is a radical transformation of the entire world.
According to the United Nations, if we don’t implement their recommendations the consequences will be absolutely disastrous….
But what, then, is to be done if we are to make a real difference for the world’s people and the planet? We must grasp the dimensions of the challenge. We must recognize that the drivers of that challenge include unsustainable lifestyles, production and consumption patterns and the impact of population growth. As the global population grows from 7 billion to almost 9 billion by 2040, and the number of middle-class consumers increases by 3 billion over the next 20 years, the demand for resources will rise exponentially. By 2030, the world will need at least 50 percent more food, 45 percent more energy and 30 percent more water — all at a time when environmental boundaries are throwing up new limits to supply. This is true not least for climate change, which affects all aspects of human and planetary health.
So what changes are needed in order for us to achieve a “sustainable” global economy?
Well, the following are some of the disturbing recommendations that we find in the new UN report….
Raise Prices
According to the United Nations, we need to start significantly raising the prices of things that are made in an “unsustainable” way so that they reflect the “true cost” of their production….
Most goods and services sold today fail to bear the full environmental and social cost of production and consumption. Based on the science, we need to reach consensus, over time, on methodologies to price them properly. Costing environmental externalities could open new opportunities for green growth and green jobs
That means that you and I would start paying a lot more for the basic things that we need every day – food, gasoline, etc.
Carbon Taxes
The UN report also discusses the need to use regulations and taxation as tools to penalize economic activities that are not “sustainable”….
Establish natural resource and externality pricing instruments, including carbon pricing, through mechanisms such as taxation, regulation or emissions trading systems, by 2020
This is one of the favorite things that social engineers like to do. They love to use taxation and regulations as weapons to get people to do the things they want.
Base Lending Decisions On Sustainable Development Criteria
The United Nations is actually suggesting that lending decisions be based on whether or not the money will be used for something “sustainable”….
Reform national fiscal and credit systems to provide long-term incentives for sustainable practices, as well as disincentives for unsustainable behaviour
Considering the fact that the entire global economy is based on credit, this is a very dangerous recommendation.
Green Jobs
The UN report also says that governments all over the world should seek to create as many “green jobs” as possible….
Governments should adopt and advance “green jobs” and decent work policies as a priority in their budgets and sustainable development strategies while creating conditions for new jobs in the private sector.
This is something that we have seen Barack Obama try to do, but obviously he has not had much success at it.
A New Economic Paradigm
According to the UN, the very way that we define “economic success” needs to be changed. Instead of looking at statistics such as GDP and inflation, we should be measuring what we do by how much it gets us closer to a “sustainable world”….
Expanding how we measure progress in sustainable development by creating a sustainable development index or set of indicators
So an economic collapse could actually be “good” if we make “progress” toward the goal of sustainable development.
Wealthy Countries Funding The Sustainable Development Goals Of Poor Countries
The UN report makes it clear that you and I will be paying for sustainable development all over the world in addition to paying for our own transition to a sustainable economy….
Financing sustainable development requires vast new sources of capital from both private and public sources. It requires both mobilizing more public funds and using global and national capital to leverage global private capital through the development of incentives. Official development assistance will also remain critical for the sustainable development needs of low-income countries
But considering the fact that the United States is already flat broke, where are we going to come up with all of this money?
Teach Sustainable Development To Our Children
The United Nations also believes that this philosophy of “sustainable development” should be taught to children in public schools all over the globe….
Government and non-governmental entities should promote the concept of sustainable development and sustainable consumption, and these should be integrated into curricula of primary and secondary education.
Sadly, this agenda is already being pushed on our children in schools all over the United States. When these children grow up, the concepts behind “sustainable development” will be second nature for them.
Population Control
Those that believe in sustainable development want to reduce carbon emissions by as much as possible.
When you sit down and really think about that, it becomes quite frightening.
Nearly every form of economic activity produces carbon emissions.
In fact, if you just sit in your home and breathe, you are producing carbon emissions.
So to them, you and I are the problem.
For those that are worried about man-made global warming, the math is simple.
The more people on earth, the higher the level of carbon emissions will be.
The less people on earth, the lower the level of carbon emissions will be.
So those that believe in sustainable development love to promote things that will reduce the human population of the earth.
In fact, we see this agenda reflected in one of the recommendations of the new UN report….
Ensuring universal access to quality and affordable family-planning and other sexual and reproductive rights and health services.
If more women have access to abortion facilities, then less babies will be born. For those that believe in sustainable development, that is a good thing.
But the UN has been pushing this kind of agenda for a long time.
“Each birth results not only in the emissions attributable to that person in his or her lifetime, but also the emissions of all his or her descendants. Hence, the emissions savings from intended or planned births multiply with time.”
This population control agenda is also being heavily promoted by many of the wealthiest people in the world. Many big “philanthropists” such as Bill Gates are using their money to fund research into population control measures. For example, Gates is currently funding research on “cutting edge” forms of birth control that could potentially be used all over the world. The following comes from a recent Natural News article….
Mass vaccination is apparently not the only depopulation strategy being employed by the Bill & Melinda Gates Foundation, as new research funded by the organization has developed a way to deliberately destroy sperm using ultrasound technology. BBC News reports that the Gates Foundation awarded a grant to researchers from the University of North Carolina (UNC) to develop this new method of contraception.
For their study, the UNC team tested ultrasound on lab rats and found that two 15-minute doses “significantly reduced” both sperm counts and sperm integrity. When administered two days apart through warm salt water, ultrasound caused the rats’ sperm counts to drop below ten million sperm per milliliter, which is five million less than the “sub-fertile” range, and stay that way for up to six months.
This population control agenda is one of the most frightening elements of sustainable development. Many advocates of sustainable development would actually cheer if something suddenly caused the population of the earth to drop dramatically.
Much Stronger Global Governance
The new UN report also advocates stronger “international governance” by bodies such as the United Nations….
International institutions have a critical role. International governance for sustainable development must be strengthened by using existing institutions more dynamically and by considering the creation of a global sustainable development council and the adoption of sustainable development goals
But this has been the ultimate goal of these control freaks for a long time. The idea is that a “global government” and a “global economy” will bring a great era of peace and prosperity to all of humanity.
Of course that is a complete and total lie, but there are a lot of people out there that actually believe this stuff.
In fact, the economic crisis that we are going through right now has renewed calls for a “global currency” which would be used by the whole world.
For example, you can watch banker Evelyn de Rothschild discuss the “need” for an “international currency” on Bloomberg Television in the following video….
The new UN report reflects this globalist agenda. The report states that “the peoples of the world” are not going to put up with all of this “inequality” any longer and that they will be demanding that their national governments adopt a “sustainable development” agenda….
“The peoples of the world will simply not tolerate continued environmental devastation or the persistent inequality which offends deeply held universal principles of social justice. Citizens will no longer accept governments and corporations breaching their compact with them as custodians of a sustainable future for all. More generally, international, national and local governance across the world must fully embrace the requirements of a sustainable development future, as must civil society and the private sector.”
If you want to get a really good idea of what a “sustainable development” society would look like, just check out the video posted below….
If you do not want to end up living in a “Planned-opolis” where virtually everything you do is watched, tracked and controlled by bureaucratic control freaks, then you better say something now.
If the United Nations actually succeeded in implementing this agenda worldwide, it would crash the global economy and it would be the end of national sovereignty.
Unfortunately, many of those that are promoting this agenda are absolute fanatics about it because they are convinced that they are saving the planet. They are so obsessed with “rescuing the earth” that they would do almost anything to all the rest of us in order to accomplish that goal.
Yes, we need to be concerned about the future of the planet, but the truth is that the “sustainable development” agenda is based on flawed science and it would make our economic problems far worse.
But the control freaks that are obsessed with “sustainable development” are going to continue to try to cram this agenda down our throats, so this is a battle that is likely to go on for many years.
Have you ever watched a football game or a basketball game where one team dominates the other team so badly that calling it a “blowout” would be a huge understatement? Well, that is what China is doing to the United States. China is absolutely destroying America on the global economic stage. Once upon a time, the Chinese economy was a joke and the U.S. economy was the most powerful the world had ever seen. But over the past couple of decades the U.S. economy has decayed and declined while the Chinese economy has skyrocketed. Today, China makes more steel, more automobiles, more beer, more cotton, more coal and more solar panels than we do. China has the fastest train in the world, the fastest computer in the world and they export twice as much high-tech equipment as we do. In 2011, our trade deficit with China was the largest trade deficit that one nation has had with another nation in the history of the world, and China has now accumulated more than 3 trillion dollars in foreign currency reserves. Every single day, we lose more jobs, more businesses and more of our national wealth to China. In technical economic terms, China has “taken us out behind the woodshed” and has beaten the living daylights out of us. Unfortunately, most Americans are so addicted to entertainment that they don’t even realize what is happening.
If you do not believe that China is wiping the floor with America in front of the rest of the world, just keep reading. The following are 47 signs that China is absolutely destroying America on the global economic stage….
#1 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Today, China’s high-tech exports are more than twice the size of U.S. high-tech exports.
#2 America has lost more than a quarter of all of its high-tech manufacturing jobs over the past ten years.
#3 The Chinese economy has grown 7 times faster than the U.S. economy has over the past decade.
#5 In 2010, China produced 627 million metric tons of steel. The United States only produced 80 million metric tons of steel.
#6 In 2010, China produced 7.3 million metric tons of cotton. The United States only produced 3.4 million metric tons of cotton.
#7 China produced 19.8 percent of all the goods consumed in the world during 2010. The United States only produced 19.4 percent.
#8 During 2010, we spent $365 billion on goods and services from China while they only spent $92 billion on goods and services from us.
#9 In 1985, the U.S. trade deficit with China was 6 million dollars for the entire year. The final U.S. trade deficit with China for 2011 will be very close to 300 billion dollars. That will be the largest trade deficit that one nation has had with another nation in the history of the world.
#10 The U.S. trade deficit with China is now 28 times larger than it was back in 1990.
#12 According to the New York Times, a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China.
#13 According to the Economic Policy Institute, America is losing half a million jobs to China every single year.
#14 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.
#15 The United States had been the leading consumer of energy on the globe for about 100 years, but during the summer of 2010 China took over the number one spot.
#16 15 years ago, China was 14th in the world in published scientific research articles. But now, China is expected to pass the United States and become number one very shortly.
#17 China is also expected to soon become the global leader in patent filings.
#18 In 2009, the United States ranked dead last of the 40 nations examined by the Information Technology & Innovation Foundation when it came to “change” in “global innovation-based competitiveness” over the previous ten years.
#30 China controls over 90 percent of the total global supply of rare earth elements.
#31 China is now the number one supplier of components that are critical to the operation of U.S. defense systems.
#32 According to author Clyde Prestowitz, China’s number one export to the U.S. is computer equipment. According to an article in U.S. News & World Report, during 2010 the number one U.S. export to China was “scrap and trash”.
#33 The United States has lost an average of 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001.
#34 Back in the year 2000, more than 20 percent of all jobs in America were manufacturing jobs. Today, only about 5 percent of all jobs in America are manufacturing jobs.
#35 Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost.
#36 The average household debt load in the United States is 136% of average household income. In China, the average household debt load is 17% of average household income.
#39 A Washington Post/ABC News poll conducted a while back found that 61 percent of all Americans consider China to be a threat to our jobs and economic security.
#40 According to U.S. Representative Betty Sutton, an average of 23 manufacturing facilities a day closed down in the United States during 2010.
#41 Overall, more than 56,000 manufacturing facilities in the United States have shut down since 2001.
#42 According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent out of the country over the next two decades.
#43 Over the past several decades, China has been able to accumulate approximately 3 trillion dollars in foreign currency reserves, and the U.S. government now owes China close to 1.5 trillion dollars.
#44 According to the IMF, China will pass the United States and will become the largest economy in the world in 2016.
#46 According to Stanford University economics professor Ed Lazear, if the U.S. economy and the Chinese economy continue to grow at current rates, the average Chinese citizen will be wealthier than the average American citizen in just 30 years.
#47 Nobel economist Robert W. Fogel of the University of Chicago is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040 if current trends continue.
If the global economy was a game, America would be losing very badly and China would have all the momentum.
Unfortunately, the global economy is not a game. Very real businesses and very real jobs are affected by this every single day.
Barack Obama keeps talking about how “the economy is improving“, but the reality is that we have never even gotten close to where we were back before the financial crisis of 2008.
The following chart (which I pulled off a Fed website today) shows the average duration of unemployment in America. Does this look like an economic recovery to you?….
The Obama administration tells us that the official unemployment rate is only 8.5 percent, but that is a joke. Even the Congressional Budget Office admits that the official unemployment rate should actually be somewhere up around 10 percent.
But the real story is the number of long-term unemployed workers we have in America today.
According to the Hamilton Project, approximately 53 percent of all unemployed workers in the state of Florida were out of work for more than six months during 2011.
But Barack Obama seems absolutely amazed that there are still so many unemployed people out there during his “economic recovery”. Just check out the following interaction that took place between Obama and one concerned wife during a recent appearance by Obama on Google+….
“Can I ask you what kind of engineer your husband is?,” Obama said to the wife of the unemployed engineer.
“He’s a semiconductor engineer,” she responded.
“It is interesting to me — and I meant what I said if your send me your husband’s resume, I’d be interested in finding out exactly what’s happening right there because the word that we’re getting is that somebody in that type of high-tech field, that kind of engineer, should be able to find something right away.”
Obama does not realize that it is not so simple to “find something right away” in this economy.
We have been shipping high-tech jobs overseas at a blistering pace. The jobs simply are not there anymore.
In Europe, unemployment is even worse. Just check out this chart which shows what has been happening to youth unemployment in Europe recently.
In both the United States and Europe, a great disconnect has taken place. Just because big corporations in the U.S. and in Europe are doing well, that does not mean that they are going to provide good jobs for workers in the U.S. and in Europe.
These days, it is way too easy for big corporations to ship jobs over to places like China where it is perfectly legal to pay workers slave labor wages.
So unless something changes, that means that from now on there will be chronic structural unemployment problems in the United States.
And unfortunately, there are signs that the economy is about to experience another downturn. Consumer confidence in the U.S. is falling once again. The Baltic Dry Index, which is often used as a measure of the health of the world economy, has fallen more than 60 percent since October.
Perhaps most importantly of all, Europe is heading into a recession and several European nations are already experiencing depression-like conditions.
Considering the fact that half of all global trade involves Europe in some manner, that is not a good thing for us.
So if you have a job right now, you might want to hold on to it tightly. Jobs are precious commodities at the moment, and they are going to become even more scarce in the years ahead.
Everywhere you turn these days, someone is proclaiming that the economy is improving. Barack Obama is endlessly touting the “improvement” in the economy, the mainstream media is constantly talking about “the economic recovery” and an increasing number of Americans seem to be buying into this line of thinking. A new NBC/Wall Street Journal poll found that 37 percent of Americans believe that the economy will improve over the next year, while only 17 percent of Americans believe that it will get worse. But is the economy actually improving? Not really. At the moment things are relatively stable. Some economic statistics are improving slightly and some continue to get even worse. However, it is very important to keep in mind that one of the biggest reasons why things have stabilized is because the federal government is pumping more than a trillion dollars a year into the economy that it does not have. The Obama administration is engaging in a debt binge unlike anything America has ever seen before, and yet many economic indicators are still in decline. So what is going to happen when the federal government stops injecting gigantic waves of borrowed money into the economy? That is a frightening thing to think about. The best efforts of our “leaders” in Washington D.C. are not accomplishing a whole lot. The Federal Reserve has pushed interest rates as low as they can go and the federal government is spending unprecedented amounts of money. But even with the federal government and the Federal Reserve pushing the accelerator all the way to the floor, the economy is still not improving much at all. Millions upon millions of Americans out there are anticipating some sort of a “great economic recovery”, and they are going to be bitterly disappointed.
But right now there are some “bright spots” in the economy, and you are bound to run into family and friends that will repeat to you the nonsense that they are hearing on the television about how the economy is recovering.
When they try to convince you that the economy is getting better, ask them these questions….
If the economy is getting better, then why did new home sales in the United States hit a brand new all-time record low during 2011?
If the economy is getting better, then why are there 6 million less jobs in America today than there were before the recession started?
If the economy is getting better, then why is the average duration of unemployment in this country close to an all-time record high?
If the economy is getting better, then why has the number of homeless female veterans more than doubled?
If the economy is getting better, then why has the number of Americans on food stamps increased by 3 million since this time last year and by more than 14 million since Barack Obama entered the White House?
If the economy is getting better, then why has the number of children living in poverty in America risen for four years in a row?
If the economy is getting better, then why is the percentage of Americans living in “extreme poverty” at an all-time high?
If the economy is getting better, then why is the Federal Housing Administration on the verge of a financial collapse?
If the economy is getting better, then why do only 23 percent of American companies plan to hire more employees in 2012?
If the economy is getting better, then why has the number of self-employed Americans fallen by more than 2 million since 2006?
If the economy is getting better, then why did an all-time record low percentage of U.S. teens have a job last summer?
If the economy is getting better, then why does median household income keep declining? Overall, median household income in the United States has declined by a total of 6.8% since December 2007 once you account for inflation.
If the economy is getting better, then why has the number of Americans living below the poverty line increased by 10 million since 2006?
If the economy is getting better, then why is the average age of a vehicle in America now sitting at an all-time high?
If the economy is getting better, then why are 18 percent of all homes in the state of Florida currently sitting vacant?
If the economy is getting better, then why are 19 percent of all American men between the ages of 25 and 34 living with their parents?
If the economy is getting better, then why does the number of “long-term unemployed workers” stay so high? When Barack Obama first took office, the number of “long-term unemployed workers” in the United States was approximately 2.6 million. Today, that number is sitting at 5.6 million.
But there is some good news.
When Barack Obama first took office, an ounce of gold was going for about $850. Today, the price of an ounce of gold is over $1700.
The era of great prosperity that America has enjoyed for so long is coming to an end.
In fact, our long-term economic decline is about to accelerate.
So enjoy this “bubble of hope” while you can, because it won’t last long.
As I have written about previously, many are warning that Europe is on the verge of a nightmarish financial crisis that could potentially plunge us into a global recession even worse than 2008.
Just because the economy is about to go through hard times does not mean that you have to go through hard times personally.
Right now, you can decide to make an investment or start a business that will thrive in a tough economic environment.
Victory often goes to the most prepared. So don’t just sit there while the storm clouds gather. Instead, this should be a time when you are gathering resources and developing a gameplan for the coming economic chaos.
Those that choose to have blind faith in “the system” are going to be tremendously disappointed in the years ahead. Just because you have a job right now does not mean that it is always going to be there. Just because your stock portfolio is doing well right now does not mean that will always be the case.
Hopefully we all learned some important lessons from 2008. The global financial situation can turn on a dime. When markets fall apart, they tend to do so very rapidly.
Ultimately, the debate about whether the economy is improving or not is going to be ended very emphatically. When the next wave of the financial crisis hits, there will be no doubt about what direction things are going.
Any financial system that is based on debt is doomed to fail. Today, we are living in the greatest debt bubble that the world has ever seen, and if all of a sudden people could not use credit to buy things our economy would immediately ground to a halt. Unfortunately, no debt bubble can last forever. When this current debt bubble finally bursts, faith in the financial system is going to disappear, credit is going to freeze up and there is going to be a massive wave of bank failures. Right now, Greece is a warning sign for the world. Nobody wants to lend money to Greece, the Greek banking system is dying, one out of every four businesses has already shut down, unemployment is soaring and the Greek economy has now been in recession for five years in a row. Sadly, the economic implosion in Greece is rapidly accelerating. The Greek economy shrunk at a 7 percent annual rate during the 4th quarter of 2011. That wasn’t supposed to happen. Things were supposed to be getting better in Greece by now. But instead the Greek depression is getting even worse, and very soon the rest of the world is going to be going through what Greece is currently experiencing.
The United Nations Wants To Crash The World Economy In Order To Save The Environment
There is certainly nothing wrong with taking care of the environment. But what the United Nations wants is a fundamental restructuring of the global economy based on flawed science.
In this new UN report, we find the following statement….
This is absolutely crucial to understand.
The folks over at the UN don’t just want to change things a little.
Their goal is a radical transformation of the entire world.
According to the United Nations, if we don’t implement their recommendations the consequences will be absolutely disastrous….
So what changes are needed in order for us to achieve a “sustainable” global economy?
Well, the following are some of the disturbing recommendations that we find in the new UN report….
Raise Prices
According to the United Nations, we need to start significantly raising the prices of things that are made in an “unsustainable” way so that they reflect the “true cost” of their production….
That means that you and I would start paying a lot more for the basic things that we need every day – food, gasoline, etc.
Carbon Taxes
The UN report also discusses the need to use regulations and taxation as tools to penalize economic activities that are not “sustainable”….
This is one of the favorite things that social engineers like to do. They love to use taxation and regulations as weapons to get people to do the things they want.
Base Lending Decisions On Sustainable Development Criteria
The United Nations is actually suggesting that lending decisions be based on whether or not the money will be used for something “sustainable”….
Considering the fact that the entire global economy is based on credit, this is a very dangerous recommendation.
Green Jobs
The UN report also says that governments all over the world should seek to create as many “green jobs” as possible….
This is something that we have seen Barack Obama try to do, but obviously he has not had much success at it.
A New Economic Paradigm
According to the UN, the very way that we define “economic success” needs to be changed. Instead of looking at statistics such as GDP and inflation, we should be measuring what we do by how much it gets us closer to a “sustainable world”….
So an economic collapse could actually be “good” if we make “progress” toward the goal of sustainable development.
Wealthy Countries Funding The Sustainable Development Goals Of Poor Countries
The UN report makes it clear that you and I will be paying for sustainable development all over the world in addition to paying for our own transition to a sustainable economy….
But considering the fact that the United States is already flat broke, where are we going to come up with all of this money?
Teach Sustainable Development To Our Children
The United Nations also believes that this philosophy of “sustainable development” should be taught to children in public schools all over the globe….
Sadly, this agenda is already being pushed on our children in schools all over the United States. When these children grow up, the concepts behind “sustainable development” will be second nature for them.
Population Control
Those that believe in sustainable development want to reduce carbon emissions by as much as possible.
When you sit down and really think about that, it becomes quite frightening.
Nearly every form of economic activity produces carbon emissions.
In fact, if you just sit in your home and breathe, you are producing carbon emissions.
So to them, you and I are the problem.
For those that are worried about man-made global warming, the math is simple.
The more people on earth, the higher the level of carbon emissions will be.
The less people on earth, the lower the level of carbon emissions will be.
So those that believe in sustainable development love to promote things that will reduce the human population of the earth.
In fact, we see this agenda reflected in one of the recommendations of the new UN report….
If more women have access to abortion facilities, then less babies will be born. For those that believe in sustainable development, that is a good thing.
But the UN has been pushing this kind of agenda for a long time.
For example, the United Nations Population Fund released a report back in 2009 entitled “Facing a Changing World: Women, Population and Climate” that included the following very chilling statement….
This population control agenda is also being heavily promoted by many of the wealthiest people in the world. Many big “philanthropists” such as Bill Gates are using their money to fund research into population control measures. For example, Gates is currently funding research on “cutting edge” forms of birth control that could potentially be used all over the world. The following comes from a recent Natural News article….
This population control agenda is one of the most frightening elements of sustainable development. Many advocates of sustainable development would actually cheer if something suddenly caused the population of the earth to drop dramatically.
Much Stronger Global Governance
The new UN report also advocates stronger “international governance” by bodies such as the United Nations….
But this has been the ultimate goal of these control freaks for a long time. The idea is that a “global government” and a “global economy” will bring a great era of peace and prosperity to all of humanity.
Of course that is a complete and total lie, but there are a lot of people out there that actually believe this stuff.
In fact, the economic crisis that we are going through right now has renewed calls for a “global currency” which would be used by the whole world.
For example, you can watch banker Evelyn de Rothschild discuss the “need” for an “international currency” on Bloomberg Television in the following video….
The new UN report reflects this globalist agenda. The report states that “the peoples of the world” are not going to put up with all of this “inequality” any longer and that they will be demanding that their national governments adopt a “sustainable development” agenda….
If you want to get a really good idea of what a “sustainable development” society would look like, just check out the video posted below….
If you do not want to end up living in a “Planned-opolis” where virtually everything you do is watched, tracked and controlled by bureaucratic control freaks, then you better say something now.
If the United Nations actually succeeded in implementing this agenda worldwide, it would crash the global economy and it would be the end of national sovereignty.
Unfortunately, many of those that are promoting this agenda are absolute fanatics about it because they are convinced that they are saving the planet. They are so obsessed with “rescuing the earth” that they would do almost anything to all the rest of us in order to accomplish that goal.
Yes, we need to be concerned about the future of the planet, but the truth is that the “sustainable development” agenda is based on flawed science and it would make our economic problems far worse.
But the control freaks that are obsessed with “sustainable development” are going to continue to try to cram this agenda down our throats, so this is a battle that is likely to go on for many years.