If you had to make a sudden visit to the emergency room, would you have enough money to pay for it without selling something or borrowing the funds from somewhere? Most Americans may not realize this, but this is something that the Federal Reserve has actually been tracking for several years now. And according to the Fed, an astounding 47 percent of all Americans could not come up with $400 to pay for an emergency room visit without borrowing it or selling something. Various surveys that I have talked about in the past have found that more than 60 percent of all Americans are living to paycheck to paycheck, but I didn’t realize that things were quite this bad for about half the country. If you can’t even come up with $400 for an unexpected emergency room visit, then you are just surviving from month to month by the skin of your teeth. Unfortunately, about half of us are currently in that situation.
Earlier today someone pointed me toward an excellent article in The Atlantic that discussed this, and I have to admit that The Atlantic is one of the last remaining bastions of old school excellence in journalism that you will find in the mainstream media. Of course I don’t see eye to eye with them on a lot of things philosophically, but there are some really hard working journalists over there.
The article where I found the 47 percent figure comes from The Atlantic, and it is entitled “The Secret Shame of Middle-Class Americans“. It was authored by Neal Gabler, and he says that he can identify with the 47 percent of Americans that don’t have $400 for an unexpected emergency room visit because he is one of them…
I know what it is like to have to juggle creditors to make it through a week. I know what it is like to have to swallow my pride and constantly dun people to pay me so that I can pay others. I know what it is like to have liens slapped on me and to have my bank account levied by creditors. I know what it is like to be down to my last $5—literally—while I wait for a paycheck to arrive, and I know what it is like to subsist for days on a diet of eggs. I know what it is like to dread going to the mailbox, because there will always be new bills to pay but seldom a check with which to pay them. I know what it is like to have to tell my daughter that I didn’t know if I would be able to pay for her wedding; it all depended on whether something good happened. And I know what it is like to have to borrow money from my adult daughters because my wife and I ran out of heating oil.
To me, this is yet more evidence that the middle class in America is dying.
Last year, it was reported that middle class Americans make up a minority of the population for the very first time in our history.
But back in 1971, 61 percent of all Americans lived in middle class households.
So what happened?
Well, the big corporations started shipping millions of good paying manufacturing jobs overseas. Millions of other good paying jobs were replaced by technology, and the competition for the good jobs that remained became extremely intense.
During the good times, the U.S. economy still created new jobs, but most of those jobs were low paying service jobs.
At this point, a majority of American workers have jobs that would be considered low paying. In fact, 51 percent of all American workers make less than $30,000 a year according to the Social Security Administration.
And once you account for inflation, the truth is that our incomes have been going down for years. According to a study that was released by Pew Charitable Trusts, median household income in the United States decreased by 13 percent between 2004 and 2014.
That isn’t “progress” any way that you slice it.
If you go all the way back to 1970, the middle class took home approximately 62 percent of all income in the United States.
Today, that number has fallen to just 43 percent.
So the fact that 47 percent of Americans can’t even pay for an unexpected emergency room visit is not exactly a surprise. To be honest, a whole host of other surveys have come up with similar numbers. Here is more from Neal Gabler…
A 2014 Bankrate survey, echoing the Fed’s data, found that only 38 percent of Americans would cover a $1,000 emergency-room visit or $500 car repair with money they’d saved. Two reports published last year by the Pew Charitable Trusts found, respectively, that 55 percent of households didn’t have enough liquid savings to replace a month’s worth of lost income, and that of the 56 percent of people who said they’d worried about their finances in the previous year, 71 percent were concerned about having enough money to cover everyday expenses.
What all of these numbers tell us is that the middle class is disappearing. I tend to compare it to a game of really bizarre musical chairs. With each passing month more chairs are being pulled out of the circle, and those members of the middle class that haven’t fallen into poverty yet are just hoping that a chair will still be there for them when the music stops.
Even during the “Obama recovery”, we have seen poverty in America absolutely explode. In fact, some brand new numbers just came out that are quite startling. The following comes from another author for The Atlantic named Gillian B. White…
Recently, the Brookings Institution published a report looking at the same idea but giving it a different name. The paper, builds on research from the British economist William Beveridge, who in 1942 proposed five types of poverty: squalor, ignorance, want, idleness, and disease. In modern terms, these could be defined as poverty related to housing, education, income, employment, and healthcare, respectively. Analyzing the 2014 American Community Survey, the paper’s co-authors, Richard Reeves, Edward Rodrigue, and Elizabeth Kneebone, found that half of Americans experience at least one of these types of poverty, and around 25 percent suffer from at least two.
To underscore this point, let me just run five quick facts about the growth of poverty in this country by you…
–The number of Americans that are living in concentrated areas of high poverty has doubled since the year 2000.
–In 2007, about one out of every eight children in America was on food stamps. Today, that number is one out of every five.
–46 million Americans use food banks each year, and lines start forming at some U.S. food banks as early as 6:30 in the morning because people want to get something before the food supplies run out.
–The number of homeless children in the U.S. has increased by 60 percent over the past six years.
–According to Poverty USA, 1.6 million American children slept in a homeless shelter or some other form of emergency housing last year.
That last number really gets me every time.
How can “the wealthiest and most powerful nation on the planet” have more than a million homeless children?
This is one of the reasons why I hammer on our ongoing economic collapse over and over and over. It is affecting real families with real children that have real hopes and real dreams.
This is not the way our country is supposed to work.
It is supposed to be “the land of opportunity”.
It is supposed to be a place where anyone can live “the American Dream”.
But instead it has become an economic wasteland where the largest and most prosperous middle class in the history of the world is being systematically eviscerated.
So no, the U.S. economy is not doing “just fine” – anyone that tries to tell you that lie is simply peddling fiction.
*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*
All over the planet, large banks are massively overexposed to derivatives contracts. Interest rate derivatives account for the biggest chunk of these derivatives contracts. According to the Bank for International Settlements, the notional value of all interest rate derivatives contracts outstanding around the globe is a staggering 505 trillion dollars. Considering the fact that the U.S. national debt is only 18 trillion dollars, that is an amount of money that is almost incomprehensible. When this derivatives bubble finally bursts, there won’t be enough money in the entire world to bail everyone out. The key to making sure that all of these interest rate bets do not start going bad is for interest rates to remain stable. That is why what is going on in Greece right now is so important. The Greek government has announced that it will default on a loan payment that it owes to the IMF on June 5th. If that default does indeed happen, Greek bond yields will soar into the stratosphere as panicked investors flee for the exits. But it won’t just be Greece. If Greece defaults despite years of intervention by the EU and the IMF, that will be a clear signal to the financial world that no nation in Europe is truly safe. Bond yields will start spiking in Italy, Spain, Portugal, Ireland and all over the rest of the continent. By the end of it, we could be faced with the greatest interest rate derivatives crisis that any of us have ever seen.
The number one thing that bond investors want is to get their money back. If a nation like Greece is actually allowed to default after so much time and so much effort has been expended to prop them up, that is really going to spook those that invest in bonds.
At this point, Greece has not gotten any new cash from the EU or the IMF since last August. The Greek government is essentially flat broke at this point, and once again over the weekend a Greek government official warned that the loan payment that is scheduled to be made to the IMF on June 5th simply will not happen…
Greece cannot make debt repayments to the International Monetary Fund next month unless it achieves a deal with creditors, its Interior Minister said on Sunday, the most explicit remarks yet from Athens about the likelihood of default if talks fail.
Shut out of bond markets and with bailout aid locked, cash-strapped Athens has been scraping state coffers to meet debt obligations and to pay wages and pensions. With its future as a member of the 19-nation euro zone potentially at stake, a second government minister accused its international lenders of subjecting it to slow and calculated torture.
After four months of talks with its eurozone partners and the IMF, the leftist-led government is still scrambling for a deal that could release up to 7.2 billion euros ($7.9 billion) in aid to avert bankruptcy.
And it isn’t just the payment on June 5th that won’t happen. There are three other huge payments due later in June, and without a deal the Greek government will not be making any of those payments either.
It isn’t that Greece is holding back any money. As the Greek interior minister recently explained during a television interview, the money for the payments just isn’t there…
“The money won’t be given . . . It isn’t there to be given,” Nikos Voutsis, the interior minister, told the Greek television station Mega.
This crisis can still be avoided if a deal is reached. But after months of wrangling, things are not looking promising at the moment. The following comes from CNBC…
People who have spoken to Mr Tsipras say he is in dour mood and willing to acknowledge the serious risk of an accident in coming weeks.
“The negotiations are going badly,” said one official in contact with the prime minister. “Germany is playing hard. Even Merkel isn’t as open to helping as before.”
And even if a deal is reached, various national parliaments around Europe are going to have to give it their approval. According to Business Insider, that may also be difficult…
The finance ministers that make up the Eurogroup will have to get approval from their own national parliaments for any deal, and politicians in the rest of Europe seem less inclined than ever to be lenient.
So what happens if there is no deal by June 5th?
Well, Greece will default and the fun will begin.
In the end, Greece may be forced out of the eurozone entirely and would have to go back to using the drachma. At this point, even Greek government officials are warning that such a development would be “catastrophic” for Greece…
One possible alternative if talks do not progress is that Greece would leave the common currency and return to the drachma. This would be “catastrophic”, Mr Varoufakis warned, and not just for Greece itself.
“It would be a disaster for everyone involved, it would be a disaster primarily for the Greek social economy, but it would also be the beginning of the end for the common currency project in Europe,” he said.
“Whatever some analysts are saying about firewalls, these firewalls won’t last long once you put and infuse into people’s minds, into investors’ minds, that the eurozone is not indivisible,” he added.
But the bigger story is what it would mean for the rest of Europe.
If Greece is allowed to fail, it would tell bond investors that their money is not truly safe anywhere in Europe and bond yields would start spiking like crazy. The 505 trillion dollar interest rate derivatives scam is based on the assumption that interest rates will remain fairly stable, and so if interest rates begin flying around all over the place that could rapidly create some gigantic problems in the financial world.
In addition, a Greek default would send the value of the euro absolutely plummeting. As I have warned so many times before, the euro is headed for parity with the U.S. dollar, and then it is going to go below parity. And since there are 75 trillion dollars of derivatives that are directly tied to the value of the U.S. dollar, the euro and other major global currencies, that could also create a crisis of unprecedented proportions.
Over the past six years I have written more than 2,000 articles, I have authored two books and I have produced two DVDs. One of the things that I have really tried to get across to people is that our financial system has been transformed into the largest casino in the history of the world. Big banks all over the planet have become exceedingly reckless, and it is only a matter of time until all of this gambling backfires on them in a massive way.
It isn’t going to take much to topple the current financial order. It could be a Greek debt default in June or it may be something else. But when it does collapse, it is going to usher in the greatest economic crisis that any of us have ever seen.
So keep watching Europe.
Things are about to get extremely interesting, and if I am right, this is the start of something big.
The U.S. economy is in a massive amount of trouble. There aren’t enough jobs. There isn’t enough money to go around. Business activity is slowing down again. Household wealth has been falling. Food prices have been rising. Many state and local governments all over the country are flat broke and are drowning in debt. The federal government has been rolling up unprecedented amounts of debt in an attempt to keep things going, but everyone knows that kind of borrowing is simply unsustainable. So where do we go from here? We consume far more than we produce and we use debt to make up the difference. 40 years ago the total amount of debt in America (government, business and consumer) was less than 2 trillion dollars. Today it is nearly 55 trillion dollars. How in the world did we let the total amount of debt in the United States grow more than 27 times larger over the past 40 years? Our economic system is fundamentally broken, but most Americans don’t realize it yet because times are still relatively good.
However, the next great economic crisis is going to wake a whole lot of Americans up.
And when they realize what has happened to our future, they are going to be really, really angry.
Enjoy the good times while they last. The next recession is rapidly approaching, and it will not be pleasant.
The following are 20 signs that all point to the exact same thing….
#1 The unemployment rate in the U.S. has been above 8 percent for 40 months in a row, and 42 percent of all unemployed Americans have been out of work for at least half a year. As I wrote about recently, there are never going to be enough jobs in America ever again. As bad as things are right now, they are about to get even worse. So what is our country going to look like once the unemployment rate starts shooting up rapidly once again?
#2 35 percent of all unemployed workers have had to dip into retirement savings in order to make ends meet over the past year.
#3 Since 2008, the U.S. economy has lost 1.3 million jobs while at the same time 3.6 million more Americans have been added to Social Security’s disability insurance program.
#4 A recent survey conducted by the National Association for Business Economics found that only 23 percent of all U.S. companies plan to hire more workers over the next 6 months. When the same question was asked a few months ago that number was at 39 percent.
#5 An important measure of U.S. manufacturing activity has fallen to its lowest level since June 2009.
#6 Hundreds of thousands of federal jobs at civilian agencies will likely be lost if Congress allows the automatic federal budget cuts to go into effect next year. The following is from a recent article posted on federalnewsradio.com….
A report released Tuesday suggests that several hundred thousand federal jobs at civilian agencies would be on the chopping block within the next year if Congress lets the automatic budget cutting process known as sequestration go into effect.
The study, authored by George Mason University professor Stephen Fuller, adds a new dimension to a budget debate that’s so far been centered on sequestration’s effects on the military.
#7 The teen unemployment rate in Washington D.C. right now is 51.7 percent.
#8 Gallup’s U.S. Economic Confidence Index is now the lowest that it has been since January.
#9 The median net worth of U.S. households in 2007 was $126,400. By 2010, it had fallen to just $77,300.
#10 Pensions at S&P 500 companies are more under-funded than they have ever been before.
#11 According to the New York Times, state and local governments across America “shortchanged their pension plans by more than $50 billion” between 2007 and 2011.
#12 The city of Compton, California is evaluating whether or not it should declare bankruptcy. If it did, it would become the fourth California city to declare bankruptcy this year.
#13 The percentage of U.S. households that are spending more than half their incomes on housing is at an all-time high.
#14 For the first time in modern history, Canadian households are wealthier than American households are.
#15 One recent poll found that 42 percent of all Americans believe that China is the leading economic power in the world while only 36 percent believe that the U.S. is still the leading economic power in the world.
#16 According to the federal government, the price of food rose much faster than the general rate of inflation did during 2011. Just check out these rates of food inflation for 2011….
- Beef: +10.2%
- Pork: +8.5%
- Fish: +7.1%
- Eggs: +9.2%
- Dairy: +6.8%
- Oils and Fats: +9.3%
If that happened during a somewhat “normal year”, what will food prices look like after we are done with the drought of 2012?
#17 The price of a bushel of corn has risen by 54 percent since mid-June.
#18 According to one survey, 42 percent of all American workers are living paycheck to paycheck.
#19 A different survey found that 28 percent of all Americans have absolutely no emergency savings at all right now.
#20 Federal Reserve Chairman Ben Bernanke made the following statement to Congress on Tuesday: “At this point we don’t see a double dip recession. We see continued moderate growth.”
Do you remember that old Seinfeld episode when George Costanza decided that he would “do the opposite” of everything that his instincts were telling him to do and everything started working out great for him?
Well, when it comes to Federal Reserve Chairman Ben Bernanke, the key is to “believe the opposite” of everything that he says.
And since Bernanke does not believe that a double dip recession is going to happen, that probably means that we are about to hit another recession.
If you doubt this theory about Bernanke, just go back and check out his track record.
Okay, so if our economy is in big trouble shouldn’t our leaders be doing something about it?
Well, it is election season now so I wouldn’t expect too much from Barack Obama. He is too busy raising money in France and in China.
I wouldn’t expect too much from Obama’s economic advisers either. In fact, Obama’s much-ballyhooed “jobs council” has not even met in six months.
Not that the “jobs council” was ever going to do anything substantive anyway.
The truth is that it was just for show and most of the CEOs on the council have been sending jobs overseas anyway.
Well, what about the SEC?
Shouldn’t they be doing something to fix the financial system?
No, they are too busy investigating the Amish.
It looks like we are on our own.
Soon, even more parts of the country will start looking like Detroit or Baltimore or Cleveland.
This country is rapidly falling apart, and the federal government is not going to save us.
That is why we need to focus on preparing to weather the coming storm on a family and community level.
There is hope in being prepared. The coming economic crisis will wipe out many Americans because they will never even see it coming. But that does not have to happen to you.
If you work really hard right now to prepare your family for the storm that is on the horizon, then you will have a much better chance of making it through to the other side.
When news broke of a 2 billion dollar trading loss by JP Morgan, much of the financial world was absolutely stunned. But the truth is that this is just the beginning. This is just a very small preview of what is going to happen when we see the collapse of the worldwide derivatives market. When most Americans think of Wall Street, they think of a bunch of stuffy bankers trading stocks and bonds. But over the past couple of decades it has evolved into much more than that. Today, Wall Street is the biggest casino in the entire world. When the “too big to fail” banks make good bets, they can make a lot of money. When they make bad bets, they can lose a lot of money, and that is exactly what just happened to JP Morgan. Their Chief Investment Office made a series of trades which turned out horribly, and it resulted in a loss of over 2 billion dollars over the past 40 days. But 2 billion dollars is small potatoes compared to the vast size of the global derivatives market. It has been estimated that the the notional value of all the derivatives in the world is somewhere between 600 trillion dollars and 1.5 quadrillion dollars. Nobody really knows the real amount, but when this derivatives bubble finally bursts there is not going to be nearly enough money on the entire planet to fix things.
Sadly, a lot of mainstream news reports are not even using the word “derivatives” when they discuss what just happened at JP Morgan. This morning I listened carefully as one reporter described the 2 billion dollar loss as simply a “bad bet”.
And perhaps that is easier for the American people to understand. JP Morgan made a series of really bad bets and during a conference call last night CEO Jamie Dimon admitted that the strategy was “flawed, complex, poorly reviewed, poorly executed and poorly monitored”.
The funny thing is that JP Morgan is considered to be much more “risk averse” than most other major Wall Street financial institutions are.
So if this kind of stuff is happening at JP Morgan, then what in the world is going on at some of these other places?
That is a really good question.
For those interested in the technical details of the 2 billion dollar loss, an article posted on CNBC described exactly how this loss happened….
The failed hedge likely involved a bet on the flattening of a credit derivative curve, part of the CDX family of investment grade credit indices, said two sources with knowledge of the industry, but not directly involved in the matter. JPMorgan was then caught by sharp moves at the long end of the bet, they said. The CDX index gives traders exposure to credit risk across a range of assets, and gets its value from a basket of individual credit derivatives.
In essence, JP Morgan made a series of bets which turned out very, very badly. This loss was so huge that it even caused members of Congress to take note. The following is from a statement that U.S. Senator Carl Levin issued a few hours after this news first broke….
“The enormous loss JPMorgan announced today is just the latest evidence that what banks call ‘hedges’ are often risky bets that so-called ‘too big to fail’ banks have no business making.”
Unfortunately, the losses from this trade may not be over yet. In fact, if things go very, very badly the losses could end up being much larger as a recent Zero Hedge article detailed….
Simple: because it knew with 100% certainty that if things turn out very, very badly, that the taxpayer, via the Fed, would come to its rescue. Luckily, things turned out only 80% bad. Although it is not over yet: if credit spreads soar, assuming at $200 million DV01, and a 100 bps move, JPM could suffer a $20 billion loss when all is said and done. But hey: at least “net” is not “gross” and we know, just know, that the SEC will get involved and make sure something like this never happens again.
And yes, the SEC has announced an “investigation” into this 2 billion dollar loss. But we all know that the SEC is basically useless. In recent years SEC employees have become known more for watching pornography in their Washington D.C. offices than for regulating Wall Street.
But what has become abundantly clear is that Wall Street is completely incapable of policing itself. This point was underscored in a recent commentary by Henry Blodget of Business Insider….
Wall Street can’t be trusted to manage—or even correctly assess—its own risks.
This is in part because, time and again, Wall Street has demonstrated that it doesn’t even KNOW what risks it is taking.
In short, Wall Street bankers are just a bunch of kids playing with dynamite.
There are two reasons for this, neither of which boil down to “stupidity.”
- The first reason is that the gambling instruments the banks now use are mind-bogglingly complicated. Warren Buffett once described derivatives as “weapons of mass destruction.” And those weapons have gotten a lot more complex in the past few years.
- The second reason is that Wall Street’s incentive structure is fundamentally flawed: Bankers get all of the upside for winning bets, and someone else—the government or shareholders—covers the downside.
The second reason is particularly insidious. The worst thing that can happen to a trader who blows a huge bet and demolishes his firm—literally the worst thing—is that he will get fired. Then he will immediately go get a job at a hedge fund and make more than he was making before he blew up the firm.
We never learned one of the basic lessons that we should have learned from the financial crisis of 2008.
Wall Street bankers take huge risks because the risk/reward ratio is all messed up.
If the bankers make huge bets and they win, then they win big.
If the bankers make huge bets and they lose, then the federal government uses taxpayer money to clean up the mess.
Under those kind of conditions, why not bet the farm?
Sadly, most Americans do not even know what derivatives are.
Most Americans have no idea that we are rapidly approaching a horrific derivatives crisis that is going to make 2008 look like a Sunday picnic.
According to the Comptroller of the Currency, the “too big to fail” banks have exposure to derivatives that is absolutely mind blowing. Just check out the following numbers from an official U.S. government report….
JPMorgan Chase – $70.1 Trillion
Citibank – $52.1 Trillion
Bank of America – $50.1 Trillion
Goldman Sachs – $44.2 Trillion
So a 2 billion dollar loss for JP Morgan is nothing compared to their total exposure of over 70 trillion dollars.
Overall, the 9 largest U.S. banks have a total of more than 200 trillion dollars of exposure to derivatives. That is approximately 3 times the size of the entire global economy.
It is hard for the average person on the street to begin to comprehend how immense this derivatives bubble is.
So let’s not make too much out of this 2 billion dollar loss by JP Morgan.
This is just chicken feed.
This is just a preview of coming attractions.
Soon enough the real problems with derivatives will begin, and when that happens it will shake the entire global financial system to the core.
When the sun goes down every night, America becomes a very frightening place. There are communities all over the country where drug dealing, human trafficking and gang violence have gotten so out of control that authorities don’t really know what to do about it. In America tonight, thousands of meth heads will break into homes as they desperately search for enough money for another hit. In America tonight, thousands of children will be sold for sex at truck stops and on street corners. In America tonight, millions of criminal predators will be searching for a new victim. From the top levels of the federal government all the way down to the most depraved criminals on the street, America is rotting. Once upon a time our tremendous affluence masked the moral decay that was happening in this nation, but now that the economy is falling apart the damage to the fabric of our society is being revealed. We have become a nation of addicts, junkies, thrill seekers and predators. When we finally see the U.S. economy fully collapse, millions of desperate, angry and depraved monsters will take out their sick frustrations on all the rest of us.
It isn’t talked a lot about anymore, but the meth epidemic in America is getting worse. According to PBS, there are approximately 1.4 million meth users in America. Meth is unbelievable addictive and it can absolutely destroy your life. If you doubt this, just check out these before and after pictures.
Sadly, there are indications that meth use is on the rise once again. According to the DEA, meth seizures increased from 2,839 in 2007 to 6,168 in 2010.
When you take meth, it can literally make you crazy. The following is from a recent USA Today article….
A mother in Bakersfield, California, was sentenced Tuesday for stabbing her newborn while in a meth rage. An Oklahoma woman drowned her baby in a washing machine in November. A New Mexico woman claiming to be God stabbed her son with a screwdriver last month, saying, “God wants him dead.”
Large numbers of meth addicts turn into thieves when they run out of money. Often, they will steal just about anything they can in order to get money for their next hit. Some things that meth addicts have stolen recently include agricultural plumbing, copper wiring and lawn sprinklers.
And making meth can be extremely dangerous as well. U.S. hospitals are filled with thousands and thousands of uninsured burn patients that were horribly burned while trying to make “shake and bake” meth.
The following comes from a recent Daily Mail article….
It is filling hospitals with thousands of uninsured burn patients requiring millions of dollars in advanced treatment – a burden so costly that it is contributing to the closure of some burns units.
So-called ‘shake-and-bake’ meth is produced by combining raw, unstable ingredients in a two-litre bottle.
But if the person mixing the noxious brew makes the slightest error, such as removing the cap too soon or accidentally perforating the plastic, the concoction can explode, searing flesh and causing permanent disfigurement, blindness or even death.
A survey of key hospitals in America’s most-active meth states showed that up to a third of patients in some burns units were hurt while making meth, and most were uninsured.
But of course meth is just one of the highly addictive drugs that are plaguing our youth. There are many other nightmarish drugs that could also be discussed. Nearly every community in America is dealing with some sort of a drug problem, and despite the “war on drugs” this crisis just seems to keep getting worse every single year.
Perhaps even more alarming is the rise of human trafficking in America.
When I was going through school, I was taught that slavery had been abolished in the United States.
But that was a lie.
Right now, thousands upon thousands of Americans are living as slaves. Most of them are sex slaves. As you read this, there are women all over America that are literally chained to beds in dark rooms where men pay their “owners” to have sex with them.
The following stats about human trafficking come from a recent Detroit Free Press article….
• Human trafficking is a $32-billion industry worldwide.
• Up to 2 million people are trafficked worldwide every year. Of those, 15,000-18,000 are in the U.S.
• Eight in 10 human trafficking cases involve the sex industry; the others involve labor trafficking.
• In 2010, 2,515 human trafficking cases were under investigation in the U.S.
• Eighty-three percent of victims in confirmed sex trafficking cases in the U.S. in 2010 were American citizens
Many Americans would be absolutely horrified to learn what goes on behind closed doors in America.
All over the nation tonight, vicious monsters will be selling or “renting” young children to other vicious monsters for sex.
The following story of one human trafficking victim comes from a recent Fox News article….
Today, Keisha Head is a wife and mother of three. But more than decade ago, she was the victim of a notorious human trafficker.
At 16-years old, Head says she was being sold on the streets of Atlanta for sex.
“I did not know that a normal, average man who was a preacher, who was a lawyer, who was a senator – could turn into this monster,” Head said. “That is the scariest moment when you are amongst people who claim to be normal yet they purchase you and they turn into these monsters. They rape you. They beat you. And then act as if they’re normal. These are not your normal pedophiles.”
When you push morality out of the schools and out of public life, this is the kind of thing that starts happening.
Thousands upon thousands of other women “work for themselves” on the streets of America. Some are willing to let strangers have sex with them for next to nothing.
For example, one woman in Los Angeles was recently arrested for approaching customers at one McDonald’s and offering sexual favors in exchange for Chicken McNuggets.
A lot of really weird stuff happens in America after dark.
As the economy has crumbled, thieves all over the country have become increasingly bold and increasingly desperate.
The following are just a few recent examples….
*In Fresno, California the damage caused by thieves stealing copper wire from city street lights is costing the city approximately $50,000 a month. So far, about 2,500 street lights have been stripped of their wiring.
*In northern Alabama, one group of crooks has been using a forklift to pull entire ATM machines out of the ground.
*A while back, a team of ambitious thieves in Pennsylvania actually stole an entire 50 foot long bridge.
Other crimes are committed by members of the government. In Chicago, the bodies of poor people that don’t have enough money to bury themselves are being treated with absolutely no respect at all by government officials. Just check out what Cook County Sheriff Tom Dart says that he found….
“Babies are buried 10, 15 to a box. They’re buried in there with animal remains. They’re buried in there with arms and legs from body parts they found during the course of the year. It is not anything that our county or society should ever sit there and say is acceptable”
Can you imagine that?
What kind of a monster would do such a thing?
Of course I could go on for ages about the sick corruption of our government officials, but that will have to be left for another day.
For now, I want to focus on another rising problem in our society. As I wrote about the other day, the FBI says that there are now 1.4 million gang members living inside the United States. That number has risen by an astounding 40 percent since 2009.
Nearly every major U.S. city has areas that are essentially “owned” by gangs. Some of these gangs are the size of small armies. For example, it is estimated that the Latin Kings have 18,000 members in the city of Chicago alone.
When civil unrest erupts in America, these organized groups of criminal predators will have a field day. Even now, law enforcement authorities in many areas of the country are having an incredibly difficult time trying to contain them.
As things fall apart all around us, an increasing number of Americans are coming to the realization that they are not going to be able to depend on someone else to defend themselves and their families.
Perhaps that is why the American people stocked up on firearms at an astounding rate during 2011.
In some areas of the country, a firefight can potentially erupt just about at any time. The following is from an article that was recently posted on standwitharizona.com….
Barbed wire fencing doesn’t keep illegal aliens off the property anymore. One Starr County, TX rancher doesn’t have time to worry about the illegals these days. He now worries about the smugglers protecting their loads.
“I don’t think they would have any conscience of taking someone’s life,” the rancher says.
He saw that will to kill firsthand. A smuggler shot at him on his own land.
“One round was fired at me, and it missed my head by about two feet,” says the rancher.
He says there’s only way to react.
“Fire all the rounds you have, reload, and do it again,” says the rancher.
We don’t do ourselves any favors by pretending that America is going to somehow turn around and become the safe, friendly place that it used to be.
There are millions of criminal predators in this country today that have little or no conscience. They don’t care about you, your spouse or your children. All they care about is feeding their addictions.
In the months and years to come, the economy is going to get worse. As it does, all of those predators are going to become even more desperate.
Desperate people do desperate things.
America is going to become a very frightening place. But instead of curling up into a ball and crying about it, the better response is to be strong and courageous and to get prepared the best that you can.
He sure has come a long way since “Ferris Bueller’s Day Off”. During a recent television segment for CBS, Ben Stein declared that “the tea leaves are ominous” and he warned that an economic collapse may be coming. In particular, Ben Stein is deeply concerned about inflation. During his recent appearance on CBS, Stein proclaimed that the Federal Reserve is “just shoving money out the door as fast as it can” and that this could have horrific consequences for the U.S. financial system. Sadly, Ben Stein is exactly right on this point. The Federal Reserve has already injected enough money into the financial system to create an inflationary disaster. Fortunately most of this liquidity is still being held by the banks (this will be further explored below), but once all of that money starts getting released into the financial system it is going to unleash economic chaos.
In the video that you are about to watch, Ben Stein states that “when serious inflation hits, it hits everyone”.
And that is absolutely true. Inflation is a hidden tax on ever single dollar that each one of us holds. Nobody can cheat that hidden tax and nobody can escape from it.
You may have noticed that the price of gas is going up.
In fact, just the other day UPI reported that the price of gas at one station in the Washington D.C. area was up to 5 dollars a gallon.
Can it get much worse?
Well, actually yes it can.
Richard Hastings, a strategist at Global Hunter Securities, recently told CNBC that he believes that we could potentially see $6 gas at some point this summer.
Do you think that a lot of American families will rethink their summer vacations if that happens?
Perhaps Americans will just fly instead.
Well, that is rapidly becoming more expensive as well. Just check out what one recent CNN article had to say about rising airfares….
Late Tuesday, Southwest Airlines raised all of its round-trip fares by $10. Delta (DAL, Fortune 500) initiated this latest round of price increases on Monday, and as of midday Wednesday American Airlines (AMR, Fortune 500), JetBlue (JBLU) and United Airlines (UAL) had matched it.
As Ben Stein also notes in the video below, food prices are soaring as well. Rampant money printing by the Federal Reserve and serious crop problems all over the globe have created a “perfect storm” for agricultural commodities. In the video, Stein sounds downright apocalyptic as he describes crop failures around the world….
But now, we are getting serious crop shortfalls in China – an enormously important agricultural producer and consumer. U.S. crop forecasts are also disappointing. There are huge problems in Australia, South America, and Russia. Corn, wheat, rice and other foodstuff prices are just going wild.
And you know what?
Ben Stein is right.
In a recent article about the global food crisis, I detailed some of the agricultural commodity price increases that we have seen….
*According to the World Bank, the global price of food has risen 36% over the past 12 months.
*The commodity price of wheat has approximately doubled since last summer.
*The commodity price of corn has also about doubled since last summer.
*The commodity price of soybeans is up about 50% since last June.
*The commodity price of orange juice has doubled since 2009.
But it isn’t just food and gas that are going up. We are seeing inflation everywhere. The value of virtually all “hard assets” is going up.
Investors are running to precious metals such as gold and silver in a desperate attempt to preserve their wealth. Gold and silver have been absolutely skyrocketing. The price of gold set another brand new all-time record high this week. The price of silver hit a 31-year high today.
So why is this happening?
One of the biggest reasons for all of this is that the Federal Reserve has been flooding the system with new money. In the video below, Ben Stein points to quantitative easing as the primary reason why we are seeing so much inflation….
But most important of all, the Fed is just shoving money out the door as fast as it can, creating piles of cash in banks.
The Federal Reserve had hoped that economic growth would be sparked by all of this new cash, but that is only happening to a minimal degree.
Instead, what Ben Stein believes all of this new money is going to bring about is a situation known as “stagflation”.
Do you remember the 1970s and the “misery index”?
Well, we seem to be headed for a repeat of those days.
In a previous article, I defined stagflation….
Stagflation exists when inflation and unemployment are both at high levels at the same time.
Up to this point, we have had high unemployment but relatively low levels of inflation.
But now we are going to get to enjoy high unemployment and high inflation at the same time.
Video of Ben Stein’s recent appearance on CBS is posted below. You can read a transcript of his remarks here. It is amazing that a mainstream news outlet would allow this much truth to get out….
Look, the reality is that you cannot pump this much money into the financial system without there eventually being very serious consequences.
For decades the Federal Reserve has been systematically debasing the U.S. dollar, but what the Fed has been doing to the money supply over the past couple of years is absolutely unprecedented. Just check out the chart below….
So why hasn’t all of this new cash caused chaos in the economy already?
Well, because most of it is still trapped in the financial system. Banks have been reluctant to loan it out. Instead, they seem content to keep most of it on reserve at the Fed.
But if all of this new money starts leaking out into the economy it is going to drive prices up. When you have lots more money chasing roughly the same number of goods and services it is inevitable that inflation will result.
Robert Wenzel of EconomicPolicyJournal.com believes that more quantitative easing is not even necessary to turn the U.S. economy into a hyperinflationary nightmare. In fact, Wenzel says that there are enough excess reserves at the Fed right now to turn us into another Zimbabwe….
With over $1.4 TRILLION in excess reserves, Bernanke never has to resort to QE style monetary operations ever again, to print money. If those excess reserves leak into the system, Bernanke has enough sitting there to make Zimbabwe look like a model of prudent money management. As per usual, Bernanke has most of the media and Fed watchers looking at the wrong card.
Forget about QE3, keep your eye on excess reserves. Excess reserves are funds that are not in the system bidding up prices, but when they enter the system by banks using them to make loans, have the potential to result in a multiple of their size, when they impact the money supply. Because of this potential for multiple size impact, excess reserve entering the economy are considered high-powered money.
We would have never even been in this position if we had never allowed the Federal Reserve to be created and had never gotten 14 trillion dollars in debt. But now America has a debt problem that can never be solved under the current system. We are locked into a debt spiral from which there is no escape.
Last year, the U.S. government spent more on interest on the national debt than on the following departments combined….
*The Department of Health and Human Services
*The Department of Energy
*The Department of Veterans Affairs
*The Department of Justice
*The Department of Homeland Security
*The Department of Agriculture
*The Treasury Department
*The Department of Labor
But right now the U.S. is still able to borrow tons of money at super low interest rates.
So what happens if interest rates go up?
It could potentially be catastrophic.
That is why the decision by S&P to downgrade its outlook on U.S. government debt was such a big thing the other day. The U.S. still has a “AAA” rating, but S&P is warning that the AAA rating is in danger.
So what would it mean if the U.S. lost the AAA rating that it currently holds?
The Washington Post recently described it this way….
A credit rating downgrade for the United States would spell even more financial trouble for the U.S. government, hampering its ability to borrow money as investors demand higher yields to make up for the increased risk. That would cause its national debt to balloon further and increase the need to hike taxes or make even more painful cuts in spending.
But the U.S. government continues to borrow money like there is no tomorrow and Ben Bernanke and his friends at the Fed continue to recklessly print money.
As bad as things may seem for many of you right now, the truth is that what we are experiencing at the moment is a “false bubble of prosperity”. Things are eventually going to get much, much worse.
Enjoy this time of economic peace and stability while you still can. Our leaders have absolutely destroyed our economic future and we are going to want to have some good memories to hold on to while we are living through economic hell in the years ahead.