What I am about to share with you is quite stunning. A well-respected financial expert that correctly predicted the last two stock market crashes is now warning that we are right on the verge of the next one. John Hussman is a former professor of economics and international finance at the University of Michigan, and the information in his latest weekly market comment is staggering. Since 1970, there have only been a handful of times when a combination of market signals that Hussman uses have indicated that a major market peak has been reached. In 1972, 2000 and 2007 each of those peaks was followed by a dramatic stock market crash. Now, for the first time since the last financial crisis, all four of those signals appeared once again during the week of July 17th. If Hussman’s analysis is correct, this could very well mean that the next great stock market crash in the United States is imminent.
It was an excellent article by Jim Quinn of the Burning Platform that first alerted me to Hussman’s latest warning. If you don’t follow Quinn’s work already, you should, because it is excellent.
When someone is repeatedly correct about the financial markets, we should all start paying attention. Back in late 2007, Hussman warned us about what was coming in 2008, but most people did not listen.
Now he is sounding the alarm again. According to Hussman, when there is a confluence of four key market indicators, that tells us that the market has peaked and is in danger of crashing. The following comes from Newsmax…
He cited the metric among the indicators that foreshadowed declines after peaks in 1972, 2000 and 2007:
*Less than 27 percent of investment advisers polled by Investors Intelligence who say they are bearish.
*Valuations measured by the Shiller price-to-earnings ratio are greater than 18 times.
*Less than 60 percent of S&P 500 stocks above their 200-day moving averages.
*Record high on a weekly closing basis.
“The most recent warning was the week ended July 17, 2015,” Hussman said. “It’s often said that they don’t ring a bell at the top, and that’s true in many cycles. But it’s interesting that the same ‘ding’ has been heard at the most extreme peaks among them.”
It is quite rare for the market to set a new record high on a weekly closing basis and have more than 40 percent of stocks below their 200-day moving averages at the same time. That is why a confluence of all these factors is fairly uncommon. Hussman elaborated on this in his recent report…
The remaining signals (record high on a weekly closing basis, fewer than 27% bears, Shiller P/E greater than 18, fewer than 60% of S&P 500 stocks above their 200-day average), are shown below. What’s interesting about these warnings is how closely they identified the precise market peak of each cycle. Internal divergences have to be fairly extensive for the S&P 500 to register a fresh overvalued, overbullish new high with more than 40% of its component stocks already falling – it’s evidently a rare indication of a last hurrah. The 1972 warning occurred on November 17, 1972, only 7 weeks and less than 4% from the final high before the market lost half its value. The 2000 warning occurred the week of March 24, 2000, marking the exact weekly high of that bull run. The 2007 instance spanned two consecutive weekly closing highs: October 5 and October 12. The final daily high of the S&P 500 was October 9 – right in between. The most recent warning was the week ended July 17, 2015.
The following is the chart that immediately followed the paragraph in his report that you just read…
When I first took a look at that chart I could hardly believe it.
It appears that Hussman’s signals are able to indicate major stock market crashes with stunning precision.
And considering the fact that we just hit a new “ding” for the first time since the last financial crisis, what Hussman is saying is more than just a little bit ominous.
According to Hussman this is not just a recent phenomenon either. Even though advisory sentiment figures were not available back in 1929, he believes that his indicators would have given a signal that a market crash was imminent in August of that year as well…
Though advisory sentiment figures aren’t available prior to the mid-1960’s, imputed data suggest that additional instances likely include the two consecutive weeks of August 19, 1929 and August 26, 1929. We can infer unfavorable market internals in that instance because we know that cumulative NYSE breadth was declining for months before the 1929 high. The week of the exact market peak would also be included except that stocks closed down that week after registering a final high on September 3, 1929. Another likely instance, based on imputed sentiment data, is the week of November 10, 1961, which was immediately followed by a market swoon into June 1962.
Of course the past is the past, and what has happened in the past will not necessarily happen in the future.
Other financial professionals are concerned that a market crash could be imminent as well. The following comes from a piece authored by Andrew Adams…
More than 13% of stocks on the New York Stock Exchange are at 52-week lows, which is about 6 standard deviations above the average over the last three years (1.62%) and an extreme only seen one other time during said period (last October when the S&P 500 was percentage points away from a 10% correction).
This dichotomy has created what I believe to be the biggest question about the stock market right now – have we already experienced a stealth correction in the majority of stocks that will soon come to an end or will the market leaders finally succumb to the weight of the laggards and join in on the sell-off? The answer to this could end up being worth at least $2.2 trillion, which is how much money would essentially be wiped out of the stock market if we finally get the much-discussed 10% correction in the overall market (the total U.S. stock market capitalization was $22.5 trillion as of June 30, according to the Center for Research in Security Prices).
Sometimes, a picture is worth more than a thousand words. I could share many more quotes from the “experts” about why they are concerned about a potential stock market collapse, but instead I want to share with you a “bonus chart” that Zero Hedge posted on Tuesday…
Do you understand what that is saying?
In 2007 and 2008, junk bonds started crashing well before stocks did.
Now, we are witnessing a similar divergence. If a similar pattern holds up this time, stocks have a long, long way to fall.
Like Hussman and so many others, I believe that a stock market crash and a new financial crisis are imminent.
The month of August is usually a slow month in the financial world, so hopefully we can get through it without too much chaos. But once we roll into the months of September and October we will officially be in “the danger zone”.
Keep an eye on China, keep an eye on Europe, and keep listening for serious trouble at “too big to fail” banks all over the planet.
The next several months are going to be extremely significant, and we all need to be getting ready while we still can.
The wait will soon be over. Greece submitted a final compromise plan to its eurozone creditors on Thursday, European finance ministers will meet on Saturday to discuss the proposal, and an emergency summit of all 28 EU nations on Sunday will make a final decision on what to do. The summit on Sunday is being billed as a “final deadline” and a “last chance” by EU officials. In essence, Greece is being given one more opportunity to embrace the austerity measures that are being demanded of them by their creditors. So has Greece gone far enough with this new proposal? We shall find out on Sunday.
For months, the entire planet has been following this seemingly endless Greek debt saga. Global financial markets have gyrated with every twist and turn of this ongoing drama, and many people have wondered if it would ever come to an end. But now European leaders are promising us that the uncertainty is finally going to be over this weekend…
This time, the leaders’ summit called for Sunday is being billed by all concerned as the definitive moment that will determine Greece’s future in the euro. It’s “really and truly the final wake-up call for Greece, but also for us — our last chance,” EU President Donald Tusk said on Wednesday, the day after the most recent emergency session.
So what is the general mood of European leaders as they head into this summit?
Overall, it does not appear to be overly optimistic.
For example, just consider what the head of the Bundesbank is saying…
Bundesbank Chief Jens Weidmann, meanwhile, said that central banks have no mandate to safeguard the solvency of banks or governments, and stressed that emergency liquidity to Greece should not be increased.
Just how uncertain the coming days are was highlighted when ECB President Mario Draghi voiced highly unusual doubts about the chances of rescuing Greece.
Italian daily Il Sole 24 Ore quoted the ECB chief, under growing fire in Germany for keeping Greek banks afloat, as saying he was not sure a solution would be found for Greece and he did not believe Russia would come to Athens’ rescue.
Asked if a deal to save Greece could be wrapped up, Draghi said: “I don’t know, this time it’s really difficult.“
Greece is seeking another bailout totaling at least 50 billion euros ($55 billion) from its European creditors and offering to make painful spending cuts and tax increases as it races to avert a financial meltdown, according to government sources.
Under a 10-page blueprint completed late Thursday, the country said it would undertake austerity measures worth between 12 billion and 13 billion euros ($13 billion to $14 billion), including raising taxes on cafes, bars and restaurants.
But once again, it appears that pensions may be a major sticking point. The following comes from a Zero Hedge report about the latest Greek proposal…
The biggest surprise is once again in the biggest hurdle: pensions. Recall that as we accurately predicted two weeks ago, it was the government’s unwillingness to directly cut pensions that led to the IMF refusing to even negotiate the Greek proposal.
As a further reminder, this is what IMF’s chief economist Olivier Blanchard said almost a month ago on the topic:
Why insist on pensions? Pensions and wages account for about 75% of primary spending; the other 25% have already been cut to the bone. Pension expenditures account for over 16% of GDP, and transfers from the budget to the pension system are close to 10% of GDP. We believe a reduction of pension expenditures of 1% of GDP (out of 16%) is needed, and that it can be done while protecting the poorest pensioners
Fast forward to today when MNI reports that “there are no pension cuts in the draft of the proposal.”
And if recent experience is indicative, this likely means that the Troika will once again refuse to move on with the draft.
We shall see what happens on Sunday.
I have a feeling that it is all going to come down to what Germany wants to do. At this point, the Greeks owe the Germans approximately 86.7 billion euros. The German people are overwhelmingly against pouring more money down a financial black hole, and German leaders have taken a very hard line with Greece in recent days.
If Germany does not like this new Greek proposal, it will almost certainly fail. And if there is no deal, Greek government finances will totally freeze up, the Greek banking system will utterly collapse, and the Greeks will probably be forced to switch back to the drachma.
Between June 28 and July 4 at a Hilton hotel in Athens, transactions on a Bloomberg reporter’s Visa credit card issued by Citigroup Inc. were posted as being carried out in “Drachma EQ.”
The inexplicable notation — bear in mind, the euro remains Greece’s official currency — flummoxed two very polite customer service representatives and spokesmen for the companies involved. It depicts a currency changeover that the Greek government and European officials have been working for over six months to avoid.
Banks around the world are bracing for the increasingly real possibility that Greece may be forced to abandon the euro, a currency it shares with 18 other European countries.
Could plans to roll out the drachma already be in motion behind the scenes?
The next few days promise to be extremely interesting.
Meanwhile, there are all sorts of other indications that big economic trouble is ahead for the entire planet. For instance, global commodity prices have been plunging big time…
While market commentators worry whether an economic collapse in Greece could trigger turmoil in financial markets, a slump in commodity markets may be signaling the world is already in a deep recession.
The slump in the Chinese stock market and concern over the Greek debt crisis sent commodities towards multiyear lows. The S&P GSCI—an index which represents a diversified basket of commodities—has been down nearly 40% over the past year and had slumped by more than six percent as of Wednesday, July 8th.
We witnessed a similar pattern just prior to the financial crisis of 2008.
And in addition to the problems that have erupted in China, Greece and Puerto Rico, CNN is reporting that every major economy in Latin America “is slowing down or shrinking”…
Every major Latin American economy is slowing down or shrinking. The World Bank predicts this will be Latin America’s worst year of growth since the financial crisis. As if that’s not dire enough, the world’s two worst performing stock markets are in the region as well.
Very few people are talking about Latin America right now, but the truth is that the region is in the midst of a slow-motion economic implosion. Here is more from CNN…
Right now, trouble signs are emerging all over the planet. That is why we shouldn’t just focus on Greece. Yes, if Greece is kicked out of the euro that is going to greatly accelerate things. But no matter what happens with Greece, the truth is that we are steamrolling toward another major worldwide financial crisis. Perhaps you didn’t notice, but I purposely did not use the word “Greece” once in my recent article entitled “The Economic Collapse Blog Has Issued A RED ALERT For The Last Six Months Of 2015“.
Yes, I am taking what is happening over in Europe very seriously. I believe that we are about to see some things happen over there that we have never seen before.
But the Greek crisis is only part of the picture. Everywhere on the globe that you look, red flags are going up.
Sadly, just like in 2008, most people have chosen to be willingly blind to what is happening right in front of their eyes.
The Chinese do not plan to live in a world dominated by the U.S. dollar for much longer. Chinese leaders have been calling for the U.S. dollar to be replaced as the primary global reserve currency for a long time, but up until now they have never been very specific about what they would put in place of it. Many have assumed that the Chinese simply wanted some new international currency to be created. But what if that is not what the Chinese had in mind? What if they have always wanted their own currency to become the single most dominant currency on the entire planet? What you are about to see is rather startling, but it shouldn’t be a surprise. When it comes to economics and finance, the Chinese have always been playing chess while the western world has been playing checkers. Sadly, we have gotten to the point where checkmate is on the horizon.
On Wednesday, I came across an excellent article by Simon Black. What he had to say in that article just about floored me…
When I arrived to Bangkok the other day, coming down the motorway from the airport I saw a huge billboard—and it floored me.
The billboard was from the Bank of China. It said: “RMB: New Choice; The World Currency”
Given that the Bank of China is more than 70% owned by the government of the People’s Republic of China, I find this very significant.
It means that China is literally advertising its currency overseas, and it’s making sure that everyone landing at one of the world’s busiest airports sees it. They know that the future belongs to them and they’re flaunting it.
This is the photograph of that billboard that he posted with his article…
Everyone knows that China is rising.
And most everyone has assumed that Chinese currency would soon play a larger role in international trade.
But things have moved so rapidly in recent years that now a very large chunk of the financial world actually expects the renminbi to replace the dollar as the primary reserve currency of the planet someday. The following comes from CNBC…
The tightly controlled Chinese yuan will eventually supersede the dollar as the top international reserve currency, according to a new poll of institutional investors.
The survey of 200 institutional investors – 100 headquartered in mainland China and 100 outside of it – published by State Street and the Economist Intelligence Unit on Thursday found 53 percent of investors think the renminbi will surpass the U.S. dollar as the world’s major reserve currency.
Optimism was higher within China, where 62 percent said they saw a redback world on the horizon, compared with 43 percent outside China.
And without a doubt we are starting to see the beginnings of a significant shift.
China’s yuan broke into the top five as a world payment currency in November, overtaking the Canadian dollar and the Australian dollar, global transaction services organization SWIFT said on Wednesday.
The U.S. dollar won’t be replaced overnight, but things are changing.
Of course the truth is that the Chinese have been preparing for this for a very long time. The Chinese refuse to tell the rest of the world exactly how much gold they have, but everyone knows that they have been accumulating enormous amounts of it. And even if they don’t explicitly back the renminbi with gold, the massive gold reserves that China is accumulating will still give the rest of the planet a great deal of confidence in Chinese currency.
But don’t just take my word for it. Consider what Alan Greenspan has had to say on the matter…
Alan Greenspan, who served at the helm of the Federal Reserve for nearly two decades, recently penned an op-ed for the Council on Foreign Relations discussing gold and its possible role in China, the world’s second-largest economy. He notes that if China converted only a “relatively modest part of its $4 trillion foreign exchange reserves into gold, the country’s currency could take on unexpected strength in today’s international financial system.”
Meanwhile, the Chinese have also been accumulating a tremendous amount of U.S. debt. At this point, the Chinese own approximately 1.3 trillion dollars worth of our debt, and that gives them a lot of power over our currency and over our financial system.
Someday if the Chinese wanted to undermine confidence in the U.S. dollar and in the U.S. financial system, they have a lot of ammunition at their disposal.
And it isn’t just all of that debt that gives China leverage. In recent years, the Chinese have been buying up real estate, businesses and energy assets all over the United States at a staggering pace. For a small taste of what has been taking place, check out the YouTube video posted below…
For much, much more on this trend, please see the following articles…
On a purchasing power basis, the size of the Chinese economy has already surpassed the size of the U.S. economy.
And there are lots of signs of trouble ahead for the U.S. economy at this point. I like how Brandon Smith put it in one recent article…
We are only two months into 2015, and it has already proven to be the most volatile year for the economic environment since 2008-2009. We have seen oil markets collapsing by about 50 percent in the span of a few months (just as the Federal Reserve announced the end of QE3, indicating fiat money was used to hide falling demand), the Baltic Dry Index losing 30 percent since the beginning of the year, the Swiss currency surprise, the Greeks threatening EU exit (and now Greek citizens threatening violent protests with the new four-month can-kicking deal), and the effects of the nine-month-long West Coast port strike not yet quantified. This is not just a fleeting expression of a negative first quarter; it is a sign of things to come.
In addition, things continue to look quite bleak for Europe. Once upon a time, many expected the euro to overtake the U.S. dollar as the primary global reserve currency, but that didn’t happen. And in recent months the euro has been absolutely crashing. On Wednesday, it hit the lowest point that we have seen against the dollar in more than a decade…
The euro last stood at $1.1072, off 0.90 percent for the day and below a key support level, Sutton said. It fell to as little as $1.1066, which was the lowest level for the euro against the dollar since September 2003, according to Thomson Reuters data.
The euro also declined to one-month lows against the Japanese yen, which was flat against the dollar at 119.72 yen to the dollar.
As the U.S. and Europe continue to struggle, China is going to want a significantly larger role on the global stage.
And as the billboard in Thailand suggests, they are more than willing to step up to the plate.
So will the road to the future be paved with Chinese currency? Please feel free to share what you think by posting a comment below…
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.
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….
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.
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.
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.
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.
The rest of the world needs to sit up and take notice of what is going on in Greece right now. This is what can happen when you allow government debt to spiral out of control. Once it becomes clear that you can’t pay your debts, a financial collapse can happen very suddenly and you start losing your sovereignty to those that you must turn to for financial help. So is the financial collapse of Greece the “canary in the coal mine” for the global economy? EU finance ministers have given the Greek government two weeks from Monday to approve another round of brutal austerity measures. If the austerity measures are not approved, Greece will not receive the next bailout installment of 12 billion euros. If that happens, the whole globe better buckle up because it is going to get crazy.
July 3rd is the deadline. Basically the EU has put a gun to the head of the Greek government. Without this bailout money, Greece will default and economic hell will break loose all across the country.
It is important to keep in mind that this is just the first Greek bailout that we are talking about. Last year, the EU and the IMF agreed to provide the Greek government with a 110 billion euro bailout. The current 12 billion euro installment is part of that package.
Sadly, it has become apparent that the first bailout is not going to be nearly enough for Greece. A second bailout, which will be the same size or even larger, is already being discussed. This is going to put the Greek people even more under the heel of the money powers in Europe.
Keep in mind that all of these “bailouts” are just more loans. There is no way that the Greeks are ever going to be able to repay all of this money.
But this is what happens when a nation lets debt get out of control. For years and years it can seem like all of that debt does not have any consequences, but then the day of reckoning comes and it is a complete and total nightmare.
In order to get the next installment of 12 billion euros, European finance ministers are insisting that the Greek Parliament approves a package of austerity measures that will be worth approximately 28 billion euros.
At this point, it is uncertain whether those austerity measures will pass.
However, the pressure on the Greek government to get them pushed through is immense.
These austerity measures include tax increases, budget cuts and a “large-scale privatization program”.
This is often what happens to third world nations that cannot pay their debts. Organizations such as the IMF or the World Bank will come in and insist that they tax their people more, cut back on their spending and sell some of their public assets to big corporations.
As we can see from the wild protests that have been taking place in Greece, a significant percentage of the Greek population is not happy with all of these austerity measures.
Unfortunately, the EU and the IMF are able to put a lot more pressure on the Greek government than the Greek people are.
Greek Prime Minister George Papandreou recently gave the following warning to the Greek people about what could happen if this debt crisis ends badly….
The consequences of a violent bankruptcy or exit from the euro would be immediately catastrophic for households, the banks, and the country’s credibility.
Not only would a Greek default be a total disaster for Greece, it would potentially be a total disaster for the entire global financial system.
A year of wage and pension cuts, benefit losses and tax increases has taken its toll: almost a quarter of the population now live below the poverty line, unemployment is at a record 16% and, as the economy contracts for a third year, economists estimate that about 100,000 businesses have closed.
As the economy crumbles, Greece has descended into an almost permanent state of civil unrest.
The fact that the EU and the IMF want even more austerity measures has sparked some wild rioting In Greece in recent days. You can see video of the stunning violence going on in Greece right here.
The employment situation in Spain is absolutely nightmarish. Spain will probably be able to squeak by without a bailout if the global economy stays stable, but if the dominoes start to fall Spain could be in a massive amount of trouble very quickly.
Not that many people are talking about Italy, but the truth is that Italy has a huge debt problem. On Friday, Moody’s warned that it may downgrade Italy’s Aa2 debt rating at some point within the next 90 days.
Belgium and France also have very substantial debt problems. They probably would not be the first dominoes to fall, but if the “contagion” starts to spread they could certainly have massive problems.
The truth is that Europe’s entire financial system is extremely vulnerable right now. Big banks all over Europe (and especially in Germany) are leveraged to the hilt. All it would take to topple many of them is a stiff breeze.
When Lehman Brothers collapsed, it was leveraged 31 to 1.
German banks are also holding a massive amount of Greek debt.
That is why there is so much fear that the crisis in Greece could spread across the rest of Europe and start toppling dominoes.
The sovereign debt crisis in Europe did not happen overnight and it is going to be with us for a long, long time even if the global economy remains relatively stable.
At the moment, the best that officials in Europe can seem to come up with is to put off the pain for another day. Pimco’s Mohamed El-Erian told CNBC the following on Monday….
“This problem is not going to go away. It’s going to weigh on markets here and we’re going to see the same set of headlines over and over again. We simply cannot continue to kick the can down the road, because we’re coming to the end of the road in Greece.”
So if Europe starts having major problems will the U.S. step in and help?
Yes, if the crisis in Europe gets worse, the Federal Reserve will probably step in just like they did back in 2008.
But the U.S. is rapidly approaching a day of reckoning like the one that Greece is going through. The U.S. government has piled up the biggest mountain of debt in the history of the world and faith in the U.S. dollar is dying.
The economic crisis in the United States gets worse with each passing year. Yes, the Federal Reserve can print up stacks of money and send it over to Europe, but that isn’t going to solve anything in the long run. The truth is that the U.S. is not even going to be able to keep itself from drowning.
The world financial system is far more vulnerable today than it was back in 2008. The next wave of the financial collapse is going to hit at some point, and when it does it is going to probably be even more painful than the last wave.
Our world is becoming an incredibly unstable place.
This past week was a perfect example of how the “Internet kill switch” is rapidly becoming one of the favorite new tools of tyrannical governments all over the globe. Once upon a time, the Internet was a bastion of liberty and freedom, but now nation after nation is cracking down on it. In fact, legislation has been introduced once again in Congress that would give the president of the United States an “Internet kill switch” that he would be able to use in the event of war or emergency. Of course there would be a whole lot of wiggle room in determining what actually constitutes a true “emergency”. The members of Congress that are pushing this “Internet kill switch” bill want the U.S. to become more like China in this regard. In China, the Internet is highly controlled, highly regulated and highly censored. In fact, China has shut down the Internet in entire regions when they have felt it necessary. So what Egypt did in shutting down the Internet this past week is not unprecedented – but it was quite shocking.
Organizers of the protests in Egypt had been using the #Jan25 hashtag on Twitter and had been communicating with each other via Facebook, and so the Mubarak regime thought that they could significantly derail the protest movement by shutting down the Internet.
It has been widely reported that approximately 88 percent of the Internet in Egypt was shut down at one point. Jim Cowie, the chief technology officer of an Internet monitoring firm known as Renesys, described on his blog just how complete and total this Internet shutdown in Egypt actually was….
“Every Egyptian provider, every business, bank, Internet cafe, website, school, embassy, and government office that relied on the big four Egyptian ISPs for their Internet connectivity is now cut off from the rest of the world.”
So how was this all done? How could such a large section of the Internet be taken offline so rapidly? Well, a recent article on MSNBC described how it works….
According to David Clark, an MIT computer scientist whose research focuses on Internet architecture and development, a government’s ability to control the Internet depends on its control of Internet Service Providers (ISPs), the private sector companies that grant Internet access to customers.
“ISPs have direct control of the Internet, so what happens in any country depends on the control that the state has over those ISPs,” Clark told Life’s Little Mysteries in an e-mail. “Some countries regulate the ISPs much more heavily. China has in the past ‘turned off’ the Internet in various regions.”
Whenever the subject of Internet censorship comes up, China always seems to be involved in the conversation. China has more Internet users than anyone else in the world, but they also have the tightest controls.
The Chinese government is absolutely obsessed with “maintaining order” and it has shown that it will go to extreme lengths to quell dissent.
For example, the government of China cut off the entire Xinjiang region from the Internet for nearly a year after civil unrest erupted there in 2009.
The Chinese government is so sensitive to political dissent that they even began censoring the word “Egypt” on a number of micro-blogging websites this past week.
On the sina.com and sohu.com sites, the Chinese equivalents of Twitter, which is censored in China, a query with the word “Egypt” returned the response: “According to the laws in force, the results of your search cannot be given.”
Isn’t that bizarre?
Nothing like that would ever happen in the United States, right?
“Right now China, the government, can disconnect parts of its Internet in case of war and we need to have that here too.”
That statement should chill you to your bones.
U.S. Senator Joe Lieberman wants Chinese-style Internet censorship to come to the United States.
In fact, as mentioned above, legislation that would give the president of the United States an “Internet kill switch” has been introduced in the Senate once again, and in fact it has already been approved by a Senate panel.
The legislation has bipartisan support, and it is being pushed this time by Maine Senator Susan Collins, who is a ranking member on the Homeland Security and Governmental Affairs Committee.
A congressional white paper (.pdf) on the measure said the proposal prohibits the government from targeting websites for censorship “based solely on activities protected by the First Amendment of the United States Constitution.”
It has been revealed time after time after time that the U.S. government has been investigating large numbers of people based on their political beliefs.
The Internet is a great way for people to express and share their political thoughts and ideas, but it is also providing a way for governments around the world to watch and track dissenters.
For example, major news websites in China now require users to register their true identities before they are able to leave any comments. This enables the government to be able to identify (and potentially deal with) anyone that does not express the “right” views.
In the same manner, the Obama administration is now proposing the introduction of a “universal Internet ID” for Americans. The program is being touted as “voluntary”, but how long do you think it would be before a whole host of government agencies started to use these universal Internet IDs to watch, monitor, track and control the Internet activities of tens of millions of Americans?
The following is a video news report from CBS News about these new universal Internet IDs….
So where does all of this Internet censorship end?
Well, the truth is that it is only going to get tighter and tighter as the years go by.
Eventually you will probably need a government-issued license to put up websites such as this one, and in fact someday you will probably need a government-issued license before you can even log on to the Internet.
So enjoy this era of relatively unlimited Internet freedom while you can, because it is rapidly coming to an end. Tyrannical governments all over the globe are realizing that in order to maintain “control” they must place a much tighter grip on the flow of information on the Internet.
If you live in the United States or another nation where there is still at least a limited amount of liberty and freedom, it is going to be important to let your representatives know that you do not want Internet censorship and you certainly do not want any sort of an Internet kill switch.
Liberties and freedoms are incredibly precious, and once they are taken away they are very difficult to get back.
Today America is very, very frustrated. In fact, we probably have not seen this level of anger in the country since World War 2 ended. So why are so many Americans so frustrated and so angry right now? Well, for most Americans it comes down to the economy. Very few things are more frustrating than not being able to find a job that will enable you to pay the mortgage and feed your family. Middle class Americans that do have a little bit of money are digging into their savings and investments at a staggering rate as they desperately try to keep their heads above water. Millions of other families that do not have a “safety cushion” are on the verge of losing their homes or have already been callously tossed out onto the streets by big, greedy banks. Meanwhile, our politicians continue to burden us with increasingly larger amounts of government debt and they stand idly by as our jobs and our industries are shipped overseas. So even though the mainstream media seems absolutely puzzled by the growing anger in America, the truth is that it is not a great mystery. The economy is an absolute nightmare, and if it gets even worse people are going to become even more angry.
The mainstream media and our top politicians are running around proclaiming that the economy has turned around, and yet all of the important long-term economic numbers continue to get worse. Do they think that the American people are stupid?
Perhaps they are just trying to be “optimistic” and are trying to get us all to “believe” in the economic recovery.
Well, while it certainly does not hurt to “stay positive” and to “have faith” when there is some basis in reality for doing so, but what the mainstream media is asking us all to do is to stick our heads in the sand and to pretend that all of our horrific economic problems are not even there.
Until we recognize exactly what our problems are and how bad they have gotten we will never be able to come up with the appropriate solutions.
Our economy does not just need a “tweak” or two. Our economy is a total nightmare at this point.
The following are 20 things about our nightmare of an economy that you will not want to read if you do not want to become very, very angry….
#1 Today, millions of American families are digging deep into their savings and investments in a desperate attempt to stay afloat. Over the past two years, U.S. consumers have withdrawn $311 billion more from savings and investment accounts than they have put into them.
#215 billion dollars: the total amount of compensation that Goldman Sachs paid out to its employees for 2010.
#3 The number of American families that were booted out of their homes and into the streets set a new all-time record in 2010.
#4 Dozens of packages that we buy in the supermarket have been reduced in size by up to 20%. For example, there are now 2 less slices of cheese in a typical package of Kraft American cheese, and there is now 9 percent less toilet paper in a typical package of Scott toilet paper. So now, you may think that you are paying the same amount for these items that you always have, but the truth is that you have been hit with a large price increase.
#5 One Canadian company is making a ton of money shipping “millions and millions of dollars” worth of manufacturing equipment from factories that are being shut down in the United States over to new factories that are being set up in China.
#6 In America today, the wealthiest 20% own a whopping 93% of all the “financial assets” in the United States.
#7 Only 35 percent of Americans now have enough “emergency savings” to be able to cover three months of living expenses.
#847 percent of all Americans now believe that China is the number one economic power in the world.
#9 If the U.S. banking system is healthy, then why does the number of “problem banks” continue to keep increasing? This past week the number of U.S. banks on the unofficial list of problem banks reached 937.
#10 According to former U.S. Labor Secretary Robert Reich, the wealthiest 0.1% of all Americans make as much money as the poorest 120 million.
#11 U.S. housing prices have now fallen further during this economic downturn than they did during the Great Depression of the 1930s.
#14 The United Nations says that the global price of food hit an all-time record high in December, and the price of oil is surging towards $100 a barrel, but the U.S. government continues to insist that we barely have any inflation at all.
#15 The more Americans that are on food stamps the more profits that JP Morgan makes. Today, an all-time record of 43.2 million Americans are on food stamps, and JP Morgan is making a lot of money processing millions of those benefit payments.
#16 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs.
#17Dozens of U.S. states are either implementing tax increases in 2011 or are considering proposals to raise taxes.
#18 The United States has had a negative trade deficit every single year since 1976.
#19 The U.S. national debt has crossed the $14 trillion mark for the first time, and at some point during 2011 it will cross the $15 trillion mark.
#20 What the U.S. economy really needs is for the government to get off all of our backs, but instead they continue to tighten their grip on us. In fact, the Obama administration is proposing a “universal Internet ID” that would watch, track, monitor and potentially control everything that you do on the Internet.
What could cause an economic collapse in 2011? Well, unfortunately there are quite a few “nightmare scenarios” that could plunge the entire globe into another massive financial crisis. The United States, Japan and most of the nations in Europe are absolutely drowning in debt. The Federal Reserve continues to play reckless games with the U.S. dollar. The price of oil is skyrocketing and the global price of food just hit a new record high. Food riots are already breaking out all over the world. Meanwhile, the rampant fraud and corruption going on in world financial markets is starting to be exposed and the whole house of cards could come crashing down at any time. Most Americans have no idea that a horrific economic collapse could happen at literally any time. There is no way that all of this debt and all of this financial corruption is sustainable. At some point we are going to reach a moment of “total system failure”.
So will it be soon? Let’s hope not. Let’s certainly hope that it does not happen in 2011. Many of us need more time to prepare. Most of our families and friends need more time to prepare. Once this thing implodes there isn’t going to be an opportunity to have a “do over”. We simply will not be able to put the toothpaste back into the tube again.
So we had all better be getting prepared for hard times. The following are 12 economic collapse scenarios that we could potentially see in 2011….
#1 U.S. debt could become a massive crisis at any moment. China is saying all of the right things at the moment, but many analysts are openly worried about what could happen if China suddenly decides to start dumping all of the U.S. debt that they have accumulated. Right now about the only thing keeping U.S. government finances going is the ability to borrow gigantic amounts of money at extremely low interest rates. If anything upsets that paradigm, it could potentially have enormous consequences for the entire world financial system.
#2 Speaking of threats to the global financial system, it turns out that “quantitative easing 2” has had the exact opposite effect that Ben Bernanke planned for it to have. Bernanke insisted that the main goal of QE2 was to lower interest rates, but instead all it has done is cause interest rates to go up substantially. If Bernanke this incompetent or is he trying to mess everything up on purpose?
#3 The debt bubble that the entire global economy is based on could burst at any time and throw the whole planet into chaos. According to a new report from the World Economic Forum, the total amount of credit in the world increased from $57 trillion in 2000 to $109 trillion in 2009. The WEF says that now the world is going to need another $100 trillion in credit to support projected “economic growth” over the next decade. So is this how the new “global economy” works? We just keep doubling the total amount of debt every decade?
#4 As the U.S. government and the Federal Reserve continue to pump massive amounts of new dollars into the system, the floor could fall out from underneath the U.S. dollar at any time. The truth is that we are already starting to see inflation really accelerate and everyone pretty much acknowledges that official U.S. governments figures for inflation are an absolute joke. According to one new study, the cost of college tuition has risen 286% over the last 20 years, and the cost of “hospital, nursing-home and adult-day-care services” rose 269% during those same two decades. All of this happened during a period of supposedly “low” inflation. So what are price increases going to look like when we actually have “high” inflation?
#5 One of the primary drivers of global inflation during 2011 could be the price of oil. A large number of economists are now projecting that the price of oil could surge well past $100 dollars a barrel in 2011. If that happens, it is going to put significant pressure on the price of almost everything else in the entire global economy. In fact, as I have explained previously, the higher the price of oil goes, the faster the U.S. economy will decline.
#6 Food inflation is already so bad in some areas of the globe that it is setting off massive food riots in nations such as Tunisia and Algeria. In fact, there have been reports of people setting themselves on fire all over the Middle East as a way to draw attention to how desperate they are. So what is going to happen if global food prices go up another 10 or 20 percent and food riots spread literally all over the globe during 2011?
#7 There are persistent rumors that simply will not go away of massive physical gold and silver shortages. Demand for precious metals has never been higher. So what is going to happen when many investors begin to absolutely insist on physical delivery of their precious metals? What is going to happen when the fact that far, far, far more “paper gold” and “paper silver” has been sold than has ever actually physically existed in the history of the planet starts to come out? What would that do to the price of gold and silver?
#8 The U.S. housing industry could plunge the U.S. economy into another recession at any time. The real estate market is absolutely flooded with homes and virtually nobody is buying. This massive oversupply of homes means that the construction of new homes has fallen off a cliff. In 2010, only 703,000 single family, multi-family and manufactured homes were completed. This was a new record low, and it was down 17% from the previous all-time record which had just been set in 2009.
#9 A combination of extreme weather and disease could make this an absolutely brutal year for U.S. farmers. This winter we have already seen thousands of new cold weather and snowfall records set across the United States. Now there is some very disturbing news emerging out of Florida of an “incurable bacteria” that is ravaging citrus crops all over Florida. Is there a reason why so many bad things are happening all of a sudden?
#10 The municipal bond crisis could go “supernova” at any time. Already, investors are bailing out of bonds at a frightening pace. State and local government debt is now sitting at an all-time high of 22 percent of U.S. GDP. According to Meredith Whitney, the municipal bond crisis that we are facing is a gigantic threat to our financial system….
“It has tentacles as wide as anything I’ve seen. I think next to housing this is the single most important issue in the United States and certainly the largest threat to the U.S. economy.”
Former Los Angeles mayor Richard Riordan is convinced that things are so bad that literally 90% of our states and cities could go bankrupt over the next five years….
#11 Of course on top of everything else, the quadrillion dollar derivatives bubble could burst at any time. Right now we are watching the greatest financial casino in the history of the globe spin around and around and around and everyone is hoping that at some point it doesn’t stop. Today, most money on Wall Street is not made by investing in good business ideas. Rather, most money on Wall Street is now made by making the best bets. Unfortunately, at some point the casino is going to come crashing down and the game will be over.
#12 The biggest wildcard of all is war. The Korean peninsula came closer to war in 2010 than it had in decades. The Middle East could literally explode at any time. We live in a world where a single weapon can take out an entire city in an instant. All it would take is a mid-size war or a couple of weapons of mass destruction to throw the entire global economy into absolute turmoil.
Once again, let us hope that none of these economic collapse scenarios happens in 2011.
However, we have got to realize that we can’t keep dodging these bullets forever.
As bad as 2010 was, the truth is that it went about as good as any of us could have hoped. Things are still pretty stable and times are still pretty good right now.
But instead of using these times to “party”, we should be using them to prepare.
A really, really vicious economic storm is coming and it is going to be a complete and total nightmare. Get ready, hold on tight, and say your prayers.
Most Americans have a deep aversion to the phrase “redistribution of wealth”, and rightly so. On a fundamental level, it is just not right to take the money that one man has worked so hard to earn and “redistribute” it to someone else. In the political realm, the phrase “a redistribution of wealth” is usually a reference to our ballooning social programs, but what most Americans don’t realize is that one of the biggest redistributions of wealth in world history took place during the Wall Street bailouts of a couple years ago. Trillions of dollars of our money and of money that belongs to future generations was redistributed to the Wall Street bankers. The Wall Street bankers did not earn this money and they did not deserve this money. We were told that if Wall Street did not get this money that the global economy would collapse and that there would be martial law in the streets. We were promised that this money would “fix” Wall Street and then the prosperity would “trickle down” to Main Street. So did this happen? Of course not.
What ended up happening is that Wall Street hoarded all of this cash. Lending to individuals and small businesses actually decreased. The Federal Reserve started handing out gigantic piles of nearly interest-free money which many of these big Wall Street banks immediately loaned back to the U.S. government at a significantly higher rate of interest.
Talk about easy money.
Now the big Wall Street banks and the ultra-wealthy are swimming in cash and sales of luxury goods in the United States are absolutely skyrocketing. Meanwhile, millions of “ordinary” Americans continue to slip into poverty.
So is the answer to all of this just to “tax the rich” and redistribute the wealth again by giving more handouts to the poor?
Of course not.
The American people don’t need more handouts.
What the American people desperately need are some good jobs.
But Wall Street is hoarding the cash they got during the bailouts.
It would be one thing if these big Wall Street banks had made a ton of money based on their own efforts. It is a very American thing to be able to enjoy the fruits of hard work.
However, the truth is that many big Wall Street banks and financial institutions may have completely imploded if not for the bailouts.
They were “too big to fail” and our politicians jumped to their service.
Our politicians redistributed wealth by taking trillions of dollars that belonged to us and to future generations and handed it to the folks on Wall Street.
So now the boys and girls over on Wall Street are thriving while tens of millions of “average” Americans are desperately suffering.
Does that seem right to you?
Isn’t it about time that the U.S. government gets out of the “redistribution of wealth” business altogether?
Just consider the following statistics. Even as the economic suffering of ordinary Americans continues to deepen, those who got big piles of bailout money are living the high life….
#1 According to Stephen Lewis of Monument Securities, luxury retailers in the United States have seen an 8.1 percent increase in sales compared to a year ago, while “discount stores” that cater to the poor and the middle class have only seen a 1.2 percent increase in sales compared to a year ago.
#2 The sad truth is that just about every company that deals in luxury goods is booming, while those that primarily serve ordinary Americans are not doing nearly as well. Just consider the following quote from a recent article by Ambrose Evans-Pritchard of the Telegraph….
Tiffany’s, Nordstrom, and Saks Fifth Avenue are booming. Sales of Cadillac cars have jumped 35pc, while Porsche’s US sales are up 29pc.
Cartier and Louis Vuitton have helped boost the luxury goods stock index by almost 50pc since October. Yet Best Buy, Target, and Walmart have languished.
#3 Elderly Americans in particular are really having a hard time of it right now. A recent study by a law professor from the University of Michigan found that Americans that are 55 years of age or older now account for 20 percent of all bankruptcies in the United States. Back in 2001, they only accounted for 12 percent of all bankruptcies.
#4 The number of Americans on food stamps has hit another all-time record. There are now 43.2 million Americans enrolled in the food stamp program.
#5 According to the U.S. Conference of Mayors, visits to soup kitchens are up 24 percent over the past year.
#6 Meanwhile, the price of food continues to go up. This hits poor and middle class Americans much harder than it hits the wealthy. According to a report on 55 top food commodities by the Food and Agriculture Organization, global food prices reached a new record high during December.
#7 Lester Brown, the president of the Washington-based Earth Policy Institute, is publicly declaring that the world is just “one poor harvest” away from total chaos….
“The reality is that the world is only one poor harvest away from chaos. We are so close to the edge that politically destabilizing food prices could come at any time.”
#8 The price of clothes is also increasing dramatically. It turns out that cotton is 80% more expensive now than it was back at the beginning of 2010.
#9 Americans will also be paying more at the gas pump this upcoming year. In fact, former Shell Oil President John Hofmeister recently stated that Americans could be paying 5 dollars for a gallon of gasoline by the end of this upcoming year.
#10 Health insurance rates are also skyrocketing. Blue Shield of California recently announced plans to raise health insurance rates by an average of 30% to 35% this year, and some individual policy holders could actually see their health insurance premiums rise by a whopping 59 percent.
#11 On top of everything else, the U.S. Census is now telling us that there are millions more poor people in America than they had previously calculated. The U.S. Census Bureau recently revealed that the figure of 43.6 million Americans living in poverty that they announced last September was way too low and that actually 47.8 million Americans are now living in poverty.
#12 If all of these economic problems were not bad enough, now many state and local governments are seriously considering raising taxes. In Illinois, there is now a proposal to raise state income tax rates by 75 percent. A recent article that appeared on the CNBC website explained why Illinois is so desperate for cash….
In a moment when states around the country are wrestling with withered revenues, Illinois faces a deficit of at least $13 billion; more than $6 billion in unpaid bills to social service agencies, schools and funeral homes; the most underfinanced state pension system; and growing signs of concern from bond investors.
So won’t the big Wall Street banks and the ultra-wealthy get hit by these tax increases too?
Some of them will, but many of them have learned to “play the game” so well that they barely pay any taxes at all.
As I have written about previously, a third of all the wealth in the world is now held in offshore banks. When taxes go up, the ultra-wealthy are not the ones that have their wealth “redistributed”. Instead, it is poor saps like you and I that have our wealth “redistributed”.
In fact, the next time another “financial crisis” comes along, the financial “powers that be” will once again come running to Congress and come running to the Federal Reserve begging for more bailouts.
Now that the precedent has been set, it will only seem natural to redistribute even more of our wealth to the folks over on Wall Street so that we can “save” the financial system.
But the truth is that our financial system is completely doomed to fail in the long run and throwing our money into the financial system is like throwing our money into a black hole.
In the end, all of us are going to greatly suffer when the financial system finally crashes. But for the moment the wealthy are partying with all of the money that they have looted from the rest of America, and the rest of us which were “small enough to fail” have been left to scratch and claw and fight with each other as we desperately try to survive in this horrible economy.