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It Is Mathematically Impossible To Pay Off All Of Our Debt

Money - Public DomainDid you know that if you took every single penny away from everyone in the United States that it still would not be enough to pay off the national debt?  Today, the debt of the federal government exceeds $145,000 per household, and it is getting worse with each passing year.  Many believe that if we paid it off a little bit at a time that we could eventually pay it all off, but as you will see below that isn’t going to work either.  It has been projected that “mandatory” federal spending on programs such as Social Security, Medicaid and Medicare plus interest on the national debt will exceed total federal revenue by the year 2025.  That is before a single dollar is spent on the U.S. military, homeland security, paying federal workers or building any roads and bridges.  So no, we aren’t going to be “paying down” our debt any time in the foreseeable future.  And of course it isn’t just our 18 trillion dollar national debt that we need to be concerned about.  Overall, Americans are a total of 58 trillion dollars in debt.  35 years ago, that number was sitting at just 4.3 trillion dollars.  There is no way in the world that all of that debt can ever be repaid.  The only thing that we can hope for now is for this debt bubble to last for as long as possible before it finally explodes.

It shocks many people to learn that our debt is far larger than the total amount of money in existence.  So let’s take a few moments and go through some of the numbers.

When most people think of “money”, they think of coins, paper money and checking accounts.  All of those are contained in one of the most basic measures of money known as M1.  The following definition of M1 comes from Investopedia

A measure of the money supply that includes all physical money, such as coins and currency, as well as demand deposits, checking accounts and Negotiable Order of Withdrawal (NOW) accounts. M1 measures the most liquid components of the money supply, as it contains cash and assets that can quickly be converted to currency.

As you can see from the chart below, M1 has really grown in recent years thanks to rampant quantitative easing by the Federal Reserve.  At the moment it is sitting just shy of 3 trillion dollars…

M1 Money Supply 2015

So if you gathered up all coins, all paper currency and all money in everyone’s checking accounts, would that even make much of a dent in our debt?

Nope.

We’ll have to find more “money” to grab.

M2 is a broader definition of money than M1 is, because it includes more things.  The following definition of M2 comes from Investopedia

A measure of money supply that includes cash and checking deposits (M1) as well as near money. “Near money” in M2 includes savings deposits, money market mutual funds and other time deposits, which are less liquid and not as suitable as exchange mediums but can be quickly converted into cash or checking deposits.

As you can see from the chart below, M2 is sitting just short of 12 trillion dollars right now…

M2 Money Supply 2015

That is a lot more “money”, but it still wouldn’t pay off our national debt, much less our total debt of 58 trillion dollars.

So is there anything else that we could grab?

Well, the broadest definition of “money” that is commonly used is M3.  The following definition of M3 comes from Investopedia

A measure of money supply that includes M2 as well as large time deposits, institutional money market funds, short-term repurchase agreements and other larger liquid assets. The M3 measurement includes assets that are less liquid than other components of the money supply, and are more closely related to the finances of larger financial institutions and corporations than to those of businesses and individuals. These types of assets are referred to as “near, near money.”

The Federal Reserve no longer provides charts for M3, but according to John Williams of shadowstats.com, M3 is currently sitting somewhere in the neighborhood of 17 trillion dollars.

So even with the broadest possible definition of “money”, we simply cannot come up with enough to pay off the debt of the federal government, much less the rest of our debts.

That is not good news at all.

Alternatively, could we just start spending less than we bring in and start paying down the national debt a little bit at a time?

Perhaps that may have been true at one time, but now we are really up against a wall.  Our rapidly aging population is going to put an enormous amount of stress on our national finances in the years ahead.

According to U.S. Representative Frank Wolf, interest on the national debt plus “mandatory” spending on programs such as Social Security, Medicare and Medicaid will surpass the total amount of federal revenue by the year 2025.  That is before a single penny is spent on homeland security, national defense, paying federal workers, etc.

But even now things are a giant mess.  We are told that “deficits are under control”, but that is a massive hoax that is based on accounting gimmicks.  During fiscal year 2014, the U.S. national debt increased by more than a trillion dollars.  That is not “under control” – that is a raging national crisis.

Many believe that that we could improve the situation by raising taxes.  And yes, a little bit more could probably be squeezed out of us, but the impact on government finances would be negligible.  Since the end of World War II, the amount of tax revenue taken in by the federal government has fluctuated in a range between 15 and 20 percent of GDP no matter what tax rates have been.  I believe that it is possible to get up into the low twenties, but that would also be very damaging to our economy and the American public would probably throw a huge temper tantrum.

The real problem, of course, is our out of control spending.

During the past two decades, spending by the federal government has grown 63 percent more rapidly than inflation, and “mandatory” spending on programs such as Social Security, Medicare and Medicaid has actually doubled after you adjust for inflation.

We simply cannot afford to keep spending money like this.

And then there is the matter of interest on the national debt.  For the moment, the rest of the world is lending us gigantic mountains of money at ridiculously low interest rates.  However, if the average rate of interest on U.S. government debt was just to return to the long-term average, we would be spending more than a trillion dollars a year just in interest on the national debt.

So the best possible environment for “paying down our debt” that we are ever going to see is happening right now.  The only place that interest rates on U.S. government debt have to go is up, and our population is going to just keep getting older and more dependent on government programs.

Meanwhile, our overall debt continues to spiral out of control as well.  According to CNBC, the total amount of debt that Americans owe has reached a staggering 58.7 trillion dollars…

As the nation entered the 1980s, there was comparatively little debt—just about $4.3 trillion. That was only about 1.5 times the size of gross GDP. Then a funny thing happened.

The gap began to widen during the decade, and then became basically parabolic through the ’90s and into the early part of the 21st century.

Though debt took a brief decline in 2009 as the country limped its way out of the financial crisis, it has climbed again and is now, at $58.7 trillion, 3.3 times the size of GDP and about 13 times what it was in 1980, according to data from the Federal Reserve’s St. Louis branch. (The total debt measure is not to be confused with the $18.2 trillion national debt, which is 102 percent of GDP and is a subset of the total figure.)

As I discussed above, there isn’t enough money in our entire system to even pay off a significant chunk of that debt.

So what happens when the total amount of debt in a society vastly exceeds the total amount of money?

Is there any way out other than collapse?

You can share what you think by posting a comment below…

19 Signs That American Families Are Being Economically Destroyed

19 - Public DomainThe systematic destruction of the American way of life is happening all around us, and yet most people have no idea what is happening.  Once upon a time in America, if you were responsible and hard working you could get a good paying job that could support a middle class lifestyle for an entire family even if you only had a high school education.  Things weren’t perfect, but generally almost everyone in the entire country was able to take care of themselves without government assistance.  We worked hard, we played hard, and our seemingly boundless prosperity was the envy of the entire planet.  But over the past several decades things have completely changed.  We consumed far more wealth than we produced, we shipped millions of good paying jobs overseas, we piled up the biggest mountain of debt in the history of the world, and we kept electing politicians that had absolutely no concern for the long-term future of this nation whatsoever.  So now good jobs are in very short supply, we are drowning in an ocean of red ink, the middle class is rapidly shrinking and dependence on the government is at an all-time high.  Even as we stand at the precipice of the next great economic crisis, we continue to make the same mistakes.  In the end, all of us are going to pay a very great price for decades of incredibly foolish decisions.  Of course a tremendous amount of damage has already been done.  The numbers that I am about to share with you are staggering.  The following are 19 signs that American families are being economically destroyed…

#1 The poorest 40 percent of all Americans now spend more than 50 percent of their incomes just on food and housing.

#2 For those Americans that don’t own a home, 50 percent of them spend more than a third of their incomes just on rent.

#3 The price of school lunches has risen to the 3 dollar mark at many public schools across the nation.

#4 McDonald’s “Dollar Menu & More” now includes items that cost as much as 5 dollars.

#5 The price of ground beef has doubled since 2009.

#6 In 1986, child care expenses for families with employed mothers used up 6.3 percent of all income.  Today, that figure is up to 7.2 percent.

#7 Incomes fell for the bottom 80 percent of all income earners in the United States during the 12 months leading up to June 2014.

#8 At this point, more than 50 percent of all American workers bring home less than $30,000 a year in wages.

#9 After adjusting for inflation, median household income has fallen by nearly $5,000 since 2007.

#10 According to the New York Times, the “typical American household” is now worth 36 percent less than it was worth a decade ago.

#11 47 percent of all Americans do not put a single penny out of their paychecks into savings.

#12 One survey found that 62 percent of all Americans are currently living paycheck to paycheck.

#13 According to the U.S. Department of Education, 33 percent of all Americans with student loans are currently behind on their student loan debt repayments.

#14 According to one recent report, 43 million Americans currently have unpaid medical debt on their credit reports.

#15 The rate of homeownership in the U.S. has been declining for seven years in a row, and it is now the lowest that it has been in 20 years.

#16 For each of the past six years, more businesses have closed in the United States than have opened.  Prior to 2008, this had never happened before in all of U.S. history.

#17 According to the Census Bureau, 65 percent of all children in the United States are living in a home that receives some form of aid from the federal government.

#18 If you have no debt at all, and you also have 10 dollars in your wallet, that you are wealthier than 25 percent of all Americans.

#19 On top of everything else, the average American must work from January 1st to April 24th just to pay all federal, state and local taxes.

All of us know people that once were doing quite well but that are now just struggling to get by from month to month.

Perhaps this has happened to you.

If you have ever been in that position, you probably remember what it feels like to have people look down on you.  Unfortunately, in our society the value that we place on individuals has a tremendous amount to do with how much money they have.

So if you don’t have much money, there are a lot of people out there that will treat you like dirt.  The following excerpt comes from a Washington Post article entitled “The poor are treated like criminals everywhere, even at the grocery store“…

Want to see a look of pure hatred? Pull out an EBT card at the grocery store.

Now that my kids are grown and gone, my Social Security check is enough to keep me from qualifying for government food benefits. But I remember well when we did qualify for a monthly EBT deposit, a whopping $22 — and that was before Congress cut SNAP benefits in November 2013. Like 70 percent of people receiving SNAP benefits, I couldn’t feed my family on that amount. But I remember the comments from middle-class people, the assumptions about me and my disability and what the poor should and shouldn’t be spending money on.

Have you ever seen this?

Have you ever experienced this yourself?

These days, most people on food stamps are not in that situation because they want to be.  Rather, they are victims of our long-term economic collapse.

And this is just the beginning.  When the next major economic crisis strikes, the suffering in this country is going to go to unprecedented levels.

As we enter that time, we are going to need a whole lot more love and compassion than we are exhibiting right now.

As a nation, we have made decades of incredibly bad decisions.  As a result, we are experiencing bad consequences which are going to become increasingly more severe.

The numbers that I just shared with you are not good.  But over the next several years they are going to get a whole lot worse.

Everything that can be shaken will be shaken, and life in America is about to change in a major way.

 

33 Strange Facts About America That Most Americans Would Be Shocked To Learn

33 SignDid you know that about one-fourth of the entire global prison population is in the United States?  Did you know that Apple has more money than the U.S. Treasury?  Did you know that if you have no debt and also have 10 dollars in your wallet that you are wealthier than 25 percent of all Americans?  Did you know that by the time an American child reaches the age of 18, that child will have seen approximately 40,000 murders on television?  There are some things that are great about the United States, and there are definitely some things that are not so great.  Once upon a time we were the most loved and most respected nation on the entire planet, but those days are long gone.  We have wrecked our economy, we have lost our values and we have fumbled away our future.  But if you look close enough, you can still see many of the things that once made this country a shining beacon to the rest of the world.  This article includes some weird facts, some fun facts, but also some very troubling facts.  It has been said that a spoonful of sugar helps the medicine go down, and hopefully as people enjoy reading the fun facts in this article they will also take note of the more serious facts.  If we are ever going to change course as a nation, we need to come to grips with just how far we have fallen.  The following are 33 strange facts about America that most Americans would be shocked to learn…

#1 The amount of cement that China used from 2011 to 2013 was greater than the total amount of cement that the United States used during the entire 20th century.

#2 In more than half of all U.S. states, the highest paid public employee in the state is a football coach.

#3 It costs the U.S. government 1.8 cents to mint a penny and 9.4 cents to mint a nickel.

#4 Almost half of all Americans (47 percent) do not put a single penny out of their paychecks into savings.

#5 In 2014, police in the United States killed 1,100 people.  During that same year, police in Canada killed 14 people, police in China killed 12 people and police in Germany didn’t kill anyone at all.

#6 The state of Alaska is 429 times larger than the state of Rhode Island is.  But Rhode Island has a significantly larger population than Alaska does.

#7 Alaska has a longer coastline than all of the other 49 U.S. states put together.

#8 The city of Juneau, Alaska is about 3,000 square miles in size.  It is actually larger than the entire state of Delaware.

#9 When LBJ’s “War on Poverty” began, less than 10 percent of all U.S. children were growing up in single parent households.  Today, that number has skyrocketed to 33 percent.

#10 In 1950, less than 5 percent of all babies in America were born to unmarried parents.  Today, that number is over 40 percent.

#11 The poverty rate for households that are led by a married couple is 6.8 percent.  For households that are led by a female single parent, the poverty rate is 37.1 percent.

#12 In 2013, women earned 60 percent of all bachelor’s degrees that were awarded that year in the United States.

#13 According to the CDC, 34.6 percent of all men in the U.S. are obese at this point.

#14 The average supermarket in the United States wastes about 3,000 pounds of food each year.

#15 Right now, more than 200 million people around the planet are officially considered to be unemployed.  Meanwhile, approximately 20 percent of the garbage that goes into our landfills is food.

#16 There is a city in Bangladesh called Dhaka where workers are paid just one dollar for every 1,000 bricks that they carry.  Meanwhile, the “inactivity rate” for men in their prime working years in the United States is hovering near record high levels.

#17 According to one recent survey, 81 percent of Russians now have a negative view of the United States.  That is much higher than at the end of the Cold War era.

#18 Montana has three times as many cows as it does people.

#19 The grizzly bear is the official state animal of California.  But no grizzly bears have been seen there since 1922.

#20 One recent survey discovered that “a steady job” is the number one thing that American women are looking for in a husband, and another survey discovered that 75 percent of women would have a serious problem dating an unemployed man.

#21 According to a study conducted by economist Carl Benedikt Frey and engineer Michael Osborne, 47 percent of the jobs in the United States could soon be lost to computers, robots and other forms of technology.

#22 The only place in the United States where coffee is grown commercially is in Hawaii.

#23 The original name of the city of Atlanta was “Terminus“.

#24 The state with the most millionaires per capita is Maryland.

#25 There are more than 4 million adult websites on the Internet, and they get more traffic than Netflix, Amazon and Twitter combined.

#26 86 percent of men include “having children” in their definition of success.  For women, that number is only 73 percent.

#27 One survey of 50-year-old men in the U.S. found that only 12 percent of them said that they were “very happy”.

#28 The United States has 845 motor vehicles for every 1,000 people.  Japan only has 593 for every 1,000 people, and Germany only has 540 for every 1,000 people.

#29 The average American spends more than 10 hours a day using an electronic device.

#30 48 percent of all Americans do not have any emergency supplies in their homes whatsoever.

#31 There are three towns in the United States that have the name “Santa Claus“.

#32 There is actually a town in Michigan called “Hell“.

#33 There are 60,000 miles of blood vessels in your body.  If they were stretched out in a single line, they could go around the planet more than twice.

 

Radical Leftists Win Election In Greece – Future Of Eurozone In Serious Jeopardy

Euro Sign - Public DomainRadical leftists have been catapulted to power in Greece, and that means that the European financial crisis has just entered a dangerous new phase.  Syriza, which is actually an acronym for “Coalition of the Radical Left” in Greek, has 36 percent of the total vote with approximately 80 percent of the polling stations reporting.  The current governing party, New Democracy, only has 28 percent of the vote.  Syriza leader Alexis Tsipras is promising to roll back a whole host of austerity measures that were imposed on Greece by the EU, and his primary campaign slogan was “hope is on the way”.  Hmmm – that sounds a bit familiar.  Clearly, the Greek population is fed up with the EU after years of austerity and depression-like conditions.  At this point, the unemployment rate in Greece is sitting at 25.8 percent, and the Greek economy is approximately 25 percent smaller than it was just six years ago.  The people of Greece are desperate for things to get better, and so they have turned to the radical leftists.  Unfortunately, things may be about to get a whole lot worse.

Once they formally have control of the government, Syriza plans to call for a European debt conference during which they plan to demand that the repayment terms of their debts be renegotiated.  But the rest of Europe appears to be highly resistant to any renegotiation – especially Germany.

Syriza says that it does not plan to unilaterally pull Greece out of the eurozone, and that it also intends for Greece to continue to use the euro.

But what happens if Germany will not budge?

Syriza’s entire campaign was based on promises to end austerity.  If international creditors refuse to negotiate and continue to insist that Greece abide by the austerity measures that were previously put in place, what will Syriza do?

Will Syriza back down and lose all future credibility with Greek voters?

Since 2010, the Greek people have endured a seemingly endless parade of wage reductions, pension cuts, tax increases and government budget cutbacks.

The Greek people just want things to go back to the way that they used to be, and they are counting on Syriza to deliver.

Unfortunately for Syriza, delivering on those promises is not going to be easy.  They may be faced with a choice of either submitting to the demands of their international creditors or choosing to leave the eurozone altogether.

And if Greece does leave the eurozone, the consequences for all of Europe could be catastrophic

Syriza risks overplaying its hand, said International Capital Strategies’ Rediker. “Given that the ECB controls the liquidity of the Greek banking system, and also serves as its regulator through the SSM (Single Supervisory Mechanism), going toe-to-toe with the ECB is one battle that could end very badly for the Greek government.”

If the ECB were to stop funding the liquidity of the Greek banks, the banks could collapse—an event that could lead to Greece abandoning the euro and printing its own money once more.

Milios didn’t believe it would come to that, saying, “No one wants a collapse of banks in the euro zone. This is going to be Lehman squared or to the tenth. No one wants to jeopardize the future of the euro zone.”

Hopefully cooler heads will prevail, because one bad move could set off a meltdown of the entire European financial system.

Even before the Greek election, the euro was already falling like a rock and economic conditions all over Europe were already getting worse.

So why would the Greeks risk pushing Europe to the brink of utter disaster?

Well, it is because economic conditions in Greece have been absolutely hellish for years and they are sick and tired of it.

For example, the BBC is reporting that many married women have become so desperate to find work in Greece that they are literally begging to work in brothels…

Some who have children and are struggling to support them have turned to sex work, to put food on the table.

Further north, in Larissa, Soula Alevridou, who owns a legal brothel, says the number of married women coming to her looking for work has doubled in the last five years.

They plead and plead but as a legal brothel we cannot employ married women,” she says. “It’s illegal. So eventually they end up as prostitutes on the streets.”

When people get this desperate, they do desperate things – like voting radical leftists into power.

But Greece might just be the beginning.  Surveys show that the popularity of the EU is plummeting all over Europe.  Just check out the following excerpt from a recent Telegraph article

Europe is being swept by a wave of popular disenchantment and revolt against mainstream political parties and the European Union.

In 2007, a majority of Europeans – 52 per cent – trusted the EU. That level of trust has now fallen to a third.

Once, Britain’s Euroscepticism was the exception, and was seen as the biggest threat to the future of the EU.

Now, other countries pose a far bigger danger thanks to the political discontents unleashed by the euro.

At this point, the future of the eurozone is in serious jeopardy.

I have a feeling that major changes in Europe are on the way which are going to shock the planet.

Meanwhile, the rest of the globe continues to slide toward another major financial crisis as well.

So many of the things that preceded the last financial crisis are happening once again.  This includes a massive crash in the price of oil.  Most people have absolutely no idea how critical the price of oil is to global financial markets.  I like how Gerald Celente put it during an interview the other day…

I began getting recognition as a trend forecaster in 1987. The Wall Street Journal covered my forecast. I said, ‘1987 would be the year it all collapses.’ I said, ‘There will be a stock market crash.’ One of the fundamentals I was looking at were the crashing oil prices in 1986.

Well, we see crashing oil prices today and the banks are much more concentrated and levered up in the oil patch than they were in 1987. From Goldman Sachs to Morgan Stanley banks have been involved in major debt financing, derivatives and energy transactions. But much of this debt has not been sold to investors and now we are going to start seeing some big defaults.

By itself, the Greek election would be a significant crisis.

But combined with all of the other economic and geopolitical problems that are erupting all over the planet, it looks like the conditions for a “perfect storm” are rapidly coming together.

Unfortunately, the overall global economy is in far worse shape today than it was just prior to the last major financial crisis.

This time around, the consequences might just be far more dramatic than most people would ever dare to imagine.

What Is Happening In Ukraine Is Far More Important Than Most People Realize

Violence During The Ukraine Revolution - Photo by Mstyslav ChernovWhat the people of Ukraine are being put through is absolutely horrible.  They are caught in the middle of a massive tug of war between the East and the West, and they are paying a great price for it.  Ultimately, Ukraine will end up either being dominated by Russia (a bad outcome) or by the EU and the United States (another bad outcome).  Most Ukrainians just want to be free and want to be able to build a better future for themselves and their families, but it is extremely unlikely that they will be able to escape the specter of foreign domination.  Meanwhile, the violence in Ukraine is planting the seeds for a potentially much larger conflict down the road.  The days of “friendly relations” between the United States and Russia are now gone.  Russia is absolutely furious that the U.S. has fueled a violent revolution on its own border, and it is something that Russian officials will not forget for a very long time.  In return, U.S. officials are taking an increasingly harsh stance toward Russia.  In the end, the seeds that are being planted right now could ultimately blossom into a full-blown conflict between the superpowers in the years to come.

Let there be no mistake – the United States is heavily involved in what is going on in Ukraine.  Even the New York Times admits this.  And the U.S. Ambassador to Ukraine and the Assistant Secretary of State have been caught on tape discussing their next moves in getting a new government installed in Ukraine.

In addition, a number of non-governmental organizations inside the United States have allegedly been assisting and organizing the revolution in Ukraine for a long time.  At least a few of these organizations have ties to George Soros.  This is something that I discussed in a previous article.

Some of the “progressive” NGOs that have been accused of fueling the violent revolution in Ukraine include the National Endowment for Democracy, Freedom House, and the Open Society Foundations (formerly known as the Open Society Institute).

Please don’t misunderstand me.  I am not taking sides.  I am just pointing out that both sides in Ukraine are controlled.  If I was living in Ukraine, I would want both Russia and the United States to go away and leave Ukraine alone.

Instead, Ukraine is being used as a battleground to fight a proxy war between the East and the West.  Now that the opposition has gained the upper hand, it does not appear that Russian officials are in any mood to recognize the new “government”

Prime Minister Dmitry Medvedev on Monday said Russia had grave doubts about the legitimacy of those in power in Ukraine following President Viktor Yanukovich’s ouster, saying their recognition by some states was an “aberration”.

Medvedev also stated that he has “big doubts about the legitimacy of a whole series of organs of power that are now functioning there.”

Last Friday, an agreement was signed by the two sides in Ukraine that was supposed to bring about a peaceful resolution to all of this.  But the revolutionaries reneged on the deal and toppled the government instead.  Needless to say, Russia was quite horrified by this

The Russian Foreign Ministry criticized the West for turning a blind eye to what Moscow described as the opposition reneging on its agreement signed Friday to form a unity government and aiming to “suppress dissent in various regions of Ukraine with dictatorial and, sometimes, even terrorist methods.”

So what does Russia plan to do?

That is the big question that everyone is asking.

They are not doing much of anything just yet.  But there have been rumors that we could potentially see some economic blowback

Russia and the Customs Union could temporarily limit increased-risk food imports from Ukraine, given fears of loose safety control, said Sergei Dankvert, head of the Russian veterinary and phytosanitary oversight service Rosselkhoznadzor.

“My Belarusian colleague and I are extremely concerned about the situation in Ukraine. We do not rule out that curbs could be introduced on the imports of products of high veterinary and phytosanitary risks from Ukraine,” Dankvert told Interfax after talks with his Belarusian counterpart Yury Pivovarchik in Bryansk, and telephone talks with Ukraine’s Deputy Agrarian Policy Minister Ivan Bisyuk.

Of course what the U.S. government is most concerned about is any military action that Russia might take.

National Security Adviser Susan Rice says that what has happened in Ukraine reflects “the will of the Ukrainian people and the interests of the United States and Europe” and that it would be a “grave mistake” for Russia to get militarily involved.

But whatever happens over the next few days, nobody should think that the Russians are simply going to abandon their interests in Ukraine.  Russia has a very important military base down in the Crimea, and the eastern half of the country is very pro-Russian.

So the struggle between East and West in Ukraine is likely to continue for quite some time to come.  The following is an excerpt from a recent WND article

The issue with Ukraine is whether it will join the E.U. or Putin’s Eurasian Union. The country is roughly divided on this issue between eastern and western Ukraine. The eastern portion wants to remain with Russia while the western side wants to move closer with the West.

In southern Ukraine, where the Crimea is located, Russian influence remains strong.

Because demonstrators who want to see Ukraine lean westward have become emboldened with their immediate success of ousting Yanukovich, it could make it more difficult for them to come to terms with any settlement agreement to reunify the country.

Moscow has a large naval military facility in Sevastopol in the Crimea and recently received a 25-year lease extension to 2042, with another five-year renewal option until 2047. In exchange, Ukraine received a multiyear discounted contract for much-needed natural gas.

And the pro-Russian eastern half of the country is actually the stronger of the two halves economically.  So this will likely complicate matters for the EU and the U.S. as they try to bring Ukraine into their sphere of influence…

Seven of Ukraine’s 10 largest private companies by revenue are either headquartered or maintain the majority of their operations in eastern Ukraine. These firms are owned by some of Ukraine’s wealthiest and most influential individuals. Three of these 10 corporations — mining and steel company Metinvest, energy firm DTEK and its subsidiary Donetskstal — are based in the eastern industrial city of Donetsk and are owned by Ukraine’s wealthiest man, Rinat Akhmetov. Interpipe, the company that controls 10 percent of the world market share of railway wheels and more than 11 percent of the world market share of manganese ferroalloys, is based in Dnipropetrovsk and belongs to businessman and politician Victor Pinchuk.

The country’s most important businessmen are embedded in the east, where their businesses make disproportionately high contributions to the Ukrainian economy and national budget.

In the end, this proxy war between the East and the West has left Ukraine with a collapsed economy and on the brink of civil war.

And what has happened in Ukraine has caused permanent damage in the relationship between the United States and Russia.

It won’t happen this month or even this year, but someday the U.S. may end up bitterly regretting antagonizing the Russian Bear.

At least that is what I think.

So what do you think?

Please feel free to share your thoughts by posting a comment below…

Ukraine 2014 - Photo by Mstyslav Chernov

China Starts To Make A Power Move Against The U.S. Dollar

US Dollars - Photo by selbstfotografiertIn order for our current level of debt-fueled prosperity to continue, the rest of the world must continue to use our dollars to trade with one another and must continue to buy our debt at ridiculously low interest rates.  Of course the number one foreign nation that we depend on to participate in our system is China.  China accounts for more global trade than anyone else on the planet (including the United States), and most of that trade is conducted in U.S. dollars.  This keeps demand for our dollars very high, and it ensures that we can import massive quantities of goods from overseas at very low cost.  As a major exporting nation, China ends up with gigantic piles of our dollars.  They lend many of those dollars back to us at ridiculously low interest rates.  At this point, China owns more of our national debt than any other country does.  But if China was to decide to quit playing our game and started moving away from U.S. dollars and U.S. debt, our economic prosperity could disappear very rapidly.  Demand for the U.S. dollar would fall and prices would go up.  And interest rates on our debt and everything else in our financial system would go up to crippling levels.  So it is absolutely critical to our financial future that China continues to play our game.

Unfortunately, there are signs that China has now decided to start looking for a smooth exit from the game.  In November, I wrote about how the central bank of China has announced that it is “no longer in China’s favor to accumulate foreign-exchange reserves”.  That means that the pile of U.S. dollars that China is sitting on is not going to get any higher.

In addition, China has signed a whole host of international currency agreements with other nations during the past couple of years which are going to result in less U.S. dollars being used in international trade.  You can read about many of these agreements in this article.

This week, we learned that China started to dump U.S. debt during the month of December.  Many have imagined that China would try to dump a flood of our debt on to the market all of a sudden once they decided to exit, but that simply does not make sense.  Instead, it makes sense for China to dump a bit of debt at a time so that the market will not panic and so that they can get close to full value for the paper that they are holding.

As Bloomberg reported the other day, China dumped nearly 50 billion dollars of U.S. debt during the month of December…

China, the largest foreign U.S. creditor, reduced holdings of U.S. Treasury debt in December by the most in two years as the Federal Reserve announced plans to slow asset purchases.

The nation pared its position in U.S. government bonds by $47.8 billion, or 3.6 percent, to $1.27 trillion, the largest decline since December 2011, according to U.S. Treasury Department data released yesterday.

This is how I would do it if I was China.  I would try to dump 30, 40 or 50 billion dollars a month.  I would try to make a smooth exit and try to get as much for my U.S. debt paper as I could.

So if China is not going to stockpile U.S. dollars or U.S. debt any longer, what is it going to stockpile?

It is going to stockpile gold of course.  In fact, China has been voraciously stockpiling gold for quite some time, and their hunger for gold appears to be growing.

According to Bloomberg, more than 80 percent of the gold that was exported from Switzerland last month went to Asia…

Switzerland sent more than 80 percent of its gold and silver bullion and coin exports to Asia last month, the Swiss Federal Customs Administration said today in an e-mailed report. It imported most from the U.K.

Hong Kong was the top destination at 44 percent on a value basis, with India at 14 percent, the Bern-based customs agency said in its first breakdown of the gold trade data since 1980. Singapore accounted for 8.6 percent of exports, the United Arab Emirates 7.9 percent and China 6.3 percent.

When China imports gold, most of it goes through Hong Kong.  We know that imports of gold from Hong Kong into China are at an all-time record high, but we don’t know exactly how much gold China has accumulated at this point because they quit reporting that to the rest of the world a number of years ago.

When it comes to global finance, China is playing chess and the United States is playing checkers.  China knows that gold is a universal currency that will hold value over the long-term.  As the paper currencies of the world race toward collapse, China could end up holding most of the real money and that would be a huge game changer when they finally reveal that fact…

The announcement of China’s new gold hoard will send shockwaves through the financial markets, and make China and the Chinese yuan (their national currency) even bigger players at the international table.

International banking expert James Rickards compared it to a game of Texas Hold ‘Em poker:

“You want a big pile of chips. The U.S. has a big pile of chips, Europe has a big pile of chips. The U.S. has 8,000 tonnes [metric tons] of gold, 17 members of the euro system have 10,000 tonnes. China at 1,000 tonnes is not a player, but at 5,000 tonnes, they are a player.”

There are some really good points made in the quote above, but I do take exception with a couple of things.  First of all, I believe that China now has far more than 5,000 tons of gold.  Secondly, I seriously doubt that the U.S. still actually has 8,000 tons of gold or that Europe still actually has 10,000 tons of gold.

As China (and eventually the rest of the world) moves away from a U.S.-based financial system, the consequences are going to be dramatic.

For instance, right now the average rate of interest that the U.S. government pays on debt is just 2.477 percent.  That is ridiculously low and it is way below the real rate of inflation.  It is simply not rational for anyone to lend the U.S. government money so cheaply, and at some point we are going to see a dramatic shift.

When that day arrives, interest rates are going to rise dramatically.  And if the average rate of interest on U.S. government debt rises to just 6 percent (and it has been much higher than that in the past), we will be paying out more than a trillion dollars a year just in interest on the national debt.

Even more frightening is what a rapidly changing interest rate environment would mean for our banking system.  There are four large U.S. banks that each have exposure to derivatives in excess of 40 trillion dollars.  You can find the identity of those banks right here.  Interest rate derivatives make up the biggest chunk of those derivatives contracts.  As John Embry told King World News just the other day, when that bubble bursts the carnage is going to be unprecedented…

“Stockman brought up a brilliant point, the fact that we have hundreds of trillions of dollars of interest rate swaps, which are polluting the world’s banking system. If we see growing volatility in interest rates, and I think that’s inevitable with what’s going on, that would cause spasms in the financial system. And if something goes wrong in the derivatives market, Heaven help us because the leverage that is imparted to the banking system through these derivatives is unholy.”

Unfortunately, very few of the “experts” will ever see this crash coming.

Very few of them saw it coming in 2000.

Very few of them saw it coming in 2008.

And very few of them will see it coming this time.

I really like what Paul B. Farrell had to say about this…

Early warnings of a crash are dismissed over and over (“just a temporary correction”). They gradually numb us about the inevitable. Time after time we forget history’s lessons. Until finally a big surprise catches us totally off-guard. Financial historian Niall Ferguson put it this way: Before the crash, our world seems almost stationary, deceptively so, balanced, at a set point. So that when the crash finally hits — as inevitably it will — everyone seems surprised. And our brains keep telling us it’s not time for a crash.

Till then, life just goes along quietly, hypnotizing us, making us vulnerable, till a shocker like Lehman Brothers upsets the balance. Then, says Ferguson, the crash is “accelerating suddenly, like a sports car … like a thief in the night.” It hits. Shocks us wide awake.

Don’t let the upcoming crash take you by surprise.

The warning signs are very clear.

Get ready while you still can.

Money - Photo by Pen Waggener

On The 100th Anniversary Of The Federal Reserve Here Are 100 Reasons To Shut It Down Forever

The Federal ReserveDecember 23rd, 1913 is a date which will live in infamy.  That was the day when the Federal Reserve Act was pushed through Congress.  Many members of Congress were absent that day, and the general public was distracted with holiday preparations.  Now we have reached the 100th anniversary of the Federal Reserve, and most Americans still don’t know what it actually is or how it functions.  But understanding the Federal Reserve is absolutely critical, because the Fed is at the very heart of our economic problems.  Since the Federal Reserve was created, there have been 18 recessions or depressions, the value of the U.S. dollar has declined by 98 percent, and the U.S. national debt has gotten more than 5000 times larger.  This insidious debt-based financial system has literally made debt slaves out of all of us, and it is systematically destroying the bright future that our children and our grandchildren were supposed to have.  If nothing is done, we are inevitably heading for a massive amount of economic pain as a nation.  So please share this article with as many people as you can.  The following are 100 reasons why the Federal Reserve should be shut down forever…

#1 We like to think that we have a government “of the people, by the people, for the people”, but the truth is that an unelected, unaccountable group of central planners has far more power over our economy than anyone else in our society does.

#2 The Federal Reserve is actually “independent” of the government.  In fact, the Federal Reserve has argued vehemently in federal court that it is “not an agency” of the federal government and therefore not subject to the Freedom of Information Act.

#3 The Federal Reserve openly admits that the 12 regional Federal Reserve banks are organized “much like private corporations“.

#4 The regional Federal Reserve banks issue shares of stock to the “member banks” that own them.

#5 100% of the shareholders of the Federal Reserve are private banks.  The U.S. government owns zero shares.

#6 The Federal Reserve is not an agency of the federal government, but it has been given power to regulate our banks and financial institutions.  This should not be happening.

#7 According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress is the one that is supposed to have the authority to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”.  So why is the Federal Reserve doing it?

#8 If you look at a “U.S. dollar”, it actually says “Federal Reserve note” at the top.  In the financial world, a “note” is an instrument of debt.

#9 In 1963, President John F. Kennedy issued Executive Order 11110 which authorized the U.S. Treasury to issue “United States notes” which were created by the U.S. government directly and not by the Federal Reserve.  He was assassinated shortly thereafter.

#10 Many of the debt-free United States notes issued under President Kennedy are still in circulation today.

#11 The Federal Reserve determines what levels some of the most important interest rates in our system are going to be set at.  In a free market system, the free market would determine those interest rates.

#12 The Federal Reserve has become so powerful that it is now known as “the fourth branch of government“.

#13 The greatest period of economic growth in U.S. history was when there was no central bank.

#14 The Federal Reserve was designed to be a perpetual debt machine.  The bankers that designed it intended to trap the U.S. government in a perpetual debt spiral from which it could never possibly escape.  Since the Federal Reserve was established 100 years ago, the U.S. national debt has gotten more than 5000 times larger.

#15 A permanent federal income tax was established the exact same year that the Federal Reserve was created.  This was not a coincidence.  In order to pay for all of the government debt that the Federal Reserve would create, a federal income tax was necessary.  The whole idea was to transfer wealth from our pockets to the federal government and from the federal government to the bankers.

#16 The period prior to 1913 (when there was no income tax) was the greatest period of economic growth in U.S. history.

#17 Today, the U.S. tax code is about 13 miles long.

#18 From the time that the Federal Reserve was created until now, the U.S. dollar has lost 98 percent of its value.

#19 From the time that President Nixon took us off the gold standard until now, the U.S. dollar has lost 83 percent of its value.

#20 During the 100 years before the Federal Reserve was created, the U.S. economy rarely had any problems with inflation.  But since the Federal Reserve was established, the U.S. economy has experienced constant and never ending inflation.

#21 In the century before the Federal Reserve was created, the average annual rate of inflation was about half a percent.  In the century since the Federal Reserve was created, the average annual rate of inflation has been about 3.5 percent.

#22 The Federal Reserve has stripped the middle class of trillions of dollars of wealth through the hidden tax of inflation.

#23 The size of M1 has nearly doubled since 2008 thanks to the reckless money printing that the Federal Reserve has been doing.

#24 The Federal Reserve has been starting to behave like the Weimar Republic, and we all remember how that ended.

#25 The Federal Reserve has been consistently lying to us about the level of inflation in our economy.  If the inflation rate was still calculated the same way that it was back when Jimmy Carter was president, the official rate of inflation would be somewhere between 8 and 10 percent today.

#26 Since the Federal Reserve was created, there have been 18 distinct recessions or depressions: 1918, 1920, 1923, 1926, 1929, 1937, 1945, 1949, 1953, 1958, 1960, 1969, 1973, 1980, 1981, 1990, 2001, 2008.

#27 Within 20 years of the creation of the Federal Reserve, the U.S. economy was plunged into the Great Depression.

#28 The Federal Reserve created the conditions that caused the stock market crash of 1929, and even Ben Bernanke admits that the response by the Fed to that crisis made the Great Depression even worse than it should have been.

#29 The “easy money” policies of former Fed Chairman Alan Greenspan set the stage for the great financial crisis of 2008.

#30 Without the Federal Reserve, the “subprime mortgage meltdown” would probably never have happened.

#31 If you can believe it, there have been 10 different economic recessions since 1950.  The Federal Reserve created the “dotcom bubble”, the Federal Reserve created the “housing bubble” and now it has created the largest bond bubble in the history of the planet.

#32 According to an official government report, the Federal Reserve made 16.1 trillion dollars in secret loans to the big banks during the last financial crisis.  The following is a list of loan recipients that was taken directly from page 131 of the report…

Citigroup – $2.513 trillion
Morgan Stanley – $2.041 trillion
Merrill Lynch – $1.949 trillion
Bank of America – $1.344 trillion
Barclays PLC – $868 billion
Bear Sterns – $853 billion
Goldman Sachs – $814 billion
Royal Bank of Scotland – $541 billion
JP Morgan Chase – $391 billion
Deutsche Bank – $354 billion
UBS – $287 billion
Credit Suisse – $262 billion
Lehman Brothers – $183 billion
Bank of Scotland – $181 billion
BNP Paribas – $175 billion
Wells Fargo – $159 billion
Dexia – $159 billion
Wachovia – $142 billion
Dresdner Bank – $135 billion
Societe Generale – $124 billion
“All Other Borrowers” – $2.639 trillion

#33 The Federal Reserve also paid those big banks $659.4 million in “fees” to help “administer” those secret loans.

#34 During the last financial crisis, big European banks were allowed to borrow an “unlimited” amount of money from the Federal Reserve at ultra-low interest rates.

#35 The “easy money” policies of Federal Reserve Chairman Ben Bernanke have created the largest financial bubble this nation has ever seen, and this has set the stage for the great financial crisis that we are rapidly approaching.

#36 Since late 2008, the size of the Federal Reserve balance sheet has grown from less than a trillion dollars to more than 4 trillion dollars.  This is complete and utter insanity.

#37 During the quantitative easing era, the value of the financial securities that the Fed has accumulated is greater than the total amount of publicly held debt that the U.S. government accumulated from the presidency of George Washington through the end of the presidency of Bill Clinton.

#38 Overall, the Federal Reserve now holds more than 32 percent of all 10 year equivalents, and that percentage is rising by about 0.3 percent each week.

#39 Quantitative easing creates financial bubbles, and when quantitative easing ends those bubbles tend to deflate rapidly.

#40 Most of the new money created by quantitative easing has ended up in the hands of the very wealthy.

#41 According to a prominent Federal Reserve insider, quantitative easing has been one giant “subsidy” for Wall Street banks.

#42 As one CNBC article recently stated, we are seeing absolutely rampant inflation in “stocks and bonds and art and Ferraris“.

#43 Donald Trump once made the following statement about quantitative easing: “People like me will benefit from this.

#44 Most people have never heard about this, but a very interesting study conducted for the Bank of England shows that quantitative easing actually increases the gap between the wealthy and the poor.

#45 The gap between the top one percent and the rest of the country is now the greatest that it has been since the 1920s.

#46 The mainstream media has sold quantitative easing to the American public as an “economic stimulus program”, but the truth is that the percentage of Americans that have a job has actually gone down since quantitative easing first began.

#47 The Federal Reserve is supposed to be able to guide the nation toward “full employment”, but the reality of the matter is that an all-time record 102 million working age Americans do not have a job right now.  That number has risen by about 27 million since the year 2000.

#48 For years, the projections of economic growth by the Federal Reserve have consistently overstated the strength of the U.S. economy.  But every single time, the mainstream media continues to report that these numbers are “reliable” even though all they actually represent is wishful thinking.

#49 The Federal Reserve system fuels the growth of government, and the growth of government fuels the growth of the Federal Reserve system.  Since 1970, federal spending has grown nearly 12 times as rapidly as median household income has.

#50 The Federal Reserve is supposed to look out for the health of all U.S. banks, but the truth is that they only seem to be concerned about the big ones.  In 1985, there were more than 18,000 banks in the United States.  Today, there are only 6,891 left.

#51 The six largest banks in the United States (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley) have collectively gotten 37 percent larger over the past five years.

#52 The U.S. banking system has 14.4 trillion dollars in total assets.  The six largest banks now account for 67 percent of those assets and all of the other banks account for only 33 percent of those assets.

#53 The five largest banks now account for 42 percent of all loans in the United States.

#54 We were told that the purpose of quantitative easing is to help “stimulate the economy”, but today the Federal Reserve is actually paying the big banks not to lend out 1.8 trillion dollars in “excess reserves” that they have parked at the Fed.

#55 The Federal Reserve has allowed an absolutely gigantic derivatives bubble to inflate which could destroy our financial system at any moment.  Right now, four of the “too big to fail” banks each have total exposure to derivatives that is well in excess of 40 trillion dollars.

#56 The total exposure that Goldman Sachs has to derivatives contracts is more than 381 times greater than their total assets.

#57 Federal Reserve Chairman Ben Bernanke has a track record of failure that would make the Chicago Cubs look good.

#58 The secret November 1910 gathering at Jekyll Island, Georgia during which the plan for the Federal Reserve was hatched was attended by U.S. Senator Nelson W. Aldrich, Assistant Secretary of the Treasury Department A.P. Andrews and a whole host of representatives from the upper crust of the Wall Street banking establishment.

#59 The Federal Reserve was created by the big Wall Street banks and for the benefit of the big Wall Street banks.

#60 In 1913, Congress was promised that if the Federal Reserve Act was passed that it would eliminate the business cycle.

#61 There has never been a true comprehensive audit of the Federal Reserve since it was created back in 1913.

#62 The Federal Reserve system has been described as “the biggest Ponzi scheme in the history of the world“.

#63 The following comes directly from the Fed’s official mission statement: “To provide the nation with a safer, more flexible, and more stable monetary and financial system.”  Without a doubt, the Federal Reserve has failed in those tasks dramatically.

#64 The Fed decides what the target rate of inflation should be, what the target rate of unemployment should be and what the size of the money supply is going to be.  This is quite similar to the “central planning” that goes on in communist nations, but very few people in our government seem upset by this.

#65 A couple of years ago, Federal Reserve officials walked into one bank in Oklahoma and demanded that they take down all the Bible verses and all the Christmas buttons that the bank had been displaying.

#66 The Federal Reserve has taken some other very frightening steps in recent years.  For example, back in 2011 the Federal Reserve announced plans to identify “key bloggers” and to monitor “billions of conversations” about the Fed on Facebook, Twitter, forums and blogs.  Someone at the Fed will almost certainly end up reading this article.

#67 Thanks to this endless debt spiral that we are trapped in, a massive amount of money is transferred out of our pockets and into the pockets of the ultra-wealthy each year.  Incredibly, the U.S. government spent more than 415 billion dollars just on interest on the national debt in 2013.

#68 In September, the average rate of interest on the government’s marketable debt was 1.981 percent.  In January 2000, the average rate of interest on the government’s marketable debt was 6.620 percent.  If we got back to that level today, we would be paying more than a trillion dollars a year just in interest on the national debt and it would collapse our entire financial system.

#69 The American people are being killed by compound interest but most of them don’t even understand what it is.  Albert Einstein once made the following statement about compound interest…

Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”

#70 Most Americans have absolutely no idea where money comes from.  The truth is that the Federal Reserve just creates it out of thin air.  The following is how I have previously described how money is normally created by the Fed in our system…

When the U.S. government decides that it wants to spend another billion dollars that it does not have, it does not print up a billion dollars.

Rather, the U.S. government creates a bunch of U.S. Treasury bonds (debt) and takes them over to the Federal Reserve.

The Federal Reserve creates a billion dollars out of thin air and exchanges them for the U.S. Treasury bonds.

#71 What does the Federal Reserve do with those U.S. Treasury bonds?  They end up getting auctioned off to the highest bidder.  But this entire process actually creates more debt than it does money…

The U.S. Treasury bonds that the Federal Reserve receives in exchange for the money it has created out of nothing are auctioned off through the Federal Reserve system.

But wait.

There is a problem.

Because the U.S. government must pay interest on the Treasury bonds, the amount of debt that has been created by this transaction is greater than the amount of money that has been created.

So where will the U.S. government get the money to pay that debt?

Well, the theory is that we can get money to circulate through the economy really, really fast and tax it at a high enough rate that the government will be able to collect enough taxes to pay the debt.

But that never actually happens, does it?

And the creators of the Federal Reserve understood this as well.  They understood that the U.S. government would not have enough money to both run the government and service the national debt.  They knew that the U.S. government would have to keep borrowing even more money in an attempt to keep up with the game.

#72 Of course the U.S. government could actually create money and spend it directly into the economy without the Federal Reserve being involved at all.  But then we wouldn’t be 17 trillion dollars in debt and that wouldn’t serve the interests of the bankers at all.

#73 The following is what Thomas Edison once had to say about our absolutely insane debt-based financial system…

That is to say, under the old way any time we wish to add to the national wealth we are compelled to add to the national debt.

Now, that is what Henry Ford wants to prevent. He thinks it is stupid, and so do I, that for the loan of $30,000,000 of their own money the people of the United States should be compelled to pay $66,000,000 — that is what it amounts to, with interest. People who will not turn a shovelful of dirt nor contribute a pound of material will collect more money from the United States than will the people who supply the material and do the work. That is the terrible thing about interest. In all our great bond issues the interest is always greater than the principal. All of the great public works cost more than twice the actual cost, on that account. Under the present system of doing business we simply add 120 to 150 per cent, to the stated cost.

But here is the point: If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good.

#74 The United States now has the largest national debt in the history of the world, and we are stealing more than 100 million dollars from our children and our grandchildren every single hour of every single day in a desperate attempt to keep the debt spiral going.

#75 Thomas Jefferson once stated that if he could add just one more amendment to the U.S. Constitution it would be a ban on all government borrowing….

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.

#76 At this moment, the U.S. national debt is sitting at $17,251,528,475,994.19.  If we had followed the advice of Thomas Jefferson, it would be sitting at zero.

#77 When the Federal Reserve was first established, the U.S. national debt was sitting at about 2.9 billion dollars.  On average, we have been adding more than that to the national debt every single day since Obama has been in the White House.

#78 We are on pace to accumulate more new debt under the 8 years of the Obama administration than we did under all of the other presidents in all of U.S. history combined.

#79 If all of the new debt that has been accumulated since John Boehner became Speaker of the House had been given directly to the American people instead, every household in America would have been able to buy a new truck.

#80 Between 2008 and 2012, U.S. government debt grew by 60.7 percent, but U.S. GDP only grew by a total of about 8.5 percent during that entire time period.

#81 Since 2007, the U.S. debt to GDP ratio has increased from 66.6 percent to 101.6 percent.

#82 According to the U.S. Treasury, foreigners hold approximately 5.6 trillion dollars of our debt.

#83 The amount of U.S. government debt held by foreigners is about 5 times larger than it was just a decade ago.

#84 As I have written about previously, if the U.S. national debt was reduced to a stack of one dollar bills it would circle the earth at the equator 45 times.

#85 If Bill Gates gave every single penny of his entire fortune to the U.S. government, it would only cover the U.S. budget deficit for 15 days.

#86 Sometimes we forget just how much money a trillion dollars is.  If you were alive when Jesus Christ was born and you spent one million dollars every single day since that point, you still would not have spent one trillion dollars by now.

#87 If right this moment you went out and started spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars.

#88 In addition to all of our debt, the U.S. government has also accumulated more than 200 trillion dollars in unfunded liabilities.  So where in the world will all of that money come from?

#89 The greatest damage that quantitative easing has been causing to our economy is the fact that it is destroying worldwide faith in the U.S. dollar and in U.S. debt.  If the rest of the world stops using our dollars and stops buying our debt, we are going to be in a massive amount of trouble.

#90 Over the past several years, the Federal Reserve has been monetizing a staggering amount of U.S. government debt even though Ben Bernanke once promised that he would never do this.

#91 China recently announced that they are going to quit stockpiling more U.S. dollars.  If the Federal Reserve was not recklessly printing money, this would probably not have happened.

#92 Most Americans have no idea that one of our most famous presidents was absolutely obsessed with getting rid of central banking in the United States.  The following is a February 1834 quote by President Andrew Jackson about the evils of central banking….

I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank. You tell me that if I take the deposits from the Bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out and, by the Eternal, (bringing his fist down on the table) I will rout you out.

#93 There are plenty of possible alternative financial systems, but at this point all 187 nations that belong to the IMF have a central bank.  Are we supposed to believe that this is just some sort of a bizarre coincidence?

#94 The capstone of the global central banking system is an organization known as the Bank for International Settlements.  The following is how I described this organization in a previous article

An immensely powerful international organization that most people have never even heard of secretly controls the money supply of the entire globe.  It is called the Bank for International Settlements, and it is the central bank of central banks.  It is located in Basel, Switzerland, but it also has branches in Hong Kong and Mexico City.  It is essentially an unelected, unaccountable central bank of the world that has complete immunity from taxation and from national laws.  Even Wikipedia admits that “it is not accountable to any single national government.”  The Bank for International Settlements was used to launder money for the Nazis during World War II, but these days the main purpose of the BIS is to guide and direct the centrally-planned global financial system.  Today, 58 global central banks belong to the BIS, and it has far more power over how the U.S. economy (or any other economy for that matter) will perform over the course of the next year than any politician does.  Every two months, the central bankers of the world gather in Basel for another “Global Economy Meeting”.  During those meetings, decisions are made which affect every man, woman and child on the planet, and yet none of us have any say in what goes on.  The Bank for International Settlements is an organization that was founded by the global elite and it operates for the benefit of the global elite, and it is intended to be one of the key cornerstones of the emerging one world economic system.

#95 The borrower is the servant of the lender, and the Federal Reserve has turned all of us into debt slaves.

#96 Debt is a form of social control, and the global elite use all of this debt to dominate all the rest of us.  40 years ago, the total amount of debt in our system (all government debt, all business debt, all consumer debt, etc.) was sitting at about 2 trillion dollars.  Today, the grand total exceeds 56 trillion dollars.

#97 Unless something dramatic is done, our children and our grandchildren will be debt slaves for their entire lives as they service our debts and pay for our mistakes.

#98 Now that you know this information, you are responsible for doing something about it.

#99 Congress has the power to shut down the Federal Reserve any time that they would like.  But right now most of our politicians fully endorse the current system, and nothing is ever going to happen until the American people start demanding change.

#100 The design of the Federal Reserve system was flawed from the very beginning.  If something is not done very rapidly, it is inevitable that our entire financial system is going to suffer an absolutely nightmarish collapse.

The truth is that we do not have to have a Federal Reserve.  The greatest period of economic growth in U.S. history was when we did not have a central bank.  If we are ever going to turn this nation around economically, we are going to have to get rid of this debt-based financial system that is centered around the Federal Reserve.  On the path that we are on now, there is no hope.  Please share this article with as many people as you can.  It is imperative that we try to wake the American people up while we still have time.

12 Shocking Clues About What America Will Look Like When The Next Great Economic Crisis Strikes

Crime Scene - Photo by JRLibbyThe collapse of American society is accelerating.  For the moment, much of our social decay is being masked by the tremendous level of affluence that we are experiencing.  It has been reported that 4 out of every 5 adults in the United States “struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives”, but in general Americans still enjoy a debt-fueled standard of living that is far beyond what most of the rest of the world enjoys.  When that debt-fueled standard of living permanently disappears, it is going to unleash chaos unlike anything that America has ever seen before.  Right now, economic conditions in this country are not anywhere close to where they were before 2008, but this is just the beginning.  We are in the midst of an ongoing economic collapse which is going to get much, much worse in the years ahead.  When the next major wave of the economic crisis strikes, millions of people are going to become extremely desperate.  And desperate people do desperate things.  We are already starting to see this play out all over the nation, but this is only a preview of coming attractions.  What we are going to witness in future years is going to be almost too horrible for words.

So how can I be so sure that this is going to happen?  After all, the United States didn’t descend into complete and utter chaos during the Great Depression of the 1930s.  Wouldn’t an economic depression unfold in a similar manner today?

Unfortunately, a lot has changed since then.  A lot more Americans were self-sufficient back in those days, and the truth is that the character of our nation has been rotting and decaying for decades.  In a previous article, I described it this way…

“We are simply not the same country that we used to be.  Americans are proud, selfish, greedy, arrogant, ungrateful, treacherous and completely addicted to entertainment and pleasure.  Our country is literally falling apart all around us, but most Americans are so plugged into entertainment that they can’t even be bothered to notice what is happening.”

Just last weekend, there were “mini-riots” in several U.S. states when “technical issues” caused the food stamp system to go haywire for a few hours.

What would have happened if there had been an extended outage or if the political crisis in D.C. had caused food stamps to be completely cut off at some point in November?

Let’s be thankful that we did not have to find out.

But even though major food stamps riots may have been averted (at least for now), there are a whole host of other signs that America is going to become a very unstable place during the next major economic downturn.  The following are 12 shocking clues about what America will look like when the next great economic crisis strikes…

#1 Would you continue to work as a bus driver if you were stabbed while driving or if a passenger poured urine all over you?  Just check out what has been going on in Detroit lately

After two drivers were recently stabbed and another had urine poured on her by an angry rider, union officials representing bus drivers for the city of Detroit are set to protest in front of city hall at 10 a.m. on Monday.

#2 We are starting to see a lot of “group crimes” happen all over America.  For example, just the other day in Brooklyn, New York a gang of 10 young thugs dragged a young couple out of their vehicle and brutally beat them…

Ronald Russo was dragged to the ground. Then he was punched and kicked in the head. He felt more blows all over his body, investigators said. He suffered a fractured nose, a broken septum, a blood clot and abrasions to his shoulder. He was treated and released from Beth Israel Medical Center.

In the midst of the attack, there was a steady chorus of epithets. “White motherf—–!” screamed the attackers, who ranged in age from 12 to 18.

Alanna Russo, 30, was calling 911 when the 12-year-old girl pulled the woman’s hair and threw her to the ground. The victim’s head slammed into the concrete. She suffered a black eye, bleeding and difficulty breathing, prosecutors said, but she refused medical attention.

#3 A lot of people assume that they are perfectly safe inside their own vehicles but that is not the case at all.  A story in the New York Post about a gang of bikers that ruthlessly hunted down a young family that was driving an SUV made national headlines a few weeks ago…

A gang of bikers terrorized a dad driving with his wife and baby daughter on the West Side Highway — chasing after their SUV and then dragging the man out and beating him to a pulp in front of his horrified family, authorities said.

When the bikers caught up with this family they showed the father of the baby daughter absolutely no mercy…

One biker can be seen on the video ripping off his helmet and using it to bash in Lien’s driver’s-side window.

The crew pummeled Lien on the pavement in front of his wife, Rosalyn Ng, and their 2-year-old daughter, police sources said.

Lien, who also was slashed during the melee, was rushed to Columbia University Medical Center. He needed stitches to his face and chest and had two black eyes.

#4 We are living at a time when hearts are becoming very cold.  Some Americans are becoming so desperate for money that they will do almost anything to get it.  In fact, one couple in Tennessee has actually been charged with selling their four daughters for use in sex films

An East Tennessee couple is facing a list of charges, accused of selling their children to take part in sex films.

Connie Sue McCall, 40, and her husband, Ronnie Lee McCall, 61, of Johnson City have been charged by a federal grand jury.

Paperwork shows the couple was selling their four daughters.

Prosecutors say the four girls were between the ages of 5 and 16 when this happened.

Could you imagine such a thing happening in your neighborhood?

Perhaps it is happening, but you just don’t know that it is going on.

#5 And it is not only older people that are having their hearts grow cold.  It is happening to young people too.  Last week, a 17-year-old girl was caught carrying around a dead baby (which she probably gave birth to) in a shopping bag in a Victoria’s Secret store right in the heart of Manhattan

The dead baby found in the teen’s shopping bag at a Victoria’s Secret store in Manhattan was born alive and then asphyxiated, police said Friday, as the macabre discovery turned toward a possible homicide case.

Police believe 17-year-old Tiana Rodriguez gave birth to the baby at a friend’s house and that the infant was later asphyxiated. However, the city medical examiner’s office said an autopsy was inconclusive, and more tests were needed.

Who does something like that?

#6 Sadly, a lot of mothers appear to be losing the natural affection that they should have for their children.  Just check out another incident that happened in New York City recently

So much for no child left behind.

A stroller-toting mom who used her 1-year-old son as cover during a massive candy shoplifting spree at a downtown Duane Reade used the tot’s pram as a battering ram when workers confronted her — and then ran away without the baby, the NYPD said.

#7 One of the clearest signs that American society is decaying is the fact that groups of kids are banding together and agreeing to commit absolutely horrible crimes.  We have seen this with the “flash mob” robberies that are plaguing many cities, but what is even worse is when groups of kids band together to commit violent acts.  In Pennsylvania recently, a group of teens cheered on attackers as they beat up a 15-year-old girl…

Speaking exclusively to CBS 3, a 15-year-old high school student, whose identity we are concealing, described a terrifying attack by a gang of at least nine teenage boys as she was leaving an Interboro High School football game Monday night.

The teenage victim described first being taunted by the attackers, who followed her down a neighborhood street, cursing and spitting at her, before she was repeatedly kicked and punched, suffering at least one blow to her head.

The attackers even tried to throw her in front of a passing vehicle and nobody tried to stop them…

The victim says as at least two of the teenagers pummeled her, the others cheered them on shouting, “Come on, let’s get her!” At one point, the victim says, the gang tried to throw her under the wheels of a passing car, which swerved, narrowly missing her.

What is happening to this country?

#8 We have also been hearing about a lot of “gang rapes” lately as well.  The following is an excerpt from a first-hand account from a 14-year-old girl in Missouri that experienced this type of horrible ordeal…

About five shots tall, I drank it. I guess I didn’t know how badly it would mess me up. But the boys who gave it to me did.

Then it was like I fell into a dark abyss. No light anywhere. Just dark, dense silence — and cold. That’s all I could ever remember from that night. Apparently, I was there for not even an entire hour before they discarded me in the snow.

You can read the rest of her sobering story right here.

Are you starting to understand why I am so convinced that we have a major problem with our young men in America today?

Instead of raising young gentlemen, we are raising wild animals that seem to have very little self-control.

#9 And sometimes the public does not do anything to stop sexual assaults even when they happen on public streets.  In a recent incident in Athens, Ohio, not only did the public not stop a sexual assault, many actually took photos of the assault and posted them on social media websites…

Horrific photos of an alleged rape in progress have been shared on social media after crowds at a college homecoming celebration chose to take pictures and videos of the sex act rather than stopping it.

Would such a thing have happened in our country 50 years ago?

Of course not.

We need to come to grips with how far we have fallen.

#10 In America today, young kids can beat a homeless man to death and it barely even makes a blip on the news.  I’ll bet hardly any of you have heard about what happened recently to a homeless man in New Jersey

Three teenagers were in custody Saturday morning, on charges of beating a homeless man to his death in Hoboken, N.J.

As CBS 2’s Janelle Burrell reported, Hudson County Acting Prosecutor Gaetano T. Gregory said two 13-year-olds and a 14-year-old were charged in the Sept. 10 death of Ralph Eric Santiago, 46.

What would cause 13-year-olds and 14-year-olds to behave so savagely?

Could it be because we are raising them in a society where basic morality is not taught any longer?

#11 Our young people certainly do not have much respect for the very elderly anymore either.  Instead, the elderly are looked at as “weak” and “easy prey”.  Just check out what recently happened to a 70-year-old man in upstate New York…

A 70-year-old man was seriously injured early Saturday morning after being attacked outside of a 7-Eleven in Syracuse.

Police say James Gifford had just left the store at the intersection of Valley Drive and South Street just after 6:00 a.m. and was attacked by a group of five or six black males, according to Syracuse Police.

Police also said this appears to be an unprovoked incident with an innocent victim.

#12 In this day and age, it is very hard to tell who you can trust.  You might meet someone on the street and they might smile and seem very nice, but inside they may be full of all kinds of garbage.  For example, just check out what one man in the Boston area planned to do

A Boston-area man, who was planning to kidnap children, lock them in a basement dungeon, rape and eat them, should be imprisoned for at least 27 years, federal authorities said in court documents filed this week.

Geoffrey Portway pleaded guilty in May to distribution and possession of child pornography and solicitation to commit a crime of violence, according to court documents. He is scheduled to be sentenced on September 17.

“Portway has pled guilty to some of the most vile and heinous crimes known to our society,” federal prosecutors wrote in a sentencing recommendation.

This is how twisted and perverted our society has become.

A lot of Americans believe that if we could just elect “the right politicians” or if we could just change our economic system or if we could just fix one particular issue that everything would be right in America again.

Unfortunately, what we are facing is not so simple.  Our problems are not just in Washington D.C. or on Wall Street.  The truth is that our biggest problem is what is going on inside of us.

America is rotting and decaying on the inside, and the next great economic crisis is going to reveal just how bad things have gotten.

Or could it be possible that I am overstating things?  Please feel free to share what you think about the ongoing collapse of our society by posting a comment below…

If You Think The Employment Numbers Are Good, Then You Really Need To Read This Article

Homeless Bill Needs Rich Woman Photo By Josh SwieringaDo you actually believe that the employment numbers are getting better?  Do you actually believe that there is a bright future ahead for American workers?  If so, then you really need to read this article.  The truth is that we are in the midst of the worst employment crisis since the Great Depression, and there has been absolutely no employment recovery.  In fact, the percentage of working age Americans that are employed is just about exactly where it was during the darkest days of the last recession.  But the mainstream media is not telling you this.  The mainstream media is instead focusing on the fact that the official “unemployment rate” declined from 7.6% in June to 7.4% in July.  That sounds like great news, but when you take a deeper look at the employment numbers some very disturbing trends emerge.

Over the past several years, almost the entire decline in the unemployment rate can be accounted for by people “leaving the workforce”.  The “unemployment rate” has not been going down because people are actually getting jobs.  Rather, the “unemployment rate” has been going down because the government has been pretending that millions upon millions of American workers simply do not want jobs anymore.  This is extremely misleading.

We are being told that 162,000 jobs were created in July.  Okay, so that is just barely enough to keep up with population growth, and most of the jobs that were created last month were part-time jobs.

Meanwhile, the jobs numbers for the two previous months were both revised down

The change in total nonfarm payroll employment for May was revised from +195,000 to +176,000, and the change for June was revised from +195,000 to +188,000. With these revisions, employment gains in May and June combined were 26,000 less than previously reported.

Will this month eventually be revised down too?

When it comes to measuring employment in the United States, I believe that a much more accurate measurement than the highly manipulated “unemployment rate” is the civilian employment-population ratio.  This ratio tells us what percentage of working age Americans actually have a job.

Just prior to the last recession, about 63 percent of all working age Americans had a job.  During the recession, that number plunged dramatically and ultimately fell below 59 percent, and it has stayed below 59 percent for 47 months in a row

Employment-Population Ratio 2013

This is the first time in the post-World War II era that the employment-population ratio has not bounced back after a recession.

So there has not been an employment recovery.  Anyone that tells you that there has been an employment recovery is lying to you.

Since the end of 2009, we have been treading water at best.  But during that time, another disturbing trend has emerged.  Good paying full-time jobs are rapidly being replaced by low paying part-time jobs.

And this trend has definitely accelerated this year.  If you can believe it, an astounding 76.7 percent of the jobs that have been “created” in 2013 have been part-time jobs.

As I wrote about last month, the employment landscape in this country is fundamentally changing.  At this point, the number one employer in this country is Wal-Mart, and the number two employer in this country is a temp agency (Kelly Services).

This is a huge reason why the middle class is dying.  You simply can’t raise a family on a part-time income.

Our young adults are being hit particularly hard.  According to Gallup, the percentage of working age Americans under the age of 30 with a job fell from 47.0% in June 2012 to 43.6% in June 2013…

Fewer Americans aged 18 to 29 worked full time for an employer in June 2013 (43.6%) than did so in June 2012 (47.0%), according to Gallup’s Payroll to Population employment rate. The P2P rate for young adults is also down from 45.8% in June 2011 and 46.3% in June 2010.

When our young people get out of school and enter the real world, they are finding that “good jobs” are few and far between.  But unless our young people can find “breadwinner jobs”, they are not going to be able to get married, buy homes and raise families.

A lot of young people are doing their best, but things are really tough out there right now.  The lack of good jobs is the primary reason why families that have a head of household under the age of 30 have a poverty rate of 37 percent.

A lot of young adults are coping with this employment crisis by moving back in with their parents.  According to one recent study, 36 percent of all young adults in the 18 to 31 age bracket are currently living with their folks.

Are you starting to understand that our system is broken?

The quality of jobs in this country continues to steadily decline.  Just consider the following numbers from one of my previous articles

-The number of part-time workers in the United States has just hit a brand new all-time high, but the number of full-time workers is still nearly 6 million below the old record that was set back in 2007.

-In America today, only 47 percent of adults have a full-time job.

-At this point, one out of every four American workers has a job that pays $10 an hour or less.

-An astounding 53 percent of all American workers make less than $30,000 a year.

And as I mentioned yesterday, until we have a jobs recovery there will be no housing recovery no matter how much the Federal Reserve tries to manipulate the system.

The mainstream media continues to insist that “things are looking up” for the housing market, and yet the home ownership rate in the United States is the lowest that it has been in 18 years.

In order for the middle class to thrive, people have got to be able to get good jobs and people have got to be able to buy homes.

Instead, the percentage of good jobs in our economy continues to shrink, the level of home ownership continues to decline, and less than half of all Americans now consider themselves to be middle class.

The next wave of the economic crisis has not even hit us yet, but we continue to see poverty rates soar all over the nation.  In fact, just this week there was an article about the tent cities that are starting to pop up all over New Jersey

Tent cities have popped up across New Jersey including the state’s poorest city.

Meg Baker chased the story of Camden’s tent city.  Residing off Route 38 at Wilson Boulevard under an overpass, through woods and down a path of trash lays a community of people living in tents.  This particular community was relocated from Federal Street and it’s inhabited by an array of people: addicts, people who have fallen on hard times and some with mental illness.

Baker took a tour of this run down community and the pictures show just how heart-wrenching this situation really is.  Among the homes are decomposing food, broken furniture, and feral cats.

This is supposed to be “the economic recovery”.

If things were going to get “better” it should have happened by now.

But things didn’t get better, and now the next wave of the economic crisis is rapidly approaching.

As I tried to explain the other day, the most important number in our economy is the yield on 10 year U.S. Treasuries.  As that number goes up, interest rates all over our economic system go up.  And much higher interest rates would be absolutely devastating for our economy.

Unfortunately, many analysts now believe that interest rates are going to go much, much higher than they are right now.  Just check out this excerpt from a recent CNBC article

The Federal Reserve will lose control of interest rates as the “great rotation” out of bonds into equities takes off in full force, according to one market watcher, who sees U.S. 10-year Treasury yields hitting 5-6 percent in the next 18-24 months.

“It is our opinion that interest rates have begun their assent, that the Fed will eventually lose control of interest rates. The yield curve will first steepen and then will shift, moving rates significantly higher,” said Mike Crofton, President and CEO, Philadelphia Trust Company told CNBC on Wednesday.

If interest rates do go that high, our economy simply will not be able to handle that.  It would cripple the finances of state and local governments all over the nation, it would absolutely crush the housing market, and it would cause a derivatives crisis unlike anything that we have ever seen before.

The smart money knows that rising interest rates spell big trouble and they are already pulling their money out of the market as a Bloomberg article recently detailed…

Private-equity managers from Fortress Investment Group LLC (FIG) to Blackstone Group LP (BX), which made billions by buying low and selling high, say now is the time to exit investments as stocks rally and interest rates start to rise.

And Apollo Global Management LLC Chief Executive Officer Leon Black said the following back in April

“It’s almost biblical: there is a time to reap and there’s a time to sow,” Apollo (APO)’s Black said at a conference in April. “We think it’s a fabulous environment to be selling. We’re selling everything that’s not nailed down in our portfolio.”

The smart money is getting out while the getting is good.

They know that a storm is coming.

They know what higher interest rates will do to the economy.

As bad as the employment picture is right now, this is NOTHING compared to what is coming.

This is about as good as things are going to get.  It is all downhill from here.

So enjoy this false bubble of pseudo-prosperity while you still can.

When the next great wave of the economic crisis strikes, millions upon millions of Americans are going to lose their jobs and the official unemployment rate is going to soar well up into the double digits.

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