Should everyone in America receive a “basic income” directly from the federal government? Considering the fact that we are already 20 trillion dollars in debt, such a concept may sound quite foolish to many of you, but this is an idea that is really starting to gain traction in leftist circles. In fact, Facebook CEO Mark Zuckerberg suggested that this was something that we should “explore” during the commencement speech that he just delivered at Harvard. For quite a while it has been obvious that Zuckerberg is very strongly considering a run for the presidency in 2020, but up until just recently we haven’t had many clues about where he would stand on particular issues. If he is serious about proposing a universal basic income for all Americans, that would make Zuckerberg very appealing to the far left voters that flocked to the Bernie Sanders campaign.
Yesterday, I discussed the fact that the number of Americans that are receiving money from the government each month has reached an all-time high, but Zuckerberg would take things much farther. According to Zuckerberg, society would be far better off if everyone got an income from the government…
“Every generation expands its definition of equality. Now it’s time for our generation to define a new social contract,” Zuckerberg said during his speech. “We should have a society that measures progress not by economic metrics like GDP but by how many of us have a role we find meaningful. We should explore ideas like universal basic income to make sure everyone has a cushion to try new ideas.”
Zuckerberg said that, because he knew he had a safety net if projects like Facebook had failed, he was confident enough to continue on without fear of failing. Others, he said, such as children who need to support households instead of poking away on computers learning how to code, don’t have the foundation Zuckerberg had. Universal basic income would provide that sort of cushion, Zuckerberg argued.
Such a proposal is going to look really good to a lot of people at first glance.
But who is going to pay for this?
Of course the truth is that the money for the people that are not working would come from taxing the people that are working.
I don’t think that Zuckerberg has really thought this through. Are young people going to have an incentive to work if they can just stay home and watch movies and play video games all day while collecting their “universal basic incomes” from the government?
And why would anyone want to bust their rear ends working for a living when their incomes are just going to be taxed extremely heavily to pay for all the people that aren’t working?
We are already 20 trillion dollars in debt, but politicians on the left just want to keep giving even more free stuff to people. During his presidential campaign, Bernie Sanders suggested that everyone in America “deserves a minimum standard of living” and that every citizen is “entitled” to universal health care, free college education and basic housing…
So long as you have Republicans in control of the House and the Senate, and so long as you have a Congress dominated by big money, I can guarantee you that the discussion about universal basic income is going to go nowhere in a hurry. But, if we can develop a strong grassroots movement which says that every man, woman and child in this country is entitled to a minimum standard of living — is entitled to health care, is entitled to education, is entitled to housing — then we can succeed. We are living in the richest country in the history of the world, yet we have the highest rate of childhood poverty of almost any major country and millions of people are struggling to put food on the table. It is my absolute conviction that everyone in this country deserves a minimum standard of living and we’ve got to go forward in the fight to make that happen.
In previous generations, very few people would have ever taken someone like Bernie Sanders seriously.
But in our day and time socialism is really starting to catch on. In fact, one survey found “that four out of every ten adults say they prefer socialism to capitalism”…
The American Culture and Faith Institute recently conducted a survey of adults 18 and older. It shows not only how deeply divided Americans are on some issues but also how their view of the nation stands in many cases in stark contrast to our nation’s founding principles. Most Americans (58 percent) see themselves as politically moderate, while a quarter identify as conservative, and 17 percent as liberal. Those who were both socially and fiscally conservative, the group tracked by the ACFI in greatest detail, were 6 percent of the population.
But those differences don’t reveal the greatest divide and danger to America’s future. “The most alarming result, according to [George] Barna, was that four out of every ten adults say they prefer socialism to capitalism,” the ACFI noted in its commentary on the poll. “That is a large minority,” Barna said, “and it includes a majority of the liberals — who will be pushing for a completely different economic model to dominate our nation. That is the stuff of civil wars. It ought to set off alarm bells among more traditionally-oriented leaders across the nation.’” That 40 percent of Americans now prefer socialism to capitalism could spell major change to the policies advanced by legislators and political leaders and to the interpretations of judges ruling on the application of new and pre-existing laws.
And as I noted yesterday, Millennials are particularly attracted to socialism. This could have dramatic implications for our society as older generations of Americans slowly die off.
Unfortunately, there is just one huge problem with socialism.
It doesn’t work.
If you want to see the end result of socialism, just move to Venezuela or North Korea for a while.
In socialist nations, there is very little incentive to work hard. Instead, people tend to become very lazy and expect the government to provide everything that they need.
When people work hard and are productive, the overall wealth of a society goes up. And when people sit around and wait for someone else to provide for them, the overall wealth of a society goes down.
Would Mark Zuckerberg have worked so hard to develop Facebook if he knew that the government would just come in and take most of the money away so that others could have a “universal basic income”?
Yes, we want to do all that we can to reduce poverty and to build a strong, vibrant middle class.
But socialism is not the answer and it never will be.
For more than 100 years global debt levels have been rising, and now we are potentially facing the greatest debt crisis in all of human history. Never before have we seen such a level of debt saturation all over the planet, and pretty much everyone understands that this is going to end very, very badly at some point. The only real question is when it will happen. Many believe that the current global debt super cycle began when the Federal Reserve was established in 1913. Central banks are designed to create debt, and since 1913 the U.S. national debt has gotten more than 6800 times larger. But of course it is not just the United States that is in this sort of predicament. At this point more than 99 percent of the population of the entire planet lives in a nation that has a debt-creating central bank, and as a result the whole world is drowning in debt.
When people tell me that things are going to “get better” in 2017 and beyond, I find it difficult not to roll my eyes. The truth is that the only way we can even continue to maintain our current ridiculously high debt-fueled standard of living is to grow debt at a much faster pace than the economy is growing. We may be able to do that for a brief period of time, but giant financial bubbles like this always end and we will not be any exception.
Barack Obama and his team understood what was happening, and they were able to keep us out of a horrifying economic depression by stealing more than nine trillion dollars from future generations of Americans and pumping that money into the U.S. economy. As a result, the federal government is now 20 trillion dollars in debt, and that means that the eventual crash is going to be far, far worse than it would have been if we would have lived within our means all this time.
Corporations and households have been going into absolutely enormous amounts of debt as well. Corporate debt has approximately doubled since the last financial crisis, and U.S. consumers are now more than 12 trillion dollars in debt.
When you add all forms of debt together, America’s debt to GDP ratio is now about 352 percent. I think that the following illustration does a pretty good job of showing how absolutely insane that is…
If your brother earns $100,000 in annual income and borrowed $10,000 on his credit card, he could consume $110,000 worth of stuff. In this example, his debt to his personal GDP is just 10%. But what if he could get more credit year after year and reached a point where his total debt reached $352,000 but his income remained the same. His personal debt-to-GDP ratio would now be 352%.
If he could borrow at super low interest rates, maybe he could sustain the monthly loan payments. Maybe? But how much more could he possibly borrow? What lender would lend him more? And what if those low rates began to rise? How much debt can his $100,000 income cover? Essentially, he has reached the end of his own debt cycle.
The United States is certainly not alone in this regard. When you look all over the industrialized world, you see similar triple digit debt to GDP figures.
When this current debt super cycle ultimately ends, it is going to create economic pain on a scale that will be unlike anything that we have ever seen before. The following comes from King World News…
That is the inevitable consequence of 100 years of credit expansion from virtually nothing to $250 trillion, plus global unfunded liabilities of roughly $500 trillion, plus derivatives of $1.5 quadrillion. This is a staggering total of $2.25 quadrillion. Therefore, the question is not what could go wrong since it is guaranteed that all these liabilities will implode at some point. And when they do, it will bring misery to the world of a magnitude that no one could ever imagine. It is of course very difficult to forecast the end of a major cycle. As this is unlikely to be a mere 100-year cycle but possibly a 2000-year cycle. It is also impossible to forecast how long the decline will take. Will it be gradual like the Dark Ages, which took 500 years after the fall of the Roman Empire? Or will the fall be much faster this time due to the implosion of the biggest credit bubble in world history? The latter is more likely, especially since the bubble will become a lot bigger before it implodes.
And there are certainly lots of signs that a global slowdown is already beginning. For example, global trade growth has fallen below 2 percent for only the third time since the year 2000. On each of the other occasions, we witnessed a horrible recession take place. For more signs that economic conditions are deteriorating, please see my previous article entitled “Recession 2017? Things Are Happening That Usually Never Happen Unless A New Recession Is Beginning“.
Of course much of the globe is already in the midst of a horrible economic crisis. Brazil is in the middle of their worst recession ever, and people are literally starving in Venezuela. A new round of debt problems has erupted in Europe, with Greece, Portugal and Italy being the latest flashpoints.
Just like in 2007, many are mocking the idea that the a major economic downturn is coming to the United States. They believe that the ridiculously high stock market valuations of today can stick around indefinitely, and they are putting their faith in politicians.
But it won’t be too long before a new economic crisis begins in America and the kind of civil unrest that I portray in “The Beginning Of The End” erupts all across the country.
I just don’t understand why more people cannot see this. Government debt, corporate debt and consumer debt have all been growing much, much faster than the overall economy. Can someone please explain to me how that could possibly be sustainable in the long-term?
Someone that I considered to be a mentor but that has since passed away once said that things would seem like they would be getting better for a little while before the next crash comes.
And it turned out that he was precisely correct. We are in a season of time when economic conditions have appeared to be getting a little bit better in the United States, and this has blinded so many people to the truth of what is about to happen to us.
Did you know that almost 70 percent of the U.S. population is essentially living paycheck to paycheck? As you will see below, a brand new survey has found that 69 percent of all Americans have less than $1,000 in savings. Of course one of the primary reasons for this is that most of us are absolutely drowning in debt. In fact, the total amount of household debt in the United States now exceeds 12 trillion dollars. So many Americans are so busy just trying to pay off their existing debts that they can’t even think about saving anything for the future. If economic conditions remain relatively stable, the fact that so many of us are living on the edge probably won’t kill us. But the moment the economy plunges into another 2008-style crisis (or worse), we could be facing a situation where two-thirds of the country is in imminent danger of running out of cash.
If you are living paycheck to paycheck, you live under the constant threat of your life being totally turned upside down if that paycheck ever goes away. During the last crisis, millions of Americans lost their jobs very rapidly, and because so many of them were living paycheck to paycheck all of a sudden large numbers of people couldn’t pay their mortgages. As a result, multitudes of American families went through the extremely painful process of foreclosure.
Unfortunately, it appears that we have not learned anything from the last go around. According to the brand new survey that I mentioned above, 69 percent of all Americans have less than $1,000 in savings…
Last year, GoBankingRates surveyed more than 5,000 Americans only to uncover that 62% of them had less than $1,000 in savings. Last month GoBankingRates again posed the question to Americans of how much they had in their savings account, only this time it asked 7,052 people. The result? Nearly seven in 10 Americans (69%) had less than $1,000 in their savings account.
Breaking the survey data down a bit further, we find that 34% of Americans don’t have a dime in their savings account, while another 35% have less than $1,000. Of the remaining survey-takers, 11% have between $1,000 and $4,999, 4% have between $5,000 and $9,999, and 15% have more than $10,000.
Perhaps the most alarming fact from this survey is that 62 percent of all Americans had less than $1,000 in savings last year. So that means that this number has gotten 7 percent worse over the last 12 months.
How did that happen? I thought the mainstream media was telling us that the economy was getting better…
Look, if you don’t have an emergency fund you are in danger of losing everything. This is a point that I have been making over and over again for years, and in an article about this new survey USA Today made this point very strongly as well…
This data is particularly worrisome since the recommendation is for Americans to have six months in expenses saved in case of an emergency, such as a large medical expense, car repair bill, or losing your job. Without this emergency fund to fall back on, millions of Americans could be risking financial disaster.
As the publisher of The Economic Collapse Blog, people are constantly asking me what they should do to get prepared for what is coming.
The number one thing that I always suggest is to build up an emergency fund.
In a chaotic situation it is always hard to anticipate accurately what is going to happen, but without a doubt we are all going to need to continue to pay our bills and to buy things for our families during the next crisis.
Yes, someday the U.S. dollar will become rather worthless, but until that happens you are going to need to continue to put a roof over the heads of your family and to put food on the table.
And you are going to need money to do those things.
Some time ago, the Federal Reserve also found that a large percentage of Americans are living on the edge of financial disaster. They discovered that 47 percent of all Americans could not even come up with $400 to pay for an unexpected emergency room visit without borrowing the money or selling something that they own.
If you can’t even come up with $400 you are really hurting, but that is the status of about half the country these days.
We are continually being told that the economy is strong, but that is simply not the truth.
In fact, it turns out that the period from 2005 to 2015 was the worst period for per capita real GDP growth in modern American history. The following comes from Zero Hedge…
- Growth was unusually strong in the 1960s and early 1970s. In every year from 1966 through 1973, per-capita income was up between 30 percent and 40 percent from a decade earlier. Thus, it’s not surprising that many Americans recall this as a great period for the nation’s economy.
- In every year from 1984 to 2007 — a period that economists call the Great Moderation, because of the way both growth and interest rates stabilized — per-person income was up between 20 percent and 30 percent from a decade earlier. That’s ample reason for Americans to view this as a good period for the economy.
- Cumulative per-person growth from 2005 to 2015 was lower than in any prior decade in the sample. That certainly helps explain why many Americans are unhappy with the nation’s recent economic performance.
And as I repeat over and over, Barack Obama is on track to be the one and only president in all of American history to never have a single year when the economy grew by at least 3 percent, and he has had eight years to try to accomplish that feat.
Why doesn’t Donald Trump ever bring up that amazing fact? I would think that he could get a lot of mileage out of that number.
At this point, nobody can deny that the middle class is shrinking. 61 percent of all Americans lived in middle class households in 1971, but now the middle class makes up a minority of the population for the very first time in our history.
Back in 1970, the middle class brought home approximately 62 percent of all income, but today that figure has plummeted to just 43 percent.
Those that are still doing well often dismiss those that are struggling by barking out such phrases as “get a job”, but the truth is that getting a good job is not so easy these days.
The most recent statistics show that there are 7.9 million Americans that are considered to be officially unemployed. When you add that number to the 94.1 million working age Americans that are considered to be “not in the labor force”, you get a grand total of 102 million working age Americans that do not have a job right now.
And just because you do have a job does not mean that everything is okay. As I have discussed previously, 51 percent of all U.S. workers make less than $30,000 a year according to the Social Security Administration.
Everywhere you look things seem to be getting worse and not better. Not too long ago I documented the explosion of tent cities all over the country as poverty continues to rise, and I discussed how one study found that some young women in our impoverished inner cities are so desperate that they are actually trading sex for food.
Sadly, it isn’t just a few hard cases that we are talking about. Even in areas of the country that are supposed to be “doing well” we are seeing record-setting poverty numbers. For example, it was recently reported that the number of New Yorkers sleeping in homeless shelters just set a brand new all-time high, and the number of New York families permanently living in homeless shelters is up 60 percent over the past five years.
If things are this bad during an “economic recovery”, what are they going to look like once the economy really starts imploding?
And considering the fact that almost 70 percent of the population has virtually no savings, could our nation handle an extended economic downturn that may be even worse than what we experienced in 2008 and 2009?
As a nation we truly are living on the edge, and it isn’t going to take very much at all to push us into oblivion.
The largest and most important bank in the largest and most important economy in Europe is imploding right in front of our eyes. Deutsche Bank is the 11th biggest bank on the entire planet, and due to the enormous exposure to derivatives that it has, it has been called “the world’s most dangerous bank“. Over the past year, I have repeatedly warned that Deutsche Bank is heading for disaster and is a likely candidate to be “the next Lehman Brothers”. If you would like to review, you can do so here, here and here. On September 16th, the Wall Street Journal reported that the U.S. Department of Justice wanted 14 billion dollars from Deutsche Bank to settle a case related to the mis-handling of mortgage-backed securities during the last financial crisis. As a result of that announcement, confidence in the bank has been greatly shaken, the stock price has fallen to record lows, and analysts are warning that Deutsche Bank may be facing a “liquidity event” unlike anything that we have seen since the collapse of Lehman Brothers back in 2008.
At one point on Friday, Deutsche Bank stock fell below the 10 euro mark for the first time ever before bouncing back a bit. A completely unverified rumor that was spreading on Twitter that claimed that Deutsche Bank would settle with the Department of Justice for only 5.4 billion dollars was the reason for the bounce.
But the size of the fine is not really the issue now. Shares of Deutsche Bank have fallen by more than half so far in 2016, and this latest episode seems to have been the final straw for the deeply troubled financial institution. Old sources of liquidity are being cut off, and nobody wants to be the idiot that offers Deutsche Bank a new source of liquidity at this point.
As a result, Deutsche Bank is potentially facing a “liquidity event” on a scale that we have not seen since the financial crisis of 2008. The following comes from Zero Hedge…
It is not solvency, or the lack of capital – a vague, synthetic, and usually quite arbitrary concept, determined by regulators – that kills a bank; it is – as Dick Fuld will tell anyone who bothers to listen – the loss of (access to) liquidity: cold, hard, fungible (something Jon Corzine knew all too well when he commingled and was caught) cash, that pushes a bank into its grave, usually quite rapidly: recall that it took Lehman just a few days for its stock to plunge from the high double digits to zero.
It is also liquidity, or rather concerns about it, that sent Deutsche Bank stock crashing to new all time lows earlier today: after all, the investing world already knew for nearly two weeks that its capitalization is insufficient. As we reported earlier this week, it was a report by Citigroup, among many other, that found how badly undercapitalized the German lender is, noting that DB’s “leverage ratio, at 3.4%, looks even worse relative to the 4.5% company target by 2018” and calculated that while he only models €2.9bn in litigation charges over 2H16-2017 – far less than the $14 billion settlement figure proposed by the DOJ – and includes a successful disposal of a 70% stake in Postbank at end-2017 for 0.4x book he still only reaches a CET 1 ratio of 11.6% by end-2018, meaning the bank would have a Tier 1 capital €3bn shortfall to the company target of 12.5%, and a leverage ratio of 3.9%, resulting in an €8bn shortfall to the target of 4.5%.
The more the stock price drops, the faster other financial institutions, investors and regular banking clients are going to want to pull their money out of Deutsche Bank. And every time there is news about people pulling money out of the bank, that is just going to drive the stock price even lower.
In other words, Deutsche Bank may be entering a death spiral that may be impossible to stop without a government bailout, and the German government has already stated that there will be no bailout for Deutsche Bank.
Banking customers have a total of approximately 566 billion euros deposited with the bank, and even if a small fraction of those clients start demanding their money back it is going to cause a major, major crunch.
Deutsche Bank CEO John Cryan attempted to calm nerves on Friday by releasing a memo to employees that blamed “speculators” for the decline in the stock price…
Instead of doing what many have correctly suggested he should be doing, namely focusing on ways to raise more capital for the undercapitalized Deutsche Bank in order to stem the slow (at first) liquidity leak, first thing this morning CEO John Cryan issued another morale-boosting note to employees of Deustche Bank who have been watching their stock price crash to another record low, dipping under €10 in early trading for the first time ever. In the memo the embattled CEO worryingly did what Dick Fuld and other chief executives did when they felt the situation slipping out of control, namely blaming evil “rumor-spreading” shorts, saying “our bank has become subject to speculation. Ongoing rumours are causing significant swings in our stock price. … Trust is the foundation of banking. Some forces in the markets are currently trying to damage this trust.”
Just as important, Cryan confirms the Bloomberg report that “a few of our hedge fund clients have reduced some activities with us. That is causing unjustified concerns.” As we explained last night, the concerns are very much justified if they spread to the biggest risk-factor for the German bank: its depositors, which collectively hold over €550 billion in liquidity-providing instruments.
If you would like to ready the full memo, you can do so right here.
One of the reasons why Deutsche Bank is considered to be so systemically “dangerous” is because it has 42 trillion euros worth of exposure to derivatives. That is an amount of money that is 14 times larger than the GDP of the entire nation of Germany.
Some firms that were derivatives clients of the bank have already gotten spooked and have moved their business to other institutions. It was this report from Bloomberg that really helped drive down the stock price of Deutsche Bank earlier this week…
The funds, a small subset of the more than 800 clients in the bank’s hedge fund business, have shifted part of their listed derivatives holdings to other firms this week, according to an internal bank document seen by Bloomberg News. Among them are Izzy Englander’s $34 billion Millennium Partners, Chris Rokos’s $4 billion Rokos Capital Management, and the $14 billion Capula Investment Management, said a person with knowledge of the situation who declined to be identified talking about confidential client matters.
“The issue here is now one of confidence,” said Chris Wheeler, a financial analyst with Atlantic Equities LLP in London.
So what comes next?
Monday is a banking holiday for Germany, so we may not see anything major happen until Tuesday.
An announcement of a major reduction in the Department of Justice fine may buy Deutsche Bank some time, but any reprieve would likely only be temporary.
What appears to be more likely is the scenario that Jeffrey Gundlach is suggesting…
But Jeffrey Gundlach, chief executive of DoubleLine Capital, said investors betting that Berlin would not rescue Deutsche could find themselves nursing big losses.
‘The market is going to push down Deutsche Bank until there is some recognition of support. They will get assistance, if need be,’ said Gundlach, who oversees more than $100 billion at Los Angeles-based DoubleLine.
It will be very interesting to see how desperate things become before the German government finally gives in to the pressure.
The complete and total collapse of Deutsche Bank would be an event many times more significant for the global financial system than the collapse of Lehman Brothers was. Global leaders simply cannot afford for such a thing to happen, but without serious intervention it appears that is precisely where we are heading.
Personally, I don’t know exactly what will happen next, but it will be fascinating to watch.
Are you ready for the most anticipated presidential debate in decades? It is being projected that Monday’s debate between Donald Trump and Hillary Clinton could potentially break the all-time record of 80 million viewers that watched Ronald Reagan and Jimmy Carter debate back in 1980. Many Americans probably hope to see some personal fireworks between the two nominees, but the two candidates have both expressed a desire to focus on substantive issues. There will likely be quite a few questions about the economy, and without a doubt this is an area where Trump and Clinton have some very sharp differences. The mainstream media would have us believe that the U.S. economy is in pretty good shape, and if that was true that would seem to favor Clinton. But is it actually true? The following are 26 incredible facts about the economy that every American should know for the Trump-Clinton debate…
#1 When Barack Obama entered the White House, the U.S. government was 10.6 trillion dollars in debt. Today, the U.S. government is 19.5 trillion dollars in debt, and Obama still has several months to go until the end of his second term. That means that an average of more than 1.1 trillion dollars a year will be added to the national debt during his presidency. We are stealing a tremendous amount of consumption from the future to make the economy look much, much better than it otherwise would be, and we are systematically destroying the future in the process.
#2 As Obama prepares to leave office, the rate at which we are adding to the national debt is actually increasing. During the fiscal year that is just ending, the U.S. government has added another 1.36 trillion dollars to the national debt.
#3 It isn’t just the federal government that is on a massive debt binge. Total U.S. corporate debt has nearly doubled since the end of 2007.
#4 Default rates on U.S. corporate debt are the highest that they have been since the last financial crisis.
#5 Corporate profits have fallen for five quarters in a row, and it is being projected that it will be six in a row once the final numbers for the third quarter come in.
#6 During the month of August, commercial bankruptcy filings were up 29 percent compared to the same period a year ago.
#7 The rate of new business formation in the United States dropped dramatically during the last recession and has hovered at that new lower level ever since.
#8 The Wall Street Journal says that this is the weakest “economic recovery” since 1949.
#9 Barack Obama is on track to be the only president in all of U.S. history to never have a single year when the U.S. economy grew by at least 3 percent.
#10 In August, the Cass Freight Index dipped to the lowest level that we have seen for that month since 2010. What this means is that the total amount of stuff being shipped around the country by air, by rail and by truck is really dropping, and this is a clear sign that real economic activity is slowing down in a major way.
#11 Capital expenditure growth has turned negative, and history has shown that this is almost always followed by a new recession.
#12 The percentage of Americans with a full-time job has been sitting at about 48 percent since 2010. You have to go back to 1983 to find a time when full-time employment in this country was so low.
#13 The labor force participation rate peaked back in 1997 and has been steadily falling ever since.
#14 The “inactivity rate” for men in their prime working years is actually higher today than it was during the last recession.
#15 The United States has lost more than five million manufacturing jobs since the year 2000 even though our population has become much larger over that time frame.
#16 If you can believe it, the total number of government employees now outnumbers the total number of manufacturing employees in the United States by almost 10 million.
#17 One study found that median incomes have fallen in more than 80 percent of the major metropolitan areas in this country since the year 2000.
#18 According to the Social Security Administration, 51 percent of all American workers make less than $30,000 a year.
#19 The rate of homeownership in the U.S. has fallen every single year while Barack Obama has been in the White House.
#20 Approximately one out of every five young adults are currently living with their parents.
#21 The auto loan debt bubble recently surpassed the one trillion dollar mark for the first time ever.
#22 Auto loan delinquencies are at the highest level that we have seen since the last recession.
#23 In 1971, 61 percent of all Americans were considered to be “middle class”, but now middle class Americans have actually become a minority in this nation.
#24 One recent survey discovered that 62 percent of all Americans have less than $1,000 in savings.
#25 According to the Federal Reserve, 47 percent of all Americans could not even pay an unexpected $400 emergency room bill without borrowing the money from somewhere or selling something.
#26 The number of New Yorkers sleeping in homeless shelters just set a brand new record high, and the number of families permanently living in homeless shelters is up a whopping 60 percent over the past five years.
Despite all of the facts that you just read, the truth is that there is one particular group of people that have been doing quite well during the Obama years. I really like how Charles Hugh Smith made this point in one of his recent articles…
The top 5% of households that dominate government, Corporate America, finance, the Deep State and the media have been doing extraordinarily well during the past eight years of stock market bubble (oops, I mean boom) and “recovery,” and so they report that the economy is doing splendidly because they’ve done splendidly.
By recklessly creating money out of thin air and pumping it into the financial markets, the Federal Reserve has greatly enriched the elite, but they have also dramatically increased the gap between the very wealthy and the rest of us. Since he has been in the White House during this time, Barack Obama has gotten the credit for this temporary stock market bubble, and most of the elite love Obama anyway.
But in the process the stage has been set for the greatest economic and financial implosion in U.S. history, and the pain that is coming is going to affect every man, woman and child in this country.
During the debate, Trump and Clinton will talk a lot about tinkering with tax rates and regulations, but those measures are essentially going to be meaningless when compared to the massive economic tsunami that is coming. The next president is going to inherit the biggest economic problems that this nation has ever faced, and it is going to take a miracle of Biblical proportions to turn the U.S. economy in the right direction.