Without Low Interest Rates, The U.S. Financial System Dies

Right now, interest rates are near historic lows.  The U.S. government is able to borrow gigantic mountains of money for next to nothing.  U.S. consumers are still able to get home loans, car loans and student loans at ridiculously low interest rates.  When this low interest rate environment changes (and it will), it is going to absolutely devastate the U.S. economy.  Without low interest rates, the U.S. financial system dies.  When it comes to borrowing money, it is the rate of interest that causes the pain.  If you could borrow as much money as you wanted at a zero rate of interest for the rest of your life you would never, ever have a debt problem.  But when there is a cost to borrowing money that changes things.  The higher the rate of interest goes, the more painful debt becomes.

The only reason that U.S. government finances have not fallen apart completely already is because the federal government is still able to borrow huge amounts of money very cheaply.  If interest rates on U.S. government debt even return just to “average” levels, it is going to be absolutely catastrophic.

So what happens if rates go above “average”?

The reality is that if there is a major crisis that causes interest rates on U.S. Treasuries to go well beyond “normal” levels it is going to cause a complete and total collapse.

In 2010, the U.S. government paid out just $413 billion in interest even though the national debt soared to 14 trillion dollars by the end of the year.

That means that the U.S. government paid somewhere in the neighborhood of 3 percent interest for the year.

Considering how rapidly the U.S. dollar has been declining and how much money printing the Federal Reserve has been doing, a rate of interest that low is absolutely ridiculous.

The shorter the term, the more ridiculous the rates of interest on U.S. Treasuries are.

For example, the rate of interest on 3 month U.S. Treasuries right now is just barely above zero.

The Federal Reserve has been playing all kinds of games in an attempt to keep interest rates on U.S. government debt low, and so far they have been pretty successful at it.

But they aren’t going to be able to do it forever.

Up until now, other nations and investors around the world have continued to participate in the system even though they know that the Federal Reserve is cheating.

However, there are signs that a lot of investors are finally getting fed up and are ready to walk away from U.S. government debt.

China has been dumping short-term U.S. government debt.  Russia has been dumping U.S. government debt. Pimco has been dumping U.S. government debt.

Others are taking things even farther.

In fact, there are some investors that plan on cashing in on the loss of confidence in U.S. Treasuries.  Renowned investor Jim Rogers says that he is now going to be shorting 30 year U.S. government bonds.

Just check out what Rogers recently told CNBC….

“I cannot imagine or conceive lending money to the United States government for 30-years at 3, 4, 5 or 6 percent —you pick a number — in U.S. dollars”

And he is right.  Who in the world would be stupid enough to loan the U.S. government money at a 4 or 5 percent rate of interest for the next 30 years?

Actually, most U.S. government debt is financed in the short-term these days.  In fact, the U.S. government issues a higher percentage of short-term debt than any other industrialized nation.

This trend really got started during the Clinton administration.  Back then they figured out that the U.S. could reduce its borrowing costs substantially by relying much more heavily on short-term debt.  The Bush and Obama administrations have continued this trend.

So these days the U.S. government constantly has huge amounts of debt that are maturing and that need to be rolled over.

This is great as long as interest rates stay very, very low.

But when interest rates rise the whole game will change.

In a recent article, Pat Buchanan explained that the Obama administration is being completely unrealistic when it assumes that interest rates on U.S. government debt will stay incredibly low over the next decade….

“The average rate of interest the Fed has had to pay to borrow for the last two decades has been 5.7 percent. However, President Obama is projecting the cost of money at only 2.5 percent.

A return to the normal Fed rate would, by 2020, add $4.9 trillion to the cumulative deficit”

Most Americans really cannot grasp how incredibly low interest rates are right now.

Sometimes a picture is worth a thousand words.

The following chart shows how interest rates on 10 year U.S. Treasury bonds have declined over the last several decades.

As confidence in the U.S. dollar and in U.S. government debt declines, interest rates will go up.

In fact, there are troubling signs that we are starting to see a move in that direction right now.  Last week, the yield on 5 year U.S. Treasuries experienced the biggest one week percentage jump ever recorded.

The big danger is that the political wrangling in Washington D.C. will start to cause a panic.  The managing director of Standard & Poor’s recently told Reuters that if the U.S. government starts defaulting on debt at the beginning of August, the credit rating on U.S. Treasury bonds that are supposed to mature on August 4th will go from AAA all the way down to D….

Chambers, who is also the chairman of S&P’s sovereign ratings committee, told Reuters on Tuesday that U.S. Treasury bills maturing on August 4 would be rated ‘D’ if the government fails to honor them. Unaffected Treasuries would be downgraded as well, but not as sharply, he said.

“If the U.S. government misses a payment, it goes to D,” Chambers said. “That would happen right after August 4, when the bills mature, because they don’t have a grace period.”

When a credit rating gets slashed, interest rates on that debt can go up dramatically.

Just ask the citizens of Greece.

Today, the interest rate on 2 year Greek bonds is over 26 percent.

You are delusional if you believe that something like that can never happen here.

Right now the U.S. national debt is completely and totally out of control.  If the U.S. government had to start paying interest rates of 10, 15 or 20 percent to borrow money it would be a total nightmare.

This year the U.S. government will have income of about 2.2 trillion dollars.

If in future years the U.S. government is spending a trillion or a trillion and a half dollars just on interest on the national debt, then how in the world is it going to be possible to even run the government, much less balance the budget?

But rising interest rates would not just devastate the federal government.

It would become much more expensive for state and local governments to borrow money.

Student loans would become much more expensive.

Car loans would become much more expensive.

Home loans would become out of reach for everyone except the very wealthy.

As we saw during the housing crash of a few years ago, rising interest rates can absolutely wipe homeowners out.

On a standard home loan, if you change the rate of interest from 5 percent to 10 percent you increase the mortgage payment by approximately 50 percent.

If you change the rate of interest from 5 percent to 15 percent, you roughly double the mortgage payment.

As the 30 year fixed rate mortgage chart below shows, interest rates are near historic lows right now….

Keep in mind that even with such ridiculously low interest rates the U.S. real estate market has been deader than a doornail.

So what would a significant spike in interest rates do to it?

When all of these low interest rates go away the entire financial system is going to change dramatically.

A significant spike in interest rates would wipe out U.S. government finances, it would push state and local governments all over the country to the brink of bankruptcy, it would bring economic activity to a standstill and it would destroy any hopes for a housing recovery.

This country, and in particular the federal government, is enslaved to debt but right now we are not feeling the full pain of that debt because interest rates are so low.

If you want to know when things are really going to start coming apart, just keep an eye on interest rates.  When they really start spiking you can start sounding the alarm.

The truth is that the state of the economy is going to continue to get worse.  Our debt is growing every single day and our country is getting poorer every single day.  When interest rates start surging it is going to start knocking over a lot of dominoes.

I hope you are getting prepared for when that happens.

Don’t Buy A House In 2011 Before You Read These 20 Wacky Statistics About The U.S. Real Estate Crisis

Unless you have been asleep or hiding under a rock for the past five years, you already know that we are experiencing the worst real estate crisis that the U.S. has ever seen.  Home prices in the United States have fallen 33 percent from the peak of the housing bubble, which is more than they fell during the Great Depression.  Those that decided to buy a house in 2005 or 2006 are really hurting right now.  Just think about it.  Could you imagine paying off a $400,000 mortgage on a home that is now only worth $250,000?  Millions of Americans are now living through that kind of financial hell.  Sadly, most analysts expect U.S. home prices to go down even further.  Despite the “best efforts” of those running our economy, unemployment is still rampant.  The number of middle class jobs continues to decline year after year, but it takes at least a middle class income to buy a decent home.  In addition, financial institutions have really tightened up lending standards and have made it much more difficult to get home loans.  Back during the wild days of the housing bubble, the family cat could get a zero-down mortgage, but today the pendulum has swung very far in the other direction and now it is really, really tough to get a home loan.  Meanwhile, the number of foreclosures and distressed properties continues to soar.  So with a ton of homes on the market and not a lot of buyers the power is firmly in the hands of those looking to buy a house.

So will home prices continue to go down?  Possibly.  But they won’t go down forever.  At some point the inflation that is already affecting many other segments of the economy will affect home prices as well.  That doesn’t mean that it will be middle class American families that will be buying up all the homes.  An increasing percentage of homes are being purchased by investors or by foreigners.  There are a lot of really beautiful homes in the United States, and wealthy people from all over the globe love to buy a house in America.

But because of the factors mentioned above, it is quite possible that U.S. home prices could go down another 10 or 20 percent, especially if the economy gets worse.

So what is the right time to buy a house?

Nobody really knows for sure.

Mortgage rates are near record lows right now and there are some great deals to be had in many areas of the country.  But that does not mean that you won’t be able to get the same home for even less 6 months or a year from now.

In any event, this truly has been a really trying time for the U.S. housing market.  Hordes of builders, construction workers, contractors, real estate agents and mortgage professionals have been put out of work by this downturn.  The housing industry is one of the core pillars of the economy, and so a recovery in home sales is desperately needed.

The following are 20 really wacky statistics about the U.S. real estate crisis….

#1 According to Zillow, 28.4 percent of all single-family homes with a mortgage in the United States are now underwater.

#2 Zillow has also announced that the average price of a home in the U.S. is about 8 percent lower than it was a year ago and that it continues to fall about 1 percent a month.

#3 U.S. home prices have now fallen a whopping 33% from where they were at during the peak of the housing bubble.

#4 During the first quarter of 2011, home values declined at the fastest rate since late 2008.

#5 According to Zillow, more than 55 percent of all single-family homes with a mortgage in Atlanta have negative equity and more than 68 percent of all single-family homes with a mortgage in Phoenix have negative equity.

#6 U.S. home values have fallen an astounding 6.3 trillion dollars since the housing crisis first began.

#7 In February, U.S. housing starts experienced their largest decline in 27 years.

#8 New home sales in the United States are now down 80% from the peak in July 2005.

#9 Historically, the percentage of residential mortgages in foreclosure in the United States has tended to hover between 1 and 1.5 percent.  Today, it is up around 4.5 percent.

#10 According to RealtyTrac, foreclosure filings in the United States are projected to increase by another 20 percent in 2011.

#11 It is estimated that 25% of all mortgages in Miami-Dade County are “in serious distress and headed for either foreclosure or short sale“.

#12 Two years ago, the average U.S. homeowner that was being foreclosed upon had not made a mortgage payment in 11 months.  Today, the average U.S. homeowner that is being foreclosed upon has not made a mortgage payment in 17 months.

#13 Sales of foreclosed homes now represent an all-time record 23.7% of the market.

#14 4.5 million home loans are now either in some stage of foreclosure or are at least 90 days delinquent.

#15 According to the Mortgage Bankers Association, at least 8 million Americans are currently at least one month behind on their mortgage payments.

#16 In September 2008, 33 percent of Americans knew someone who had been foreclosed upon or who was facing the threat of foreclosure.  Today that number has risen to 48 percent.

#17 During the first quarter of 2011, less new homes were sold in the U.S. than in any three month period ever recorded.

#18 According to a recent census report, 13% of all homes in the United States are currently sitting empty.

#19 In 1996, 89 percent of Americans believed that it was better to own a home than to rent one.  Today that number has fallen to 63 percent.

#20 According to Zillow, the United States has been in a “housing recession” for 57 straight months without an end in sight.

So should we be confident that the folks in charge are doing everything that they can to turn all of this around?

Sadly, the truth is that our “authorities” really do not know what they are doing.  The following is what Fed Chairman Ben Bernanke had to say about the housing market back in 2006….

“Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”

Since that time U.S. housing prices have experienced their biggest decline ever.

At some point widespread inflation is going to reverse the trend we are experiencing right now, but that doesn’t mean that most American families will be able to afford to buy homes when that happens.

As I have written about previously, the middle class in America is shrinking.  The number of Americans on food stamps has increased by 18 million over the past four years and today 47 million Americans (a new all-time record) are living in poverty.

Millions of our jobs are being shipped overseas, the cost of living keeps going up and an increasing percentage of American families are losing faith in the economy.

More Americans than ever are talking about “the coming economic collapse” as if it is a foregone conclusion.  Our federal government is swamped with debt, our state and local governments are swamped with debt and our economic infrastructure is being ripped to shreds by globalization.

So sadly, no, there are not a whole lot of reasons to be optimistic at this point about a major economic turnaround.

The U.S. economy is going down the toilet and the coming collapse is going to be incredibly painful for all of us.

Hopefully when that collapse comes you will have somewhere warm and safe to call home.  If not, hopefully someone will have compassion on you.  In any event, we all need to buckle up because it is going to be a wild ride.

18 Reasons Why You Can Stick A Fork In The New Home Construction Industry

If you make your living by building or selling new homes in the United States, you might want to consider taking up a different career for a while.  New homes sales in the United States hit yet another new all-time record low in the month of February, and there are a whole lot of reasons why new home sales are going to stay extremely low for an extended period of time.  The massive wave of foreclosures that we have seen has produced a giant glut of unsold homes in the marketplace, mortgage lenders are making it really hard to get approved for home loans, unemployment is still rampant and the global economy looks like it may soon plunge into another major recession.  None of those things is good news for the new home construction industry.  The truth is that we were supposed to have seen new home sales already bounce back by now.  If you look at the historical numbers, new home sales in the U.S. always increased significantly after the end of every recession since World War 2.  But that did not happen this time.  Instead, new home sales have just continued to decline.  This is absolutely unprecedented, and economists are puzzled.  So what is going to happen if the U.S. economy suffers another major downturn?

New home construction has always been one of the foundational pillars of the U.S. economy.  When times were good new home construction would boom, and when times were bad new home construction would falter.

Well, unfortunately the industry is stuck in the midst of a multi-year decline right now.  The reality is that you can stick a fork in the new home construction industry in the United States.  It is toast.  There is going to be no recovery for the foreseeable future.

Not that previously owned homes are doing that much better.  According to the National Association of Realtors, sales of previously existing homes in the United States dropped 9.6 percent in February.  But at least sales of previously owned homes are not at all-time record lows like new home sales are.

As you can see from the facts posted below, new home sales are absolutely abysmal right now, and there are a lot of indications that things may get even worse.  The following are 18 reasons why you can stick a fork in the new home construction industry….

#1 New home sales in the United States set a brand new all-time record low in the month of February.

#2 Only 19,000 new homes were sold in the United States during the month of February. The previous record low for new home sales during the month of February was 27,000, which was set last year.

#3 The “months of supply” of new homes in the U.S. rose from 7.4 months in January to 8.9 months in February.

#4 The median price of a new home in the United States declined almost 14 percent to $202,100 in the month of February.

#5 The median price of a new home in the U.S. is now the lowest it has been since December 2003.

#6 As of the end of 2010, new home sales in the United States had declined for five straight years, and they are expected to be lower once again in 2011.

#7 Now home sales in the United States are now down 80% from the peak in July 2005.

#8 New home construction starts in the United States fell 22.5 percent during the month of February.  This was the largest decline in 27 years.

#9 In February, the number of new building permits (a measure of future home building activity) declined to the lowest level in more than 50 years.  In fact, new building permits were 20 percent lower during February 2011 than they were in February 2010.

#10 There is a major glut of foreclosed homes that still need to be sold off.  David Crowe, the chief economist for the National Association of Home Builders, recently told CNN that the constant flow of new foreclosures being put on the market is a huge hindrance to a recovery for new home sales….

“One of the biggest detriments to building new homes is the flow of existing foreclosed homes.”

#11 The number of foreclosures just continues to increase.  This means that those trying to sell new homes are going to continue to be competing against a giant mountain of foreclosed homes for the foreseeable future.  An all-time record of 2.87 million U.S. households received a foreclosure filing in 2010, and that number is expected to be even higher in 2011.

#12 In fact, there are a whole lot of signs that there will be very high levels of foreclosures for years to come.  For example, according to the Mortgage Bankers Association, at least 8 million Americans are at least one month behind on their mortgage payments at this point.

#13 A stunningly high number of Americans are “underwater” on their mortgages right now.  This could lead to an increase in the number of “strategic defaults”.  31 percent of the homeowners that responded to a recent Rasmussen Reports survey indicated that they are “underwater” on their mortgages, and Deutsche Bank is projecting that 48 percent of all U.S. mortgages could have negative equity by the end of 2011.

#14 The truth is that the U.S. doesn’t need a whole lot of new housing at the moment.  Right now, 11 percent of all homes in the United States are currently standing empty.

#15 Mortgage lending standards have become extremely tight.  Back during the housing bubble, almost anyone that was breathing could get a zero-down mortgage.  Today, mortgage lenders have made it extremely difficult to acquire a home loan, and it is quite typical these days for lenders to demand down payments of 20 percent or more.  This is dramatically reducing the number of home buyers in the marketplace.

#16 American families cannot buy homes if they do not have good jobs.  Unfortunately, it has become extremely difficult to find a job in the United States today.  This is especially true if you are looking for a good job.  It now takes the average unemployed worker in America about 33 weeks to find a job.

#17 There is not going to be a jobs recovery until the overall economy improves.  Unfortunately, the price of oil continues to rise dramatically and economic disasters all over the planet threaten to plunge the global economy into another major recession.

#18 On top of everything else, perceptions regarding home ownership are shifting in the United States.  In 1996, 89 percent of Americans believed that it was better to own a home than to rent one.  Today that number has fallen to 63 percent.

Even Donald Trump Is Warning That An Economic Collapse Is Coming

In a shocking new interview, Donald Trump has gone farther than he ever has before in discussing a potential economic collapse in America.  Using phrases such as “you’re going to pay $25 for a loaf of bread pretty soon” and “we could end up being another Egypt”, Trump explained to Newsmax that he is incredibly concerned about the direction our economy is headed.  Whatever you may think of Donald Trump on a personal level, it is undeniable that he has been extremely successful in business.  As one of the most prominent businessmen in America, he is absolutely horrified about what is happening to this nation.  In fact, he is so disturbed about the direction that this country is heading that he is seriously considering running for president in 2012.  But whether he decides to run in 2012 or not, what Trump is now saying about the U.S. economy should be a huge wake up call for all of us.

Trump says that the U.S. government is broke, that all of our jobs are being shipped overseas, that other nations are heavily taking advantage of us and that the value of the U.S. dollar is being destroyed.  The following interview with Trump was originally posted on Newsmax and it is really worth watching….

Now, you may or may not think much of Donald Trump as a politician, but when a businessman of his caliber starts using apocalyptic language to describe where the U.S. economy is headed perhaps we should all pay attention.

The following are 12 key quotes that were pulled out of Trump’s new interview along with some facts and statistics that show that what Trump is saying is really happening.

#1 “If oil prices are allowed to inflate and keep inflating, if the dollar keeps going down in value, I think there’s a very distinct possibility that things could get worse.”

Donald Trump is exactly right – we are headed for big trouble if we continue to allow the Federal Reserve to pump hundreds of billions of new dollars into the system.  As I have written about previously, all of this new money will give us the illusion of short-term economic growth and it will pump up the stock market, but in the end all of the inflation the new money is gong to cause is going to be very painful.  Just look at how rapidly M1 has been skyrocketing over the last couple of years.  Is there any way that we are going to be able to avoid paying a very serious price for all of this reckless money printing?….

Already all of this money printing has had a very serious affect on world financial markets.  The price of agricultural commodities is skyrocketing and the price of oil has almost reached $100 a barrel once again.  The last time that the price of oil soared above $100 a barrel was in the early part of 2008, and we all remember the horrific financial collapse that followed in the fall of 2008.

#2 “….you’re going to pay $25 for a loaf of bread pretty soon. Look at what’s happening with our food prices. They’re going through the roof. We could end up being another Egypt. You could have riots in our streets also.”

The price of corn has risen 88 percent over the past year and the price of wheat has soared a whopping 114 percent over the past year.  Let’s hope that we don’t have to pay $25 for a loaf of bread in the United States any time soon, but in some areas of the world that is what it now feels like.

Approximately 3 billion people in the world today live on the equivalent of $2 a day or less, and most of that money ends up getting spent on food.  When food prices go up 10 or 20 percent in deeply impoverished areas of the globe, suddenly the lives of millions are threatened.  The riots that we have seen in Egypt, Algeria, Tunisia and other nations recently were not entirely caused by rising food prices, but they were certainly a big factor.

#3 “I think gold will go up as long as people don’t have confidence in our president and our country. And they don’t have confidence in our president.”

Investors run to gold and other precious metals when they don’t feel secure.  We saw that happen a lot in 2010.  As confidence in the paper currencies and the financial systems of the world has rapidly diminished, precious metals have become increasingly attractive.

In fact, the price of gold has doubled since the beginning of the economic downturn in 2007.  As the global financial situation continues to become more unstable, the demand for precious metals is likely only going to become more intense.

#4 “The banks have really let us down. Number one, they did some bad things and caused some bad problems. Number two, if you have something that you want to buy, like a house, they’re generally not there for you.”

Banks were given massive bailouts with the understanding that they would open up the vaults and start lending money to average Americans again.

Well, that has not happened.

In particular, it has become much, much harder to get a mortgage in the United States today.  Not that the big banks didn’t need to make changes to their lending practices, but things have gotten so tight now that it is choking the real estate market to death.

#5 “I see $3.50 for a gallon of gas for cars, and cars are lined up trying to get it and it’s $3.50. It’s a shame, a ridiculous shame.”

Our lack of a cohesive energy policy is a national disgrace.  There is no way in the world that a gallon of gas should be $3.50 a gallon.

The U.S. has massive reserves of oil and natural gas that it should be using.  In addition, the lack of progress on developing alternative energy sources in light of our sickening dependence on foreign oil is very puzzling.  We should be very far along towards solving our energy problems by this point.

Meanwhile, we keep pouring billions into the pockets of foreign oil barons every single month.  Unfortunately, Trump was exactly correct in the interview – if something is not done the price of gas is going to keep going higher.

#6 “I think the biggest threat is that our jobs are being stolen by other countries. We’re not going to have any jobs here pretty soon.”

Donal Trump is one of the few prominent leaders that is openly speaking the truth about the predatory economic practices of some of our “trading partners”.  Most of our politicians have just kept endlessly promising us that free trade is “good for us” even as tens of thousands of factories and millions upon millions of jobs have been shipped overseas.

Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs.

Yes, computers and robots have replaced a lot of manual labor today, but technology does not account for most of the decline we have seen in manufacturing.

n 1959, manufacturing represented 28 percent of all U.S. economic output.  In 2008, it represented only 11.5 percent.  Meanwhile, manufacturing in the “developing world” has absolutely exploded.

#7 “We’re like a whipping post for other countries. We are standing there and just being beaten by South Korea, by Mexico, by China, by India.”

Most Americans have absolutely no idea how lopsided many of our “trade agreements” actually are.  Other nations openly manipulate their currencies in order to keep their exports dirt cheap and we allow it.  Other nations openly subsidize their domestic industries that are directly competing with businesses in the United States and we don’t complain.  Other nations make it incredibly difficult for American companies to do business in their countries while we allow foreign corporations to come on in and do pretty much whatever they want here.

Then there are certain nations (such as China) that brazenly rip off trade secrets from foreign corporations time after time after time and never get penalized for it.

Meanwhile, our economy continues to bleed jobs at a staggering pace.  The number of net jobs gained by the U.S. economy during this past decade was smaller than during any other decade since World War 2.

Fortunately, more Americans than ever seem to be waking up and are realizing that globalism is causing many of these problems.  A NBC News/Wall Street Journal poll conducted last year discovered that 69 percent of Americans now believe that free trade agreements have cost America jobs.

#8 “All of our jobs are going to China. We’re rebuilding China and other places.”

China is doing great.  China is now the number one producer in the world of wind and solar power.  They now possess the fastest supercomputer on the entire globe.  China also now has the world’s fastest train and the world’s biggest high-speed rail network.

Most Americans don’t realize that China is literally kicking the crap out of us.

Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China’s share had soared to 20 percent.

Every single month we buy about 4 times as much stuff from them as they buy from us.  Our trade deficit with China has ballooned to enormous proportions.  In fact, the U.S. trade deficit with China during this past August was more than 4,600 times larger than the U.S. trade deficit with China was for the entire year of 1985.

So when Donald Trump says that we are rebuilding China he is not joking around.

Nobel economist Robert W. Fogel of the University of Chicago is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040 if current trends continue.

Yes, that is how serious things have become.

#9 “We are a laughingstock throughout the world.”

Donald Trump has said on several occasions that his friends and business partners in China just laugh and laugh at us.  They can’t even believe what they are getting away with.

We have become an incompetent giant that is the butt of all the jokes.

According to Stanford University economics professor Ed Lazear, if the U.S. economy and the Chinese economy continue to grow at current rates, the average Chinese citizen will be wealthier than the average American citizen in just 30 years.

Our formerly great industrial cities are slowly becoming ghost towns.  The number of long-term unemployed Americans is at an all-time high.  Tens of millions of Americans can’t even survive without government assistance anymore.  The number of Americans on food stamps set a new all-time record every single month during 2010, and now well over 43 million Americans are enrolled in the program.

We really have become a joke.

#10 “The federal government has no money.”

Unfortunately, our federal government has continued to borrow and spend like there is no tomorrow.

According to the Congressional Budget Office, the U.S. government will have the biggest budget deficit ever recorded (approximately 1.5 trillion dollars) this year.

So much for fiscal discipline, eh?

It is being projected that the U.S. national debt will increase by $150,000 per U.S. household between 2009 and 2021.

Do you have an extra $150,000 to contribute for your share?

By 2015 our national debt will be somewhere in the neighborhood of 20 trillion dollars.

It is the biggest mountain of debt in the history of the world by far, and it is the gift that we are going to pass down to future generations of Americans.

If there are any future generations of Americans.

#11 “I hate what is happening to this country.”

We should all hate what is happening to this country.  Our economic guts are being ripped out, we are being abused by the rest of the world, America’s infrastructure is being sold off piece by piece, our federal government is drowning in debt, our state governments are drowning in debt and our local governments are drowning in debt.

The only way we can even keep going is to run around to the rest of the world and beg them to keep lending us more money.

The mainstream media keeps proclaiming that we are the greatest economy on earth, but the truth is that we are being transformed into a pathetic loser and our politicians are just standing there with their hands in their pockets letting it happen.

All red-blooded Americans should be horrified by what is happening to this nation.  We have been betrayed by corrupt and incompetent leaders.  As a nation, we have become fat, lazy and stupid.

Hopefully what Donald Trump and others are saying about a coming economic collapse will serve as a huge wake up call and the sleeping giant will arise once again.

If the sleeping giant does not arise, we are in a massive amount of trouble, because right now the road we are on is leading to the biggest economic collapse the world has ever seen.

20 Shocking New Economic Records That Were Set In 2010

2010 was quite a year, wasn’t it?  2010 will be remembered for a lot of things, but for those living in the United States, one of the main things that last year will be remembered for is economic decline.  The number of foreclosure filings set a new record, the number of home repossessions set a new record, the number of bankruptcies went up again, the number of Americans that became so discouraged that they simply quit looking for work reached a new all-time high and the number of Americans on food stamps kept setting a brand new record every single month.  Meanwhile, U.S. government debt reached record highs, state government debt reached record highs and local government debt reached record highs.  What a mess!  In fact, even many of the “good” economic records that were set during 2010 were indications of underlying economic weakness.  For example, the price of gold set an all-time record during 2010, but one of the primary reasons for the increase in the price of gold was that the U.S. dollar was rapidly losing value.  Most Americans had been hoping that 2010 would be the beginning of better times, but unfortunately economic conditions just kept getting worse.

So will things improve in 2011?  That would be nice, but at this point there are not a whole lot of reasons to be optimistic about the economy.  The truth is that we are trapped in a period of long-term economic decline and we are now paying the price for decades of horrible decisions.

Amazingly, many of our politicians and many in the mainstream media have declared that “the recession is over” and that the U.S. economy is steadily improving now.

Well, if anyone tries to tell you that the economy got better in 2010, just show them the statistics below.  That should shut them up for a while.

The following are 20 new economic records that were set during 2010….

#1 An all-time record of 2.87 million U.S. households received a foreclosure filing in 2010.

#2 The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.

#3 The price of gold moved above $1400 an ounce for the first time ever during 2010.

#4 According to the American Bankruptcy Institute, approximately 1.53 million consumer bankruptcy petitions were filed in 2010, which was up 9 percent from 1.41 million in 2009.  This was the highest number of personal bankruptcies we have seen since the U.S. Congress substantially tightened U.S. bankruptcy law several years ago.

#5 At one point during 2010, the average time needed to find a job in the United States had risen to an all-time record of 35.2 weeks.

#6 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs, which is believed to be a new record low.

#7 The number of Americans working part-time jobs “for economic reasons” was the highest it has been in at least five decades during 2010.

#8 The number of American workers that are so discouraged that they have given up searching for work reached an all-time high near the end of 2010.

#9 Government spending continues to set new all-time records.  In fact, at the moment the U.S. government is spending approximately 6.85 million dollars every single minute.

#10 The number of Americans on food stamps surpassed 43 million by the end of 2010.  This was a new all-time record, and government officials fully expect the number of Americans enrolled in the program to continue to increase throughout 2011.

#11 The number of Americans on Medicaid surpassed 50 million for the first time ever in 2010.

#12 The U.S. Census Bureau originally announced that 43.6 million Americans are now living in poverty and according to them that was the highest number of Americans living in poverty that they had ever recorded in 51 years of record-keeping.  But now the Census Bureau says that they miscalculated and that the real number of poor Americans is actually 47.8 million.

#13 According to the FDIC, 157 banks failed during 2010.  That was the highest number of bank failures that the United States has experienced in any single year during the past decade.

#14 The Federal Reserve brought in a record $80.9 billion in profits during 2010.  They returned $78.4 billion of that to the U.S. Treasury, but the real story is that thanks to the Federal Reserve’s continual debasement of our currency, the U.S. dollar was worth less in 2010 than it ever had been before.

#15 It is projected that the major financial firms on Wall Street will pay out an all-time record of $144 billion in compensation for 2010.

#16 Americans now owe more than $881 billion on student loans, which is a new all-time record.

#17 In July, sales of new homes in the United States declined to the lowest level ever recorded.

#18 According to Zillow, U.S. housing prices have now declined a whopping 26 percent since their peak in June 2006.  Amazingly, this is even farther than house prices fell during the Great Depression.  From 1928 to 1933, U.S. housing prices only fell 25.9 percent.

#19 State and local government debt reached at an all-time record of 22 percent of U.S. GDP during 2010.

#20 The U.S. national debt has surpassed the 14 trillion dollar mark for the first time ever and it is being projected that it will soar well past 15 trillion during 2011.

There are some people that have a hard time really grasping what statistics actually mean.  For people like that, often pictures and charts are much more effective.  Well, that is one reason I like to include pictures and graphs in many of my articles, and below I have posted my favorite chart from this past year.  It shows the growth of the U.S. national debt from 1940 until today.  I honestly don’t know how anyone can look at this chart and still be convinced that our nation is not headed for a complete financial meltdown….

Economic War

Most Americans have no idea what an “economic war” is, and even fewer realize that economic warfare is being waged against the United States right now.  For generations, it has been drummed into our heads that “free trade” is always a good thing and that truly free trade will always benefit both sides in the long run.  None of our universities teach that trade can actually also be used as a brutally effective weapon of warfare and that economic warfare can bring down entire societies.  Nowhere in the mainstream media will you even get a hint that other nations are purposely trying to damage the U.S. economy for their own benefit.  But in a world where a “shooting war” with the United States is virtually unthinkable, those that wish to damage the U.S. must resort to other means to accomplish their goals.

The American people need to wake up and stop being so naive.  The truth is that much of the rest of the world absolutely hates our guts.  They resent our dominance and they are tired of us imposing our will on the rest of the globe.  For generations, Americans have been taught to view themselves as “the good guys”, but the sad fact of the matter is that most of the rest of the world does not view us as “the good guys” anymore.

In fact, there are quite a few nations out there that would actively like to do us harm.

So if they can’t shoot at us, then how can they harm us?

Well, they can try to destroy us financially and economically.

Today, major exporting nations around the globe are draining the United States of wealth, they are stealing our industries and they are feeding our national debt addiction.

For some of these nations, they may not actively want to destroy our economy, but they sure do want to steal what we have got.  They are more than happy to keep trading with us as long as they keep getting wealthier and their national economic infrastructure continues to get built up.  The fact that their economies are getting stronger at the expense of the U.S. economy is not really a huge concern for nations in this category.

However, there are also quite a few nations that do actively wish to do harm to the United States.  If trading with the United States will cause the U.S. to become poorer and to go into more debt, then that is a tool that they can use to reduce the power and influence of the Americans in the world.

Is this something that really happens?  Yes.  Do yourself a favor some time and read some economic articles and research papers from the other side of the world.  In some of these countries they are not afraid to openly talk about economic war.

So what are some of the goals of economic warfare?

Well, when it comes to the United States, the goal is to induce big corporations (or even entire industries) to leave the U.S. and set up shop somewhere else.  The idea is that the economic infrastructure of the United States will decline while the economic infrastructure of the “attacking nation” will be built up.  The jobs and wealth creation that once were a benefit to America will now benefit someone else.

Another goal is to transfer wealth from the target country (the United States) to the attacking country.  Each month the United States buys tens of billions of dollars more stuff from the rest of the world than they buy from us.  Each month we send them big chunks of our national wealth and they send us oil and cheap plastic trinkets which we greedily consume.  As this continues month after month after month, the rest of the world is getting richer while the United States is becoming poorer.

In a desperate attempt to maintain our standard of living, our federal government, our state governments and even our local governments are going into insane amounts of debt.  Debt is another tool of economic warfare.  As we continue to borrow trillions of dollars from the rest of the world, the ability of the United States to exert power and control over those nations diminishes.

The eventual goal of waging economic warfare against the United States is to make us so impoverished and so far in debt that our entire financial system crashes.  If the U.S. experiences a “financial armageddon”, it will greatly reduce America’s place in the world.  It could ultimately lead to the collapse of the U.S. government.  Other nations (or organizations) that wish to have more power would then be able to fill the void that would be created.

So what are the tools of economic warfare?

One is currency manipulation.  By keeping national currencies at an artificially low level, major exporting nations make their own exports much more attractive, thus stimulating job growth and wealth creation in their own nations.

Another tool of economic war is government subsidization of industries.  Virtually all governments do this to some degree these days, but some take it much farther than others.

For example, there are some governments in Asia that will openly pump huge piles of government money into industries that are considered to be of “national interest”.  There is simply no way that western industries can compete on an equal footing against that kind of unfair advantage.

In the United States, companies face one of the highest overall tax rates in the world, they face mountains of ridiculous regulations and they have to provide health care and retirement benefits for their employees.  But in other areas of the world the government takes care of health care for everyone, regulations are much less strict and corporate tax rates are much lower.

Is it any wonder why so many U.S. companies are having such a hard time today?

Another weapon of economic warfare is technology theft.

U.S. companies spend billions upon billions of dollars developing new technology that gets “stolen” one way or another by many foreign governments.

For example, there is one major Asian nation that offers huge tax incentives and kickbacks to big companies to get them to come over and set up shop there.  But these companies are also required to train and hire local workers and they must agree to certain “technology disclosures”.

Well, after a time the host nation sets us their own “domestic competitors” using the technology that they have acquired from the foreign company.  Then the “domestic competitors” are tremendously subsidized and are given huge advantages that the original foreign company simply cannot compete with.  Eventually the “domestic competitors” become the dominant players in the market.

This is happening over and over and over.  Companies are shutting down operations in the United States and are opening up facilities in other nations where the labor is much cheaper, where regulations are not nearly as suffocating and where taxes are much lower.  However, once these other nations learn the technology and are able to set up “domestic competitors”, the original companies are learning that maybe it wasn’t such a sweet deal they were being offered after all.

As the U.S. is being stripped of industry and is being deindustrialized, the American middle class is being absolutely devastated.  Since the year 2000, we have lost 10% of our middle class jobs.  In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.  Sadly, the millions of jobs that have been sent overseas are never coming back.

Meanwhile, our national wealth is being drained from our bank accounts.  Back in 1985, the U.S. trade deficit with one particular Asian nation was just 6 million dollars for the entire year.  But for this past August alone, the trade deficit with that same nation was over 28 billion (that’s billion with a “b”) dollars.

In other words, the U.S. trade deficit with that one Asian nation in August was more than 4,600 times larger than the U.S. trade deficit with that Asian nation was for the entire year of 1985.

So how are we maintaining our high standard of living if we are shipping all of our wealth overseas?

Well, what we are doing is going back to all those nations where we have sent our wealth and we are begging them to loan it back to us.

Our federal government now owes trillions of dollars to major exporting nations.  Our state governments also owe insane amounts of money to major exporting nations.  We are in debt up to our eyeballs and it gets worse every single year.

Meanwhile, our national economic infrastructure is being absolutely ripped to shreds….

*Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs.

*The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

*Since 2001, over 42,000 U.S. factories have closed down for good.

*As of the end of 2009, less than 12 million Americans worked in manufacturing.  The last time that less than 12 million Americans were employed in manufacturing was in 1941.

*Manufacturing employment in the U.S. computer industry was actually lower in 2010 than it was in 1975.

The sad truth is that the U.S. is being dominated even in very high-tech industries.  The major exporting nations are becoming rich by creating wealth and we are becoming poor by voraciously consuming wealth.

Unfortunately, some of the major exporting nations that we have a massively imbalanced trade relationship with are doing this to us on purpose.  They see our weakness and the are taking advantage of it.  They believe that it is in their own national interests to make the United States weaker.

Sadly, a very significant percentage of those that will read this article will not believe it.  Most Americans have been so brainwashed when it comes to trade that they could never even conceive that it could possibly be used as a weapon of economic war.

But the truth is that there are even many prominent Americans that openly talk of weakening the U.S. economy and of reducing the standard of living of the U.S. middle class so that we can be more easily merged into the emerging global economic system.

It is time to wake up.  The United States is under economic attack.

More jobs are going to leave the United States this month.  More factories are going to leave the United States this month.  Tens of billions more dollars of our national wealth is going to be transferred out of the country this month.  Our federal, state and local governments are all going to go into more debt to foreigners this month.

Month after month after month this goes on.  It is being done by design.

Perhaps when the entire U.S. financial system collapses the American people will finally begin to understand.  The truth is that the greatest threats to our national security are not some impoverished goat herders hiding out in caves in Afghanistan.  Rather, the cold, hard reality of the situation is that our national economic infrastructure is being ripped apart and stolen right in front of our eyes and we have become so dumbed-down that we don’t even understand what is happening.

If you want to see “the future of America”, just tour some of the formerly great industrial centers of the upper Midwest some time.  Ask yourself why “the greatest economy on earth” has so many abandoned factories and boarded-up homes.  There are many decaying communities across America right now that are so depressing that the moment you enter them you get the sense that all of the hope has been sucked right out of them.

The U.S. economy is under attack and it is dying.  We are being looted and pillaged from coast to coast.  This is really happening.

So what do you think about all of this?  Please feel free to leave a comment with your opinion below….

George Soros: The United States Must Stop Resisting The Orderly Decline Of The Dollar, The Coming Global Currency And The New World Order

In the video you are about to see, George Soros talks about “the creation of a New World Order”, he discusses the need for a “managed decline” of the U.S. dollar and he talks at length of the global need for a true world currency. So just who is George Soros? Well, he is a billionaire “philanthropist” who came to be known as “the Man Who Broke the Bank of England” when he raked in a staggering one billion dollars during the 1992 “Black Wednesday” currency crisis. These days Soros is most famous for being perhaps the most “politically active” (at least openly) billionaire in the world. His Open Society Institute is in more than 60 countries and it spends approximately $600 million a year promoting the ideals that Soros wants promoted. Soros and his pet organizations have played a key role in quite a few “revolutions” around the globe over the last several decades, but these days the main goal of George Soros is to bring political change to the United States.

So exactly what is it that George Soros is trying to accomplish? Well, in a nutshell, what he wants is a Big Brother-style one world government based on extreme European-style socialism, strict population control and the radical green agenda. It would be a world where the state tightly regulates everything that we do for the greater benefit of the environment and of society as a whole.

However, Soros is not the “mastermind of the New World Order” that some have tried to make him out to be.  The truth is that to those in the international banking elite, Soros is considered to be something of a “black sheep” and an “outsider”.  Much of what Soros is trying to accomplish lines up with the goals of the international banking elite, but what they don’t like is that Soros won’t stop publicly talking about a global currency and a “New World Order”.  Of course the international banking elite very much want a global currency and a “New World Order”, but what they don’t need is a “squeaky wheel” like Soros running around drawing unneeded attention to those goals.

Also, Soros does not seem to understand that both sides of the political spectrum in the United States are deeply influenced by the international banking elite.  Sadly, the truth is that the same handful of elitist organizations has dominated the cabinets of every single president that we have had since World War II.  If you doubt this, just check out how many members of each presidential administration over the last 40 years have belonged to either the Council on Foreign Relations, the Trilateral Commission or the Bilderberg Group.  If you have never looked into this before, you will be absolutely shocked.  No matter what president we elect, it is always the exact same organizations that always dominate their cabinets.

But Soros still seems very much trapped within the left/right paradigm and he seems absolutely obsessed with destroying the Republican Party.  For example, Soros spent an insane amount of money attempting to defeat George W. Bush back in 2004.  According to the Center for Responsive Politics, George Soros donated $23,581,000 during that election cycle to political organizations that were trying to keep Bush from being reelected.

Soros has also been a tremendous backer of Barack Obama, although lately Soros seems a bit disenchanted with him.  Through organizations such as the Center for American Progress and MoveOn.org, Soros is constantly trying to influence the state of American politics.

So what is George Soros thinking about these days?  Well, in the video posted below you will see Soros discussing “an orderly decline” of the U.S. dollar, the coming global currency and the importance of the New World Order….

Did you noticed how uncomfortable Soros was when he was saying the term “New World Order”?

The truth is that he knows exactly what that phrase means.  He knows that it is a phrase that he probably shouldn’t say and that will get a lot of attention.

But he said it anyway.

Soros also seemed a bit uncomfortable as he discussed “an orderly decline” of the U.S. dollar.

Soros has been saying the the U.S. dollar needs to go down for quite a while now, and he speaks of the coming fall of the dollar as if it is inevitable.

The only thing that Soros seems to fear is that the “managed decline” of the dollar could “get out of hand” and could lead to global financial chaos.

Soros even had the gall to say that having the dollar be the reserve currency of the world is not in our national interest and that a move to a global currency is “a healthy, if painful, adjustment” that we are just going to have to endure for the greater good of the world economy.

But shouldn’t the American people have something to say about all of this?

Perhaps the American people do not want a “managed decline” of the U.S. dollar.

Perhaps the American people do not want any part of a new “global currency”.

Perhaps the American people do not want any part of a “New World Order”.

But to men like George Soros, it doesn’t really matter what “the little people” think.  In the world that Soros lives in, those with overwhelming amounts of money and power know what is best for the rest of us, and if “the little people” don’t seem to want to go along initially then public opinion can be bought if you just spend enough money.

The sad truth is that we already live in a global economy.  Just go into just about any store across the United States and start picking up products to see where they were made.  Very few of the things we buy are still made in the United States.

Today, labor is a global commodity.  American workers must now directly compete for jobs with those making slave labor wages in China and India.  The fact that millions of U.S. jobs are being offshored and outsourced does not bother advocates of globalism at all because it is supposedly a beneficial thing for the overall global economy.

And most Americans have little to no idea just how much influence international organizations such as the United Nations, the World Bank, the IMF and the WTO have over our daily lives.

The truth is that we already live in a world that has been deeply, deeply integrated.  As this continues, at some point it will only seem “natural” for America to agree to a true global currency and full global political integration.

Let us hope that day never arrives.  Or at least let us hope that the American people wake up enough to not just go passively into a “New World Order”.

A global economy is bad for America and a global government would be really bad for America.

But perhaps you disagree.  Perhaps you believe that integrating our economy, our currency and our government with the rest of the world would be a wonderful thing.  If that is the case, please feel free to leave a comment explaining exactly why globalism is such a wonderful thing for all of us….

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