When it comes to “prepping”, many among the elite take things to an entirely different level. As you will see below, the elite are willing to pay big money for cutting edge home security measures, luxury bomb shelters and superyacht getaway submarines. Some of the things that the elite are demanding for their own protection go beyond even what we would see in a James Bond film, and serving the prepping needs of the elite has become a multi-billion dollar business. Meanwhile, the media outlets that the elite own continue to mock the rest of us for getting prepared. All the time we see headlines like this one that appeared in a major American news source: “Preppers: Meet the paranoid Americans awaiting the apocalypse“. Well, if we are paranoid for setting aside some extra food and supplies for the future, what does that make the people that you will read about in this article?
Business is booming because billionaires are a paranoid bunch. Take one who recently moved to Mayfair. ‘He wanted everything, from protection from cyber hacking through to physical intrusion and kidnapping,’ says Bond Gunning. ‘We ended up installing fingerprint-activated locks for family members and programmable keys for staff that limit the time they are allowed into the property and the rooms they are able to enter and exit.
‘Inside and outside we installed 24-hour monitored CCTV cameras that are so hi-tech they can tell the difference between a dog, cat and a person. In the garden there are thermal-imaging cameras that can detect heat sources in the undergrowth. One thing intruders can’t hide is the heat of their bodies.
‘Should an intruder evade the cameras or ignore the warnings they automatically broadcast, the property itself is protected by bulletproof glass and alarm sensors in all rooms. There is a bullet, gas and bombproof panic or safe room, with its own food and water, medical supplies and communications, and an impregnable supply of fresh air. Just in case the family cannot make it there in time, key rooms are sealed by reinforced shutters.’
But for many elitists, those kinds of extreme security measures are simply not enough. That is why sales of “luxury doomsday shelters” are absolutely soaring. If “the end of the world” arrives unexpectedly, high net worth individuals want to know that there will be somewhere for them and their families to go. The following is an excerpt from an article about one such facility located in Indiana…
As we roll down US Highway 41 in Terre Haute, Indiana , my guide insists I give him my iPhone. Then he tosses me a satin blindfold. The terms of our trip were clear—I wasn’t to know where we were going or how we got there.That’s because we’re on our way to the undisclosed location of an underground bunker designed to survive the end of the world, whatever form that apocalypse takes.
When I remove my blindfold, I am standing in a grassy clearing looking at a boxy concrete structure that serves as the entrance to a Cold War–era government communications facility gutted and reborn as Vivos Indiana. This is the Ritz Carlton of doomsday shelters, a hideout where residents can wait out a nuclear winter or a zombie apocalypse in luxury and style while the rest of humanity melts and disintegrates. The living area has 12-and-a-half-foot ceilings, sumptuous black leather couches, wall art featuring cheerful Parisian street scenes, towering faux ferns, and plush carpets. Faith Hill croons from a large-screen TV set in front of three rows of comfy beige reclining chairs. The cupboards are stocked with 60 varieties of freeze-dried and canned foodstuffs; an evening meal might include spaghetti aglio e olio topped with skillet fried steak chunks, a fresh tomato-and-zucchini salad fresh from the hydroponic garden, and decadent turtle brownies. An eight-by-nine bedroom is designed for four people (there are larger units for six) and comes with double-queen bunks clothed in 600-thread-count ivory sheets and duvet covers worthy of a four-star hotel, a comparison highlighted on the Vivos website.
That sounds lovely.
But normal people like us cannot afford something like that. It will only be the elite that will be able to afford to hole up in underground bunkers while the world above descends into madness.
Other elitists will be taking off in their superyachts and heading out into the open ocean when things really start falling to pieces. And if their superyachts are threatened, some of them even have “getaway subs”. Here is more from the Evening Standard…
The ultimate vehicle of choice is no longer an armoured limousine or a private jet. They’re so Noughties. If you want bragging rights these days, you need your own submarine, which floats out of a sub-sea compartment in your superyacht. ‘It’s a toy, but if the worst happened, it could also be an escape route,’ says one prominent London tycoon with a weakness for Monaco-berthed superyachts — provided they have military-grade radar jammers and missile and torpedo defences.
So exactly why are so many among the elite so concerned about their own security these days?
Why are so many of them going to such extraordinary lengths to prepare for worst case scenarios?
Do they know something that the rest of us do not?
Since the depths of the last recession, the price of ground beef in the United States has doubled. Has your paycheck doubled since then? Even though the Federal Reserve insists that we are in a “low inflation” environment, the government’s own numbers show that the price of ground beef has been on an unprecedented run over the past six years. In early 2009, the average price of a pound of ground beef was hovering near 2 dollars. In February, it hit a brand new all-time record high of $4.238 per pound. Even just 12 months ago, the price of ground beef was sitting at $3.555 per pound. So we are talking about a huge increase. And this hits American families where they really live. Each year, the average American consumes approximately 270 pounds of meat. The only nation in the world that eats more meat than we do is Luxembourg. If the paychecks of American workers were going up fast enough to deal with this increase, it wouldn’t be that big of a deal. But of course that is not happening. In an article just last week, I showed that real median household income is a couple thousand dollars lower now than it was during the depths of the last recession. The middle class is being squeezed, and we are rapidly getting to the point where burgers are going to be considered a “luxury” item.
The following chart was posted by the Economic Policy Journal on Wednesday, and it incorporates the latest data from the Bureau of Labor Statistics. When I first saw it, I was rather stunned. I knew that the price of ground beef had become rather outrageous in my local grocery stores, but I had no idea just how much damage had been done over the past six years…
The biggest reason why the price of ground beef has been going up is the fact that the U.S. cattle herd has been shrinking. It shrunk seven years in a row, and on January 1st, 2014 it was the smallest that it had been since 1951.
The good news is that the decline appears to have stopped, at least for the moment. According to the Wall Street Journal, the size of the U.S. cattle herd actually increased by 1 percent last year…
The U.S. cattle herd expanded in 2014 for the first time in eight years, offering hope to consumers that beef prices could start to subside after soaring to a series of records.
The nation’s cattle supply increased 1% in the year through Jan. 1 to 89.8 million head, according to data released Friday by the U.S. Agriculture Department, reversing a steady decline fueled by prolonged drought in the southern U.S. Great Plains and industry consolidation that encouraged many ranchers to thin herds.
But an increase of 1 percent is just barely going to keep up with the official population growth rate. If you factor in illegal immigration, we are still losing ground.
And if we have another major drought in cattle country this summer, the cattle herd is going to start shrinking again.
In addition, the price of food overall has been steadily rising for years. Here is a chart that I shared the other day…
It boggles the mind that the Federal Reserve can claim that we are in a “low inflation” environment. Anyone that goes grocery shopping feels the pain of these rising prices every time that they go to the store.
In the list that I put together yesterday, I included the following statistic…
Almost half of all Americans (47 percent) do not put a single penny out of their paychecks into savings.
One of the primary reasons why so many Americans are not saving any money is because many families simply cannot save any money. Their paychecks are stagnant while the cost of living just keeps going up and up.
There simply are not enough “good jobs” out there anymore. Our economy continues to bleed middle class jobs and the competition for the jobs that remain is quite intense.
Do you know what the two most common occupations in America today are?
According to the Bureau of Labor Statistics, they are “retail sales clerk” and “cashier”.
And of course neither of those “occupations” pays even close to what is required to support a middle class family.
On average, a retail sales clerk makes $24,020 a year, and a cashier makes $20,670 a year.
Because the quality of our jobs has declined so much, there are millions of American families today in which both the mother and the father are working multiple jobs in a desperate attempt to make ends meet each month.
But don’t worry, the Federal Reserve says that we are nearly at “full employment“, and Barack Obama says that everything is going to be just fine.
Actually, the truth is that things are about to get a lot worse. At this point, we are even getting pessimistic numbers out of the Federal Reserve. Just this week we learned that the Fed is now projecting that economic growth for the first quarter of 2015 will be barely above zero…
We are at a turning point. The bubble of false stability that we have been living in is rapidly coming to an end, and when people start to realize that another great economic crisis is coming there is going to be a lot of panic.
And as far as food prices go, they are just going to keep taking a bigger chunk out of all of our wallets.
As high as prices are already, the truth is that your food dollars are never going to go farther than they do right now.
So let us hope for the best, but let us also get prepared for the worst.
As the price of meat continues to skyrocket, will it soon be considered a “luxury item” for most American families? This week we learned that the price of meat in the United States rose at the fastest pace in more than 10 years last month. Leading the way is the price of shrimp. According to the U.S. Bureau of Labor Statistics, the price of shrimp has jumped an astounding 61 percent compared to a year ago. The price of pork is also moving upward aggressively thanks to a disease which has already killed about 10 percent of all of the pigs in the entire country. And the endless drought in the western half of the country has caused the size of the U.S. cattle herd to shrink to a 63 year low and has pushed the price of beef to an all-time high. This is really bad news if you like to eat meat. The truth is that the coming “meat crisis” is already here, and it looks like it is going to get a lot worse in the months ahead.
A devastating bacterial disease called “early mortality syndrome” is crippling the shrimping industry all over Asia right now. According to Bloomberg, this has pushed the price of shrimp up 61 percent over the past 12 months…
In March, shrimp prices jumped 61 percent from a year earlier, according to the U.S. Bureau of Labor Statistics. The climb is mainly due to a bacterial disease known as early mortality syndrome. While the ailment has no effect on humans, it’s wreaking havoc on young shrimp farmed in Southeast Asia, shrinking supplies.
This disease has an extremely high mortality rate. In fact, according to the article that I just quoted, it kills approximately nine out of every ten shrimp that it infects…
Cases of early mortality syndrome, which destroys the digestive systems of young shrimp, were first reported in China in 2009, said Donald Lightner, a professor of animal and comparative biomedical sciences at University of Arizona in Tucson.
The disease, which kills about 90 percent of the shrimp it infects, traveled from China to Vietnam to Malaysia and then to Thailand, he said. Cases also were reported in Mexico last year, Lightner said.
A different disease is driving up the price of pork in the United States. It is known as the porcine epidemic diarrhea virus, and in less than a year it has spread to 30 states and has killed approximately 7 million pigs.
The price of bacon is already up 13.1 percent over the past year, but this is just the beginning.
The price of beef has also moved to unprecedented heights. Thanks to the crippling drought that never seems to end in the western half of the nation, the size of the U.S. cattle herd has been declining for seven years in a row, and it is now the smallest that is has been since 1951.
Over the past year, the price of ground chuck beef is up 5.9 percent. It would have been worse, but ranchers have been slaughtering lots of cattle in order to thin their herds in a desperate attempt to get through this drought. If this drought does not end soon, the price of beef is going to go much, much higher.
As prices for shrimp, pork and beef have risen, many consumers have been eating more chicken. But the price of chicken is rising rapidly as well.
In fact, the price of chicken breast is up 12.4 percent over the past 12 months.
Unfortunately, this could just be the very beginning of this meat crisis. As I wrote about recently, some scientists are warning that we could potentially be facing “a century-long megadrought“.
And right now, there are no signs that the drought out west is letting up. Just check out the map posted below. It comes from the U.S. Drought Monitor, and it shows how the drought in California has significantly intensified since the beginning of the year…
Right now, things are so bone dry in most of the state that it is easy for wildfires to get out of control. In fact, Governor Jerry Brown has just declared a state of emergency in San Diego County because of the vicious wildfires that are raging there…
Officials ordered another round of evacuations early Thursday north of San Diego as gusty winds and near 100-degree temperatures offer little relief from at least nine fires that have consumed a 14-square mile area of Southern California.
Gov. Jerry Brown declared a state of emergency for San Diego County, which frees up special resources and funding for the firefight.
The fires, coming earlier than normal in the wildfire season, are being fed by brush and trees left brittle by prolonged drought. They are also being whipped by a Santa Ana wind system that reverses the normal flow of wind from the Pacific Ocean and creates tinderbox fire conditions.
For the first time in its 14-year-history, the U.S. Drought Monitor, a federal website that tracks drought, designated the entire state of California as in a severe (or worse) drought.
If you do not live out west, you may have no idea how very serious this all really is.
For years, I have been warning about the potential for dust bowl conditions to return to the western half of the country.
So what happens if drought, diseases and plagues continue to cause food production in this country to plummet?
Those that have studied these things tell us that there is a clear correlation between food prices and civil unrest. For example, the following is a short excerpt from a recent Scientific American article…
Since the beginning of 2014, riots have occurred in countries including Thailand and Venezuela. Although they’re different cultures on different continents, these mass protests movements may all have one commonality; increasing food prices may have contributed to their occurrence. The cost of food has been steadily increasing in both Thailand and Venezuela; last month demonstrators in Caracas took to the streets marching with empty pots to protest food shortages. According to Dr. Yaneer Bar-Yam and fellow researchers at the New England Complex Systems Institute (NECSI), events such as these may be anticipated by a mathematical model that examines rising food costs.
The events of 2014 aren’t without precedent; the price of food has provoked (and placated) throughout history, beginning in Imperial Rome when Augustus introduced grain subsidies. In recent years, the Middle East has been particularly affected by the cost of grain. Centuries after Egypt developed bread as we recognize it, the nation experienced a bread intifada – the country rioted for two days in January 1977 following Anwar Sadat’s decision to drastically decrease food subsidies. More recently, under the rule of Hosni Mubarak, the price of grain rose 30 percent between 2010 and 2011. Then, on January 25, 2011 a new revolution began in Egypt.
Could rapidly rising food prices cause civil unrest in the United States eventually?
It won’t happen today, and it won’t happen tomorrow, but some day it might.
Meanwhile, you might want to start carving out a significantly larger portion of the family budget for food for the foreseeable future.
You can thank the reckless money printing that the Federal Reserve has been doing for the incredible bull market that we have seen in recent months. When the Federal Reserve does more “quantitative easing”, it is the financial markets that benefit the most. The Dow and the S&P 500 have both hit levels not seen since 2007 this month, and many analysts are projecting that 2013 will be a banner year for stocks. But is a rising stock market really a sign that the overall economy is rapidly improving as many are suggesting? Of course not. Just because the Federal Reserve has inflated another false stock market bubble with a bunch of funny money does not mean that the U.S. economy is in great shape. In fact, the truth is that things just keep getting worse for average Americans. The percentage of working age Americans with a job has fallen from 60.6% to 58.6% while Barack Obama has been president, 40 percent of all American workers are making $20,000 a year or less, median household income has declined for four years in a row, and poverty in the United States is absolutely exploding. So quantitative easing has definitely not made things better for the middle class. But all of the money printing that the Fed has been doing has worked out wonderfully for Wall Street. Profits are soaring at Goldman Sachs and luxury estates in the Hamptons are selling briskly. Unfortunately, this is how things work in America these days. Our “leaders” seem far more concerned with the welfare of Wall Street than they do about the welfare of the American people. When things get rocky, their first priority always seems to be to do whatever it takes to pump up the financial markets.
When QE3 was announced, it was heralded as the grand solution to all of our economic problems. But the truth is that those running things knew exactly what it would do. Quantitative easing always pumps up the financial markets, and that overwhelmingly benefits those that are wealthy. In fact, a while back a CNBC article discussed a very interesting study from the Bank of England which showed a clear correlation between quantitative easing and rising stock prices…
It said that the Bank of England’s policies of quantitative easing – similar to the Fed’s – had benefited mainly the wealthy.
Specifically, it said that its QE program had boosted the value of stocks and bonds by 26 percent, or about $970 billion. It said that about 40 percent of those gains went to the richest 5 percent of British households.
Many said the BOE’s easing added to social anger and unrest. Dhaval Joshi, of BCA Research wrote that “QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it.”
So should we be surprised that stocks are now the highest that they have been in more than 5 years?
Of course not.
And who benefits from this?
The wealthy do. In fact, 82 percent of all individually held stocks are owned by the wealthiest 5 percent of all Americans.
Unfortunately, all of this reckless money printing has a very negative impact on all the rest of us. When the Fed floods the financial system with money, that causes inflation. That means that the cost of living has gone up even though your paycheck may not have.
If you go to the supermarket frequently, you know exactly what I am talking about. The new “sale prices” are what the old “regular prices” used to be. They keep shrinking many of the package sizes in order to try to hide the inflation, but I don’t think many people are fooled. Our food dollars are not stretching nearly as far as they used to, and we can blame the Federal Reserve for that.
Sadly, this is what the Federal Reserve does. The system was designed to create inflation. Before the Federal Reserve came into existence, the United States never had an ongoing problem with inflation. But since the Fed was created, the United States has endured constant inflation. In fact, we have come to accept it as “normal”. Just check out the amazing chart in the video posted below…
The chart in that video kind of reminds me of a chart that I shared in a previous article…
Not that I expect the United States to enter a period of hyperinflation in the near future.
Actually, despite all of the reckless money printing that the Fed has been doing, I expect that at some point we are going to see another wave of panic hit the financial markets like we saw back in 2008. The false stock market bubble will burst, major banks will fail and the financial system will implode. It could unfold something like this…
4 – Economic activity in the United States starts to grind to a halt.
5 – Unemployment rises above 20 percent and mortgage defaults soar to unprecedented levels.
6 – Tax revenues fall dramatically and austerity measures are implemented by the federal government, state governments and local governments.
7 – The rest of the globe rapidly loses confidence in the U.S. financial system and begins to dump U.S. debt and U.S. dollars.
I write about derivatives a lot, because they are one of the greatest threats that the global financial system is facing. In fact, right now a derivatives scandal is threatening to take down the oldest bank in the world…
Banca Monte dei Paschi di Siena, the world’s oldest bank, was making loans when Michelangelo and Leonardo da Vinci were young men and before Columbus sailed to the New World. The bank survived the Italian War, which saw Siena’s surrender to Spain in 1555, the Napoleonic campaign, the Second World War and assorted bouts of plague and poverty.
But MPS may not survive the twin threats of a gruesomely expensive takeover gone bad and a derivatives scandal that may result in legal action against the bank’s former executives. After five centuries of independence, MPS may have to be nationalized as its losses soar and its value sinks.
So when you hear the word “derivatives” in the news, pay close attention. The bankers have turned our financial system into a giant casino, and at some point the entire house of cards is going to come crashing down.
In response to the coming financial crisis, I believe that our “leaders” will eventually resort to money printing unlike anything we have ever seen before in a desperate attempt to resuscitate the system. When that happens, I believe that we will see the kind of rampant inflation that so many people have been warning about.
So what do you think about all of this?
Do you believe that Federal Reserve money printing is the real reason why the stock market is soaring?
Please feel free to post a comment with your thoughts below…
If you knew that you could live in luxury for the rest of your life but that by doing so it would absolutely destroy the future for your children, your grandchildren and your great-grandchildren would you do it? Well, that is exactly what we are doing as a nation. Over the past several decades, we have stolen 15 trillion dollars from future generations so that we could enjoy a dramatically inflated level of prosperity. Our 15 trillion dollar party has been a lot of fun, but what we have done to our children and our grandchildren has been beyond criminal. We ran up the greatest mountain of debt in the history of the planet and we are sticking them with the bill. Sadly, both political parties have been responsible for the big spending that has been going on. Both Democrats and Republicans have run up huge budget deficits when in power. But instead of learning the hard lessons of the past, both political parties continue to vote for even more debt. They would rather continue to steal trillions of dollars from future generations than have the party end and have to face the consequences.
And the consequences will be dramatic when the party ends. During fiscal year 2011, the U.S. government spent 3.7 trillion dollars but it only brought in 2.4 trillion dollars. That means that the U.S. government spent about 1.3 trillion dollars that it did not have. It is important to understand that even if the U.S. government spent that 1.3 trillion dollars on really stupid things, that money still got into the pockets of ordinary Americans who then spent it on things like food, gas, housing, etc. In turn, most of those that received money from providing those goods and services would spend it on other things.
So extra government spending can definitely stimulate the economy. The problem is that we have been doing it permanently. Since 1975, we have added more than 15 trillion dollars to the national debt. This has fueled a false prosperity that was way beyond what we could afford.
If the U.S. government tried to go to a balanced budget now, our standard of living would crash and there would be riots in the streets. The American people have been enjoying false prosperity for so long that they have lost any notion of what “normal” actually is.
Think of it this way. If your family makes $40,000 this year and you spend an extra $20,000 on your credit cards, your family would be enjoying a false sense of prosperity.
You could do that year after year as long as the credit card companies keep loaning you more money.
But debt always catches up with you in the end.
It is the same thing with the United States.
We have been running up our national credit card balance and the interest payments have become quite painful.
That is 454 billion dollars that the people of the United States do not receive anything in return for.
So in order to keep up with interest on the national debt and to enjoy a standard of living that is beyond our means we now have to run deficits that are in excess of a trillion dollars every single year.
And a trillion dollars is a staggering amount of money.
If right this moment you went out and started spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars.
Since Barack Obama was elected, the U.S. government has added about 5 trillion more dollars to the national debt.
That kind of debt is a recipe for national financial suicide.
How are we supposed to explain to our children that we are passing a debt of $15,579,852,946,457.64 down to them?
At this point, the United States government is responsible for more than a third of all the government debt in the entire world.
The 15 trillion dollar party that we have been enjoying has been amazing, but all of that debt is soon going to bring us a tremendous amount of pain.
And there is really no way out under our current financial system. As our population ages, government budget deficits are projected to spiral wildly out of control in future years.
Already, entitlement programs are starting to cause massive problems. For example, mandatory federal spending surpassed total federal revenue for the first time ever in fiscal 2011. That was not supposed to happen until 50 years from now.
If the federal government used GAAP (Generally Accepted Accounting Principles) like all publicly-traded corporations are required to do, the situation would be much worse.
The truth is that the U.S. government never had a “balanced budget” during the end of the Clinton administration. The federal government was borrowing gigantic amounts of money from the Social Security trust fund to finance regular government operations. It was a big fraud. Under GAAP, there would have been huge budget deficits during those years.
And even under the non-GAAP numbers used by the U.S. Treasury Department, the U.S. national debt still increased every single year during the Clinton administration.
So let’s get real.
Our national financial situation has always been much worse than we have been told.
And looking down the road a bit, we are facing a tsunami of unfunded liabilities that is absolutely nightmarish.
In other words, we have committed ourselves to tens of trillions of dollars of expenses that we don’t have any money for.
According to Professor Laurence J. Kotlikoff, the U.S. is facing a “fiscal gap” of over 200 trillion dollars in the coming years. The following is a brief excerpt from a recent article that he did for CNN….
The government’s total indebtedness — its fiscal gap — now stands at $211 trillion, by my arithmetic. The fiscal gap is the difference, measured in present value, between all projected future spending obligations — including our huge defense expenditures and massive entitlement programs, as well as making interest and principal payments on the official debt — and all projected future taxes.
And it just keeps getting worse. Recently it was revealed that Obamacare will add 17 trillion dollars more to our long-term unfunded obligations.
Basically what we have done is we have committed future generations to a life of endless debt slavery to pay for our debts and for the financial promises that we have made.
How could we be so stupid?
Of course this entire fraudulent system is going to completely collapse before we get too much farther down the road anyway. Right now the whole thing is essentially being held together by chicken wire and duct tape.
Most Americans do not realize this, but the Federal Reserve bought approximately 61 percent of all government debt issued by the U.S. Treasury Department in 2011.
Normally, the Federal Reserve is not supposed to be doing this.
But right now there are not nearly enough buyers of U.S. government debt at the super low interest rates that the U.S. government wants to pay. A recent Money News article explained that foreigners have been increasingly shying away from U.S. debt….
“In 2009, such foreign purchases of U.S. debt amounted to 6 percent of GDP and has since falled by over eighty percent to a paltry 0.9 percent.”
Instead of interest rates on U.S. Treasuries rising to attract additional investors, the U.S. Federal Reserve has been intervening to make up the difference.
This is essentially “monetizing the debt” and it is something that Ben Bernanke promised that he would never do.
But he is doing it.
If the Federal Reserve was not buying up all this debt, interest rates on U.S. debt would soar and so would U.S. government interest payments.
Yes, this is a giant Ponzi scheme and it cannot last for long.
Of course all of this could have been avoided if our politicians had not been running up such massive amounts of debt all these years.
Some have suggested that our problems could be solved by simply increasing taxes on the wealthy.
Well, the truth is that the top 5 percent of all income earners already pay nearly 50 percent of all federal taxes and soaking them even more will not even come close to solving the federal budget crisis.
For example, if Bill Gates gave every single penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for 15 days.
And as Bill Whittle has shown, you could take every single penny that every American earns above $250,000 and it would only fund about 38 percent of the federal budget.
So taxing the wealthy will certainly not solve all of our problems.
In fact, when you tax the wealthy and the “somewhat wealthy” it slows economic growth in a number of different ways.
Number one, they have less money to spend into the economy.
Number two, they have less money to invest in business activities.
Number three, it gives wealthy individuals and corporations more of an incentive to move out of the United States. As I have written about previously, the global elite are already hiding about 18 trillion dollars in offshore banks. The U.S. government keeps trying to tap into all of that offshore wealth, but the elite always seem to be a few steps ahead of the game.
Yes, we should try to close loopholes in the tax system, but the truth is that the root cause of our problem is that the federal government is simply spending way, way too much money.
Right now, spending by the federal government accounts for about 24 percent of GDP. Back in 2001, it accounted for just 18 percent.
But our politicians always want to put off spending cuts for another day because they know that immediate spending cuts would really hurt the economy.
“The time for austerity is not today,” Lew told NBC News “Meet the Press.” “If we were to put in austerity measures right now, it would take the economy in the wrong way.”
Yes, the Obama administration definitely does not want to hurt the economy with an election coming up in a few months.
So when will it be time to seriously cut government spending?
The day never seems to arrive.
But even though the federal government has been pumping more than a trillion extra dollars into the economy every year, the economy has not shown much improvement. The percentage of working age Americans that have jobs has barely budged for over two years.
Yes, the policies of the Obama administration have stabilized the U.S. economy for the moment, but if he was actually going to tell the truth he would say something like this….
“By mortgaging the future of our children and our grand-children I have stabilized our economic statistics for the short-term. Unfortunately, I am going to have to continue to financially abuse future generations to keep us from falling into another Great Depression. Meanwhile, I am making our long-term financial problems far, far worse. But the most important thing is that I win re-election so that I can continue to be president. Thank you for being so selfish and so willing to destroy the future of your children. Vote for me in 2012 and let the party continue!”
Unfortunately, the party is going to come crashing to an end at some point.
Right now, the global financial system is based on the U.S. dollar and on U.S. government debt.
There will come a time when the rest of the world is going to get sick and tired of watching this Ponzi scheme play out and they are going to completely lose faith in the U.S. dollar and in U.S. government debt. In fact, there are already signs that this is starting to happen.
When faith in our currency and our debt is completely gone, it will be nearly impossible to get back and the game will be over.
The false prosperity that we are experiencing right now is about as good as things are going to get.
Enjoy it while you still can, because when it is gone that will be the end of it.
Both the Democrats and the Republicans have failed us. They played fast and loose with our future and they never planned for the long-term.
Now we are facing a collapse of unprecedented magnitude that most Americans will never even see coming.
Barack Obama recently made the following statement to American families that are struggling to survive in this economy: “If you’re a family trying to cut back, you might skip going out to dinner, or you might put off a vacation.” A few days after making that statement Obama sent his wife and children off on yet another vacation, this time to a luxury ski hotel in Vail, Colorado. But the Obamas are not the only ones enjoying the high life. Wealthy corporate executives and greedy Wall Street fatcats insist that profit margins are too tight to hire more American workers, and yet sales of luxury cars, private jets and vacation homes are soaring. Meanwhile, most American families are going through economic hell right now. In 2010, more Americans than ever before were living below the poverty line. Over 4 million Americans have been unemployed for more than a year, and over 5 million Americans are at least two months behind on their mortgage payments. As the Obamas and wealthy corporate executives jet off to fancy ski resorts, half of all American workers are earning $505 or less per week and 55 percent of American families are living paycheck to paycheck. Something is very wrong with this picture.
So is there anything wrong with working hard and enjoying the fruits of success? Of course not, as long as it was done honestly and not on the backs of the American taxpayers. But the truth is that many of the corporate executives that are enjoying luxury vacations right now would not even have companies to run if the American taxpayers had not stepped in and bailed them out during the financial crisis. Thanks to the U.S. government and the Federal Reserve, Wall Street bankers and top corporate executives are once again enjoying bonuses that most of us would consider obscene.
Meanwhile, most of the rest of the country is suffering very deeply.
Over the past several decades, the biggest financial institutions and the biggest corporations have worked really hard to “fix” the rules of the game in their favor. The truth is that our economy is no longer a “free market” capitalist system. Rather, what we have now is more accurately described as “corporatism” or “neo-feudalism”. The big corporations dominate almost everything, and whatever they don’t dominate the government does.
One of the key features of a “corporatist” system is that it tends to funnel all the wealth to the very top.
Back in 1976, the top 1 percent of earners in the United States took in 8.9 percent of all income. By 2007, that number had risen to 23.5 percent.
There are two different Americas today. There is the America of the gated communities, the private planes and the good life, and there is the America of declining wages, thrift stores and rising desperation.
What is saddest of all is that the most vulnerable people in society often suffer the most from all of this.
Do you think that the Obamas are thinking about any of this while they are enjoying their stay at a luxury ski hotel in Vail, Colorado?
The truth is that leadership is not just about words. Leadership is about setting an example.
Back in August, Michelle Obama took her daughter Sasha and 40 of her friends for a vacation in Spain.
So what was the bill to the taxpayers for that little jaunt across the pond?
It is estimated that vacation alone cost U.S. taxpayers $375,000.
Hey, Barack Obama won the most votes in 2008 and so if he wants his family to get as much enjoyment out of these four years as they can that is his prerogative.
However, if he wants to tell American families that they “might put off a vacation” after all the vacations that the Obamas have taken over the past two years then he is just being a massive hypocrite.
According to the New York Post, Barack Obama enjoyed a total of 10 separate vacations that stretched over a total of 90 vacation days during the years of 2009 and 2010.
During his first two years in office, he also managed to play 29 rounds of golf.
Oh, but it is the rest of us that have to cut back on our vacations.
But it is not just the Obamas that are enjoying the high life right now.
The wealthy have recovered nicely from the “recession” and now they are spending money by the gobs once again.
According to Moody’s Analytics, the wealthiest 5% of households in the United States account for approximately 37% of all consumer spending.
Life is very good in America if you have got enough money.
A recent article in USA Today detailed some of the things that wealthy corporate executives are spending money on in 2011….
Luxury and high-end marketers have picked up on what they hope is a growing trend, offering products that bank on a looming spending spree. Germany’s PG-Bikes is rolling out the $80,000 Black Trail, a battery-powered bicycle. Swiss watchmaker Richard Mille is selling $525,000 timepieces. Steinway has launched a John Lennon-themed grand piano — at $90,000 and up. After selling out a $245,000 model, automaker Porsche is planning the 918 Spyder, a hybrid car that could sell for more than $630,000.
Nearly all luxury brands experienced a resurgence in 2010. Just check out some of the sales increases for luxury car brands….
At the exact same time, however, life is getting really, really hard for the rest of America.
There are tens of millions of Americans that would like to have a full-time job that are not able to get a full-time job. The number of Americans on food stamps has gone from about 26 million at the start of 2007 to 43 million today and it continues to set a brand new record every single month. One out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government.
Our economy has become a complete and total nightmare.
Over the past couple of days some of the readers of this column have been sharing some of their economic horror stories. But they are far from alone. There are literally millions of Americans with economic horror stories out there. It is just that we don’t get to hear too many stories from the “other America” on our televisions.
The following stories of economic pain are from people just like you and me. Times are incredibly hard for most of America right now, and they are only getting harder with each passing month….
My mother is unemployed. She is 61 years old, has 25 years of experience working for a major telecommunications corporation, and has a four-year degree. I watch her send application after application to employers with no response. I watch her get contacted by recruiters who say she is a ‘perfect fit’ for a job and never deliver. I watch her slide into depression and staying in bed many hours of the day.
I am 38 years old, I have mental illness, and I recently lost my job as a delivery driver because the owner sold his business to a competitor.
I don’t believe that either my mother or I will ever be employed again. I am beginning to feel that I am permanently in the world of the unemployed.
I graduated college in May 2000 with a Bachelors degree in Broadcasting/Minored in History. I have worked for major corporations as an Enterprise Sales Consultant selling Servers. I was a Network Engineer for Qwest Communications. I even worked for the Federal Government and held a Security Clearance for 4 years. I also won Dell Small Business Sales Consultant of the quarter as well. But since I don’t have an active clearance anymore no one wants to hire me in D.C. I lost my job in 07/2010 and from 07/2010-Present I have been unemployed. My food stamps were also recently cut off last month since the State of Virginia decided that for a household of 1 you can’t make more than $1178 a month. I make $1250 a month in Unemployment compensation before taxes so according to the Government I am too rich to receive Food stamps now. My Rent, Gas and Car insurance is $1000 a month and I am holding on for dear life. I am currently in the process of declaring Chapter 7 Bankruptcy and using my tax return to pay the attorney $1500 to file. That leaves me with only #250 a month for food, water and cell phone.
I have a list compiled in my Google email with approximately 784 applications I have filled out for every government agency, defense contractor and job available in the Washington, DC area. I even applied to Carmax and my old job in college waiting tables at red Lobster and the moving company I used to work at during the summers in college. If its bad for someone like me with over 10 years of Sales, Server/computer experience, Investigations and Network Engineering than I can’t imagine how bad it is for people that just have a high school diploma. I have been on one interview out of the almost 1000 jobs I have applied to (It takes about 2 hours to apply to one job). The one interview I went on offered me less than my unemployment gives me at $8 an hour. I can sit at home and make more money on unemployment than 80% of the jobs that I have applied too and even those jobs don’t call me. Is this what America has become? Is this what I sacrificed 5 years of my life in college from 17 years old to 21 years old and spent $40,000 to get a worthless degree that won’t even get you hired?
Well, My family has been ripped to shreds alright.
Overall combined (My father, and myself) make about 60k a year. We can barely survive we keep looking to cut things, and make things cheaper but it’s just not working fast enough.
My wife can’t find a job, and now student loans are starting to become issues. (won’t go in to further details).
Tax returns taken, and various other things, Can’t even afford dental care. We don’t even get to go out anymore, and lucky to get any type of snacks. Just so you know there are 5 people living in this house.
The only reason I am not out on the street is that when I had money I paid off my mortgage.
However, because I did that, my food stamp allotment is only $25 a month. The heating assistance I get only paid for less than one months’ heat out of the six months I need here in Pennsylvania. All other expenses use up what’s left, so you learn to eat at home; I try not to leave the house because it’s going to cost me money.
I blame Congress for destroying America. They have given tax breaks to themselves and their rich friends at our expense. Did you know that anybody who serves 5 years in Congress gets a FULL pension at age 62? Us peasants work for 45 years and then if we retire at age 62 we are forced to give up 25% of what we earned.
I lost my house, my family was split, and all my savings is gone.
I have lost hope. I served in the military, went to college and have high tech skills. My country doesn’t give a ***** about me. The bankers are as evil as the communists and I hate them.
I’m also 38, and have worked in IT since the mid 90s. I lost my full time job in April ’03, and have only been able to find short term temporary work since. The contracts started to get shorter and fewer as the years went on, so in spring ’10 I retrained to be an Emergency Medical Technician (EMT) but have not been able to find work in the last 9 months. An ambulance company I applied with said that they have hundreds of applications in several Northern CA counties but no job openings. And health care jobs are supposed to be on the the only areas of growth. I deliver pizzas for cash on and off and am getting unemployment.
I lost track of how many resumes I’ve sent out during the past several months. My neighbors think I’m trying to win the Publishers Clearing House sweepstakes or something (yeah, that would help too! Ha!)
Maybe I should go back to school and become an RLP (Rejection Letter Professional).
The rent at the place I lived was so high that I couldn’t afford it on a school bus driver’s salary, which I was doing for the past few years, because in spite of 30 years clerical experience, where I performed every function from clerk typist to executive legal secretary, I could not find employment. So I applied for subsidized housing and was forced to move back to Chicago, where the crime rate is very high in certain areas.
Before I moved I was getting $200 in food stamps, but now that I am in subsidized housing, I have to go and reapply and if I get anything at all, I have heard that it will be about $52 a month! Although the rent is subsidized, I have to pay for my own heat, and the building in which I live is completely electric! Energy assistance doesn’t cover it. They give with one hand and take away with the other.
All of the people above are still “surviving”, but what do you think is going to happen to many of them as the cost of living goes up dramatically? Brent crude just hit $108 a barrel and the UN says that the global price of food recently hit a new all-time high.
Americans on fixed incomes or that are on government assistance are going to be absolutely devastated if prices for basics such as food and gas rise substantially.
Not only that, but budget cuts on the federal, state and local levels are also going to hurt many of these people deeply.
But this is where we are at as a nation. A small privileged class is enjoying the high life while a rapidly growing poverty class pleads for the government to toss them some more crumbs.
The American people deserve better than this. They deserve an economy that will provide them with good jobs which will enable them to pay their mortgages and feed their families.
Unfortunately, the U.S. economy is dying. The number of good jobs is actually declining. The middle class is being systematically wiped out.
The answer is not to “tax the rich” so that we can toss the rapidly growing poverty class a few more crumbs. The answer is to radically transform our economy back into the kind of economy our founding fathers originally intended.
But wealthy corporate executives and politicians such as Barack Obama are not going to have any of that. Those sitting on top don’t want any real change to happen. Sadly, the general population has become so dumbed-down that they don’t even know the questions that they should be asking.
So unfortunately it appears we are going to keep heading down the exact same economic path that we have been heading for decades. The middle class will keep being ripped apart and politicians like George W. Bush and Barack Obama will just keep on smiling.