The Beginning Of The End
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Most People Cannot Even Imagine That An Economic Collapse Is Coming

Thinking - Public DomainThe idea that the United States is on the brink of a horrifying economic crash is absolutely inconceivable to most Americans.  After all, the economy has been relatively stable for quite a few years and the stock market continues to surge to new heights.  On Friday, the Dow and the S&P 500 both closed at brand new all-time record highs.  For the year, the S&P 500 is now up 9 percent and the Nasdaq is now up close to 11 percent.  And American consumers are getting ready to spend more than 600 billion dollars this Christmas season.  That is an amount of money that is larger than the entire economy of Sweden.  So how in the world can anyone be talking about economic collapse?  Yes, many will concede, we had a few bumps in the road back in 2008 but things have pretty much gotten back to normal since then.  Why be concerned about economic collapse when there is so much stability all around us?

Unfortunately, this brief period of stability that we have been enjoying is just an illusion.

The fundamental problems that caused the financial crisis of 2008 have not been fixed.  In fact, most of our long-term economic problems have gotten even worse.

But most Americans have such short attention spans these days.  In a world where we are accustomed to getting everything instantly, news cycles only last for 48 hours and 2008 might as well be an eternity ago.

In the United States today, our entire economic system is based on debt.

Without debt, very little economic activity happens.  We need mortgages to buy our homes, we need auto loans to buy our vehicles and we need our credit cards to do our shopping during the holiday season.

So where does all of that debt come from?

It comes from the banks.

In particular, the “too big to fail banks” are the heart of this debt-based system.

Do you have a mortgage, an auto loan or a credit card from one of these “too big to fail” institutions?  A very large percentage of the people that will read this article do.

And a lot of people might not like to hear this, but without those banks we essentially do not have an economy.

When Lehman Brothers collapsed in 2008, it almost resulted in the meltdown of our entire system.  The stock market collapsed and we experienced an absolutely wicked credit crunch.

Unfortunately, that was just a small preview of what is coming.

Even though a few prominent “experts” such as New York Times columnist Paul Krugman have declared that the “too big to fail” problem is “over”, the truth is that it is now a bigger crisis than ever before.

Compared to five years ago, the four largest banks in the country are now almost 40 percent larger.  The following numbers come from a recent article in the Los Angeles Times

Just before the financial crisis hit, Wells Fargo & Co. had $609 billion in assets. Now it has $1.4 trillion. Bank of America Corp. had $1.7 trillion in assets. That’s up to $2.1 trillion.

And the assets of JPMorgan Chase & Co., the nation’s biggest bank, have ballooned to $2.4 trillion from $1.8 trillion.

At the same time that those banks have been getting bigger, 1,400 smaller banks have completely disappeared from the banking industry.

That means that we are now more dependent on these gigantic banks than ever.

At this point, the five largest banks account for 42 percent of all loans in the United States, and the six largest banks account for 67 percent of all assets in our financial system.

If someone came along and zapped those banks out of existence, our economy would totally collapse overnight.

So the health of this handful of immensely powerful banking institutions is absolutely critical to our economy.

Unfortunately, these banks have become deeply addicted to gambling.

Have you ever known people that allowed their lives to be destroyed by addictions that they could never shake?

Well, that is what is happening to these banks.  They have transformed Wall Street into the largest casino in the history of the world.  Most of the time, their bets pay off and they make lots of money.

But as we saw back in 2008, when they miscalculate things can fall apart very rapidly.

The bets that I am most concerned about are known as “derivatives“.  In essence, they are bets about what will or will not happen in the future.  The big banks use very sophisticated algorithms that are supposed to help them be on the winning side of these bets the vast majority of the time, but these algorithms are not perfect.  The reason these algorithms are not perfect is because they are based on assumptions, and those assumptions come from people.  They might be really smart people, but they are still just people.

If things stay fairly stable like they have the past few years, the algorithms tend to work very well.

But if there is a “black swan event” such as a major stock market crash, a collapse of European or Asian banks, a historic shift in interest rates, an Ebola pandemic, a horrific natural disaster or a massive EMP blast is unleashed by the sun, everything can be suddenly thrown out of balance.

Acrobat Nik Wallenda has been making headlines all over the world for crossing vast distances on a high-wire without a safety net.  Well, that is essentially what our “too big to fail” banks are doing every single day.  With each passing year, these banks have become even more reckless, and so far there have not been any serious consequences.

But without a doubt, someday there will be.

What would you say about a bookie that took $200,000 in bets but that only had $10,000 to cover those bets?

You would certainly call that bookie a fool.

But that is what our big banks are doing.

Right now, JPMorgan Chase has more than 67 trillion dollars in exposure to derivatives but it only has 2.5 trillion dollars in assets.

Right now, Citibank has nearly 60 trillion dollars in exposure to derivatives but it only has 1.9 trillion dollars in assets.

Right now, Goldman Sachs has more than 54 trillion dollars in exposure to derivatives but it has less than a trillion dollars in assets.

Right now, Bank of America has more than 54 trillion dollars in exposure to derivatives but it only has 2.2 trillion dollars in assets.

Right now, Morgan Stanley has more than 44 trillion dollars in exposure to derivatives but it has less than a trillion dollars in assets.

Most people have absolutely no idea how incredibly vulnerable our financial system really is.

The truth is that these “too big to fail” banks could collapse at any time.

And when they fail, our economy will fail too.

So let us hope and pray that this brief period of false stability lasts for as long as possible.

Because when it ends, all hell is going to break loose.

From This Day Forward, We Will Watch How The Stock Market Performs Without The Fed’s Monetary Heroin

Money - Public DomainMark this day on your calendars.  The Dow is at 16974, the S&P 500 is at 1982 and the NASDAQ is at 4549.  From this day forward, we will be looking to see how the stock market performs without the monetary heroin that the Federal Reserve has been providing to it.  Since November 2008, the Fed has created about 3.5 trillion dollars and pumped it into the financial system.  An excellent chart illustrating this in graphic format can be found right here.  Pretty much everyone agrees that this has been a tremendous boon for the financial markets.  As you will see below, even former Fed chairman Alan Greenspan says that quantitative easing was “a terrific success” as far as boosting stock prices.  But he also says that QE has not been very helpful to the real economy at all.  In essence, the entire quantitative easing program was a massive 3.5 trillion dollar gift to Wall Street.  If that sounds unfair to you, that is because it is unfair.

So why is the Federal Reserve finally ending quantitative easing?

Well, officially the Fed says that it is because there has been so much improvement in the labor market

The Fed’s language, however, did suggest that they were getting more comfortable with the economy’s improvement. It cited “solid job gains,” citing a “substantial improvement in the outlook for the labor market,” as well as pointing out that “underutilization” of labor resources is “gradually diminishing.”

But that is not true at all.

The percentage of Americans that are working right now is about the same as it was during the depths of the last recession.  Just check out this chart…

Employment Population Ratio 2014

So there has been no “employment recovery” to speak of at all.

And as I wrote about yesterday, the percentage of Americans that are homeowners has been steadily falling throughout the quantitative easing era…

Homeownership Rate 2014

So let’s put the lie that quantitative easing helped the “real economy” to rest.  It did no such thing.

Instead, what QE did do was massively inflate stock prices.

The following is an excerpt from a Wall Street Journal report about a speech that former Fed chairman Alan Greenspan made to the Council on Foreign Relations on Wednesday

Mr. Greenspan’s comments to the Council on Foreign Relations came as Fed officials were meeting in Washington, D.C., and expected to announce within hours an end to the bond purchases.

He said the bond-buying program was ultimately a mixed bag. He said that the purchases of Treasury and mortgage-backed securities did help lift asset prices and lower borrowing costs. But it didn’t do much for the real economy.

Effective demand is dead in the water” and the effort to boost it via bond buying “has not worked,” said Mr. Greenspan. Boosting asset prices, however, has been “a terrific success.”

Moving forward, what did Greenspan tell the members of the Council on Foreign Relations that they should do with their money?

This might surprise you…

Mr. Greenspan said gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments.

Wow.

It almost sounds like Greenspan has been reading the Economic Collapse Blog.

Since November 2008, every time there has been an interruption in the Fed’s quantitative easing program, the stock market has gone down substantially.

Will that happen again this time?

Well, the market is certainly primed for it.  We are repeating so many of the very same patterns that we saw just prior to the last two financial crashes.

For example, there have been three dramatic peaks in margin debt in the last twenty years.

One of those peaks came early in the year 2000 just before the dotcom bubble burst.

The second of those peaks came in the middle of 2007 just before the subprime mortgage meltdown happened.

And the third of those peaks happened earlier this year.

You can view  a chart that shows these peaks very clearly right here.

The Federal Reserve appears to be confident that the stock market will be okay without the monetary heroin that it has been supplying.

We shall see.

But it should be deeply troubling to all Americans that this unelected, unaccountable body of central bankers has far more power over our economy than anyone else does.  During election season, our politicians get up and give speeches about what they will “do for the economy”, but the truth is that they are essentially powerless compared to the immense power that the Federal Reserve wields.  Just a few choice words from Janet Yellen can cause the financial markets to rise or fall dramatically.  The same cannot be said of any U.S. Senator.

We are told that monetary policy is “too important” to be exposed to politics.

We are told that the independence of the Federal Reserve is “sacred” and must never be interfered with.

I say that is a bunch of nonsense.

No organization should have the power to print up trillions of dollars out of thin air and give it to their friends.

The Federal Reserve is completely and totally out of control, and Congress needs to start exerting power over it.

The first step is to get in there and do a comprehensive audit of the Fed’s books.  This is something that U.S. Senator Ted Cruz called for in a recent editorial for USA Today

Americans are seeing near-zero interest rates on their savings accounts while median incomes are falling, and millions of people are facing higher gas prices, food prices, electricity prices, health insurance prices. Enough is enough, the Federal Reserve needs to open its books — Americans deserve a sound and stable dollar.

Whether you agree with Ted Cruz on other issues or not, this is one issue that all Americans should be able to agree on.

If you study any of our major economic problems, usually you will find that the Federal Reserve is at the heart of that problem.

So if we ever hope to solve the issues that are plaguing our economy, the Fed is going to need to be dealt with.

Hopefully the American people will start to send more representatives to Washington D.C. that understand this.

Ebola Travel Ban Now!

Ebola Travel Ban - Public DomainIs Barack Obama completely insane?  By not instituting an immediate ban on all non-essential travel between the United States and West Africa, he is putting the lives of more than 300 million Americans at risk.  Anyone with a shred of common sense knows that you keep more people from getting sick by keeping the sick people away from the healthy people.  Because the Ebola outbreaks in Liberia, Guinea and Sierra Leone are raging out of control, it is extremely difficult to tell who is carrying Ebola and who is not carrying Ebola.  Therefore we need to keep everyone from those countries away until those outbreaks subside.  If Barack Obama had established an Ebola travel ban a month or two ago like he should have done, Thomas Eric Duncan would never have entered the United States, and we would not have two Texas nurses infected with the virus.  But because Barack Obama did not do his job, now we have a new Ebola scare popping up somewhere in the country almost hourly.  If this outbreak eventually evolves into a full-blown pandemic, we will know who to blame.

Will an Ebola travel ban work?

It has worked in Africa.  Even as the outbreaks in Liberia, Guinea and Sierra Leone have spread like wildfire, the nations immediately bordering them are doing just fine.  And there is one primary reason why this is the case…

Ivory Coast, Guinea-Bissau and Senegal, all of which share borders with at least one of the three most affected countries, have closed those borders.

At this point, nearly 30 countries have instituted an Ebola travel ban.

So why won’t Obama do it?

This is clearly what the American people want.  For example, one recent survey asked the following question…

Should the government allow people who have recently been in any of the countries in western Africa where there is a major Ebola outbreak to enter the United States?

Only 23 percent of respondents said yes to that question.

We aren’t talking about the flu or the measles or some other disease that we are accustomed to dealing with.

We are talking about a brutally efficient killer that could kill millions of us if it were to spread widely inside the United States.

Sadly, at this point Barack Obama and the CDC are dead set against a travel ban, and there are “experts” popping up all over the mainstream media explaining to us why an Ebola travel ban would be a bad idea.

They say that a travel ban would provide a “false sense of security”.

Of course they never mention that travel bans are working quite well in Africa.

They say that a travel ban would make the Ebola outbreaks worse by keeping people from going over there to help.

But very few people are suggesting that essential medical personnel should be banned from traveling.  So that argument makes no sense whatsoever.

They say that travelers would just find another way into this country, and that it is better for us to be able to screen them when they come through the airports.

What are they going to do?  Swim over here from West Africa?

If we ban all sea and air travel from those nations, the only way that they would be able to come in would be through the Canadian or Mexican borders.  And if Obama had secured those borders like he should have done by now, we wouldn’t have a problem.

Some “experts” are even suggesting that a travel ban would be “racist”.

Really?

What about all of the other African nations that have instituted Ebola travel bans?

Are they “racist” too?

Right now, the dead bodies of Ebola victims are decaying in the streets over in West Africa.  Ebola corpses are being dumped into rivers and are being eaten by animals.  Grave diggers can’t keep up with the number of bodies being delivered to them.  The Liberian government estimates that it will soon need more than 84,000 additional body bags as the death toll climbs at an exponential rate.

We don’t want that coming here.

But thanks to Obama, most Americans now believe that we will see a major Ebola outbreak in the United States during the coming year…

According to a Wednesday poll by the Harvard School of Public Health, 52 percent of Americans surveyed said they believe the country will experience a large outbreak in the coming year, while 38 percent said they believed they or a family member would be infected.

In a previous article, I blamed the current state of affairs on Obama’s incompetence.

But to be honest, I was giving him the benefit of the doubt.

The truth is that Obama being incompetent is the best case scenario.

There is also a possibility that Donald Trump has raised.  We could actually be looking at a situation where there is something wrong with his mental health

Thursday on NewsMax TV’s “The Steve Malzberg Show,” real estate mogul Donald Trump called into question President Barack Obama mental health for refusing enact a travel ban on commercial flights from West African nations suffering with the Ebola outbreak.

When Malzberg asked if Trump, who had tweeted that the president was “psycho” for not stopping the flights, stands by questioning Obama’s mental health, Trump doubled down saying, “There is something wrong, and nobody knows what it is, but there is something wrong. There are so many bad decision. Can anybody be that incompetent? There is something wrong.”

Others have suggested that Obama may even be doing this on purpose.

Whatever his motivation is, the truth is that he is endangering all of us and our families.

Meanwhile, the CDC also richly deserves all of the criticism that it is currently getting.

This is an agency that is absolutely showered with money.  It gets more than $6,000,000,000 a year, and it is supposed to be preparing our health care system for events such as this.

And without a doubt, the money is in their budget

This lack of response is despite having these line items in its budget (2012 numbers):

  • Quarantine (non-add) $25,866,000
  • Healthcare-Associated Infections – PPHF (non-add) $11,750,000
  • Workplace Wellness – PPHF $10,000,000
  • Surveillance, Epidemiology, and PH Informatics $262,129,000
  • Personal Protective Technology $16,791,000
  • State and Local Preparedness and Response Capability $657,418,000
  • Public Health and Social Services Emergency Fund Transfer (non-add) $30,000,000

How much of these funds were used to monitor, consult, advice the nurses in Dallas who were treating a man with deadly Ebola? $0.00

“Incompetent” is far too kind a word to describe the performance of the CDC so far.

But of course this is just par for the course for federal agencies these days.  This has become so glaringly obvious that even CNBC is talking about it…

The CDC is just the latest in a line of federal agencies viewed as bumbling and incompetent. First it was the botched rollout of Obamacare by the Department of Health and Human Services and the IRS seemingly targeting conservative groups for extra scrutiny. More recently, the Secret Service came under heavy criticism for allowing a knife-wielding intruder to burst in and run wild inside the White House, among other appalling lapses.

The CDC now is under heavy scrutiny for not moving more swiftly to ensure that Ebola patient Thomas Eric Duncan did not spread the disease to American nurses and for apparently unclear direction to one of those nurses, Amber Joy Vinson, about whether she could fly after treating Duncan.

As political pressure has mounted, Obama has finally made a “big move” to get a grip on this crisis.

He has appointed an “Ebola czar” to oversee the federal response to Ebola.

His name is Ron Klain, and he is a Democratic political hack best known for his work during the “hanging chads” episode of the 2000 presidential election.

The White House says that they were not looking for an expert on Ebola.

Mission accomplished.

The “Ebola czar” heading up the response to what could be the greatest health crisis in U.S. history does not know anything about the virus.

Let us hope that this Ebola outbreak fizzles out somehow and that by some miracle no more Ebola victims travel to the United States.

Because it has become exceedingly clear that our government is not equipped to deal with something like this.

Matt Drudge recently sent out a tweet warning that we need to be ready to “self-quarantine” if necessary.

I think that is very good advice.  Obviously the government is not going to be able to protect us if Ebola starts spreading like wildfire.

The only people that you are going to be able to depend on are yourself, your family and your close friends.

I encourage all of you to get prepared while we still have time.

9 Ominous Signals Coming From The Financial Markets That We Have Not Seen In Years

Ominous Storm Clouds Gathering - Public DomainIs the stock market about to crash?  Hopefully not, and there definitely have been quite a few “false alarms” over the past few years.  But without a doubt we have been living through one of the greatest financial bubbles in U.S. history, and the markets are absolutely primed for a full-blown crash.  That doesn’t mean that one will happen now, but we are starting to see some ominous things happen in the financial world that we have not seen happen in a very long time.  So many of the same patterns that we witnessed just prior to the bursting of the dotcom bubble and just prior to the 2008 financial crisis are repeating themselves again.  Hopefully we still have at least a little bit more time before stocks completely crash, because when this market does implode it is going to be a doozy.

The following are 9 ominous signals coming from the financial markets that we have not seen in years…

#1 By the time the markets closed on Monday, we had witnessed the biggest three day decline for U.S. stocks since 2011.

#2 On Monday, the S&P 500 moved below its 200 day moving average for the first time in about two years.  The last time this happened after such an extended streak of success, the S&P 500 ended up declining by a total of 22 percent.

#3 This week the put-call ratio actually moved higher than it was at any point during the collapse of Lehman Brothers in 2008.  This is an indication that there is a tremendous amount of fear on Wall Street right now.

#4 Everybody is watching the VIX at the moment.  According to the Economic Policy Journal, the VIX has now risen to the highest level that it has been since the heart of the European debt crisis.  This is another indicator that there is extraordinary fear on Wall Street…

US stock market volatility has jumped to the highest since the eurozone debt crisis, according to a closely watched index, the the CBOE Vix index of implied US share price volatility.

It jumped to 24.6 late on Monday and is up again this morning. On Thursday, it was as low as 15.

That’s a very strong move, but things have been much worse. At height of the recent financial crisis – the Vix index peaked at 80.1 in November 2008.

Could we get there again? Yeah.

#5 The price of oil is crashing.  This also happened in 2008 just before the financial crisis erupted.  At this point, the price of oil is now the lowest that it has been in more than two years.

#6 As Chris Kimble has pointed out, the chart for the Dow has formed a “Doji Star topping pattern”.  We also saw this happen in 2007.  Could this be an indication that we are on the verge of another stock market crash similar to what happened in 2008?

#7 Canadian stocks are actually doing even worse than U.S. stocks.  At this point, Canadian stocks have already dropped more than 10 percent from the peak of the market.

#8 European stocks have also had a very rough month.  For example, German stocks have already dropped about 10 percent since July, and there are growing concerns about the overall health of the German economy.

#9 The wealthy are hoarding cash and precious metals right now.  In fact, one British news report stated that sales of gold bars to wealthy customers are up 243 percent so far this year.

So what comes next?

Some experts are saying that this is the perfect time to buy stocks at value prices.  For example, USA Today published a story with the following headline on Tuesday: “Time to ‘buy’ the fear? One Wall Street pro says yes“.

Other experts, however, believe that this could represent a major turning point for the financial markets.

Just consider what Abigail Doolittle recently told CNBC

Technical strategist Abigail Doolittle is holding tight to her prediction of market doom ahead, asserting that a recent move in Wall Street’s fear gauge is signaling the way.

Doolittle, founder of Peak Theories Research, has made headlines lately suggesting a market correction worse than anyone thinks is ahead. The long-term possibility, she has said, is a 60 percent collapse for the S&P 500.

In early August, Doolittle was warning both of a looming “super spike” in the CBOE Volatility Index as well as a “death cross” in the 10-year Treasury note. The former referenced a sharp move higher in the “VIX,” while the latter used Wall Street lingo for an event that already occurred in which the fixed income benchmark saw its 50-day moving average cross below its 200-day trend line.

Both, she said, served as indicators for trouble ahead.

So what do you think?

Are we about to witness a stock market crash and another major financial crisis?

Or is this just another “false alarm” that will soon fade?

Please feel free to share what you think by posting a comment below…

12 Charts That Show The Permanent Damage That Has Been Done To The U.S. Economy

12 - Public DomainMost people that discuss the “economic collapse” focus on what is coming in the future.  And without a doubt, we are on the verge of some incredibly hard times.  But what often gets neglected is the immense permanent damage that has been done to the U.S. economy by the long-term economic collapse that we are already experiencing.  In this article I am going to share with you 12 economic charts that show that we are in much, much worse shape than we were five or ten years ago.  The long-term problems that are eating away at the foundations of our economy like cancer have not been fixed.  In fact, many of them continue to get even worse year after year.  But because unprecedented levels of government debt and reckless money printing by the Federal Reserve have bought us a very short window of relative stability, most Americans don’t seem too concerned about our long-term problems.  They seem to have faith that our “leaders” will be able to find a way to muddle through whatever challenges are ahead.  Hopefully this article will be a wake up call.  The last major wave of the economic collapse did a colossal amount of damage to our economic foundations, and now the next major wave of the economic collapse is rapidly approaching.

#1 Employment

The mainstream media is constantly telling us about the “employment recovery” that is happening in the United States, but the truth is that it is just an illusion.  As the chart below demonstrates, just prior to the last recession about 63 percent of all working age Americans had a job.  During the last wave of the economic collapse, that number dropped to below 59 percent and stayed there for a very long time.  In the past few months we have finally seen the employment-population ratio tick back up to 59 percent, but we are still far, far below where we used to be.  To call the tiny little bump at the end of this chart a “recovery” is really an insult to our intelligence…

Employment Population Ratio 2014

#2 The Labor Force Participation Rate

The percentage of Americans that are either employed or currently looking for a job started to fall during the last recession and it has not stopped falling since then.  The labor force participation rate has now fallen to a 36 year low, and this is a sign of a very, very sick economy…

Labor Force Participation Rate 2014

#3 The Inactivity Rate For Men In Their Prime Years

Some blame the decline in the labor force participation rate on the aging of our population.  But it isn’t just elderly people that are dropping out of the labor force.  In fact, the inactivity rate for men in their prime working years (25 to 54) continues to rise and is now at the highest level that has ever been recorded…

Inactivity Rate Men 2014

#4 Manufacturing Employees

Once upon a time in America, anyone that was reliable and willing to work hard could easily find a manufacturing job somewhere.  But we have stood by and allowed millions upon millions of good paying manufacturing jobs to be shipped out of the country, and now many of our formerly great manufacturing cities have been transformed into ghost towns.  Over the past few years, there has been a slight “recovery”, but we are still well below where we were at just previous to the last recession…

Manufacturing Employees 2014

#5 Our Current Account Balance

As a nation, we buy far more from the rest of the world than they buy from us.  In other words, we perpetually consume far more wealth than we produce.  This is a recipe for national economic suicide.  Our current account balance soared to obscene levels just prior to the last recession, and now we have almost gotten back to those levels…

Current Account Balance 2014

#6 Existing Home Sales

Our economy has never fully recovered from the housing crash of 2007-2008.  As you can see from the chart below, the number of existing home sales is still far below the level that we hit back in 2006.  At this point we are just getting back to the level we were at in 2000, but our population today is far larger than it was back then…

Existing Home Sales 2014

#7 New Home Sales

Things are even more dramatic when you look at new home sales.  This is an industry that have been absolutely emasculated.  The number of new home sales in the United States is just a little more than half of what it was back in 2000, and it isn’t even worth comparing to what we experienced during the peak of 2006.

New Home Sales 2014

#8 The Monetary Base

In a desperate attempt to get the economy going again, the Federal Reserve has been wildly printing money.  It has been so reckless that it is hard to put it into words.  When I look at this chart, the phrase “Weimar Republic” comes to mind…

Monetary Base 2014

#9 Food Inflation

Thankfully, much of the money that the Federal Reserve has been injecting into the system has not made it into the real economy.  But enough of it has gotten into the system to force food prices significantly higher.  For example, my wife went to the store today and paid just a shade under 10 bucks for just four pieces of chicken.  And as you can see from the chart below, food prices have been steadily going up in America for a very long time…

Food Inflation 2014

#10 The Velocity Of Money

One of the reasons why we have not seen even more inflation is because the velocity of money is extraordinarily low.  In general, when an economy is healthy money tends to flow through the system rapidly.  People are buying and selling and money changes hands frequently.  But when an economy is sick, money tends to stagnate.  And that is exactly what is happening in the United States right now.  In fact, at this point the velocity of the M2 money stock has dropped to the lowest level ever recorded…

Velocity Of Money 2014

#11 The National Debt

As our economic fundamentals have deteriorated, our politicians have attempted to prop up our standard of living by borrowing from the future.  The U.S. national debt is on pace to approximately double during the Obama years, and it increased by more than a trillion dollars in fiscal year 2014 alone.  Despite assurances that “the deficit is under control”, the federal government borrows about a trillion dollars a year to fund new spending in addition to borrowing about 7 trillion dollars to pay off old debt that is coming due.  What we are doing to future generations of Americans is absolutely criminal, and it is just a matter of time before this Ponzi scheme totally collapses…

National Debt 2014

#12 Total Debt

Of course it is not just the federal government that is gorging on debt.  When you add up all forms of debt in our society (government, business, consumer, etc.) it comes to a grand total of more than 57 trillion dollars.  This total has more than doubled since the year 2000…

Total Debt 2014

If you know anyone that believes that we are in good economic shape, just show them these charts.

The numbers do not lie.  Our economy is sick and it is getting sicker by the day.

And of course the next major financial crisis could strike at any time.  U.S. stocks just experienced their worst week in three years, and if cases of Ebola start popping up around the country the fear that would cause could collapse our economy all by itself.

The debt-fueled prosperity that we are enjoying today is not real.  We are living on the fumes of our past, and every single day our long-term problems get even worse.

Anyone with half a brain should be able to see what is coming.

Sadly, most Americans will continue to deny the truth until it is far too late.

There Will Be Pestilences: Why Are So Many Deadly Diseases Breaking Out All Over The Globe Right Now?

Earth - Our World - Public DomainEbola, Marburg, Enterovirus and Chikungunya – these diseases were not even on the radar of most people coming into 2014, but now each one of them is making headline news.  So why is this happening?  Why are so many deadly diseases breaking out all over the world right now?  Is there some kind of a connection, or is the fact that so many horrible diseases are arising all at once just a giant coincidence?  And this could be just the beginning.  For example, there are now more than a million cases of Chikungunya in Central and South America, and authorities are projecting that there will be millions more in 2015.  The number of Ebola cases continues to grow at an exponential rate, and now an even deadlier virus (Marburg) has broken out in Uganda.  We have gone decades without experiencing a major worldwide pandemic, and many people believed that it could never happen in our day and time.  But now we could potentially see several absolutely devastating diseases all racing across the planet at the same time.

On Monday, we got news that the first confirmed case of Ebola transmission in Europe has happened.  A nurse in Spain that had treated a couple of returning Ebola patients has contracted the disease herself

A nurse’s assistant in Spain is the first person known to have contracted Ebola outside of Africa in the current outbreak.

Spanish Health Minister Ana Mato announced Monday that a test confirmed the assistant has the virus.

The woman helped treat a Spanish missionary and a Spanish priest, both of whom had contracted Ebola in West Africa. Both died after returning to Spain.

Health officials said she developed symptoms on September 30. She was not hospitalized until this week. Her only symptom was a fever.

How many people did she spread the virus to before it was correctly diagnosed?

Meanwhile, Ebola continues to rage out of control in West Africa.  It is being reported that Sierra Leone just added 121 new Ebola deaths to the overall death toll in a single day.  If Ebola continues to spread at an exponential rate, it is inevitable that more people will leave West Africa with the virus and take it to other parts of the globe.

In fact, it was being reported on Monday that researchers have concluded that there is “a 50 percent chance” that Ebola could reach the UK by October 24th…

Experts have analysed the pattern of the spread of the disease, along with airline traffic data, to make the startling prediction Ebola could reach Britain by October 24.

They claim there is a 50 percent chance the virus could hit Britain by that date and a 75 percent chance the it could be imported to France, as the deadliest outbreak in history spreads across the world.

Currently, there is no cure for the disease, which has claimed more than 3,400 lives since March and has a 90 percent fatality rate.

I have written extensively about Ebola, but it is certainly not the only virus making headlines right now.

Down in Uganda, a man has just died from a confirmed case of the Marburg Virus…

A man has died in Uganda’s capital after an outbreak of Marburg, a highly infectious haemorrhagic fever similar to Ebola, authorities said on Sunday, adding that a total of 80 people who came into contact with him had been put under quarantine.

Marburg starts with a severe headache followed by haemorrhaging and leads to death in 80% or more of cases in about nine days. It is from the same family of viruses as Ebola, which has killed thousands in West Africa in recent months.

There is no vaccine or specific treatment for the Marburg virus, which is transmitted through bodily fluids such as saliva and blood or by handling infected wild animals such as monkeys.

The Marburg Virus is an absolutely horrible disease, and many consider it to be even more deadly than Ebola.  But the fact that it kills victims so quickly may keep it from spreading as widely as Ebola.

We shall see.

Meanwhile, a disease that sounds very similar to Ebola and Marburg has popped up in Venezuela and doctors down there do not know what it is…

“We do not know what it is,” admitted Duglas León Natera, president of the Venezuelan Medical Federation.

In its initial stages, the disease presents symptoms of fever and spots on the skin, and then produces large blisters and internal and external bleeding, according to data provided week stop by the College of Physicians of the state of Aragua, where the first cases were reported.

Then, very quickly, patients suffer from respiratory failure, liver failure and kidney failure. Venezuelan doctors have not been able to determine what the disease is, much less how to fight it.

Why aren’t we hearing more about this in the mainstream news?

Here in the United States, enterovirus D-68 has sickened hundreds of children all over the country.  So far cases have been confirmed in 43 different states, several children have been paralyzed by it, and one New Jersey boy has died

Parents in New Jersey are concerned after a state medical examiner determined a virus causing severe respiratory illness across the country is responsible for the death of a 4-year-old boy.

Hamilton Township health officer Jeff Plunkett said the Mercer County medical examiner’s office found the death of Eli Waller was the result of enterovirus D-68. Waller, the youngest of a set of triplets, died in his sleep at home on Sept. 25.

The virus has sickened more than 500 people in 43 states and Washington, D.C.— almost all of them children. Waller is the first death in New Jersey directly linked to the virus.

The CDC seems to have no idea how to contain the spread of enterovirus D-68.

So why should we be confident that they will be able to contain the spread of Ebola?

Last but not least, the Chikungunya virus is at pandemic levels all over Central and South America.

We aren’t hearing that much about this disease in the U.S., but at this point more than a million people have already been infected…

An excruciating mosquito-borne illness that arrived less than a year ago in the Americas is raging across the region, leaping from the Caribbean to the Central and South American mainland, and infecting more than 1 million people. Some cases already have emerged in the United States.

The good news is that very few people actually die from this disease.

The bad news is that almost everyone that gets it feels like they are dying.

In a previous article, I wrote about the intense suffering that victims go through.  According to Slate, the name of this virus originally “comes from a Makonde word meaning ‘that which bends up,’ referring to the contortions sufferers put themselves through due to intense joint pain.”

Right now, the number of cases of Chikungunya is absolutely exploding.  Just check out the following excerpt from a recent Fox News report

In El Salvador, health officials report nearly 30,000 suspected cases, up from 2,300 at the beginning of August, and hospitals are filled with people with the telltale signs of the illness, including joint pain so severe it can be hard to walk.

“The pain is unbelievable,” said Catalino Castillo, a 39-year-old seeking treatment at a San Salvador hospital. “It’s been 10 days and it won’t let up.”

Venezuelan officials reported at least 1,700 cases as of Friday, and the number is expected to rise. Neighboring Colombia has around 4,800 cases but the health ministry projects there will be nearly 700,000 by early 2015.

So why is this happening?

Why are so many absolutely horrible diseases emerging all at once?

Please share what you think by posting a comment below…

During An Ebola Pandemic All Of Your Rights Would Essentially Be Meaningless

Prison Fence - Public DomainIf there is a major Ebola pandemic in America, all of the liberties and the freedoms that you currently enjoy would be gone.  If government officials believe that you have the virus, federal law allows them to round you up and detain you “for such time and in such manner as may be reasonably necessary.”  In addition, the CDC already has the authority to quarantine healthy Americans if they reasonably believe that they may become sick.  During an outbreak, the government can force you to remain isolated in your own home, or the government may forcibly take you to a treatment facility, a tent city, a sports stadium, an old military base or a camp.  You would not have any choice in the matter.  And you would be forced to endure any medical procedure mandated by the government.  That includes shots, vaccines and the drawing of blood.  During such a scenario, you can scream about your “rights” all that you want, but it won’t do any good.

In case you are tempted to think that I am making this up, I want you to read what federal law actually says.  The following is 42 U.S.C. 264(d).  I have added bold for emphasis…

(1) Regulations prescribed under this section may provide for the apprehension and examination of any individual reasonably believed to be infected with a communicable disease in a qualifying stage and (A) to be moving or about to move from a State to another State; or (B) to be a probable source of infection to individuals who, while infected with such disease in a qualifying stage, will be moving from a State to another State. Such regulations may provide that if upon examination any such individual is found to be infected, he may be detained for such time and in such manner as may be reasonably necessary. For purposes of this subsection, the term “State” includes, in addition to the several States, only the District of Columbia.

(2) For purposes of this subsection, the term “qualifying stage”, with respect to a communicable disease, means that such disease—

(A) is in a communicable stage; or

(B) is in a precommunicable stage, if the disease would be likely to cause a public health emergency if transmitted to other individuals.

In addition, as I discussed above, the CDC already has the authority to isolate people that are not sick to see if they do become sick.  The following is what the CDC website says about this…

Quarantine is used to separate and restrict the movement of well persons who may have been exposed to a communicable disease to see if they become ill. These people may have been exposed to a disease and do not know it, or they may have the disease but do not show symptoms. Quarantine can also help limit the spread of communicable disease.

On a very basic level, we are already starting to see this happen in Texas.  Obviously Thomas Eric Duncan has already been “isolated”, and now his family has been placed under mandatory quarantine and ordered not to leave their home for 21 days

Texas health officials have placed the Dallas family of a Liberian national infected with Ebola under quarantine and ordered them not to leave their home or have any contact with outsiders for 21 days without approval of the local or state health department.

The “control order” also requires the family of Thomas Eric Duncan to be available to provide blood samples and agree to any testing required by public health officials. Officials said Thursday that the four or five family members could face criminal charges for violating the order, which was delivered to them in writing Wednesday evening.

Police have been stationed at the apartment complex to ensure residents’ safety, Dallas Mayor Mike Rawlings told a news briefing Thursday afternoon.

If we could all just stay in our homes during a national Ebola emergency, that wouldn’t be so bad.

But if thousands (or even millions) of cases start popping up it simply will not be possible for law enforcement authorities to monitor so many homes.

This is a point that Mike Adams of Natural News made exceptionally well…

When just one family is suspected of carrying Ebola, they can be easily monitored in a “volunteer home isolation” scenario. But what happens when it’s 100 families? 500? 1,000? At that point, there aren’t enough state or federal workers to keep an eye on these people, and the quarantine effort will almost certainly shift to forced relocation into quarantine camps.

Those camps will, of course, be called something nice-sounding like “Community Health Centers.” No one in government or media will call them camps, even though they are camps. The word “camp” brings up echoes of “concentration camps” and the government definitely wants to avoid that association.

If one particular town or city is hit especially hard with the virus, there is a likelihood of the entire town being quarantined. No one in, no one out. Everybody will be ordered to “shelter in place” in their own homes for at least 21 days while health workers wearing hazmat suits go door to door, identifying Ebola victims and “relocating” them to the “Community Health Centers.”

If that sounds like “martial law” to you, that is because it would essentially be martial law.

For the moment, public health authorities are pledging that nothing like this will ever happen because they have everything completely under control.

Others are not so sure.

For example, on Thursday a doctor from Missouri named Gil Mobley checked in for a flight at Atlanta’s Hartsfield-Jackson International Airport dressed in a mask, goggles, gloves, boots and a protective white jumpsuit.  On the back of the jumpsuit, he had written the following words:  “CDC is lying!”

Mobley believes that we are not being told the truth about the spread of Ebola.  And he is convinced that as Ebola continues to spread exponentially, that we will eventually “be importing clusters of Ebola on a daily basis”

“Once this disease consumes every third world country, as surely it will, because they lack the same basic infrastructure as Sierra Leone and Liberia, at that point, we will be importing clusters of Ebola on a daily basis,” Mobley predicted. “That will overwhelm any advanced country’s ability to contain the clusters in isolation and quarantine. That spells bad news.”

Mobley, a Medical College of Georgia graduate who had an overnight layover after flying to Atlanta from Guatemala on Wednesday, said that he feels that the CDC is “asleep at the wheel” when it comes to screening passengers arriving in the United States from other countries.

“Yesterday, I came through international customs at the Atlanta airport,” the doctor told The Atlanta Journal-Constitution. “The only question they asked arriving passengers is if they had tobacco or alcohol.”

Earlier on Thursday, there were reports of people being tested for Ebola in Hawaii, Kentucky and Utah.  None of those tests has produced a confirmed case of Ebola as I write this article.

Many Americans are still treating this Ebola crisis as if it was just one big joke.

But Ebola is no joking matter.  This is a very, very serious disease.

Just consider the experience of one British health worker that witnessed a young brother and sister both die one day apart

‘The next morning I came in and saw him lying as I had left him, on the bed.

‘He wasn’t breathing. I remember going up to him and looking at his face, his lips were drawn back in a grimace, and his eyes were vacant, lying in a pool of his own diarrhea.

‘I lifted his hand to try, just to confirm things and his whole body turned rigid and cold.

‘I put him in a body bag as his sister looked on.

‘She seemed more baffled than anything, not really understanding what was happening. I carried his corpse outside with the others.

‘The little girl, she deteriorated the next day. Overnight, the following night she had intravenous fluids and the line came out and she bled.

‘I came in the following morning and she was covered in blood. She still had a very puzzled expression on her face and she wasn’t breathing.

‘So I put her in a bag and left her next to her brother. She was a beautiful little girl.’

Hopefully our medical authorities are correct and this virus will not spread easily in this country.

But at this point even some of our top politicians are wondering if we are truly getting accurate information.  For example, check out what U.S. Senator Rand Paul had to say on the Laura Ingraham Show just recently…

“I really think that it is being dominated by political correctness and I think because of political correctness we’re not really making sound, rational, scientific decisions on this.” Paul said referring to statements issued by the CDC last week that assured there was little risk of an outbreak occurring in the US.

“We should not underestimate the transmissibility of this,” said Paul, a doctor himself, adding that medical workers have been contracting the virus even though they are taking precautions and covering themselves with gowns and masks.

My suspicion is that it’s a lot more transmissible than that if people who are taking every precaution are getting it. There are people getting it who simply helped people get in or out of a taxicab.” Paul said.

Let’s pray that this crisis fizzles out, because if it doesn’t, we could truly be looking at the greatest health crisis that any of us have ever seen.

And along with countless numbers of people getting sick and dying, we would also have to deal with government-imposed medical martial law.

The stakes are extremely high, and so let us hope that this crisis does not escalate any further.

This Is About As Good As Things Are Going To Get For The Middle Class – And It’s Not That Good

Depressed - Public DomainThe U.S. economy has had six full years to bounce back since the financial collapse of 2008, and it simply has not happened.  Median household income has declined substantially since then, total household wealth for middle class families is way down, the percentage of the population that is employed is still about where it was at the end of the last recession, and the number of Americans that are dependent on the government has absolutely exploded.  Even those that claim that the economy is “recovering” admit that we are not even close to where we used to be economically.  Many hope that someday we will eventually get back to that level, but the truth is that this is about as good as things are ever going to get for the middle class.  And we should enjoy this period of relative stability while we still can, because when the next great financial crisis strikes things are going to fall apart very rapidly.

The U.S. Census Bureau has just released some brand new numbers, and they are quite sobering.  For example, after accounting for inflation median household income in the United States has declined a total of 8 percent from where it was back in 2007.

That means that middle class families have significantly less purchasing power than they did just prior to the last major financial crisis.

And one research firm is projecting that it is going to take until 2019 for median household income to return to the level that we witnessed in 2007…

For everybody wondering why the economic recovery feels like a recession, here’s the answer: We’re still at least five years away from regaining everything lost during the 2007-2009 downturn.

Forecasting firm IHS Global Insight predicts that real median household income — perhaps the best proxy for middle-class living standards — won’t reach the prior peak from 2007 until 2019. Since the numbers are adjusted for inflation, that means the typical family will wait 12 years until their purchasing power is as strong as it was before the recession. That would be the longest period of stagnation, by far, since the Great Depression of the 1930s.

Of course that projection assumes that the economy will continue to “recover”, which is a very questionable assumption at best.

Meanwhile, total household wealth has been declining for middle class families as well.

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

That is a pretty substantial drop.  But you never hear our politicians (especially the Democrats) bring up numbers like that because they want us to feel good about things.

So why is all of this happening?

The biggest reason why the middle class is struggling so much is the lack of good jobs.

As the chart posted below demonstrates, the percentage of the working age population that is actually employed is still way, way below where it was prior to the last recession…

Employment Population Ratio

The “employment recovery” (the tiny little bump at the end of the chart) has been so miniscule that it is hardly even worth mentioning.

At the moment, we still have 1.4 million fewer full-time jobs than we did in 2008 even though more than 100,000 people are added to the U.S. population each month.

And a lot of the workers that have lost jobs since the start of the last recession have never been able to find a new one.

According to a brand new survey conducted by Rutgers University, more than 20 percent of all workers that have been laid off in the past five years still have not found a new job.

Meanwhile, the control freak bureaucrats that run this country continue to kill off small businesses.

In recent years we have seen large numbers of small businesses fail, and at this point the rate of small business ownership in the United States is at an all-time low.

As a result of everything that you have just read, the middle class is shrinking and dependence on the government is soaring.

Today, there are 49 million Americans that are dealing with food insecurity, and Americans received more than 2 trillion dollars in benefits from the federal government last year alone.

For many more statistics just like this, please see my previous article entitled “30 stats to show to anyone that does not believe the middle class is being destroyed“.

Without a doubt, things are not that good for the middle class in America these days.

Unfortunately, the next great wave of financial trouble is rapidly approaching, and once it strikes things are going to get substantially worse for the middle class.

Yes, the stock market set record high after record high this summer.  But what we have observed is classic bubble behavior.  So many of the exact same patterns that occurred just prior to previous stock market crashes are happening once again.

And it is interesting to note that September 22nd has marked important market peaks at various times throughout history…

For traders, September 22 is one of those days with a notorious history. UBS’s Art Cashin notes that September 22 marked various market highs in 1873, 1929, 1980, and even as recent as 2008.

Could the coming months be the beginning of the next major stock market decline?

Small-cap stocks are already starting to show signs of real weakness.  In fact, the Russell 2000 just hit a “death cross” for the first time in more than 2 years

The Russell 2000 has been diverging from the broader market over the last several weeks, and now technicians point out it has flashed a bearish signal. For the first time in more than two years, the small-cap index has hit a so-called death cross.

A death cross occurs when a nearer-term 50-day moving average falls below a longer-term, 200-day moving average. Technicians argue that a death cross can be a bearish sign.

None of us knows what the market is going to do tomorrow, but a lot of the “smart money” is getting out of the market right now while the getting is good.

So where is the “smart money” putting their assets?

In a previous article, I discussed how sales of gold bars to wealthy clients is way up so far this year.

And CNBC has just reported that the ultra-wealthy “are holding mountains of cash” right now…

Billionaires are holding mountains of cash, offering the latest sign that the ultra-wealthy are nervous about putting more money into today’s markets.

According to the new Billionaire Census from Wealth-X and UBS, the world’s billionaires are holding an average of $600 million in cash each—greater than the gross domestic product of Dominica.

Why are they doing this?

Are they concerned about the potential of a market crash?

And if we do see another market crash like we witnessed back in 2008, what is that going to mean for the rest of us?

2008 certainly did not destroy our economy.

But it did cause an immense amount of damage that we have never recovered from.

Now the next wave is approaching, and most people don’t even see it coming.

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