The bank runs that we are watching right now in Greece are shocking, but they are only just the beginning. Since May 6th, nearly one billion dollars has been withdrawn from Greek banks. For a small nation like Greece, that is an absolutely catastrophic number. At this point, the entire Greek banking system is in danger of collapsing. If you had money in a Greek bank, why wouldn’t you pull it out? If Greece leaves the euro, all euros in Greek banks will likely be converted to drachmas, and the value of those drachmas will almost certainly decline dramatically. In fact, it has been estimated that Greek citizens could see the value of their bank accounts decline by up to 50 percent if Greece leaves the euro. So if you had money in a Greek bank, it would only make sense to withdraw it and move it to another country as quickly as possible. And as the eurozone begins to unravel, this is a scenario that we are going to see play out in country after country. As member nations leave the eurozone, you would be a fool to have your euros in Italian banks or Spanish banks when you could have them in German banks instead. So the bank runs that are happening in Greece right now are only a preview of things to come. Before this crisis is over we are going to see bank runs happening all over Europe.
If Greece leaves the euro, the consequences are likely to be quite messy. Those that are promoting the idea that a “Grexit” can be done in an orderly fashion are not being particularly honest. The following is from a recent article in the Independent….
“Whoever tells you a Greek exit would be no big deal is an idiot, lying or disingenuous,” said Sony Kapoor of the European think-tank Re-Define. Economists fear that a disorderly exit would prompt a huge run by investors on Spanish and Italian debt, forcing those countries to seek support from an EU bailout fund, which, with a capacity of just €500bn, is widely regarded as too small to cope with those pressures.
A Greek exit from the euro would not only result in a run on Spanish and Italian bonds, but it would also likely result in a run on Spanish and Italian banks.
If Greece is allowed to leave the euro, that will be a signal that other countries will eventually be allowed to leave as well. Nobody in their right mind would want their euros stuck in Spanish or Italian banks if those countries end up converting back to national currencies.
Fear is a powerful motivator. If Greece converts their euros back to drachmas, that will be a clear signal that all euros are not created equally. The race to move money into German banks will accelerate dramatically.
And a Greek exit from the euro is looking more likely with each passing day. Even the IMF is now admitting that it is a very real possibility….
Christine Lagarde, head of the IMF, warned she was “technically prepared for anything” and said the utmost effort must be made to ensure any Greek exit was orderly. The effect was likely to be “quite messy” with risks to growth, trade and financial markets. “It is something that would be extremely expensive and would pose great risks but it is part of options that we must technically consider,” she said.
Meanwhile, banks in other troubled European nations are already on shaky ground. The Spanish banking system is an absolute disaster zone at this point and on Monday night Moody’s downgraded the credit ratings of 26 Italian banks.
The situation in Italy is especially worth keeping a close eye on. As Ambrose Evans-Pritchard recently noted, things are not looking good for Italy at all….
Italy’s former premier Romano Prodi said the EU risks instant contagion to Spain, Italy, and France if Greece leaves. “The whole house of cards will come down”, he said
Angelo Drusiani from Banca Albertini said the only way to avert catstrophe is to convert the European Central Bank into a lender of last resort. Otherwise Italy faces “massive devaluation, three to five years of hyperinflation, and unbearable unemployment.”
So what can be done about any of this?
Well, there is actually a lot that could be done if politicians in Europe were willing to think outside of the established global financial paradigm.
The truth is that Greece could solve their current financial problems in four easy steps. They would have to be willing to stick it to the rest of Europe and to risk being blackballed by the international community, but it could be done.
The following is my prescription for Greece….
1) Default on all debts.
2) Leave the euro.
3) Issue drachmas that are debt-free and that do not come from a central bank. Instead, have the Greek government create them and spend them directly into circulation.
4) Enjoy a return to prosperity.
In such a scenario, the Greek national debt would no longer be a problem, the Greek government would never have to borrow any more money and austerity would no longer be needed.
Yes, inflation would be an issue with the new currency, but a bit of inflation would be a walk in the park compared to the horrible economic depression that Greece is experiencing right now.
And once the Greek economy was growing again, it would certainly be possible for them to make the transition to “hard money” if they wanted to.
It is imperative that we all understand that just because the global financial system works a certain way today does not mean that it must always work that way.
If you have a few minutes, I want you to watch an incredible speech by a 12-year-old Canadian girl named Victoria Grant. In this 6 minute speech, she details how the bankers are defrauding the people of Canada and how the Canadian government does not actually need to borrow a single penny from the bankers….
If a 12-year-old girl can figure this out, then why can’t the rest of us?
Sadly, the financial world still seems enamored with the corrupt central banking system that has gotten us into this mess. In fact, one recent poll found that Federal Reserve Chairman Ben Bernanke has a 75 percent approval rating from global investors.
Right now, America is going down the same path as Greece, Spain and Italy have gone. Eventually we will hit a wall and our financial system will fall apart.
We need the American people to understand that the Federal Reserve system is a perpetual debt machine. The U.S. national debt is now more than 5000 times larger than it was when the Fed was first created. It is at the very core of our national financial problems.
When will people wake up and realize that central banking is the problem and not the solution?
When will people wake up and realize that national governments do not have to go into debt to anyone if they do not want to?
In our world today, there is far more debt than there is money.
It is a system that will inevitably crash.
But there are other alternatives.
Unfortunately, politicians all over the globe continue to want to be married to our current debt-based financial system.
As a result, we will suffer the consequences of that system.
You are not going to believe how much money is being spent on our former presidents. At a time when U.S. government spending is wildly out of control, a total of 3.6 million dollars is being used to support the lavish lifestyles of former presidents such as George W. Bush and Bill Clinton in 2012. For 2013, the plan is to increase that amount to 3.7 million dollars. But do any of them really need this kind of welfare? The truth is that all of them are very wealthy. So what justification is there for giving them so much money? You can see the GSA budget proposal for former presidents for 2013 right here. The 3.7 million dollars for 2013 does not even include the cost of Secret Service protection. Rather, it only covers expenses such as office rentals, travel, phone bills, postage, printing and pension benefits. Certainly it is not unreasonable to grant former presidents a small pension, but should we be showering them with millions of dollars each year? At a time when the federal government is drowning in so much debt, the fact that these former presidents are willing to take such huge amounts of taxpayer money really does make them look like parasites.
So why are these former presidents getting this money?
Well, these days former presidents are definitely not in danger of ending up poor. But this law does enable former presidents to stick the U.S. taxpayer with some absolutely outrageous bills.
For example, George W. Bush is scheduled to get $1,356,000 from U.S. taxpayers in 2013.
$85,000 of that will be for phone expenses.
He must have a really, really bad calling plan.
Bill Clinton is scheduled to get $1,019,000 from U.S. taxpayers in 2013.
A whopping $442,000 of that will be for office space.
That breaks down to more than $36,000 a month.
I hope that office space is nice.
Perhaps he needs a lot of office space to hide from Hillary.
George H.W. Bush is scheduled to get $879,000 from U.S. taxpayers in 2013.
$63,000 of that total will be going toward “equipment”.
How many iPads does he really need?
Even the old peanut farmer, Jimmy Carter, will be getting $518,000 from U.S. taxpayers in 2013.
But do they even need this money?
Exactly how wealthy are these former presidents?
Well, it turns out that they are very, very wealthy.
Bill Clinton earned an estimated $41 million in speaking fees during the first six years after he left office. He also received a $12 million advance for for his memoir, “My Life”.
George W. Bush earned an estimated $15 million in speaking fees during just the first two years after he left office.
So why are we spending millions to support these guys?
Perhaps this is yet another question that we don’t have an answer to. We can add it to the list….
-Why do chimps throw poop?
The federal government has spent $592,527 to try to find the answer.
-Do unhappy people spend more time on Twitter or on Facebook?
The federal government has spent $198,000 in an attempt to get an answer.
-How do rats respond to jazz music when they are high on cocaine?
Your tax dollars are being spent to get to the bottom of it.
-Does cocaine cause Japanese quail to engage in sexually risky behavior?
The federal government has spent $175,587 to find out the truth.
Right now there are more than 100 million working age Americans that do not have jobs, and this is the kind of nonsense that the federal government is spending money on.
Shame on these former presidents for taking this money.
If our Congress critters are looking for a place to cut the federal budget, this would be a good place to start.
The results of the elections in France and Greece have made it abundantly clear that there is a tremendous backlash against the austerity approach that Germany has been pushing. All over Europe, prominent politicians and incumbent political parties are being voted out. In fact, Nicolas Sarkozy has become the 11th leader of a European nation to be defeated in an election since 2008. We have seen governments fall in the Netherlands, the UK, Spain, Ireland, Italy, Portugal and Greece. Whenever they get a chance, the citizens of Europe are using the ballot box to send a message that they do not like what is going on. It turns out that austerity is extremely unpopular. But if newly elected politicians all over Europe begin rejecting austerity, this puts Germany in a very difficult position. Should Germany be expected to indefinitely bail out all of the members of the eurozone that choose to live way beyond their means? If Germany pulled out of the euro tomorrow, the euro would absolutely collapse, bond yields for the rest of the eurozone would skyrocket to unprecedented heights, and without German bailout money troubled nations such as Greece would be headed directly for default. The rest of the eurozone is absolutely and completely dependent on Germany at this point. But as we have seen, much of the rest of the eurozone is sick and tired of taking orders from Germany and is rejecting austerity. A lot of politicians in Europe apparently believe that they should be able to run up gigantic amounts of debt indefinitely and that the Germans should be expected to always be there to bail them out whenever they need it. Will the Germans be willing to tolerate such a situation, or will they simply pick up their ball and go home at some point?
Over the past several years, German Chancellor Angela Merkel and French President Nicolas Sarkozy have made a formidable team. They worked together to push the eurozone on to the path of austerity, but now Sarkozy is out.
Francois Hollande, the new French president, has declared that the financial world is his “greatest enemy“.
He may regret making that statement.
One of the primary reasons why Hollande was elected was because he clearly rejected the austerity approach favored by the Germans. Shortly after winning the election in France, he made the following statement….
“Europe is watching us, austerity can no longer be the only option”
Hollande says that he wants to “renegotiate” the fiscal pact that European leaders agreed to under the leadership of Merkel and Sarkozy.
But Merkel says that is not going to happen. The following Merkel quotes are from a recent CNBC article….
“We in Germany are of the opinion, and so am I personally, that the fiscal pact is not negotiable. It has been negotiated and has been signed by 25 countries,” Merkel told a news conference.
“We are in the middle of a debate to which France, of course, under its new president will bring its own emphasis. But we are talking about two sides of the same coin — progress is only achievable via solid finances plus growth,” she added.
So instead of being on the same page, Germany and France are now headed in opposite directions.
But if the French do not get their debt under control, they could be facing a huge crisis of their own very quickly. The following is from a recent article by Ambrose Evans-Pritchard….
“They absolutely must cut public spending and control the debt,” said Marc Touati from Global Equities in Paris. “It will soon be clear that we are in deep recession. If they don’t act fast, interest rates will shoot up and we will have a catastrophe by September,” he said.
Without German help, France is not going to be able to handle its own financial problems – much less bail out the rest of Europe.
Germany is holding all of the cards, but much of the rest of the eurozone does not seem afraid to defy Germany at this point.
In Greece, anti-bailout parties scored huge gains in the recent election.
None of the political parties in Greece were able to reach 20 percent of the vote, and there is a tremendous amount of doubt about what comes next.
New Democracy (the “conservatives”) won about 19 percent of the vote, but they have already announced that they have failed to form a new government.
So now it will be up to the second place finishers, the Syriza party (the radical left coalition), to try to form a new government.
Alexis Tsipras, the leader of the Syriza party, is very anti-austerity. He made the following statement the other night….
“The people of Europe can no longer be reconciled with the bailouts of barbarism.”
But at this point, it seems very doubtful that Syriza will be able to form a new government either.
PASOK, the socialists that have been pushing through all of the recent austerity measures, only ended up with about 13 percent of the vote. In the 2009 election, PASOK got 44 percent of the vote. Obviously their support of the austerity measures cost them dearly.
So what happens if none of the parties are able to form a new government?
It means that new elections will be held.
Meanwhile, Greece must somehow approve more than 11 billion euros in additional budget cuts by the end of June in order to receive the next round of bailout money.
Greece is currently in its 6th year of economic contraction, and there is very little appetite for more austerity in Greece at this point.
Citibank analysts are saying that there is now a 50 to 75 percent chance that Greece is going to be forced to leave the euro….
Overall, the outcome of the Greek election shows that it will be very difficult to form a viable coalition and to implement the measures required in the MoU. Particularly, the identification of the 7% GDP of budget savings for 2013 and 2014 by the end of June looks very unlikely to us. As a consequence, in a first step, the Troika is likely to delay the disbursement of the next tranche of the programme. Note that for 2Q 2012, disbursements of €31.3bn from the bailout programme are scheduled. If Greece does not make progress, in a second step, the Troika is likely to stop the programme. If that happens, the Greek sovereign and its banking sector would run out of funding. As a consequence, we expect that Greece would be forced to leave the euro area. With the outcome of the election, to us the probability of a Greek exit is now larger than our previous estimate of 50%, and rises to between 50-75%. However, even after the elections in Greece, France and Germany, we regard the probability of a broad-based break up of the monetary union as very low. We continue to expect that in reaction to Greece leaving the euro area, more far-reaching measures from governments and the ECB would be put in place.
But if Greece rejects austerity that does not mean that it has to leave the eurozone.
There is no provision that allows for the other nations to kick them out.
Greece could say no to austerity and dare Germany and the rest of the eurozone to keep the bailout money from them.
If Greece defaulted, it would severely damage the euro and bond yields all over the eurozone would likely skyrocket – especially for troubled countries like Spain and Italy.
If Greece wanted to play hardball, they could simply choose to play a game of “chicken” with Germany and see what happens.
Would Germany and the rest of the eurozone be willing to risk a financial disaster just to teach Greece a lesson?
But Greece is not the only one that is in trouble.
As I wrote about recently, the Spanish economy is rapidly heading into an economic depression.
Now it has come out that the Spanish government is going to bail out a major Spanish bank. The following is from a recent Bloomberg article….
Rodrigo Rato stepped down as head of the Bankia group as a government bailout loomed after Spanish Prime Minister Mariano Rajoy retreated from a pledge to avoid using public money to save lenders.
Rato, a former International Monetary Fund managing director, proposed Jose Ignacio Goirigolzarri, ex-president and chief operating officer of Banco Bilbao Vizcaya Argentaria SA (BBVA), as Bankia executive chairman, he said in a statement today in Madrid. The government plans to inject funds into the lender by buying contingent-capital securities, said an Economy Ministry official who declined to be named as the plan isn’t public.
But this is just the beginning.
Major banks all over Europe are going to need to be bailed out, and countries such as Portugal, Italy and Spain are going to need huge amounts of financial assistance.
So does Germany want to keep rescuing the rest of the eurozone over and over again during the coming years? The cost of doing this would likely be astronomical. The following is from a recent New York Times article….
Bernard Connolly, a persistent critic of Europe, estimates it would cost Germany, as the main surplus-generating country in the euro area, about 7 percent of its annual gross domestic product over several years to transfer sufficient funds to bail out Europe’s debt-burdened countries, including France.
That amount, he has argued, would far surpass the huge reparations bill foisted upon Germany by the victorious powers after World War I, the final payment of which Germany made in 2010.
At some point, Germany may decide that enough is enough.
In fact, there have been persistent rumors that Germany has been very quietly preparing to leave the euro.
A while back, German Chancellor Angela Merkel’s Christian Democratic Union party approved a resolution that would allow a nation to leave the euro without leaving the European Union.
Many believed that this resolution was aimed at countries like Greece or Portugal, but the truth is that the resolution may have been setting the stage for an eventual German exit from the euro.
The following is an excerpt from that resolution….
“Should a member [of the euro zone] be unable or unwilling to permanently obey the rules connected to the common currency he will be able to voluntarily–according to the rules of the Lisbon Treaty for leaving the European Union–leave the euro zone without leaving the European Union. He would receive the same status as those member states that do not have the euro.”
Most analysts will tell you that they think that it is inconceivable that Germany could leave the euro.
But stranger things have happened.
And Germany has made some very curious moves recently.
For example, Germany recently reinstated its Special Financial Market Stabilization Funds. Those funds could be utilized to bail out German banks in the event of a break up of the euro. The following is from a recent article by Graham Summers….
In short, Germany has given the SoFFIN:
€400 billion to be used as guarantees for German banks.
€80 billion to be used for the recapitalization of German banks
Legislation that would permit German banks to dump their euro-zone government bonds if needed.
That is correct. Any German bank, if it so chooses, will have the option to dump its EU sovereign bonds into the SoFFIN during a Crisis.
In simple terms, Germany has put a €480 billion firewall around its banks. It can literally pull out of the Euro any time it wants to.
So has Germany been quietly preparing a plan “B” just in case the rest of the eurozone rejected the path of austerity?
Most people have assumed that it will be a nation such as Greece or Portugal that will leave the euro first, but in the end it just might be Germany.
And the “smart money” is definitely betting on something big happening.
Right now some of the largest hedge funds in the world are betting against the eurozone as a recent Daily Finance article described….
Some of the world’s most prominent hedge fund managers are betting against the eurozone — and not just the peripheral countries everyone knows are in trouble. They’re taking positions against the core countries, economies that — until now — everyone has assumed were rock-solid.
Yes, the countdown to the break up of the euro has officially begun.
A great financial crisis is going to erupt in Europe, and it is going to shake the world to the core.
If you were frightened by what happened back in 2008, then you are going to be absolutely horrified by what is coming next.
At a time when America desperately needs to come together, we are becoming more divided than ever. The mainstream media and most of our politicians love to pit us against one another in dozens of different ways, and right now class warfare has become one of their favorite tools for getting us to hate one another. If you are struggling in this economy, you are being told that “the wealthy” are the cause of your problems. If you have money, you are being told that the poor hate you and want to tax you into oblivion. Class warfare has already become a dominant theme in the 2012 race for the White House, and there will certainly be endless speeches given along these lines by politicians from both major political parties all the way up to election day. Class warfare will be used by both sides as a way to divide America and get votes. And the frightening thing is that it is clearly working. There is more hatred between the poor and the wealthy in America today than at any other time that I can remember. But hating people because of how much money they have or don’t have is not going to solve anything. Instead, it is just going to cause more problems.
The other day, Yale economics professor Robert Shiller told CNBC that the globe is already in a state of “late Great Depression“. The United States is heading into unprecedented economic and financial problems and we desperately need to pull together as a country and solve these problems.
But instead, our leaders are tapping into the politics of division in a desperate attempt to get elected in the fall.
Rather than focus on real issues and real solutions, our politicians attempt to make “the wealthy” or “welfare recipients” the focus of our debates.
Well, you know what?
Most people that are rich and most people that are poor are not purposely trying to abuse the system. Most of them are hard working people that are trying to do the best that they can in a world that is increasingly going crazy.
These days, the Occupy Wall Street crowd loves to talk about how evil the “1 percent” is. But most of the “1 percent” are people that have worked really hard and that have been fortunate enough to get some really good breaks in life.
Yes, there are some among the “1 percent” that do some really bad things. The too big to fail banks and the big money managers on Wall Street should be held accountable for the crimes that they have committed.
But most wealthy Americans are not trying to oppress the poor. Most of them are just trying to do the best that they can for themselves and their families.
Neither are most poor people trying to abuse the system either.
Yes, without a doubt there are some that do not want to work and that want to live on government benefits indefinitely.
But that is a minority.
Most Americans that are receiving government benefits today would rather be working good jobs that would enable them to provide for their families.
Most Americans understand that government handouts can never provide dignity and hope for a better future.
But if you don’t demonize the poor and you point out the decline of the middle class, many Republicans will call you a “liberal” or a “socialist”.
And if you don’t demonize the rich and you don’t blame them for all of our economic problems, many Democrats will call you a “pig” or a “fascist”.
Unfortunately, playing the blame game is not going to get us anywhere.
The number of Americans living in poverty increased dramatically under George W. Bush and it also increased dramatically under Barack Obama.
Sadly, Americans seem to really enjoy blaming one another these days. Just check out some of the slogans that have been seen on various signs at Occupy Wall Street protests….
“They Only Call It Class Warfare When We Fight Back”
“Eat The Rich – Feed The Poor”
“The Rich Are Wrecking The Planet”
So will destroying the lives of the rich solve our problems?
Of course not.
The truth is that we should want millions more Americans to be prosperous. We should be cheering for one another instead of tearing one another down.
But that is heresy to many on the left.
On the right, it is heresy even to mention that our tax system is fundamentally flawed and that it has thousands of loopholes that are being abused by the very wealthy.
In a previous article, I detailed how many of the largest and most profitable corporations in America get away with paying absolutely nothing in taxes.
There is something very wrong with that.
Our income tax system should be abolished altogether, but if we do have to pay income taxes, then it is fundamentally unfair for some people and businesses to be able to pay little or nothing while the rest of us get absolutely obliterated by taxes.
But if you try to say that to many on the right, they will look at you in horror.
The other day, there was a New York Times article that detailed the extreme measures that Apple takes to avoid paying taxes. It turns out that Apple sets up shell offices all over the globe in order to evade taxation….
As it has in Nevada, Apple has created subsidiaries in low-tax places like Ireland, the Netherlands, Luxembourg and the British Virgin Islands — some little more than a letterbox or an anonymous office — that help cut the taxes it pays around the world.
That same article talked about how Apple has become a model which hundreds of other companies have followed. To giant corporations such as Apple, tax evasion has become an art form….
Apple, for instance, was among the first tech companies to designate overseas salespeople in high-tax countries in a manner that allowed them to sell on behalf of low-tax subsidiaries on other continents, sidestepping income taxes, according to former executives. Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations — some of which directly imitated Apple’s methods, say accountants at those companies.
So what is the solution to all of this?
Raising income taxes won’t work too well because the tax lawyers are always several steps ahead of our politicians.
The truth is that when taxes get raised it is always the middle class that gets absolutely clobbered and the wealthy always find more ways to reduce their exposure.
Just take a look at Mitt Romney. He made more than 42 million dollars in 2010 and yet Romney had an effective tax rate of only 14 percent.
If I could find a way to have an effective tax rate of only 14 percent I would be jumping up and down for joy, and so would millions of other Americans.
Our tax system is deeply, deeply broken and needs to be thrown into the trash can.
Abandoning the current tax system would not solve all of our problems, but it would be a start.
Unfortunately, neither political party is willing to even consider this.
Instead, the Democrats want to raise taxes a little bit and the Republicans want to lower taxes a little bit.
But neither alternative will do much of anything to solve any of the real problems we are facing.
Our economy is dying and it is not producing nearly enough jobs for all of us. When Barack Obama took office, the number of “long-term unemployed workers” in America was 2.6 million. Today, it is 5.3 million.
At this point, an astounding 53 percent of all college graduates under the age of 25 are either unemployed or underemployed.
So where is all of the “change” that Obama promised?
Things just keep getting worse.
Since Obama has been in the White House, 14 million more Americans have gone on food stamps, and more than 25 percent of all American children are enrolled in the program today.
How will class warfare help those people?
Will blaming the wealthy make things better for them?
They are already receiving government handouts.
Will increasing those handouts a little bit more fundamentally change their lives for the better?
Of course not.
What those people need are good jobs.
But instead, both the Democrats and the Republicans continue to pursue the same job killing policies that have been destroying American jobs for decades.
In a previous article, I detailed the explosive growth of social welfare benefits that we have seen under both Republicans and Democrats….
Back in 1960, social welfare benefits made up approximately 10 percent of all salaries and wages. In the year 2000, social welfare benefits made up approximately 21 percent of all salaries and wages. Today, social welfare benefits make up approximately 35 percent of all salaries and wages.
The goal should not be to rape the rich and give out even more social welfare benefits.
Instead, the goal should be to develop an economy that creates good jobs.
We need have an economy that empowers individuals and small businesses.
Instead, we have an economy dominated by big government and big corporations.
We have an economy that funnels the vast majority of the economic rewards to a tiny elite while most of the rest of us struggle.
Just consider the following statistics….
*Back in the 1970s, the top 1 percent of all income earners in the United States brought in about 8 percent of all income. Today, they bring in about 21 percent of all income.
*The following is how income gains in the U.S. were distributed during 2010….
-37 percent of all income gains went to the top 0.01 percent of all income earners
-56 percent of all income gains went to the rest of the top 1 percent
-7 percent of all income gains went to the bottom 99 percent
*According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.
So what is the solution to that problem?
Is it to attack the rich and take away all their money and give more government handouts to the poor?
Of course not.
Rather, we need to change the rules of the game so that individuals and small businesses are empowered to succeed.
We need to decentralize economic power and dramatically reduce the undue influence that big government and giant corporations have over our economic system.
We need to create an environment where almost anyone that has a good idea and that is willing to work hard can succeed.
But instead of focusing on real solutions like shutting down the Federal Reserve, converting to debt-free currency, eliminating the income tax, shutting down the IRS, massively reducing the size of government and getting rid of thousands upon thousands of unneeded regulations, the mainstream media and our politicians are going to continue to try to get Americans to blame one another for our problems.
The efforts to divide America are working, and hatred is growing to unprecedented levels in this country.
Eventually this will lead to mass rioting in our major cities and that will make our problems far worse.
Hatred and division are not going to bring us a better future.
They are only going to destroy us from within.
We don’t need hate.
What we need is more love and more solutions.
Unfortunately, our leaders are leading us down a very dark path, and we are heading for a future that is going to be a complete mess.
Why do chimpanzees throw poop? The federal government would like to know and is using your tax dollars to investigate the matter. Every single year, we all send huge amounts of our hard-earned money to the federal government. We hope that they will spend that money wisely. Unfortunately, that is simply not the case. You are about to read some examples of how the government is wasting your money that are absolutely mind blowing. Anyone that claims that there is not a lot of waste that can be cut out of the federal budget is lying to you. Our politicians have racked up the biggest pile of debt in the history of the world and they are spending our money on some of the stupidest things imaginable. It is imperative that the American people be educated about all of this outrageous government waste, because right now the political will to change this corrupt system is simply not there among the current crop of politicians in Washington. We are stealing trillions of dollars from future generations and many of the things that our politicians are wasting that money on are almost too bizarre to believe.
The following are 30 mind blowing ways that the government is wasting your money….
#1 In 2011, the National Institutes of Health spent $592,527 on a study that sought to figure out once and for all why chimpanzees throw poop.
#2 The National Institutes of Health has spent more than 5 million dollars on a website called Sexpulse that is targeted at “men who use the Internet to seek sex with men”. According to Fox News, the website “includes pornographic images of homosexual sex as well as naked and scantily clad men” and features “a Space Invaders-style interactive game that uses a penis-shaped blaster to shoot down gay epithets.”
#3 The General Services Administration spent $822,751 on a “training conference” for 300 west coast employees at the M Resort and Casino in Las Vegas.
The following is how the Washington Post described some of the wasteful expenses that happened during this “conference”….
Among the “excessive, wasteful and in some cases impermissable” spending the inspector general documented: $5,600 for three semi-private catered in-room parties and $44 per person daily breakfasts; $75,000 for a “team-building” exercise — the goal was to build a bicycle; $146,000 on catered food and drinks; and $6,325 on commemorative coins in velvet boxes to reward all participants for their work on stimulus projects. The $31,208 “networking” reception featured a $19-per-person artisanal cheese display and $7,000 of sushi. At the conference’s closing-night dinner, employees received “yearbooks” with their pictures, at a cost of $8,130.
You can see some stunning pictures of GSA employees living the high life in Las Vegas right here.
#4 Do you remember a few days ago when credit rating agency Egan Jones downgraded U.S. government debt from AA+ to AA? Well, someone in the federal government apparently did not like that at all. According to Zero Hedge, the SEC plans to file charges against Egan Jones for “misstatements” on a regulatory application with the SEC.
Normally, the SEC does not go after anyone. After all, when is the last time a major banker went to prison?
No, the truth is that the SEC is usually just a huge waste of taxpayer money. According to ABC News, one investigation found that 17 senior SEC officials had been regularly viewing pornography while at work. While the American people were paying their salaries, this is what senior SEC officials were busy doing….
One senior attorney at SEC headquarters in Washington spent up to eight hours a day accessing Internet porn, according to the report, which has yet to be released. When he filled all the space on his government computer with pornographic images, he downloaded more to CDs and DVDs that accumulated in boxes in his offices.
An SEC accountant attempted to access porn websites 1,800 times in a two-week period and had 600 pornographic images on her computer hard drive.
Another SEC accountant used his SEC-issued computer to upload his own sexually explicit videos onto porn websites he joined.
And another SEC accountant attempted to access porn sites 16,000 times in a single month.
#5 According to InformationWeek, the federal government is spending “millions of dollars” to train Asian call center workers.
#6 If you can believe it, the federal government has actually spent $750,000 on a new soccer field for detainees held at Guantanamo Bay.
#7 The U.S. Agency for International Development spent 10 million dollars to create a version of “Sesame Street” for Pakistani television.
#8 The Obama administration has plans to spend between 16 and 20 million dollars to help students from Indonesia get master’s degrees.
#9 The National Science Foundation spent $198,000 on a University of California-Riverside study that explored “motivations, expectations and goal pursuit in social media.” One of the questions the study sought an answer to was the following: “Do unhappy people spend more time on Twitter or Facebook?”
#10 The federal government actually has spent $175,587 “to determine if cocaine makes Japanese quail engage in sexually risky behavior”.
#11 In 2011, $147,138 was given to the American Museum of Magic in Marshall, Michigan. Their best magic trick is making U.S. taxpayer dollars disappear.
#12 The federal government recently spent $74,000 to help Michigan “increase awareness about the role Michigan plays in the production of trees and poinsettias.”
#13 In 2011, the federal government gave $550,000 toward the making of a documentary about how rock and roll contributed to the fall of the Soviet Union.
#14 The National Institutes of Health has contributed $55,382 toward a study of “hookah smoking habits” in the country of Jordan.
#15 The federal government gave $606,000 to researchers at Columbia University to study how heterosexuals use the Internet to find love.
#16 A total of $133,277 was recently given to the International Center for the History of Electronic Games for video game preservation. The International Center for the History of Electronic Games says that it “collects, studies, and interprets video games, other electronic games, and related materials and the ways in which electronic games are changing how people play, learn, and connect with each other, including across boundaries of culture and geography.”
#17 The federal government has given approximately $3 million to researchers at the University of California at Irvine to fund their research into video games such as World of Warcraft.
#18 In 2011, the National Science Foundation gave one team of researchers $149,990 to create a video game called “RapidGuppy” for cell phones and other mobile devices.
#19 The U.S. Department of Agriculture once handed researchers at the University of New Hampshire $700,000 to study methane gas emissions from dairy cows.
#20 In 2011, $936,818 was spent developing an online soap opera entitled “Diary of a Single Mom”. The show “chronicles the lives and challenges of three single mothers and their families trying to get ahead despite obstacles that all single mothers face, such as childcare, healthcare, education, and finances.”
#21 The federal government once shelled out $2.6 million to train Chinese prostitutes to drink responsibly.
#22 Last year, the federal government spent $96,000 to buy iPads for kindergarten students in Maine.
#23 The U.S. Postal Service once spent $13,500 for a single dinner at Ruth’s Chris Steakhouse.
#24 In 2011, the Air Force Academy completed work on an outdoor worship area for pagans and Wiccans. The worship area consists of “a small Stonehenge-like circle of boulders with [a] propane fire pit” and it cost $51,474 to build. The worship area is “for the handful of current or future cadets whose religions fall under the broad category of ‘Earth-based’, which includes Wiccans, druids and pagans.” At this point, that only includes 3 current students at the Air Force Academy.
#25 The National Institutes of Health once gave researchers $400,000 to study why gay men in Argentina engage in risky sexual behavior when they are drunk.
#26 The National Institutes of Health once gave researchers $442,340 to study the behavior of male prostitutes in Vietnam.
#27 The National Institutes of Health once spent $800,000 in “stimulus funds” to study the impact of a “genital-washing program” on men in South Africa.
#28 The National Science Foundation recently spent $200,000 on a study that examined how voters react when politicians change their stances on climate change.
#29 The federal government recently spent $484,000 to help build a Mellow Mushroom pizzeria in Arlington, Texas.
#30 At this point, China is holding over a trillion dollars of U.S. government debt. But that didn’t stop the United States from sending 17.8 million dollars in foreign aid to China in 2011.
Do you feel good about paying your federal taxes after reading all of those examples of wasteful government spending?
All over America, middle class families are scratching and clawing in an effort to survive in this economy, and the oppressive levels of taxation imposed on those families certainly does not make things any easier for them.
It is tremendously immoral for the federal government to take money out of the hands of hard working families and spend it on such ridiculous things.
So what do you all think about the list above?
Do you have any things that you would add to that list?
Are you disgusted by how the federal government is mismanaging our money?
Feel free to leave a comment with your opinion below….
The middle class in America is being systematically wiped out, and most people don’t even realize what is happening. Every single year, millions more Americans fall out of the middle class and become dependent on the government. The United States once had the largest and most vibrant middle class in the history of the world, but now the middle class is rapidly shrinking and government dependence is at an all-time high. So why is this happening? Well, America is becoming a poorer nation at the same time that wealth is becoming extremely concentrated at the very top. At this point, our economic system is designed to funnel as much money and power to the federal government and to the big corporations as possible. Individuals and small businesses have a really hard time thriving in this environment. To most big corporations these days, workers are viewed as financial liabilities. Most corporations want to reduce their payrolls as much as possible. You see, the truth is that most corporations want to be just like Apple. If you can believe it, Apple makes $400,000 in profit per employee. Big corporations don’t care that you need to pay the mortgage and provide for your family. Their goal is to make as much money as possible. And most of the control freaks that run our bloated federal government don’t care much about middle class families either. To many politicians and federal bureaucrats, middle class families are “useless eaters” that are constantly damaging the environment with their “excessive” lifestyles. In this day and age, neither the federal government nor the big corporations really have much use for middle class Americans, and that is really, really bad news for the the future of the middle class family in America.
There are three key factors that are constantly chipping away at the middle class….
-Globalization
-Inflation
-Taxes
Labor has become a global commodity, and American workers are often 10 to 20 times as expensive as workers on the other side of the world are. Middle class jobs (such as manufacturing, etc.) have been leaving this country at an astounding pace. Competition for the jobs that remain has become extremely fierce, and this has driven wages down. The following is from a recent article in the New York Times….
But in the last two decades, something more fundamental has changed, economists say. Midwage jobs started disappearing. Particularly among Americans without college degrees, today’s new jobs are disproportionately in service occupations — at restaurants or call centers, or as hospital attendants or temporary workers — that offer fewer opportunities for reaching the middle class.
As paychecks have stagnated, the cost of living has continued to escalate. Middle class families are finding that their paychecks simply do not go nearly as far as they did before. This is creating a tremendous amount of financial stress in households all over America.
Meanwhile, our politicians are taxing the middle class like crazy. Most people only focus on federal and state income taxes, but that is only a small part of the story. As I detailed the other day, our politicians are taxing us in literally dozens of different ways and it is almost always the middle class that ends up getting hit the hardest.
If America wants to be great again, it is going to need a thriving middle class. But right now the federal government and the big corporations are gobbling up all of the power and all of the money and the middle class is shrinking rapidly.
If current trends continue, eventually there will not be much of a middle class left.
The following are 25 signs that middle class families have been targeted for extinction….
#1 Over the past several decades, millions upon millions of middle class Americans have been systematically turned into government dependents. Back in 1960, social welfare benefits made up approximately 10 percent of all salaries and wages. In the year 2000, social welfare benefits made up approximately 21 percent of all salaries and wages. Today, social welfare benefits make up approximately 35 percent of all salaries and wages.
#2 Unemployment is at epidemic levels and the vast majority of the new jobs that have been “created” in recent years have been low paying jobs. Of those Americans that do have a job at this point, one out of every four works a job that pays $10 an hour or less.
#3 The “working poor” is a group that is rapidly growing in this country. If you can believe it, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.
#4 Over the past several decades, the percentage of low income jobs has steadily increased. Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.
#5 The way that our economic system is structured today, almost all of the economic rewards go to the very top of the food chain. The following is how income gains in the United States were distributed during 2010….
-37 percent of all income gains went to the top 0.01 percent of all income earners
-56 percent of all income gains went to the rest of the top 1 percent
-7 percent of all income gains went to the bottom 99 percent
#6 Several decades ago, there was a much more even distribution of income in this country. Back in the 1970s, the top 1 percent of all income earners brought in about 8 percent of all income. Today, they bring in about 21 percent of all income.
#7 As the middle class shrinks, the number of “low income” and “poor” Americans is rapidly rising. Today, approximately 48 percent of all Americans are currently either considered to be “low income” or are living in poverty.
#8 Manufacturing jobs once enabled huge numbers of Americans to enjoy a middle class lifestyle. Unfortunately, those jobs are leaving this country at a breathtaking pace. Back in 1940, 23.4% of all American workers had manufacturing jobs. Today, only 10.4% of all American workers have manufacturing jobs.
#9 In the old days, any man that was willing to work hard and wanted a job could get one. Today, there are millions of American men sitting on their couches at home wondering why nobody will hire them. Back in 1950, more than 80 percent of all men in the United States had jobs. Today, less than 65 percent of all men in the United States have jobs.
#10 The middle class is shrinking at the same time that America is getting poorer as a nation. In the middle of the last century, the United States was #1 in the world in GDP per capita. Today, the United States is #13 in GDP per capita.
#11 Every year now, we see millions of Americans fall out of the middle class. In 2010, 2.6 million more Americans descended into poverty. That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.
#12 The shrinking middle class is having a disproportionate impact on children. At this point, approximately 22 percent of all American children are living in poverty.
#13 In the old days, most Americans grew up in middle class neighborhoods. Sadly, this is no longer true. In 1970, 65 percent of all Americans lived in “middle class neighborhoods”. By 2007, only 44 percent of all Americans lived in “middle class neighborhoods”.
#14 The concentration of wealth at the very top of the food chain is astounding. Right now, over 50 percent of all stocks and bonds are owned by just 1 percent of the U.S. population.
#15 When you concentrate too much power in the hands of the federal government and the big corporations, it is inevitable that massive amounts of wealth will become concentrated in just a few hands. In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.
#16 There is nothing wrong with making money, but there is something wrong with a game where individuals and small businesses cannot compete fairly. According to Forbes, the 400 wealthiest Americans now have more wealth than the bottom 150 million Americans combined.
#17 When the number of poor people rapidly expands in a society, that is a recipe for social unrest. At this point, the poorest 50 percent of all Americans collectively own just 2.5% of all the wealth in the United States.
#18 The hidden tax of inflation is absolutely devastating middle class families all over America. Since 1970, the U.S. dollar has lost more than 83 percent of its value. Any dollars that middle class families try to save are constantly losing a little bit more value every single day.
#19 American workers that try to play by the rules find that they are constantly fighting a losing battle. According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 dropped by 27 percent after you account for inflation.
#20 In recent years, many middle class families have seen their paychecks get smaller. Median household income in the United States has fallen 7.8 percent since December 2007 after adjusting for inflation.
#21 In recent years, many middle class families have seen many of their basic expenses absolutely soar. For example, health insurance costs have risen by 23 percent since Barack Obama became president.
#22 Just turning on the lights and heating their homes has become a major burden for many middle class families. Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.
#23 Just putting gas in the car has become a major financial ordeal for millions of hard working Americans. The average price of a gallon of gasoline in the United States has increased by more than 100 percent since Barack Obama became president.
#24 Sadly, government dependence is now at an all-time high, and that is the way that many among the elite like it. When Barack Obama took office, there were 32 million Americans on food stamps. Now, there are more than 46 million Americans on food stamps. In particular, an astounding number of children are on food stamps right now. At this point, approximately one-fourth of all American children are enrolled in the food stamp program.
#25 Many middle class families will not be in the middle class for too much longer. According to a shocking new study from the National Bureau of Economic Research, 200,000 U.S. households will use the money from their tax refunds this year “to pay for bankruptcy filing and legal fees“.
Unless major changes are made on a national level, the middle class is going to continue to disappear.
If you are playing the game the way that the system tells you to play it and you expect to live a middle class lifestyle for many years to come there is a good chance that you will be deeply disappointed at some point.
Millions upon millions of Americans have done everything that the system told them to do and the system has still failed them. They got good grades all the way through school, they went to college, they worked really hard, they stayed out of trouble and they gave everything they could to their employers. In spite of all that, millions of hard working families have still lost their jobs and their homes in recent years.
Do not trust that the system will take care of you, and you should not trust that the government will take care of you either.
We don’t need the federal government to hand out more money to everyone. Government handouts are already at record levels and the government is not even coming close to paying for all of this reckless spending.
More government spending is not going to solve any of our problems.
Instead, what we need is an environment where the size and power of the federal government is limited and the size and the power of the big corporations is limited. We need an environment where individuals and small businesses can thrive and compete fairly.
Unfortunately, neither major political party is going to move us in that direction, so there is not much hope for solutions on the national level any time soon.
On an individual level, we can all learn how to prepare for the very difficult years that are coming. It is imperative that we all work to become more independent of the system, because the system could fail at any time.
If you have blind faith that your job will always be there and that the federal government will rescue you if the economy crashes then you are likely to be bitterly disappointed at some point.
The truth is that our economy is slowly dying and the great American middle class is being systematically wiped out.
Many of the things that worked in the past are not going to work any longer.
You can choose to adapt or you can suffer the consequences.
Our world is rapidly changing, and we all need to prepare for what is coming.
Most people think of a cashless society as something that is way off in the distant future. Unfortunately, that is simply not the case. The truth is that a cashless society is much closer than most people would ever dare to imagine. To a large degree, the transition to a cashless society is being done voluntarily. Today, only 7 percent of all transactions in the United States are done with cash, and most of those transactions involve very small amounts of money. Just think about it for a moment. Where do you still use cash these days? If you buy a burger or if you purchase something at a flea market you will still use cash, but for any mid-size or large transaction the vast majority of people out there will use another form of payment. Our financial system is dramatically changing, and cash is rapidly becoming a thing of the past. We live in a digital world, and national governments and big banks are both encouraging the move away from paper currency and coins. But what would a cashless society mean for our future? Are there any dangers to such a system?
Those are very important questions, but most of the time both sides of the issue are not presented in a balanced way in the mainstream media. Instead, most mainstream news articles tend to trash cash and talk about how wonderful digital currency is.
For example, a recent CBS News article declared that soon we may not need “that raggedy dollar bill” any longer and that the “greenback may soon be a goner”….
It’s what the wallet was invented for, to carry cash. After all, there was a time when we needed cash everywhere we went, from filling stations to pay phones. Even the tooth fairy dealt only in cash.
But money isn’t just physical anymore. It’s not only the pennies in your piggy bank, or that raggedy dollar bill.
Money is also digital – it’s zeros and ones stored in a computer, prompting some economists to predict the old-fashioned greenback may soon be a goner.
“There will be a time – I don’t know when, I can’t give you a date – when physical money is just going to cease to exist,” said economist Robert Reich.
So will we see a completely cashless society in the near future?
Of course not. It would be wildly unpopular for the governments of the world to force such a system upon us all at once.
Instead, the big banks and the governments of the industrialized world are doing all they can to get us to voluntarily transition to such a system. Once 98 or 99 percent of all transactions do not involve cash, eliminating the remaining 1 or 2 percent will only seem natural.
The big banks want a cashless society because it is much more profitable for them.
The big banks earn billions of dollars in fees from debit cards and they make absolutely enormous profits from credit cards.
But when people use cash the big banks do not earn anything.
So obviously the big banks and the big credit card companies are big cheerleaders for a cashless society.
Most governments around the world are eager to transition to a cashless society as well for the following reasons….
-Cash is expensive to print, inspect, move, store and guard.
-Counterfeiting is always going to be a problem as long as paper currency exists.
-Cash if favored by criminals because it does not leave a paper trail. Eliminating cash would make it much more difficult for drug dealers, prostitutes and other criminals to do business.
-Most of all, a cashless society would give governments more control. Governments would be able to track virtually all transactions and would also be able to monitor tax compliance much more closely.
When you understand the factors listed above, it becomes easier to understand why the use of cash is increasingly becoming demonized. Governments around the world are increasingly viewing the use of cash in a negative light. In fact, according to the U.S. government paying with cash in some circumstances is now considered to be “suspicious activity” that needs to be reported to the authorities.
This disdain of cash has also grown very strong in the financial community. The following is from a recent Slate article….
David Birch, a director at Consult Hyperion, a firm specializing in electronic payments, says a shift to digital currency would cut out these hidden costs. In Birch’s ideal world, paying with cash would be viewed like drunk driving—something we do with decreasing frequency as more and more people understand the negative social consequences. “We’re trying to use industrial age money to support commerce in a post-industrial age. It just doesn’t work,” he says. “Sooner or later, the tectonic plates shift and then, very quickly, you’ll find yourself in this new environment where if you ask somebody to pay you in cash, you’ll just assume that they’re a prostitute or a Somali pirate.”
Do you see what is happening?
Simply using cash is enough to get you branded as a potential criminal these days.
Many people are going to be scared away from using cash simply because of the stigma that is becoming attached to it.
This is a trend that is not just happening in the United States. In fact, many other countries are further down the road toward a cashless society than we are.
Up in Canada, they are looking for ways to even eliminate coins so that people can use alternate forms of payment for all of their transactions….
The Royal Canadian Mint is also looking to the future with the MintChip, a new product that could become a digital replacement for coins.
In Sweden, only about 3 percent of all transactions still involve cash. The following comes from a recent Washington Post article….
In most Swedish cities, public buses don’t accept cash; tickets are prepaid or purchased with a cell phone text message. A small but growing number of businesses only take cards, and some bank offices — which make money on electronic transactions — have stopped handling cash altogether.
“There are towns where it isn’t at all possible anymore to enter a bank and use cash,” complains Curt Persson, chairman of Sweden’s National Pensioners’ Organization.
In Italy, all very large cash transactions have been banned. Previously, the limit for using cash in a transaction had been reduced to the equivalent of just a few thousand dollars. But back in December, Prime Minister Mario Monti proposed a new limit of approximately $1,300 for cash transactions.
And that is how many governments will transition to a cashless society. They will set a ceiling and then they will keep lowering it and lowering it.
But is a cashless society really secure?
Of course not.
Bank accounts can be hacked into. Credit cards and debit cards can be stolen. Identity theft all over the world is absolutely soaring.
So companies all over the planet are working feverishly to make all of these cashless systems much more secure.
In the future, it is inevitable that national governments and big financial institutions will want to have all of us transition over to using biometric identity systems in order to combat crime in the financial system.
Many of these biometric identity systems are becoming quite advanced.
For example, just check out what IBM has been developing. The following is from a recent IBM press release….
You will no longer need to create, track or remember multiple passwords for various log-ins. Imagine you will be able to walk up to an ATM machine to securely withdraw money by simply speaking your name or looking into a tiny sensor that can recognize the unique patterns in the retina of your eye. Or by doing the same, you can check your account balance on your mobile phone or tablet.
Each person has a unique biological identity and behind all that is data. Biometric data – facial definitions, retinal scans and voice files – will be composited through software to build your DNA unique online password.
Referred to as multi-factor biometrics, smarter systems will be able to use this information in real-time to make sure whenever someone is attempting to access your information, it matches your unique biometric profile and the attempt is authorized.
Are you ready for that?
It is coming.
In the future, if you do not surrender your biometric identity information, you may be locked out of the entire financial system.
Another method that can be used to make financial identification more secure is to use implantable RFID microchips.
Yes, there is a lot of resistance to this idea, but the fact is that the use of RFID chips in animals and in humans is rapidly spreading.
Some U.S. cities have already made it mandatory to implant microchips into all cats and all dogs so that they can be tracked.
All over the United States, employees are being required to carry badges that contain RFID chips, and in some instances employers are actually requiring employees to have RFID chips injected into their bodies.
Increasingly, RFID chips are being implanted in the upper arm of patients that have Alzheimer’s disease. The idea is that this helps health care providers track Alzheimer’s patients that get lost.
In some countries, microchips are now actually being embedded into school uniforms to make sure that students don’t skip school.
Can you see where all of this is headed?
Some companies are even developing RFID technologies that do not require an injection.
One company called Somark has developed chipless RFID ink that is applied directly to the skin of an animal or a human. These “RFID tattoos” are applied in about 10 seconds using micro-needles and a reusable applicator, and they can be read by an RFID reader from up to four feet away.
Would you get an “RFID tattoo” if the government or your bank asked you to?
Some people out there are actually quite excited about these new technologies.
For example, a columnist named Don Tennant wrote an article entitled “Chip Me – Please!” in which he expressed his unbridled enthusiasm for an implantable microchip which would contain all of his medical information….
“All I can say is I’d be the first person in line for an implant.”
But are there real dangers to going to a system that is entirely digital?
For example, what if a devastating EMP attack wiped out our electrical grid and most of our computers from coast to coast?
How would we continue to function?
Sadly, most people don’t think about things like that.
Our world is changing more rapidly than ever before, and we should be mindful of where these changes are taking us.
Just because our technology is advancing does not mean that our world is becoming a better place.
There are millions of Americans that want absolutely nothing to do with biometric identity systems or RFID implants.
But the mainstream media continues to declare that nothing can stop the changes that are coming. A recent CBS News article made the following statement….
“Most agree a cashless society is not only inevitable, for most of us, it’s already here.”
Well, it is official. The restructuring deal between Greece and private investors has been pushed through and the International Swaps and Derivatives Association has ruled that this is a credit event which will trigger credit-default swap contracts. The ISDA is saying that there are approximately $3.2 billion in credit-default swap contracts on Greek debt outstanding, and most analysts expect that the global financial system will be able to absorb these losses. But still, 3.2 billion dollars is nothing to scoff at, and some of these financial institutions that wrote a lot of these contracts on Greek debt are going to be hurting. This deal with private investors may have “rescued” Greece for the moment, but the consequences of this deal are going to be felt for years to come. For example, now that Greece has gotten a sweet “haircut” from private investors, politicians in Portugal, Italy, Spain and other European nations are going to wonder why they shouldn’t get some “debt forgiveness” too. Also, private investors are almost certainly going to be less likely to want to loan money to European nations from now on. If they will be required to take a massive haircuts at some point, then why in the world would they want to lend huge amounts of money to European governments at super low interest rates? It simply does not make sense. Now that Greece has defaulted, the whole game is going to change. This is just the beginning.
The “restructuring deal” was approved by approximately 84 percent of all Greek bondholders, but the key to triggering the payouts on the credit-default swaps was the fact that Greece decided to activate the “collective action clauses” which had been retroactively inserted into these bonds. These collective action clauses force most of the rest of the bondholders to go along with this restructuring deal.
A recent article by Ambrose Evans-Pritchard explained why so many people were upset about these “collective action clauses”….
The Greek parliament’s retroactive law last month to insert collective action clauses (CACs) into its bonds to coerce creditor hold-outs has added a fresh twist. These CAC’s are likely to be activated over coming days. Use of retroactive laws to change contracts is anathema in credit markets.
If a government can go in and retroactively change the terms of a bond just before it is ready to default, then why should private investors invest in them?
That is a very good question.
But for now the buck has been passed on to those that issued the credit-default swaps. As mentioned above, the ISDA says that there are approximately $3.2 billion in Greek credit-default swaps that will need to be paid out.
However, that number assumes that a lot of hedges and offsetting swaps cancel each other out. When you just look at the raw total of swaps outstanding, the number is much, much higher. The following is from a recent article in The Huffington Post….
If you remove all hedges and offsetting swaps, there’s about $70 billion in default-insurance exposure to Greece out there, which is a little bit bigger pill for the banking system to swallow. Is it possible that some banks won’t be able to pay on their default policies? We’ll find out.
Yes, indeed. We will find out very soon.
If some counterparties are unable to pay we could soon see some big problems cascade through the financial system.
But even with this new restructuring deal with private investors, Greece is still in really bad shape.
German Finance Minister Wolfgang Schaeuble told reporters recently that it “would be a big mistake to think we are out of the woods”.
Even with this new deal, Greek debt is still projected to be only reduced to 120 percent of GDP by the year 2020. And that number relies on projections that are almost unbelievably optimistic.
In addition, there are still a whole host of very strict conditions that the Greek government must meet in order to continue getting bailout money.
Also, the upcoming Greek elections in just a few weeks could bring this entire process to an end in just a single day.
The Greek economy has been in recession for five years in a row and it continues to shrink at a frightening pace. Greek GDP was 7.5 percent smaller during the 4th quarter of 2011 than it was during the 4th quarter of 2010.
Unemployment in Greece also continues to get worse.
The average unemployment rate in Greece in 2010 was 12.5 percent. During 2011, the average unemployment rate was 17.3 percent, and in December the unemployment rate in Greece was 21.0 percent.
Young people are getting hit the hardest. The youth unemployment rate in Greece is up to an all-time record of 51.1 percent.
Unfortunately, there is no light at the end of the tunnel for Greece at this point. The latest round of austerity measures that are now being implemented will slow the economy down even more.
Sadly, several other countries in Europe are going down the exact same road that Greece has gone.
Investors all over the globe are wondering which one will be the “next Greece”.
Some believe that it will be Portugal. The following is from a recent article in The Telegraph….
“The rule of law has been treated with contempt,” said Marc Ostwald from Monument Securities. “This will lead to litigation for the next ten years. It has become a massive impediment for long-term investors, and people will now be very wary about Portugal.”
Right now, the combination of all public and private debt in Portugal comes to a grand total of 360 percent of GDP.
In Greece, the combined total of all public and private debt is about 100 percentage points less than that.
So yes, Portugal is heading for a world of hurt. The following is more about Portugal from the recent Telegraph article mentioned above….
Citigroup expects the economy to contract by 5.7pc this year, warning that bondholders may face a 50pc haircut by the end of the year. Portugal’s €78bn loan package from the EU-IMF Troika is already large enough to crowd out private creditors, reducing them to ever more junior status.
So why should anyone invest in Portuguese debt at this point?
Or Italian debt?
Or Spanish debt?
Or any European debt at all?
The truth is that the European financial system is a house of cards that could come crashing down at any time.
German economist Hans-Werner Sinn is even convinced that the European Central Bank itself could collapse.
There is a Der Spiegel article that everyone out there should read. It is entitled “Euro-Zone Central Bank System Massively Imbalanced“. It is quite technical, but if this German economist is correct, the implications are staggering.
The following is from the first paragraph of the article….
More than a year ago, German economist Hans-Werner Sinn discovered a gigantic risk on the balance sheets of Germany’s central bank. Were the euro zone to collapse, Bundesbank losses could be half a trillion euros — more than one-and-a-half times the size of the country’s annual budget.
Ronald Reagan once famously declared that inflation is a tax, but sadly most Americans did not really grasp what he was talking about. If the American people truly understood what inflation was doing to them, they would be screaming bloody murder about monetary policy. Inflation is an especially insidious tax because it is not just a tax on your income for one year. It is a continual tax on every single dollar that you own. As your money sits in the bank, it is constantly losing value. Over time, the effects of inflation can be absolutely devastating. For example, if you put 100 dollars in the bank in 1970, those same dollars today would only have about 17 percent of the purchasing power that they did back then. In essence, you were hit by an 83 percent “inflation tax” and all you did was leave your money in the bank. So who is responsible for this? Well, the Federal Reserve controls monetary policy in the United States, and the inflationary monetary policy that the Fed has gotten all of us accustomed to is taxing the living daylights out of us. This is madness, and it needs to stop.
In previous articles I have discussed how the Federal Reserve creates money. If you have not read those articles yet, you can find a few of them here, here and here.
The Federal Reserve system is designed to have the U.S. money supply expand indefinitely.
And that is exactly what has happened since 1913.
But when the money supply expands, there are very serious consequences.
Every time more money comes into existence, the dollars that you and I are already holding become less valuable because now there are more dollars chasing the same amount of goods and services.
Right now, the U.S. government says that the annual rate of inflation is somewhere around 2 percent. Those of you that have to buy food and gas on a regular basis realize how much of a joke that is.
Thankfully, there are others out there that keep track of these statistics as well. According to John Williams of shadowstats.com, if inflation was measured the same way that it was back in 1980, the annual rate of inflation would be more than 10 percent right now.
But let’s use the doctored government numbers for a moment. Using the doctored numbers, what inflation has done to all of us is still absolutely horrific. Just check out the chart below. This is what the Federal Reserve was designed to do. It was designed to constantly expand the money supply and create inflation that never ends….
Most of us have been living in an inflationary environment for so long that we have come to accept it as normal.
Most Americans believe that prices are supposed to just keep going up as time goes by.
Unfortunately, we have now entered an era when prices are going up much faster than wages are. Family budgets are being squeezed tighter and tighter as the inflation tax keeps taking a bigger and bigger toll on all of our paychecks.
I remember the days when I could go into the grocery store and get a large bag of brand name potato chips for 99 cents.
I remember the days when I could get all the groceries that I needed for an entire week for 20 bucks.
Unfortunately, those days are long gone.
Have you been to the grocery store lately?
When I go to the grocery store these days I almost get the feeling that someone is going to ask me to fill out a credit application.
When I get to the checkout counter I almost get the feeling that the cashier is going to ask me if I want to pay with an arm or a leg.
But food is not the only thing going up. Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row. There are millions of American families that are keeping the heat really, really low this winter in an attempt to make ends meet.
Health care is another thing that has become ridiculously expensive. During the Obama administration, worker health insurance costs have risen by 23 percent.
Has your paycheck increased by 23 percent?
Of course we all know what is happening with the price of gasoline. The average price of a gallon of gasoline in the United States is now up to $3.72. It has increased by more than 90 percent since Barack Obama became president.
This is why so many economists get so upset when the Federal Reserve starts printing money like there is no tomorrow. Inflation is a tax that is very cruel to average American families. It destroys their wealth and it destroys the purchasing power of their paychecks.
Unfortunately, this is always what happens when a society adopts fiat currency. Our dollars are just pieces of paper backed by absolutely nothing. When more pieces of paper are printed up, the value of the pieces of paper already in existence goes down.
This is one of the reasons why so many people out there are talking about “real money” like gold and silver. Unlike fiat currency, precious metals tend to hold value over a very long period of time.
For example, it will take you about three times as much U.S. currency to buy a gallon of gasoline in 2012 as it did back in 1990.
But an ounce of silver will actually buy you more gasoline today than it did back then.
Back in 1990, an ounce of silver would buy you about 4 gallons of gasoline. Today it will buy you more than 8 gallons of gasoline.
Talk about holding value.
We see the same kind of thing happening with gold.
When Barack Obama first took office, an ounce of gold was selling for about $850. Today an ounce of gold costs more than $1700 an ounce.
It is not that gold is becoming so much more valuable. It is just that the U.S. dollar is losing value on a continual basis.
So why don’t the U.S. government and the Federal Reserve quit flooding our economy with more paper money?
That is a very good question.
Sadly, our leaders seem to have a never ending addiction to more paper money and the American people are not demanding change.
On Wednesday, Federal Reserve Chairman Ben Bernanke told Congress that the Federal Reserve may have to implement even more stimulus measures in order to help the economy.
Of course such talk is utter insanity considering what Bernanke and his cohorts have already done to the monetary base over the past few years….
Thankfully, the vast majority of that money is still trapped in the financial system. If all of that money was floating around on the street inflation would be far worse.
Those of you that think that the surging stock market is a sign of “economic recovery” should realize that the market has been pumped up by huge amounts of funny money from the Federal Reserve. Just because the number of dollars circulating has increased does not mean that things are getting better.
There is much more to all of this of course, but what is important for the man and the woman on the street is the fact that when the Federal Reserve expands the money supply it is a tax on all of us and it makes all of us poorer.
So what do you think about the inflation tax and the reckless monetary policy of the Federal Reserve?
Please feel free to leave a comment with your thoughts below….
The bank runs that we are watching right now in Greece are shocking, but they are only just the beginning. Since May 6th, nearly one billion dollars has been withdrawn from Greek banks. For a small nation like Greece, that is an absolutely catastrophic number. At this point, the entire Greek banking system is in danger of collapsing. If you had money in a Greek bank, why wouldn’t you pull it out? If Greece leaves the euro, all euros in Greek banks will likely be converted to drachmas, and the value of those drachmas will almost certainly decline dramatically. In fact, it has been estimated that Greek citizens could see the value of their bank accounts decline by up to 50 percent if Greece leaves the euro. So if you had money in a Greek bank, it would only make sense to withdraw it and move it to another country as quickly as possible. And as the eurozone begins to unravel, this is a scenario that we are going to see play out in country after country. As member nations leave the eurozone, you would be a fool to have your euros in Italian banks or Spanish banks when you could have them in German banks instead. So the bank runs that are happening in Greece right now are only a preview of things to come. Before this crisis is over we are going to see bank runs happening all over Europe.
Class Warfare Is Being Used To Divide America – And It Is Working
The other day, Yale economics professor Robert Shiller told CNBC that the globe is already in a state of “late Great Depression“. The United States is heading into unprecedented economic and financial problems and we desperately need to pull together as a country and solve these problems.
But instead, our leaders are tapping into the politics of division in a desperate attempt to get elected in the fall.
Rather than focus on real issues and real solutions, our politicians attempt to make “the wealthy” or “welfare recipients” the focus of our debates.
Well, you know what?
Most people that are rich and most people that are poor are not purposely trying to abuse the system. Most of them are hard working people that are trying to do the best that they can in a world that is increasingly going crazy.
These days, the Occupy Wall Street crowd loves to talk about how evil the “1 percent” is. But most of the “1 percent” are people that have worked really hard and that have been fortunate enough to get some really good breaks in life.
Yes, there are some among the “1 percent” that do some really bad things. The too big to fail banks and the big money managers on Wall Street should be held accountable for the crimes that they have committed.
But most wealthy Americans are not trying to oppress the poor. Most of them are just trying to do the best that they can for themselves and their families.
Neither are most poor people trying to abuse the system either.
Yes, without a doubt there are some that do not want to work and that want to live on government benefits indefinitely.
But that is a minority.
Most Americans that are receiving government benefits today would rather be working good jobs that would enable them to provide for their families.
Most Americans understand that government handouts can never provide dignity and hope for a better future.
But if you don’t demonize the poor and you point out the decline of the middle class, many Republicans will call you a “liberal” or a “socialist”.
And if you don’t demonize the rich and you don’t blame them for all of our economic problems, many Democrats will call you a “pig” or a “fascist”.
Unfortunately, playing the blame game is not going to get us anywhere.
The number of Americans living in poverty increased dramatically under George W. Bush and it also increased dramatically under Barack Obama.
Our country is drowning in debt, millions of our jobs are being shipped overseas, the middle class is shrinking at an astounding pace, and the Federal Reserve continues to destroy our financial system.
Getting angry at the wealthy or the poor is not going to fix those problems.
But it will distract us from the reality that both major political parties have been doing a horrible job.
Sadly, Americans seem to really enjoy blaming one another these days. Just check out some of the slogans that have been seen on various signs at Occupy Wall Street protests….
“They Only Call It Class Warfare When We Fight Back”
“Eat The Rich – Feed The Poor”
“The Rich Are Wrecking The Planet”
So will destroying the lives of the rich solve our problems?
Of course not.
The truth is that we should want millions more Americans to be prosperous. We should be cheering for one another instead of tearing one another down.
But that is heresy to many on the left.
On the right, it is heresy even to mention that our tax system is fundamentally flawed and that it has thousands of loopholes that are being abused by the very wealthy.
In a previous article, I detailed how many of the largest and most profitable corporations in America get away with paying absolutely nothing in taxes.
There is something very wrong with that.
Our income tax system should be abolished altogether, but if we do have to pay income taxes, then it is fundamentally unfair for some people and businesses to be able to pay little or nothing while the rest of us get absolutely obliterated by taxes.
But if you try to say that to many on the right, they will look at you in horror.
The other day, there was a New York Times article that detailed the extreme measures that Apple takes to avoid paying taxes. It turns out that Apple sets up shell offices all over the globe in order to evade taxation….
That same article talked about how Apple has become a model which hundreds of other companies have followed. To giant corporations such as Apple, tax evasion has become an art form….
So what is the solution to all of this?
Raising income taxes won’t work too well because the tax lawyers are always several steps ahead of our politicians.
The truth is that when taxes get raised it is always the middle class that gets absolutely clobbered and the wealthy always find more ways to reduce their exposure.
Just take a look at Mitt Romney. He made more than 42 million dollars in 2010 and yet Romney had an effective tax rate of only 14 percent.
If I could find a way to have an effective tax rate of only 14 percent I would be jumping up and down for joy, and so would millions of other Americans.
Our tax system is deeply, deeply broken and needs to be thrown into the trash can.
Abandoning the current tax system would not solve all of our problems, but it would be a start.
Unfortunately, neither political party is willing to even consider this.
Instead, the Democrats want to raise taxes a little bit and the Republicans want to lower taxes a little bit.
But neither alternative will do much of anything to solve any of the real problems we are facing.
Our economy is dying and it is not producing nearly enough jobs for all of us. When Barack Obama took office, the number of “long-term unemployed workers” in America was 2.6 million. Today, it is 5.3 million.
At this point, an astounding 53 percent of all college graduates under the age of 25 are either unemployed or underemployed.
So where is all of the “change” that Obama promised?
Things just keep getting worse.
Since Obama has been in the White House, 14 million more Americans have gone on food stamps, and more than 25 percent of all American children are enrolled in the program today.
How will class warfare help those people?
Will blaming the wealthy make things better for them?
They are already receiving government handouts.
Will increasing those handouts a little bit more fundamentally change their lives for the better?
Of course not.
What those people need are good jobs.
But instead, both the Democrats and the Republicans continue to pursue the same job killing policies that have been destroying American jobs for decades.
Without good jobs, the number of Americans dependent on the government is going to continue to grow.
In a previous article, I detailed the explosive growth of social welfare benefits that we have seen under both Republicans and Democrats….
The goal should not be to rape the rich and give out even more social welfare benefits.
Instead, the goal should be to develop an economy that creates good jobs.
We need have an economy that empowers individuals and small businesses.
Instead, we have an economy dominated by big government and big corporations.
We have an economy that funnels the vast majority of the economic rewards to a tiny elite while most of the rest of us struggle.
Just consider the following statistics….
*Back in the 1970s, the top 1 percent of all income earners in the United States brought in about 8 percent of all income. Today, they bring in about 21 percent of all income.
*The following is how income gains in the U.S. were distributed during 2010….
-37 percent of all income gains went to the top 0.01 percent of all income earners
-56 percent of all income gains went to the rest of the top 1 percent
-7 percent of all income gains went to the bottom 99 percent
*In America today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.
*According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.
So what is the solution to that problem?
Is it to attack the rich and take away all their money and give more government handouts to the poor?
Of course not.
Rather, we need to change the rules of the game so that individuals and small businesses are empowered to succeed.
We need to decentralize economic power and dramatically reduce the undue influence that big government and giant corporations have over our economic system.
We need to create an environment where almost anyone that has a good idea and that is willing to work hard can succeed.
But instead of focusing on real solutions like shutting down the Federal Reserve, converting to debt-free currency, eliminating the income tax, shutting down the IRS, massively reducing the size of government and getting rid of thousands upon thousands of unneeded regulations, the mainstream media and our politicians are going to continue to try to get Americans to blame one another for our problems.
The efforts to divide America are working, and hatred is growing to unprecedented levels in this country.
Eventually this will lead to mass rioting in our major cities and that will make our problems far worse.
Hatred and division are not going to bring us a better future.
They are only going to destroy us from within.
We don’t need hate.
What we need is more love and more solutions.
Unfortunately, our leaders are leading us down a very dark path, and we are heading for a future that is going to be a complete mess.