The U.S. government is telling us that the unemployment rate fell all the way down to 9.0% in January. Should we all cheer? Is it now going to be a lot easier to find a job? Has the economy finally turned around? Are happy days here again? Well, it is a good thing to have a positive attitude, but the truth is that there is just not much to cheer about when you take a closer look at the recent unemployment numbers. First of all, the U.S. economy only added 36,000 jobs in January. Economists had been expecting an increase of about 145,000 jobs, and an increase of 150,000 jobs per month is necessary just to keep up with population growth. So why did the unemployment rate go down? Well, the government says that over half a million Americans suddenly dropped out of the labor force in January. That doesn’t make a lot of sense, but this is how the government calculates their numbers. So what happened to those 500,000 Americans? Did they all win the lottery? Have they all become independently wealthy? Did they all die? No, the vast majority of them are still around and the vast majority of them still desperately need jobs. It is just that the government does not count them as “looking for work” anymore.
It would be great if the employment situation in America actually was getting better. All the time people send me absolutely heartbreaking stories about what they have had to endure in this economy. Soon I hope to share some of those stories with you all. It is hard to try to describe the absolute horror that many Americans are going through right now.
People would like to believe that things are going to get better, but unfortunately that is just not going to be the case. The government can try to massage the numbers to make them look better, but the truth is that the tens of millions of American families that are deeply suffering right now are not fooled.
The following are 10 statistics that reveal that the latest unemployment numbers from the government are no reason to cheer….
#1According to CNBC, economists were expecting the U.S. economy to add 145,000 jobs during January. Obviously the 36,000 figure was a huge disappointment.
#2 Approximately 150,000 jobs need to be added to the economy each month just to keep up with population growth.
#3 The government jobs report also indicated that 504,000 Americans “dropped out of the labor force” in January. That may make the unemployment numbers look better, but the truth is that the vast majority of those 500,000 Americans still need incomes and still need jobs.
#4 According to the latest numbers from Gallup, the unemployment rate actually increased to 9.8% at the end of January.
#5 Gallup’s measure of “underemployment” (those that are unemployed plus those that are working part-time but want full-time employment) was sitting at 18.9% at the end of January.
#6 As I reported yesterday, there are approximately 28 million Americans that would like full-time jobs but that don’t have full-time jobs.
#7 According to Zero Hedge, the number of Americans that are “not in the labor force” but that would like a job right now has hit an all-time record high. If you add all of those people into the official unemployment figure it would jump to 12.8%.
#8According to Calculated Risk, this is the deepest and most brutal employment downturn that the United States has experienced since World War II. The current employment downturn started 37 months ago and there doesn’t seem to be any indication that we will return to pre-recession levels any time soon.
#9 The U.S. Labor Department has also announced that job growth during 2010 was much weaker than they had previously reported. The numbers for 8 months were revised down, and the numbers for 4 months were revised up. After all of the revisions are accounted for, it turns out that a total of 215,000 fewer jobs were created during 2010 than originally calculated.
#10 According to one brand new survey, 4 out of every 10 Americans are struggling “a lot” to pay the bills right now.
The situation is not pretty out there. The U.S. needs tens of millions more jobs than we have right now.
So where are all of our jobs going? The video posted below contains some very strong hints. The truth is that globalism is ripping our economic infrastructure apart, and all of the crazy rules and regulations we keep heaping on business are not helping either….
U.S. workers have been merged into a “global labor pool” where we are expected to directly compete for jobs with people making slave labor wages on the other side of the globe.
The more time you spend thinking about that, the more you start realizing that the standard of living of average American families is going to continue to decline.
Unfortunately, as I wrote about in a recent article entitled “Nothing Is Stable Anymore“, the world is changing faster today than at any other time during our lifetimes. Everything that we used to assume about employment, money, our economy and our finances is being turned upside down. We now live in a world where very little can be taken for granted.
2011 has already been a very tumultuous year. The world is being transformed. Nobody knows for sure what is going to happen next.
One thing to really keep an eye on is the price of oil. Right now, large numbers of investors are betting that the price of oil will rise to $125 a barrel by May. Shockingly, some investors are even betting that the price of oil will rise to $250 a barrel by next December.
If oil starts to spike dramatically, it will have tremendous implications for the U.S. economy. Our entire economic system runs on oil. The price of oil affects the price of everything else.
If the price of oil keeps going up it is inevitably going to cause a slowdown in the U.S. economy and it will cause the unemployment situation to get even worse.
So be glad that the employment situation is at least somewhat stable for now, because if things take a bad turn for the worse in 2011 who knows what kind of unemployment numbers we’ll be talking about a year from now.
The world is becoming a very unstable place, and the pace at which things are changing all around us has become absolutely mind-numbing. In fact, change has become one of the only constants in today’s world. Once upon a time, people in the United States could actually make 20 or 30 year plans and feel confident about achieving them. But now, nothing is stable anymore. The financial crisis showed us that some of the biggest corporations on the globe can collapse in a single day. The events of the past few weeks have shown us that entire governments can be brought down in a single week. We live in a world where there are now very few “guarantees” that you can count on. One of the only things that is guaranteed is that technology and information will continue to grow at exponential speeds. This year, the total amount of information produced on electronic devices around the globe is projected to be more than a zettabyte. A zettabyte is equivalent to one sextillion bytes. In other words, imagine a one with more than 21 zeroes following it.
Many of the things that we take for granted today didn’t even exist a few short years ago. Facebook has only been with us since 2004. YouTube has only been with us since 2005. Can you imagine a world where those two websites did not exist?
We live in a world of information overload. Once upon a time it would have been possible to go to sleep for a decade and wake up and everything would still be pretty much the same. But today if you were to do that you would be in for a case of severe culture shock.
Do you remember when you could buy a set of encyclopedias and the information in them would still be good a decade or two later?
Well, things do not work that way anymore.
In fact, most of the articles on this website will be obsolete a month from now.
In today’s world, you really have to think twice before you say that something is “not possible”.
A few months ago, it was absolutely inconceivable that Egyptian President Hosni Mubarak would declare to the world that he has “spent enough time serving Egypt“.
Yet here we are.
One week the government of Tunisia seemed perfectly stable and the next week it was toppled.
Do any of you out there still think that you can make realistic “plans for the future” in today’s world?
Once upon a time in America, many of us were taught that if we worked really hard in school we could get a great job with a great company. We were promised that if we were faithful to that company for 30 or 40 years that we would be treated fairly and given a good pension.
Well, in today’s world you might as well crumple up that plan and throw it into the wastebasket.
There is no such thing as a stable job anymore. Businesses are coming into existence and going out of existence faster than ever before. Today, one out of every four Americans workers has been with their empl0yer for less than a year.
Most Americans still don’t really understand that they are now part of a global economy. They keep thinking that things were the way they used to be. They keep thinking that the U.S. economy is invincible.
Well, those days are long gone. The United States is being deindustrialized at lightning speed. Tens of thousands of manufacturing facilities and millions of jobs have been sent overseas. China, once a complete economic backwater, is now kicking the crap out of us on the global economic stage.
Our financial system is certainly on incredibly shaky ground. Will any of us ever forget what happened in 2008?
Do any of us actually believe that it can’t happen again?
Our health care system is also incredibly unstable. Today, 46 million Americans have absolutely no health insurance. That means that 46 million Americans are just one major injury or illness away from financial ruin with no protection whatsoever.
Not that those that actually have health insurance are protected. According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States. Of those bankruptcies that were caused by medical bills, approximately 75 percent of them involved individuals that did have health insurance.
So just because you have health insurance does not mean anything. One bad accident or one really bad disease and you could be totally wiped out.
Isn’t that comforting?
But the truth is that our entire economy is on the verge of total collapse.
World famous investor Harry Schultz recently published the last issue of his legendary financial newsletter. After 45 years, the following is how Schultz summed up the economic collapse that we are now facing….
“Roughly speaking, the mess we are in is the worst since 17th century financial collapse. Comparisons with the 1930’s are ludicrous. We’ve gone far beyond that. And, alas, the courage & political will to recognize the mess & act wisely to reverse gears, is absent in U.S. leadership, where the problems were hatched & where the rot is by far the deepest.”
David Stockman, the former director of the Office of Management and Budget under Ronald Reagan was quoted by Schultz as saying the following about how desperate things are about to become….
“Get some gold, beans, water, anything that Bernanke can’t destroy. Ron Paul is right. We’re entering a global monetary conflagration. If a sell-off of U.S. bonds starts, it will be an Armageddon.”
Millions of Americans have become “preppers” in recent years as they have come to realize that our economy is headed down a very dark road.
But sadly, the reality is that the vast majority of Americans are not prepared for any kind of economic or natural disaster. As this week has shown us, just the threat of a major snow storm can wipe out store shelves in a single day.
So what would this country look like if a major disaster fundamentally changed life in America and suddenly people were desperate for food and supplies?
It is a frightening thing to think about.
As the pace of change has accelerated dramatically, the U.S. government and other governments around the world have responded by trying to get a tighter grip on everyone and everything.
To get on an airplane in the United States today, you either have to allow a security goon to use a scanner to look over your completely exposed body, or you have to allow a security goon to feel up all of your private areas with the fronts of his or her hands.
The America that so many of us once loved is rapidly disappearing.
But it is not just our man-made systems that are rapidly changing. Something seems to be happening to the entire planet. Flooding of biblical proportions has hit Australia, Brazil, China and Pakistan over the past 12 months. Scorching heat caused massive crop failures all over Russia last summer. Record-setting cold temperatures and snowfalls all over the northern hemisphere have scientists scratching their heads. On top of everything else, mass deaths of birds and fish are suddenly being reported all over the globe.
Even the crust of the earth is becoming increasingly unstable. Did you see that volcano go off in Japan the other day? Over the past two years it seems like volcanoes have been suddenly erupting all over the world.
Not only that, but sinkholes have become an absolute epidemic all over the planet. Some of these sinkholes have been so large that they have swallowed entire apartment buildings.
In addition, it seems like there is a magnitude 6 or magnitude 7 earthquake somewhere in the world almost every day now. They have become so common that the mainstream media barely even takes notice of them anymore unless one happens near a very populated area.
None of us really knows what the world is going to look like ten years from now. What will the “new” Facebooks and YouTubes be? Will Ben Bernanke’s reckless money printing destroy our economy by then? Will our U.S. dollars still be of any value ten years from now? Will there even still be a U.S. dollar?
Will we still be able to feed most of the people in the world by 2011? Will shortages of food, water and oil start driving people crazy? Could some amazing energy discovery completely transform society?
Who will be the president of the United States? Will there even be a president of the United States? Will war have erupted in the Middle East by that point? Will the United States be in another war by then?
The truth is that things are changing so fast that it is hard to even come up with the right questions to ask. The world is going to change faster this year than it did last year. In 2012 the pace of change will be even faster.
So buckle up and hold on tight because this is going to be one wild ride.
For much more on how incredibly fast the pace of change is in our modern society, check out the video posted below. It is entitled “Did You Know?” and it has been viewed more than 12 million times on YouTube….
This past week was a perfect example of how the “Internet kill switch” is rapidly becoming one of the favorite new tools of tyrannical governments all over the globe. Once upon a time, the Internet was a bastion of liberty and freedom, but now nation after nation is cracking down on it. In fact, legislation has been introduced once again in Congress that would give the president of the United States an “Internet kill switch” that he would be able to use in the event of war or emergency. Of course there would be a whole lot of wiggle room in determining what actually constitutes a true “emergency”. The members of Congress that are pushing this “Internet kill switch” bill want the U.S. to become more like China in this regard. In China, the Internet is highly controlled, highly regulated and highly censored. In fact, China has shut down the Internet in entire regions when they have felt it necessary. So what Egypt did in shutting down the Internet this past week is not unprecedented – but it was quite shocking.
Organizers of the protests in Egypt had been using the #Jan25 hashtag on Twitter and had been communicating with each other via Facebook, and so the Mubarak regime thought that they could significantly derail the protest movement by shutting down the Internet.
It has been widely reported that approximately 88 percent of the Internet in Egypt was shut down at one point. Jim Cowie, the chief technology officer of an Internet monitoring firm known as Renesys, described on his blog just how complete and total this Internet shutdown in Egypt actually was….
“Every Egyptian provider, every business, bank, Internet cafe, website, school, embassy, and government office that relied on the big four Egyptian ISPs for their Internet connectivity is now cut off from the rest of the world.”
So how was this all done? How could such a large section of the Internet be taken offline so rapidly? Well, a recent article on MSNBC described how it works….
According to David Clark, an MIT computer scientist whose research focuses on Internet architecture and development, a government’s ability to control the Internet depends on its control of Internet Service Providers (ISPs), the private sector companies that grant Internet access to customers.
“ISPs have direct control of the Internet, so what happens in any country depends on the control that the state has over those ISPs,” Clark told Life’s Little Mysteries in an e-mail. “Some countries regulate the ISPs much more heavily. China has in the past ‘turned off’ the Internet in various regions.”
Whenever the subject of Internet censorship comes up, China always seems to be involved in the conversation. China has more Internet users than anyone else in the world, but they also have the tightest controls.
The Chinese government is absolutely obsessed with “maintaining order” and it has shown that it will go to extreme lengths to quell dissent.
For example, the government of China cut off the entire Xinjiang region from the Internet for nearly a year after civil unrest erupted there in 2009.
The Chinese government is so sensitive to political dissent that they even began censoring the word “Egypt” on a number of micro-blogging websites this past week.
On the sina.com and sohu.com sites, the Chinese equivalents of Twitter, which is censored in China, a query with the word “Egypt” returned the response: “According to the laws in force, the results of your search cannot be given.”
Isn’t that bizarre?
Nothing like that would ever happen in the United States, right?
“Right now China, the government, can disconnect parts of its Internet in case of war and we need to have that here too.”
That statement should chill you to your bones.
U.S. Senator Joe Lieberman wants Chinese-style Internet censorship to come to the United States.
In fact, as mentioned above, legislation that would give the president of the United States an “Internet kill switch” has been introduced in the Senate once again, and in fact it has already been approved by a Senate panel.
The legislation has bipartisan support, and it is being pushed this time by Maine Senator Susan Collins, who is a ranking member on the Homeland Security and Governmental Affairs Committee.
This bill, S.3480, is entitled “The Protecting Cyberspace As A National Asset Act of 2010“. It would create a brand new government agency (as if we needed more of those) known as the National Center for Cybersecurity and Communications.
This new agency would be given extraordinary power over the Internet – including the power to completely shut down the Internet for 30 days.
Collins insists that this new law is necessary because it would enable us to protect the Internet against “cyber threats” before they could cause serious damage.
While that may sound good on paper, the reality is that giving the government an “Internet kill switch” would create opportunities for tremendous government abuse.
A congressional white paper (.pdf) on the measure said the proposal prohibits the government from targeting websites for censorship “based solely on activities protected by the First Amendment of the United States Constitution.”
It has been revealed time after time after time that the U.S. government has been investigating large numbers of people based on their political beliefs.
The Internet is a great way for people to express and share their political thoughts and ideas, but it is also providing a way for governments around the world to watch and track dissenters.
For example, major news websites in China now require users to register their true identities before they are able to leave any comments. This enables the government to be able to identify (and potentially deal with) anyone that does not express the “right” views.
In the same manner, the Obama administration is now proposing the introduction of a “universal Internet ID” for Americans. The program is being touted as “voluntary”, but how long do you think it would be before a whole host of government agencies started to use these universal Internet IDs to watch, monitor, track and control the Internet activities of tens of millions of Americans?
The following is a video news report from CBS News about these new universal Internet IDs….
So where does all of this Internet censorship end?
Well, the truth is that it is only going to get tighter and tighter as the years go by.
Eventually you will probably need a government-issued license to put up websites such as this one, and in fact someday you will probably need a government-issued license before you can even log on to the Internet.
So enjoy this era of relatively unlimited Internet freedom while you can, because it is rapidly coming to an end. Tyrannical governments all over the globe are realizing that in order to maintain “control” they must place a much tighter grip on the flow of information on the Internet.
If you live in the United States or another nation where there is still at least a limited amount of liberty and freedom, it is going to be important to let your representatives know that you do not want Internet censorship and you certainly do not want any sort of an Internet kill switch.
Liberties and freedoms are incredibly precious, and once they are taken away they are very difficult to get back.
As if the world economy did not have enough problems already, now the riots in Egypt threaten to send the price of oil soaring into the stratosphere. On Friday, the price of U.S. crude soared 4 percent. A 4 percent rise in a single day is pretty staggering. The price of Brent crude in London closed just under the magic $100 a barrel mark at $99.42. The incredibly violent riots in Egypt have financial markets all over the globe on edge right now. Any time there is violence or war in the Middle East it has a dramatic impact on financial markets, but this time things seem even more serious than usual. Many believe that we could see an entirely new Egyptian government emerge out of this crisis, and the uncertainty that would bring would make investors all around the globe nervous. Financial markets like predictability, peace and security. If Egyptian President Hosni Mubarak’s 30 year reign is brought to an end, it will severely shake up the entire region, and that will not be good news for the global economy.
Have you seen how violent these protests have become? Cars and buildings are on fire all over the place. Even the headquarters of Hosni Mubarak’s political party was burned down. The Egyptian military has been deployed on the streets of Cairo. Protesters have been showering government forces with stones, firebombs and anything else that they can find to throw. Security forces have been using rubber bullets, water cannons and tear gas to try to disperse the protesters but those efforts seem to be doing little good. Deaths and injuries are being reported all over the place. There are even rumors that the wife and son of Hosni Mubarak have already left the country.
At this point, Mubarak has gone on national television and has announced that he has asked his cabinet to resign. That is an absolutely stunning move, but it is doubtful that the protesters will be satisfied. All over Cairo protesters continue to chant for Mubarak to resign.
The following is a short compilation of some raw video from the riots in Egypt….
These riots in Egypt come on the heels of violent uprisings in Algeria and Tunisia. In fact, it seems like virtually the entire Middle East is in a very foul mood right now. Riots have been reported in Lebanon, in Jordan and in Yemen over the past few days.
Some of the rioting has been motivated by economic factors, but unfortunately all of this rioting is only going to make the global economic situation even worse. Concern over all of these riots is driving up the price of oil and driving up the prices of agricultural commodities. These higher prices are going to make it even harder for the poor people in the Middle East to afford food.
But also it must be acknowledged that much of this rioting is being done for very deep political and religious reasons as well. Many westerners are cheering the protests in Egypt because they envision the protesters to be some sort of “freedom fighters”. But the vast majority of these protesters do not desire “American-style democracy”. The Muslim Brotherhood is one of the groups at the heart of these protests. The government that they intend to set up would not give “liberty and freedom for all”. Rather, it would be a hardline Islamic government based on Shariah law. According to Wikipedia, the Muslim Brotherhood bills itself as the “world’s most influential Islamist movement”, and their goal is to impose their version of Islam on society….
The Brotherhood’s stated goal is to instill the Qur’an and Sunnah as the “sole reference point for … ordering the life of the Muslim family, individual, community … and state”
So unless your version of “freedom” includes being forced to live like the Taliban, then you probably would not enjoy the “liberty” that the Muslim Brotherhood wishes to impose on you.
Coptic Christians all over Egypt are already being slaughtered even with a relatively pro-western president in power. On New Year’s Day, an attack on a Coptic Christian church in Egypt killed 21 people. The following is how one eyewitness described the scene to a reporter from the New York Times….
“There were bodies on the streets,” said Sherif Ibrahim, who saw the blast’s aftermath. “Hands, legs, stomachs. Girls, women and men.”
Once a radical Islamic government is installed in Egypt it will be open season on all Christians.
Yes, there is a whole lot of blame to be passed around to other nations, organizations and individuals in the Middle East for things they have done as well, but that does not excuse the horrific persecution of the Coptic Christians in Egypt.
We have to call a spade a spade. We cannot condemn some forms of tyranny and persecution and then make excuses for other forms of tyranny and persecution just because those doing it are on “our side”.
Replacing one form of tyranny (Mubarak) with an even more repressive form of tyranny (The Muslim Brotherhood) is not something that those who love liberty and freedom should be celebrating.
In any event, everyone should be able to agree that these events are going to severely rattle world financial markets that were already very nervous about 2011.
If these violent riots in Egypt and other countries in the Middle East keep going on, the global price of oil and the global price of food will continue to soar.
Not that oil and food were not going to be heading in that direction anyway. Yesterday I wrote about the warning signs for the global economy that we are starting to see. Wheat and corn have absolutely skyrocketed in price over the past 6 months. The UN had already been projecting that we would see a 30 percent increase in the global price of food in 2011 even before these riots.
If you add rampant political instability into the mix, there is no telling how bad food inflation could get this year.
Many experts have already been forecasting substantial food shortages throughout the world this year based on all the extreme weather we have been having. So what is going to happen if something causes those food shortages to be even worse than anticipated?
We live in very interesting times my friends. The globe is becoming an increasingly unstable place. Even nations that seemed perfectly stable just a few months ago can erupt in rioting at almost any moment.
People around the world are getting angry. Thanks to the Internet, people are able to circumvent official government propaganda more easily than ever before. This is making it harder and harder for governments to control people.
Egypt tried to regain some of that control during the riots by shutting down cell phones and by shutting down the Internet but it did not work.
Let’s just hope that Egypt can soon find peace and that the changes that are made in the Egyptian government are good for freedom and liberty.
Do you see all of the warning signs that are flashing all around you? These days it seems like there is more bad economic news in a single week than there used to be in an entire month. 2011 is already shaping up to be a very dark year for the world economy. The price of food is shooting through the roof and we have already seen violent food riots in countries like Egypt, Algeria and Tunisia. World financial markets are becoming increasingly unstable as the sovereign debt crisis continues to get worse. Meanwhile, the number of Americans applying for unemployment benefits is up, foreclosures are up and poverty continues to spread like a plague throughout the United States. What we are starting to see around the globe is a lot like the “stagflation” of the 1970s. All of the crazy money printing that has been going on is overheating prices for agricultural commodities and precious metals, but all of this new money is not doing much to help the average man or woman on the street.
Do you remember what the economy was like in America during the 70s? We had high unemployment and high inflation at the same time. It was horrible. Well, all the warning signs are there for a stagflation repeat. Unemployment is at epidemic levels and it isn’t showing any signs of decreasing much any time soon. Meanwhile, the crazy money printing that the Federal Reserve and other central banks have been doing is starting to cause significant inflation. The price of oil is about to cross the 100 dollar a barrel mark and the UN is forecasting that the global price of food is going to increase by 30 percent by the end of the year.
So, yes, there are some really, really good reasons to be incredibly concerned about the global economy in 2011.
Meanwhile, the only solutions that our global leaders seem to be offering are more money printing, more government debt and more financial control by international organizations.
The truth is that we have a real mess on our hands. The following are 20 economic warning signs that should be of great concern to all of us….
#1 Over the past seven days, the price of wheat has risen by 11 percent as concerns about food shortages continue to grow around the world.
#4 According to the U.S. Department of Labor, the number of Americans applying for unemployment benefits rose last week to the highest level since last October.
#5 According to the Pew Charitable Trusts, of the 14 million Americans “officially” unemployed in December, 30% of them had been unemployed for one year or longer.
#6 Beginning in the month of March, the U.S. Postal Service will begin shutting down up to 2,000 post offices across the United States.
#7 In an absolutely stunning move, Standard & Poor’s has downgraded Japanese government debt from AA to AA-.
#872 percent of the major metropolitan areas in the United States had more foreclosures in 2010 than they did in 2009.
#9 Approximately 5 million homeowners in the United States are at least two months behind on their mortgages, and it is being projected that over a million American families will be booted out of their homes this year alone.
#10 According to the Congressional Budget Office, the Social Security system will run a deficit of 45 billion dollars this year. When the new payroll tax breaks are factored in, the projected “Social Security deficit” for this year swells to 130 billion dollars.
#13 The U.S. Bureau of Labor Statistics says that the price of food increased 50 percent faster than the overall rate of inflation during 2010.
#14 According to the U.S. Conference of Mayors, visits to soup kitchens are up 24 percent over the past year.
#15 During the last school year, almost half of all school children in the state of Illinois came from families that were considered to be “low-income”.
#16 Those living in the town of Discovery Bay, California will soon not be permitted to use cash to pay for any public services. Could this be another disturbing step in the direction of a cashless society?
#17 French President Nicolas Sarkozy says that the IMF should be given the power to enforce new rules that would be designed to prevent “global economic imbalances” from happening.
#18 The U.S. government is currently borrowing about 40 cents of every single dollar that it spends.
#19 According to the Congressional Budget Office, the U.S. government will have the biggest budget deficit ever recorded (approximately 1.5 trillion dollars) this year.
U.S. Representative Ron Paul has introduced a new bill to audit the Federal Reserve. Let us hope that the move to audit the Fed fares better in the 112th Congress than it did in the 111th Congress. It would be wonderful if the American people could actually learn what has been going on inside the Fed all this time.
But mostly the news about the global economy is really bad. There have been some people that have been warning for decades that all of this money printing and all of this government debt would eventually catch up with us. Now we have almost reached the moment of reckoning that the doomsayers have been warning about for so long, and it is going to be really painful to go through it.
Thanks to the greatest debt bubble in the history of the world, we have been living beyond our means for decades. When “times were good” it was not because either the Republicans or the Democrats were doing something right. The truth is that both political parties have been horribly addicted to government debt. The debt-fueled prosperity that our politicians purchased for us is starting to come to an end, and an economic implosion is coming that most Americans will never see coming.
But hopefully most of the readers of this article are much wiser than the average American. The warning signs are there. Now is the time to take action and get prepared.
How do we fix the economy? That is a question that tens of millions of Americans are asking right now. Republicans are harshly criticizing the empty economic proposals being put forward by Barack Obama and the Democrats, but the Republicans don’t seem to have any real solutions either. There is talk of cutting taxes a little bit more, reducing federal spending a little bit and getting rid of a few useless federal regulations but doing any of those things would essentially be like spitting into Niagara Falls – the effect would not really be noticeable at all. As this column has documented over and over and over, the economic and financial problems that we are facing are so enormous that radical solutions are needed. In essence, what we need is not an “economic bandage” or two – what we need is major reconstructive surgery. If dramatic action is not taken, our economy is going to completely collapse.
Is anything that Barack Obama is currently proposing going to help fix the economy? No, of course not. As I wrote about the other day, Obama’s address to the nation was packed with empty promises and a whole lot of inspirational nonsense. There were no real solutions to the very real problems we are facing.
So is there anything that we could do to actually start fixing things?
Yes, but the solutions are radical. They would cause quite a bit of chaos. They would not be easy for people to accept.
But the truth is that our economy and our financial system have terminal cancer. If something radical is not done quickly we are going to lose the patient.
The following are 16 ideas that Barack Obama could have proposed if he actually wanted to fix the economy….
#1 We Must Shut Down The Federal Reserve
If you are not willing to accept this, you may as well not read the rest of the solutions. The truth is that the U.S. government will never be able to solve the national debt problem until the Federal Reserve is shut down. The U.S. government should nationalize all Federal Reserve assets and start issuing currency that is completely and totally debt-free.
Under such a system, it is conceivable that U.S. budget deficits could be eliminated entirely and that over time the entire U.S. government debt could be retired.
One of the biggest threats of going to such a system would be inflation, but remember, the United States has only had a major, ongoing problem with inflation since the Federal Reserve was created back in 1913. The U.S. dollar has lost well over 95 percent of its value since the Federal Reserve was created, and so it is hard to imagine that we would do even worse without the Federal Reserve.
In any event, it is the fundamental right of any sovereign nation to be able to issue and control its own currency. This right was given to the U.S. government by the U.S. Constitution and it is time for the U.S. government to reclaim that right.
#2 We Must End Trade With All Nations That Allow Their Citizens To Be Paid Slave Labor Wages Or That Do Not Respect Basic Human Rights
This would dramatically reduce the “outsourcing” of our jobs and our industries almost overnight. The truth is that it was never a good idea to put American workers in direct competition with hundreds of millions of workers that are making slave labor wages on the other side of the globe.
Trading with nations that have a similar wage structure to ours and that respect basic human rights (Canada, for example) is a very good thing. However, all of the “free trade” agreements that politicians from both parties have been pushing down our throats for decades are literally wrecking the U.S. economy.
Since 2001, over 42,000 factories have been shut down in the United States. This proposal would go a long way towards stopping the bleeding, and if some of these countries are willing to raise their wage levels significantly then we would be able to resume trade with them in the future on a much more level playing field.
#3 We Must Radically Reduce The Size Of The Federal Government
Our big, fat government is a big, fat drain on our economy. We have millions of paper pushers that don’t contribute much of anything of real value.
Not only that, but some of the things that the U.S. government wastes money on are absolutely mind blowing. There is a reason why our founders insisted that we have a very limited government. It is time to get back to those principles.
The Congressional Budget Office is projecting that the U.S. government budget deficit for this year will be nearly $1.5 trillion.
Talk about ridiculous!
I estimate that we could easily cut the size of government in half without hampering how effective it is.
We could start by abolishing the Department of Education. After that, there are several dozen other government agencies and institutions which are worthy candidates for elimination.
#4 We Must Provide Temporary Jobs For The American People During The Economic Transition
If the Federal Reserve is shut down and the size of the federal government is cut in half, it would cause quite a bit of economic chaos. During this transition it will be important to help people survive.
Instead of just passing out a bunch of handouts, a better alternative would be getting the American people working on something constructive.
During this time, the U.S. government could use all of the untapped labor of the unemployed to build massive infrastructure projects.
According to the American Society of Civil Engineers, we need to spend approximately $2.2 trillion on infrastructure repairs and upgrades just to bring our existing infrastructure up to “good condition”.
These jobs would just be temporary until new manufacturing facilities are set up and jobs in private industry are plentiful again.
Having the American people produce something of value is better than just handing them endless unemployment checks.
#5 We Must Ban All Short Selling
When you allow greedy individuals the opportunity to make lots of money by betting against the U.S. economy, it gives those individuals an incentive to make sure that those bets pay off.
Yes, this proposal is controversial, but it just makes sense. If people want to make money, it should be because a company is doing well and not because someone is failing.
#6 We Must Ban Virtually All Derivatives
Once upon a time, derivatives were for hedging risk, but that is not what they are primarily being used for anymore.
Now derivatives are being used to bet on almost anything that you can possibly imagine.
Our financial markets have been turned into a gigantic financial casino.
The derivatives bubble is somewhere in the neighborhood of one quadrillion dollars and it could burst at any moment.
These weapons of financial mass destruction must be banned.
#7 We Must Break Up The Big Wall Street Banks
The big Wall Street banks have far too much power and far too much control. They have come to dominate our entire financial system.
In a capitalist system, too much power concentrated in too few hands is not a good thing. The corruption that has gone on at many of these institutions is absolutely unbelievable.
These banks need to be broken up into much smaller pieces for the good of our country.
#8 We Must Initiate A Massive Law Enforcement Crackdown On Our Financial Markets
As noted above, the corruption that has been going on down on Wall Street has been absolutely sickening. We need a massive law enforcement crackdown on all of this fraud in order to restore faith in the financial system.
Just one small example of this corruption happened during the recent housing crash. Goldman Sachs sold mortgage-related securities that were absolute junk to trusting clients at vastly overinflated prices and then made huge profits betting against those exact same securities.
So do you think that Goldman Sachs or any of the other major players on Wall Street will ever receive more than a slap on the wrist for all the things that have gone on in recent years?
Of course they won’t – unless the American people start demanding it.
#9 We Must Order U.S. Oil Companies To Use Untapped Oil Reserves In The United States And We Must Aggressively Develop Alternative Energy Sources
Right now, the price of oil is pushing up towards 100 dollars a barrel. If oil passes that mark, it is going to put tremendous inflationary pressure on the entire global economy.
Sadly, there is no need for such a high price for oil. There are vast, vast reserves of oil that are virtually untapped inside the United States. These are mostly in the western states and up in Alaska. We have enough to supply very cheap oil to the entire country for decades.
The U.S. government needs to order these oil companies to quit playing games and to start pumping this oil.
However, it is undeniable that we also need to develop alternative energy sources. In fact, we should set up a “Manhattan Project”-style team to aggressively pursue this goal.
In the past, U.S. oil and car companies have blatantly repressed alternative energy projects. The U.S. government should tell U.S. corporate executives that if they ever even think of doing such a thing again that they will be locked away so fast that it will make their heads swim.
#10 We Must Stop Paying Farmers Not To Grow Food
Instead of paying farmers not to grow food, we need to find ways to encourage them to grow as much food as possible. A horrible global food crisis is coming and we are going to need huge stockpiles of everything.
#11 We Must Secure The U.S. border With Mexico
Illegal immigration costs the U.S. economy tens of billions of dollars (conservatively) every single year. We need to secure the border and make sure that all of our immigrants are coming through the “front door”.
#12 We Must Shut Down The IRS
Did you know that the United States has only had an income tax for less than 100 years? For most of our history, the U.S. government got along just fine without taxing personal income.
The IRS is massive waste of time, energy and resources. There are many alternatives that could easily replace the income tax and the ridiculous tax code that we have right now.
For example, a flat tax or a national sales tax could both potentially work, although both have their problems.
Personally, I am convinced that we could have a system that would not require any taxation of income by the U.S. government whatsoever.
Just imagine how much time, how much energy and how many resources would be saved!
#13 We Must Slash Red Tape And The Miles Of Ridiculous Regulations
In the United States today, you almost have to be insane to start up a new business. When you consider all sources of taxation, U.S. businesses face one of the highest overall levels of taxation in the entire world. Not only that, but U.S. businesses face miles and miles of absolutely ridiculous regulations and red tape.
If you plan to start a business in America today, you better get a hold of a good lawyer. In fact, if you want to be safe, you better get a small army of lawyers. You are going to need an expert on the federal regulations that apply to your business, you are going to need an expert on the state regulations that apply to your business and you are going to need an expert on the local regulations that apply to your business.
There are going to literally be thousands of regulations that apply to any business started inside the United States today. There is no way that you will ever be able to learn them all. Not only that, but the truth is that your lawyers will only be aware of a small fraction of them.
Until the regulatory environment in this country dramatically changes, companies are going to continue to be motivated to leave the United States.
#14 We Must Conduct A Massive Law Enforcement Crackdown On The Health Care Industry
It should not cost $30,000 for a one day stay in the hospital in this country.
The truth is that the American people are being ripped off big time.
We need to conduct a massive law enforcement crackdown on all the big hospitals and all the big health care companies.
We need to conduct a massive law enforcement crackdown on all the big health insurance companies.
We need to conduct a massive law enforcement crackdown on all the big pharmaceutical companies.
We also need massive medical malpractice reform.
Not only that, we also should end the monopoly of the AMA immediately. We need to reintroduce honest, legitimate competition back into the medical system.
In addition, we need to make sure that natural health practitioners are able to compete on a fair and equal basis in this country.
As I have written about previously, the health care industry in the United States has become all about making as much money as possible.
This is a tremendous drain on our national resources and we are spread way too thin militarily. It is about time that many off these other countries started protecting themselves for a while.
#16 We Must Pull Out Of The United Nations And We Must Dramatically Reduce Foreign Aid
The United Nations is a massive waste of time, energy and resources. We should have pulled the plug on that ridiculous globalist organization long before now.
In addition, we need to dramatically cut back on foreign aid until we get our own house in order. We should only help the most desperate nations until we get our own economy back on track.
#17 We Must End All Of The Ridiculous Police State Measures Which Are Chasing Tourists Away From Our Soil
Tourism is a very, very important industry to the United States. But today, all of the incredibly intrusive police state measures that the past few administrations have introduced are chasing millions of tourists away and are ruining our national reputation.
For example, there are many cultures around the globe where it would be unthinkable to have anonymous security goons feel up the private areas of women and children before they are allowed to get on an airplane. Rather than put up with such nonsense, millions of tourists are simply going to choose to spend their money somewhere else.
#18 We Must Seize The Assets Of The Ultra-Wealthy Individuals And International Banks That Have Been Committing Fraud Against The U.S. Government For Decades
Once the Federal Reserve is shut down, it will be important to hold those that have been defrauding the U.S. government responsible. Once a full audit of the Federal Reserve is conducted and evidence of criminal activity is uncovered, those involved should be arrested and all of their assets should be seized and frozen pending trial.
If the things that have been going on inside the Federal Reserve are ever fully exposed, it will make the whole Bernie Madoff scandal look like a nickel and dime operation.
But that is why there has never been a full, comprehensive audit of the Federal Reserve since it was created back in 1913. The American people are not supposed to see what happens inside that institution.
Unfortunately, even though economic times are a little rough, things are still good enough that the vast majority of Americans are not ready to start demanding the kind of radical changes listed above.
Not only that, but the kind of radical changes listed above would be fought against by the establishment every step of the way. Those with money and power are not going to step aside just because “justice” demands it.
What is probably going to happen is that the “establishment politicians” that the establishment has bought and paid for are just going to continue to propose half-baked solutions to our problems as this country continues to tumble towards economic oblivion.
So what do all of you readers think? Is there hope that someday we will see some real economic solutions implemented in this country?
Barack Obama’s State of the Union address sure sounded good, didn’t it? There were lots of solemn promises, lots of stuff about America’s “bright future” and a line about how we are now facing this generation’s “Sputnik moment” that will surely make headlines all over the globe. But we all knew that Barack Obama could give a good speech. That has never been the issue. What the American people really need are some very real answers to some very real problems. So were there any real answers in Barack Obama’s State of the Union address? Well, Barack Obama promised that America will “out-innovate, out-educate and out-build” the rest of the world. He also pledged that America will become “the best place in the world to do business” and that the government must “take responsibility” for our deficit spending. But does all of this rhetoric mean anything or is all this just another batch of empty promises to add to the long list of empty promises that Barack Obama has already made and broken?
The American people certainly don’t need any more empty promises. Millions of American families have been pushed to the edge of desperation by this economy.
There has been a lot of talk that the economy is “turning around”, but in many areas of the country the employment situation continues to get even worse. Payrolls decreased in 35 U.S. states during the month of December.
The truth is that the number of “good jobs” produced by the U.S. economy continues to shrink. In fact, only 47 percent of working-age Americans have a full-time job at this point.
The American people are not going to buy this “economic recovery” as long as unemployment remains at epidemic levels in so many areas. Just consider some of the stunningly high unemployment rates in some of our most important states….
Nevada – 14.5%
California – 12.5%
Florida – 12.0%
So did Barack Obama propose anything substantial that will actually create real jobs?
No.
Instead, all he had to offer was just a bunch of empty promises. It is almost as if Obama believes that a really good inspirational speech will somehow make things better. The following are just a few of the empty promises Obama made during his address to the nation….
Empty Promise #1: America Will “Out-Innovate” The Rest Of The World And This Will Create More Jobs
During the State of the Union address, Barack Obama promised that the United States will “out-innovate” the rest of the world and that this will create more jobs.
Oh really?
Perhaps we could create some more cutting edge products like the Apple iPhone, right?
After all, Apple iPhones were one of the most wildly successful American technological innovations of the past decade. Surely this is the kind of innovation that Obama would like to see more of.
Well, do you know where Apple iPhones are made?
Apple iPhones are manufactured in China by workers making about 293 dollars a month (and that was after a big raise).
But it isn’t just the Apple iPhone that is made overseas. The truth is that almost all high technology products are made outside of the United States.
In 2008, 1.2 billion cellphones were sold worldwide. So how many of them were manufactured inside the United States? Zero.
Ouch.
Not only that, another fact to note is that manufacturing employment in the U.S. computer industry was actually lower in 2010 than it was in 1975.
Empty Promise #2: America Will “Out-Educate” The Rest Of The World And This Will Create More Jobs
For decades, U.S. presidents have promised that “education” is the key to competing with the rest of the world.
Okay, if suddenly every single person in the United States had an extra college degree, would that mean that more jobs would suddenly start popping into existence?
Of course not.
Right now, we can’t produce enough nearly enough jobs for all of the college graduates that we already have.
Sadly, the truth is that we are already experiencing an epidemic of unemployment among our college graduates. According to the Project on Student Debt, unemployment for new college graduates stood at 8.7 percent in 2009, which was way up from 5.8 percent in 2008.
But that is not the whole story.
Millions of college graduates that have been able to find jobs have ended up taking jobs that they didn’t even need a college education for. The “underemployment rate” among college graduates is absolutely exploding.
In 1992, there were just 5.1 million “underemployed” college graduates in the United States, but by 2008 there were 17 million “underemployed” college graduates in the United States.
Many of our brightest young minds are now flipping burgers, waiting tables and welcoming people to Wal-Mart.
Oh, but certainly the answer is to get more Americans to go to college, right?
It certainly sounds good in a speech for a politician to say that “more education” is the answer, but in the end all it amounts to is a hollow promise.
Getting more Americans to go to college will not create any more jobs, but it will create more debt. Americans now owe more than $884 billion on student loans, which is more than the total amount that Americans owe on their credit cards.
Empty Promise #3: America Will “Out-Build” The Rest Of The World And This Will Create More Jobs
So Barack Obama says that we are going to “out-build” the rest of the world?
Well, that certainly sounds good.
But what exactly does that mean?
Does it mean that we are going to quit shutting down our factories and tearing down our economic infrastructure?
So is Obama going to do something to stop the flood of jobs and factories that are leaving the United States?
No, in fact he intends to “increase” trade with countries such as China and India. That is going to mean that thousands more factories and millions more jobs are going to be “outsourced”.
Well, what about building up infrastructure such as roads, bridges, power grids, dams and ports?
That is certainly a very good idea.
According to the American Society of Civil Engineers, we need to spend approximately $2.2 trillion on infrastructure repairs and upgrades just to bring our existing infrastructure up to “good condition”.
As will be discussed below, the U.S. government is flat broke. Not only that, our state governments are flat broke and our local governments are flat broke.
So where will the trillions of dollars that we need for infrastructure come from?
Obama did not even come close to answering that question.
Empty Promise #4: America Will Become “The Best Place In The World To Do Business” And This Will Create More Jobs
It was incredible that Barack Obama could suggest that America is “the best place in the world to do business” with a straight face.
First of all, when you consider all forms of taxation, U.S. businesses face one of the most oppressive taxation regimes in the entire world.
But not only that, U.S. businesses also have to deal with one of the most horrific regulatory environments in the history of mankind.
As I have written about previously, the mountains of red tape that U.S. businesses have to wade through just continues to grow every single year.
The Federal Register is the main source of regulations for U.S. government agencies. In 1936, the number of pages in the Federal Register was about 2,600. Today, the Federal Register is over 80,000 pages long.
So is Barack Obama going to do anything about that?
Of course not.
In fact, Barack Obama and the Democrats have been really busy passing even more ridiculous regulations.
For example, the U.S. Food and Drug Administration is projecting that the food service industry will have to spend an additional 14 million hours every single year just to comply with new federal regulations that mandate that all vending machine operators and chain restaurants must label all products that they sell with a calorie count in a location visible to the consumer.
Empty Promise #5: Barack Obama Pledges To “Take Responsibility” For Our Deficit Spending
In fact, since Barack Obama took office, the U.S. government has gotten us into so much new debt that it breaks down to $10,429.64 for each of the 308,745,538 people counted by the 2010 U.S. census.
So is that “taking responsibility” for our deficit spending?
When Barack Obama took office, the U.S. national debt was 10.6 trillion dollars.
Today it is over 14 trillion dollars.
Government debt is absolutely out of control. At this point, the U.S. national debt is increasing by roughly 4 billion dollars every single day.
If all of this debt is not brought under control, it will bring down the entire U.S. financial system. According to a recent U.S. Treasury report to Congress, the U.S. national debt will reach 19.6 trillion dollars in 2015.
Can you imagine being 20 trillion dollars in debt?
That is 20,000,000,000,000 dollars.
So it would be really great if Barack Obama could do something about all of this debt, but based on his track record perhaps we should not be holding our breath.
Not that Obama is to blame for all of this.
The sad reality is that both parties have been involved in a massive debt orgy for decades and decades. Now the day of reckoning is almost here and it is going to be incredibly painful.
We are in so much trouble that it is hard to even try to put it into words. None of our politicians are telling us the whole truth. We are headed for a complete and total disaster.
If the U.S. economy “grows” by 4 percent in 2011, but by the end of the year we are paying $3.00 for a loaf of bread, $4.00 for a gallon of milk and $5.00 for a gallon of gasoline are the American people going to be better off economically or worse off? The answer is obvious, but most “experts” in the mainstream media continue to insist that as long as U.S. GDP is increasing and as long as the stock market is going up that our economy is improving. But that is just not the case. If the amount of money in circulation was relatively constant, those measurements would be helpful, but unfortunately the U.S. government and the Federal Reserve are dramatically pumping up the money supply right now. Just because larger amounts of paper money are changing hands does not mean that the economy is getting stronger. Of course GDP is going to rise when there is much more money in the system. But economic growth that is fueled by inflation is just an illusion and it is not an indicator of economic health at all.
A very basic example shows this very easily. Imagine if suddenly everyone in the United States had the amount of money they owned instantly doubled. Would the U.S. economy be twice as healthy? Of course not. Very quickly prices would rise to meet the new level of money.
Well, in the United States today our “authorities” are pumping massive amounts of new dollars into the system. That is one reason why so many people are so upset about the Federal Reserve’s “quantitative easing 2″ program. The Federal Reserve is creating money out of thin air and pumping it into the financial system. The first people that get their hands on this new money are Wall Street banks and major financial institutions. The idea is that eventually all of this new money will “trickle down” and will help average Americans, but that just does not seem to be happening.
In addition, when the U.S. government goes into more debt, this also creates more money. The U.S. government has accumulated far more new debt during the last two years than it ever has in any other two year period. When the U.S. government spends all of this money that it borrows it introduces a massive amount of new money into the system.
There are many ways to measure the money supply, and one of the most basic (M1) is displayed below. As you can see, thanks to the actions of the Federal Reserve and the U.S. government, the money supply is rising at an almost exponential rate at this point. The money supply has grown rapidly at various points in the past, but what we are witnessing now is really unprecedented…..
So what happens when you have a lot more money chasing roughly the same number of goods and services?
Well, you have inflation of course.
Are our “leaders” alarmed by any of this?
No, in fact they plan to pump up the money supply even more. The Federal Reserve seems content to continue their “quantitative easing” program and Barack Obama is proposing all kinds of new federal spending which will be funded by more debt.
So the truth is that we had better have some significant “economic growth” during 2011. If this amount of money is pumped into our financial system and we don’t see any “economic growth” then that would be an indication of a major league economic breakdown.
But instead of looking at things rationally, many mainstream economists are hailing the fact that the U.S. economy may grow by a few percentage points in 2011 as a sign that happy days are here again.
According to a recent article in USA Today, economists are becoming increasingly optimistic about 2011, and the consensus seems to be that economic growth in the United States will fall somewhere between 3 and 4 percent….
Economists are more optimistic about the recovery than they were just a few months ago, significantly upgrading their forecasts for 2011 as consumers open their wallets.
Unfortunately, the irrational optimism is not limited to just the United States. As global leaders prepare to descend on the annual meeting of the World Economic Forum in Davos, Switzerland many mainstream media outlets are declaring that the worldwide financial crisis is over and that we are now entering a glorious boom time for the global economy. For example, the following is how one recent article from Bloomberg opened….
For only the third time since the Industrial Revolution, the world may be entering a long-term growth cycle that will lift all economies simultaneously, driving bond yields and commodity prices higher.
People don’t seem to realize that just because more money is changing hands and just because financial markets are going higher that it doesn’t mean that the economic situation is improving.
If a rising GDP and a soaring stock market truly were strong indicators of economic health, then Zimbabwe would have been one of the strongest economies on the planet over the last 10 years.
Inflation changes everything.
Unfortunately, official U.S. government inflation figures have become so manipulated that they are of basically no value at this point. Whenever one particular category starts to experience significant inflation, the U.S. government simply removes that category from the inflation calculations. Over the past 40 years the way that inflation is calculated has been changed way too many times.
If you really want to get a good idea of what is happening with inflation, a good thing to do is to look at the basic commodities that everyone uses around the world.
For example, according to the United Nations, the global price of food hit an all-time high in December. Not only that, but almost every major agricultural commodity that you could possibly name experienced a double-digit percentage increase in price during 2010.
In addition, the price of oil is steamrolling towards $100 a barrel again. In fact, many analysts are convinced that the price of oil will set a new all-time record in 2011.
The final dam to stopping $150-a-barrel oil and $4-a-gallon gas is being breached, as financial regulation continues its daily erosion into worthlessness.
So what is the answer to these problems?
Well, according to many of the top “economic leaders” in the world, the solution is to create even more money and even more credit.
Between 2000 and 2009, the total amount of credit in the world grew from 57 trillion dollars to 109 trillion dollars. Now the World Economic Forum says that we need to grow the total amount of credit by another 100 trillion dollars over the next ten years to “support” the anticipated amount of “economic growth” around the world that they expect to see.
Does that make any sense?
We have to double the amount of debt in the world so that the world economy can grow?
But this is what the world economic system has become at this point. It is a never ending debt spiral that requires constantly increasing levels of debt and paper money.
That is a huge reason why precious metals such as gold and silver are becoming so popular. Investors are becoming sick and tired of the constantly inflating paper currencies. Gold and silver are both very much in demand right now. For example, the Chinese are voraciously gobbling up gold right now. Also, the Central Bank of Russia has announced plans to purchase 100 metric tons of gold per year in order “to replenish the country’s gold reserves”.
Well, the answer is very simple. In an environment of rapidly rising prices, the standard of living for most Americans is going to go down.
In this economic environment, employers are simply not going to increase salaries fast enough to keep up with the rising price of food, gas and health care.
In addition, there are tens of millions of Americans that are on fixed incomes. As prices rise, those fixed incomes will simply not go as far.
So the truth is that most Americans are going to find their finances stretched even thinner in the months and years to come.
Inflation is like a thief. When prices rise it means that the purchasing power of all the dollars that we have accumulated goes down.
But for our politicians, inflation can be a helpful thing. They can take inflation-fueled “economic growth” numbers and claim that their policies are working and that the economy is becoming healthier.
A year from now when these jokers trot out their “economic growth” numbers and yet the cost of nearly everything you buy has increased dramatically, don’t you believe their propaganda.
Yes, U.S. economic numbers are most likely going to experience a little bit of inflation-fueled “growth” in 2011.
But it will not mean that our economy is improving.
Today America is very, very frustrated. In fact, we probably have not seen this level of anger in the country since World War 2 ended. So why are so many Americans so frustrated and so angry right now? Well, for most Americans it comes down to the economy. Very few things are more frustrating than not being able to find a job that will enable you to pay the mortgage and feed your family. Middle class Americans that do have a little bit of money are digging into their savings and investments at a staggering rate as they desperately try to keep their heads above water. Millions of other families that do not have a “safety cushion” are on the verge of losing their homes or have already been callously tossed out onto the streets by big, greedy banks. Meanwhile, our politicians continue to burden us with increasingly larger amounts of government debt and they stand idly by as our jobs and our industries are shipped overseas. So even though the mainstream media seems absolutely puzzled by the growing anger in America, the truth is that it is not a great mystery. The economy is an absolute nightmare, and if it gets even worse people are going to become even more angry.
The mainstream media and our top politicians are running around proclaiming that the economy has turned around, and yet all of the important long-term economic numbers continue to get worse. Do they think that the American people are stupid?
Perhaps they are just trying to be “optimistic” and are trying to get us all to “believe” in the economic recovery.
Well, while it certainly does not hurt to “stay positive” and to “have faith” when there is some basis in reality for doing so, but what the mainstream media is asking us all to do is to stick our heads in the sand and to pretend that all of our horrific economic problems are not even there.
Until we recognize exactly what our problems are and how bad they have gotten we will never be able to come up with the appropriate solutions.
Our economy does not just need a “tweak” or two. Our economy is a total nightmare at this point.
The following are 20 things about our nightmare of an economy that you will not want to read if you do not want to become very, very angry….
#1 Today, millions of American families are digging deep into their savings and investments in a desperate attempt to stay afloat. Over the past two years, U.S. consumers have withdrawn $311 billion more from savings and investment accounts than they have put into them.
#215 billion dollars: the total amount of compensation that Goldman Sachs paid out to its employees for 2010.
#3 The number of American families that were booted out of their homes and into the streets set a new all-time record in 2010.
#4 Dozens of packages that we buy in the supermarket have been reduced in size by up to 20%. For example, there are now 2 less slices of cheese in a typical package of Kraft American cheese, and there is now 9 percent less toilet paper in a typical package of Scott toilet paper. So now, you may think that you are paying the same amount for these items that you always have, but the truth is that you have been hit with a large price increase.
#5 One Canadian company is making a ton of money shipping “millions and millions of dollars” worth of manufacturing equipment from factories that are being shut down in the United States over to new factories that are being set up in China.
#6 In America today, the wealthiest 20% own a whopping 93% of all the “financial assets” in the United States.
#7 Only 35 percent of Americans now have enough “emergency savings” to be able to cover three months of living expenses.
#847 percent of all Americans now believe that China is the number one economic power in the world.
#9 If the U.S. banking system is healthy, then why does the number of “problem banks” continue to keep increasing? This past week the number of U.S. banks on the unofficial list of problem banks reached 937.
#10 According to former U.S. Labor Secretary Robert Reich, the wealthiest 0.1% of all Americans make as much money as the poorest 120 million.
#11 U.S. housing prices have now fallen further during this economic downturn than they did during the Great Depression of the 1930s.
#12 According to some very disturbing new research, 45 percent of U.S. college students exhibit “no significant gains in learning” after two years in college.
#13 Americans now owe more than $884 billion on student loans, which is a new all-time record.
#14 The United Nations says that the global price of food hit an all-time record high in December, and the price of oil is surging towards $100 a barrel, but the U.S. government continues to insist that we barely have any inflation at all.
#15 The more Americans that are on food stamps the more profits that JP Morgan makes. Today, an all-time record of 43.2 million Americans are on food stamps, and JP Morgan is making a lot of money processing millions of those benefit payments.
#16 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs.
#17Dozens of U.S. states are either implementing tax increases in 2011 or are considering proposals to raise taxes.
#18 The United States has had a negative trade deficit every single year since 1976.
#19 The U.S. national debt has crossed the $14 trillion mark for the first time, and at some point during 2011 it will cross the $15 trillion mark.
#20 What the U.S. economy really needs is for the government to get off all of our backs, but instead they continue to tighten their grip on us. In fact, the Obama administration is proposing a “universal Internet ID” that would watch, track, monitor and potentially control everything that you do on the Internet.
The U.S. government is telling us that the unemployment rate fell all the way down to 9.0% in January. Should we all cheer? Is it now going to be a lot easier to find a job? Has the economy finally turned around? Are happy days here again? Well, it is a good thing to have a positive attitude, but the truth is that there is just not much to cheer about when you take a closer look at the recent unemployment numbers. First of all, the U.S. economy only added 36,000 jobs in January. Economists had been expecting an increase of about 145,000 jobs, and an increase of 150,000 jobs per month is necessary just to keep up with population growth. So why did the unemployment rate go down? Well, the government says that over half a million Americans suddenly dropped out of the labor force in January. That doesn’t make a lot of sense, but this is how the government calculates their numbers. So what happened to those 500,000 Americans? Did they all win the lottery? Have they all become independently wealthy? Did they all die? No, the vast majority of them are still around and the vast majority of them still desperately need jobs. It is just that the government does not count them as “looking for work” anymore.
Nothing Is Stable Anymore
Many of the things that we take for granted today didn’t even exist a few short years ago. Facebook has only been with us since 2004. YouTube has only been with us since 2005. Can you imagine a world where those two websites did not exist?
We live in a world of information overload. Once upon a time it would have been possible to go to sleep for a decade and wake up and everything would still be pretty much the same. But today if you were to do that you would be in for a case of severe culture shock.
Do you remember when you could buy a set of encyclopedias and the information in them would still be good a decade or two later?
Well, things do not work that way anymore.
In fact, most of the articles on this website will be obsolete a month from now.
In today’s world, you really have to think twice before you say that something is “not possible”.
A few months ago, it was absolutely inconceivable that Egyptian President Hosni Mubarak would declare to the world that he has “spent enough time serving Egypt“.
Yet here we are.
One week the government of Tunisia seemed perfectly stable and the next week it was toppled.
Do any of you out there still think that you can make realistic “plans for the future” in today’s world?
Once upon a time in America, many of us were taught that if we worked really hard in school we could get a great job with a great company. We were promised that if we were faithful to that company for 30 or 40 years that we would be treated fairly and given a good pension.
Well, in today’s world you might as well crumple up that plan and throw it into the wastebasket.
There is no such thing as a stable job anymore. Businesses are coming into existence and going out of existence faster than ever before. Today, one out of every four Americans workers has been with their empl0yer for less than a year.
Most Americans still don’t really understand that they are now part of a global economy. They keep thinking that things were the way they used to be. They keep thinking that the U.S. economy is invincible.
Well, those days are long gone. The United States is being deindustrialized at lightning speed. Tens of thousands of manufacturing facilities and millions of jobs have been sent overseas. China, once a complete economic backwater, is now kicking the crap out of us on the global economic stage.
Our financial system is certainly on incredibly shaky ground. Will any of us ever forget what happened in 2008?
Do any of us actually believe that it can’t happen again?
Our health care system is also incredibly unstable. Today, 46 million Americans have absolutely no health insurance. That means that 46 million Americans are just one major injury or illness away from financial ruin with no protection whatsoever.
Not that those that actually have health insurance are protected. According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States. Of those bankruptcies that were caused by medical bills, approximately 75 percent of them involved individuals that did have health insurance.
So just because you have health insurance does not mean anything. One bad accident or one really bad disease and you could be totally wiped out.
Isn’t that comforting?
But the truth is that our entire economy is on the verge of total collapse.
World famous investor Harry Schultz recently published the last issue of his legendary financial newsletter. After 45 years, the following is how Schultz summed up the economic collapse that we are now facing….
David Stockman, the former director of the Office of Management and Budget under Ronald Reagan was quoted by Schultz as saying the following about how desperate things are about to become….
Millions of Americans have become “preppers” in recent years as they have come to realize that our economy is headed down a very dark road.
But sadly, the reality is that the vast majority of Americans are not prepared for any kind of economic or natural disaster. As this week has shown us, just the threat of a major snow storm can wipe out store shelves in a single day.
So what would this country look like if a major disaster fundamentally changed life in America and suddenly people were desperate for food and supplies?
It is a frightening thing to think about.
As the pace of change has accelerated dramatically, the U.S. government and other governments around the world have responded by trying to get a tighter grip on everyone and everything.
To get on an airplane in the United States today, you either have to allow a security goon to use a scanner to look over your completely exposed body, or you have to allow a security goon to feel up all of your private areas with the fronts of his or her hands.
Not only that, but the U.S. government has now deployed VIPR (Visible Intermodal Prevention and Response) teams to set up security checkpoints at bus terminals, subway stations and on major highways.
The America that so many of us once loved is rapidly disappearing.
But it is not just our man-made systems that are rapidly changing. Something seems to be happening to the entire planet. Flooding of biblical proportions has hit Australia, Brazil, China and Pakistan over the past 12 months. Scorching heat caused massive crop failures all over Russia last summer. Record-setting cold temperatures and snowfalls all over the northern hemisphere have scientists scratching their heads. On top of everything else, mass deaths of birds and fish are suddenly being reported all over the globe.
Even the crust of the earth is becoming increasingly unstable. Did you see that volcano go off in Japan the other day? Over the past two years it seems like volcanoes have been suddenly erupting all over the world.
Not only that, but sinkholes have become an absolute epidemic all over the planet. Some of these sinkholes have been so large that they have swallowed entire apartment buildings.
In addition, it seems like there is a magnitude 6 or magnitude 7 earthquake somewhere in the world almost every day now. They have become so common that the mainstream media barely even takes notice of them anymore unless one happens near a very populated area.
None of us really knows what the world is going to look like ten years from now. What will the “new” Facebooks and YouTubes be? Will Ben Bernanke’s reckless money printing destroy our economy by then? Will our U.S. dollars still be of any value ten years from now? Will there even still be a U.S. dollar?
Will we still be able to feed most of the people in the world by 2011? Will shortages of food, water and oil start driving people crazy? Could some amazing energy discovery completely transform society?
Who will be the president of the United States? Will there even be a president of the United States? Will war have erupted in the Middle East by that point? Will the United States be in another war by then?
The truth is that things are changing so fast that it is hard to even come up with the right questions to ask. The world is going to change faster this year than it did last year. In 2012 the pace of change will be even faster.
So buckle up and hold on tight because this is going to be one wild ride.
For much more on how incredibly fast the pace of change is in our modern society, check out the video posted below. It is entitled “Did You Know?” and it has been viewed more than 12 million times on YouTube….