Do you have an emergency fund? If you even have one penny in emergency savings, you are already ahead of about one-fourth of the country. I write about this stuff all the time, but it always astounds me how many Americans are literally living on the edge financially. Back in 2008 when the economy tanked and millions of people lost their jobs, large numbers of Americans suddenly couldn’t pay their bills because they were living paycheck to paycheck. Now the stage is set for it to happen again. Another major recession is going to happen at some point, and when it does millions of people are going to get blindsided by it.
Despite all of our emphasis on education, we never seem to teach our young people how to handle money. But this is one of the most basic skills that everyone needs. Personally, I went through high school, college and law school without ever being taught about the dangers of going into debt or the importance of saving money.
If you are ever going to build any wealth, you have got to spend less than you earn. That is just basic common sense. Unfortunately, nearly one out of every four Americans does not have even a single penny in emergency savings…
Bankrate’s newly released June Financial Security Index survey indicates that 24 percent of Americans have not saved any money at all for their emergency funds.
This is despite experts recommending that people strive for a savings cushion equivalent to the amount needed to cover three to six months’ worth of expenses.
For years, I have been telling my readers that at a minimum they need to have an emergency fund that can cover at least six months of expenses. It is great to have more than that, but everyone should strive to have at least a six month cushion.
The June survey also found that 31 percent of Americans have what Bankrate considers an ‘adequate’ savings cushion — six or more months’ worth of money to pay expenses — which means that nearly two-thirds of the country isn’t saving enough money.
That means that a whopping 69 percent of all Americans do not have an adequate emergency fund.
So what is going to happen if another great crisis arrives and millions of people suddenly lose their jobs?
Just like last time, mortgage defaults will start soaring and countless numbers of families will lose their homes.
If you do not have anything to fall back on, you can lose your spot in the middle class really fast. And in the case of a truly catastrophic national crisis, trying to operate without any money at all is going to be exceedingly challenging.
And a different survey by CareerBuilder found that 75 percent of all Americans have lived paycheck to paycheck “at least some of the time”.
Unfortunately, in a desperate attempt to make ends meet many of us continue to pile up more and more debt. According to Moneyish, Americans have now accumulated more than a trillion dollars of credit card debt, more than a trillion dollars of student loan debt, and more than a trillion dollars of auto loan debt.
We’ve racked up $1 trillion in credit card debt — and that’s just a fraction of what we owe. That’s according to data released this year from the Federal Reserve, which found that U.S. consumers owe $1.0004 trillion on their cards, up 6.2% from a year ago; this is the highest amount owed since January 2009. What’s more, this isn’t the only consumer debt to top $1 trillion. We now also owe more than $1 trillion for our cars, and for our student loans, the data showed.
We often criticize the federal government for being nearly 20 trillion dollars in debt. And that criticism is definitely valid. What we are doing to future generations of Americans is beyond criminal.
But are we not doing something similar to ourselves?
When you divide the total amount of consumer debt by the size of the U.S. population, it breaks down to roughly $40,000 for every man, woman and child in our country.
When someone lends you money, you have to pay back more than you originally borrow. And in the case of high interest debt, you can end up paying back several times what you originally borrowed.
If you carry a balance from month to month on a high interest credit card, it is absolutely crippling you financially. But many Americans don’t understand this. Instead, they just keep sending off the “minimum payment” every month because that is the easiest thing to do.
If you ever want to achieve financial freedom, you have got to get rid of your toxic debts. There are some forms of low interest debt, such as mortgage debt, that are not going to financially cripple you. But anything with a high rate of interest you will want to pay off as soon as possible.
And everyone needs a financial cushion. Unless you can guarantee that your life is always going to go super smoothly and you are never going to have any problems, you need an emergency fund to fall back on.
Yes, you may need to make some sacrifices in order to make that happen. Nobody ever said that it would be easy. But just about everyone has somewhere that a little “belt tightening” can be done, and in the long-term it will be worth it.
When you don’t have to constantly worry about how you are going to pay the bills next month, it will help you sleep a lot easier at night. Many of us have put a lot of unnecessary stress on ourselves by spending money that we didn’t have for things that we really didn’t need.
And now is the time to get your financial house in order, because it appears that another major economic downturn is not too far away.
Should we make homelessness against the law and simply throw all homeless people into prison so that we don’t have to deal with them? Incredibly, this is actually starting to happen in dozens of major cities all across the United States. It may be difficult to believe, but in many large urban areas today, if you are found guilty of “public camping” you can be taken directly to jail. In some cities, activities such as “blocking a walkway” or creating any sort of “temporary structure for human habitation” are also considered to be serious crimes. And there are some communities that have even made it illegal to feed the homeless without an official permit. Unfortunately, as the U.S. economy continues to slow down the number of homeless people will continue to grow, and so this is a crisis that is only going to grow in size and scope.
Of course the goal of many of these laws is to get the homeless to go somewhere else. But as these laws start to multiply all across the nation, pretty soon there won’t be too many places left where it is actually legal to be homeless.
One city that is being highly criticized for passing extremely draconian laws is Houston. In that city it is actually illegal for the homeless to use any sort of material to shield themselves from the wind, the rain and the cold…
Houston Mayor Sylvester Turner is taking a similar approach—his anti-encampment ordinance makes it illegal to use “fabric, metal, cardboard, or other materials as a tent or temporary structure for human habitation.” This ensures that the Houstonian homeless are vulnerable not just to the elements, but also to the constant threat of the police. Officials cite one of the most common justifications for crackdowns on the homeless: neighborhood safety (a more socially acceptable way of talking about the not-in-my-backyard mentality).
With all of the other problems that we are facing as a nation, it stuns me that there are politicians that would spend their time dreaming up such sick and twisted laws.
According to one news report, the homeless in Houston are now officially banned from doing all of the following things…
1. They can’t block a sidewalk, stand in a roadway median or block a building doorway. (AKA they can’t panhandle).
2. They also can’t do any of these things — blocking walkways — under state law that already existed.
3. They can’t sleep in tents, boxes or any other makeshift shelter on public property.
4. They also can’t have heating devices.
5. They can’t carry around belongings that take up space more than three feet long, three feet wide, three feet tall.
6. People can’t spontaneously feed more than five homeless people without a permit.
If I was a homeless person in Houston, I would definitely be looking to get out of there.
But where are they going to go?
Things are almost as bad in Dallas. In fact, it is being reported that the police in Dallas “issued over 11,000 citations for sleeping in public from January 2012 to November 2015.”
When you break that number down, it comes to 323 citations per month.
Of course some people have tried to challenge these types of laws in court, but most of the challenges have been unsuccessful. For example, just check out what recently happened in Denver…
Three people who were contesting Denver’s urban-camping ban were found guilty on Wednesday, April 5, at the Lindsey-Flanigan courthouse. The defendants — Jerry Burton, Randy Russell and Terese Howard — were determined to have unlawfully camped on November 28, 2016, and to have interfered with police operations at one location. All three were sentenced with court-ordered probation for one year and between twenty and forty hours of community service.
The case challenged Denver’s unauthorized-camping ordinance, which has been divisive ever since Denver City Council approved it in 2012.
Since the courts are generally upholding these laws, this has just emboldened more communities to adopt anti-homelessness ordinances. According to one report, dozens of major cities have now passed such laws…
City-wide bans on public camping (PDF) have increased by 69 percent throughout the United States. What used to be seen as an annoyance is now prohibited, forcing fines or jail time on those who certainly can’t afford it. The only nationwide nonprofit devoted to studying this, the National Law Center on Homelessness and Poverty, has been tracking these changes since 2006. Their findings? There are a scary number of laws passed that ironically make it costly to be homeless.
For example, in 33 of the 100 U.S. cities they studied, it’s illegal to publicly camp. In 18, it’s illegal to sleep in public. Panhandling is illegal in 27 cities.
In 39 cities, it’s illegal to live in vehicles.
As I have warned repeatedly, we are seeing hearts grow cold all around us. Instead of doing everything that they can to try to help those in need, communities are trying to make them go some place else, and those that try to feed and help the homeless are being harshly penalized.
Sadly, all of this comes at a time when homelessness is on the rise all over America. In a previous article I pointed out that in New York City the number of homeless people recently hit a brand new all-time high, and things have gotten so bad in Los Angeles that the L.A. City Council has formally requested that Governor Jerry Brown declare a state of emergency.
We tend to think of the homeless as bearded old men with drinking problems, but the truth is that many of the homeless are children.
In fact, the number of homeless children in the United States has risen by about 60 percent since the end of the last recession.
If this is how we are going to treat some of the most vulnerable members of our society while things are still relatively stable, how are we going to be treating one another when the economy completely collapses?
Did World War III begin on April 6th, 2017? After Donald Trump fired 59 Tomahawk cruise missiles into Syria on Thursday night, millions of Americans were cheering, but the cheering isn’t going to last for long if a new world war erupts. What is amazing to me is that this happened on the 100th anniversary of the United States entry into World War I. The U.S. officially entered that war on April 6th, 1917, and now 100 years later to the day Donald Trump has essentially declared war on Syria.
If you think using the term “World War III” is alarmist, you might want to tell that to the vast numbers of people that are buzzing about a new world war all over social media. If you don’t yet understand why a strike on Syria could be so dangerous, go back and read my article from yesterday. If we continue striking Syria, we could very easily find ourselves in a direct military conflict with Russia, Iran and Hezbollah.
Hopefully last night will be the full extent of U.S. military action. If Donald Trump and his national security advisers pat themselves on the back for “looking tough” and decide that was enough, we probably won’t see a major regional war break out.
But if the U.S. decides that regime change is necessary and continues to conduct more strikes, we will have war. And unfortunately, there are already signs that this may happen. On Friday, U.S. Ambassador to the United Nations Nikki Haley stated that the Trump administration “is prepared to do more”…
“The United States took a very measured step last night,” Haley said. “We are prepared to do more. But we hope that will not be necessary. It is time for all civilized nations to stop the horrors that are taking place in Syria and demand a political solution.”
I don’t understand why so many Americans seem to have a thirst for war.
I have been studying war virtually all my life. When I was just a small boy, I would check huge volumes on World War I, World War II and the Korean War out of the library and read them cover to cover. And let me tell you, war is hell. Nobody should actually want to see war, and now we are closer to the next world war than we have been in decades.
Needless to say, the Russians are extremely angry about what Trump has done. Russian President Vladimir Putin has denounced it as an “illegal act of aggression”, and Russian Prime Minister Dmitry Medvedev says that the U.S. came “within an inch” of a direct conflict with Russian forces…
Russian Prime Minister Dmitry Medvedev has said the US air strike on a Syrian air base came “within an inch” of militarily clashing with their forces.
He said the action taken by the Americans was in breach of international law and their own internal procedures, and accused Washington of “barely avoiding combat clashes with Russia”.
In a post on Facebook, Mr Medvedev said the air strike had “completely ruined relations” between the two superpowers.
What in the world is Trump thinking?
The Russians very much wanted Trump to win the election because they felt that there was a very high probability of war between our two nations if Hillary Clinton would have won.
And the Russians were quite right to think that.
So the Russian people rejoiced greatly when Trump won, because they thought that it would be a new day for relations between our two great countries.
But after last night that hope is dead.
In fact, historians will probably mark April 6, 2017 as the day when the relationship between the United States and Russia officially died.
And it didn’t take long for the Russians to start to respond. The following comes from Business Insider…
The Russia Foreign Ministry announced that it suspended an agreement to avoid clashes between Russian and US-led coalition jets over Syrian airspace, while Reuters reporter Idrees Ali reports that Russia withdrew from a deconfliction channel, which the US used Thursday night to warn Russian forces of the incoming cruise-missile strikes (which took place Friday morning local time).
In addition, it has been announced that Russia will be significantly bolstering air defenses in Syria, and according to Fox News a Russian warship has been dispatched to confront the two U.S. naval vessels that fired the cruise missiles at Syria…
A Russian warship entered the eastern Mediterranean Friday and was heading toward the area where two U.S. Navy destroyers launched missile strikes into Syria, Fox News has learned.
The Russian frigate, Admiral Grigorovich RFS-494, crossed through the Bosphorus Strait “a few hours ago” from the Black Sea, according to a U.S. defense official.
Here in the United States, we need to start making our voices heard very loudly so that President Trump will understand that most Americans do not want to go to war in Syria.
And of course the same thing can be said about a potential war with North Korea. After last night’s cruise missile display, North Korean leader Kim Jong Un is warning that his nation is on the “brink of war” with the United States.
One of the angles that is not getting a lot of discussion in the mainstream media is how the events of last night were viewed by the Chinese.
Donald Trump grew up in New York City at a time when the mafia still had a dominant presence, and to put a “hit” on another rival across town when you are sitting down for a meeting with a top boss from another family sends a very, very powerful message.
The fact that Trump ordered those 59 cruise missiles to rain down on Syria at the exact moment when he was having dinner with the president of China is going to be remembered by the Chinese for a very, very long time. In Asian cultures respect is a very big thing, and the Chinese had to be deeply embarrassed by what just happened last night.
On top of everything else, the truth is that Donald Trump blatantly violated the U.S. Constitution by conducting a military strike against Syria without the approval of Congress. This is something that U.S. Senator Rand Paul pointed out very clearly in an editorial that was released on Friday…
The Constitution clearly states that it is Congress that has the power to declare war, not the president. Even the War Powers Resolution, shoved forward by hawks as justification, clearly states criteria under which the president may act – a declaration of war, a specific statutory authorization, or a national emergency created by an attack on the United States.
That’s it. Absent those criteria, the president has no authority to act without congressional authorization. Congress must stand up and assert its authority here and now.
Conservatives always protested whenever Barack Obama violated the U.S. Constitution in this manner, and so they should protest when Donald Trump acts in the same fashion.
A lot of people will read this article and they aren’t going to grasp the importance of what is going on because they do not understand where all of this is ultimately heading.
But there are some of you that have major alarm bells going off in your head because you have been listening to the warnings and you know what comes next.
We have entered a season of time that myself and other watchmen have been warning about for many years. I just can’t believe that it is starting to happen so quickly. Many had been hoping for a time of peace and prosperity during a time of “reprieve” under Donald Trump, but you can forget that now.
The events of April 6th, 2017 have changed everything, and most Americans are completely unprepared for what will soon follow.
It makes me physically ill when I think that the U.S. could be on the verge of starting a disastrous war in the Middle East that will not benefit us in any way, shape or form. I can’t believe this is happening, and a lot of other people apparently can’t either. In fact, there were some that heavily criticized me when I suggested that Donald Trump had just committed to taking military action in Syria in part 1 and part 2 of this series of articles. But less than 24 hours later, the front page of USA Today was running this jarring headline: “Trump team developing military response in Syria”. It is interesting to note that this came on the 77th day of Trump’s presidency, and on Thursday it was also revealed that the Trump administration is working to put together an international coalition to remove Syrian President Bashar al-Assad from power. The following comes from Fox News…
America’s top diplomat addressed the Syria crisis a day after Trump declared in the Rose Garden that the chemical strike would not be tolerated. Tillerson pointedly said Russia should “consider carefully” its support for the Assad regime, while calling for an international effort to defeat ISIS in Syria, stabilize the country and ultimately work with partners through a political process that leads to Assad leaving power.
Asked if the U.S. would organize a coalition to remove Assad, Tillerson said: “Those steps are underway.”
U.S. Secretary of State Rex Tillerson also told the press that Assad has “no role” in governing Syria in the future, and he pledged there there will be a “serious response” to the recent chemical attack in Syria’s Idlib province.
Of course it is extremely doubtful that Assad had anything to do with that chemical attack, and I am going to share some more of that evidence with you in part 4 of this series.
Defense Secretary James Mattis will brief President Donald Trump at Mar-a-Lago on military options against Syrian leader Bashar al-Assad’s regime later on Thursday in the wake of a deadly attack which activists said killed at least 100 people — including 25 children — and injured at least 400 others earlier this week.
The White House and Pentagon have had detailed back-and-forth conversations over the past two days over options including a National Security Council meeting Wednesday. Mattis and National Security Adviser H.R. McMaster have had repeated contact about the best way forward, a U.S. official told NBC News.
It is being reported that airstrikes and the use of cruise missiles against Syrian targets are among the initial options under consideration.
If Trump drops a few bombs or fires of a few cruise missiles that likely wouldn’t spark a broader conflict, but there is one option that is reportedly being considered that could bring us into direct military conflict with Russia. According to The Intercept, the Trump team is actually considering a “saturation strike” which would result “in Russian military deaths”…
The proposed strike would involve launching Tomahawk cruise missiles to overwhelm Russian air defense systems used by the Syrian military. The Russian government currently helps maintain the air defense sites and advises the Syrian military.
According to both U.S. military officials, the current proposal would likely result in Russian military deaths and mark a drastic escalation of U.S. force in Syria.
One U.S. military official said the decision to allow the strikes, which would kill Russians, signals a significant change in policy by the Trump administration. A decision by Trump to go forward with the plan would be a reversal from the Obama administration, which denied multiple air strike proposals that would likely cause Russian personnel casualties in Syria.
If that happens, any hope for improved relations with Russia will be permanently extinguished and it could easily result in the Russians shooting back at us.
The Russians have S-300 and S-400 air defense systems already in place in Syria. Both of those systems are some of the most advanced in the world and are a significant threat to U.S. warplanes.
As I discussed yesterday, it is not difficult to imagine what would happen if footage of U.S. aircraft being blown out of the sky by Russian missiles started rolling on our cable news channels 24 hours a day.
“In addition to other measures, the United States should lead an international coalition to ground Assad’s air force. This capability provides Assad a strategic advantage in his brutal slaughter of innocent civilians, both through the use of chemical weapons as well as barrel bombs, which kill far more men, women and children on a daily basis … Ultimately, the grounding of Assad’s air force can and should be part of a new comprehensive strategy to end the conflict in Syria.”
Of course if Trump goes to war with another sovereign nation without the approval of Congress that would be a blatant violation of the U.S. Constitution, and that is something else that I would be talking about in part 4 of this series.
Even though I am writing about all of this, I still have a hard time believing that this is all happening less than three months into Trump’s presidency. The stage is being set for the kind of scenario that I outlined in The Beginning Of The End, and right now I am far more alarmed by the state of world events than I was at any point in 2016.
I am particularly disturbed by all of this talk about removing Assad.
How in the world does the Trump administration plan to do that?
Even if they conduct a massive bombing campaign that would turn Damascus into a “ruinous heap”, that would still not guarantee regime change.
The only thing that would guarantee regime change is a full-scale ground invasion and the conquest of the entire city of Damascus.
Of course the Russians, the Iranians and Hezbollah would not willingly step aside and let “coalition forces” march to Damascus, and so such a move could very easily spark World War 3 in the Middle East.
I can’t believe that Trump is actually thinking of going to war with Syria. There is nothing to be gained and so much that could be lost. Let us hope that someone can talk some sense to him while there is still time to do so.
I got chills when I saw a CNN report that said that a White House official has just warned that “the clock has now run out” on North Korea’s nuclear program and that “all options are on the table”. That second phrase has been repeatedly used by members of the Trump administration in recent days, and everyone knows what it means. When I wrote that a conflict with North Korea could be “Trump’s first war” last month, I was still hoping that cooler heads would prevail and that a military conflict could be avoided. Unfortunately, it appears that a peaceful solution is not in the cards, and that means that the United States may soon start bombing North Korea. And of course if that happens the North Koreans will strike back with whatever they can, and that includes nuclear weapons.
A senior White House official issued a dire warning to reporters Tuesday on the state of North Korea’s nuclear program, declaring “the clock has now run out and all options are on the table.”
“The clock has now run out, and all options are on the table,” the official said, pointing to the failure of successive administration’s efforts to negotiate an end to North Korea’s nuclear program.
Later this week, President Trump is going to meet with Chinese President Xi Jinping in Florida. The eyes of the entire world will be on this summit, because everyone knows that Trump is going to press the Chinese leader for help on resolving the crisis with North Korea.
But what can China actually do?
The Chinese could cut off trade with North Korea, and that would definitely hurt, but North Korean leader Kim Jong Un appears to have become convinced that long range nuclear missiles are the key to the survival of his regime, and so he will never give up his nuclear program.
And the Chinese will certainly not strike North Korea militarily, and so ultimately if something is going to be done to stop North Korea from getting long range nuclear missiles it will be up to the United States.
On Tuesday morning, North Korea once again showed their defiance by firing yet another test missile into the Sea of Japan…
The missile was fired from the Sinpo region at 10.40pm GMT (6.10am local time) on the communist nation’s east coast and landed into the sea off the Korean peninsula, South Korean military officials confirmed.
The rocket is believed to have flown around 37 miles before crashing into the sea. Specific details about the type of projectile were not immediately available.
Kim Jong Un conducted more missile tests in 2016 than his father did in nearly two decades.
It has become crystal clear that North Korea is not going to back down.
President Trump is still hoping that China will step up to the plate, but if the Chinese don’t he has already stated that the United States is fully prepared to “act alone”. In fact, he made headlines all over the planet when he told the Financial Times the following: “Well if China is not going to solve North Korea, we will. That is all I am telling you.”
It doesn’t take much imagination to figure out what Trump is saying there.
Previous administrations have tried sanctions and negotiations for decades, and they all failed.
In the end, Trump is going to be faced with a choice whether to bomb North Korea or not, and four-star general Jack Keane says that bombing North Korea “may be the only option left”…
A four-star general with close ties to Donald Trump has warned that military strikes are ‘rapidly’ becoming the only solution to North Korea’s nuclear program.
Jack Keane, who declined the President’s offer to become Defense Secretary last year, said bombing Kim Jong-un’s nuclear facilities ‘may be the only option left.’
But bombing North Korea is not like bombing Afghanistan, Iraq, Libya or Syria.
The North Koreans already have nuclear weapons, and the U.S. better destroy them all in an overwhelming initial assault, because Kim Jong Un will use any that survive to strike back.
A senior North Korean defector has told NBC News that the country’s “desperate” dictator is prepared to use nuclear weapons to strike the United States and its allies.
Thae Yong Ho is the most high profile North Korean defector in two decades, meaning he is able to give a rare insight into the secretive, authoritarian regime.
According to Thae, North Korean dictator Kim Jong Un is “desperate in maintaining his rule by relying on his [development of] nuclear weapons and ICBM.” He was using an acronym for intercontinental ballistic missiles — a long range rocket that in theory would be capable of hitting the U.S.
North Korea is currently developing an intercontinental ballistic missile known as the “Taepodong 2” that will have a range of approximately 8000 kilometers.
In other words, it would be capable of striking cities in the western portion of the United States.
It is unthinkable that we would allow a tyrannical leader that is literally insane and that is obsessed with destroying the United States to have such a weapon.
But the moment that we start dropping bombs on North Korea we will start a war in which millions could die. Whatever nuclear weapons are missed in the first assault will likely be fired at U.S. military bases in Japan or at South Korea’s capital city of Seoul. Approximately 10 million people live in Seoul, so the death toll would be absolutely enormous. And even if all North Korean nuclear devices are destroyed by the first attack, the North Koreans still have thousands of artillery guns and rocket launchers trained on Seoul, and they would not hesitate to use their vast stockpile of chemical warheads.
After the initial North Korean barrage, the fourth largest military on the entire planet would start pouring across the border in a massive invasion of South Korea. The U.S. military would be forced to respond with large scale ground forces if South Korea would have any chance of surviving, and just like in the first Korean War the Chinese may decide to respond to that move by committing their own troops to the war on the side of North Korea.
This is a season of “wars and rumors of wars”, and most Americans have no idea how dangerously close we are to the beginning of World War III. My hope is that a peaceful way out of this crisis can still be found, but at this point that is becoming increasingly difficult to imagine.
If Donald Trump decides to go to war with North Korea, he needs to hit them with an absolutely overwhelming first strike that takes out every single North Korean nuke, the bulk of North Korea’s artillery and rockets, and the entire North Korean leadership team within the first few minutes of the attack.
It is hard to imagine a scenario that does not involve nukes that would accomplish that.
And Donald Trump better get the public approval of South Korean and Japanese leadership before ever attempting such an attack, because they will likely pay the highest price if North Korea is able to strike back.
If South Korea or Japan balk at backing such an operation and then they get hit by North Korean nukes, the United States could lose them as friends and allies forever.
The stakes are incredibly high, and there are so many things that could go wrong.
So let us pray for peace, because the alternative is almost too horrible to imagine.
Have you ever thought about what comes after the bubble? In 2008 we got a short preview of what life will be like, but most Americans seem to have come to the conclusion that the last financial crisis was just a minor bump in the road toward endless economic prosperity. But of course the truth is that the ridiculously high debt-fueled standard of living that we are enjoying now is not sustainable, and after this bubble bursts it will be an extremely painful adjustment for our society.
Since the last financial crisis, the U.S. national debt has nearly doubled, corporate debt has doubled, stock valuations have reached exceedingly ridiculous extremes, the student loan debt bubble has surpassed a trillion dollars, we are facing the largest unfunded pension crisis in U.S. history, and in many parts of the country (particularly the west coast) we are facing a housing bubble that is even worse than the one that burst in 2007 and 2008.
And even with all of these bubbles, U.S. GDP growth has been absolutely anemic. Even if you believe the grossly manipulated numbers that the federal government puts out, the U.S. economy grew at a “miserably low” rate of just 1.6 percent in 2016…
In terms of GDP, the fourth quarter was revised up slightly, but there were adjustments for prior quarters, and overall GDP growth for the year 2016 remained at a miserably low 1.6%. We’ve come to call this the “stall speed.” It’s difficult for the US economy to stay aloft at this slow speed. As Q4 gutted any hopes for a strong finish, GDP growth in 2016 matched the worst year since the Great Recession.
And corporate profits, despite a stock market that has been surging for years, are even worse. A lot worse. They’ve declined for years. In fact, they declined for years during the prior two stock market bubbles, the dotcom bubble and the pre-Financial-Crisis bubble. Both ended in crashes.
Things have continued to get even worse early in 2016. At this point, it is being projected that U.S. GDP will grow at an annual rate of just 0.9 percent during the first quarter of 2017.
So anyone that tries to tell you that the U.S. economy is in good shape is simply not being honest with you.
But even though things don’t look great now, they are going to look far, far worse after the biggest debt bubble in human history bursts.
For example, what do you think that America will look like after half of all stock market wealth disappears? In a recent note to his clients, John P. Hussman stated that his team is projecting that by the end of this current market cycle “roughly half of U.S. equity market capitalization – $17 trillion in paper wealth – will simply vanish”.
And of course that projection lines up perfectly with what I have been saying for quite a while. In order for key measures of stock market valuation (such as CAPE, etc.) to return to their long-term averages, stocks are going to have to fall at least 40 to 50 percent from their current levels.
As this coming crisis unfolds, other asset classes will experience astounding downturns as well. This week, Morgan Stanley (one of the too big to fail banks) released a report that said that used car prices “could crash by up to 50%” over the next several years…
For months we’ve been talking about the massive lending bubble propping up the U.S. auto market. Now, noting many of the same concerns that we’ve highlighted repeatedly, Morgan Stanley’s auto team, led by Adam Jonas, has just issued a report detailing why they think used car prices could crash by up to 50% over the next 4-5 years.
Housing prices are primed for a major plunge as well. This is especially true on the west coast where tech money and foreign purchasers from Asia have pushed home values up to dizzying levels. Half a million dollars will be lucky to get you a “starter home” in San Francisco, and it was being reported that one poor techie living there was paying $1400 a month just to live in a closet. Many believe that some cities on the west coast will be quite fortunate if home values only go down by 50 percent during the coming crash.
Eric Rosengren, the president of the Federal Reserve Bank of Boston, recently made a startling tacit admission. We may be in the midst of yet another real estate bubble. Major financial institutions in this country are in possession of over $14 trillion worth of residential real estate loans. That’s well over $40,000 for every man woman and child in America.
Low interest rates have fueled a bubble in subprime auto loans, and that bubble appears to be reaching its limits. There are now over 1 million ordinary and subprime auto loans that are delinquent, a number that hasn’t been this high since 2009.
There is now well over a trillion dollars worth of student loan debt in this country; much of it owned by low income families. And there’s little hope that these students will ever see a return on their investment. That’s why at least 27% of student loans are in default. While more than one in four students are in default now, that number was one in nine a decade ago. And if current trends continue, there could be $3.3 trillion of student loan debt by the end of the next decade.
At some point the imbalances become just too great and the system collapses in upon itself.
In other words, we are heading for a massive implosion.
And once the implosion happens, people are going to go absolutely nuts. Anger and frustration are already rising to the boiling point all over the country, and it isn’t going to take much to push millions of Americans completely over the edge.
In a recent interview with Greg Hunter, author James Rickards warned that when things get really bad in America we could actually see what he refers to as “money riots”…
So, could we be facing a “Mad Max” world if the financial system totally crashes? Rickards says, “In ‘Road to Ruin,’ I talk about what I call the money riots. There is a lot of reasons for rioting. When you start shutting banks and the stock exchange and they say you can’t get your money, it’s only temporary, trust us, people will go out and start to burn down banks. The government is ready for that also with emergency response and martial law. . . . Governments don’t go down without a fight. . . . You can see the shutdown coming because they will try to buy time until they come up with a solution, whether it’s gold, Special Drawing Rights (SDR), guarantees or whatever it might be. There are only two or three possibilities here, but all of them will take time, and they will have to shut down the system. . . . People will not sit for that. So, that means people will riot. They’ll burn down banks. They will smash windows, but what is the reaction to that? The answer is martial law, militarized police, actual military units and you get something that looks like fascism pretty quickly.”
I very much agree with his assessment.
All it is going to take is another major financial crisis and this nation will go completely and utterly insane.
Unfortunately, all of our long-term economic problems have proceeded to get a lot worse since the last time around, and so when things fall apart this time we will likely be looking at a scenario that is absolutely unprecedented in American history.
A lot of people have become very complacent out there these days, but that is a huge mistake.
Just because a crisis is delayed does not mean that it is canceled. And because our leaders have kept making this economic bubble larger and larger, that just means that the coming crisis will be even more painful than it otherwise could have been.
Iran just conducted another provocative missile test, more U.S. troops are being sent to the Middle East, it was just announced that the U.S. military will be sending B-1 and B-52 bombers to South Korea in response to North Korea firing four missiles into the seas near Japan, and China is absolutely livid that a U.S. carrier group just sailed through contested waters in the South China Sea. We have entered a season where leaders all over the globe feel a need to rattle their sabers, and many fear that this could be leading us to war. In particular, Donald Trump is going to be under the microscope in the days ahead as other world leaders test his resolve. Will Trump be able to show that he is tough without going over the edge and starting an actual conflict?
As tensions between the U.S. and Iran continue to mount, the semi-official news agency Tasnim is reporting that Iran’s Revolutionary Guard has successfully conducted yet another ballistic missile test, this time from a navy vessel. Called the Hormuz 2, these latest missiles are designed to destroy moving targets at sea at ranges up to 300 km (180 miles).
Reports on the latest test quotes Amir Ali Hajizadeh, commander of the IRGC’s Aerospace Force, who confirmed that “the naval ballistic missile called Hormuz 2 successfully destroyed a target which was 250 km away.”
The missile test is the latest event in a long-running rivalry between Iran and the United States in and around the Strait of Hormuz, which guards the entrance to the Gulf. About 20% of the world’s oil passes through the waterway, which is less than 40 km wide at its narrowest point.
So how will Trump respond to this provocation?
Will he escalate the situation? If he does nothing he will look weak, but if he goes too far he could risk open conflict.
Elsewhere in the Middle East, things are already escalating. It is being reported that “several hundred Marines” are on the ground in Syria to support an assault on the city of Raqqa, and another 1,000 troops could be sent to Kuwait to join the fight against ISIS any day now. The following comes from Zero Hedge…
While the Trump administration waits to decide if it will send 1,000 troops to Kuwait to fight ISIS, overnight the Washington Post reported that the US has sent several hundred Marines to Syria to support an allied local force aiming to capture the Islamic State stronghold of Raqqa. Defence officials said they would establish an outpost from which they could fire artillery at IS positions some 32km (20 miles) away. US special forces are already on the ground, “advising” the Kurdish-led Syrian Democratic Forces (SDF) alliance according to the BBC.
The defence officials told the Washington Post that the Marines were from the San Diego-based 11th Marine Expeditionary Unit, and that they had flown to northern Syria via Djibouti and Kuwait. They are to set up an artillery battery that could fire powerful 155mm shells from M777 howitzers, the officials said. Another marine expeditionary unit carried out a similar mission at the start of the Iraqi government’s operation to recapture the city of Mosul from IS last year.
Meanwhile, China is spitting mad for several reasons. For one, the Chinese are absolutely furious that South Korea has allowed the U.S. to deploy the THAAD missile defense system on their soil…
China is lashing out at South Korea and Washington for the deployment of a powerful missile defense system known as the Terminal High Altitude Area Defense system, or THAAD, deposited at the Osan Air Base in South Korea on Monday evening.
The deployment of THAAD follows several ballistic missile tests by North Korea in recent months, including the launch of four missiles on Monday, three of which landed in the sea off the coast of Japan. Though THAAD would help South Korea protect itself from a North Korean missile attack, China is vocally protesting the deployment of the system, claiming it upsets the “strategic equilibrium” in the region because its radar will allow the United States to detect and track missiles launched from China.
Of course the U.S. needed to do something, because the North Koreans keep rattling their sabers by firing off more ballistic missiles toward Japan.
But it is one thing to deploy a missile defense system, and it is another thing entirely to fly strategic nuclear bombers into the region.
Now US military chiefs are reportedly planning to fly in B-1 and B-52 bombers – built to carry nuclear bombs – to show America has had enough.
South Korea and the US have also started their annual Foal Eagle military exercise sending a strong warning to North Korea over its actions.
A military official said 300,000 South Korean troops and 15,000 US personnel are taking part in the operation.
The Trump administration has openly stated that all options “are on the table” when it comes to North Korea, and that includes a military strike.
It has been more than 60 years since the Korean War ended, but many are concerned that we may be closer to a new Korean War than we have been at any point since that time.
And of course our relationship with China is tumbling precariously downhill as well. Another reason why the Chinese are extremely upset with the Trump administration is because a U.S. Navy carrier battle group led by the USS Carl Vinson sailed past islands that China claims in the South China Sea just a few weeks ago.
In China, the media openly talks about the possibility of war with the United States over the South China Sea. Most Americans are not even aware that the South China Sea is a very serious international issue, but over in China this is a major focus.
Also in February, the U.S. sent a dozen F-22 Raptor stealth fighters to Tindal AB in northern Australia, the closest Australian military airbase to China, for coalition training and exercises. It’s the first deployment of that many F-22s in the Pacific.
And if that didn’t get the attention of the Chinese government, the U.S. just tested four Trident II submarine-launched ballistic missiles during a nuclear war exercise, sending the simulated weapons 4,200 miles from the coast of California into the mid-Pacific. It’s the first time in three years the U.S. has conducted tests in the Pacific, and the first four-missile salvo since the end of the Cold War.
I can understand the need to look tough, but eventually somebody is going to go too far.
If you are familiar with my work, then you know that I believe that war is coming. Things in the Middle East continue to escalate, and it is only a matter of time before a great war erupts between Israel and her neighbors. Meanwhile, U.S. relations with both Russia and China continue to deteriorate, and this is something that I have been warning about for a very long time.
We should hope for peace, but we should also not be blind to the signs of war that are starting to emerge all over the planet. Relatively few people anticipated the outbreak of World War I and World War II in advance, and I have a feeling that the same thing will be true for World War III.
The ninth largest economy in the entire world is currently experiencing “its longest and deepest recession in recorded history”, and in a country right next door people are being encouraged to label their trash so that the thousands upon thousands of desperately hungry people that are digging through trash bins on the streets can find discarded food more easily. Of course the two nations that I am talking about are Brazil and Venezuela. The Brazilian economy was once the seventh largest on the globe, but after shrinking for eight consecutive quarters it has now fallen to ninth place. And in Venezuela the economic collapse has gotten so bad that more than 70 percent of the population lost weight last year due to a severe lack of food. Most of us living in the northern hemisphere don’t think that anything like this could happen to us any time soon, but the truth is that trouble signs are already starting to erupt all around us. It is just a matter of time before the things currently happening in Brazil and Venezuela start happening here, but unfortunately most people are not heeding the warnings.
Just a few years ago, the Brazilian economy was absolutely roaring and it was being hailed as a model for the rest of the world to follow. But now Brazil’s GDP has been imploding for two years in a row, and this downturn is being described as “the worst recession in recorded history” for that South American nation…
Latin America’s largest economy Brazil has contracted by 3.6 percent in 2016, shrinking for the second year in a row; statistics agency IBGE said on Tuesday. It confirmed the country is facing its longest and deepest recession in recorded history.
Data shows gross domestic product (GDP) fell for the eighth straight quarter in the three months to December, down 0.9 percent from the previous quarter. The figure was worse than the 0.5 percent decline economists had forecast and left the country’s overall GDP down 3.6 percent for the full year following a 3.8 percent drop in 2015.
“In real terms, GDP is now nine percent below its pre-recession peak,” Neil Shearing, chief emerging markets economist at Capital Economics, told the Financial Times.
“This is comfortably the worst recession in recorded history,” he added.
It had been hoped that things in Brazil would be getting better by now, but instead they just keep getting worse.
The number of bankruptcy filings has soared to an all-time record high, and the official unemployment rate has more than doubled since the end of 2013. The following comes from Wolf Richter…
In a stunning deterioration, the unemployment rate in Brazil spiked to 12.6% in the rolling three-month period through January, a record in the new data series going back to 2012, according to Brazil’s statistical agency IBGE. Up from 11.8% in the three-month period through October. Up from an already terribly high 9.5% a year ago. And more than double the 6.2% in December 2013.
Meanwhile, hordes of hungry people are rummaging through garbage cans in Venezuela in order to find something to fill their aching stomachs.
Things have gotten so bad that one of President Maduro’s chief opponents has urged citizens to label which trash bags have food in them so that people that are searching through the garbage can find food scraps more easily…
Controversial Priest and opponent to President Nicolás Maduro’s administration Father Jose Palmar posted on social media this week about labeling discarded waste so those looking through it for food can do so more easily and “with dignity.”
Palmar called on Venezuelans to celebrate Lent by identifying bags where food has been discarded for those with no where else to turn. That way, they don’t have to dig through non-edible items to find it.
Thanks to chronically empty store shelves and severe food shortages, people in Venezuela are losing weight at an astounding pace. In the United States it would be a good thing if much of the population lost this much weight, but in Venezuela it definitely is not…
Three quarters of the country’s population lost an average of over 18 pounds over food shortages in 2016, according to a survey by Venezuelan universities and nonprofit groups. Last year, over 80 percent of foodstuffs disappeared from shelves and many had to get by with one meal a day, Foreign Policy reported.
Venezuela was once South America’s most powerful petrostate. But decades of government mismanagement sent the country into decline. Maduro’s predecessor Hugo Chavez choked the economy with heavy-handed regulations, price controls, and a campaign to nationalize major industries that chased out foreign investments.
Further north, very alarming signs are starting to pop up in Mexico.
It probably won’t happen next week or next month, but there are indications of emerging “liquidity problems” which could precipitate a major debt crisis at some point…
In Mexico foreign investors hold around $100 billion of the country’s local-currency government debt, the most for any emerging market economy. That’s almost 20 times what it was 20 years ago. They also hold billions of euros worth of corporate bonds, which are also showing signs of strain, prompting some Mexican business leaders to call for “new programs” to be implemented before the situation causes “a large-scale crisis” among Mexican companies.
The most ominous sign yet came last week when Bloomberg reported sources saying that the Bank of Mexico (or Banxico, as it is referred to) had sought a swap line from the Federal Reserve in case of “liquidity problems,” which immediately triggered furious denials from Banxico. “I can say clearly and unequivocally that we are not in the process of asking for any credit line from any authority,” said the central bank’s governor, Agustin Carstens, who has postponed by six months his departure from the bank, initially scheduled for May.
One of the biggest problems for nations such as Brazil, Venezuela and Mexico is the strength of the U.S. dollar. During the good times they went into tremendous amounts of debt, and much of that debt was denominated in U.S. dollars. So when the U.S. dollar becomes stronger, it takes more of their own local currencies to pay that debt back.
And if the Federal Reserve raises interest rates at their next meeting, that will strengthen the U.S. dollar even more and put even more pressure on emerging market economies.
Even one small interest rate increase by the Fedcould have a sweeping impact on U.S. and world economies, Komal Sri-Kumar told CNBC on Monday.
“I think they are going to hike” on March 15, Sri-Kumar said on “Squawk Box,” echoing a theory shared by many analysts. “But that is going to prompt capital outflows from the euro zone, especially with the political risk. It is going to increase the capital outflow from China, and the U.S. economy will feel the impact.”
The global economy is more interconnected than ever before, and pain that starts in one region can rapidly spread to others.
The biggest debt bubble that the world has ever seen is starting to burst, and over the coming years we are going to see financial pain on a scale that would be unimaginable to most of us at this moment.
But even now there are those that would suggest that this colossal debt bubble can continue growing much faster than global GDP indefinitely, and this sort of exceedingly reckless optimism is leading many astray.
When Donald Trump originally announced that he was going to run for president, he said that his ideal choice for a running mate was Oprah Winfrey, but now he may be actually running against her in the 2020 election. A recent episode of The David Rubenstein Show that featured an interview with Oprah Winfrey is creating a tremendous amount of buzz that Oprah Winfrey may throw her hat into the ring during the next election cycle. This particular episode was taped back on December 12th, but it didn’t actually get aired on Bloomberg TV until last Tuesday. You can see the portion of the interview in which Oprah is asked about her presidential aspirations on YouTube right here, and as you can see, she definitely sounds like someone that is very seriously thinking about running…
Prior to this last election, Oprah says that she never even considered the possibility of running, but Donald Trump’s victory in November made her realize that maybe she could do it too. The following summary of the most important moments from the interview comes from Charisma News…
“I actually never thought—never considered the question, even the possibility,” she said while smiling coyly. “I just thought, ‘Oh. Oh.'”
“Because it’s clear you don’t need government experience to be elected president of the United States,” Rubenstein interjected.
“That’s what I thought,” she replied. “I thought, Oh gee, I don’t have the experience, I don’t know enough. Now I’m thinking, Oh. Oh.”
When Oprah made these statements, she had to know that they would create a firestorm.
In a tweet sent Wednesday morning, the reclusive journalist who broke the Clinton-Monica Lewinsky scandal said such a race would be one for the ages.
“Trump vs Oprah would be the most epic race in American history. MAKE THIS HAPPEN…” Drudge tweeted to his nearly half a million followers.
And this is certainly not the first time that it has been suggested that Oprah should run for president. Just one week after the election, political activist Michael Moore mentioned her as a potential candidate…
“Democrats would be better off if they ran Oprah or Tom Hanks … why don’t we run beloved people?” Moore told CNN’s Jake Tapper on “State of the Union.”
“We have so many of them,” he said. “The Republicans do this — they run Reagan and the Terminator and other people.” It was a reference to former California Gov. Arnold Schwarzenegger, as well as former President Ronald Reagan.
“Why don’t we run somebody that the American people love and are really drawn to, and that are smart and have good politics and all that?” Moore said.
Needless to say, Oprah would make a horrible president. Her political views are ultra-liberal, and she has no practical political experience whatsoever.
However, if she did run she would definitely be the front-runner for the Democratic nomination. At the moment, Joe Biden and Elizabeth Warren are considered to be the most likely opponents for Trump, and Oprah would almost certainly trounce either of them.
“I was in the audience that day and it was clearly a joke when she was playing with David because they have such a great rapport,” said Winfrey’s close pal and CBS This Morning co-host Gayle King early Thursday of a recent interview Oprah gave suggesting she was finally thinking of running for President. “But I also heard on the Oprah Winfrey show over the years you always have the right to change your mind but I would bet my first, second born and any unborn children to come, that ain’t never happening,” King emphatically added.
And hopefully it will not happen.
But the ironic thing is that the very first person that Donald Trump suggested as a potential running mate when he announced his candidacy in 2015 was Oprah Winfrey. The following comes from the New York Post…
Real estate mogul-turned-celebrity TV star Donald Trump already had an “Aha!” moment about his 2016 running mate.
After declaring his run for the White House Tuesday, Trump appeared on ABC and said Oprah Winfrey would complete his presidential dream ticket.
“I think Oprah would be great. I’d love to have Oprah,” Trump said. “I think we’d win easily, actually.”
I’ll bet you don’t remember that, do you?
And in his new book entitled “The Making of the President 2016“, Roger Stone reminds everyone that Trump actually floated the idea of Oprah as his running mate all the way back in 1999 during an interview with Larry King. The following is an excerpt from Roger Stone’s new book that was posted on Infowars…
Early in the interview, Trump dropped Bombshell Number One: “So I am going to form a presidential exploratory committee, I might as well announce that on your show, everyone else does, but I’ll be forming that and effective, I believe, tomorrow,” Trump told the crusty interviewer. “And we’ll see. I mean, we’re going to take a very good, strong look at it.”
And just minutes later, Larry went for it and asked him if he had a vice presidential candidate in mind. Trump hesitated briefly as if to ponder his answer and then stunned everyone including King – and no doubt Oprah herself. “Oprah. I love Oprah,” Trump said. “Oprah would always be my first choice. She’s a terrific woman. She is somebody that is very special. If she’d do it, she’d be fantastic. I mean, she’s popular, she’s brilliant, she’s a wonderful woman.” The following day the newspapers and TV news were filled with talk of Trump and Oprah.
I honestly don’t know what Trump was thinking, because Oprah Winfrey definitely does not belong in politics.
Even if Oprah does not run for president, Trump’s victory has a lot of other celebrities thinking that they could do the same thing that he did. Other big names that have been floated as potential candidates in 2020 include Mark Zuckerberg, Kanye West, Mark Cuban and Dwayne “The Rock” Johnson.
As you can see, we have entered a strange new era in American politics, and there is no telling what craziness we may see during the next election cycle.