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22 Signs That The Global Economic Turmoil We Have Seen So Far In 2016 Is Just The Beginning

Skyline Globe Clock Gears - Public DomainAs bad as the month of January was for the global economy, the truth is that the rest of 2016 promises to be much worse.  Layoffs are increasing at a pace that we haven’t seen since the last recession, major retailers are shutting down hundreds of locations, corporate profit margins are plunging, global trade is slowing down dramatically, and several major European banks are in the process of completely imploding.  I am about to share some numbers with you that are truly eye-popping.  Each one by itself would be reason for concern, but when you put all of the pieces together it creates a picture that is hard to deny.  The global economy is in crisis, and this is going to have very serious implications for the financial markets moving forward.  U.S. stocks just had their worst January in seven years, and if I am right much worse is still yet to come this year.  The following are 22 signs that the global economic turmoil that we have seen so far in 2016 is just the beginning…

1. The number of job cuts in the United States skyrocketed 218 percent during the month of January according to Challenger, Gray & Christmas.

2. The Baltic Dry Index just hit yet another brand new all-time record low.  As I write this article, it is sitting at 303.

3. U.S. factory orders have now dropped for 14 months in a row.

4. In the U.S., the Restaurant Performance Index just fell to the lowest level that we have seen since 2008.

5. In January, orders for class 8 trucks (the big trucks that you see shipping stuff around the country on our highways) declined a whopping 48 percent from a year ago.

6. Rail traffic is also slowing down substantially.  In Colorado, there are hundreds of train engines that are just sitting on the tracks with nothing to do.

7. Corporate profit margins peaked during the third quarter of 2014 and have been declining steadily since then.  This usually happens when we are heading into a recession.

8. A series of extremely disappointing corporate quarterly reports is sending stock after stock plummeting.  Here is a summary from Zero Hedge of a few examples that we have just witnessed…

  • SHARES OF LIONS GATE ENTERTAINMENT FALL 5 PCT IN EXTENDED TRADE AFTER QUARTERLY RESULTS – RTRS
  • TABLEAU SOFTWARE SHARES TUMBLE 40 PCT IN AFTER HOURS TRADING – RTRS
  • YRC WORLDWIDE SHARES DOWN 16.4 PCT AFTER THE BALL FOLLOWING RESULTS – RTRS
  • SPLUNK INC SHARES DOWN 7.6 PCT IN AFTER HOURS TRADING – RTRS
  • LINKEDIN SHARES EXTEND DECLINE, DOWN 24 PCT AFTER RESULTS, GUIDANCE – RTRS
  • HANESBRANDS SHARES FURTHER ADD TO LOSSES IN EXTENDED TRADE, LAST DOWN 14.9 PCT – RTRS
  • OUTERWALL SHARES FALL 11 PCT IN EXTENDED TRADING AFTER QUARTERLY RESULTS – RTRS
  • GENWORTH SHARES DOWN 16.5 PCT AFTER THE BELL FOLLOWING RESULTS, RESTRUCTURING PLAN

9. Junk bonds continue to crash on Wall Street.  On Monday, JNK was down to 32.60 and HYG was down to 77.99.

10. On Thursday, a major British news source publicly named five large European banks that are considered to be in very serious danger…

Deutsche Bank, Credit Suisse, Santander, Barclays and RBS are among the stocks that are falling sharply sending shockwaves through the financial world, according to former hedge fund manager and ex Goldman Sachs employee Raoul Pal.

11. Deutsche Bank is the biggest bank in Germany and it has more exposure to derivatives than any other bank in the world.  Unfortunately, Deutsche Bank credit default swaps are now telling us that there is deep turmoil at the bank and that a complete implosion may be imminent.

12. Last week, we learned that Deutsche Bank had lost a staggering 6.8 billion euros in 2015.  If you will recall, I warned about massive problems at Deutsche Bank all the way back in September.  The most important bank in Germany is exceedingly troubled, and it could end up being for the EU what Lehman Brothers was for the United States.

13. Credit Suisse just announced that it will be eliminating 4,000 jobs.

14. Royal Dutch Shell has announced that it is going to be eliminating 10,000 jobs.

15. Caterpillar has announced that it will be closing 5 plants and getting rid of 670 workers.

16. Yahoo has announced that it is going to be getting rid of 15 percent of its total workforce.

17. Johnson & Johnson has announced that it is slashing its workforce by 3,000 jobs.

18. Sprint just laid off 8 percent of its workforce and GoPro is letting go 7 percent of its workers.

19. All over America, retail stores are shutting down at a staggering pace.  The following list comes from one of my previous articles

-Wal-Mart is closing 269 stores, including 154 inside the United States.

-K-Mart is closing down more than two dozen stores over the next several months.

-J.C. Penney will be permanently shutting down 47 more stores after closing a total of 40 stores in 2015.

-Macy’s has decided that it needs to shutter 36 stores and lay off approximately 2,500 employees.

-The Gap is in the process of closing 175 stores in North America.

-Aeropostale is in the process of closing 84 stores all across America.

-Finish Line has announced that 150 stores will be shutting down over the next few years.

-Sears has shut down about 600 stores over the past year or so, but sales at the stores that remain open continue to fall precipitously.

20. According to the New York Times, the Chinese economy is facing a mountain of bad loans that “could exceed $5 trillion“.

21. Japan has implemented a negative interest rate program in a desperate attempt to try to get banks to make more loans.

22. The global economy desperately needs the price of oil to go back up, but Morgan Stanley says that we will not see $80 oil again until 2018.

It is not difficult to see where the numbers are trending.

Last week, I told my wife that I thought that Marco Rubio was going to do better than expected in Iowa.

How did I come to that conclusion?

It was simply based on how his poll numbers were trending.

And when you look at where global economic numbers are trending, they tell us that 2016 is going to be a year that is going to get progressively worse as it goes along.

So many of the exact same things that we saw happen in 2008 are happening again right now, and you would have to be blind not to see it.

Hopefully I am wrong about what is coming in our immediate future, because millions upon millions of Americans are not prepared for what is ahead, and most of them are going to get absolutely blindsided by the coming crisis.

Private Prisons: The More Americans They Put Behind Bars The More Money They Make

Private Prisons: The More Americans They Put Behind Bars The More Money They Make - Photo by Tony HisgettHow would you describe an industry that wants to put more Americans in prison and keep them there longer so that it can make more money?  In America today, approximately 130,000 people are locked up in private prisons that are being run by for-profit companies, and that number is growing very rapidly.  Overall, the U.S. has approximately 25 percent of the entire global prison population even though it only has 5 percent of the total global population.  The United States has the highest incarceration rate on the entire globe by far, and no nation in the history of the world has ever locked up more of its own citizens than we have.  Are we really such a cesspool of filth and decay that we need to lock up so many of our own people?  Or are there some other factors at work?  Could part of the problem be that we have allowed companies to lock up men and women in cages for profit?  The two largest private prison companies combined to bring in close to $3,000,000,000 in revenue in 2010, and the largest private prison companies have spent tens of millions of dollars on lobbying and campaign contributions over the past decade.  Putting Americans behind bars has become very big business, and those companies have been given a perverse incentive to push for even more Americans to be locked up.  It is a system that is absolutely teeming with corruption, and it is going to get a lot worse unless someone does something about it.

One of the keys to success in the private prison business it to get politicians to vote your way.  That is why the big private prison companies spend so much money on lobbying and campaign contributions.  The following is an excerpt from a report put out by the Justice Policy Institute entitled “Gaming the System: How the Political Strategies of Private Prison Companies Promote Ineffective Incarceration Policies“…

For-profit private prison companies primarily use three strategies to influence policy: lobbying, direct campaign contributions, and building relationships, networks, and associations.

Over the years, these political strategies have allowed private prison companies to promote policies that lead to higher rates of incarceration and thus greater profit margins for their company. In particular, private prison companies have had either influence over or helped to draft model legislation such as “three-strikes” and “truth-in-sentencing” laws, both of which have driven up incarceration rates and ultimately created more opportunities for private prison companies to bid on contracts to increase revenues.

If you can believe it, three of the largest private prison companies have spent approximately $45,000,000 combined on lobbying and campaign contributions over the past decade.

Would they be spending so much money if those companies did not believe that it was getting results?

Just look at what has happened to the U.S. prison population over the past several decades.  Prior to 1980, there were virtually no private prisons in the United States.  But since that time, we have seen the overall prison population and the private prison population absolutely explode.

For example, between 1990 and 2009 the number of Americans in private prisons grew by about 1600 percent.

Overall, the U.S. prison population more than quadrupled between 1980 and 2007.

So something has definitely changed.

Not that it is wrong to put people in prison when they commit crimes.  Of course not.  And right now violent crime is rapidly rising in many of our largest cities.  When people commit violent crimes they need to be removed from the streets.

But when you put those criminals into the hands of private companies that are just in it to make a buck, the potential for abuse is enormous.

For example, when auditors visited one private prison in Texas, they “got so much fecal matter on their shoes they had to wipe their feet on the grass outside.

The prisoners were literally living in their own manure.

How would you feel if a member of your own family was locked up in such a facility?

And the truth is that there seem to be endless stories of abuse in private prisons.  One private prison company reportedly charges inmates $5.00 a minute to make phone calls but only pays them $1.00 a day to work…

Last year the Corrections Corporation of America (CCA), the nation’s largest private prison company, received $74 million of taxpayers’ money to run immigration detention centers. Their largest facility in Lumpkin, Georgia, receives $200 a night for each of the 2,000 detainees it holds, and rakes in yearly profits between $35 million and $50 million.

Prisoners held in this remote facility depend on the prison’s phones to communicate with their lawyers and loved ones. Exploiting inmates’ need, CCA charges detainees here $5 per minute to make phone calls. Yet the prison only pays inmates who work at the facility $1 a day. At that rate, it would take five days to pay for just one minute.

Speaking of work, private prisons have found that exploiting their inmates as a source of slave labor can be extraordinarily profitable.  Today, private prisons are stealing jobs from ordinary American workers in a whole host of industries.  The following is from an article by Vicky Pelaez

According to the Left Business Observer, the federal prison industry produces 100% of all military helmets, ammunition belts, bullet-proof vests, ID tags, shirts, pants, tents, bags, and canteens. Along with war supplies, prison workers supply 98% of the entire market for equipment assembly services; 93% of paints and paintbrushes; 92% of stove assembly; 46% of body armor; 36% of home appliances; 30% of headphones/microphones/speakers; and 21% of office furniture. Airplane parts, medical supplies, and much more: prisoners are even raising seeing-eye dogs for blind people.

And many of the largest corporations in America have rushed in to take advantage of this pool of very cheap slave labor.  Just check out some of the big names that have been exploiting prison labor…

At least 37 states have legalized the contracting of prison labor by private corporations that mount their operations inside state prisons. The list of such companies contains the cream of U.S. corporate society: IBM, Boeing, Motorola, Microsoft, AT&T, Wireless, Texas Instrument, Dell, Compaq, Honeywell, Hewlett-Packard, Nortel, Lucent Technologies, 3Com, Intel, Northern Telecom, TWA, Nordstrom’s, Revlon, Macy’s, Pierre Cardin, Target Stores, and many more. All of these businesses are excited about the economic boom generation by prison labor. Just between 1980 and 1994, profits went up from $392 million to $1.31 billion. Inmates in state penitentiaries generally receive the minimum wage for their work, but not all; in Colorado, they get about $2 per hour, well under the minimum. And in privately-run prisons, they receive as little as 17 cents per hour for a maximum of six hours a day, the equivalent of $20 per month. The highest-paying private prison is CCA in Tennessee, where prisoners receive 50 cents per hour for what they call “highly skilled positions.” At those rates, it is no surprise that inmates find the pay in federal prisons to be very generous. There, they can earn $1.25 an hour and work eight hours a day, and sometimes overtime. They can send home $200-$300 per month.

But of course some of the biggest profits for private prisons come from detaining young people.  Today, private prison companies operate more than 50 percent of all “youth correctional facilities” in the United States.

And sometimes judges have even been bribed by these companies to sentence kids to very harsh sentences and to send them to their facilities.  The following is from a report about two judges in Pennsylvania that were recently convicted for taking money to send kids to private prisons…

Michael Conahan, a former jurist in Luzerne County, was sentenced on Friday to 210 months in custody by Senior U.S. District Court Judge Edwin M. Kosik II. Conahan was also ordered to pay $874,000 in restitution. […] As Main Justice reported in August, Ciavarella, former president judge of the Court of Common Pleas and former judge of the Juvenile Court for Luzerne County, was sentenced to 28 years in prison and ordered to make restitution of $965,930. […]

Conahan’s role in the “cash for kids” scheme was to order the closing of a county-run detention center, clearing the way for Ciavarella, once known as a strict “law and order” judge, to send young offenders to private facilities. This arrangement worked out well for Ciavarella and Conahan, as well as the builder of the facilities and a developer, who pleaded guilty to lesser charges.

The arrangement didn’t work out so well for the young offenders, some of them sent away for offenses that were little more than pranks and would have merited probation, or perhaps just scoldings, if the judges had tried to live up to their oaths.

Are you starting to see why private prisons are such a problem?

Hundreds of kids had their lives permanently altered by those corrupt judges.

When you allow people to make money by locking other people up in cages, you are just asking for trouble.

The more Americans they put behind bars, the more money these private prisons make.  It is a system that needs to be brought to an end.

So what do you think?

Do you believe that private prisons are a good idea or a bad idea?

Please feel free to post a comment with your thoughts below…

They Will Lock You Up Too If They Get The Chance - Photo by Barnellbe

Data Mining: Big Corporations Are Gathering Every Shred Of Information About You That They Can And Selling It For Profit

When most people think of “Big Brother”, they think of the FBI, the CIA, the NSA, the Department of Homeland Security and other shadowy government agencies.  Yes, they are definitely watching you, but so are many big corporations.  In fact, there are some companies that are making tens of millions of dollars by gathering every shred of information about all of us that they can and selling it for profit to anyone willing to pay the price.  It is called “data mining”, and these data miners want to keep track of literally everything that you do.  Most people know that basically everything that we do on the Internet is tracked, but data mining goes far beyond that.  When you use a customer rewards card at the supermarket, the data miners know about it.  When you pay for a purchase with a credit card or a debit card, the data miners know about it.  Every time you buy a prescription drug, that information is sold to someone.  Every time you apply for a loan, a whole host of organizations is notified.  Information has become an extremely valuable commodity, and thanks to computers and the Internet it is easier to gather information than ever before.  But that also means that our personal information is no longer “private”, and this trend is only going to get worse in the years ahead.

You have probably never even heard of many of these companies that are making millions of dollars selling your personal information.  Acxiom and Epsilon are two of the biggest names in the industry, and most of the time they are selling your information to companies that want to sell you stuff.

Almost every single day, very personal information about you is being bought and sold without your permission and it is all perfectly legal.

A recent article in The Week says the following about Acxiom….

An Arkansas company you’ve probably never heard of knows more about you than some of your friends, Google, and even the FBI — and it’s selling your data

The scale of the information gathering that Acxiom does is absolutely mind blowing.  If you can believe it, Acxiom actually keeps track of more than 190 million people inside the United States….

The company fits into a category called database marketing. It started in 1969 as an outfit called Demographics Inc., using phone books and other notably low-tech tools, as well as one computer, to amass information on voters and consumers for direct marketing. Almost 40 years later, Acxiom has detailed entries for more than 190 million people and 126 million households in the U.S., and about 500 million active consumers worldwide. More than 23,000 servers in Conway, just north of Little Rock, collect and analyze more than 50 trillion data ‘transactions’ a year.

So what does Acxiom want to know about you?

Everything.

The following is from a recent New York Times article about Acxiom….

IT knows who you are. It knows where you live. It knows what you do.

It peers deeper into American life than the F.B.I. or the I.R.S., or those prying digital eyes at Facebook and Google. If you are an American adult, the odds are that it knows things like your age, race, sex, weight, height, marital status, education level, politics, buying habits, household health worries, vacation dreams — and on and on.

Companies such as Acxiom literally want every shred of information about you that they can possibly get.

Once they gather all that data, Acxiom analyzes it, packages it and sells it to large corporations such as Wells Fargo, HSBC, Toyota, Ford and Macy’s.

And being in the “Big Brother business” is very, very profitable.

Acxiom made more than 77 million dollars in profits during their latest fiscal year.

Some members of Congress are very alarmed by all of this.  According to U.S. Senator John Kerry, this industry is virtually unregulated….

“There’s no code of conduct. There’s no standard. There’s nothing that safeguards privacy and establishes rules of the road.”

So what do big corporations do with all of this data after they purchase it from companies like Acxiom?

Well, for one thing, they use it to try to predict how you will behave.  A Daily Beast article gave some examples of how this works….

Predicting people’s behavior is becoming big business—and increasingly feasible in an era defined by accessible information. Data crunching by Canadian Tire, for instance, recently enabled the retailer’s credit card business to create psychological profiles of its cardholders that were built upon alarmingly precise correlations. Their findings: Cardholders who purchased carbon-monoxide detectors, premium birdseed, and felt pads for the bottoms of their chair legs rarely missed a payment. On the other hand, those who bought cheap motor oil and visited a Montreal pool bar called “Sharx” were a higher risk. “If you show us what you buy, we can tell you who you are, maybe even better than you know yourself,” a former Canadian Tire exec said. 

I don’t know about you, but I find that a bit creepy.

Later on in that same article, how some U.S. companies are using this kind of information was explained….

Other industries have bolstered their bottom lines by predicting how consumers will behave, according to Super Crunchers. UPS predicts when customers are at risk of fleeing to one of its competitors, and then tries to prevent the loss with a telephone call from a salesperson. And with its “Total Rewards” card, Harrah’s casinos track everything that players win and lose, in real time, and then analyze their demographic information to calculate their “pain point”—the maximum amount of money they’re likely to be willing to lose and still come back to the casino in the future. Players who get too close to their pain point are likely to be offered a free dinner that gets them off the casino floor.

So is all of this data gathering harmless?

Does it simply make our economy more efficient?

Or is there a greater danger here?

At some point could all of our personal information be used for more insidious purposes?

One thing is for sure – this is a trend that is not going away any time soon.

As our society becomes even more integrated through the Internet, data gathering is going to become even more comprehensive.

Eventually these complicated computer algorithms will be able to make very detailed predictions about your future behavior with a very, very high degree of accuracy.

When you add government snooping into the equation, it becomes easy to see why privacy advocates are going crazy these days.

Our society is literally being transformed into a technological monitoring grid.  Virtually everything we do is monitored, tracked and recorded in some way.

If we are not very careful, eventually we could end up living in a society that is much more oppressive than anything George Orwell ever dreamed of.

So what do you think of all of this snooping, spying and data mining?

Do you believe that it is harmless or do you believe that it represents a significant threat?

Feel free to post a comment with your thoughts below….

25 Signs That Middle Class Families Have Been Targeted For Extinction

The middle class in America is being systematically wiped out, and most people don’t even realize what is happening.  Every single year, millions more Americans fall out of the middle class and become dependent on the government.  The United States once had the largest and most vibrant middle class in the history of the world, but now the middle class is rapidly shrinking and government dependence is at an all-time high.  So why is this happening?  Well, America is becoming a poorer nation at the same time that wealth is becoming extremely concentrated at the very top.  At this point, our economic system is designed to funnel as much money and power to the federal government and to the big corporations as possible.  Individuals and small businesses have a really hard time thriving in this environment.  To most big corporations these days, workers are viewed as financial liabilities.  Most corporations want to reduce their payrolls as much as possible.  You see, the truth is that most corporations want to be just like Apple.  If you can believe it, Apple makes $400,000 in profit per employee.  Big corporations don’t care that you need to pay the mortgage and provide for your family.  Their goal is to make as much money as possible.  And most of the control freaks that run our bloated federal government don’t care much about middle class families either.  To many politicians and federal bureaucrats, middle class families are “useless eaters” that are constantly damaging the environment with their “excessive” lifestyles.  In this day and age, neither the federal government nor the big corporations really have much use for middle class Americans, and that is really, really bad news for the the future of the middle class family in America.

There are three key factors that are constantly chipping away at the middle class….

-Globalization

-Inflation

-Taxes

Labor has become a global commodity, and American workers are often 10 to 20 times as expensive as workers on the other side of the world are.  Middle class jobs (such as manufacturing, etc.) have been leaving this country at an astounding pace.  Competition for the jobs that remain has become extremely fierce, and this has driven wages down.  The following is from a recent article in the New York Times….

But in the last two decades, something more fundamental has changed, economists say. Midwage jobs started disappearing. Particularly among Americans without college degrees, today’s new jobs are disproportionately in service occupations — at restaurants or call centers, or as hospital attendants or temporary workers — that offer fewer opportunities for reaching the middle class.

As paychecks have stagnated, the cost of living has continued to escalate.  Middle class families are finding that their paychecks simply do not go nearly as far as they did before.  This is creating a tremendous amount of financial stress in households all over America.

Meanwhile, our politicians are taxing the middle class like crazy.  Most people only focus on federal and state income taxes, but that is only a small part of the story.  As I detailed the other day, our politicians are taxing us in literally dozens of different ways and it is almost always the middle class that ends up getting hit the hardest.

If America wants to be great again, it is going to need a thriving middle class.  But right now the federal government and the big corporations are gobbling up all of the power and all of the money and the middle class is shrinking rapidly.

If current trends continue, eventually there will not be much of a middle class left.

The following are 25 signs that middle class families have been targeted for extinction….

#1 Over the past several decades, millions upon millions of middle class Americans have been systematically turned into government dependents.  Back in 1960, social welfare benefits made up approximately 10 percent of all salaries and wages.  In the year 2000, social welfare benefits made up approximately 21 percent of all salaries and wages.  Today, social welfare benefits make up approximately 35 percent of all salaries and wages.

#2 Unemployment is at epidemic levels and the vast majority of the new jobs that have been “created” in recent years have been low paying jobs.  Of those Americans that do have a job at this point, one out of every four works a job that pays $10 an hour or less.

#3 The “working poor” is a group that is rapidly growing in this country.  If you can believe it, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.

#4 Over the past several decades, the percentage of low income jobs has steadily increased.  Back in 1980, less than 30% of all jobs in the United States were low income jobs.  Today, more than 40% of all jobs in the United States are low income jobs.

#5 The way that our economic system is structured today, almost all of the economic rewards go to the very top of the food chain.  The following is how income gains in the United States were distributed during 2010….

-37 percent of all income gains went to the top 0.01 percent of all income earners

-56 percent of all income gains went to the rest of the top 1 percent

-7 percent of all income gains went to the bottom 99 percent

#6 Several decades ago, there was a much more even distribution of income in this country.  Back in the 1970s, the top 1 percent of all income earners brought in about 8 percent of all income.  Today, they bring in about 21 percent of all income.

#7 As the middle class shrinks, the number of “low income” and “poor” Americans is rapidly rising.  Today, approximately 48 percent of all Americans are currently either considered to be “low income” or are living in poverty.

#8 Manufacturing jobs once enabled huge numbers of Americans to enjoy a middle class lifestyle.  Unfortunately, those jobs are leaving this country at a breathtaking pace.  Back in 1940, 23.4% of all American workers had manufacturing jobs.  Today, only 10.4% of all American workers have manufacturing jobs.

#9 In the old days, any man that was willing to work hard and wanted a job could get one.  Today, there are millions of American men sitting on their couches at home wondering why nobody will hire them.  Back in 1950, more than 80 percent of all men in the United States had jobs.  Today, less than 65 percent of all men in the United States have jobs.

#10 The middle class is shrinking at the same time that America is getting poorer as a nation.  In the middle of the last century, the United States was #1 in the world in GDP per capita.  Today, the United States is #13 in GDP per capita.

#11 Every year now, we see millions of Americans fall out of the middle class.  In 2010, 2.6 million more Americans descended into poverty.  That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.

#12 The shrinking middle class is having a disproportionate impact on children.  At this point, approximately 22 percent of all American children are living in poverty.

#13 In the old days, most Americans grew up in middle class neighborhoods.  Sadly, this is no longer true.  In 1970, 65 percent of all Americans lived in “middle class neighborhoods”.  By 2007, only 44 percent of all Americans lived in “middle class neighborhoods”.

#14 The concentration of wealth at the very top of the food chain is astounding.  Right now, over 50 percent of all stocks and bonds are owned by just 1 percent of the U.S. population.

#15 When you concentrate too much power in the hands of the federal government and the big corporations, it is inevitable that massive amounts of wealth will become concentrated in just a few hands.  In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.

#16 There is nothing wrong with making money, but there is something wrong with a game where individuals and small businesses cannot compete fairly.  According to Forbes, the 400 wealthiest Americans now have more wealth than the bottom 150 million Americans combined.

#17 When the number of poor people rapidly expands in a society, that is a recipe for social unrest.  At this point, the poorest 50 percent of all Americans collectively own just 2.5% of all the wealth in the United States.

#18 The hidden tax of inflation is absolutely devastating middle class families all over America.  Since 1970, the U.S. dollar has lost more than 83 percent of its value.  Any dollars that middle class families try to save are constantly losing a little bit more value every single day.

#19 American workers that try to play by the rules find that they are constantly fighting a losing battle.  According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 dropped by 27 percent after you account for inflation.

#20 In recent years, many middle class families have seen their paychecks get smaller.  Median household income in the United States has fallen 7.8 percent since December 2007 after adjusting for inflation.

#21 In recent years, many middle class families have seen many of their basic expenses absolutely soar.  For example, health insurance costs have risen by 23 percent since Barack Obama became president.

#22 Just turning on the lights and heating their homes has become a major burden for many middle class families.  Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.

#23 Just putting gas in the car has become a major financial ordeal for millions of hard working Americans.  The average price of a gallon of gasoline in the United States has increased by more than 100 percent since Barack Obama became president.

#24 Sadly, government dependence is now at an all-time high, and that is the way that many among the elite like it.  When Barack Obama took office, there were 32 million Americans on food stamps.  Now, there are more than 46 million Americans on food stamps.  In particular, an astounding number of children are on food stamps right now.  At this point, approximately one-fourth of all American children are enrolled in the food stamp program.

#25 Many middle class families will not be in the middle class for too much longer.  According to a shocking new study from the National Bureau of Economic Research, 200,000 U.S. households will use the money from their tax refunds this year “to pay for bankruptcy filing and legal fees“.

Unless major changes are made on a national level, the middle class is going to continue to disappear.

If you are playing the game the way that the system tells you to play it and you expect to live a middle class lifestyle for many years to come there is a good chance that you will be deeply disappointed at some point.

Millions upon millions of Americans have done everything that the system told them to do and the system has still failed them.  They got good grades all the way through school, they went to college, they worked really hard, they stayed out of trouble and they gave everything they could to their employers.  In spite of all that, millions of hard working families have still lost their jobs and their homes in recent years.

Do not trust that the system will take care of you, and you should not trust that the government will take care of you either.

We don’t need the federal government to hand out more money to everyone.  Government handouts are already at record levels and the government is not even coming close to paying for all of this reckless spending.

More government spending is not going to solve any of our problems.

Instead, what we need is an environment where the size and power of the federal government is limited and the size and the power of the big corporations is limited.  We need an environment where individuals and small businesses can thrive and compete fairly.

Unfortunately, neither major political party is going to move us in that direction, so there is not much hope for solutions on the national level any time soon.

On an individual level, we can all learn how to prepare for the very difficult years that are coming.  It is imperative that we all work to become more independent of the system, because the system could fail at any time.

If you have blind faith that your job will always be there and that the federal government will rescue you if the economy crashes then you are likely to be bitterly disappointed at some point.

The truth is that our economy is slowly dying and the great American middle class is being systematically wiped out.

Many of the things that worked in the past are not going to work any longer.

You can choose to adapt or you can suffer the consequences.

Our world is rapidly changing, and we all need to prepare for what is coming.

As The Obamas And The Ultra-Wealthy Live The High Life Most Americans Are Going Through Economic Hell

Barack Obama recently made the following statement to American families that are struggling to survive in this economy: “If you’re a family trying to cut back, you might skip going out to dinner, or you might put off a vacation.” A few days after making that statement Obama sent his wife and children off on yet another vacation, this time to a luxury ski hotel in Vail, Colorado.  But the Obamas are not the only ones enjoying the high life.  Wealthy corporate executives and greedy Wall Street fatcats insist that profit margins are too tight to hire more American workers, and yet sales of luxury cars, private jets and vacation homes are soaring.  Meanwhile, most American families are going through economic hell right now.  In 2010, more Americans than ever before were living below the poverty line.  Over 4 million Americans have been unemployed for more than a year, and over 5 million Americans are at least two months behind on their mortgage payments.  As the Obamas and wealthy corporate executives jet off to fancy ski resorts, half of all American workers are earning $505 or less per week and 55 percent of American families are living paycheck to paycheck.  Something is very wrong with this picture.

So is there anything wrong with working hard and enjoying the fruits of success?  Of course not, as long as it was done honestly and not on the backs of the American taxpayers.  But the truth is that many of the corporate executives that are enjoying luxury vacations right now would not even have companies to run if the American taxpayers had not stepped in and bailed them out during the financial crisis.  Thanks to the U.S. government and the Federal Reserve, Wall Street bankers and top corporate executives are once again enjoying bonuses that most of us would consider obscene.

Meanwhile, most of the rest of the country is suffering very deeply.

Over the past several decades, the biggest financial institutions and the biggest corporations have worked really hard to “fix” the rules of the game in their favor.  The truth is that our economy is no longer a “free market” capitalist system.  Rather, what we have now is more accurately described as “corporatism” or “neo-feudalism”.  The big corporations dominate almost everything, and whatever they don’t dominate the government does.

One of the key features of a “corporatist” system is that it tends to funnel all the wealth to the very top.

Back in 1976, the top 1 percent of earners in the United States took in 8.9 percent of all income.  By 2007, that number had risen to 23.5 percent.

Ouch.

There are two different Americas today.  There is the America of the gated communities, the private planes and the good life, and there is the America of declining wages, thrift stores and rising desperation.

What is saddest of all is that the most vulnerable people in society often suffer the most from all of this.

According to one recent study, approximately 21 percent of all children in the United States were living below the poverty line in 2010.

Do you think that the Obamas are thinking about any of this while they are enjoying their stay at a luxury ski hotel in Vail, Colorado?

The truth is that leadership is not just about words.  Leadership is about setting an example.

Back in August, Michelle Obama took her daughter Sasha and 40 of her friends for a vacation in Spain.

So what was the bill to the taxpayers for that little jaunt across the pond?

It is estimated that vacation alone cost U.S. taxpayers $375,000.

Hey, Barack Obama won the most votes in 2008 and so if he wants his family to get as much enjoyment out of these four years as they can that is his prerogative.

However, if he wants to tell American families that they “might put off a vacation” after all the vacations that the Obamas have taken over the past two years then he is just being a massive hypocrite.

According to the New York Post, Barack Obama enjoyed a total of 10 separate vacations that stretched over a total of 90 vacation days during the years of 2009 and 2010.

During his first two years in office, he also managed to play 29 rounds of golf.

Oh, but it is the rest of us that have to cut back on our vacations.

But it is not just the Obamas that are enjoying the high life right now.

The wealthy have recovered nicely from the “recession” and now they are spending money by the gobs once again.

According to Moody’s Analytics, the wealthiest 5% of households in the United States account for approximately 37% of all consumer spending.

Life is very good in America if you have got enough money.

A recent article in USA Today detailed some of the things that wealthy corporate executives are spending money on in 2011….

Luxury and high-end marketers have picked up on what they hope is a growing trend, offering products that bank on a looming spending spree. Germany’s PG-Bikes is rolling out the $80,000 Black Trail, a battery-powered bicycle. Swiss watchmaker Richard Mille is selling $525,000 timepieces. Steinway has launched a John Lennon-themed grand piano — at $90,000 and up. After selling out a $245,000 model, automaker Porsche is planning the 918 Spyder, a hybrid car that could sell for more than $630,000.

Nearly all luxury brands experienced a resurgence in 2010.  Just check out some of the sales increases for luxury car brands….

Porsche: 29%

Cadillac 36%

Rolls-Royce 171%

At the exact same time, however, life is getting really, really hard for the rest of America.

As I wrote about yesterday, the U.S. middle class continues to be decimated even in the midst of this “economic recovery”.

There are tens of millions of Americans that would like to have a full-time job that are not able to get a full-time job.  The number of Americans on food stamps has gone from about 26 million at the start of 2007 to 43 million today and it continues to set a brand new record every single month.  One out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government.

Our economy has become a complete and total nightmare.

Over the past couple of days some of the readers of this column have been sharing some of their economic horror stories.  But they are far from alone.  There are literally millions of Americans with economic horror stories out there.  It is just that we don’t get to hear too many stories from the “other America” on our televisions.

The following stories of economic pain are from people just like you and me.  Times are incredibly hard for most of America right now, and they are only getting harder with each passing month….

Colin:

My mother is unemployed. She is 61 years old, has 25 years of experience working for a major telecommunications corporation, and has a four-year degree. I watch her send application after application to employers with no response. I watch her get contacted by recruiters who say she is a ‘perfect fit’ for a job and never deliver. I watch her slide into depression and staying in bed many hours of the day.

I am 38 years old, I have mental illness, and I recently lost my job as a delivery driver because the owner sold his business to a competitor.

I don’t believe that either my mother or I will ever be employed again. I am beginning to feel that I am permanently in the world of the unemployed.

Jeff:

I graduated college in May 2000 with a Bachelors degree in Broadcasting/Minored in History. I have worked for major corporations as an Enterprise Sales Consultant selling Servers. I was a Network Engineer for Qwest Communications. I even worked for the Federal Government and held a Security Clearance for 4 years. I also won Dell Small Business Sales Consultant of the quarter as well. But since I don’t have an active clearance anymore no one wants to hire me in D.C. I lost my job in 07/2010 and from 07/2010-Present I have been unemployed. My food stamps were also recently cut off last month since the State of Virginia decided that for a household of 1 you can’t make more than $1178 a month. I make $1250 a month in Unemployment compensation before taxes so according to the Government I am too rich to receive Food stamps now. My Rent, Gas and Car insurance is $1000 a month and I am holding on for dear life. I am currently in the process of declaring Chapter 7 Bankruptcy and using my tax return to pay the attorney $1500 to file. That leaves me with only #250 a month for food, water and cell phone.

I have a list compiled in my Google email with approximately 784 applications I have filled out for every government agency, defense contractor and job available in the Washington, DC area. I even applied to Carmax and my old job in college waiting tables at red Lobster and the moving company I used to work at during the summers in college. If its bad for someone like me with over 10 years of Sales, Server/computer experience, Investigations and Network Engineering than I can’t imagine how bad it is for people that just have a high school diploma. I have been on one interview out of the almost 1000 jobs I have applied to (It takes about 2 hours to apply to one job). The one interview I went on offered me less than my unemployment gives me at $8 an hour. I can sit at home and make more money on unemployment than 80% of the jobs that I have applied too and even those jobs don’t call me. Is this what America has become? Is this what I sacrificed 5 years of my life in college from 17 years old to 21 years old and spent $40,000 to get a worthless degree that won’t even get you hired?

Todd:

Well, My family has been ripped to shreds alright.

Overall combined (My father, and myself) make about 60k a year. We can barely survive we keep looking to cut things, and make things cheaper but it’s just not working fast enough.

My wife can’t find a job, and now student loans are starting to become issues. (won’t go in to further details).

Tax returns taken, and various other things, Can’t even afford dental care. We don’t even get to go out anymore, and lucky to get any type of snacks. Just so you know there are 5 people living in this house.

Sharonsj:

The only reason I am not out on the street is that when I had money I paid off my mortgage.

However, because I did that, my food stamp allotment is only $25 a month. The heating assistance I get only paid for less than one months’ heat out of the six months I need here in Pennsylvania. All other expenses use up what’s left, so you learn to eat at home; I try not to leave the house because it’s going to cost me money.

I blame Congress for destroying America. They have given tax breaks to themselves and their rich friends at our expense. Did you know that anybody who serves 5 years in Congress gets a FULL pension at age 62? Us peasants work for 45 years and then if we retire at age 62 we are forced to give up 25% of what we earned.

Niles:

I lost my house, my family was split, and all my savings is gone.

I have lost hope. I served in the military, went to college and have high tech skills. My country doesn’t give a ***** about me. The bankers are as evil as the communists and I hate them.

Michael:

I’m also 38, and have worked in IT since the mid 90s. I lost my full time job in April ’03, and have only been able to find short term temporary work since. The contracts started to get shorter and fewer as the years went on, so in spring ’10 I retrained to be an Emergency Medical Technician (EMT) but have not been able to find work in the last 9 months. An ambulance company I applied with said that they have hundreds of applications in several Northern CA counties but no job openings. And health care jobs are supposed to be on the the only areas of growth. I deliver pizzas for cash on and off and am getting unemployment.

Mondobeyondo:

I lost track of how many resumes I’ve sent out during the past several months. My neighbors think I’m trying to win the Publishers Clearing House sweepstakes or something (yeah, that would help too! Ha!)

Maybe I should go back to school and become an RLP (Rejection Letter Professional).

Dorothy:

The rent at the place I lived was so high that I couldn’t afford it on a school bus driver’s salary, which I was doing for the past few years, because in spite of 30 years clerical experience, where I performed every function from clerk typist to executive legal secretary, I could not find employment. So I applied for subsidized housing and was forced to move back to Chicago, where the crime rate is very high in certain areas.

Before I moved I was getting $200 in food stamps, but now that I am in subsidized housing, I have to go and reapply and if I get anything at all, I have heard that it will be about $52 a month! Although the rent is subsidized, I have to pay for my own heat, and the building in which I live is completely electric! Energy assistance doesn’t cover it. They give with one hand and take away with the other.

All of the people above are still “surviving”, but what do you think is going to happen to many of them as the cost of living goes up dramatically?  Brent crude just hit $108 a barrel and the UN says that the global price of food recently hit a new all-time high.

Americans on fixed incomes or that are on government assistance are going to be absolutely devastated if prices for basics such as food and gas rise substantially.

Not only that, but budget cuts on the federal, state and local levels are also going to hurt many of these people deeply.

But this is where we are at as a nation.  A small privileged class is enjoying the high life while a rapidly growing poverty class pleads for the government to toss them some more crumbs.

The American people deserve better than this.  They deserve an economy that will provide them with good jobs which will enable them to pay their mortgages and feed their families.

Unfortunately, the U.S. economy is dying.  The number of good jobs is actually declining.  The middle class is being systematically wiped out.

The answer is not to “tax the rich” so that we can toss the rapidly growing poverty class a few more crumbs.  The answer is to radically transform our economy back into the kind of economy our founding fathers originally intended.

But wealthy corporate executives and politicians such as Barack Obama are not going to have any of that.  Those sitting on top don’t want any real change to happen.  Sadly, the general population has become so dumbed-down that they don’t even know the questions that they should be asking.

So unfortunately it appears we are going to keep heading down the exact same economic path that we have been heading for decades.  The middle class will keep being ripped apart and politicians like George W. Bush and Barack Obama will just keep on smiling.

Finca Bayano

Panama Relocation Tours




 

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