New DVDs By Michael Snyder
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 Europe is not just heading into another recession. The truth is that Europe is heading into a full-blown depression. The economy of the EU is actually larger than the U.S. economy, and we are watching it melt down right in front of our eyes. Things just continue to get worse in Europe, and yet somehow the authorities over in Europe just keep insisting that everything is going to be “just fine”. Well, everything is not “just fine” over in Europe right now. Unemployment in the eurozone has just hit another brand new record high. In some nations in Europe, the unemployment rate is already significantly higher than anything the United States experienced during the Great Depression of the 1930s. Europe is a continent that is collapsing under the weight of its own debt, and this is just the beginning. A lot more pain is on the way. Officials over in Europe are trying to hold the European financial system together with duct tape and prayers, but it could literally fall apart at any moment. Europe has a much larger banking system than the United States does, so when a financial collapse happens in Europe, it is going to be very significant for the entire globe. Sadly, most Americans do not even pay attention to much of anything that is happening in Europe. They tend to think that the United States is the center of the universe and that as long as we are fine that everything will be okay. Well, all of those people who are not paying attention need to wake up. First of all, the U.S. economy is most definitely in decline. Secondly, the European economy is imploding right in front of our eyes and Europe is going to end up dragging the entire globe down with it.
The following are 11 facts that show that Europe is heading into an economic depression…
1. The economies of 17 out of the 27 countries in the EU have contracted for at least two consecutive quarters.
2. Unemployment in the eurozone has hit a brand new all-time record high of 11.7 percent.
3. The unemployment rate in Portugal is now up to 16.3 percent. A year ago it was just 13.7 percent.
4. The unemployment rate in Greece is now up to 25.4 percent. A year ago it was just 18.4 percent.
5. The unemployment rate in Spain has hit a brand new all-time record high of 26.2 percent. How much higher can it possibly go? This is already higher than the unemployment rate in the United States ever reached during the Great Depression of the 1930s.
6. Youth unemployment levels in both Greece and Spain are rapidly approaching the 60 percent level.
7. Earlier this month, Moody’s stripped France of its AAA credit rating, and wealthy individuals are leaving France in droves as the socialists implement plans to raise taxes to very high levels on the rich.
8. Industrial production is collapsing all over Europe. Just check out these numbers…
You don’t have to be an economic genius to understand that the perpetual uncertainty over the Eurozone’s future has led to a widespread freeze on industrial investment and development. Industrial production is collapsing at an accelerating rate, falling 7% year-on-year in Spain and Greece, 4.8% in Italy, and 2.1% in France.
9. There are even trouble signs in the “stable” economies in Europe. In Germany, factory orders in September were down 3.3 percent from the month before, and retail sales in October declined 2.8 percent from the previous month.
10. The debt of the Greek government is now projected to hit 189 percent of GDP by the end of this year.
11. The Greek economy has shrunk by more than 7 percent this year, and it is being projected that the Greek economy will contract by another 4.5 percent in 2013.
But sometimes you can’t really get a feel for how bad things really are over there just from the raw economic numbers.
Many people that are living through these depression-like conditions are totally giving in to despair. Just check out the following example from an RT article from earlier this year…
A 61-year-old Greek pensioner has hung himself from a tree in a public park after succumbing to the pressure of crushing debt. A note in his pocket indicates he is merely the latest in a rash of economic crisis-induced suicides.
The pensioner’s lifeless body was found dangling by an attendant in a public park not far from his home in the suburb of Nikaia, Athens. The attendant also found a suicide note in the man’s pocket, The Athens news reports.
The man, identifying himself as Alexandros, said he was a man of few vices who “worked all day.” However, he blamed himself from committing one “horrendous crime”: becoming a professional at the age of 40 and plunging himself into debt. He referred to himself as a 61-year-old idiot who had to pay, hoping his grandchildren would not be born in Greece, as the country’s prospects were so bleak.
Please take note of what is happening in places like Greece and Spain right now, because similar conditions will soon be coming to the United States.
This is one reason why I try so hard to encourage people to prepare for what is coming. There is hope in understanding what is coming and there is hope in getting prepared.
You don’t want to end up getting blindsided by the coming crisis and end up sitting on a park bench trying to figure out if life is still worth living or not.
Life is most definitely worth living. Yes, a storm is coming and the world is going to become incredibly unstable in more ways than one. But if you understand what is coming and you work hard to prepare, then you and your family will have a chance to thrive even in the midst of the storm.
Please learn from what is happening over in Europe. The economic horror show that is unfolding over there is going to come to America too, and time is running out.
 The fiscal cliff is coming! Run for the hills! There have been endless stories in the mainstream media about the “fiscal cliff” that our country is facing if the Democrats and the Republicans can’t come to some sort of an agreement. If there is no agreement, taxes will go up and government spending will be reduced by a very small amount. And yes, that would likely push the U.S. economy into another recession, although there are many that would argue that we are already in a recession right now. In any event, there is a tremendous amount of distress out there about the fact that something might interrupt the debt-fueled prosperity that we have all been enjoying. You can almost hear them now: “No! Please don’t cut government spending! Please don’t raise taxes! Please keep stealing more than 100 million dollars from our children and our grandchildren every single hour of every single day so that we can continue this economic illusion that feels so very good.” The American people want the government to give everything to everybody, but they definitely do not want to pay for it. They want a big government that showers them with government checks and government benefits, but they don’t want to cough up the ridiculous amount of money that it would take to fund such a government. So we just keep ripping off our kids and our grandkids. What we are doing to future generations is not just immoral, it is criminal. If they get the chance, someday they will look back and curse us for destroying their futures and destroying their country. So why do we continue to do this to them? Because we are greedy and selfish and we are absolutely desperate to maintain the massively overinflated standard of living that we have been enjoying. We have lived way above our means for so long that we don’t even know what “normal” is supposed to be anymore.
But nobody can spend far more money than they bring in forever. At some point an adjustment comes, and our adjustment is going to be exceedingly painful.
Right now, the overwhelming consensus in the United States seems to be that we should put off any economic pain for as long as possible. The American people don’t want significant cuts to government spending and they don’t want taxes to be raised to pay for the spending that we are already doing.
But if the Republicans and the Democrats don’t agree to a deal soon, we are going to see taxes raised substantially and government spending cut by a little bit. A recent CBS News article did a good job of describing exactly what this “fiscal cliff” that we are facing actually is…
There are two parts to the so-called fiscal cliff. The first is the scheduled expiration of the tax cuts enacted in 2001 and 2003 under President George W. Bush, the payroll tax holiday enacted under President Obama, and a host of other tax breaks. The second is $1.2 trillion in automatic spending cuts to defense and domestic programs that are looming due to a 2011 deal that resulted from House Republicans’ reluctance to raise the debt limit.
Now, it’s true that if lawmakers fail to work out any sort of deal, there will be severe long-term consequences for the economy: According to the Tax Policy Center, going off the “cliff” would affect 88 percent of U.S. taxpayers, with their taxes rising by an average of $3,500 a year. Many economists, as well as the nonpartisan Congressional Budget Office, say the combination of spending cuts and tax hikes that are set to take effect would tip the economy into a new recession.
Please keep in mind that the “$1.2 trillion in automatic spending cuts” is not for a single year. When you break it down, the cuts to spending would be somewhere around 100 billion dollars a year. And a lot of those “cuts” are actually spending increases that would be cancelled. So those spending cuts would not really put much of a dent in our yearly budget deficits at all.
The tax increases would be more significant. Middle class families would be paying thousands of dollars more per year in taxes. These tax increases would raise some more revenue for the federal government, but they would also do significant damage to the economy in the short-term.
Do you know what they call a combination of government spending cuts and tax increases over in Europe?
They call it “austerity”.
Nations like Greece and Spain have tried this. They cut spending and raised taxes in an attempt to reduce government budget deficits. What happens is that the spending cuts and the tax increases cause a significant economic slowdown and this causes tax revenues to come in much lower than projected. So then more spending cuts and tax hikes are necessary in order to try to get closer to balancing the budget. But then tax revenues fall even more.
In the end, both Greece and Spain still have large budget deficits and yet the economies of both nations are suffering through depression-like conditions. The unemployment rate in both nations is now over 25 percent. Just check out this chart right here to see how nightmarish austerity has been for the economies of both Greece and Spain.
So that is why everybody is freaking out about the fiscal cliff. They don’t want to go down the same road of austerity. They want to keep living in an economic fantasy land where we can borrow our way to “prosperity”.
But it is all a lie. The lines at the Apple stores, the crazed consumers on Black Friday, the restaurants teeming full with people and the government that thinks that it can take care of everyone from the cradle to the grave and yet keep taxes low. It is all a giant lie.
And no, please do not think that I am in favor of raising taxes. I most definitely am not. I believe that the government brings in more than enough money already.
Personally, I believe that we could have a system that completely eliminates income taxes and that funds the government through tariffs and various other forms of taxation. It was good enough for the Founding Fathers and it should be good enough for us. But that is a subject for another article.
Our current system has allowed us to live way beyond our means for an extended period of time, but it is only a matter of time until it all comes crashing down.
In fact, the game is already over. We have already destroyed the future. At this point it is only a matter of how long we can keep kicking the can down the road and putting off the pain.
Sadly, what we have done on a national level is simply a reflection of our “buy now, pay later” society. We have become a nation that is constantly willing to sacrifice the future in order to make the present more pleasant.
Just check out this video. We have become addicted to a prosperity that we cannot possibly pay for. But as long as someone will keep lending us the money we will continue to enjoy it.
As I have mentioned previously, the government has spent about 11 dollars for every 7 dollars of revenue that it has actually brought in while Barack Obama has been president.
We print, borrow and spend without giving any thought to what we are doing to the future of this country. We are shredding confidence in our currency and we are wrecking the greatest economic machine that the world has ever seen.
And all of our politicians and all of our “leaders” prance about as if they are the smartest generation of Americans ever, and they think that they are an “example” for the rest of the world, but if our Founding Fathers were around today they would be absolutely horrified about what they have done to the country that they built.
If you think that the economy is bad now, you just wait.
We are still in the “economic fantasy land” phase where we are enjoying a massively inflated standard of living constructed on a mountain of borrowed fiat currency. Our economy is being held up by trillions of borrowed dollars, and all of that money makes the U.S. economy appear to be far more prosperous than it actually should be.
When we have to start living closer to what our real standard of living should be things are going to get really bad.
Most Americans simply don’t understand that if the federal government went to a balanced budget tomorrow it would instantly plunge the U.S. economy into a depression.
Just look at Greece and Spain. The same thing is going to happen to us one way or another.
So enjoy this false prosperity while you still can. This is about as good as things are going to get, and from here on out it is downhill for America.
 The United States is not the only one with massive economic problems right now. The truth is that just about wherever you look around the globe things are getting even worse. China is experiencing a substantial economic slowdown, and Japan has resorted to yet another round of money printing in an effort to keep the Japanese economy moving. Unemployment in Europe continues to get even worse, and the riots this week in Spain and in Greece have been absolutely frightening at times. In the United States there are a whole host of signs that another recession is approaching, and the number of American CEOs that say that they plan to eliminate jobs in the coming months is rapidly rising. The world economy is more interconnected today than ever before, and that means that we are all in this together. Just remember what happened back in 2008 and 2009. The economic pain that started on Wall Street was felt in every corner of the planet. So anyone that believes that the United States (or any other major nation for that matter) is going to escape the next wave of the economic crisis is simply not being realistic. Why do you think central banks all over the world are in “panic mode” right now? They are firing all of their ammunition and printing money like there is no tomorrow in an attempt to keep the system together. Unfortunately, it is not going to work.
If the powers that be had an “easy button” that would quickly fix everything, they would have pressed it by now. But despite all of their efforts things continue to unravel. If you want to get an idea of where we are headed, just look at what is already happening in Europe. Unemployment has risen above 24 percent in Greece and above 25 percent in Spain.
Those two nations are on the “bleeding edge” of the next wave of economic problems. Unemployment is rising almost everywhere else in Europe as well, and things are eventually going to get really bad in Asia and in North America too.
So hold on to your seat belts – it is going to be a bumpy ride.
The following are 14 signs from around the globe that the world economy is getting weaker….
#1 Things in China do not look good right now. The Shanghai Composite index fell to its lowest point in over 3 years earlier this week. Will the S&P 500 soon follow suit?
#2 The Bank of Japan has resorted to yet another round of money printing in a desperate attempt to try to bolster the faltering Japanese economy….
In Asia, the Bank of Japan has long been manufacturing money out of thin air. It has just announced an eighth round of money printing to prop up the ailing Japanese economy. The Bank of Japan is to purchase 10 trillion yen of bonds to add further liquidity into the financial system. Now it has 80 trillion yen of bonds in its portfolio, equivalent to 20 per cent of Japan’s gross domestic product.
#3 In Spain, violent demonstrations over the state of the Spanish economy just outside the national Parliament building in Madrid on Tuesday evening made headlines all over the globe. You can view video of police brutally beating young Spanish protesters during those demonstrations right here.
#4 As unemployment hovers around the 25 percent mark, foraging through garbage bins for food has become so rampant in Spain that one city has actually started putting locks on supermarket garbage bins “as a public health precaution“.
#5 Despite all of the money printing that the ECB has been doing, the yield on 10 year Spanish bonds has risen back up to about 6 percent again.
#6 The economic protests in Greece are getting completely and totally out of control. Just check out this description of the “Day of Rage” that took place in Greece earlier this week….
Police fired stun grenades and tear gas at protesters yesterday as tens of thousands poured into the streets of Athens as part of a nationwide strike to challenge a new round of austerity measures that are expected to cut wages, pensions and healthcare once again.
Dozens of youths, some masking their faces with helmets and T-shirts, hurled Molotov cocktails and rocks at police who fired back in an effort to scatter the angry crowds around the parliament building. More than 50,000 people are believed to have participated in the mass walk-out in Athens alone.
#7 The unemployment rate in France has risen for 16 months in a row and is now the highest that it has been in over a decade.
#8 As I wrote about recently, the number of unemployed workers in Italy has increased by more than 37 percent over the past year.
#9 New orders for durable goods in the United States fell by a whopping 13.2 percent in August. That was the largest decline that we have seen since the middle of the last recession (January 2009).
#10 According to the Bureau of Economic Analysis, U.S. GDP only grew at a 1.3 percent annual rate during the second quarter of 2012 as opposed to the 1.7 percent annual rate previously reported.
#11 The U.S. Postal Service is about to experience its second financial default in just the past two months….
The U.S. Postal Service will default this week on a $5.6 billion congressionally mandated obligation to pre-fund retiree health benefits, marking the second time in two months the cash-strapped agency has done this.
#12 It looks like General Motors is on a path that will lead to bankruptcy (again).
#13 According to a recent survey conducted by State Street Global Advisors, 71 percent of “investors in a survey of 300 around the world, including the largest pension funds, asset managers and private banks, fear an imminent Lehman-like event.”
#14 According to a recent survey of American CEOs by Business Roundtable, the number of CEOs that plan to eliminate jobs has risen significantly from earlier this year….
The CEOs’ decline in confidence comes alongside a worsening employment outlook. Thirty-four percent of the 138 CEOs surveyed said in this quarter’s survey that they expected their companies to cut jobs in the next six months, compared to just 20 percent in the second quarter. Likewise, only 29 percent say they expect employment to grow in the next half year, down from 36 percent last quarter.
But the mainstream media in the United States would like us to believe that everything is getting better.
The mainstream media would like us to believe that QE3 is going to stimulate lots of new hiring all over America, and they are greatly celebrating the fact that the S&P 500 hit a five year high on Thursday.
Well, those on Wall Street should celebrate this monetary “sugar high” while they still can. Of course QE3 was going to cause stock prices to rise in the short-term, but the reality of the matter is that QE3 is not going to do a thing to stop the financial markets from crashing when the time comes for them to crash.
Economies tend to flourish in a stable, predictable environment. When you start recklessly printing money, it may help your economic numbers in the short-term, but it disrupts the stability of the system.
And once you have created a tremendous amount of instability, it is really, really hard to convince people that you can create stability once again.
When it comes to economics, confidence is one of the most important ingredients. If people lose confidence in the system, it almost does not matter what else you do.
As I wrote about the other day, quantitative easing worked for the Weimar Republic for a little while, but in the end it resulted in total disaster.
It will also end in total disaster for us.
All over the globe financial authorities are playing all sorts of games in an attempt to keep the system functioning smoothly. But these games are going to steadily undermine confidence in the system, and that is going to prove to be absolutely deadly.
Take advantage of this period of relative stability while you still can, because when it is gone it is not coming back.
 Are you good at flipping burgers , waiting tables or stocking shelves? Are you proficient with a cash register? Do you enjoy doing mindless work for very low pay? If you answered yes to any of those questions, then you are probably going to fit in very well in the new U.S. economy. According to a report that has just been released by the National Employment Law Project, 58 percent of the jobs that have been created since the end of the recession have been low paying jobs. So exactly what is a low paying job? Well, the National Employment Law Project defines it as a job with an hourly wage between $7.69 and $13.83. But of course you can’t pay a mortgage or support a family on $13.83 an hour. Even if you got full-time hours the entire year, you would make less than $28,000 on an annual basis. The federal poverty level for a family of five is $27,010. So needless to say, most of these new jobs are not paying enough to support a middle class lifestyle. This represents an economic failure on a fundamental level. Our economy is producing very few good jobs that enable people to be able to raise families and live the American Dream. The ranks of “the working poor” are exploding and the number of Americans that are dependent on the government is sitting at an all-time record. Sadly, if current trends continue things are going to get a lot worse.
The numbers compiled by the National Employment Law Project are absolutely stunning. Most of the jobs lost during the recent recession were mid-wage jobs, and most of the jobs created since then have been low wage jobs. This represents a fundamental shift in our economy. Just check out these figures….
–21 percent of the jobs lost during the last recession were low wage jobs paying between $7.69 and $13.83 an hour.
–58 percent of the jobs created since the end of the recession have been low wage jobs paying between $7.69 and $13.83 an hour.
–60 percent of the jobs lost during the last recession were mid-wage jobs paying between $13.84 and $21.13 an hour.
–22 percent of the jobs created since the end of the recession have been mid-wage jobs paying between $13.84 and $21.13 an hour.
But even the high end of the mid-wage pay scale is not that great.
If you make $21.13 an hour and you work full-time hours for the entire year you will end up making about 42,000 for an entire year.
Yes, that can probably support a family of four in most areas of the country, but you really have to scrimp and save to do it.
And keep in mind that 80 percent of all the jobs being created now pay at that level or less.
Welcome to the new U.S. economy.
It really stinks for workers.
The truth is that there has been a fundamental cultural change in our economy. Workers are no longer valued. They are viewed as expensive liabilities that should be disposed of as rapidly as possible once their usefulness has ended.
There is very little loyalty to workers these days, and most big corporations do not really care about the quality of the lives of their workers. The number of companies offering health insurance to their workers continues to decline (and thanks to Obamacare that decline is accelerating even further), and the number of companies offering pension plans to their workers continues to decrease as well.
At this point, less than 25 percent of all jobs in the United States are good jobs, and that number continues to shrink.
Is this because the big corporations are not making enough money?
Not at all.
In fact, corporate profits have been setting all-time records in recent years….
Meanwhile, wages as a percentage of the economy are at an all-time low….
So why is this happening?
Well, I already talked about the fundamental cultural shift that is happening. Companies simply do not care about their workers like they used to. America is becoming a very cold place.
Another major factor is that millions upon millions of our good jobs have been shipped overseas thanks to the emerging one world economy.
In the old days, U.S. corporations were more or less forced to hire American workers and the wages earned from a typical manufacturing job could easily support a growing family.
That has entirely changed now.
The big corporations no longer need American workers to make stuff. They can just close up shop and move their facilities to the other side of the globe where it is legal to pay slave labor wages to very desperate workers.
And now there is greatly increased competition for the jobs that we still have in this country because so many of our jobs have disappeared.
If you don’t like how your employer is treating you that is just too bad. In most cases your employer would have absolutely no problem finding a replacement for you. In fact, there are probably thousands of people in your community that are desperate for a job such as yours.
So what does all of this mean?
It means that the decline of the middle class in America is going to get a lot worse.
American families are rapidly getting poorer. Real median household income has fallen another 4.8 percent since the last recession ended.
Meanwhile, the cost of living continues to go up and American family budgets are being stretched to the limit.
In a previous article, I noted that 62 percent of all middle class Americans say that they have had to reduce household spending over the past year.
Things have fundamentally changed. The days of endless prosperity for the middle class are gone for good. You are going to have to adjust.
At this point, 77 percent of all Americans are living paycheck to paycheck at least some of the time.
If you are relying solely on a job for the financial survival of your family, then you are probably in a similar situation.
Do you know why they call it a “job”?
It is because you will mostly likely end up living “Just Over Broke” for most of your life.
A major shift in our economy is happening.
We are transitioning from an “employment economy” to an “ownership economy”.
Most Americans that are currently working for others are not going to have a bright economic future.
That may sound harsh, but it is the truth.
Even if you are still one of the fortunate Americans that still has a good job, you need to start thinking about what you are going to do when you lose that job someday.
The system is failing, and if you have blind faith that it is always going to take care of you and provide a job for you then you are likely to be bitterly disappointed someday.
 Did you know that median household income in the United States is lower today than it was when the last recession supposedly ended? If we are in the middle of an “economic recovery”, how can this possibly be happening? Stunning new statistics compiled by Sentier Research show that the U.S. economy is not nearly as healthy as we have been led to believe. According to the study that Sentier Research has just released, median household income in the United States was sitting at $55,470 back in January 2000. In December 2007, when the recession began, it was sitting at $54,916. In June 2009, when the recession supposedly ended, it was sitting at $53,508. Today, it is sitting at $50,964. This is a long-term trend that is definitely going in the wrong direction. The fact that median household income in the U.S. is now 4.8 percent lower than it was when the last recession ended is incredibly disturbing, especially since all of the things that we buy on a regular basis just keep going up in price. Food, gas, electricity, car insurance and health insurance all cost a whole lot more today than they did back in the year 2000, and yet median household income has dropped 8.1 percent since that time. So what does all of this mean? It means that American families ARE getting poorer.
Yes, the stock market has been soaring, corporate profits have set all-time records in recent years and the big Wall Street banks that were showered with bailout money are absolutely thriving.
But there has been no economic recovery on “Main Street”.
According to the Sentier Research report mentioned above, incomes have been declining in all geographic regions of the country and in all sectors of the economy….
-Median household income for the self-employed has fallen 9.4 percent since June 2009.
-Median household income for private sector employees has fallen 4.5 percent since June 2009.
-Median household income for government workers has fallen 3.5 percent since June 2009.
-Median household income for Americans living in the West has fallen 8.5 percent since June 2009.
-Median household income for Americans living in the Northeast has fallen 4.9 percent since June 2009.
-Median household income for Americans living in the South has also fallen 4.9 percent since June 2009.
-Median household income for Americans living in the Midwest has fallen 1.1 percent since June 2009.
Remember, the recession supposedly ended in June 2009.
Since that time we have supposedly been in a “recovery”.
So if it has seemed to you that American families have been getting poorer it has not just been your imagination.
In a previous article, I detailed 84 statistics that prove that the middle class in America is being systematically destroyed. If you have not read it yet, I encourage you to go check it out. At this point it is absolutely undeniable that the middle class in America is declining. The following are just a couple of the numbers from my recent article….
1. According to the Pew Research Center, 61 percent of all Americans were “middle income” back in 1971. Today, only 51 percent of all Americans are.
2. The Pew Research Center has also found that 85 percent of middle class Americans say that it is harder to maintain a middle class standard of living today compared with 10 years ago.
3. 62 percent of middle class Americans say that they have had to reduce household spending over the past year.
4. The average net worth of a middle class family in America was $129,582 in 2001. By 2010 that figure had dropped to $93,150.
5. According to the Federal Reserve, the median net worth of all families in the United States declined “from $126,400 in 2007 to $77,300 in 2010“.
You can find 79 more statistics just like this right here.
At the same time that our incomes are going down, the cost of living just continues to rise steadily.
Thanks Ben Bernanke.
American families are being increasingly stretched financially, and if major changes are not made this is going to get even worse in the years ahead.
Another thing that we aren’t being told on the nightly news is that the percentage of working age Americans that have jobs is lower today than when the last recession ended.
So let’s summarize….
-A smaller percentage of Americans have jobs today compared to June 2009.
-Median household income has declined by 4.8 percent since June 2009.
-American families are far less wealthy than they were just a few years ago.
Are we sure that we are in an economic recovery?
Just look at what is happening to our cities.
The rest of the world once looked at Detroit in awe.
Now it is a global joke.
You can see some incredible photographs of the devastation in Detroit right here.
This kind of thing is happening on the east coast as well. I have written many times about how horrible life has become in places such as Camden, New Jersey.
Well, now the entire Camden police force is being disbanded, and the policing of the city is going to be turned over to the county.
We are a mess, and it is time to admit that.
Sadly, most Americans simply have no idea how close our economic system really is to total system failure.
Only 24.6 percent of the jobs in this country are “good jobs” at this point, the velocity of money in our economy has plunged to a post-World War II low, unemployment is rampant, more than half of all Americans are at least partially financially dependent on the government and our national debt is crossing the 16 trillion dollar mark.
We don’t need someone to come in and “tweak” the economy.
We need radical reconstructive surgery.
But most Americans do not understand this.
Most Americans do not seem to grasp these things until economic hardship touches them personally.
After all, if you still have a good job and the mainstream media is telling you that everything is going to be okay it is really easy to pretend that we aren’t heading for an economic disaster of unimaginable proportions.
A massive problem that we are facing right now is something known as “normalcy bias”. This is how Wikipedia defines “normalcy bias”….
The normalcy bias, or normality bias, refers to a mental state people enter when facing a disaster. It causes people to underestimate both the possibility of a disaster occurring and its possible effects. This often results in situations where people fail to adequately prepare for a disaster, and on a larger scale, the failure of governments to include the populace in its disaster preparations. The assumption that is made in the case of the normalcy bias is that since a disaster never has occurred then it never will occur. It also results in the inability of people to cope with a disaster once it occurs. People with a normalcy bias have difficulties reacting to something they have not experienced before. People also tend to interpret warnings in the most optimistic way possible, seizing on any ambiguities to infer a less serious situation.
Doesn’t that sound exactly like the vast majority of Americans right now?
Most Americans just assume that since we have always recovered from every other economic downturn in the past that we will always be able to easily handle whatever the future throws at us.
If only that was true.
We are heading into a time that will be unlike anything any of us have ever experienced before, and many people that have blind faith in the system are going to be absolutely devastated when this coming crisis blindsides them.
Our economy has been collapsing, it is continuing to collapse, and the collapse is going to accelerate dramatically in the coming years.
You can have blind faith in the system, or you can get prepared for what is coming.
The choice is up to you.
 It is absolutely amazing what some people will do to make a living in this economy. Desperate times call for desperate measures, and we have not seen this kind of desperation for jobs in America since the Great Depression of the 1930s. What some people are willing to put up with just to bring home a paycheck these days will totally shock you. For example, would you slaughter dogs all day long even though you are really a dog lover? Would you personally train your replacement from China even though you knew he was about to take your job? Would you trade sex for a job? There are people out there actually doing all these things and worse. Every night in America, millions upon millions of people roll around endlessly in their beds and stare at their ceilings for hours because they can’t sleep. They are sick to their stomachs because their money is gone and nobody will hire them. They can’t provide even the basics for their families and they feel worthless. Unemployment can be absolutely soul crushing and it can suck the life right out of you. Things were supposed to be better by now, but they aren’t. The month after Barack Obama took office the unemployment rate broke the 8 percent barrier and it has stayed above it ever since. But the truth is that the “official” unemployment number greatly understates the real amount of suffering that is going on out there. In reality, the percentage of working age Americans that have jobs is lower today than when the last recession ended. There are millions upon millions of Americans that are desperate for some hope, and there is no hope on the horizon. In fact, things are going to be getting a whole lot worse for the U.S. economy.
I like personal stories because they tell us things that all of the economic statistics in the world never could.
There are millions of Americans that have had their lives totally turned upside down by this economy. They feel abandoned and worthless, and many of them feel as though life is no longer worth living.
As you read the following stories, try to put yourself in their shoes and try to feel their pain.
Also, try to remember that these kinds of stories are going to multiply in the years ahead as the U.S. economy falls apart all around us.
A 61-Year-Old Woman Begging For A Job
A recent article posted on gawker.com included the story of a 61-year-old woman who has been through hell and back during this economic downturn….
I sent out close to 500 resumes. Most never were even acknowledged and those that were I was told I was over qualified. When you would press them they would fumble but I was sure my age was part of the “over qualified”. The thoughts of wanting life to be over were with me every day. I wanted the horror to stop. Every time I would hear of the unemployment rates I would cry-what about ME.
At one point she was so desperate she took a job where she was making the decision about what dogs to slaughter at an animal shelter. Approximately 85 percent of the dogs at the shelter ended up being killed, and she was working about 80 hours a week doing this. The really sad part is that she really loves dogs….
In 2008 I was able to get a job at the local shelter as a dog trainer. That turned into a job as an Operations Manager. Though I was thankful for the job we had a euthanasia rate of nearly 85%. I was the one that would be the decision maker on who lives and dies of over 10,000 animals per year and the toll mentally was hard. Being salary I was working nearly 80 hours a week due to shorthanded staff.
After she was fired for not being aggressive enough in killing off dogs, she started endlessly sending out resumes once again. Nobody wants to hire her, and she essentially feels like an old lady begging for a job….
Since February I began sending out 3 resumes a day. As the no return answer, over qualified and now I was getting I was out of engineering too long I started to set my sights lower. I have sent in resumes to sit in the booth in gas stations, secretary and so on. Local colleges have said I am qualified to teach there but they have no openings. I am for all purposes the old lady begging for a job.
Personally Training Their Replacements
If you knew that your company was going to tear down your factory and send your job to China, would you personally train your replacement?
That is what a whole bunch of workers in Illinois are doing.
The following is from a recent article that appeared in the Guardian….
The shock of losing a precious job in a town afflicted by high unemployment is always hard. A foundation for a stable family life and secure home instantly disappears, replaced with a future filled with fears over health insurance, missed mortgage payments and the potential for a slip below the breadline.
But for Bonnie Borman – and 170 other men and women in Freeport, Illinois – there is a brutal twist to the torture. Borman, 52, and the other workers of a soon-to-be-shuttered car parts plant are personally training the Chinese workers who will replace them.
It’s a surreal experience, they say. For months they have watched their plant being dismantled and shipped to China, piece by piece, as they show teams of Chinese workers how to do the jobs they have dedicated their lives to.
Can you imagine that?
Would you be willing to do the same thing just to keep the paychecks coming in for as long as possible?
Sadly, both major political parties are obsessed with promoting unrestricted free trade even though millions of American jobs continue to go overseas.
Our top political candidates even argue about which of them love “free trade” more.
It truly is sickening.
Do you remember when U.S. taxpayers bailed out the auto industry?
Well, since the auto industry bailout approximately 70 percent of all GM vehicles have been built outside the United States.
The insanity has gotten to such a level that some Americans simply cannot take it anymore. Just consider the following example from a recent article by Donald L. Barlett and James B. Steele….
On his last day on the job, Kevin Flanagan, after clearing out a few personal effects and putting them in boxes in the back of his Ford Ranger, left the building where he’d worked for seven years.
He settled into the front seat of his pickup truck on the lower level of the company garage, placed a 12-gauge Remington shotgun to his head, and pulled the trigger. He was 41 years old.
He was a computer programmer. He’d been a programmer his entire working life. Until, that is, his job was shipped overseas. The business of moving traditional U.S. jobs abroad-called “outsourcing”-has been one of this country’s few growth industries. It’s the ultimate short-sighted business promoted by the country’s elite because it means lower wages and fatter profits. As for the American workers eliminated along the way, they are just collateral damage.
It turns out that Kevin’s replacement was a programmer from India that he personally trained.
Trading Sex For A Job
If you were truly desperate, would you trade sex for a job?
I hope not, but that is exactly what some Americans are doing.
The following is a story from a desperate unemployed woman that was posted on gawker.com recently….
I have been very depressed since I lost my job. I go through periods where I spend most of my days in bed, and although I’ve had a few interviews those people don’t even have the decency to let you know the position is filled. Sometimes I’d call for weeks asking for updates only to get the HR persons voicemail, and they’d never return my calls. With no experience I can’t even get a job waiting tables. I apply to every job in the paper and online, whether I’m qualified or not, and have had 7 interviews total, none of which ended with a job offer. Living paycheck to paycheck would be a blessing at this point.
She has become so desperate that she is even willing to trade her body for a paycheck….
The current ‘bright side’ is that I know someone who owns a small retail clothing chain and has offered me a minimum wage job there on the condition that we become ‘close friends’. I think you & I both know what that entails, but at this time in my life it seems like a better alternative than losing the little that I have. I’d have a paycheck equal to what I am getting on unemployment with the opportunity for overtime and advancements, full benefits and a schedule that would allow me to continue schooling.
A Lot More Layoffs Coming Soon
The frightening thing is that a whole lot more layoffs are on the horizon.
Just check out this excerpt from a recent article on thehill.com….
Lockheed Martin and Pratt & Whitney are going forward with plans to issue layoff notices to thousands of employees due to looming defense cuts under sequestration, despite administration claims that such warnings are unnecessary.
So how many jobs will be lost?
Unfortunately, it is being projected that we could be looking at a million jobs lost….
Top industry officials have said publicly that automatic cut under sequestration could lead to the loss of 1 million defense-related jobs.
Industry leaders and their supporters in Congress say those job losses would hit battleground states such as Ohio, Pennsylvania, Virginia and Florida particularly hard.
Like I have written about before, we simply cannot continue to steal more than a trillion dollars from future generations every single year, but when we do make deep cuts to the federal budget the economic pain is going to be immense.
We already have more than 100 million Americans on welfare.
What is this country going to look like if things get even worse?
The good news is that if you do lose your job and your home you might have somewhere to sleep. New York City is opening up a bunch of new homeless shelters….
New York City has opened nine new shelters in the last two months in efforts to handle the city’s rapidly growing homeless population, officials said.
The city recorded 43,731 homeless people in shelters this week, which is up 18 percent from the 37,143 at the same time last year, The New York Times reported.
So don’t get too down.
If you can’t find a job and you can’t afford a home perhaps you can at least get into one of those shiny new homeless shelters.
Seriously, I don’t actually want anyone reading this to end up in a homeless shelter.
That is why I endlessly urge people to adjust their priorities and to work as hard as they can right now to prepare for the very hard economic times that are coming.
Now is not the time to be going on expensive vacations and now is not the time to be blowing your money on all kinds of stupid stuff.
We are moving into the most difficult times that any of us have ever seen, and if you do nothing to prepare yourself you will be very sorry.
 What do you do when the city where you live is dying? All over the United States formerly great cities are crumbling, but some are definitely in worse shape than others. One reader recently wrote to me about what she sees happening all around her in Reno, Nevada. The unemployment rate in Reno is now up to 11.7 percent, which is well above the national average of 8.3 percent. But that doesn’t tell the whole story. The recent recession hit Nevada particularly hard and people have been moving out of the state in waves. In fact, the labor force in Nevada has shrunk by close to 20 percent over the past year as workers have moved elsewhere in search of work. But even though the labor force is now nearly 20 percent smaller, the unemployment rate is still well above 11 percent. There simply are not enough jobs in large Nevada cities such as Reno and Las Vegas. Unfortunately for Reno, it does not have the same kind of big corporate money pouring into it that Las Vegas does. The good news is that you can buy a house very, very cheaply in Reno because homes were foreclosed on in droves during the housing crash. Even today, some housing developments that were put up near the end of the boom times look like virtual ghost towns. The main industry in Reno is “entertainment”, but many of Reno’s strip clubs and gambling establishments have aged so badly at this point that they just look kind of depressing. I guess that is kind of fitting, because Nevada has the fifth highest suicide rate in the nation, and Reno has been ranked as one of the top 10 depressed cities in the entire country. As the city has declined, gangs have moved in and the drug trade is flourishing. Reno has been called the meth capital of America, and crime is on the rise. Despite being surrounded by tremendous natural beauty, Reno has become a very unpleasant place in which to live. But what is happening in Reno is also happening in hundreds of other communities across the United States. Our economy is collapsing and our cities are crumbling right in front of our eyes, and it is only going to get worse from here.
A reader of my site named Heather who has been unemployed since November of last year recently shared the following with me….
I am living in Reno/Sparks Nevada and I feel like it is ground zero for collapse. There are a lot of people who are in denial right now and cannot see the larger picture. I keep also saying we are the canary in the coal mine for the rest of the country. It is quite depressing driving around seeing empty office buildings with vacancies and retail areas just empty. Went to the stores and retail seems pretty slow also. I am volunteering at ProNet locally and it helps unemployed people finds jobs and skills. It has been depressing there too with very little jobs out there for many people who need one.
She said that I should share what is happening in Reno with my readers. She wanted people to know what those living in Reno are going through.
You might think that since Reno is so sunny, so warm and surrounded by such natural beauty that it would be one of the happiest places in America.
Unfortunately it turns out that the opposite is true.
Reno is actually a very sad place.
In fact, last year Men’s Health ranked Reno as the ninth saddest city in the United States.
In response to this ranking, one resident of Reno wrote the following….
In light of this disheartening list-making, it is, of course, important for Nevadans to look on the bright side. Rather than allowing these statistics to depress us further, we can consider them a series of challenges that make living in places like Reno and Las Vegas all the more impressive. You don’t just live in Reno. You survive Reno! To dwell in Reno, you must triumph over the odds that are stacked against you—one of the things we’re supposed to do best here.
If we can withstand all of the emotional curveballs thrown at us because we have selected such a turbulent location in which to reside, we can probably survive anything.
As a lifelong Renoite, I am inclined to respond to these lists with defiance. Yeah, things can look pretty grim sometimes when no one can find a job, and there seems to be no way out.
And that is how many Americans are feeling these days. They are broke, unemployed, depressed and out of options.
How can you pick up and start a new life somewhere else when you have no job and no money?
Sadly, a lot of younger Americans are turning to drugs in an attempt to escape the pain of their daily lives.
One article that I found attempted to find humor in the raging meth epidemic that is happening in Reno….
Reno has been affectionately called the meth capital of the nation. Some foolishly think mass drug usage can ravage a city as swiftly as it can ruin a user’s clear complexion. In all reality, drug addiction is no more than an endearing quirk, certainly not a cause for concern. Babies and adolescents with addiction-addled parents should stop being coddled and learn how to take care of themselves. I’ve been doing my own laundry since I was six months old — I’m sure they can do the same. If there is anything disturbing about the meth problem in Reno, it’s that it shows the lack of variety in this town. Why don’t you try some uppers like MDMA? Your teeth will thank me.
Unfortunately, Reno is far from alone. In the past I have written about how formerly great cities such as Detroit, Cleveland and Baltimore are completely falling apart as well. This kind of thing is literally happening from coast to coast.
There is a very serious lack of decent jobs in America right now. At this point only 24.6 percent of all jobs in the United States are good jobs.
This has made it increasingly difficult for Americans to be able to take care of themselves.
If you can believe it, more than 100 million Americans are on welfare at this point.
And that number does not even include the tens of millions of people that are on Social Security and Medicare.
What in the world has happened to us?
These days most Americans work really hard all of their lives but never end up reaching their dreams.
In fact, one recent study found that 46 percent of all Americans die with less than $10,000 worth of financial assets.
Talk about depressing.
But instead of having us focus on how bad the economic numbers are, the Federal Reserve wants to start measuring how “happy” everyone is. The following is from a recent ABC News article….
Ben Bernanke wants to know if you are happy.
The Federal Reserve chairman said Monday that gauging happiness can be as important for measuring economic progress as determining whether inflation is low or unemployment high. Economics isn’t just about money and material benefits, Bernanke said. It is also about understanding and promoting “the enhancement of well-being.”
So what would you say if the Federal Reserve contacted you and asked if you are happy?
Please feel free to post a comment with your thoughts below….
 Did you know that a smaller percentage of Americans are working today than when the last recession supposedly ended? But you won’t hear about this on the mainstream news. Instead, the mainstream media obsesses over the highly politicized and highly manipulated “unemployment rate”. The media is buzzing about how “163,000 new jobs” were added in July but the unemployment rate went up to “8.254%“. Sadly, those numbers are quite misleading. According to the Bureau of Labor Statistics, in June 142,415,000 people had jobs in the United States. In July, that number declined to 142,220,000. That means that 195,000 fewer Americans were working in July than in June. But somehow that works out to “163,000 new jobs” in July. I am not exactly sure how they get that math to add up. Perhaps someone out there can explain it to me. Personally, I find that the “employment rate” gives a much clearer picture of what is actually going on in the economy. The employment to population ratio is a measure of the percentage of working age Americans that actually have jobs. When it goes up that is good. When it goes down, that is bad. In July, the employment to population ratio dropped from 58.6 percent to 58.4 percent. Overall, the percentage of working age Americans that have jobs has now been under 59 percent for 35 months in a row.
The following is a chart of the employment to population ratio in the United States over the past 10 years….
The gray shaded bar in the chart represents the last recession as defined by the Federal Reserve. As you can see, the percentage of working age Americans with a job dropped sharply from nearly 63 percent at the start of 2008 to a little above 59 percent when the recession ended.
But the “employment rate” kept on dropping even further.
It finally bottomed out at 58.2 percent in December of 2009.
Since that time, it has stayed very steady. It has not fallen below 58 percent and it has not risen back above 59 percent.
This is very odd, because after ever other recession since World War II this number has always bounced back strongly.
But this has not happened this time.
In essence, it is starting to look like 4 percent of the working age population of the United States has been removed from the workforce permanently.
The good news in all of this is that things have at least not been getting any worse over the last couple of years. Even though things have been bad, at least we have had a period of relative stability.
The bad news is that the employment rate has not rebounded despite unprecedented borrowing and spending by the federal government and despite reckless money printing by the Federal Reserve.
Considering how desperately the federal government and the Federal Reserve have been trying to stimulate the economy, I truly did expect to see the employment rate bounce back at least a little bit by now.
Unfortunately it has not and now the U.S. economy is rapidly heading for another recession.
But Barack Obama is going to prance around over the next few days and talk about how wonderful it is that the economy created “163,000 new jobs” in July.
What he isn’t going to talk about are the millions of Americans that have been unemployed for so long that they don’t even “count” in the official unemployment numbers anymore.
But those people actually exist and they are really hurting. Many of them are starting to lose their unemployment benefits and they really do not know what they are going to do. The following is from a recent USA Today article….
Since abruptly losing her $312 weekly unemployment check in June, Laurie Cullinan has depleted her savings, sought food from the Salvation Army and lit candles to save electricity.
If she can’t find a job this month, the Royal Oak, Mich., resident worries she’ll be evicted from her apartment, an unthinkable prospect for the 52-year-old, who enjoyed a solidly middle-class lifestyle until she lost her office-manager job two years ago.
“What am I going to do if I’m homeless?” says Cullinan, who collected unemployment for 1½ years. “My mind won’t let me comprehend that.”
Could you imagine having to face that?
What would you do if you were about to be tossed out on to the street?
When you add up all of the working age Americans without a job in the United States today, it comes to more than 100 million.
Some people have accused me of lying about that figure, but it is actually true.
There are more than 100 million working age Americans that are not employed right now.
And even if you do have a job that does not mean that you are doing well. As I wrote about yesterday, only 24.6 percent of all jobs in the United States today are good jobs.
The cost of living continues to rise much faster than wages are. Many families are having a really hard time just paying for the basics. The inflated standard of living that we have all enjoyed for so long is starting to disappear.
An increasing number of young people are living with their parents well past the age of 18 because there are not enough good jobs and it is just so hard to make it in this economy. If you can believe it, 24 percent of all Americans in the 20 to 34 year old age bracket are living at home with their parents at this point.
But we will be seeing a lot more of this as the economy gets even worse. “Multi-generational households” will become very common, and that is not necessarily a bad thing. Perhaps this will give some families a chance to do some bonding.
Meanwhile, many of our once great cities continue to rot and decay at a staggering pace. Today, I saw one report that discussed how the city of Detroit has become a dumping ground for dead bodies.
How sad is that?
Detroit was once the envy of the world and now it is a place where murder victims are dumped.
These are all indications of just how far we have fallen.
But things are going to get a lot worse, so we should actually be thankful for the period of relative stability that we are enjoying right now.
The long-term economic collapse that we are experiencing right now will soon accelerate. Eventually even the highly manipulated official “unemployment rate” will soar well up into the double digits.
When it does, the anger and frustration that is boiling under the surface in this country is going to explode.
Let us hope for the best, but let us also prepare for the worst.
 Are we rapidly approaching a moment of reckoning for the global financial system? August is likely to be a relatively slow month as most of Europe is on vacation, but after that we will be moving into a “danger zone” where just about anything could happen. Historically, a financial crisis has been more likely to happen in the fall than during any other time, and this fall is shaping up to be a doozy. Much of the focus of the financial world is on whether or not the euro is going to break up, but even if the authorities in Europe are able to keep the euro together we are still facing massive problems. Countries such as Greece and Spain are already experiencing depression-like conditions, and much of the rest of the globe is sliding into recession. Unemployment has already risen to record levels in some parts of Europe, major banks all over Europe are teetering on the brink of insolvency, and the flow of credit is freezing up all over the planet. If things take a really bad turn, this crisis could become much worse than the financial crisis of 2008 very quickly.
All over the world people are starting to write about the possibility of a major economic crisis starting this fall.
For example, a recent article in the International Business Times discussed how some economists around the globe are fearing the worst for the coming months….
The consensus? The world economy has entered a final countdown with three months left, and investors should pencil in a collapse in either August or September.
Citing a theory he has been espousing since 2010 that predicts “a future lack of policy flexibility from the monetary and fiscal side,” Jim Reid, a strategist at Deutsche Bank, wrote a note Tuesday that gloated “it feels like Europe has proved us right.”
“The U.S. has the ability to disprove the universal nature of our theory,” Reid wrote, but “if this U.S. cycle is of completely average length as seen using the last 158 years of history (33 cycles), then the next recession should start by the end of August.”
The global financial system is so complex and there are so many thousands of moving parts that it is always difficult to put an exact date on anything. In fact, history is littered with economists that have ended up looking rather foolish by putting a particular date on a prediction.
But without a doubt we are starting to see storm clouds gather for this fall.
The following are 11 more signs that time is quickly running out for the global financial system….
#1 A number of very important events regarding the financial future of Europe are going to happen in the month of September. The following is from a recent Reuters article that detailed many of the key things that are currently slated to occur during that month….
In that month a German court makes a ruling that could neuter the new euro zone rescue fund, the anti-bailout Dutch vote in elections just as Greece tries to renegotiate its financial lifeline, and decisions need to be made on whether taxpayers suffer huge losses on state loans to Athens.
On top of that, the euro zone has to figure out how to help its next wobbling dominoes, Spain and Italy – or what do if one or both were to topple.
#2 Reuters is reporting that Spanish Economy Minister Luis de Guindos has suggested that Spain may need a 300 billion euro bailout.
#3 Spain continues to slide deeper into recession. The Spanish economy contracted 0.4 percent during the second quarter of 2012 after contracting 0.3 percent during the first quarter.
#4 The unemployment rate in Spain is now up to 24.6 percent.
#5 According to the Wall Street Journal, a new 30 billion euro hole has been discovered in the financial rescue plan for Greece.
#6 Morgan Stanley is projecting that the unemployment rate in Greece will exceed 25 percent in 2013.
#7 It is now being projected that the Greek economy will shrink by a total of 7 percent during 2012.
#8 German Finance Minister Wolfgang Schäuble says that the rest of Europe will not be making any more concessions for Greece.
#9 The UK economy has now plunged into a deep recession. During the second quarter of 2012 alone, the UK economy contracted by 0.7 percent.
#10 The Dallas Fed index of general business activity fell dramatically to -13.2 in July. This was a huge surprise and it is yet another indication that the U.S. economy is rapidly heading into a recession.
#11 As I have written about previously, a banking crisis is more likely to happen in the fall than at any other time during the year. The global financial system will enter a “danger zone” starting in September, and none of us need to be reminded that the crashes of 1929, 1987 and 2008 all happened during the second half of the year.
So is there any hope on the horizon?
European leaders have tried short-term solution after short-term solution and none of them have worked.
Now countries all over Europe are sliding into depression and the authorities in Europe seem to be all out of answers. The following is what one eurozone diplomat said recently….
“For two years we’ve been pumping up the life raft, taking decisions that fill it with just enough air to keep it afloat even though it has a leak,” the diplomat said. “But now the leak has got so big that we can’t pump air into the raft quickly enough to keep it afloat.”
The boat is filling up with water faster than they can bail it out.
So what is the solution?
Well, some of the top names in economics on both sides of the Atlantic are urging authorities to keep the debt bubble pumped up by printing lots and lots more money.
For example, even though the U.S. government is already running trillion dollar deficits New York Times “economist” Paul Krugman is boldly proclaiming that now is the time to print and borrow even more money. He is proud to be a Keynesian, and he says that “you should be a Keynesian, too.”
Across the pond, the International Business Editor of the Telegraph, Ambrose Evans-Pritchard, is strongly urging the ECB to print more money….
Needless to say, I will be advocating 1933 monetary stimulus à l’outrance, or trillions of asset purchases through old fashioned open-market operations through the quantity of money effect (NOT INTEREST RATE ‘CREDITISM’) to avert deflation – and continue doing so until nominal GDP is restored to its trend line, at which point the stimulus can be withdrawn again.
But is more money and more debt really the solution to anything?
In the United States, M2 recent surpassed the 10 trillion dollar mark for the first time ever. It has increased in size by more than 5 times over the past 30 years.
Unfortunately, our debt has been growing much faster than GDP has over that time period.
For example, during the second quarter of 2012 U.S. government debt grew by 274.3 billion dollars but U.S. GDP only grew by 117.6 billion dollars.
Our problem is not that there is not enough money floating around.
Our problem is that there is way, way too much debt.
But this is how things always go with fiat currencies.
There is always the temptation to print more.
That is one of the big reasons why every single fiat currency in history has eventually collapsed.
Printing more money will not solve our problems. It will just cause our problems to take a different form.
In the end, nothing that the authorities can do will be able to avert the crisis that is coming.
A lot of people are starting to realize this, and that is one reason why we are seeing so much economic pessimism right now.
For example, according to a new Rasmussen poll only 14 percent of all Americans believe that children in America today will be “better off” than their parents.
That is an absolutely stunning figure, but it just shows us where we are at.
Our economy has been in decline for a long time, and now we are rapidly approaching another major downturn.
You better buckle up, because this downturn is not going to be pleasant at all.
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