The American people are becoming increasingly angry about the extraordinary amount of power and influence that corporations have in the United States today. A new Gallup poll found that 67 percent of Americans are dissatisfied with the size and influence of major corporations in the United States today. Not only that, the most recent Chicago Booth/Kellogg School Financial Trust Index found that only 26 percent of Americans trust our financial system at this point. The mainstream media is acting as if this is a new phenomenon, but the truth is that a dislike of giant corporations goes all the way back to the founding of this nation. Our founders held a deep distrust for all big concentrations of power, and they intended to set up a nation where no one person or no one institution could become too powerful.
Unfortunately, we have very much strayed from those principles. In the United States today, the federal government completely dominates all other levels of government and mammoth international corporations completely dominate our economy.
If our founding fathers could see what is going on today they would probably roll over in their graves.
The history of the corporation can be traced back to the early part of the 17th century when Queen Elizabeth I established the East India Trading Company.
Our founders were not too fond of the East India Trading Company. In fact, it was their tea that was dumped into the harbor during the original Boston Tea Party.
In his book entitled “Unequal Protection”, Thom Hartman described the great antipathy that our founders had for the East India Trading Company….
“Trade-dominance by the East India Company aroused the greatest passions of America’s Founders – every schoolboy knows how they dumped the Company’s tea into Boston harbour. At the time in Britain virtually all members of parliament were stockholders, a tenth had made their fortunes through the Company, and the Company funded parliamentary elections generously.”
So a disgust for great concentrations of financial power is built into our national DNA.
Many people today think of giant international corporations as being synonymous with “capitalism”, but that is just not the case.
Our founders envisioned a land where free enterprise could flourish in an environment where no institution held too much power.
So this false left/right debate about whether we should give more power to the government or more power to the corporations is largely a bunch of nonsense.
If the founders were around today they would say that we need to take a lot of power away from both of them.
Fortunately, it looks like the American people are starting to think the same thing. Not only are the American people dissatisfied with government, they are also becoming increasingly dissatisfied with big corporations.
As mentioned above, according to Gallup two-thirds of Americans are now dissatisfied with the size and influence of major corporations in America today….
As you can see, the gap between those in favor of the size and influence of major corporations and those not in favor has been significantly widening over the past decade.
That is a good thing.
Not only that, but the latest Chicago Booth/Kellogg School Financial Trust Index shows that Americans have very little trust in the financial system at this point.
*Only 26 percent of Americans trust the nation’s financial system.
*Only 13 percent of Americans trust big corporations.
*Only 16 percent of Americans trust the stock market.
*Only 43 percent of Americans trust the banks.
These numbers are staggering, but they should not be surprising. The American people were not pleased at all when the major banks and big financial institutions were showered with bailouts during the recent financial crisis. A lot of that anger is still simmering.
The recent housing collapse, which is still ongoing, was caused in great part by the behavior of the major banks and big financial institutions, but it is the American people which have suffered the most from it. The following very brief animation from Taiwan demonstrates this very humorously….
The American people are still wondering where their “bailouts” are. Most of the big banks and big corporations seem to be thriving even while the number of Americans slipping into poverty continues to grow.
According to Calculated Risk, approximately 15 million Americans are unemployed, about 9 million Americans are working part-time for “economic reasons” and approximately 4 million American workers have left the labor force since the beginning of the economic downturn.
When you total that all up, you get 28 million Americans that wish they had full-time jobs.
Ouch.
There are other numbers that are very disturbing as well. In the month of November, the number of people on food stamps set another new all-time record: 43.6 million Americans.
So we have tens of millions of Americans that can’t get the jobs that they want and we have tens of millions of Americans that can’t feed themselves without government assistance.
No wonder so many people are angry at the big corporations!
The U.S. government has showered the big corporations and the big banks with bailouts, tax breaks and cheap loans and yet the big corporations and the big banks are not coming through for the American people.
Meanwhile, food prices continue to go up. According to the United Nations food agency, global food prices set another new all-time record during the month of January, and they are expected to continue rising for months to come.
That certainly is not going to ease tensions in the Middle East and elsewhere around the world. When people are not able to pay for the food that they need that tends to make them very, very angry.
For now we are not likely to see food riots in the United States, but as food prices rise all of those food stamp cards are not going to go as far as they used to. Average American families are going to feel more strain at the supermarket. There will be less money available for other things.
A key indicator to watch is the price of oil. The price of oil is one of the key components of the price of food, and if we see the price of oil go up to $120 or $150 a barrel that could mean really bad things for both the U.S. economy and the overall global economy.
If we do see another financial crisis like we did in 2008, is the U.S. government going to rush to bail out the big corporations and the big banks like they did the last time?
As we have seen from the numbers above, that certainly would not sit well with the American people.
How do we fix the economy? That is a question that tens of millions of Americans are asking right now. Republicans are harshly criticizing the empty economic proposals being put forward by Barack Obama and the Democrats, but the Republicans don’t seem to have any real solutions either. There is talk of cutting taxes a little bit more, reducing federal spending a little bit and getting rid of a few useless federal regulations but doing any of those things would essentially be like spitting into Niagara Falls – the effect would not really be noticeable at all. As this column has documented over and over and over, the economic and financial problems that we are facing are so enormous that radical solutions are needed. In essence, what we need is not an “economic bandage” or two – what we need is major reconstructive surgery. If dramatic action is not taken, our economy is going to completely collapse.
Is anything that Barack Obama is currently proposing going to help fix the economy? No, of course not. As I wrote about the other day, Obama’s address to the nation was packed with empty promises and a whole lot of inspirational nonsense. There were no real solutions to the very real problems we are facing.
So is there anything that we could do to actually start fixing things?
Yes, but the solutions are radical. They would cause quite a bit of chaos. They would not be easy for people to accept.
But the truth is that our economy and our financial system have terminal cancer. If something radical is not done quickly we are going to lose the patient.
The following are 16 ideas that Barack Obama could have proposed if he actually wanted to fix the economy….
#1 We Must Shut Down The Federal Reserve
If you are not willing to accept this, you may as well not read the rest of the solutions. The truth is that the U.S. government will never be able to solve the national debt problem until the Federal Reserve is shut down. The U.S. government should nationalize all Federal Reserve assets and start issuing currency that is completely and totally debt-free.
Under such a system, it is conceivable that U.S. budget deficits could be eliminated entirely and that over time the entire U.S. government debt could be retired.
One of the biggest threats of going to such a system would be inflation, but remember, the United States has only had a major, ongoing problem with inflation since the Federal Reserve was created back in 1913. The U.S. dollar has lost well over 95 percent of its value since the Federal Reserve was created, and so it is hard to imagine that we would do even worse without the Federal Reserve.
In any event, it is the fundamental right of any sovereign nation to be able to issue and control its own currency. This right was given to the U.S. government by the U.S. Constitution and it is time for the U.S. government to reclaim that right.
#2 We Must End Trade With All Nations That Allow Their Citizens To Be Paid Slave Labor Wages Or That Do Not Respect Basic Human Rights
This would dramatically reduce the “outsourcing” of our jobs and our industries almost overnight. The truth is that it was never a good idea to put American workers in direct competition with hundreds of millions of workers that are making slave labor wages on the other side of the globe.
Trading with nations that have a similar wage structure to ours and that respect basic human rights (Canada, for example) is a very good thing. However, all of the “free trade” agreements that politicians from both parties have been pushing down our throats for decades are literally wrecking the U.S. economy.
Since 2001, over 42,000 factories have been shut down in the United States. This proposal would go a long way towards stopping the bleeding, and if some of these countries are willing to raise their wage levels significantly then we would be able to resume trade with them in the future on a much more level playing field.
#3 We Must Radically Reduce The Size Of The Federal Government
Our big, fat government is a big, fat drain on our economy. We have millions of paper pushers that don’t contribute much of anything of real value.
Not only that, but some of the things that the U.S. government wastes money on are absolutely mind blowing. There is a reason why our founders insisted that we have a very limited government. It is time to get back to those principles.
The Congressional Budget Office is projecting that the U.S. government budget deficit for this year will be nearly $1.5 trillion.
Talk about ridiculous!
I estimate that we could easily cut the size of government in half without hampering how effective it is.
We could start by abolishing the Department of Education. After that, there are several dozen other government agencies and institutions which are worthy candidates for elimination.
#4 We Must Provide Temporary Jobs For The American People During The Economic Transition
If the Federal Reserve is shut down and the size of the federal government is cut in half, it would cause quite a bit of economic chaos. During this transition it will be important to help people survive.
Instead of just passing out a bunch of handouts, a better alternative would be getting the American people working on something constructive.
During this time, the U.S. government could use all of the untapped labor of the unemployed to build massive infrastructure projects.
According to the American Society of Civil Engineers, we need to spend approximately $2.2 trillion on infrastructure repairs and upgrades just to bring our existing infrastructure up to “good condition”.
These jobs would just be temporary until new manufacturing facilities are set up and jobs in private industry are plentiful again.
Having the American people produce something of value is better than just handing them endless unemployment checks.
#5 We Must Ban All Short Selling
When you allow greedy individuals the opportunity to make lots of money by betting against the U.S. economy, it gives those individuals an incentive to make sure that those bets pay off.
Yes, this proposal is controversial, but it just makes sense. If people want to make money, it should be because a company is doing well and not because someone is failing.
#6 We Must Ban Virtually All Derivatives
Once upon a time, derivatives were for hedging risk, but that is not what they are primarily being used for anymore.
Now derivatives are being used to bet on almost anything that you can possibly imagine.
Our financial markets have been turned into a gigantic financial casino.
The derivatives bubble is somewhere in the neighborhood of one quadrillion dollars and it could burst at any moment.
These weapons of financial mass destruction must be banned.
#7 We Must Break Up The Big Wall Street Banks
The big Wall Street banks have far too much power and far too much control. They have come to dominate our entire financial system.
In a capitalist system, too much power concentrated in too few hands is not a good thing. The corruption that has gone on at many of these institutions is absolutely unbelievable.
These banks need to be broken up into much smaller pieces for the good of our country.
#8 We Must Initiate A Massive Law Enforcement Crackdown On Our Financial Markets
As noted above, the corruption that has been going on down on Wall Street has been absolutely sickening. We need a massive law enforcement crackdown on all of this fraud in order to restore faith in the financial system.
Just one small example of this corruption happened during the recent housing crash. Goldman Sachs sold mortgage-related securities that were absolute junk to trusting clients at vastly overinflated prices and then made huge profits betting against those exact same securities.
So do you think that Goldman Sachs or any of the other major players on Wall Street will ever receive more than a slap on the wrist for all the things that have gone on in recent years?
Of course they won’t – unless the American people start demanding it.
#9 We Must Order U.S. Oil Companies To Use Untapped Oil Reserves In The United States And We Must Aggressively Develop Alternative Energy Sources
Right now, the price of oil is pushing up towards 100 dollars a barrel. If oil passes that mark, it is going to put tremendous inflationary pressure on the entire global economy.
Sadly, there is no need for such a high price for oil. There are vast, vast reserves of oil that are virtually untapped inside the United States. These are mostly in the western states and up in Alaska. We have enough to supply very cheap oil to the entire country for decades.
The U.S. government needs to order these oil companies to quit playing games and to start pumping this oil.
However, it is undeniable that we also need to develop alternative energy sources. In fact, we should set up a “Manhattan Project”-style team to aggressively pursue this goal.
In the past, U.S. oil and car companies have blatantly repressed alternative energy projects. The U.S. government should tell U.S. corporate executives that if they ever even think of doing such a thing again that they will be locked away so fast that it will make their heads swim.
#10 We Must Stop Paying Farmers Not To Grow Food
Instead of paying farmers not to grow food, we need to find ways to encourage them to grow as much food as possible. A horrible global food crisis is coming and we are going to need huge stockpiles of everything.
#11 We Must Secure The U.S. border With Mexico
Illegal immigration costs the U.S. economy tens of billions of dollars (conservatively) every single year. We need to secure the border and make sure that all of our immigrants are coming through the “front door”.
#12 We Must Shut Down The IRS
Did you know that the United States has only had an income tax for less than 100 years? For most of our history, the U.S. government got along just fine without taxing personal income.
The IRS is massive waste of time, energy and resources. There are many alternatives that could easily replace the income tax and the ridiculous tax code that we have right now.
For example, a flat tax or a national sales tax could both potentially work, although both have their problems.
Personally, I am convinced that we could have a system that would not require any taxation of income by the U.S. government whatsoever.
Just imagine how much time, how much energy and how many resources would be saved!
#13 We Must Slash Red Tape And The Miles Of Ridiculous Regulations
In the United States today, you almost have to be insane to start up a new business. When you consider all sources of taxation, U.S. businesses face one of the highest overall levels of taxation in the entire world. Not only that, but U.S. businesses face miles and miles of absolutely ridiculous regulations and red tape.
If you plan to start a business in America today, you better get a hold of a good lawyer. In fact, if you want to be safe, you better get a small army of lawyers. You are going to need an expert on the federal regulations that apply to your business, you are going to need an expert on the state regulations that apply to your business and you are going to need an expert on the local regulations that apply to your business.
There are going to literally be thousands of regulations that apply to any business started inside the United States today. There is no way that you will ever be able to learn them all. Not only that, but the truth is that your lawyers will only be aware of a small fraction of them.
Until the regulatory environment in this country dramatically changes, companies are going to continue to be motivated to leave the United States.
#14 We Must Conduct A Massive Law Enforcement Crackdown On The Health Care Industry
It should not cost $30,000 for a one day stay in the hospital in this country.
The truth is that the American people are being ripped off big time.
We need to conduct a massive law enforcement crackdown on all the big hospitals and all the big health care companies.
We need to conduct a massive law enforcement crackdown on all the big health insurance companies.
We need to conduct a massive law enforcement crackdown on all the big pharmaceutical companies.
We also need massive medical malpractice reform.
Not only that, we also should end the monopoly of the AMA immediately. We need to reintroduce honest, legitimate competition back into the medical system.
In addition, we need to make sure that natural health practitioners are able to compete on a fair and equal basis in this country.
As I have written about previously, the health care industry in the United States has become all about making as much money as possible.
This is a tremendous drain on our national resources and we are spread way too thin militarily. It is about time that many off these other countries started protecting themselves for a while.
#16 We Must Pull Out Of The United Nations And We Must Dramatically Reduce Foreign Aid
The United Nations is a massive waste of time, energy and resources. We should have pulled the plug on that ridiculous globalist organization long before now.
In addition, we need to dramatically cut back on foreign aid until we get our own house in order. We should only help the most desperate nations until we get our own economy back on track.
#17 We Must End All Of The Ridiculous Police State Measures Which Are Chasing Tourists Away From Our Soil
Tourism is a very, very important industry to the United States. But today, all of the incredibly intrusive police state measures that the past few administrations have introduced are chasing millions of tourists away and are ruining our national reputation.
For example, there are many cultures around the globe where it would be unthinkable to have anonymous security goons feel up the private areas of women and children before they are allowed to get on an airplane. Rather than put up with such nonsense, millions of tourists are simply going to choose to spend their money somewhere else.
#18 We Must Seize The Assets Of The Ultra-Wealthy Individuals And International Banks That Have Been Committing Fraud Against The U.S. Government For Decades
Once the Federal Reserve is shut down, it will be important to hold those that have been defrauding the U.S. government responsible. Once a full audit of the Federal Reserve is conducted and evidence of criminal activity is uncovered, those involved should be arrested and all of their assets should be seized and frozen pending trial.
If the things that have been going on inside the Federal Reserve are ever fully exposed, it will make the whole Bernie Madoff scandal look like a nickel and dime operation.
But that is why there has never been a full, comprehensive audit of the Federal Reserve since it was created back in 1913. The American people are not supposed to see what happens inside that institution.
Unfortunately, even though economic times are a little rough, things are still good enough that the vast majority of Americans are not ready to start demanding the kind of radical changes listed above.
Not only that, but the kind of radical changes listed above would be fought against by the establishment every step of the way. Those with money and power are not going to step aside just because “justice” demands it.
What is probably going to happen is that the “establishment politicians” that the establishment has bought and paid for are just going to continue to propose half-baked solutions to our problems as this country continues to tumble towards economic oblivion.
So what do all of you readers think? Is there hope that someday we will see some real economic solutions implemented in this country?
Last year was an absolutely fascinating time for world currency markets. The yen, the dollar and the euro all took their turns in the spotlight. Each experienced wild swings at various times, but the overall theme that we saw was that faith in paper currencies is dying. The biggest reason for this is the horrific sovereign debt crisis that has swept the globe. The United States, Japan and a whole host of European nations are all drowning in debt. The U.S. and Japan are both steamrolling toward insolvency, and several European nations would have already defaulted on their debts if they had not been bailed out. So which of the major currencies of the world is going to crash first? Will one (or more) of the big currencies fall before the end of 2011? Once one major currency collapses will the rest start to fall like dominoes? The truth is that the world has never seen a sovereign debt crisis of this magnitude in all of human history. Almost the entire globe is drowning in a sea of red ink and it has brought us right to the brink of financial disaster.
So which of the currencies of the world is going to be the first to come crashing down? Well, let’s take a quick look at the yen, the euro and the dollar….
The Yen
Japan has the 3rd biggest economy in the world, but they are also deeply swamped in debt. At well over 200%, the Japanese government has the biggest debt to GDP ratio of all of the major industrialized nations. In fact, it is estimated that this massive pile of Japanese government debt amounts to approximately 7.5 million yen for every person living in the entire nation of Japan.
So why hasn’t Japan defaulted yet? Well, a big reason is because Japan has one of the highest personal savings rates on the entire globe, and Japanese citizens have been more than happy to gobble up huge amounts of Japanese government debt at very, very low interest rates.
However, Standard & Poor’s has warned that they may have to slash Japan’s credit rating if the debt gets much bigger, and once confidence starts to falter Japan is going to have to start paying higher interest rates.
At some point Japan is going to be facing a financial meltdown, but for the moment they are hanging in there.
The Euro
Several large European nations would have already defaulted on their debts if they had not been bailed out last year. Greece, Portugal, Ireland, Italy, Belgium and Spain are all on very shaky ground right now. Several of them have already had their credit ratings slashed.
Bond yields all over Europe have been absolutely soaring in recent months. It is getting really expensive for many of these nations to take on new debt. Interest rates on 10-year Greek bonds went from 6 percent up to 13 percent in just a single month at one point in 2010. In fact, even some of the nations that aren’t in the most danger are even feeling the pain. For example, the cost of insuring French debt hit a new record high on December 20th.
Right now there are all kinds of rumblings that more European nations are going to need bailouts very soon. Professor Willem Buiter, the chief economist at Citibank, is warning that quite a few EU nations could financially collapse in the next few months if they are not rapidly bailed out….
“The market is not going to wait until March for the EU authorities to get their act together. We could have several sovereign states and banks going under. They are being far too casual.”
So where is all of this bailout money coming from? Well, a lot of it is coming from Germany and a significant amount of it is actually coming from the United States.
But will wealthy nations such as Germany be willing to pour hundreds of billions of euros into these financial black holes indefinitely?
Are the Germans going to accept a situation where they are permanently bailing out the “weak sisters” all over the rest of the continent?
Already some prominent politicians in Europe are calling for the European “bailout fund” to be doubled in size to about 2 trillion dollars. Other analysts believe that it is going to take at least 4 or 5 trillion dollars to properly bail out all of the European nations that need it.
In any event, the truth is that the situation is really, really bad. If at some point the bailouts stop, the defaults are going to begin.
The Dollar
The United States has the biggest national debt of all. The 14 trillion dollar threshold has just been crossed, and the national debt is now less than 300 billion dollars away from the 14.294 trillion dollar debt ceiling. If the U.S. Congress does not raise the debt ceiling, the U.S. government will shortly begin to default on its debts. Of course everyone fully expects that the U.S. Congress will indeed raise the debt ceiling just like they have every time before.
However, U.S. politicians are not going to be able to keep kicking the can down the road forever. Today the U.S. national debt is more than 14 times larger than it was just 30 years ago. Everyone around the world is beginning to realize that this debt is not even close to sustainable. Investors are beginning to become more hesitant about loaning the United States money. The Federal Reserve has been forced to step in and “buy” more and more of the debt the U.S. government is issuing.
Yields on U.S. Treasuries have been moving up in recent months and this could eventually become a huge problem.
Why?
Well, the sad truth is that the U.S. government has been increasingly using short-term debt.
At this point, the average maturity of U.S. government bonds has fallen to 4.4 years. The is the lowest figure of all the major industrialized nations. That means that the U.S. government must constantly roll over massive amounts of debt.
As a point of comparison, UK government debt has an average maturity of approximately 13 years. That obviously gives them a lot more breathing room.
For the United States, the situation could become incredibly dire if interest rates start to go up.
If interest rates on U.S. government debt reach an average of 7 percent, interest payments on the debt would gobble up approximately 45 percent of the tax revenue that the U.S. government takes in each year.
Yes, at that point the game would be over.
But what the United States has going for it that the European nations do not is that the United States can just have the Federal Reserve keep printing currency. Unfortunately for the nations involved in the euro, they do not have that option.
That is why an increasing number of analysts believe that it will be the euro that will crash and burn first.
But only time will tell.
There are even many that believe that authorities at the highest level actually want the dollar, euro and yen to fail.
Why?
Well, many of the same individuals and groups that brought us NAFTA, the WTO, the IMF, the OECD and the World Bank believe that it would be absolutely wonderful for humanity if we could all have a single, united global currency. The “chaos” produced by the fall of our existing global currencies could provide the perfect “opportunity” to provide the grand “solution” that they have been hoping to introduce all along.
All over the world top politicians and financiers have been very open about the fact that a world currency is coming. In fact, men like George Soros are openly talking about these things. The United Nations has been publicly calling for the U.S. dollar to be replaced with a new global currency for some time now. Just this week Chinese President Hu Jintao stated that “the current international currency system is the product of the past.”
So will the American people just sit back and accept it when their dollars are replaced with a new global currency?
Well, sadly, when things go badly most Americans seem to be willing to accept just about anything if it will mean that things will go back to “normal”. When the global economy falls to pieces, and there already lots of signs that we are on the verge of such a collapse, will the American people be willing to say goodbye to the dollar if politicians from both major political parties tell them that the new global currency is the “answer” to our problems?
Hopefully the American people will wake up and will realize that “globalism” is rapidly wiping away almost everything that it means to be an “American”. Now even many of our children and teens are primarily identifying themselves as “citizens of the world” rather than “citizens of the United States”.
Even if the U.S. dollar does collapse, it is absolutely imperative that we continue to have our own national currency. The U.S. Constitution does not make any provision for any sort of “world currency”. If we allow the globalists to push a truly global currency down our throats it will be another giant step towards the creation of a totalitarian one world system.
So what do you think about all of this? Please feel free to leave a comment with your thoughts below….
Have you noticed that most Americans seem to know far more about American Idol, Dancing with the Stars, Justin Bieber and their favorite sports teams than they do about world affairs? Most Americans cannot even find Tunisia and Algeria on a map, and if you told them that food riots are happening in those nations right now most of them would not even care anyway. We have become a very self-centered, self-involved and self-absorbed nation. Quite a few people have accused this column of being obsessed with “doom and gloom”, but the truth is that the world really is falling apart out there. What are we supposed to do? Are we all supposed to stick our heads in the sand and pretend that everything is going to be okay? Should we all not try to warn others so that they can prepare for what is coming? Until people understand that we are facing absolutely massive problems they are not going to be motivated to take significant action, and hopefully those of us that are proclaiming “doom and gloom” are doing a good enough job of describing what is really going on out there that some people are starting to wake up and actually make changes.
Most Americans may not care, but the food riots that are starting to erupt around the globe are actually very serious.
Do you remember what happened back in the summer of 2008?
That summer, the price of oil spiked to an all-time high of $147 a barrel and that caused a substantial increase in the price of food all over the globe. Suddenly millions of poor people couldn’t afford to feed themselves anymore and food riots erupted all over the world.
Well, here we are in 2011 and the price of oil hasn’t even reached $100 a barrel, and yet the food riots are already beginning.
Violent food riots are being reported in Tunisia, in Algeria, in Chile and in Mozambique.
Yes, that is how serious things are getting already.
Unfortunately, it looks like the global food situation is only going to get even worse.
Australia is a major food producer and right now they are experiencing flooding of Biblical proportions. In fact, it has been reported that at one point the flooding covered an area greater than France and Germany combined.
In Brazil, another major food producer, horrific flooding has killed more than 500 people so far. This flooding is being called the “worst-ever natural disaster” in the history of Brazil.
Meanwhile, record cold temperatures and record snowfalls are playing havoc with winter crops all over the Northern Hemisphere.
But even before all of these weather disasters struck the price of food had been going up significantly. The UN recently announced that the global price of food hit an all-time high during the month of December, and world leaders all over the globe are openly expressing concern about what 2011 is going to bring.
Sadly, the truth is that there has been a trend of rising food prices for quite some time. According to Forbes, corn is up 94% since June, soybeans are up 51% since June, and wheat is up 80% since last June.
As one of my readers recently pointed out to me, it usually takes about six months for the prices of agricultural futures to filter down into the supermarkets. So the very high prices for agricultural commodities that we are seeing right now should really start to be felt around the globe by the middle of 2011.
In addition to everything else, reports continue to come in of thousands of birds and millions of fish suddenly dying all over the globe, and nobody seems to really know what is causing it.
Do you want some more doom and gloom?
*There are reports of “panic buying” of silver and other precious metals right now.
*S&P and Moody’s have both warned once again that the United States is in danger of having its credit rating slashed if it does not get government debt under control.
*U.S. housing prices have now fallen further during this economic downturn than they did during the Great Depression of the 1930s.
Meanwhile, America’s economic infrastructure continues to be taken apart piece by piece.
The United States is losing more jobs to China. In fact, the United States is losing more high technology “green jobs” to China.
Evergreen Solar, a company that manufactures solar panels, is closing their factory in Devon, Massachusetts and they are moving their production facilities to China. This is going to result in the loss of 800 good American jobs.
“Solar manufacturers in China have received considerable government and financial support and, together with their low manufacturing costs, have become price leaders within the industry.”
Is it any wonder that a recent survey found that 47 percent of Americans now believe that China is the world’s leading economic power while only 31 percent still believe that the United States is the world’s leading economic power?
As America continues to lose good jobs, millions of Americans find themselves simply unable to pay the bills. In fact, at this point one out of every six Americans is now enrolled in at least one government-run anti-poverty program.
As things have fallen apart in the United States, many private citizens have tried to step forward and do what they can to help people, but now in many areas of the country the government is actually stepping in and shutting down these private avenues of assistance.
For example, in the city of Houston, Texas a couple named Bobby and Amanda Herring has been feeding homeless people for over a year. They never left behind any trash and no trouble was ever caused.
So will they be able to get a permit? Well, it turns out that city officials are saying that this “Feed a Friend” effort most likely will be denied one.
Apparently the city “officials” believe that the homeless “are the most vulnerable to foodborne illness” and that therefore the warm meals that the Herrings were providing for them were potentially dangerous.
Can you believe this?
This is what happens when political correctness and bureaucracy get wildly out of control.
Now it is illegal to go out and feed homeless people?
What is American turning into?
As the economy continues to fall part, the iron grip of the government is likely only going to get tighter as it desperately tries to keep order.
The truth is that there is a reason why so many websites are now reporting so much “doom and gloom”. Things really are getting bad out there.
Sadly, most Americans have only known tremendous prosperity all of their lives, so they can’t even conceive of what it would be like to go through difficult times.
Most Americans have been conditioned to believe that while we may have brief “recessions” once in a while, in the end our economy will always get better and the good times will continue to roll.
But the good news is that an increasing number of Americans are waking up and are trying to warn their family and friends about what is coming.
So do you believe that the food shortages and the food riots are going to get even worse throughout the rest of 2011? Please feel free to leave a comment with your thoughts below….
The vast majority of Americans, including many of those who believe that they are “educated” about the Federal Reserve, do not really understand how the Federal Reserve really makes money for the international banking elite. Many of those opposed to the Federal Reserve will point to the record $80.9 billion in profits that the Federal Reserve made last year as evidence that they are robbing the American people blind. But then those defending the Federal Reserve will point out that the Fed returned $78.4 billion to the U.S. Treasury. As a result, the Fed only made a couple billion dollars last year. Pretty harmless, eh? Well, actually no. You see, the money that the Federal Reserve directly makes is not the issue. Rather, the “magic” of the Federal Reserve system is that it took the power of money creation away from the U.S. government and gave it to the bankers. Now, the only way that the U.S. government can inject more money into the economy is by going into more debt. But when new government debt is created, the amount of money to pay the interest on that debt is not also created. In this way, it was intended by the international bankers that U.S. government debt would expand indefinitely and the U.S. money supply would also expand indefinitely. In the process, the international bankers would become insanely wealthy by lending money to the U.S. government.
Every single year, hundreds of billions of dollars in profits are made lending money to the U.S. government.
But why in the world should the U.S. government be going into debt to anyone?
Why can’t the U.S. government just print more money whenever it wants?
Well, that is not the way our system works. The U.S. government has given the power of money creation over to a consortium of international private bankers.
Not only is this unconstitutional, but it is also one of the greatest ripoffs in human history.
“The people must be helped to think naturally about money. They must be told what it is, and what makes it money, and what are the possible tricks of the present system which put nations and peoples under control of the few.”
It is important to try to understand how the international banking elite became so fabulously wealthy. One of the primary ways that this was accomplished was by gaining control over the issuance of national currencies and by trapping large national governments in colossal debt spirals.
The U.S. national debt problem simply cannot be fixed under the current system. U.S. government debt has been mathematically designed to expand forever. It is a trap from which there is no escape.
Many liberals won’t listen because they don’t really care about ever paying off the debt, and most conservatives won’t listen because they are convinced we can solve the national debt problem if we just get a bunch of “good conservatives” into positions of power, but the truth is that we have such a horrific debt problem because it was designed to be this way from the beginning.
So how would America be different if we could go back to 1913 and keep the Federal Reserve Act from ever being passed? Well, the following are 10 things that would be different if the Federal Reserve had never been created….
#1 If the U.S. government had been issuing debt-free money all this time, the U.S. government could conceivably have a national debt of zero dollars. Instead, we currently have a national debt that is over 14 trillion dollars.
#2 If the U.S. government had been issuing debt-free money all this time, the U.S. government would likely not be spending one penny on interest payments. Instead, the U.S. government spent over 413 billion dollars on interest on the national debt during fiscal 2010. This is money that belonged to U.S. taxpayers that was transferred to the U.S. government which in turn was transferred to wealthy international bankers and other foreign governments. It is being projected that the U.S. government will be paying 900 billion dollars just in interest on the national debt by the year 2019.
#3 If the U.S. government could issue debt-free money, there would not even have to be a debate about raising “the debt ceiling”, because such a debate would not even be necessary.
#4 If the U.S. government could issue debt-free money, it is conceivable that we would not even need the IRS. You doubt this? Well, the truth is that the United States did just fine for well over a hundred years without a national income tax. But about the same time the Federal Reserve was created a national income tax was instituted as well. The whole idea was that the wealth of the American people would be transferred to the U.S. government by force and then transferred into the hands of the ultra-wealthy in the form of interest payments.
#5 If the Federal Reserve did not exist, we would not be on the verge of national insolvency. The Congressional Budget Office is projecting that U.S. government debt held by the public will reach a staggering 716 percent of GDP by the year 2080. Remember when I used the term “debt spiral” earlier? Well, this is what a debt spiral looks like….
#6 If the Federal Reserve did not exist, the big Wall Street banks would not have such an overwhelming advantage. Most Americans simply have no idea that over the last several years the Federal Reserve has been giving gigantic piles of nearly interest-free money to the big Wall Street banks which they turned right around and started lending to the federal government at a much higher rate of return. I don’t know about you, but if I was allowed to do that I could make a whole bunch of money very quickly. In fact, it has come out that the Federal Reserve made over $9 trillion in overnight loans to major banks, large financial institutions and other “friends” during the financial crisis of 2008 and 2009.
#7 If the Federal Reserve did not exist, it is theoretically conceivable that we would have an economy with little to no inflation. Of course that would greatly depend on the discipline of our government officials (which is not very great at this point), but the sad truth is that our current system is always going to produce inflation. In fact, the Federal Reserve system was originally designed to be inflationary. Just check out the inflation chart posted below. The U.S. never had ongoing problems with inflation before the Fed was created, but now it is just wildly out of control….
#8 If the Federal Reserve had never been created, the U.S. dollar would not be a dying currency. Since the Federal Reserve was created, the U.S. dollar has lost well over 95 percent of its purchasing power. By constantly inflating the currency, it transfers financial power away from those already holding the wealth (the American people) to those that are able to create more currency and more government debt. Back in 1913, the total U.S. national debt was just under 3 billion dollars. Today, the U.S. government is spending approximately 6.85 million dollars per minute, and the U.S. national debt is increasing by over 4 billion dollars per day.
#9 If the Federal Reserve did not exist, we would not have an unelected, unaccountable “fourth branch of government” running around that has gotten completely and totally out of control. Even some members of Congress are now openly complaining about how much power the Fed has. For example, Ron Paul told MSNBC last year that he believes that the Federal Reserve is now more powerful than Congress…..
“The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve. They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of this. They’re more powerful than the Congress.”
#10 If the Federal Reserve had never been created, the American people would be much more free. We would not be enslaved to this horrific national debt. Our politicians would not have to run around the globe begging people to lend us money. Representatives that we directly elect would be the ones setting national monetary policy. Our politicians would be much less under the influence of the international banking elite. We would not be at the mercy of the financial bubbles that the Fed has constantly been creating.
There is a reason why so many of the most prominent politicians from the early years of the United States were so passionately against a central bank. The following is a February 1834 quote by President Andrew Jackson about the evils of central banking….
I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank. You tell me that if I take the deposits from the Bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out and, by the Eternal, (bringing his fist down on the table) I will rout you out.
But we didn’t listen to men like Andrew Jackson.
We allowed the Federal Reserve to be created in 1913 and we have allowed it to develop into an absolute monstrosity over the past century.
Now we are drowning in debt and we are on the verge of national bankruptcy.
Will the American people wake up before it is too late?
Most Americans have a deep aversion to the phrase “redistribution of wealth”, and rightly so. On a fundamental level, it is just not right to take the money that one man has worked so hard to earn and “redistribute” it to someone else. In the political realm, the phrase “a redistribution of wealth” is usually a reference to our ballooning social programs, but what most Americans don’t realize is that one of the biggest redistributions of wealth in world history took place during the Wall Street bailouts of a couple years ago. Trillions of dollars of our money and of money that belongs to future generations was redistributed to the Wall Street bankers. The Wall Street bankers did not earn this money and they did not deserve this money. We were told that if Wall Street did not get this money that the global economy would collapse and that there would be martial law in the streets. We were promised that this money would “fix” Wall Street and then the prosperity would “trickle down” to Main Street. So did this happen? Of course not.
What ended up happening is that Wall Street hoarded all of this cash. Lending to individuals and small businesses actually decreased. The Federal Reserve started handing out gigantic piles of nearly interest-free money which many of these big Wall Street banks immediately loaned back to the U.S. government at a significantly higher rate of interest.
Talk about easy money.
Now the big Wall Street banks and the ultra-wealthy are swimming in cash and sales of luxury goods in the United States are absolutely skyrocketing. Meanwhile, millions of “ordinary” Americans continue to slip into poverty.
So is the answer to all of this just to “tax the rich” and redistribute the wealth again by giving more handouts to the poor?
Of course not.
The American people don’t need more handouts.
What the American people desperately need are some good jobs.
But Wall Street is hoarding the cash they got during the bailouts.
It would be one thing if these big Wall Street banks had made a ton of money based on their own efforts. It is a very American thing to be able to enjoy the fruits of hard work.
However, the truth is that many big Wall Street banks and financial institutions may have completely imploded if not for the bailouts.
They were “too big to fail” and our politicians jumped to their service.
Our politicians redistributed wealth by taking trillions of dollars that belonged to us and to future generations and handed it to the folks on Wall Street.
So now the boys and girls over on Wall Street are thriving while tens of millions of “average” Americans are desperately suffering.
Does that seem right to you?
Isn’t it about time that the U.S. government gets out of the “redistribution of wealth” business altogether?
Just consider the following statistics. Even as the economic suffering of ordinary Americans continues to deepen, those who got big piles of bailout money are living the high life….
#1 According to Stephen Lewis of Monument Securities, luxury retailers in the United States have seen an 8.1 percent increase in sales compared to a year ago, while “discount stores” that cater to the poor and the middle class have only seen a 1.2 percent increase in sales compared to a year ago.
#2 The sad truth is that just about every company that deals in luxury goods is booming, while those that primarily serve ordinary Americans are not doing nearly as well. Just consider the following quote from a recent article by Ambrose Evans-Pritchard of the Telegraph….
Tiffany’s, Nordstrom, and Saks Fifth Avenue are booming. Sales of Cadillac cars have jumped 35pc, while Porsche’s US sales are up 29pc.
Cartier and Louis Vuitton have helped boost the luxury goods stock index by almost 50pc since October. Yet Best Buy, Target, and Walmart have languished.
#3 Elderly Americans in particular are really having a hard time of it right now. A recent study by a law professor from the University of Michigan found that Americans that are 55 years of age or older now account for 20 percent of all bankruptcies in the United States. Back in 2001, they only accounted for 12 percent of all bankruptcies.
#4 The number of Americans on food stamps has hit another all-time record. There are now 43.2 million Americans enrolled in the food stamp program.
#5 According to the U.S. Conference of Mayors, visits to soup kitchens are up 24 percent over the past year.
#6 Meanwhile, the price of food continues to go up. This hits poor and middle class Americans much harder than it hits the wealthy. According to a report on 55 top food commodities by the Food and Agriculture Organization, global food prices reached a new record high during December.
#7 Lester Brown, the president of the Washington-based Earth Policy Institute, is publicly declaring that the world is just “one poor harvest” away from total chaos….
“The reality is that the world is only one poor harvest away from chaos. We are so close to the edge that politically destabilizing food prices could come at any time.”
#8 The price of clothes is also increasing dramatically. It turns out that cotton is 80% more expensive now than it was back at the beginning of 2010.
#9 Americans will also be paying more at the gas pump this upcoming year. In fact, former Shell Oil President John Hofmeister recently stated that Americans could be paying 5 dollars for a gallon of gasoline by the end of this upcoming year.
#10 Health insurance rates are also skyrocketing. Blue Shield of California recently announced plans to raise health insurance rates by an average of 30% to 35% this year, and some individual policy holders could actually see their health insurance premiums rise by a whopping 59 percent.
#11 On top of everything else, the U.S. Census is now telling us that there are millions more poor people in America than they had previously calculated. The U.S. Census Bureau recently revealed that the figure of 43.6 million Americans living in poverty that they announced last September was way too low and that actually 47.8 million Americans are now living in poverty.
#12 If all of these economic problems were not bad enough, now many state and local governments are seriously considering raising taxes. In Illinois, there is now a proposal to raise state income tax rates by 75 percent. A recent article that appeared on the CNBC website explained why Illinois is so desperate for cash….
In a moment when states around the country are wrestling with withered revenues, Illinois faces a deficit of at least $13 billion; more than $6 billion in unpaid bills to social service agencies, schools and funeral homes; the most underfinanced state pension system; and growing signs of concern from bond investors.
So won’t the big Wall Street banks and the ultra-wealthy get hit by these tax increases too?
Some of them will, but many of them have learned to “play the game” so well that they barely pay any taxes at all.
As I have written about previously, a third of all the wealth in the world is now held in offshore banks. When taxes go up, the ultra-wealthy are not the ones that have their wealth “redistributed”. Instead, it is poor saps like you and I that have our wealth “redistributed”.
In fact, the next time another “financial crisis” comes along, the financial “powers that be” will once again come running to Congress and come running to the Federal Reserve begging for more bailouts.
Now that the precedent has been set, it will only seem natural to redistribute even more of our wealth to the folks over on Wall Street so that we can “save” the financial system.
But the truth is that our financial system is completely doomed to fail in the long run and throwing our money into the financial system is like throwing our money into a black hole.
In the end, all of us are going to greatly suffer when the financial system finally crashes. But for the moment the wealthy are partying with all of the money that they have looted from the rest of America, and the rest of us which were “small enough to fail” have been left to scratch and claw and fight with each other as we desperately try to survive in this horrible economy.
Most Americans have become so accustomed to the “new normal” of continual economic decline that they don’t even remember how good things were just a few short years ago. Back in 2007, unemployment was very low, good jobs were much easier to get, far fewer Americans were living in poverty or enrolled in welfare programs and government finances were in much better shape. Of course most of this prosperity was fueled by massive amounts of debt, but at least times were better. Unfortunately, things have really deteriorated over the last several years. Since 2007, unemployment has skyrocketed, foreclosures have set new all-time records, personal bankruptcies have soared and U.S. government debt has gotten completely and totally out of control. Poll after poll has shown that Americans are now far less optimistic about the future than they were in 2007. It is almost as if the past few years have literally sucked the hope out of millions upon millions of Americans.
Sadly, our economic situation is continually getting worse. Every month the United States loses more factories. Every month the United States loses more jobs. Every month the collective wealth of U.S. citizens continues to decline. Every month the federal government goes into even more debt. Every month state and local governments go into even more debt.
Unfortunately, things are going to get even worse in the years ahead. Right now we look back on 2005, 2006 and 2007 as “good times”, but in a few years we will look back on 2010 and 2011 as “good times”.
We are in the midst of a long-term economic decline, and the very bad economic choices that we have been making as a nation for decades are now starting to really catch up with us.
So as horrible as you may think that things are now, just keep in mind that things are going to continue to deteriorate in the years ahead.
But for the moment, let us remember how far we have fallen over the past few years. The following are 14 eye opening statistics which reveal just how dramatically the U.S. economy has collapsed since 2007….
#1 In November 2007, the official U.S. unemployment rate was just 4.7 percent. Today, the official U.S. unemployment rate is 9.4 percent.
#2 In November 2007, 18.8% of unemployed Americans had been out of work for 27 weeks or longer. Today that percentage is up to 41.9%.
#3 As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer. Today, there are over 6 million Americans that have been unemployed for half a year or longer.
#4 Nearly 10 million Americans now receive unemployment insurance, which is almost four times as many as were receiving it back in 2007.
#5 More than half of the U.S. labor force (55 percent) has “suffered a spell of unemployment, a cut in pay, a reduction in hours or have become involuntary part-time workers” since the “recession” began in December 2007.
#7 As 2007 began, only 26 million Americans were on food stamps. Today, an all-time record of 43.2 million Americans are enrolled in the food stamp program.
#8 In 2007, the U.S. government held a total of $725 billion in mortgage debt. As of the middle of 2010, the U.S. government held a total of $5.148 trillion in mortgage debt.
#9 In the year prior to the “official” beginning of the most recent recession in 2007, the IRS filed just 684,000 tax liens against U.S. taxpayers. During 2010, the IRS filed over a million tax liens against U.S. taxpayers.
#10 From the year 2000 through the year 2007, there were 27 bank failures in the United States. From 2008 through 2010, there were 314 bank failures in the United States.
#11 According to the U.S. Department of Housing and Urban Development, the number of U.S. families with children living in homeless shelters increased from 131,000 to 170,000 between 2007 and 2009.
#12 In 2007, one poll found that 43 percent of Americans were living “paycheck to paycheck”. Sadly, according to a survey released very close to the end of 2010, approximately 55 percent of all Americans are now living paycheck to paycheck.
#13 In 2007, the “official” federal budget deficit was just 161 billion dollars. In 2010, the “official” federal budget deficit was approximately 1.3 trillion dollars.
#14 As 2007 began, the U.S. national debt was just under 8.7 trillion dollars. Today, the U.S. national debt has just surpassed 14 trillion dollars and it continues to soar into the stratosphere.
So is there any hope that we can turn all of this around?
Unfortunately, the massive amount of debt that we have piled up as a society over the last several decades has made that impossible.
If you add up all forms of debt (government debt, business debt, individual debt), it comes to approximately 360 percent of GDP. It is the biggest debt bubble in the history of the world.
If the federal government and our state governments stop borrowing and spending so much money, our economy would collapse. But if they keep borrowing and spending so much money they will continually make the eventual economic collapse even worse.
We are in the terminal stages of the most horrific debt spiral the world has ever seen, and when the debt spiral gets stopped the house of cards is going to finally come down for good.
So enjoy these times while you still have them. Yes, today is not nearly as prosperous as 2007 was, but today is most definitely a whole lot better than 2015 or 2020 is going to be.
Sadly, we could have avoided this financial disaster completely if only we had listened more carefully to those that founded this nation. Once upon a time, Thomas Jefferson said the following….
I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.
The fact that the official U.S. government unemployment rate has dipped slightly is good news. However, it is not the “economic turning point” that Barack Obama and others are proclaiming it to be. Rather, what we are in right now is “the calm before the storm”. The massive amount of government spending that the U.S. government has done over the past few years and the massive quantities of new dollars that the Federal Reserve has been pumping into the system has bought us all just a little bit of time. Instead of using this brief period of economic stability to party, we should all be using it to prepare for the very hard economic times that are coming. Please do not get fooled when the short-term economic numbers go up or down a little bit. When evaluating the state of the U.S. economy, the key is to look at the long-term trends. The truth is that when you take a longer-term view, it becomes undeniable that the United States is in the midst of a long-term economic decline from which there is no escape.
But how are most Americans responding to the “good news” that the U.S. economy has stabilized for the moment? Many Americans are running right back out and are spending like it is 1999. Many Americans are viewing the slight improvement in some of the economic numbers as a sign that “happy times are here again” and they are behaving just as they did right before the financial crisis of 2008.
Many of us have family or friends that are taking expensive trips, making huge purchases and partying as if the good times are never going to end.
But is this wise?
The fact that the official government unemployment rate declined to 9.4% in December has got a lot of people excited, including Barack Obama….
“The pace of hiring is beginning to pick up.”
So is the fact that the unemployment rate declined slightly good news?
Yes, it is good news.
However, there are also a whole lot of reasons not to be so excited about this one piece of unemployment data….
*A big part of the reason why the unemployment figure was down in December was because the government considered 260,000 Americans to have dropped out of the labor force.
*Federal Reserve Chairman Ben Bernanke says that unemployment is likely to stay very high for four or five more years.
*The 103,000 jobs that were added in December was actually far below the 140,000 to 178,000 jobs that economists were expecting.
*Gallup numbers tell an entirely different story when it comes to unemployment. According to Gallup, the unemployment rate actually rose to 9.6% at the end of December. This was a significant increase from 9.3% in mid-December and 8.8% at the end of November.
*Not only that, but Gallup also says that the underemployment rate is moving up dramatically. According to Gallup, the underemployment rate in the United States increased to 19.0% during December, which was up substantially from 18.5% in mid-December and 17.2% at the end of November.
*The percentage of Americans participating in the labor force is now the lowest it has been since the early 1980s. In December, the Labor Force Participation Rate fell to 64.3%. Over the last twenty years, the Labor Force Participation Rate has usually been around 66 or 67 percent. So do less Americans want jobs today? Of course not. What has happened is that millions of Americans have become so discouraged about the lack of jobs that they aren’t even actively searching anymore.
*According to the Bureau of Labor Statistics, the number of Americans that have been out of work for more than 26 weeks actually increased in December. In November, there were 6.328 Americans in that category, and in December there were 6.441 million Americans in that category.
So, as you can see, there are a whole lot of reasons not to get too excited about the employment numbers.
But has the economic situation in the United States somewhat stabilized in the short-term?
Yes, but this is not going to last forever.
When you look at the longer-term economic trends they just keep getting worse and worse and worse….
#1 Every single month the U.S. government goes into even more debt. The U.S. government is now over 14 trillion dollars in debt and this debt in increasing by about 4 billion dollars every single day.
#2 Even single month state and local governments across the United States go into even more debt. As I have written about previously, our infrastructure is literally crumbling and falling apart from coast to coast but our state and local governments can’t do anything about it because they are drowning in a sea of red ink.
#3 Every single month we are getting poorer as a nation. Every month we consume massive amounts of foreign oil and cheap, foreign-made plastic trinkets and we send the rest of the world hundreds of billions of dollars of our money. Unfortunately, very few of our politicians ever even mention this obscene transfer of wealth.
#4 Every single month we send large numbers of our factories and our jobs overseas. Over the past decade, over 42,000 factories in the United States have shut down permanently and millions of good jobs have been outsourced and offshored. Those jobs and those factories are never coming back and America is rapidly becoming a “post-industrial” nation.
#5 Every single month the United States continues to lose not only factory jobs, but also many other types of good paying “middle class jobs”. In fact, since the year 2000, we have lost 10% of our middle class jobs. In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs. Meanwhile, our population continues to grow larger.
#6 Almost every single month the cost of basics such as food, gasoline and health care goes up faster than our incomes do. Inflation is a brutal “hidden tax” which is destroying the standard of living of middle class Americans.
#7 Confidence in the U.S. dollar and U.S. Treasury bonds is starting to rapidly decline. When global confidence in the U.S. dollar and in U.S. Treasury bonds is totally gone, the entire world financial system will be thrown into total chaos and the U.S. economic system will fall like a house of cards.
#8 We are being constantly looted and pillaged by those at the top of the food chain. Every single month the ultra-wealthy and the international banking elite drain even more money out of the system and transfer it to “offshore” banks. At this point, a third of all the wealth in the world is held in “offshore” banks.
Right now we are still able to enjoy relatively good times because the rest of the world continues to loan the U.S. government massive amounts of cheap money and because the Federal Reserve has so far gotten away with printing gigantic piles of new money out of thin air.
But this “can” cannot be kicked down the road forever. At some point, the greatest debt bubble in the history of the world is going to completely burst and the fallout is going to be nightmarish.
So what should we all be doing?
What we shouldn’t be doing is partying as if the good times are going to last indefinitely.
What we need to be doing is starting to prepare.
So what are some things that we all can do to prepare for hard economic times? Well, the following are just a few of the columns I have authored in the past about prepping….
Use this brief time of economic stability to prepare – once the economy falls apart it will be too late.
Hopefully some of the readers of this column will be willing to share some of their best preparation tips. If you have got some tips and ideas that you would like to share with the rest of us, please feel free to post a comment below….
Today, millions of American families are extremely stressed out because they are working as hard as they can and yet they find at the end of the month they still haven’t been able to pay all of the bills. Unfortunately, things are only going to get rougher in the years ahead. The U.S. government has reached a terminal phase of the debt spiral that it is trapped in, and the only way to keep the system going is to print more money, borrow more money and spend more money. But won’t this cause horrible inflation eventually? Of course it will. That is why so many people around the world have so loudly denounced “quantitative easing 2″. The Federal Reserve is just creating hundreds of billions of dollars out of thin air and is chucking all of this money into the system in a desperate attempt to get it moving again. This is also why the Tea Party movement is so angry about the record amounts of government debt that are being piled up. When the U.S. government goes into more debt, it creates more dollars. As the Federal Reserve and the U.S. government flood the system with new dollars, it means that there are now more dollars chasing roughly the same number of goods and services, and that is a recipe for inflation.
Fortunately (or unfortunately, however you want to look at it), most of this new money is trapped in the financial markets right now. The first people that get their hands on all of this new money are banks, financial institutions and the folks down on Wall Street and right now they are hoarding much of it and much of it is going to pump up the stock market.
That is one reason why we saw such a tremendous bubble in commodities in 2010. It is also a key reason why we have seen such a stock market “recovery”.
But eventually all of this new money is going to get into the hands of average U.S. consumers and it is going to start pushing the price of everything up.
Ronald Reagan once said that inflation is “as violent as a mugger, as frightening as an armed robber, and as deadly as a hit man.” Ron Paul has called inflation a “hidden tax” on all of us, and that is exactly what it is. All of the paper money that we are storing in the banks is losing a little bit of value every single day. Over long periods of time, this loss of value becomes absolutely massive. For example, did you know that the U.S. dollar has lost over 95 percent of its purchasing power since the Federal Reserve was created in 1913?
Unfortunately, as the Federal Reserve and the U.S. government continue to flood the system with new dollars in a desperate attempt to stimulate the economy, inflation is only going to get worse and worse and worse.
So enjoy the relatively tame inflation that we are enjoying for now. The official U.S. government inflation rate has been hovering around 1 percent or so, but everyone knows that the official inflation rate is an absolute joke. The government pulls different categories in and out of the inflation rate almost at will in an attempt to keep the numbers low.
One recent study that analyzed price movement of 86 products in Wal-Mart stores found that the “real” rate of inflation was approximately twice the “official” rate reported by the U.S. government.
Others are convinced that the official rate of inflation is even higher than that. For example, John Williams of ShadowStats.com has closely studied inflation in the U.S. and he believes that it is currently hovering somewhere around 5 percent.
However, John Williams does not believe that inflation is going to stay at 5 percent for much longer. He recently released a “Hyperinflation Special Report” for 2010 that everyone needs to read. Personally, I do not agree with all of his conclusions and I do not believe that things are going to happen quite as quickly as he is projecting, but his overall analysis is sound.
The truth is that our financial system has now reached a terminal phase. Just look at the chart below. Really look at it. How can any financial system survive debt that is rising this fast? The printing and borrowing of money continues to spiral out of control with no end in sight. It is hard to imagine any scenario in which we can even achieve a “soft landing”. One way or another, this exploding debt is going to take us down…..
So are the politicians sorry that they have saddled us with all of this debt?
In fact there are quite a few politicians running around in Washington D.C. that are still convinced “that deficits don’t matter” and that all this debt will never catch up with us.
Well, hold on to your hats, because this is going to be the decade when all of this debt really does start to catch up with us.
One of the ways that we are going to feel the pain is through inflation.
In the months and years ahead, wages will remain relatively stable and government entitlement payments will not increase much while prices for the basic things that American families need go through the roof.
Already we are starting to see some troubling signs of inflation. In 2010, the price of almost every major agricultural commodity you can name shot up dramatically. We are starting to see these price increases filter into the supermarket. Some companies are trying to hide these price increases by shrinking package sizes.
Have you noticed this yet? Have any of the packages that you buy regularly seemed to shrink in recent months?
Sadly, it looks like food prices are headed even higher. According to a recent report by Reuters, world food prices hit an all-time record high in December….
World food prices rose to a record in December on higher sugar, grain and oilseed costs, the United Nations said, exceeding levels reached in 2008 that sparked deadly riots from Haiti to Egypt.
So what are you and your family going to do if a worldwide food shortage pushes food prices up significantly?
Another place where American families are really going to start feeling the pain is at the gas pump.
Do you remember back in October when I warned you that 100 dollar oil is coming?
Well, the price of Brent crude reached 95 dollars a barrel for the first time in almost two years on Monday.
Unfortunately, there are many who now believe that the price of oil is going to go a lot higher than that.
John Hofmeister, the former president of Shell Oil, believes that American consumers will likely be paying 5 dollars for a gallon of gas by the time 2012 rolls around.
So is your employer going to be paying you much more to keep up with rising gas prices?
Of course not.
And you know what?
When the price of oil rises, it affects the price of almost everything else in the stores, because nearly everything has to be transported in one way or another.
So why is the price of oil going up so much? Well, of course there are speculators and of course the price of oil is highly manipulated, but one of the big reasons why oil is going up is because the U.S. dollar is losing value.
The cost of other basics is going up as well. Have your health insurance premiums gone up lately? All over the country, horrific health insurance premium increases are being reported.
Quite a few of the readers of this column have stated that they simply cannot afford health insurance anymore and so they are now doing without it. There are millions of Americans that refuse to go to a hospital because there is no way they can pay for health insurance and there is no way they can pay the ridiculous fees charged by our hospitals today.
Sadly, in the months and years to come millions more working American families will be pushed into poverty-like conditions by rising inflation.
Already we are seeing huge numbers of American families that are working as hard as they can not being able to afford the basics.
*51% of Americans say that it is difficult to afford health care.
*48% of Americans say that it is difficult to pay their home heating and electric bills.
*29% of Americans say that it is difficult to afford food.
Those numbers should be quite sobering for us all – especially considering the fact that jobs are becoming very difficult to get.
According to the same Pew Research study, a staggering 46 percent of all Americans say that someone in their household has been without a job and looking for work at some point during the past year.
It can be really depressing to search for a decent job month after month after month when there doesn’t seem to be any out there.
So if even one person if your family has a decent job you should consider yourself to be very fortunate.
But sadly even families where everyone is working are going to continue to be stretched further and further financially as rapidly increasing inflation steals our purchasing power a little bit more every single day.
The “good times” are rapidly coming to an end. The greatest debt-fueled party in the history of the world is wrapping up and you should enjoy it while you still can, because the years ahead are just going to be brutal.
How do we fix the economy? That is a question that tens of millions of Americans are asking right now. Republicans are harshly criticizing the empty economic proposals being put forward by Barack Obama and the Democrats, but the Republicans don’t seem to have any real solutions either. There is talk of cutting taxes a little bit more, reducing federal spending a little bit and getting rid of a few useless federal regulations but doing any of those things would essentially be like spitting into Niagara Falls – the effect would not really be noticeable at all. As this column has documented over and over and over, the economic and financial problems that we are facing are so enormous that radical solutions are needed. In essence, what we need is not an “economic bandage” or two – what we need is major reconstructive surgery. If dramatic action is not taken, our economy is going to completely collapse.
Pissed Off!: 67 Percent Of Americans Are Dissatisfied With The Size And Influence Of Major Corporations
Unfortunately, we have very much strayed from those principles. In the United States today, the federal government completely dominates all other levels of government and mammoth international corporations completely dominate our economy.
If our founding fathers could see what is going on today they would probably roll over in their graves.
The history of the corporation can be traced back to the early part of the 17th century when Queen Elizabeth I established the East India Trading Company.
Our founders were not too fond of the East India Trading Company. In fact, it was their tea that was dumped into the harbor during the original Boston Tea Party.
In his book entitled “Unequal Protection”, Thom Hartman described the great antipathy that our founders had for the East India Trading Company….
So a disgust for great concentrations of financial power is built into our national DNA.
Many people today think of giant international corporations as being synonymous with “capitalism”, but that is just not the case.
Our founders envisioned a land where free enterprise could flourish in an environment where no institution held too much power.
So this false left/right debate about whether we should give more power to the government or more power to the corporations is largely a bunch of nonsense.
If the founders were around today they would say that we need to take a lot of power away from both of them.
Fortunately, it looks like the American people are starting to think the same thing. Not only are the American people dissatisfied with government, they are also becoming increasingly dissatisfied with big corporations.
As mentioned above, according to Gallup two-thirds of Americans are now dissatisfied with the size and influence of major corporations in America today….
As you can see, the gap between those in favor of the size and influence of major corporations and those not in favor has been significantly widening over the past decade.
That is a good thing.
Not only that, but the latest Chicago Booth/Kellogg School Financial Trust Index shows that Americans have very little trust in the financial system at this point.
The following are some of the key findings from their most recent report….
*Only 26 percent of Americans trust the nation’s financial system.
*Only 13 percent of Americans trust big corporations.
*Only 16 percent of Americans trust the stock market.
*Only 43 percent of Americans trust the banks.
These numbers are staggering, but they should not be surprising. The American people were not pleased at all when the major banks and big financial institutions were showered with bailouts during the recent financial crisis. A lot of that anger is still simmering.
The recent housing collapse, which is still ongoing, was caused in great part by the behavior of the major banks and big financial institutions, but it is the American people which have suffered the most from it. The following very brief animation from Taiwan demonstrates this very humorously….
The American people are still wondering where their “bailouts” are. Most of the big banks and big corporations seem to be thriving even while the number of Americans slipping into poverty continues to grow.
According to Calculated Risk, approximately 15 million Americans are unemployed, about 9 million Americans are working part-time for “economic reasons” and approximately 4 million American workers have left the labor force since the beginning of the economic downturn.
When you total that all up, you get 28 million Americans that wish they had full-time jobs.
Ouch.
There are other numbers that are very disturbing as well. In the month of November, the number of people on food stamps set another new all-time record: 43.6 million Americans.
So we have tens of millions of Americans that can’t get the jobs that they want and we have tens of millions of Americans that can’t feed themselves without government assistance.
No wonder so many people are angry at the big corporations!
The U.S. government has showered the big corporations and the big banks with bailouts, tax breaks and cheap loans and yet the big corporations and the big banks are not coming through for the American people.
Meanwhile, food prices continue to go up. According to the United Nations food agency, global food prices set another new all-time record during the month of January, and they are expected to continue rising for months to come.
That certainly is not going to ease tensions in the Middle East and elsewhere around the world. When people are not able to pay for the food that they need that tends to make them very, very angry.
For now we are not likely to see food riots in the United States, but as food prices rise all of those food stamp cards are not going to go as far as they used to. Average American families are going to feel more strain at the supermarket. There will be less money available for other things.
A key indicator to watch is the price of oil. The price of oil is one of the key components of the price of food, and if we see the price of oil go up to $120 or $150 a barrel that could mean really bad things for both the U.S. economy and the overall global economy.
If we do see another financial crisis like we did in 2008, is the U.S. government going to rush to bail out the big corporations and the big banks like they did the last time?
As we have seen from the numbers above, that certainly would not sit well with the American people.