Why Is Indiana Putting Armed Security Guards Into 36 Unemployment Offices Across The State?

Did you ever think that things in America would get so bad that we would need to put armed guards into our unemployment offices?  Well, that is exactly what is happening in Indiana.  Armed security guards will now be posted at all 36 full-service unemployment offices in the state of Indiana.  So why is this happening now?  Well, Indiana Department of Workforce Development spokesman Marc Lotter says that the agency is bringing in the extra security in anticipation of an upcoming deadline when thousands upon thousands of Indiana residents could have their unemployment benefits cut off.  But it is not just the state of Indiana that could have a problem.  In fact, one recent study found that approximately 2 million Americans will lose their unemployment insurance benefits during this upcoming holiday season unless Congress authorizes another emergency extension of benefits by the end of November.  At this point, however, that is looking less and less likely.

So perhaps all the states will have to start putting armed security guards in their unemployment offices.  The truth is that frustration among unemployed Americans is growing by the day.

Could we soon see economic riots similar to what we have seen in Greece and France?

Let’s hope not.

The following is a video news report about the armed guards that are going into Indiana unemployment offices….

So could things really get out of hand when thousands of unemployed workers in Indiana find out that they aren’t going to get checks any longer?

Indiana Department of Workforce Development spokesman Marc Lotter makes it sound like that is very much on his mind….

“Given the upcoming expiration of the federal extensions and the increased stress on some of the unemployed, we thought added security would provide an extra level of protection for our employees and clients.”

So who is paying for all of this extra security?

The Feds of course.

The additional cost of the new security will be approximately $1 million, and it will be paid for with U.S. government funds designated for the administration of the unemployment system according to Lotter.

This is not a good trend.  As you go through your daily life, just start taking note of the places that now have armed security that did not have armed security five or ten years ago.

Unfortunately, as the U.S. economy goes downhill even further, the amount of security that people feel is “necessary” is likely to go up even more.

So is America going to become an armed camp where the people and institutions with money are protected by armed guards from the hordes of frustrated unemployed workers that can’t feed themselves or their families?

Americans are certainly not in a good mood about the economy.  According to a recent poll conducted by CNBC, 92 percent of Americans believe that the performance of the U.S. economy is either “fair” or “poor”.

The lack of jobs is the main thing that the American people are so mad about.  In fact, it is hard for even highly educated people to find work in 2010.  In America today, 317,000 waiters and waitresses have college degrees. 

People are really hurting and they are getting to the end of their ropes.  Over 41 million Americans are now on food stamps, and one out of every six Americans is enrolled in at least one federal anti-poverty program.  It is getting hard to believe that this is even America anymore.  For many more statistics that reveal the economic horror we are now facing as a nation, please see my previous article entitled “30 Reasons Why People Should Be Getting Really Nervous About The State Of The U.S. Economy“.

But it is not just unemployment that is the problem.  In recent years, millions upon millions of Americans have been forced to take reduced hours or a cut in pay due to the economy.  Millions of others have had to take jobs that barely enable them to survive.  In fact, the number of Americans working part-time jobs “for economic reasons” is now the highest it has been in at least five decades.

So why aren’t there even close to enough jobs for everyone?  Well, there are a number of contributing factors, including the fact that we have been “offshoring” and “outsourcing” millions of our jobs and now it is really starting to catch up with us.  I have discussed this so many times now that I am starting to sound like a broken record.

But instead of fixing the fundamental problems with our economy, the Federal Reserve wants to print yet another gigantic pile of paper money and throw it at the problem.  It is called “quantitative easing“, and it may help smooth things over for a few months, but it is also going to make our long-term problems even worse.

Unfortunately, the Federal Reserve does not really seem concerned about protecting the value of the U.S. dollar at this point.  Not that they ever did, but it would be nice to see Fed officials paying at least some lip service to the dangers of inflation.

Instead, various Fed officials have been publicly making statements about the need for more quantitative easing for weeks.  Right now they seem desperate to put the American people back to work – even if it ends up crashing the value of the dollar.   

But now even the IMF seems supportive of a dollar devaluation.  On Thursday, the IMF actually said that the U.S. dollar is “overvalued” and that adjustments need to be made.

We’ll see what the Fed decides to do next week.  Most analysts believe that they will announce a quantitative easing program of some sort or another.

But what have we come to as a nation when those who control our economy believe that the best solution to our economic problems is to print another big pile of paper money and chuck it into the system?

We’ve got an absolutely gigantic economic mess on our hands, and none of our “leaders” seem to have any idea about how to fix it.

Meanwhile, millions of unemployed Americans are just going to become more and more frustrated – especially when it gets to the point when they aren’t receiving unemployment checks anymore.

5 Dangers To Global Crops That Could Dramatically Reduce The World Food Supply

The world food situation is starting to get very, very tight.  Unprecedented heat and wildfires this summer in Russia and horrific flooding in Pakistan and China have been some of the primary reasons for the rapidly rising food prices we are now seeing around the globe.  In places such as Australia and the African nation of Guinea-Bissau, the big problem for crops has been locusts.  In a world that already does not grow enough food for everyone (thanks to the greed of the elite), any disruption in food production can cause a major, major problem.  Tonight, thousands of people around the world will starve to death.  So what happens if things get even worse?  Many agricultural scientists are now warning that global food production is facing dangers that are absolutely unprecedented.  Crop diseases such as UG99 wheat rust and the “unintended effects” of genetic modification pose challenges that previous generations simply did not have to face.  The outbreak of a real, live global famine looks increasingly possible with each passing year.  So are you and your family prepared if a global famine does strike?

Already, there are huge warning signs on the horizon.  Just check out what agricultural commodities have been doing.  They have been absolutely soaring.      

A recent article on the Forbes website noted a few of the agricultural commodities that have skyrocketed during this year….

Here’s what’s happened to some key farm commodities so far in 2010…

•Corn: Up 63%
•Wheat: Up 84%
•Soybeans: Up 24%
•Sugar: Up 55%

Are you ready to pay 84 percent more for a loaf of bread?

You better get ready – these raw material prices will filter down to U.S. consumers eventually.

So what is going to happen if the world food situation gets even tighter?

Don’t think that it can’t happen.

The following are 5 potential dangers to global crops that could dramatically reduce the world food supply…. 

UG99 Wheat Rust

UG99 is commonly known as “wheat rust” or “stem rust” because it produces reddish-brown flakes on wheat stalks.  The International Maize and Wheat Improvement Center in Mexico believes that approximately 19 percent of the global wheat crop is in imminent danger of being infected with UG99.

Ultimately, it is estimated that about 80 percent of the wheat on the globe is capable of catching the disease.

There is no known cure.

This current strain of wheat rust was discovered in Uganda in 1999 and has spread into areas of Kenya, Sudan, Ethiopia, Yemen and Iran.  It is feared that this crippling disease will spread even farther into south Asia, devastating the fertile growing regions of Afghanistan, Pakistan, India and Bangladesh.

If that happens, you might as well kiss world food stability goodbye.

A recent article in the Financial Times contained an absolutely stunning quote from one prominent agricultural scientist….

“You can talk about crying wolf,” says Ronnie Coffman, director of the Durable Rust Resistance in Wheat project at the University of Cornell in the US, “but it is a wolf”, he asserts, driving across the corn fields of Kansas.

Later on in the same article, Coffman warns that this disease could cause a devastating famine in which literally millions of people would die….

“It can be absolutely devastating if environmental conditions are right,“ he says. “You can count the number of people who could die from this in the millions.”

Mad Soy Disease

Mad Soy disease is spreading at an alarming rate among soy farms down in Brazil.  Previously the disease had been confined to the north part of the country, but now it has been increasingly spreading south.  This disease retards the maturation of infected plants, and it has been causing yield losses of up to 40 percent.  The USDA says that “there are no known effective treatments.”

Verticillium Wilt

Verticillium Wilt is a fungus that prevents lettuce from absorbing water, causing it to quickly grow yellow and eventually wilt.  This dangerous fungus is very hard to get rid of totally because it can stay in the soil for up to seven years.

Today, Verticillium Wilt is spreading all over Monterey County, California.  Considering the fact that Monterey County produces more than 60 percent of the lettuce in the United States, that is very bad news.

Late Blight

In 2009, a disease known as “late blight” attacked potato and tomato plants in the United States with a ferocity never seen before.  According to a press release from Cornell University, late blight had “never occurred this early and this widespread in the U.S.” when it started showing up all over the place early last year.

Late blight begins as ugly brown spots on the stems of potato and tomato plants, and as the spots increase in size, white fungal growth develops until finally a soft rot completely collapses the stem.

This was the disease that was responsible for the Irish potato famine in the 1850s.  A major new outbreak could occur without warning.

Genetic Modification

While it may or may not technically be a disease (depending on how you look at it), genetic modification is having a very serious affect on crops around the globe.

For example, about 10 years ago Chinese farmers began to widely adopt Monsanto’s genetically modified Bt cotton.  Well, researchers have found that since that time, mirid bugs that are resistant to the Bt pesticide have experienced a complete and total population boom.

Today, six provinces in Northern China are experiencing what can only be described as a “mirid bug plague”.  Mirid bugs eat more than 200 different kinds of fruit, vegetables and grains.  Chinese farmers in the region are completely frustrated.

In the United States, a different problem is developing.  The complete and total reliance of so many U.S. farmers on Monsanto’s Roundup herbicide has resulted in several varieties of glyphosate-resistant “superweeds” developing in many areas of the United States. 

The most feared of these “superweeds”, Pigweed, can grow to be seven feet tall and it can literally wreck a combine.  Pigweed has been known to produce up to 10,000 seeds at a time, it is resistant to drought, and it has very diverse genetics.

Superweeds were first spotted in Georgia in 2004, and since then they have spread to South Carolina, North Carolina, Arkansas, Tennessee, Kentucky and Missouri. 

In some areas, superweeds have become so bad that literally tens of thousands of acres of U.S. farmland have actually been abandoned.

But that is what we get for trying to “play God”.

We think that we can just do whatever we want with nature and there will not be any consequences.

One of the most frightening things about genetic modification is that it actually reduces that amount of crop diversity in the world.

For example, if nearly all farmers start using the same “brand” of genetically modified plants that are all virtually identical, it sets up a situation where crop diseases and crop failures can cascade across the planet very easily.

Genetic variety is a very desirable thing, but today our scientists are just doing pretty much whatever they want without really considering the consequences. 

It has been said many times that genetic engineering is similar to “performing heart surgery with a shovel”.

The truth is that we just do not know enough about how our ecosystems work to be messing around with them so dramatically.

Perhaps even more frightening is that once these genetically engineered monstrosities have been released into our environment, it is absolutely impossible to recall them.  They essentially become a permanent part of our ecosystem.

But can we afford to make any serious mistakes at this point?

The truth is that we already live in a world that is not able to feed itself.

Tonight, approximately 1 billion people across the globe will go to bed hungry.  Every 3.6 seconds someone in the world starves to death, and three-fourths of those who starve to death are children under the age of five.

It is currently being projected that global demand for food will more than double over the next 50 years.

So what is going to happen if we start seeing widespread crop failures in the coming years?

The global food supply is not nearly as stable as most people believe.  At some point, it is going to be tested severely.

30 Reasons Why People Should Be Getting Really Nervous About The State Of The U.S. Economy

The mainstream media is full of happy economic news these days.  The S&P 500 has shot up 16 percent since the beginning of July.  Ford Motor Company just reported a profit that jumped nearly 70 percent in the third quarter.  It was Ford’s best third quarter performance ever and it was the 6th quarterly profit in a row for the company.  Other major firms have announced earnings that have far exceeded expectations in recent weeks.  Hooray!  The pundits are proclaiming that the economic collapse is over and that the U.S. economy has won.  It is almost enough to make one tear into a stirring rendition of “Happy Days Are Here Again”.  But perhaps we should take a moment and get a hold of ourselves first.  After all, the underlying economic fundamentals have not changed.  The same long-term trends that were ripping the U.S. financial system apart a month or two ago are still continuing to do so.  Millions upon millions of American families are still deeply suffering.  So exactly what in the world is going on here?  Well, this is what is known as a “sucker’s rally”.  Those on the inside know better than to throw money at this market.  In fact, corporate insiders are now selling off stock so fast you would think it is going out of style.  Meanwhile, hordes of innocent rubes are jumping back into the stock market thinking that it is the perfect time to get in. 

The truth is that these “good times” are only temporary.  Don’t get used to them.  The following are 30 reasons why people should be getting really, really nervous about the state of the U.S. economy…. 

#1 Corporate insiders are selling off stock at a blinding pace and are looking for the exits.  Alan Newman, the editor of the Crosscurrents newsletter, examined a number of the top performing stocks in the market including Google, Apple and Target and found that the ratio of corporate insider stock sold to corporate insider stock purchased over the last six months for those companies was 3,177 to 1.  At the group of firms that Newman looked at, corporate insiders had purchased 38,000 shares of stock over the last six months and yet had sold off over 120 million shares.

#2 Analysts at both Bank of America and Goldman Sachs both believe that the U.S. Federal Reserve is going to initiate a new round of quantitative easing in November.  It does not take a genius to figure out that this is very likely to push up inflation and have very serious consequences for the U.S. dollar.

#3 Economists at Goldman Sachs are projecting that the Fed will have to purchase at least $4 trillion in assets during this next round of quantitative easing to get the U.S. economy moving in a positive direction once again.

#4 In the United States today, there are 5,057 janitors with Ph.D.’s, other doctorates, or professional degrees.

#5 Investors have very little faith in the U.S. dollar (and in paper currencies in general) at this point.  Precious metals are soaring to obscene heights.  The price of gold has increased more than 20 percent in 2010.  The price of silver has skyrocketed about 40 percent this year.  These are not signs that indicate that the U.S. financial system is stable.

#6 Robin Griffiths, a technical strategist at Cazenove Capital, told CNBC on Monday that the U.S. dollar is in danger of becoming “toxic waste”.

#7 In the United States today, 317,000 waiters and waitresses have college degrees.

#8 U.S. lending institutions repossessed an all-time record total of 102,134 homes in the month of September.  That was the first time that home repossessions in the U.S. had ever exceeded the 100,000 mark during a single month.

#9 According to a Standard & Poor’s/Case-Shiller home price report that was released on Tuesday, single family home prices in the United States declined  for a second straight month in August.

#10 In the United States today, over 18,000 parking lot attendants have college degrees.

#11 During the months of August and September, the state of Nevada had an unemployment rate of 14.4 percent, which was the highest in the history of the state.  Not that the rest of the country is doing any better.  The state of California has become a complete and total economic disaster zone, and the city of Detroit, Michigan is literally dying.

#12 The “official” unemployment rate in the United States has been at nine and a half percent or above for 14 consecutive months.

#13 The number of people unemployed in the state of California is approximately equivalent to the populations of Nevada, New Hampshire and Vermont combined.

#14 According to the president of the Federal Reserve Bank of New York, there are approximately 3 million more vacant housing units than usual in the United States.

#15 China has reduced the export quota on rare earth elements for the second half of 2010 by 72%, thus strengthening their position in the world economy even more.  Rare earth elements are absolutely crucial to the manufacture of a vast array of high technology products, and now even more of them will have to be made in China.

#16 In 1985, the U.S. trade deficit with China was 6 million dollars for the entire year.  In the month of August alone, the U.S. trade deficit with China was over 28 billion dollars.

#17 Wheat, corn and other staples are absolutely soaring in price on world markets.  These higher food prices are going to hit U.S. consumers hard.

#18 In 2007, 3 U.S. banks failed.  In 2008, 25 U.S. banks failed.  In 2009, 140 U.S. banks failed.  Last Friday, it was announced that 139 U.S. banks have failed so far this year and it is not even the end of October yet.

#19 Total student loan debt in the United States is climbing at a rate of approximately $2,853.88 per second.

#20 Back in 1980, the United States imported approximately 37 percent of  the oil that we use.  Now we import nearly 60 percent of the oil that we use.

#21 According to an analysis by the Congressional Joint Committee on Taxation, the health care reform legislation that Congress didn’t read but passed into law anyway will generate $409.2 billion in additional taxes on the American people by the year 2019.

#22 Median household income in the U.S. declined from $51,726 in 2008 to $50,221 in 2009.  That was the second yearly decline in a row.

#23 One out of every six Americans is now enrolled in a government anti-poverty program, and yet the number of Americans signing up for food stamps and other social programs just continues to set new all-time records month after month after month.

#24 The number of Americans working part-time jobs “for economic reasons” is now the highest it has been in at least five decades.

#25 American 15-year-olds do not even rank in the top half of all advanced nations when it comes to math or science literacy.

#26 According to a recent poll conducted by CNBC, 92 percent of Americans believe that the performance of the U.S. economy is either “fair” or “poor”.

#27 After analyzing Congressional Budget Office data, Boston University economics professor Laurence J. Kotlikoff came to the conclusion that the U.S. government is now facing a “fiscal gap” of $202 trillion dollars.

#28 A trillion $10 bills, if they were taped end to end, would wrap around the earth more than 380 times.  That amount of money would still not be enough to pay off the U.S. national debt.

#29 According to the U.S. Treasury Department, the U.S. national debt is rapidly closing in on 14 trillion dollars and and will climb to an estimated $19.6 trillion by 2015.

#30 At our current pace, the Congressional Budget Office is projecting that U.S. government public debt will hit 716 percent of GDP by the year 2080.

The U.S. economy is in the midst of a long-term decline.  There are always going to be moments when it seems like things are getting a bit better, but then reality will kick in and the depressing slide will continue.

If you really want to understand what is happening to the U.S. economy, do not become fixated on the short-term numbers.  Instead, always keep an eye on the long-term trends.

The U.S. economy is dying.  We are getting whipped by the rest of the world and we are drowning in a sea of debt.  A little rally in the stock market is not going to do a thing to fix our very deep fundamental economic problems.

12 Ominous Signs For World Financial Markets

Can anyone explain the very strange behavior that we are seeing in world financial markets right now?  Corporate insiders are bailing out of the U.S. stock market at a very alarming rate.  Investors are moving mountains of money into gold and other commodities.  In fact, there is such a rush towards gold that shortages are starting to be reported in some areas.  Meanwhile, some very, very unusual option activity has started to show up.  In particular, someone is making some incredibly large bets that the S&P 500 is going to absolutely tank during the month of October.  Central banks around the world have caught a case of “loose money fever” and are apparently hoping that a new flood of paper money will shock the global economy back to life.  Meanwhile, the furor over the foreclosure procedure abuses of the major U.S mortgage companies threatens to bring even more turmoil to the U.S. housing industry.

There are some very ominous signs that something is just not right in world financial markets right now.  Some of the signs listed below may be related.  Others may not be.  That is for you to decide.

Often, just before something really bad happens, you can actually see the rats leaving a sinking ship if you know where to look.  The truth is that if things are going to go south it is the insiders who know before anyone else.

So are some of the signs below actually clues for what we should expect in the months ahead?

Maybe.

Maybe not.

You make your own call.

But it is becoming hard to deny that there are some serious danger signs out there at this point….    

#1 Corporate insiders are getting out of the U.S. stock market at an absolutely blinding pace.  It is being reported that the ratio of corporate insider selling to corporate insider buying last week was 1,411 to 1, and this week the ratio has soared even higher and is at 2,341 to 1.

#2 Many of the world’s wealthiest people are buying absolutely massive quantities of gold right now.

#3 It is being reported that J.P. Morgan is gobbling up the rights to as much physical gold as it possibly can.

#4 The United States Mint has announced that it has run out of 1-ounce, 24-karat American Buffalo gold bullion coins and that it will not be selling any more of them in 2010.

#5 It is becoming increasingly difficult to explain the unusually high option volume that we are witnessing right now.

#6 Some very large investors are making massive bets that the S&P 500 is going to take a serious tumble during the month of October.

#7 On Tuesday, the Bank of Japan shocked world financial markets by cutting interest rates even closer to zero and by setting up a 5 trillion yen quantitative easing fund.

#8 The president of the Federal Reserve Bank of New York and the president of the Federal Reserve Bank of Chicago are both publicly urging the Fed to do much more to stimulate the U.S. economy, including beginning a new round of quantitative easing, even if it means a significant rise in the U.S. inflation rate.

#9 Nobel Prize-winning economist Joseph Stiglitz told reporters on Tuesday that the loose monetary policies of the Federal Reserve and the European Central Bank are throwing the world into “chaos”.

#10 At the end of September, federal regulators announced a $30 billion bailout of the U.S. wholesale credit union system.

#11 Bank of America, JPMorgan Chase and GMAC Mortgage have all suspended foreclosures in many U.S. states due to serious concerns about foreclosure procedures.  Now, Texas Attorney General Greg Abbott is actually demanding that all mortgage servicing companies in the state of Texas immediately suspend all foreclosures, the selling of foreclosed properties and the eviction of people living in foreclosed properties until they have completed a review of their foreclosure procedures.

#12 Not only that, but Nancy Pelosi and 30 other members of Congress are requesting a federal investigation of the foreclosure practices of U.S. mortgage lenders.  Needless to say, this controversy has the potential to turn the entire U.S. mortgage industry into an absolute quagmire.

So are dark days ahead for world financial markets?

Well, yeah, but it is incredibly hard to predict exactly when things are going to fall apart.

The truth is that there are going to be a whole lot more “crashes” and “collapses” in the years ahead.

The important thing, as discussed yesterday, is to keep your eye on the long-term trends.

The U.S. economy is undeniably in decline.  The only thing keeping the economy going at this point is a rapidly growing sea of red ink.  Debt is literally everywhere.  It is what our entire financial system is based on in 2010. 

In the months and years to come, the major players are going to try very hard to keep all the balls in the air and to continue the massive shell game that is going on, but in the end the whole thing is going to collapse like a house of cards.

Unfortunately, we have been destroying the U.S. economy for decades and there is simply not going to be a happy ending to this story.

The Death Cross: Another Sign That We Are On The Verge Of A Recession?

The Standard & Poor’s 500 50-day moving average stands poised to cross beneath the 200-day moving average.  To those in the financial industry, this is known as a “death cross”, and it is a very powerful indicator that we could be entering a bearish period.  So is this yet another sign that we are on the verge of a recession?  Well, anyone who has spent much time trying to interpret financial charts will tell you how inexact that science can be.  Financial markets can be wildly unpredictable, and there is always a tremendous amount of manipulation going on behind the scenes.  However, when you add this impending death cross with all of the other signs that we could be entering a recession, there certainly seems to be reason for alarm.  The truth is that financial markets across the globe are full of fear and panic right now.  In fact, as noted in another article, the dominant force in world financial markets in 2010 is fear.  When fear rules, markets become very volatile and they can fall very quickly.  Anyone who has spent much time trying to squeeze profits out of world financial markets knows that they tend to fall much faster than they ever rise.  So are we now approaching one of those times of panic when financial markets across the world fall at breathtaking speed?

Well, the truth is that nobody knows.  Anyone who says that they can predict these things with 100 percent certainty is either a liar or they are unbelievably rich.

But certainly the mood in the financial markets is grim.  If a death cross does happen on the S&P it is going to make things even more tense.

For those not familiar with investing terminology, Investopedia defines a “death cross” this way….

A crossover resulting from a security’s long-term moving average breaking above its short-term moving average or support level.

In this case, the death cross would be happening on the S&P 500, which is a weighted index of the prices of 500 large-cap common stocks actively traded in the United States.  The S&P 500 is one of the most commonly used benchmarks for the overall U.S. stock market.

So how soon could we see a death cross on the S&P 500?

Well, some analysts believe that it could happen almost at any time….

“Because the market has moved down so violently, it’s brought about the likelihood of the Death Cross occurring much more rapidly,” Abigail Doolittle, the founder of Peak Theories Research, was recently quoted by CNBC as saying.  “It now appears it could be only a day or two off if downward momentum continues.”

But hopefully most of you that are reading this are not even in the stock market at this point anyway.

The truth is that the “rally” that we have witnessed in the financial markets has been nothing more than a “sucker’s rally”.

The fundamentals of the marketplace have not changed.

The U.S. housing market continues to teeter on the brink of disaster.

The sovereign debt crisis is worse now than it ever has been.

In fact, just about every economic indicator you could name is pointing to difficult times ahead.

So there was really no fundamental reason why we should have even seen such a rally.

But even with the recent rally, the stock market still has not been producing good returns.

So often you hear people giving advice that goes something like this….

“If you are going to get into the stock market just keep your money in there and ride out the hard times because in the long run things always go up”.

But do they?

The truth is that some people have done well, but overall inflation-adjusted returns from stocks over the past ten years have been pretty close to zero.

So if the stock market is a game that you want to play, you had better really know what you are doing (or hire someone else who does), because it can be a very cruel game for amateurs.

What does seem certain is that with so much tension in world financial markets right now, we are likely to continue to see an extreme amount of volatility in the marketplace.  In such an environment, even the slightest piece of good news or bad news can set off incredibly wild swings.

It is a very exciting time for those of us who follow the financial news, but for those seeking to actually squeeze some  profits out of the marketplace, times such as these are not easy.

“The World Has No Money, And The Emperor Has No Clothes”

Most of us are aware of the very old fairly tale by Hans Christian Andersen in which two weavers promise an emperor the finest suit of clothes imaginable, but from a fabric invisible to anyone who is unfit for his position or “just hopelessly stupid”.  Well, in the fairy tale it turns out that nobody wants to admit that they are “unfit” or “stupid”, so when the emperor parades before his subjects in his imaginary new suit of clothes, it takes a child to cry out: “But he isn’t wearing anything at all!”  Well, many of us have been declaring that the world economy “has no clothes” for some time now, but when the anchor of NBC News declares it on national television it gets a bit more attention.  During his recent appearance on The Late Show with David Letterman, NBC’s Brian Williams was asked about the world financial situation.  His answer included this shocking statement: “The world has no money, and the Emperor has no clothes.”

During the interview, it was readily apparent that Williams was honestly shaken up by what had happened last Thursday in the stock market.  But who can blame him?  After all, most of us who watch the markets were totally stunned when the stock market dropped almost 1000 points exactly in less than an hour.

Normally a network news anchor is much more guarded and is much more careful about what is revealed to the public.  But on Letterman’s show, Williams gave us a glimpse of what he really thinks about the world economic situation….

“If I wasn’t a tad too close to this, I’d probably not leave the house.  But that’s how bad it is.”

A video clip that includes these jaw dropping comments by Williams is posted below….

So why did the U.S. stock market plunge so rapidly last Thursday?

Well, many have blamed the episode on a “bad trade” or a “computer glitch”.  Others claim that the Greek debt crisis caused a brief panic.  There are yet others who see something more insidious going on – such as Goldman Sachs seeking to remove their name from the financial headlines, or the Federal Reserve sending a message that S. 604 (the bill to audit the Federal Reserve) should not be passed.

The truth is that we will probably never know what actually caused the market to fall through the floor that afternoon.

But it did pave the way for more bailouts.

Over the weekend, European policy makers unveiled an unprecedented loan package worth almost $1 trillion and a program of bond purchases designed to stop the sovereign debt crisis that threatened to shatter confidence in the euro.

The Federal Reserve got into the act as well.  Over the weekend the Fed promised to flood the international financial system with U.S. dollars.  This was seen in the markets as a sign of “resolve” meant to keep doubt about the European economy from turning into a global crisis of confidence.

So on Monday, investors responded to these bailouts with exuberance.  The Dow Jones industrial average gained 405 points that day, which was the average’s biggest one day point gain since March 23rd, 2009.

But are more bailouts, more debt and a flood of paper money really something to celebrate?

No.

The truth is that debt and paper money that continually declines in value are some of the chief causes of the financial mess that the world is now in.

In fact, Congressman Ron Paul is warning that the European bailout that was just announced will just lead to even larger financial problems in the future….

And Ron Paul is right – all of these bailouts and all of this debt will eventually cause all of the major paper currencies (including the U.S. dollar) to collapse.

The funny thing about these bailouts is that they never seem to help the average people on the street.  Just take a look at the U.S. economy.  We are told that Wall Street has recovered and that things are getting back to normal, and yet more Americans than ever find themselves dependent on the U.S. government for their survival.

The U.S. Department of Agriculture recently announced that 39.68 million people, or 1 out of every 8 Americans, were enrolled in the food stamp program during February, an increase of 260,000 from the previous month.

Nearly 40 million Americans on food stamps?

How in the world did that happen?

Once upon a time, the old timers would tell us that one day things would get so bad that we would all have to stand in bread lines.

Well, today food stamps are the new bread lines.

If you have to rely on the government for the very bread that you eat, what kind of a position does that put you in?

The truth is that the once great American middle class is allowing the system to slowly keep grinding them into oblivion.

Like never before in our lifetimes, wealth is being concentrated in the hands of the “lucky one percent”, while the rest of us are rapidly being marginalized.

Do you ever stop to wonder why it seems like almost everyone is either broke or up to their eyeballs in debt?

That even goes for the major governments of the world.  The U.S. government (the “wealthiest” nation on the globe) has piled up the biggest mountain of debt in world history.

You see, Brian Williams was actually chillingly accurate when he declared that “the world has no money”.

So if the world doesn’t have any money, then who does have it?

The international bankers.

But, shhhhh, don’t tell anybody.

Just keep quietly clapping as the emperor walks down the street with no clothes on.

8 Theories For Why The Stock Market Plunged Almost 1000 Points In A Matter Of Minutes On May 6th

In one of the most dizzying half-hours in stock market history, the Dow plunged nearly 1,000 points on Thursday, May 6th before bouncing back to close down 347.80 points.  This represented the biggest intraday decline since 1987.  But what made this crash so absolutely shocking is that it happened in the course of less than an hour.  Between 2 p.m. and 3 p.m. the Dow lost over 700 points before dramatically bouncing back about 600 points.  Two of the 30 stocks in the Dow, Procter & Gamble and 3M, plunged more than 30% in just 15 minutes.  Accenture went from trading at around 40 dollars a share all the way down to one cent before bouncing back.  Traders and investors were left completely stunned and wondering what in the world had just happened.

So what did happen?

The following are some of the most common theories being put forward to explain what happened….

#1) A Bad Trade

It has been widely suggested that a “fat finger trade” was responsible for triggering the panic.  According to CNBC, “sources” have told that network that a trader (possibly at Citigroup) entered a “b” for billion instead of an “m” for million in a trade involving Procter & Gamble.

However, Citigroup has already announced that it has found “no evidence” that it was involved in any erroneous trades.  In fact, a statement was released in which Citigroup spokesman Stephen Cohen said this….

“At this point, we have no evidence that Citi was involved in any erroneous transaction.”

#2) A Computer Glitch

New York Stock Exchange spokesman Rich Adamonis says that “there were a number of erroneous trades” on May 6th, and that these could have been caused by computer error.

And the truth is that trading in the financial markets is more automated and more reliant on computers than it ever has been before.  Trading literally moves at lightning speed now, and a number of analysts are warning that the pace of the market is so fast at this point that it is really easy for things to spin out of control very quickly.

But if this was really primarily caused by a “computer glitch”, how are investors supposed to have any confidence at all in the market?  After all, if a computer error can wipe out half your account in less than an hour, why invest at all?

#3) Cascading Stop Losses

Once the market hits certain technical levels, it is going to automatically start triggering stop loss orders.  Once those stop loss orders are triggered, it will push the market down further thus triggering more stop loss orders.

While there have been some protections implemented to guard against this kind of thing, the reality is that it does still happen.

#4) Hackers

Hackers have become more sophisticated and more cunning than ever before.  In fact, the bigger a target is, the more enjoyment most hackers get out of taking them down.  Is it a possible that someone could have hacked in to the New York Stock Exchange?

#5) Cyberterrorism

Rogue nations and terrorist organizations have been developing their “cyber warfare” capabilities for some time now.  We have been repeatedly warned that someday we will see an “Internet 9/11”.  Could this stock market plunge be a preview of that?

#6) Fear Of The European Debt Crisis Spreading

There are mounting concerns in the financial markets about Greece’s financial condition and that the European debt crisis could spread around the globe.

In fact, the Dow has lost 631 points, or more than 5%, in just the last three days amidst worries about the situation in Greece.  This represents the biggest three day drop since March 2009.

#7) Stop Hunting

Anyone who has spent much time in the Forex market knows what this is all about.  The truth is that some of the big financial sharks in the marketplace seem to really enjoy blowing out stop losses.

So could have this have been a situation where a stop loss hunting expedition spun wildly out of control?

#8) A Real Panic

There is also the possibility that this was a real financial panic.  There are huge concerns about what is going on in Europe and the currency markets are fluctuating wildly.  The Dow was already down several hundred points even before the massive plunge took place.  The reality is that there is a lot of fear in the financial markets right now.

But if it was a real panic, then why did the Dow bounce back so quickly?  Well, it is the job of the “plunge protection team” to keep the stock market from declining too rapidly.  So did the “plunge protection team” swing into action today?  Well, the truth is that we will probably never know because the general public is not supposed to know when they intervene.

In any event, the next couple of days should hopefully make all of this a lot clearer.  The trading during the afternoon of May 6th at the big firms will be gone over with a fine-toothed comb, and the exchanges will be closely analyzing their systems for any glitches.

It has already been announced that some of the most erroneous trades will be cancelled.  The Nasdaq and NYSE’s ARCA trading unit have both said that they will cancel trades executed between 2:40 p.m. and 3 p.m. on May 6th where a stock price rose or fell more than 60 percent from the last trade in that security at 2:40 p.m.

But this episode shows just how vulnerable our financial markets really are.  After witnessing what we saw today, it is going to be really hard to have confidence in the system.

In fact, even if this was just one “bad trade” or a “simple computer glitch”, the reality is that this episode is going to inject even more fear into a marketplace that is already filled with tension.

When fear grips a market things can go south very, very quickly.  The truth is that markets tend to fall more quickly than they rise, and if a wave of panic starts sweeping over the financial markets we could see things get quite messy in the coming days.

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