What would you say if I told you that Americans are nearly 60 TRILLION dollars in debt? Well, it is true. When you total up all forms of debt including government debt, business debt, mortgage debt and consumer debt, we are 59.4 trillion dollars in debt. That is an amount of money so large that it is difficult to describe it with words. For example, if you were alive when Jesus Christ was born and you had spent 80 million dollars every single day since then, you still would not have spent 59.4 trillion dollars by now. And most of this debt has been accumulated in recent decades. If you go back 40 years ago, total debt in America was sitting at about 2.2 trillion dollars. Somehow over the past four decades we have allowed the total amount of debt in the United States to get approximately 27 times larger. This is utter insanity, and anyone that thinks this is sustainable is completely deluded. We are living in the greatest debt bubble of all time, and there is no way that this is going to end well. Just check out the chart…
When the last recession hit, total debt in America actually started going down for a short period of time.
But then the Federal Reserve and our politicians in Washington worked feverishly to reinflate the bubble and they assured everyone that everything was going to be just fine. So Americans once again resorted to their free spending ways, and now total debt in the United States is rising at almost the same trajectory as before and has hit a new all-time record high.
We see a similar thing when we look at a chart for consumer debt in America…
For a while after the recession it was trendy to cut up your credit cards and get out of debt.
But that fad wore off rather quickly, didn’t it?
It is almost as if 2008 never happened. We are making the same mistakes with debt that we did before.
As I noted recently, total consumer credit in the U.S. has risen by 22 percent over the past three years alone, and at this point 56 percent of all Americans have a subprime credit rating.
And have you noticed that a lot of people are not afraid to extend themselves in order to buy shiny new vehicles these days?
During the first quarter 0f this year, the size of the average vehicle loan soared to a new all-time record high of $27,612.
Five years ago, that number was just $24,174.
And as I noted in one recent article, the size of the average monthly car payment in this country is now up to $474.
That is practically a mortgage payment.
Speaking of mortgage payments, even though home sales have been falling and the rate of homeownership in the United States is the lowest that it has been in 19 years, a very large percentage of those who own homes are still overextended.
In fact, one recent survey discovered that a whopping 52 percent of Americans cannot even afford the house that they are living in right now.
At the same time, an increasing number of Americans are acting as if the last financial crisis never happened and are treating their homes like piggy banks. Home equity loans are soaring again, and when the next great crisis strikes a lot of those people are going to end up getting into a lot of financial trouble.
There has been much written about what is wrong with the housing industry, but the truth is that home prices are still way too high and young adults cannot afford to purchase homes because they are already loaded down by huge amounts of debt even before they get to the point where they are ready to buy.
In fact, a newly released survey found that 47 percent of millennials are spending at least half of their paychecks on paying off debt…
Four in 10 millennials say they are “overwhelmed” by their debt — nearly double the number of baby boomers who feel that way, according to a Wells Fargo survey of more than 1,600 millennials between 22 and 33 years old, and 1,500 baby boomers between 49 and 59 years old.
To try to get out from underneath it, 47% said they spend at least half of their monthly paychecks on paying off their debts.
When I read that I was absolutely astounded.
Of course the biggest debt that many young adults are facing is student loan debt. According to the Federal Reserve, there is now more than 1.2 trillion dollars of student loan debt in this country, and about 124 billion dollars of that total is more than 90 days delinquent.
What we have done to our young people is shameful. We have encouraged them to sign up for a lifetime of debt slavery before they even understand what life is all about. The following is an excerpt from my previous article entitled “Is College A Waste Of Time And Money?“…
In America today, approximately two-thirds of all college students graduate with student loan debt, and the average debt level has been steadily rising. In fact, one study found that “70 percent of the class of 2013 is graduating with college-related debt – averaging $35,200 – including federal, state and private loans, as well as debt owed to family and accumulated through credit cards.”
That would be bad enough if most of these students were getting decent jobs that enabled them to service that debt.
But unfortunately, that is often not the case. It has been estimated that about half of all recent college graduates are working jobs that do not even require a college degree.
Considering what you just read, is it a surprise that half of all college graduates in America are still financially dependent on their parents when they are two years out of college?
According to the U.S. Census Bureau, only 36 percent of all Americans under the age of 35 own a home at this point. That is the lowest level that has ever been recorded.
And we are passing on to our young people the largest single debt in all of human history. Weighing in at 17.5 trillion dollars, the U.S. national debt is a colossal behemoth. And almost all of that debt has been accumulated over the past 40 years. In fact, 40 years ago the U.S. national debt was less than half a trillion dollars.
But this is just the beginning. As the Baby Boomer “demographic tsunami” washes through our economy, we are going to be facing a wave of red ink unlike anything we have ever contemplated before.
Meanwhile, the rest of the planet is drowning in debt as well.
As I wrote about the other day, the total amount of debt in the world has risen to a new all-time record high of $223,300,000,000,000.
Our “leaders” keep acting as if these debt levels can keep growing much faster than the overall level of economic growth indefinitely.
But anyone with even a shred of common sense knows that you can’t spend more money that you bring in forever.
At some point, a day of reckoning arrives.
2008 should have been a major wake up call that resulted in massive changes. But instead, our leaders just patched up the old system and reinflated the old bubbles so that they are now even larger than they were before.
They assure us that they know exactly what they are doing and that everything will be just fine.
Unfortunately, they are dead wrong.
The numbers that you are about to see are likely to shock you. They prove that the global financial Ponzi scheme is far more extensive than most people would ever dare to imagine. As you will see below, the total amount of debt in the world is now more than three times greater than global GDP. In other words, you could take every single good and service produced on the entire planet this year, next year and the year after that and it still would not be enough to pay off all the debt. But even that number pales in comparison to the exposure that big global banks have to derivatives contracts. It is hard to put into words how reckless they have been. At the low end of the estimates, the total exposure that global banks have to derivatives contracts is 710 trillion dollars. That is an amount of money that is almost unimaginable. And the reality of the matter is that there is really not all that much actual “money” in circulation today. In fact, as you will read about below, there is only a little bit more than a trillion dollars of U.S. currency that you can actually hold in your hands in existence. If we all went out and tried to close our bank accounts and investment portfolios all at once, that would create a major league crisis. The truth is that our financial system is little more than a giant pyramid scheme that is based on debt and paper promises. It is literally a miracle that it has survived for so long without collapsing already.
When Americans think about the financial crisis that we are facing, the largest number that they usually can think of is the size of the U.S. national debt. And at over 17 trillion dollars, it truly is massive. But it is actually the 2nd-smallest number on the list below. The following are 12 numbers about the global financial Ponzi scheme that should be burned into your brain…
–$1,280,000,000,000 – Most people are really surprised when they hear this number. Right now, there is only 1.28 trillion dollars worth of U.S. currency floating around out there.
–$17,555,165,805,212.27 – This is the size of the U.S. national debt. It has grown by more than 10 trillion dollars over the past ten years.
–$32,000,000,000,000 – This is the total amount of money that the global elite have stashed in offshore banks (that we know about).
–$48,611,684,000,000 – This is the total exposure that Goldman Sachs has to derivatives contracts.
–$59,398,590,000,000 – This is the total amount of debt (government, corporate, consumer, etc.) in the U.S. financial system. 40 years ago, this number was just a little bit above 2 trillion dollars.
–$70,088,625,000,000 – This is the total exposure that JPMorgan Chase has to derivatives contracts.
–$71,830,000,000,000 – This is the approximate size of the GDP of the entire world.
–$75,000,000,000,000 – This is approximately the total exposure that German banking giant Deutsche Bank has to derivatives contracts.
–$100,000,000,000,000 – This is the total amount of government debt in the entire world. This amount has grown by $30 trillion just since mid-2007.
–$223,300,000,000,000 – This is the approximate size of the total amount of debt in the entire world.
–$236,637,271,000,000 – According to the U.S. government, this is the total exposure that the top 25 banks in the United States have to derivatives contracts. But those banks only have total assets of about 9.4 trillion dollars combined. In other words, the exposure of our largest banks to derivatives outweighs their total assets by a ratio of about 25 to 1.
–$710,000,000,000,000 to $1,500,000,000,000,000 – The estimates of the total notional value of all global derivatives contracts generally fall within this range. At the high end of the range, the ratio of derivatives exposure to global GDP is about 21 to 1.
Most people tend to assume that the “authorities” have fixed whatever caused the financial world to almost end back in 2008, but that is not the case at all.
In fact, the total amount of government debt around the globe has grown by about 40 percent since then, and the “too big to fail banks” have collectively gotten 37 percent larger since then.
Our “authorities” didn’t fix anything. All they did was reinflate the bubble and kick the can down the road for a little while.
I don’t know how anyone can take an honest look at the numbers and not come to the conclusion that this is completely and totally unsustainable.
How much debt can the global financial system take before it utterly collapses?
How recklessly can the big banks behave before the house of cards that they have constructed implodes underneath them?
For the moment, everything seems fine. Stock markets around the world have been setting record highs and credit is flowing like wine.
But at some point a day of reckoning is coming, and when it arrives it is going to be the most painful financial crisis the world has ever seen.
If you plan on getting ready before it strikes, now is the time to do so.
None of the problems that caused the last financial crisis have been fixed. In fact, they have all gotten worse. The total amount of debt in the world has grown by more than 40 percent since 2007, the too big to fail banks have gotten 37 percent larger, and the colossal derivatives bubble has spiraled so far out of control that the only thing left to do is to watch the spectacular crash landing that is inevitably coming. Unfortunately, most people do not know the information that I am about to share with you in this article. Most people just assume that the politicians and the central banks have fixed the issues that caused the last great financial crisis. But the truth is that we are in far worse shape than we were back then. When this financial bubble finally bursts, the devastation that we will witness is likely to be absolutely catastrophic.
Too Much Debt
One of the biggest financial problems that the world is facing is that there is simply way too much debt. Never before in world history has there ever been a debt binge anything like this.
You would have thought that we would have learned our lesson from 2008 and would have started to reduce debt levels.
Instead, we pushed the accelerator to the floor.
It is hard to believe that this could possibly be true, but according to the Bank for International Settlements the total amount of debt in the world has increased by more than 40 percent since 2007…
The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record low interest rates, according to the Bank for International Settlements.
The $30 trillion increase from $70 trillion between mid-2007 and mid-2013 compares with a $3.86 trillion decline in the value of equities to $53.8 trillion in the same period, according to data compiled by Bloomberg. The jump in debt as measured by the Basel, Switzerland-based BIS in its quarterly review is almost twice the U.S.’s gross domestic product.
That is a recipe for utter disaster, and yet we can’t seem to help ourselves.
And of course the U.S. government is the largest offender.
Back in September 2008, the U.S. national debt was sitting at a total of 10.02 trillion dollars.
As I write this, it is now sitting at a total of 17.49 trillion dollars.
Is there anyone out there that can possibly conceive of a way that this ends other than badly?
Too Big To Fail Is Now Bigger Than Ever
During the last great financial crisis we were also told that one of our biggest problems was the fact that we had banks that were “too big to fail”.
Well, guess what?
Those banks are now much larger than they were back then. In fact, the six largest banks in the United States (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley) have collectively gotten 37 percent larger since the last financial crisis.
Meanwhile, 1,400 smaller banks have gone out of business during that time frame, and only one new bank has been started in the United States in the last three years.
So the problem of “too big to fail” is now much worse than it was back in 2008.
The following are some more statistics about our “too big to fail” problem that come from a previous article…
-The U.S. banking system has 14.4 trillion dollars in total assets. The six largest banks now account for 67 percent of those assets and all of the other banks account for only 33 percent of those assets.
-Approximately 1,400 smaller banks have disappeared over the past five years.
-JPMorgan Chase is roughly the size of the entire British economy.
-The four largest banks have more than a million employees combined.
-The five largest banks account for 42 percent of all loans in the United States.
-Bank of America accounts for about a third of all business loans all by itself.
-Wells Fargo accounts for about one quarter of all mortgage loans all by itself.
-About 12 percent of all cash in the United States is held in the vaults of JPMorgan Chase.
The Derivatives Bubble
Most people simply do not understand that over the past couple of decades Wall Street has been transformed into the largest and wildest casino on the entire planet.
Nobody knows for sure how large the global derivatives bubble is at this point, because derivatives trading is lightly regulated compared to other types of trading. But everyone agrees that it is absolutely massive. Estimates range from $600 trillion to $1.5 quadrillion.
And what we do know is that four of the too big to fail banks each have total exposure to derivatives that is in excess of $40 trillion.
The numbers posted below may look similar to numbers that I have included in articles in the past, but for this article I have updated them with the very latest numbers from the U.S. government. Since the last time that I wrote about this, these numbers have gotten even worse…
Total Assets: $1,989,875,000,000 (nearly 2 trillion dollars)
Total Exposure To Derivatives: $71,810,058,000,000 (more than 71 trillion dollars)
Total Assets: $1,344,751,000,000 (a bit more than 1.3 trillion dollars)
Total Exposure To Derivatives: $62,963,116,000,000 (more than 62 trillion dollars)
Bank Of America
Total Assets: $1,438,859,000,000 (a bit more than 1.4 trillion dollars)
Total Exposure To Derivatives: $41,386,713,000,000 (more than 41 trillion dollars)
Total Assets: $111,117,000,000 (just a shade over 111 billion dollars – yes, you read that correctly)
Total Exposure To Derivatives: $47,467,154,000,000 (more than 47 trillion dollars)
During the coming derivatives crisis, several of those banks could fail simultaneously.
If that happened, it would be an understatement to say that we would be facing an “economic collapse”.
Credit would totally freeze up, nobody would be able to get loans, and economic activity would grind to a standstill.
It is absolutely inexcusable how reckless these big banks have been.
Just look at those numbers for Goldman Sachs again.
Goldman Sachs has total assets worth approximately 111 billion dollars (billion with a little “b”), but they have more than 47 trillion dollars of total exposure to derivatives.
That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 427 times greater than their total assets.
I don’t know why more people aren’t writing about this.
This is utter insanity.
During the next great financial crisis, it is very likely that the rest of the planet is going to lose faith in the current global financial system that is based on the U.S. dollar and on U.S. debt.
When that day arrives, and the U.S. dollar loses reserve currency status, the shift in our standard of living is going to be dramatic. Just consider what Marin Katusa of Casey Research had to say the other day…
It will be shocking for the average American… if the petro dollar dies and the U.S. loses its reserve currency status in the world there will be no middle class.
The middle class and the low class… wow… what a game changer. Your cost of living will quadruple.
The debt-fueled prosperity that we are enjoying now will not last forever. A day of reckoning is fast approaching, and most Americans will not be able to handle the very difficult adjustments that they will be forced to make. Here is some more from Marin Katusa…
Imagine this… take a country like Croatia… the average worker with a university degree makes about 1200 Euros a month. He spends a third of that, after tax, on keeping his house warm and filling up his gas tank to get to work and get back from work.
In North America, we don’t make $1200 a month, and we don’t spend a third of our paycheck on keeping our house warm and driving to work… so, the cost of living… food will triple… heat, electricity, everything subsidized by the government will triple overnight… and it will only get worse even if you can get the services.
All of this could have been prevented if we had done things the right way.
Unfortunately, we didn’t learn any of the lessons that we should have learned from the last financial crisis, and our politicians and the central banks have just continued to do the same things that they have always done.
So now we all get to pay the price.
Will this be the last normal holiday season that Americans ever experience? To many Americans, such a notion would be absolutely inconceivable. After all, in the affluent areas of the country restaurants and malls are absolutely packed. Beautiful holiday decorations are seemingly everywhere this time of the year and children all over the United States are breathlessly awaiting the arrival of Santa Claus. Even though poverty is exploding to unprecedented levels, most families will still have mountains of presents under their Christmas trees. Of course a whole lot of those presents were purchased with credit cards, but people don’t like to talk about that. It kind of spoils the illusion. Sadly, the truth is that our entire economy is a giant illusion. The extreme prosperity that we have been enjoying has been fueled by debt, and any future prosperity that we will experience is completely dependent on our ability to go into even more debt. The total amount of debt in our economy is almost 10 times larger than it was just 30 years ago, but we don’t like to think about that too much. Most Americans are way too busy living the good life to be bothered with “doom and gloom”. Well, get ready to say goodbye to normal. As history has shown us, no financial bubble lasts forever, and time is rapidly running out for us.
You know that the hour is late when even mainstream news sources start publishing articles with titles such as this: “Will 2013 Mark the Beginning of American Decline?”
That article appeared on Bloomberg.com the other day, and it was written by Simon Johnson, a former chief economist at the International Monetary Fund. He is convinced that a day of reckoning is coming for U.S. government finances, and he seems resigned to the fact that we will not be ready when that day arrives…
“Sooner or later, it will be America’s turn to fall out of favor with investors and to see its own interest rates rise. It is hard to know when that day will come, or precisely what pressures the country will face.
Let me only venture one forecast: We will not be ready.”
Other analysts are far more pessimistic. For example, the following is what Gerald Celente said about the “bond bubble” during a recent interview with King World News…
Eric King: “Gerald, I wanted to take a look at this upcoming issue you have coming out. (In here it says,) ‘Bonds Away! The bond bomb is ready to explode … threatening to make the real estate and dot-com bubbles, and even the Great Recession, look like market corrections.’ Can you talk about that?”
Celente: “Yes. This piece is being penned by Dr. Paul Craig Roberts, the former Assistant Treasury Secretary under Ronald Reagan. And he is convinced that the bond bubble is about to burst. This cannot continue to go on the way it is. Everyone knows that the whole game is rigged, and so is this….”
“The whole game is rigged. It’s ready to go down, and Dr. Paul Craig Roberts believes it’s ‘Bonds Away’ in 2013 as the bond bubble explodes and brings about a financial disaster even worse than the Great Depression.”
Eric King: “He’s saying here it’s a road to financial collapse that we are going to head down when this thing bursts.”
Celente: “It is. Because the whole world is being propped up by these phony bonds and it’s going to collapse. It has to happen. Interest rates are going to start going up, and when they do the bond bubble explodes. You cannot keep interest rates at zero for this amount of time and expect anything other than disaster to follow.”
For much more on all this, you can listen to another excellent interview with Gerald Celente right here.
Our politicians just assume that we will be able to borrow trillions upon trillions of dollars far into the future at super low interest rates, but that is a very dangerous assumption.
As I noted the other day, the average rate of interest on U.S. government debt was 2.534 percent at the end of November. If that number just rose to where it was about a decade earlier we would be in a massive amount of trouble.
Back in the year 2000, the average rate of interest on U.S. government debt was 6.638 percent. If we were at that level today, the U.S. government would be paying out more than a trillion dollars a year just in interest on the national debt.
But our politicians just keep borrowing and spending as if we could do this forever.
From the time that George Washington was inaugurated (1789) to the time that George W. Bush was inaugurated (2001), the U.S. government accumulated about 5.7 trillion dollars of debt.
During the first four years of the Obama administration, the U.S. government accumulated about 5.7 trillion dollars of debt.
How can anyone support this kind of insanity?
You can see an excellent video demonstrating the vastness of our national debt right here. In the end, all of this debt will absolutely destroy the U.S. dollar, our economic system and the bright futures that our children and our grandchildren were supposed to have.
As if all of that was not enough to be concerned about, there is also the threat that Wall Street could implode at any time. Most Americans have no idea that Wall Street has been transformed into the largest casino in the history of the world. The “too big to fail” banks are the ringleaders, and the derivatives bubble hangs over our financial system like a “sword of Damocles” that could fall at virtually any moment.
Everything will remain fine as long as the spiral of derivatives that our bankers have constructed remains perfectly balanced. But if something happens and it becomes unbalanced and starts to collapse, the consequences could be unlike anything we have ever seen before.
A recent Zero Hedge article entitled “1000x Systemic Leverage: $600 Trillion In Gross Derivatives ‘Backed’ By $600 Billion In Collateral” detailed how there is barely any collateral backing up the hundreds of trillions of dollars of derivatives that are out there…
But a bigger question is what is the actual collateral backing this gargantuan market which is about 10 times greater than the world’s combined GDP, because as the “derivative” name implies all this exposure is backed on some dedicated, real assets, somewhere. Luckily, the IMF recently released a discussion note titled “Shadow Banking: Economics and Policy” where quietly hidden in one of the appendices it answers precisely this critical question. The bottom line: $600 trillion in gross notional derivatives backed by a tiny $600 billion in real assets: a whopping 0.1% margin requirement! Surely nothing can possibly go wrong with this amount of unprecedented 1000x systemic leverage.
Our entire economy has become a giant pyramid of debt, risk and leverage. At some point there is going to be a giant crash. When that happens, people are going to become very desperate.
When people become very desperate, they often accept “solutions” that they were not willing to consider previously.
We need to learn some lessons from history. This is exactly the kind of thing that happened back in the 1930s.
For example, an elderly woman named Kitty Werthmann is telling audiences what life was like in Austria back in the late 1930s…
“In 1938, Austria was in deep Depression. Nearly one-third of our workforce was unemployed. We had 25 percent inflation and 25 percent bank loan interest rates.”
“Farmers and business people were declaring bankruptcy daily. Young people were going from house to house begging for food. Not that they didn’t want to work; there simply weren’t any jobs.”
The Austrian people were really hurting and they were desperate for answers. When Hitler came to them with “solutions”, they were ready to embrace him with open arms…
“We looked to our neighbor on the north, Germany, where Hitler had been in power since 1933.” she recalls. “We had been told that they didn’t have unemployment or crime, and they had a high standard of living.”
“Nothing was ever said about persecution of any group – Jewish or otherwise. We were led to believe that everyone in Germany was happy. We wanted the same way of life in Austria. We were promised that a vote for Hitler would mean the end of unemployment and help for the family. Hitler also said that businesses would be assisted, and farmers would get their farms back.””Ninety-eight percent of the population voted to annex Austria to Germany and have Hitler for our ruler.”
“We were overjoyed,” remembers Kitty, “and for three days we danced in the streets and had candlelight parades. The new government opened up big field kitchens and everyone was fed.”
Sadly, America is already starting to go down the same path in many ways. If you doubt this, you can read the rest of her account right here.
Right now, things are still relatively good in America. Yes, there are a whole host of economic numbers that look really bad, but what we are experiencing right now is nothing compared to the horrific economic pain that is coming.
When our economy finally crashes, nobody is going to be able to press a button and restore things to how they were previously. We will be told that we have to “adjust” and consider “new solutions” to our “new challenges”. Someday we will look back on the good life that we were enjoying in 2010, 2011 and 2012 and wish that we could go back to those days.
So enjoy the relative peacefulness and prosperity of these times while you still can. A horrific economic collapse is on the way, and once it strikes none of our lives will ever be the same.
The U.S. economy is in a massive amount of trouble. There aren’t enough jobs. There isn’t enough money to go around. Business activity is slowing down again. Household wealth has been falling. Food prices have been rising. Many state and local governments all over the country are flat broke and are drowning in debt. The federal government has been rolling up unprecedented amounts of debt in an attempt to keep things going, but everyone knows that kind of borrowing is simply unsustainable. So where do we go from here? We consume far more than we produce and we use debt to make up the difference. 40 years ago the total amount of debt in America (government, business and consumer) was less than 2 trillion dollars. Today it is nearly 55 trillion dollars. How in the world did we let the total amount of debt in the United States grow more than 27 times larger over the past 40 years? Our economic system is fundamentally broken, but most Americans don’t realize it yet because times are still relatively good.
However, the next great economic crisis is going to wake a whole lot of Americans up.
And when they realize what has happened to our future, they are going to be really, really angry.
Enjoy the good times while they last. The next recession is rapidly approaching, and it will not be pleasant.
The following are 20 signs that all point to the exact same thing….
#1 The unemployment rate in the U.S. has been above 8 percent for 40 months in a row, and 42 percent of all unemployed Americans have been out of work for at least half a year. As I wrote about recently, there are never going to be enough jobs in America ever again. As bad as things are right now, they are about to get even worse. So what is our country going to look like once the unemployment rate starts shooting up rapidly once again?
#2 35 percent of all unemployed workers have had to dip into retirement savings in order to make ends meet over the past year.
#3 Since 2008, the U.S. economy has lost 1.3 million jobs while at the same time 3.6 million more Americans have been added to Social Security’s disability insurance program.
#4 A recent survey conducted by the National Association for Business Economics found that only 23 percent of all U.S. companies plan to hire more workers over the next 6 months. When the same question was asked a few months ago that number was at 39 percent.
#5 An important measure of U.S. manufacturing activity has fallen to its lowest level since June 2009.
#6 Hundreds of thousands of federal jobs at civilian agencies will likely be lost if Congress allows the automatic federal budget cuts to go into effect next year. The following is from a recent article posted on federalnewsradio.com….
A report released Tuesday suggests that several hundred thousand federal jobs at civilian agencies would be on the chopping block within the next year if Congress lets the automatic budget cutting process known as sequestration go into effect.
The study, authored by George Mason University professor Stephen Fuller, adds a new dimension to a budget debate that’s so far been centered on sequestration’s effects on the military.
#7 The teen unemployment rate in Washington D.C. right now is 51.7 percent.
#8 Gallup’s U.S. Economic Confidence Index is now the lowest that it has been since January.
#9 The median net worth of U.S. households in 2007 was $126,400. By 2010, it had fallen to just $77,300.
#10 Pensions at S&P 500 companies are more under-funded than they have ever been before.
#11 According to the New York Times, state and local governments across America “shortchanged their pension plans by more than $50 billion” between 2007 and 2011.
#12 The city of Compton, California is evaluating whether or not it should declare bankruptcy. If it did, it would become the fourth California city to declare bankruptcy this year.
#13 The percentage of U.S. households that are spending more than half their incomes on housing is at an all-time high.
#14 For the first time in modern history, Canadian households are wealthier than American households are.
#15 One recent poll found that 42 percent of all Americans believe that China is the leading economic power in the world while only 36 percent believe that the U.S. is still the leading economic power in the world.
#16 According to the federal government, the price of food rose much faster than the general rate of inflation did during 2011. Just check out these rates of food inflation for 2011….
- Beef: +10.2%
- Pork: +8.5%
- Fish: +7.1%
- Eggs: +9.2%
- Dairy: +6.8%
- Oils and Fats: +9.3%
If that happened during a somewhat “normal year”, what will food prices look like after we are done with the drought of 2012?
#17 The price of a bushel of corn has risen by 54 percent since mid-June.
#18 According to one survey, 42 percent of all American workers are living paycheck to paycheck.
#19 A different survey found that 28 percent of all Americans have absolutely no emergency savings at all right now.
#20 Federal Reserve Chairman Ben Bernanke made the following statement to Congress on Tuesday: “At this point we don’t see a double dip recession. We see continued moderate growth.”
Do you remember that old Seinfeld episode when George Costanza decided that he would “do the opposite” of everything that his instincts were telling him to do and everything started working out great for him?
Well, when it comes to Federal Reserve Chairman Ben Bernanke, the key is to “believe the opposite” of everything that he says.
And since Bernanke does not believe that a double dip recession is going to happen, that probably means that we are about to hit another recession.
If you doubt this theory about Bernanke, just go back and check out his track record.
Okay, so if our economy is in big trouble shouldn’t our leaders be doing something about it?
Well, it is election season now so I wouldn’t expect too much from Barack Obama. He is too busy raising money in France and in China.
I wouldn’t expect too much from Obama’s economic advisers either. In fact, Obama’s much-ballyhooed “jobs council” has not even met in six months.
Not that the “jobs council” was ever going to do anything substantive anyway.
The truth is that it was just for show and most of the CEOs on the council have been sending jobs overseas anyway.
Well, what about the SEC?
Shouldn’t they be doing something to fix the financial system?
No, they are too busy investigating the Amish.
It looks like we are on our own.
Soon, even more parts of the country will start looking like Detroit or Baltimore or Cleveland.
This country is rapidly falling apart, and the federal government is not going to save us.
That is why we need to focus on preparing to weather the coming storm on a family and community level.
There is hope in being prepared. The coming economic crisis will wipe out many Americans because they will never even see it coming. But that does not have to happen to you.
If you work really hard right now to prepare your family for the storm that is on the horizon, then you will have a much better chance of making it through to the other side.