If the economy is really “getting better”, then why have millions upon millions of formerly middle class Americans been pushed to the point of utter despair? The stories that you are about to read are absolutely heartbreaking. I don’t know how anyone can read them without getting chills. In America today, if you lose a good job, there is a good chance that you will get back on your feet before too long. But there is also a good chance that you won’t be able to find a decent job and will plunge into the abyss of depression and desperation that so many millions of other Americans have fallen into. As I wrote about earlier this month, the U.S. economy is definitely not getting any better. For example, if you assume that the percentage of Americans that want to work is about at the long term average, then the official unemployment rate in the United States would be above 11 percent. And compared to six years ago, 1,154,000 fewer Americans are working today even though our population has gotten significantly larger since then. Behind all of these numbers are real flesh and blood people, and you are about to hear from some of them. The following are 10 stories from the cold, hard streets of America that will break your heart…
#1 A 34-year-old man named Rocco…
“While my wife goes to work, I’ve been staying at home to conserve fuel. I’ve been losing weight from eating less, so my family has more on their plates. It feels like the government and big business expect more and more while trying to give back as little as possible. Soon my internet connection will be shut off and since most companies don’t offer paper applications, how will I find work then? Walking around for miles a day, asking for an application that may or may not be available?”
#2 Homeless people wasting away in “Obamavilles” on the outskirts of Baltimore, Maryland…
A sheet of plastic laid over a clothesline. A mini-fortress of milk crates stacked under a tree. A thin mattress on a flimsy crate lying in a dark tunnel.
On the edge of Baltimore’s woodlands, dozens of the city’s transients live in makeshift homes which they consider safer than homeless shelters.
You can see some incredible photos of how these homeless people are living right here.
#3 A 50-year-old woman in Pennsylvania named Karen…
“My husband only makes 10 dollars an hour and drives 30 miles round trip, so it’s taking all we have just to keep the Jeep filled with gas. We stopped going to church and all to save gas. We are homebodies now, afraid to use what gas we have. We save two kids from getting put in foster care just to be hit like this. It’s just a constant trap they try to keep you from receiving any help! I’m so disgusted when my 12-year-old asks me why we don’t have snacks anymore, or why are we eating so much rice, etc.”
#4 The following is an excerpt from a comment that was recently left by one of my readers…
“I live right at ground zero. South West Virginia and let me tell you things are bad and getting worse by the day. We don’t do drugs but have family members hooked on meth and or pills or both. Many of these pills are prescribed by local doctors either Suboxone to get you off the opiates, a total joke by the way and tons of Xanax why would anyone need 120 Xanax a month how can you even be expected to function. These pills get traded for cash sex and other items, same goes for the SNAP cards. We have family members going to jail repeatedly for the same crimes making meth, selling pills and stealing anything that’s not nailed down. People who are 30 years old look like they are 55 years old. The jobs here are awful walmat, gas stations, fast food etc. Most of our whole county is on the government dole.”
#5 A 55-year-old man from California named Randy Carpadus…
“I was working as a firefighter for the state of California and was laid off in April 2012, right at the beginning of fire season. At my age, I’m not going to be picked up by another fire department. They want younger guys.
I’ve applied for everything from truck driver, to sales, to nonprofit work. I’ve sent out almost 400 resumes, and I’ve gotten nothing. I’ve done whatever I could to make ends meet.
Through some connections, I got a temp job as a truck driver in Napa Valley — a 3-hour commute from where I live. I lived in my car and worked during grape harvest.”
#6 In this tough economic environment, debt collectors are becoming even more aggressive. Just check out the kind of harassment that one woman named Jennifer Posey has been put through…
“This is Jimmy Lee calling from CheckCare. Just letting you know we’re in full force,” he said. The man had a thick Southern accent that stretched the word “you” into a two-syllable accusation. “We’re going to have warrants out for your arrest in Columbus, Ga.,” the man threatened. “We know you have an apartment on the canal in Clearwater.”
It was when he mentioned her home in Florida that Posey began to feel anxious. “We’re hurting you,” he continued. “We’re hurting your family, your son’s family, your cousin’s family. Whatever we can do to get you to pay.”
Forty minutes later, her phone rang again. “What about that 12-, 13-year-old child you’re trying to raise?” the voice sneered.
#7 A 50-year-old woman from New York named Sharon Ritchie…
“I am constantly told I am ‘overqualified.’ I’ve also been told to dumb down my resume, but I can’t just erase 30 years of experience.
You can only stand the word ‘no’ so many times. There are times that I cry at night wondering what happened, and at times I have thought about suicide.
But, I keep on going, hoping the cycle will break.”
#8 In response to my recent article about Appalachia, a reader named Rob shared the following…
“I am from rural south central KY (Brodhead, Rockcastle County) and I can tell you that most of the things described above are exactly how it is here. There are so many people on drugs it’s crazy. First it was the meth, which was more of a problem back in 2002-2007, then the pain pills really started becoming a huge problem, OxyContin and perc 30’s (roxicet) obtained from Florida and Georgia doctors. The pain pills are something that you can’t just walk away from after doing them for a while; they cause people to steal from family, sell everything they own, and/or prostitute themselves in order to avoid opiate withdrawal.”
#9 A 30-year-old man from California named Alejandro…
“I need to provide for my son who is diagnosed with autism and my baby girl. I’ve sold a bunch of my belongings to try and put food on the table, to buy clothes for my kids, to pay rent and utilities and to put gas in my vehicle to go job hunting. Not having money for necessities takes a toll on my mind. Depression has kicked in. It really takes a toll on one’s self-esteem and confidence to move forward.I’ve applied to countless amounts of jobs, only to not even get a call back. I’ve gone from construction site to construction site, only to be told they are not hiring. Finally, I got at least a positive call back from a company telling me they will call me to work in a couple of weeks. I am crossing my fingers and praying. There are millions of people in my situation or even worse.”
#10 An excerpt from a heartbreaking letter that an unemployed woman named Paula Bray sent to Barack Obama…
Dear Mr. President,
I write to you today because I have nowhere else to turn. I lost my full time job in September 2012. I have only been able to find part-time employment — 16 hours each week at $12 per hour — but I don’t work that every week. For the month of December, my net pay was $365. My husband and I now live in an RV at a campground because of my job loss. Our monthly rent is $455 and that doesn’t include utilities. We were given this 27-ft. 1983 RV when I lost my job.
This is America today. We have no running water; we use a hose to fill jugs. We have no shower but the campground does. We have a toilet but it only works when the sewer line doesn’t freeze — if it freezes, we use the campground’s restrooms. At night, in my bed, when it’s cold out, my blanket can freeze to the wall of the RV. We don’t have a stove or an oven, just a microwave, so regular-food cooking is out. Recently we found a small toaster oven on sale so we can bake a little now because eating only microwaved food just wasn’t working for us. We don’t have a refrigerator, just an icebox (a block of ice cost about $1.89). It keeps things relatively cold. If it’s freezing outside, we just put things on the picnic table.
Sadly, this is just the beginning.
The economic despair that we are witnessing right now is just a taste of the horrible economic nightmare that is going to unfold in the United States during the coming years.
And already there are signs that things are starting to take another turn for the worse. In recent months, we have seen a whole host of retail chains announce store closings. In fact, one of my readers wrote to me the other day and told me about a home appliance chain known as “American TV” that is going out of business in the Midwest. When these stores shut down, close to another 1000 Americans will soon be out of work…
“While this is a sad moment it is also a proud moment. It’s a moment to be proud of our efforts and to be proud of what we have delivered to the community”, said Doug Reuhl, President and CEO of American since 1988. “Words cannot adequately express how grateful we are to our millions of loyal customers, and to the incredible, dedicated family of employees that we have been blessed with over our 60 years of business”. Advanced notice of the business closing has been given to the 989 employees affected in eleven locations. Employees will be compensated, with benefits, through the notification period, and the majority will continue employment through the closing process.
But if you listen to the mainstream media, you would think that happy days are here again for America. Just check out some of the bizarre headlines that I have collected in recent weeks…
CNBC: “Stop whining! The US economy is in good shape”
USA Today: “Economists: U.S. will see better growth in ’14”
Newsday: “Why the economy isn’t doomed”
Most Americans will buy into this propaganda and will never see the next major economic crisis coming until it is too late to do anything about it.
So what do you think about all of this?
Do you have a personal story to share?
Please feel free to add to the discussion by leaving a comment below…
That headline is not a misprint. The number of working age Americans that do not have a job has increased by nearly 10 million since Barack Obama first entered the White House. In January 2009, the number of “officially unemployed” workers plus the number of Americans “not in the labor force” was sitting at a grand total of 92.6 million. Today, that number has risen to 102.2 million. That means that the number of working age Americans that are not working has grown by close to 10 million since Barack Obama first took office. So why does the “official unemployment rate” keep going down? Well, it is because the federal government has been pretending that millions upon millions of unemployed workers have “left the labor force” over the past few years and do not want to work anymore. The government says that another 347,000 workers “left the labor force” in December. That is nearly five times larger than the 74,000 jobs that were “created” by the U.S. economy last month. And it is important to note that more than half of those jobs were temporary jobs, and it takes well over 100,000 new jobs just to keep up with population growth each month. So the unemployment rate should not have gone down. If anything, it should have gone up.
In fact, if the federal government was using an honest labor force participation rate, the official unemployment rate would be far higher than it is right now. Instead of 6.7 percent, it would be 11.5 percent, and it has stayed at about that level since the end of the last recession.
But “6.7 percent” makes Obama look so much better than “11.5 percent”, don’t you think?
The labor force participation rate is now at a 35 year low, and the only way that the federal government has been able to get the “unemployment rate” to go down is by removing hundreds of thousands of Americans out of the labor force every month.
Why don’t they just get it over with and announce that they have decided that all workers immediately leave the labor force the moment that they lose their jobs? That way we could have an unemployment rate of “0.0 percent” and Obama could be hailed as a great economic savior.
Of course the truth is that the employment crisis in the United States is about as bad now as it was during the depths of the last recession.
If you want a much more accurate reading of the employment picture in America, just look at the employment-population ratio. The percentage of working age Americans that actually have a job continues to stagnate at an extremely low level. In fact, the percentage of working age Americans that are employed has stayed between 58.2 percent and 58.8 percent for 52 months in a row…
Does that look like an “employment recovery” to you?
Because no matter how hard I squint my eyes, I just can’t see it.
The percentage of Americans that actually have jobs should have bounced back at least a little bit by now.
But it has not happened.
And guess what? Most people don’t know this, but the U.S. economy actually created fewer jobs in 2013 than it did in 2012. So the momentum of job creation is actually going the wrong way.
No matter how rosy the mainstream media makes things out to be, the reality on the ground tells an entirely different story.
For example, just check out the desperation that was displayed on the streets of New York City last week…
The line wrapped nearly around an entire city block on Friday as approximately 1,500 people waited in Queens for a chance to apply for a coveted union job as painters or blasters on bridges and steel structures.
The first few people on line had been there since 1 p.m. on Tuesday when the temperature in New York City was in the single digits.
The job that those desperate workers wanted to apply for only pays $17.20 an hour.
Of course that is far from an isolated incident. Last week, I wrote about how 1,600 workers recently applied for just 36 jobs at an ice cream plant in Maryland.
We would not be witnessing scenes like these if the unemployment rate in America was really just 6.7 percent.
An article by Phoenix Capital Research does a good job of summarizing how useless the official government numbers have become…
Since 2009, we’ve been told that things have improved. The fact of the matter is that the improvement has been largely due to accounting tricks rather than any real change in reality.
Sure you can make unemployment look better by not counting people, you can claim the economy is growing by ignoring inflation, you can argue that inflation is low because you don’t count food or energy, but the reality is that all of these arguments are grade “A” BS.
We are now five years into the “recovery.” The single and I mean SINGLE accomplishment from spending over $3 trillion has been the stock market going higher. This is a complete and total failure. Based on the business cycle alone, the economy should be roaring.
What does it say that we’ve spent this much money and accomplished so little?
The word is FAILURE.
The media is lying about the economy. They have been for years. Even the BLS now admits that its methodologies are either inefficient (read: DON’T work) or outright wrong.
The cold, hard reality of the matter is that there has not been an economic recovery in this nation.
Anyone that tries to tell you that is lying to you.
And now the next major wave of the economic collapse is rapidly approaching.
The U.S. national debt is on pace to more than double during the eight years of the Obama administration and the Federal Reserve has been recklessly printing up trillions of dollars. The long-term damage that they have done to our economy is incalculable. But despite all of those extraordinary “stimulus” measures, the percentage of Americans that are actually working has not budged.
If we were going to have a recovery, it would have happened by this point. In fact, this is all the “recovery” that we are going to experience.
From here on out, this is about as good as things are going to get. As bad as you may think things are now, the truth is that this is rip-roaring prosperity compared to what is coming.
I hope that you are getting prepared.
Are we on the verge of another major economic downturn? In recent weeks, most of the focus has been on our politicians in Washington, but there are lots of other reasons to be deeply alarmed about the economy as well. Economic confidence is down, retail sales figures are disappointing, job cuts are up, and American consumers are deeply struggling. Even if our politicians do everything right, there would still be a significant chance that we could be heading into tough economic times in the coming months. Our economy has been in decline for a very long time, and that decline appears to be accelerating. There aren’t enough jobs, the quality of our jobs continues to decline, our economic infrastructure is being systematically gutted, and poverty has been absolutely exploding. Things have gotten so bad that former President Jimmy Carter says that the middle class of today resembles those that were living in poverty when he was in the White House. But this process has been happening so gradually that most Americans don’t even realize what has happened. Our economy is being fundamentally transformed, and the pace of our decline is picking up speed. The following are 22 reasons to be concerned about the U.S. economy as we head into the holiday season…
#1 According to Gallup, we have just seen the largest drop in U.S. economic confidence since 2008.
#2 Retailers all over America are reporting disappointing sales figures, and many analysts are very concerned about what the holiday season will bring. The following is an excerpt from a recent Zero Hedge article…
Chico’s FAS [CHS] Earnings Call 8/28/13:
“Traffic was our issue in quarter two. In a highly promotional and challenging environment, comparable sales result was a negative 2.6 percent on top of a positive 5.6 percent last year and a positive 12.8 percent in 2011.”
William-Sonoma [WSM] Earnings Call 8/28/13:
“The retail environment, it seems to indicate there’s still a lot of uncertainty out there, that the promotional environment has not gone away and that the retail environment in general continues to be choppy, especially with the recent earnings releases and this global unrest, and we just don’t want to get ahead of ourselves.”
Zale Corp [ZLC] Earnings Call 8/28/13:
“Overall, we continue to take a conservative view of market conditions in both the U.S. and in Canada. That being said, we do expect to continue to achieve positive top line growth. We expect store closures will impact our overall revenue growth for the year by about 250 basis points. It represents net closures of approximately 50 to 55 retail locations.”
DSW Inc. [DSW] Earnings Call 8/27/13:
“We did have a traffic decline in Q2, sort of similar to what just about every other retailer in America has reported.”
Guess? [GES] Earnings Call 8/28/13:
“The Korean business continued to be strong as revenue grew in the high single digits in local currency during the quarter. This was offset with the weakness from China, where we are seeing clear evidence of a pullback in consumer spending behavior because of the slowdown in the economy.”
Aeropostale [ARO] Earnings Call 8/22/13:
“Our business trends in the second quarter did not change materially from earlier in the year, which was disappointing given the level of change we registered with the brand. This performance in the third quarter outlook is being influenced by a challenging retail environment, with weak traffic trends and high levels of promotional activity.”
#3 Domestic vehicle sales just experienced their largest “miss” relative to expectations since January 2009.
#4 One of the largest furniture manufacturers in America was recently forced into bankruptcy.
#5 According to the Wall Street Journal, the 2013 holiday shopping season is already being projected to be the worst that we have seen since 2009.
#6 The Baltic Dry Index recently experienced the largest 4 day drop that we have seen in 11 months.
#7 Merck, one of the largest drug makers in the nation, has announced the elimination of 8,500 jobs.
#8 Overall, corporations announced the elimination of 387,384 jobs through the first nine months of this year.
#9 The number of announced job cuts in September 2013 was 19 percent higher than the number of announced job cuts in September 2012.
#10 The labor force participation rate is the lowest that it has been in 35 years.
#11 As I mentioned the other day, the labor force participation rate for men in the 18 to 24 year old age bracket is at an all-time low.
#12 Approximately one out of every four part-time workers in America is living below the poverty line.
#13 Incredibly, only 47 percent of all adults in America have a full-time job at this point.
#14 U.S. consumer delinquencies are starting to rise again.
#15 The Postal Service recently defaulted on a 5.6 billion dollar retiree health benefit payment.
#16 The national debt has increased more than twice as fast as U.S. GDP has grown over the past two years.
#17 Obamacare is causing health insurance premiums to skyrocket and this is reducing the disposable income that consumers have available.
#18 Median household income in the United States has fallen for five years in a row.
#19 The gap between the rich and the poor in the United States is at an all-time record high.
#20 Former President Jimmy Carter says that the middle class in America has declined so dramatically that the middle class of today resembles those that were living in poverty when he was in the White House.
#21 According to a Gallup poll that was recently released, 20.0% of all Americans did not have enough money to buy food that they or their families needed at some point over the past year. That is just under the record of 20.4% that was set back in November 2008.
#22 Right now, one out of every five households in the United States is on food stamps. There are going to be a lot of struggling families out there this winter, so please be generous with organizations that help the poor. A lot of people are really going to need their help during the cold months ahead.
There is a reason why every fiat currency in the history of the world has eventually failed. At some point, those issuing fiat currencies always find themselves giving in to the temptation to wildly print more money. Sometimes, the motivation for doing this is good. When an economy is really struggling, those that have been entrusted with the management of that economy can easily fall for the lie that things would be better if people just had “more money”. Today, the Federal Reserve finds itself faced with a scenario that is very similar to what the Weimar Republic was facing nearly 100 years ago. Like the Weimar Republic, the U.S. economy is also struggling and like the Weimar Republic, the U.S. government is absolutely drowning in debt. Unfortunately, the Federal Reserve has decided to adopt the same solution that the Weimar Republic chose. The Federal Reserve is recklessly printing money out of thin air, and in the short-term some positive things have come out of it. But quantitative easing worked for the Weimar Republic for a little while too. At first, more money caused economic activity to increase and unemployment was low. But all of that money printing destroyed faith in German currency and in the German financial system and ultimately Germany experienced an economic meltdown that the world is still talking about today. This is the path that the Federal Reserve is taking America down, but most Americans have absolutely no idea what is happening.
It is really easy to start printing money, but it is incredibly hard to stop. Like any addict, the Fed is promising that they can quit at any time, but this month they refused to even start tapering their money printing a little bit. The behavior of the Fed is so shameful that even CNBC is comparing it to a drug addict at this point…
The danger with addictions is they tend to become increasingly compulsive. That might be one moral of this week’s events.
A few days ago, expectations were sky-high that the Federal Reserve was about to reduce its current $85 billion monthly bond purchases. But then the Fed blinked, partly because it is worried that markets have already over-reacted to the mere thought of a policy shift.
Faced with a choice of curbing the addiction or providing more hits of the QE drug, in other words, it chose the latter.
So why won’t the Fed cut back on the reckless money printing?
Well, as Peter Schiff recently noted, Fed officials seem to be convinced that any “tapering” could result in the bursting of the massive financial bubbles that they have created…
The Fed understands, as the market seems not to, that the current “recovery” could not survive without continuation of massive monetary stimulus. Mainstream economists have mistaken the symptoms of the Fed’s monetary expansion, most notably rising stock and real estate prices, as signs of real and sustainable growth. But the current asset price bubbles have nothing to do with the real economy. To the contrary, they are setting up for a painful correction that will likely be worse than the one we experienced five years ago.
As I have written about previously, the Federal Reserve is usually very careful not to do anything which will hurt the short-term interests of the financial markets and the big banks.
But at this point the Fed is caught in a trap. If it continues to pump, the financial bubbles that it has created will get even worse. If it stops, those bubbles will burst. But as Doug Kass noted recently, it is inevitable that these financial bubbles will burst at some point one way or another…
“Getting in was easy. Getting out—not so much. The Fed is trapped and can’t end tapering or else the bond and stock markets will blow up. The longer this continues the bigger the inevitable burst.”
In essence, we can have disaster now or disaster later.
But most Americans don’t care much about what is happening on Wall Street. They just want economic conditions to get better for them and for those around them. And to this day, the mainstream media continues to sell quantitative easing to the American people as an “economic stimulus” program by the Federal Reserve.
So has quantitative easing actually been good for the U.S. economy?
For example, while the Fed has been recklessly printing money out of thin air, household incomes have actually been going down for five years in a row…
What about employment?
Don’t more Americans have jobs now?
Actually, that is not the case at all. Posted below is a chart that shows how the percentage of working age Americans with a job has changed since the year 2000. As you can see, the employment to population ratio fell from about 63 percent before the last recession down to underneath 59 percent at the end of 2009 and it has stayed there ever since…
So where is the “employment recovery”?
Can you point it out to me? Because I have been staring at this chart for a long time and I still can’t find it.
So if quantitative easing has not been good for average Americans, who has it been good for?
The wealthy, of course.
Just check out what billionaire hedge fund manager Stanley Druckenmiller told CNBC about quantitative easing the other day…
“This is fantastic for every rich person,” he said Thursday, a day after the Fed’s stunning decision to delay tightening its monetary policy. “This is the biggest redistribution of wealth from the middle class and the poor to the rich ever.”
“Who owns assets—the rich, the billionaires. You think Warren Buffett hates this stuff? You think I hate this stuff? I had a very good day yesterday.”
Druckenmiller, whose net worth is estimated at more than $2 billion, said that the implication of the Fed’s policy is that the rich will spend their wealth and create jobs—essentially betting on “trickle-down economics.”
“I mean, maybe this trickle-down monetary policy that gives money to billionaires and hopefully we go spend it is going to work,” he said. “But it hasn’t worked for five years.”
Sadly, Druckenmiller is exactly correct.
Since the end of the last recession, the Dow has been on an unprecedented tear…
Of course these stock prices have nothing to do with economic reality at this point, but for the moment those that are making giant piles of cash on Wall Street don’t really care.
Sadly, what very few people seem to understand is that what the Fed is doing is going to absolutely destroy confidence in our currency and in our financial system in the long-term. Yeah, many investors have been raking in huge gobs of cash right now, but in the long run this is going to be bad for everybody.
We have now entered a money printing spiral from which there is no easy exit. According to Graham Summers, the Fed has “crossed the Rubicon” and we are now “in the End Game”…
If tapering even $10-15 billion per month from $85 billion month QE programs would damage the economy, then we’re all up you know what creek without a paddle.
Put it this way… here we are, five years after 2008, and the Fed is stating point blank that the economy would absolutely collapse if it spent any less than $85 billion per month. This admission has proven just how long ago we crossed the Rubicon. We’re already in the End Game. Period.
Most Americans don’t really understand what quantitative easing is, and most don’t really try to understand it because “quantitative easing” sounds very complicated.
But it really isn’t that complicated.
The Federal Reserve is creating gigantic mountains of money out of thin air every month, and the Fed is using all of that newly created money to buy government debt and mortgage-backed securities. Over the past several years, the value of the financial securities that the Fed has accumulated is greater than the total amount of publicly held debt that the U.S. government accumulated from the presidency of George Washington though the end of the presidency of Bill Clinton…
The same day that the Federal Reserve’s Federal Open Market Committee announced last week that the Fed would continue to buy $40 billion in mortgage-backed securities (MBS) and $45 billion in U.S. Treasury securities per month, the Fed also released its latest weekly accounting sheet indicating that it had already accumulated more Treasuries and MBS than the total value of the publicly held U.S. government debt amassed by all U.S. presidents from George Washington though Bill Clinton.
To say that this is a desperate move by the Fed would be a massive understatement. We have never seen anything like this before in U.S. history.
And look at what all of this wild money printing has done to our money supply…
In many ways, the chart above is reminiscent of what the Weimar Republic did during the early years of their hyperinflationary spiral…
Just like the Weimar Republic, our money supply is beginning to grow at an exponential pace.
So far, complete and total disaster has not struck, so most people think that everything must be okay.
But it is not.
In a previous article, I included an outstanding illustration from Simon Black that I think would be extremely helpful here as well…
Let’s say you’re at a party in a small apartment that’s about 500 square feet in size. Then suddenly, at 11pm, a pipe bursts, starting a trickle into the living room.
Aside from the petty annoyance, would you feel like you were in danger? Probably not. This is a linear problem– the rate at which the water is leaking is more or less constant, so the guests can keep partying through the night without worry.
But let’s assume that it’s an exponential leak.
At first, there’s just one drop of water. But each minute, the rate doubles. So by 11:01pm, there’s 2 drops. By 11:02, 4 drops. And so forth.
By 11:27pm, there’s only six inches of standing water. Yet by 11:31pm, just four minutes later, the entire room is under nearly 8 feet of water. And the party’s over.
For nearly half an hour, it all seemed safe and manageable. People had all the time in the world to leave, right up until the bitter end. 11:27, 11:28, 11:29. Then it all went from benign to deadly in a matter of minutes.
Are you starting to get the picture?
What the Federal Reserve is doing is systematically destroying the U.S. dollar, and the rest of the world is starting to take notice.
Why should they continue to lend us trillions of dollars at super low interest rates when we are exploding the size of our money supply?
It is simply not rational for other nations to continue to lend us money at less than 3 percent a year when the real rate of inflation is somewhere around 8 to 10 percent and reckless money printing by the Fed threatens to greatly accelerate the devaluation of our currency.
When QE first started, the added demand for U.S. government debt by the Federal Reserve helped drive long-term interest rates down to record low levels.
But in the long-term, the only rational response by all other buyers of U.S. government debt will be to demand a much higher rate of return because of the rapid devaluation of U.S. currency.
So QE drives down long-term interest rates in the short-term, but in the long-term the only rational direction for long-term interest rates to go is much, much higher and in recent months we have already started to see this.
The only way that the Fed can stop this is by increasing the amount of quantitative easing.
Right now, the Fed is buying roughly half a trillion dollars worth of U.S. Treasuries a year, but the U.S. government issues close to a trillion dollars of new debt and must roll over about 3 trillion dollars of existing debt each year.
If the Federal Reserve eventually decides to buy all of the debt, then interest rates won’t be a major problem. But if the Fed goes that far our financial system would be regarded as a total joke by the remainder of the globe and we would reach hyperinflation much more rapidly.
If the Federal Reserve stops buying debt completely, the financial bubbles that they have created will burst and we will rapidly be facing a financial crisis even worse than what we experienced back in 2008.
But almost whatever the Fed does at this point, the rest of the world will probably continue to start to move away from the U.S. dollar as the de facto reserve currency of the planet. This move is just beginning, but it is going to have major implications for us in the years ahead. This is a topic that I will be addressing extensively in future articles.
Most of the debate about quantitative easing has focused on the impact that it will have on the U.S. economy in the short-term.
That is a huge mistake.
Of much greatest importance is what quantitative easing means for the long-term.
The rest of the world is losing confidence in the U.S. dollar and in U.S. debt because of the reckless money printing that the Fed has been doing.
But we desperately need the rest of the world to use “the petrodollar” and to lend us the money that we need to pay our bills.
As the rest of the planet starts to reject the U.S. dollar and starts to demand a much higher rate of return to lend us money, the U.S. economy is going to experience a tremendous amount of pain.
It is hard to put into words how foolish the Federal Reserve has been. The Fed is systematically destroying what was once the strongest financial system in the world, and in the end we are all going to pay the price.
How can anyone not see that the U.S. economy is collapsing all around us? It just astounds me when people try to tell me that “everything is just fine” and that “things are getting better” in America. Are there people out there that are really that blind? If you want to see the economic collapse, just open up your eyes and look around you. By almost every economic and financial measure, the U.S. economy has been steadily declining for many years. But most Americans are so tied into “the matrix” that they can only understand the cheerful propaganda that is endlessly being spoon-fed to them by the mainstream media. As I have said so many times, the economic collapse is not a single event. The economic collapse has been happening, it is is happening right now, and it will continue to happen. Yes, there will be times when our decline will be punctuated by moments of great crisis, but that will be the exception rather than the rule. A lot of people that write about “the economic collapse” hype it up as if it will be some huge “event” that will happen very rapidly and then once it is all over we will rebuild. Unfortunately, that is not how the real world works. We are living in the greatest debt bubble in the history of the world, and once it completely bursts there will be no going back to how things were before. Right now, we are living in a “credit card economy”. As long as we can keep borrowing more money, most people think that things are just fine. But anyone that has lived on credit cards knows that eventually there comes a point when the game is over, and we are rapidly approaching that point as a nation.
Have you ever been there? Have you ever desperately hoped that you could just get one more credit card or one more loan so that you could keep things going?
At first, living on credit can be a lot of fun. You can live a much higher standard of living than you otherwise would be able to.
But inevitably a day of reckoning comes.
If the federal government and the American people were forced at this moment to live within their means, the U.S. economy would immediately plunge into a depression.
That is a 100% rock solid guarantee.
But our politicians and the mainstream media continue to perpetuate the fiction that we can live in this credit card economic fantasy land indefinitely.
And most Americans could not care less about the future. As long as “things are good” today, they don’t really think much about what the future will hold.
As a result of our very foolish short-term thinking, we have now run up a national debt of 16.4 trillion dollars. It is the largest debt in the history of the world, and it has gotten more than 23 times larger since Jimmy Carter first entered the White House.
The chart that you see below is a recipe for national financial suicide…
Of course things have accelerated over the past four years. Since Barack Obama entered the White House, the U.S. government has run a budget deficit of well over a trillion dollars every single year, and we have stolen more than 100 million dollars from our children and our grandchildren every single hour of every single day.
It is the biggest theft of all time. What we are doing to our children and our grandchildren is beyond criminal.
And now our debt is at a level that most economists would consider terminal. When Barack Obama first entered the White House, the U.S. debt to GDP ratio was under 70 percent. Today, it is up to 103 percent.
We are officially in “the danger zone”.
If things really were “getting better” in America, we would not need to borrow so much money.
Our politicians are stealing from the future in order to make the present look better. During Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.
That is utter insanity!
If you started paying off just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.
So what is the solution?
Get ready to laugh.
The most prominent economic journalist in the entire country, Paul Krugman of the New York Times, recently suggested the following in an article that he wrote entitled “Kick That Can“…
Realistically, we’re not going to resolve our long-run fiscal issues any time soon, which is O.K. — not ideal, but nothing terrible will happen if we don’t fix everything this year. Meanwhile, we face the imminent threat of severe economic damage from short-term spending cuts.
So we should avoid that damage by kicking the can down the road. It’s the responsible thing to do.
You mean that we might actually do damage to the debt-fueled economic fantasy world that we are living in if we stopped stealing so much money from future generations?
Oh the humanity!
It is horrifying to think that all that one of the “top economic minds” in America can come up with is to “kick the can” down the road some more.
Unfortunately, neither Paul Krugman nor most of the American people understand that our financial system is actually designed to create government debt.
The bankers that helped create the Federal Reserve intended to permanently enslave the U.S. government to a perpetually expanding spiral of debt, and their plans worked.
At this point, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was first created.
So why don’t the American people understand what the Federal Reserve system is doing to us?
It is because most of them are still plugged into the matrix. A Zero Hedge article that I came across today put it beautifully…
US society in a nutshell: Chris Dorner has been around for a week and has 222 million results on Google; the Federal Reserve has been around for one hundred years and has 187 million results.
If nothing is done about our exploding debt, it is only a matter of time before we reach financial oblivion.
According to Boston University economist Laurence Kotlikoff, the U.S. government is facing a “present value difference between projected future spending and revenue” of 222 trillion dollars in the years ahead.
So how in the world are we going to come up with an extra 222 trillion dollars?
But it is not just the U.S. government that is drowning in debt.
Just check out this chart which shows the astounding growth of state and local government debt in recent years…
All over the United States there are state and local governments that are on the verge of bankruptcy. Just check out what is going on in Detroit. The only way that most of our state and local governments can keep going at this point is to also “kick the can” down the road some more.
And of course most of the rest of us are drowning in debt as well.
40 years ago, the total amount of debt in the U.S. economic system (government + business + consumer) was less than 2 trillion dollars.
Today, the total amount of debt in the U.S. economic system has grown to more than 55 trillion dollars.
Can anyone say bubble?
The good news is that U.S. GDP is now more than 12 times larger than it was 40 years ago.
The bad news is that the total amount of debt in our financial system is now more than 30 times larger than it was 40 years ago…
At the same time that we are going into so much debt, our ability to produce wealth continues to decline.
According to the World Bank, U.S. GDP accounted for 31.8 percent of all global economic activity in 2001. That number dropped to 21.6 percent in 2011. That is not just a decline – that is a nightmarish freefall. Just check out the chart in this article.
We are becoming less competitive as a nation with each passing year. In fact, the U.S. has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.
Most Americans don’t understand this, but the United States buys far more from the rest of the world than they buy from us each year. In 2012, we had a trade deficit of more than 500 billion dollars with the rest of the world.
That means that more than 500 billion dollars that could have gone to U.S. workers and U.S. businesses went out of the country instead.
So how does our country survive if hundreds of billions of dollars more is flowing out of the country than is flowing into it?
Well, to make up the shortfall we go to the countries that we sent our money to and we beg them to lend it back to us. If that doesn’t work, we just print and borrow even more money.
Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975.
That is 8 trillion dollars that could have saved U.S. businesses, paid the salaries of U.S. workers and that would have helped fund government.
But instead, our foolish policies have greatly enriched China and the oil barons of the Middle East.
Sadly, politicians from both political parties continue to boldly support the one world economic agenda of the global elite.
Just consider how destructive many of these “free trade” deals have been to our economy…
When NAFTA was pushed through Congress in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars.
By 2010, we had a trade deficit with Mexico of 61.6 billion dollars.
Back in 1985, our trade deficit with China was approximately 6 million dollars (million with a little “m”) for the entire year.
In 2012, our trade deficit with China was 315 billion dollars. That was the largest trade deficit that one nation has had with another nation in the history of the world.
In particular, our trade with China is extremely unbalanced. Today, U.S. consumers spend approximately 4 dollars on goods and services from China for every one dollar that Chinese consumers spend on goods and services from the United States.
But isn’t getting cheap stuff from China good?
No, because it costs us good paying jobs.
According to the Economic Policy Institute, the United States is losing half a million jobs to China every single year.
Overall, more than 56,000 manufacturing facilities in the United States have been shut down since 2001. During 2010, manufacturing facilities in the United States were shutting down at a rate of 23 per day. How can anyone say that “things are getting better” when our economic infrastructure is being absolutely gutted?
The truth is that there are never going to be enough jobs in America ever again, because millions of our jobs are being sent overseas and millions of our jobs are being lost to technology.
You won’t hear this on the news, but the percentage of the civilian labor force in the United States that is employed has been steadily declining every single year since 2006.
Younger workers have been hit particularly hard. In 2007, the unemployment rate for the 20 to 29 age bracket was about 6.5 percent. Today, the unemployment rate for that same age group is about 13 percent.
If you are under the age of 30 and you aren’t living with your parents, there is a really good chance that you are living in poverty. If you can believe it, U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
Our economy has been steadily bleeding huge numbers of middle class jobs, and many of those jobs have been replaced by low paying jobs in recent years.
According to one study, 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.
And at this point, an astounding 53 percent of all American workers make less than $30,000 a year.
Oh, but “things are getting better”, right?
Maybe if you live on Wall Street or if you are an employee of the federal government.
But for most families this economic decline has been a total nightmare. Median household income in America has fallen for four consecutive years. Overall, it has declined by over $4000 during that time span.
Sometimes people forget how good things were about a decade ago. About three times as many new homes were sold in the United States in 2005 as were sold in 2012.
But we like to live in denial.
In fact, a lot of families are trying to keep up their standards of living by going into tremendous amounts of debt.
Back in 1983, the bottom 95 percent of all income earners in the United States had 62 cents of debt for every dollar that they earned. By 2007, that figure had soared to $1.48.
Fake it until you make it, right?
But how much debt can our system possibly handle?
Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.
Total credit card debt in the United States is now more than 8 times larger than it was just 30 years ago.
We are a nation that is completely addicted to debt, but as the financial crisis of 2008 demonstrated, all of that debt can have horrific consequences.
As the economy has slowed in recent years, the Federal Reserve has decided that “the solution” is to recklessly print money in an attempt to get the debt spiral cranked up again.
Have they gone overboard? You be the judge…
And of course this won’t have any affect on the value of the money that you have been saving up all these years right?
Every single dollar that you own is continually losing value…
Overall, the value of the U.S. dollar has declined by more than 96 percent since the Federal Reserve was first created.
As the cost of living continues to go up and wages continue to go down, millions of American families have fallen out of the middle class and into poverty.
If you can believe it, the number of Americans on food stamps has grown from about 17 million in the year 2000 to more than 47 million today.
But “things are getting better”, right?
Incredibly, more than a million public school students in the United States are homeless. This is the first time that has ever happened in our history.
But “things are getting better”, right?
There are now 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.
But “things are getting better”, right?
In 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 55.1 percent are covered by employment-based health insurance.
But “things are getting better”, right?
Today, more Americans than ever have found themselves forced to turn to the federal government for help.
Overall, the federal government runs nearly 80 different “means-tested welfare programs”, and at this point more than 100 million Americans are enrolled in at least one of them.
According to the U.S. Census Bureau, 49 percent of all Americans live in a home that receives direct monetary benefits from the federal government. Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.
So is it a good sign or a bad sign that the percentage of Americans that are financially dependent on the federal government is at an all-time high?
And in future years the number of Americans that are receiving benefits from the federal government is projected to absolutely skyrocket.
Back in 1965, only one out of every 50 Americans was on Medicaid. Today, one out of every 6 Americans is on Medicaid, and things are about to get a whole lot worse. It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
If you take a look at Medicare, things are very more sobering.
As I wrote recently, it is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.
At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years. That comes to approximately $328,404 for every single household in the United States.
Are you ready to contribute your share?
Social Security is a complete and total nightmare as well.
Right now, there are approximately 56 million Americans collecting Social Security benefits.
By 2035, that number is projected to soar to an astounding 91 million.
Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.
Oh, but don’t worry because “things are getting better”, right?
I honestly do not know how anyone can look at the numbers above and come to the conclusion that the economy is in good shape.
We have accumulated the largest mountain of debt in the history of the world, our economic infrastructure is being gutted, we are bleeding good jobs, government dependence is at an all-time high and we are getting poorer as a nation with each passing day.
But other than that, everything is rainbows and lollipops, right?
If you want to see the economic collapse, just open up your eyes.
And if dramatic changes are not made quickly, things are going to get much, much worse from here.
Please share this article with as many people as possible. Time is quickly running out and there are a whole lot of people out there that we need to wake up while we still can.
Why isn’t the U.S. economy in a depression right now? The number one reason is because the federal government has stolen more than five trillion dollars from future generations since Barack Obama was elected and has used that money to pump up our grossly inflated standard of living. Whether the federal government spends money wisely or foolishly, the truth is that the vast majority of it still ends up in the pockets of the American people who then use it to buy the things they need for their daily lives. If the U.S. government had not borrowed and spent an extra five trillion dollars that we did not have over the past several years, we would be in the middle of a rip-roaring economic depression right now. So any talk that Barack Obama is “improving the economy” is a total farce. It is a five trillion dollar lie. The reality is that Barack Obama and the U.S. Congress have been stealing trillions of dollars from future generations in order to make things tolerable in the present. If the federal government adopted a balanced budget next year, the debt-fueled prosperity that we are currently enjoying would start disappearing very rapidly and all hell would break loose in America.
At this point, the U.S. national debt is over 15.7 trillion dollars.
When Ronald Reagan took office it was less than a trillion dollars.
If you were to divide the national debt up equally, it would come to more than $50,000 for every man, woman and child in the United States.
So the share of the national debt for an average family of four would be about $200,000.
When the government borrows and spends money that it does not have, that increases the amount of dollars in circulation and it causes GDP to go up.
That is one of the reasons why our politicians like to borrow and spend money that we do not have. It makes the economic statistics look good. They can point to those economic statistics as a reason to send them back for another term.
This is a major flaw in our system. Most of our politicians do not care about how they are raping future generations financially. Most of them just care about getting elected again.
If you will notice carefully, neither Mitt Romney nor Barack Obama are promising to balance the budget any time soon. Like so many politicians in the past, they promise to do it “eventually”, but “eventually” never arrives.
According to a recent article in the Washington Times, Mitt Romney declared during a recent campaign appearance that he has no plans to balance the federal budget in his first year….
“My job is to get America back on track to have a balanced budget. Now I’m not going to cut $1 trillion in the first year”
Why would he say that?
Why wouldn’t he want to balance the budget?
He went on to explain that….
“The reason,” he explained, “is taking a trillion dollars out of a $15 trillion economy would cause our economy to shrink [and] would put a lot of people out of work.”
Romney is right about this. Taking a trillion dollars out of a 15 trillion dollar economy would plunge us into an economic nightmare.
And that would make him look bad.
Of course if Obama wins the election we can just expect more of the same from him as well.
For example, just check out what White House Chief of Staff Jack Lew had to say about balancing the budget recently….
“The time for austerity is not today,” Lew told NBC News “Meet the Press.” “If we were to put in austerity measures right now, it would take the economy in the wrong way.”
Why is the time for austerity not today?
It is because the 2012 election is coming up and Obama wants the economic statistics to look good.
But can you blame our politicians for being cowardly?
Just look at what is happening in Greece. After several years of austerity they are in the midst of a full-blown economic depression and they still have not balanced their budget.
Do we want to end up like Greece?
Most Americans do not realize this, but the U.S. already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain.
So why haven’t we collapsed yet?
Well, because we continue to borrow larger and larger amounts of money.
It took from the founding of America until 1995 for the federal government to accumulate 5 trillion dollars of debt.
Under Obama, we have accumulated more than 5 trillion dollars of new debt in just over 3 years.
Amazingly, Obama has added more to the national debt than George W. Bush did during his entire 8 year term.
And let there be no mistake – George W. Bush was a wild spender. A fiscal conservative he most certainly was not.
But Barack Obama does not seem troubled by any of this.
Barack Obama is prancing about the countryside touting his great “economic plan”, but the truth is that the only reason the economy has not totally collapsed is because he is stealing 150 million dollars an hour from our children and our grandchildren.
Sadly, most Americans don’t understand that the current level of prosperity that we are enjoying is a grand illusion. Most Americans still expect things to return to the way that they used to be, and they are increasingly becoming angry that it is taking so long to get back there.
In fact, a whole host of recent surveys have shown that Americans are very dissatisfied with the direction the economy is heading in….
Four recent surveys have found that on average only 28% of Americans are satisfied with the condition of the country, while 70% are dissatisfied. Three recent surveys have found that between 69% and 83% of Americans believe that the country is still in recession (it isn’t), and only half believe that a recovery is under way.
What they don’t realize is that if we were not massively ripping off our kids and our grandkids things would be much, much worse.
Thomas Jefferson understood that government borrowing is essentially the same as theft from future generations.
He once made the following statement….
And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.
What we are doing to our children and our grandchildren is so immoral that it is hard to put into words.
We are running up trillions upon trillions of dollars of debt in their name just so that our lives can be more comfortable right now.
How could we be so selfish?
The sad thing is that even with all of this reckless spending our economy is still not in great shape.
In fact, the middle class continues to shrink at an alarming rate. The following are just a few statistics from a recent article I did about this phenomenon….
-Today, approximately 48 percent of all Americans are currently either considered to be “low income” or are living in poverty.
-Back in 1960, social welfare benefits made up approximately 10 percent of all salaries and wages. In the year 2000, social welfare benefits made up approximately 21 percent of all salaries and wages. Today, social welfare benefits make up approximately 35 percent of all salaries and wages.
-The United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.
-Every year now, we see millions of Americans fall out of the middle class. In 2010, 2.6 million more Americans descended into poverty. That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.
-At this point, approximately 22 percent of all American children are living in poverty.
-When Barack Obama took office, there were 32 million Americans on food stamps. Now, there are more than 46 million Americans on food stamps.
So how much worse would things be if a trillion dollars of federal spending was suddenly removed from the economy?
Are you starting to get the picture?
As bad as things are right now, they are about to get a whole lot worse.
So why can’t we just keep on borrowing and spending forever?
Well, just like Greece found out, debt always catches up with you eventually.
During fiscal 2011, the U.S. government spent over 454 billion dollars just on interest on the national debt.
But just like we are seeing in Europe, if confidence in U.S. government debt starts to disappear the U.S. government could end up facing much higher interest rates to borrow money.
If the average rate on U.S. government debt only rose to 7 percent (in the past it has actually been much higher than that), then the U.S. government would be spending about 1.1 trillion dollars a year just on interest on the national debt.
During fiscal year 2011, the U.S. government spent 3.7 trillion dollars but it only brought in about 2.4 trillion dollars.
So if we were spending 1.1 trillion dollars just on interest, that would be close to half of all the revenue the federal government brings in.
Right now, the Federal Reserve is manipulating the system in a desperate attempt to keep interest rates down. During 2011, the Federal Reserve bought up approximately 61 percent of all government debt issued by the U.S. Treasury Department.
But most Americans have no idea how fragile our financial system is.
Most Americans just assume that we will always be the greatest economy on the planet and that there is nothing to be worried about.
Sadly, one way or another this debt bubble is going to burst and then our debt-fueled false prosperity is going to disappear.
Most Americans are not going to understand what is happening and they are going to go absolutely nuts.
The Dow has closed above 13,000 for the first time since 2008, and the mainstream media is declaring that a strong economic recovery is underway. Barack Obama is telling anyone who will listen that his economic policies are a huge success, and U.S. consumers are piling up astounding amounts of new debt. Unfortunately, this euphoria about the economy will be short-lived. None of the long-term problems that are destroying the U.S. economy have been solved. In fact, there are dozens of statistics that can be quoted that prove that the U.S. economy is in far worse shape than it was when the recession supposedly ended. If dramatic changes are not made very rapidly, our nation is going to smash directly into an economic brick wall. Sadly, most Americans are so addicted to entertainment that they have no idea what is about to happen. Most of them are “sheeple” that are content to trust that the “experts” know exactly how to fix our problems as they continue to enjoy their entertainment-induced comas. After all, it is much easier to turn on “American Idol” or “Dancing With The Stars” than it is to think about debt ratios and monetary policy. But that doesn’t mean that we should not try to wake the sheeple up. It just means that it will not be easy.
If you went to the doctor tomorrow and he told you to take some little blue pills without telling you anything else, would you take them?
Of course not.
You would want to know what the little blue pills are for.
But if your doctor told you that you have a deadly incurable disease that is about to kill you, and that the little blue pills are the only cure, then you would definitely be interested in taking them.
Well, it is the same way with the American people. Until they understand just how sick the economy is, they will not be interested in fighting for a solution.
We need to show all the sheeple out there that the U.S. economy has terminal cancer and is headed for death.
We need to show them that the future of our children and our grandchildren is literally being destroyed.
Way too many Americans are sitting around waiting for the government to save them.
It isn’t going to happen.
It is up to those of us that are awake to wake up those that are asleep.
And there are many out there that think that they are awake that are only partially awake.
One very famous author once wrote that “people are destroyed for lack of knowledge”, and that is exactly what is happening in America today. Most Americans simply don’t understand what is happening economically, politically, socially, morally or financially in this nation.
Please help me wake the sheeple up.
The following are 20 economic statistics to use to wake sheeple up from their entertainment-induced comas….
#1 The United States has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain.
#2 The European Commission has formally declared that Europe has now entered another recession. German banks are leveraged 32 to 1 and the European financial system is rapidly approaching a nightmare. Lehman Brothers was only leveraged 30 to 1 when it finally collapsed.
#3 There are clear signs that economic activity is also significantly slowing down in the United States. For example, new orders for goods manufactured in the United States experienced the biggest drop in three years in January.
#4 U.S. consumers are busy racking up staggering amounts of debt once again. Total consumer debt rose at an annual rate of 9.3 percent in December. It is now sitting at a grand total of 2.498 trillion dollars.
#5 The U.S. Postal Service has announced plans to eliminate 35,000 more jobs.
#6 There are more unemployed Americans than there are people living in the entire nation of Greece.
#7 The percentage of American men that have jobs is near an all-time record low.
#8 Right now, there are 88 million working age Americans that do not have jobs and that the government says are not looking for jobs.
#9 The average duration of unemployment in the United States is nearly three times as long as it was back in the year 2000.
#10 In January 2009, there were 2.6 million “long-term unemployed workers” according to the federal government. Today, there are 5.6 million.
#11 The average price of a gallon of gasoline in the United States has risen by 14 cents in just the past week, and the average price of a gallon of gasoline in the state of California is now an astounding $4.29. Sadly, the price of gas is expected to continue rising over the next few months.
#12 The U.S. housing market continues to struggle deeply. Home prices in the 4th quarter of 2011 were four percent lower than they were during the 4th quarter of 2010. Overall, U.S. home prices are 34 percent lower than they were back at the peak of the housing bubble.
#13 Large numbers of Americans are putting off basic health procedures due to the declining economy. Just consider the following example from a recent Huffington Post article….
Americans between the ages of 50 to 64 got 500,000 fewer colonoscopies, or screenings aimed at detecting colon cancer, during the recession, compared to the two years before, according to a recent study from researchers at the University of North Carolina’s medical school.
#14 The number of Americans on food stamps has increased by almost 50 percent since Barack Obama first took office.
#15 Right now, 48 percent of all Americans are considered to be either “low income” or “living in poverty”.
#16 The U.S. government is stealing about 150 million dollars from our children and our grandchildren every single hour of every single day.
#17 If Bill Gates gave all of his money to the U.S. government, it would only cover the U.S. budget deficit for about 15 days.
#18 Since the Federal Reserve was created, the U.S. dollar has declined in value by more than 95 percent and the U.S. national debt has gotten more than 5000 times larger.
#19 Approximately 25 million American adults are living with their parents. Most of them are doing it for economic reasons.
#20 According to a new Politico poll, only 30 percent of all Americans believe that the next generation will be “better off economically” than the previous generation.
For many more current statistics about the U.S. economy, check out the interesting facts which I documented in this previous article.
Thankfully, there are others out there such as trends researcher Gerald Celente that are tirelessly working to sound the alarm. Celente is convinced that the U.S. financial system is rapidly heading for a disaster. Just consider the following quotes from Celente in a recent USA Today article….
“2012 is when many of the long-simmering socioeconomic and political trends that we have been forecasting and tracking will climax,” Celente noted in his Top 12 Trends 2012 newsletter. In an interview he added: “When money stops flowing to the man on the street, blood starts flowing in the street.”
Even some politicians on the state level are deeply concerned about the possibility of a massive financial meltdown.
For example, a bill has been introduced in Wyoming that would set up “a state-run government continuity task force” which would develop plans for how Wyoming would deal with potential disasters such as a “complete meltdown of the federal government”, an economic collapse or a major disruption in food and energy supplies….
State Rep. David Miller, R-Riverton, has seen the national debt rise above $15 trillion and protest movements grow around the country. Wealthy Americans are fleeing the country, he says, and confidence in the dollar has taken a hit around the world.
If America’s economic and social problems continue to escalate and spiral out of control, Miller said, Wyoming needs to be ready. So, he’s introduced legislation to create a state-run government continuity task force, which would study and prepare Wyoming for potential catastrophes, from disruptions in food and energy supplies to a complete meltdown of the federal government.
It would even look at the feasibility of quickly providing an alternative currency in Wyoming should the U.S. dollar collapse entirely.
But for many Americans, the “meltdown” has already happened on a personal level.
Many are going to extreme lengths in an attempt to survive in this economy.
For example, one ex-police officer in Ohio got so desperate that he decided that it would be better to get arrested for bank robbery and be thrown in prison than to be homeless and living in the streets….
Former Columbus police officer Edward Pascucci had been jobless for more than a year and was facing homelessness last summer when he decided to rob a local bank. Making off with stacks of cash, however, never was his intention.
Pascucci told a federal judge on Thursday he’d run out of options, was facing “severe health problems” and opted to avail himself of the services offered by the federal penal system rather than live on the street.
Can you imagine that?
Can you imagine getting arrested just so that you could get free health care and wouldn’t have to sleep in the streets?
Meanwhile, the Obamas are living the high life and seem to have developed a “let them eat cake” mentality. The following is from a recent article in The Daily Mail….
The Obama family just finished a luxury ski vacation in Aspen, Colorado. This comes on the heels of a Hawaiian Christmas vacation for the family that lasted a few weeks. The 2011 Hawaiian vacation cost the American taxpayers $4 million and a big increase from the 2010 bill sent to the American people for $2.5 million, according to the Huffington Post.
Over the past three summers, the Obama’s have vacationed in the exclusive Blue Heron Farm in Chilmark, Martha’s Vineyard in Massachusetts. President Obama has a reputation for hitting every golf course on this island vacation spot for the rich and famous.
There is nothing wrong with a President taking a modest vacation, but there is a problem when the political leader of America is taking frequent swanky vacations when average Americans are experiencing economic pain.
Shouldn’t the Obamas be setting an example for the rest of us during these hard economic times?
Unfortunately, Barack Obama seems to believe that the worst of our economic troubles is now behind us.
If only that were true.
During this short-lived bubble of false hope, we should all be working hard to prepare for what is ahead.
A menacing storm is on the horizon and it will be here way too soon.
Let us wake up as many of the sheeple as we can while there is still time.
How is the U.S. economy doing in 2012? Unfortunately, it is not doing nearly as well as the mainstream media would have you believe. Yes, things have stabilized for the moment but this bubble of false hope will not last for long. The long-term trends that are ripping our economy and our financial system to shreds continue unabated. When you step back and look at the broader picture, it is hard to deny that we are in really bad shape and that things are rapidly getting worse. Later on in this article you will find a list of interesting facts that show the true state of the U.S. economy. Hopefully many of you will find this list to be a useful tool that you can share with your family and friends. Each day the foundations of our economy crumble a little bit more, and we need to wake up as many Americans as we can to what is really going on while there is still time. We have accumulated way too much debt, we consume far more wealth than we produce, millions of our jobs are being shipped overseas, our big cities are decaying, family budgets are being squeezed more than ever, poverty is rampant and we have raised several generations of Americans that expect the government to fix all of their problems. The U.S. economy is at a crossroads, and the decisions that the American people make in 2012 are going to be incredibly important.
The statistics listed below are presented without much commentary. They pretty much speak for themselves.
After reading this list, it will be hard for anyone to argue that we are on the right track.
The following are 55 interesting facts about the U.S. economy in 2012….
#1 As you read this, there are more than 6 million mortgages in the United States that are overdue.
#2 In January, U.S. home prices were the lowest that they have been in more than a decade.
#3 In Florida right now, some drivers are paying nearly 6 dollars for a gallon of gas.
#4 On average, you could buy about 10 gallons of gas for an hour of work back in the mid-90s. Today, the average hour of work will get you less than 6 gallons of gas.
#5 Sadly, 43 percent of all American families spend more than they earn each year.
#6 According to Gallup, the unemployment rate was at 8.3% in mid-January but rose to 9.0% in mid-February.
#7 The percentage of working age Americans that have jobs is not increasing. The employment to population ratio has stayed very steady (hovering between 58% and 59%) since the beginning of 2010.
#8 If you gathered together all of the workers that are “officially” unemployed in the United States into one nation, they would constitute the 68th largest country in the entire world.
#9 When Barack Obama first took office, the number of “long-term unemployed workers” in the United States was approximately 2.6 million. Today, that number is sitting at 5.6 million.
#10 The average duration of unemployment in the United States is hovering close to an all-time record high.
#11 According to Reuters, approximately 23.7 million American workers are either unemployed or underemployed right now.
#12 There are about 88 million working age Americans that are not employed and that are not looking for employment. That is an all-time record high.
#13 According to CareerBuilder, only 23 percent of American companies plan to hire more employees in 2012.
#14 Back in the year 2000, about 20 percent of all jobs in America were manufacturing jobs. Today, about 5 percent of all jobs in America are manufacturing jobs.
#15 The United States has lost an average of approximately 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001.
#16 Amazingly, more than 56,000 manufacturing facilities in the United States have been shut down since 2001.
#17 According to author Paul Osterman, about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.
#18 During the Obama administration, worker health insurance costs have risen by 23 percent.
#19 An all-time record 49.9 million Americans do not have any health insurance at all at this point, and the percentage of Americans covered by employer-based health plans has fallen for 11 years in a row.
#20 According to the New York Times, approximately 100 million Americans are either living in poverty or in “the fretful zone just above it”.
#21 In the United States today, corporate profits are at an all-time high. The percentage of Americans that are living in “extreme poverty” is also at an all-time high according to the U.S. Census Bureau.
#22 In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.
#23 The poorest 50 percent of all Americans now collectively own just 2.5% of all the wealth in the United States.
#24 The number of children living in poverty in the state of California has increased by 30 percent since 2007.
#25 According to the National Center for Children in Poverty, 36.4% of all children that live in Philadelphia are living in poverty, 40.1% of all children that live in Atlanta are living in poverty, 52.6% of all children that live in Cleveland are living in poverty and 53.6% of all children that live in Detroit are living in poverty.
#26 Since Barack Obama entered the White House, the number of Americans on food stamps has increased from 32 million to 46 million.
#27 As the economy has slowed down, so has the number of marriages. According to a Pew Research Center analysis, only 51 percent of all Americans that are at least 18 years old are currently married. Back in 1960, 72 percent of all U.S. adults were married.
#28 In 1984, the median net worth of households led by someone 65 or older was 10 times larger than the median net worth of households led by someone 35 or younger. Today, the median net worth of households led by someone 65 or older is 47 times larger than the median net worth of households led by someone 35 or younger.
#29 If you can believe it, 37 percent of all U.S. households that are led by someone under the age of 35 have a net worth of zero or less than zero.
#30 After adjusting for inflation, U.S. college students are borrowing about twice as much money as they did a decade ago.
#31 According to the Student Loan Debt Clock, total student loan debt in the United States will surpass the 1 trillion dollar mark at some point in 2012. If you went out right now and starting spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars.
#32 Today, 46% of all Americans carry a credit card balance from month to month.
#33 Incredibly, one out of every seven Americans has at least 10 credit cards.
#34 The average interest rate on a credit card that is carrying a balance is now up to 13.10 percent.
#35 Of the U.S. households that do have credit card debt, the average amount of credit card debt is an astounding $15,799.
#36 Overall, Americans are carrying a grand total of $798 billion in credit card debt. If you were alive when Jesus was born and you spent a million dollars every single day since then, you still would not have spent $798 billion by now.
#37 It may be hard to believe, but the truth is that consumer debt in America has increased by a whopping 1700% since 1971.
#38 At this point, about 70 percent of all auto purchases in the United States involve an auto loan.
#39 In the United States today, 45 percent of all auto loans are made to subprime borrowers.
#40 Mortgage debt as a percentage of GDP has more than tripled since 1955.
#41 According to a recent study conducted by the BlackRock Investment Institute, the ratio of household debt to personal income in the United States is now 154 percent.
#42 To get the same purchasing power that you got out of $20.00 back in 1970 you would have to have more than $116 today.
#43 When Barack Obama first took office, an ounce of gold was going for about $850. Today an ounce of gold costs more than $1700 an ounce.
#44 The number of Americans that are not paying federal incomes taxes is at an all-time high.
#45 A staggering 48.5% of all Americans live in a household that receives some form of government benefits. Back in 1983, that number was below 30 percent.
#46 The amount of money that the federal government gives directly to Americans has increased by 32 percent since Barack Obama entered the White House.
#47 During 2012, the U.S. government must roll over nearly 3 trillion dollars of old debt.
#48 The U.S. debt to GDP ratio has now reached 101 percent.
#49 At the moment, the U.S. national debt is sitting at a grand total of $15,419,800,222,325.15.
#50 The U.S. national debt is now more than 22 times larger than it was when Jimmy Carter became president.
#51 During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.
#52 If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.
#53 If Bill Gates gave every single penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for about 15 days.
#54 Right now, the U.S. national debt is increasing by about 150 million dollars every single hour.
#55 Spending by the federal government accounted for about 2 percent of GDP back in 1800. It accounted for 23.8 percent in 2011, and according to former U.S. Comptroller General David M. Walker, it will account for 36.8 percent of GDP by 2040.
Bad news, eh?
But it isn’t just our economy that is decaying.
We are witnessing a tremendous amount of social decay as well. As I wrote about the other day, America is rapidly decomposing right in front of our eyes.
When the water level of a river drops far enough, it will reveal rocks that have been hidden from view for a very long time. Well, a similar thing is happening in America right now. For decades, our debt-fueled prosperity has masked a lot of the social decay that has been going on.
But now that our prosperity is evaporating, a lot of frightening stuff is being revealed.
Unfortunately, another major financial crisis is rapidly approaching and economic conditions in the United States are going to get a lot worse.
So what is our country going to look like when that happens?
That is a very good question.
Does it cost you hundreds of dollars just to get to work each month? If it does, you are certainly not alone. There are millions of other Americans in the exact same boat. In recent years, the price of gas in the United States has gotten so outrageous that it has played a major factor in where millions of American families have decided to live and in what kind of vehicles they have decided to purchase. Many Americans that have very long commutes to work end up spending thousands of dollars on gas a year. So when the price of gas starts going up to record levels, people like that really start to feel it. But the price of gas doesn’t just affect those that drive a lot. The truth is that the price of gas impacts each and every one of us. Almost everything that we buy has to be transported, and when the price of gasoline goes up the cost of shipping goods also rises. The U.S. economy has been structured around cheap oil. It was assumed that we would always be able to transport massive quantities of goods over vast distances very inexpensively. Once that paradigm totally breaks down, we are going to be in a huge amount of trouble. For the moment, the big concern is the stress that higher gas prices are going to put on the budgets of ordinary American families. Unfortunately, almost everyone agrees that in the short-term the price of gas is going to go even higher.
When you are on a really tight budget and you are already spending several hundred dollars on gas each month, you certainly do not want to hear that gas prices are going to increase even more.
A lot of Americans are moving or are getting different vehicles just because of these outrageous gas prices. The following comes from a recent Mercury News article….
Katherine Zak, of South San Jose, is searching for an apartment near her new job at Facebook in Palo Alto, partly to cut down the cost of driving. Jeff Benson, of Raymond in the Sierra foothills, typically drives 60,000 to 70,000 miles a year and has traded in his 19 mpg Ford Taurus for a Fusion that gets 33 mpg. And David Thomas says his commute from San Jose to San Francisco is getting so expensive that he and his fiancee are hunting for a house near a BART station in the San Mateo-San Bruno area to shorten his commute and lower his $400-a-month gas bill.
The price of gas is going even higher even though energy consumption is sharply declining in the United States. Just check out the charts in this article by Charles Hugh Smith. Americans are using less gasoline and less energy and yet the price of gas continues to go up.
That is not a good sign.
Certainly any decrease that we are seeing in the U.S. is being more than offset by rising demand in places such as China and India. As emerging economies all over the globe continue to develop this is going to continue to put pressure on gas prices.
So just how bad are gas prices in the U.S. right now?
Just consider the following facts….
-The average price of a gallon of gasoline in the United States is now $3.53.
-The average price of a gallon of gasoline is already higher than $3.70 in Connecticut, Washington D.C. and New York.
-In California, the average price of a gallon of gasoline is $3.96 and there are quite a few cities where it is now above 4 dollars.
-In mid-January 2009, the average price of a gallon of gasoline in the United States was just $1.85.
-The average price of a gallon of gasoline in the United States has risen 25 cents since the beginning of 2012.
-Never before in U.S. history has the price of gasoline been this high so early in the year.
-The Oil Price Information Service is projecting that the price of gas could reach an average of $4.25 a gallon by the end of April.
-The price of oil just keeps going up. The price for West Texas Intermediate is about 19 percent higher than it was one year ago.
-The price of gasoline is also reaching record highs in many areas of Europe as well. For example, the price of diesel fuel in the UK recently set a brand new record.
-In 2011, U.S. households spent a whopping 8.4% of their incomes on gasoline. That percentage has approximately doubled over the past ten years.
But the price of gas is not the only thing making driving much more expensive these days.
All over the country, our politicians have been putting up toll booths. Most of the time these toll booths are going up on roads that have already been paid for.
After paying an outrageous amount for gas and after paying the outrageous tolls on many of these toll roads, many Americans wonder if it is even worth it to get up in the morning and go to work.
Unfortunately, a couple of new bills in Congress right now would reportedly allow even more highways to be made into toll roads.
It is almost as if they want to force us all to stop driving our cars.
America used to be the land of the open road, but that era is rapidly coming to an end.
Another thing that could put upward pressure on the price of gas is the situation in the Middle East.
Iran has already stopped selling oil to companies in the UK and France, and there is the potential that war could erupt in the Middle East at any time.
If war does erupt, or if commercial traffic through the Strait of Hormuz was interrupted for even a brief time, that would send the global price of oil through the roof.
Approximately 20 percent of all oil sold in the world passes through the Strait of Hormuz. If the flow of oil was halted, that would change the global economy almost overnight.
So is there any good news?
Well, there is one thing that would likely bring down the price of gas substantially.
A global recession.
Remember what happened back in 2008.
Just like we are seeing right now, the price of gas really spiked early in that year.
Eventually, the price of oil hit an all-time record of $147 a barrel in mid-2008.
But then the financial crisis struck and the price of oil fell like a rock as you can see from the chart below….
So could that happen again?
There are a ton of other parallels between 2008 and 2012.
In both years, we saw global shipping start to slow down dramatically.
In both years, the U.S. was getting ready to hold a presidential election.
In both years, many economists were warning that a great financial crisis was about to strike.
Back in 2008, the epicenter of the financial crisis was on Wall Street.
This time, the epicenter of the financial crisis will probably be in Europe.
Keep your eye on Europe. A disorderly default by Greece (and potentially even an exit from the eurozone) is looking increasingly likely.
But the problems in Europe are not going to end with Greece. The entire eurozone is going to be greatly shaken by the time this thing is over.
So yes, if we see another major global recession that will be great news for the price of gas, but it will be really bad news for the millions of people that lose their jobs and their homes.
Unfortunately, we live at a time when the world is becoming extremely unstable. The great era of peace and prosperity that we have been enjoying is coming to an end. The global financial system is going to experience a tremendous amount of chaos in the years ahead and that is something we will all need to prepare for.
For now, the price of gas is a major concern for millions upon millions of American families.
Someday, however, we will wish desperately that we could go back to these days.