As we enter the second half of 2015, financial panic has gripped most of the globe. Stock prices are crashing in China, in Europe and in the United States. Greece is on the verge of a historic default, and now Puerto Rico and Ukraine are both threatening to default on their debts if they do not receive concessions from their creditors. Not since the financial crisis of 2008 has so much financial chaos been unleashed all at once. Could it be possible that the great financial crisis of 2015 has begun? The following are 16 facts about the tremendous financial devastation that is happening all over the world right now…
1. On Monday, the Dow fell by 350 points. That was the biggest one day decline that we have seen in two years.
2. In Europe, stocks got absolutely smashed. Germany’s DAX index dropped 3.6 percent, and France’s CAC 40 was down 3.7 percent.
3. After Greece, Italy is considered to be the most financially troubled nation in the eurozone, and on Monday Italian stocks were down more than 5 percent.
4. Greek stocks were down an astounding 18 percent on Monday.
5. As the week began, we witnessed the largest one day increase in European bond spreads that we have seen in seven years.
6. Chinese stocks have already met the official definition of being in a “bear market” – the Shanghai Composite is already down more than 20 percent from the high earlier this year.
7. Overall, this Chinese stock market crash is the worst that we have witnessed in 19 years.
8. On Monday, Standard & Poor’s slashed Greece’s credit rating once again and publicly stated that it believes that Greece now has a 50 percent chance of leaving the euro.
9. On Tuesday, Greece is scheduled to make a 1.6 billion euro loan repayment. One Greek official has already stated that this is not going to happen.
10. Greek banks have been totally shut down, and a daily cash withdrawal limit of 60 euros has been established. Nobody knows when this limit will be lifted.
11. Yields on 10 year Greek government bonds have shot past 15 percent.
12. U.S. investors are far more exposed to Greece than most people realize. The New York Times explains…
But the question of what happens when the markets do open is particularly acute for the hedge fund investors — including luminaries like David Einhorn and John Paulson — who have collectively poured more than 10 billion euros, or $11 billion, into Greek government bonds, bank stocks and a slew of other investments.
Through the weekend, Nicholas L. Papapolitis, a corporate lawyer here, was working round the clock comforting and cajoling his frantic hedge fund clients.
“People are freaking out,” said Mr. Papapolitis, 32, his eyes red and his voice hoarse. “They have made some really big bets on Greece.”
13. The Governor of Puerto Rico has announced that the debts that the small island has accumulated are “not payable“.
14. Overall, the government of Puerto Rico owes approximately 72 billion dollars to the rest of the world. Without debt restructuring, it is inevitable that Puerto Rico will default. In fact, CNN says that it could happen by the end of this summer.
15. Ukraine has just announced that it may “suspend debt payments” if their creditors do not agree to take a 40 percent “haircut”.
16. This week the Bank for International Settlements has just come out with a new report that says that central banks around the world are “defenseless” to stop the next major global financial crisis.
Without a doubt, we are overdue for another major financial crisis. All over the planet, stocks are massively overvalued, and financial markets have become completely disconnected from economic reality. And when the next crash happens, many believe that it will be even worse than what we experienced back in 2008. For example, just consider the words of Jim Rogers…
“In the United States, we have had economic slowdowns every four to seven years since the beginning of the Republic. It’s now been six or seven years since our last stock market problem. We’re overdue for another problem.”
In Rogers’ view, low interest rates caused stock prices to increase significantly. He believes many assets are priced beyond their fundamentals thanks to the ultra-easy monetary policies by the Federal Reserve. Fed supporters argue such measures are good for investors, but Rogers takes a different view.
“The Fed might tell us we don’t have to worry and that a correction or crash will never happen again. That’s balderdash! When this artificial sea of liquidity ends, we’re going to pay a terrible price. When the next economic problem occurs, it will be much worse because the debt is so much higher.”
Of course Rogers is far from alone. A recent article by Paul B. Farrell expressed similar sentiments…
America’s 95 million investors are at huge risk. Remember the $10 trillion losses in the crash and recession of 2007-2009? The $8 trillion lost after the dot-com technology crash and recession of 2000-2003? This is the third big recession of the century. Yes, America will lose trillions again.
Especially with dead-ahead predictions like Mark Cook’s 4,000-point Dow correction. And Jeremy Grantham’s warning of a 50% crash around election time, with negative stock returns through the first term of the next president, beyond 2020. Starting soon.
Why is America so vulnerable when the next recession hits? Simple: The Fed’s cheap-money giveaway is killing America. When the downturn, correction, crash hits, it will compare to the 2008 crash. The Economist warns: “the world will be in a rotten position to do much about it. Rarely have so many large economies been so ill-equipped to manage a recession,” whatever the trigger.
Things have been relatively quiet in the financial world for so long that many have been sucked into a false sense of security.
But the underlying imbalances were always there, and they have been getting worse over time.
I believe that we are heading into a global financial collapse that will make what happened in 2008 look like a Sunday picnic by the time it is all said and done.
Global debt levels are at all-time highs, big banks all over the planet have been behaving more recklessly than ever, and financial markets are absolutely primed for a huge crash.
Hopefully things will calm down a bit as the rest of this week unfolds, but I wouldn’t count on it.
We have entered uncharted territory, and what comes next is going to shock the world.
A horse named “American Pharoah” just won the Triple Crown. Is this some sort of a sign for America? The office of the presidency was greatly strengthened under previous administrations, but now Barack Obama has grabbed an unprecedented amount of power for himself. In this article, I am going to focus on immigration, but Obama’s power grab is certainly not limited to this area. And as I have written about previously, if there is some sort of major “national emergency” over the next year or so, the legal framework has already been created for Obama to use his “emergency powers” to take total control of virtually everything. So is comparing Obama to the pharoahs of ancient Egypt unfair? I don’t think so at all. He is certainly acting as if he would like the powers of a dictator, his policies in the Middle East would make the pharoahs proud, and without a doubt Obama loves the adoration and worship of his fans. In my opinion, he is the closest thing to a pharoah that the United States has ever seen.
Just consider Obama’s approach to immigration. The laws of our land require him to protect our borders, but he has left them wide open and has openly encouraged illegal immigration because that is what he decided was best. He also attempted to use his “executive powers” to grant amnesty to millions upon millions of immigrants that were in this country illegally. Fortunately, that action has been blocked in the courts (at least for now), but Obama says that he is going to keep trying to do everything he can to “bring them out of the shadows”.
Personally, I am someone that believes that the United States will always need a certain level of legal immigration. But the key word there is “legal”. It is absolutely imperative that we require everyone to come in by the front door, so that we can weed out those that would be damaging to our society. But instead of adopting a system that makes sense, we have left the back door wide open while making it extremely challenging to come in through the front door. As a result, we have seen an endless flow of gang members, drug dealers, serial criminals, welfare parasites and political radicals enter this country illegally. We have made it really easy for the “bad guys” to come in, but extraordinarily difficult for the “good guys” to move here. What we are doing does not make any sense at all.
And thanks to our foolishness and the refusal of recent presidential administrations to enforce the law, all of this immigration has fundamentally altered the employment picture in this nation. According to the latest numbers, nearly all of the job gains that the U.S. economy has experienced since 2007 have gone to foreign born workers…
Assuming, the Household and Establishment surveys were congruent, this would mean that there was just 1K native-born workers added in May of the total 280K jobs added.
Alternatively, assuming the series, which is not seasonally adjusted, was indicative of seasonally adjusted data, then the 272K increase in total Household Survey civilian employment in May would imply a decline of 7K native-born workers offset by the increase of 279K “foreign borns.”
But while all of these comparisons are apples to oranges, using the BLS’ own Native-Born series, also presented on an unadjusted basis, we find the following stunner: since the start of the Second Great Depression, the US has added 2.3 million “foreign-born” workers, offset by just 727K “native-born”.
This means that the “recovery” has almost entirely benefited foreign-born workers, to the tune of 3 to 1 relative to native-born Americans!
It is getting to the point where we have a national epidemic on our hands. According to one recent study, nearly one out of every 10 workers in the entire state of California is here illegally. Imagine how much easier it would be to get a job in that state if the illegal workers were not part of the equation.
And of course it isn’t just employment that we need to be concerned about. Thanks to unchecked illegal immigration, there are now 1.4 million gang members living in our cities, and these gang members often commit crimes that are absolutely horrific. For example, the following is from an article about a crime that was recently committed by members of MS-13…
Three teenage reputed members of the MS-13 street gang were ordered held without bail Friday on charges they forced a 16-year-old into a wooded area of a Long Island golf course, where two of them took turns raping her while the third stood as a lookout.
‘This is one of the most brutal, heinous crimes that I have seen in a long, long time,’ Suffolk County District Attorney Thomas Spota said at a news conference following the suspects’ arraignments.
‘This poor young woman is so lucky that, quite frankly, that she is alive. These are vicious young men, vicious young men and what they did to her was absolutely terrible.’
If Barack Obama had protected our borders like he should have, those members of MS-13 would have never gotten into this country and they never would have raped that girl.
But instead of admitting that what he has done has been wrong, Pharoah Obama is doubling down on his current approach. He insists that leaving the border wide open is “the right thing to do”, and he pledges to “bring more undocumented immigrants out of the shadows”. The following comes from the Examiner…
After executive amnesty was blocked in the courts and in the House the last two days, President Obama used his weekly radio address to ridicule House Republicans for blocking a vote on immigration reform, while promising that he would keep up the fight for undocumented immigrants.
“I’m going to keep doing everything I can to make our immigration system more just and more fair,” Obama said. “Last fall, I took action to provide more resources for border security; focus enforcement on the real threats to our security; modernize the legal immigration system for workers, employers and students; and bring more undocumented immigrants out of the shadows so they can get right with the law.”
“Some folks are still fighting against these actions,” Obama said, without directly naming the legal hurdles his executive actions face. “I’m going to keep fighting for them. Because the law is on our side. It’s the right thing to do. And it will make America stronger.”
And if Obama has his way, this is only just the beginning.
I have previously written about the devastating impact that the Trans-Pacific Partnership will have on our economy, but did you know that this secret new treaty that Obama is negotiating will also allow for the free flow of people within the Asia-Pacific region? The following comes from WND…
The European Union was founded on “four freedoms”: the free flow of people, goods, money and services among members. We learned at a recent White House press conference the Trans-Pacific Partnership will ensure “people, goods and money will flow freely within the Asia Pacific region.”
So what does that mean?
Will immigrants be able to move around the nations that are involved in the Trans-Pacific Partnership as freely as they do in the European Union today? Mexico is one of the countries that will be a part of this new treaty. Does that mean that people will now “flow freely” between our two nations?
We have seen it time and time again – once Obama is blocked one way, he just comes back and tries to advance his agenda another way. When he promised to “fundamentally transform” this country, I don’t think that most people had any idea of what we would really be in for.
At this point, many regard Barack Obama as a “lame duck” president that is on his way out.
I don’t see it like that at all. In fact, I believe that the most tumultuous time of Obama’s presidency is still to come.
Do you agree? Tell us what you think the remainder of Obama’s time in the White House will look like by leaving a comment below…
Who is to blame for the staggering collapse of the price of oil? Is it the Saudis? Is it the United States? Are Saudi Arabia and the U.S. government working together to hurt Russia? And if this oil war continues, how far will the price of oil end up falling in 2015? As you will see below, some analysts believe that it could ultimately go below 20 dollars a barrel. If we see anything even close to that, the U.S. economy could lose millions of good paying jobs, billions of dollars of energy bonds could default and we could see trillions of dollars of derivatives related to the energy industry implode. The global financial system is already extremely vulnerable, and purposely causing the price of oil to crash is one of the most deflationary things that you could possibly do. Whoever is behind this oil war is playing with fire, and by the end of this coming year the entire planet could be dealing with the consequences.
Ever since the price of oil started falling, people have been pointing fingers at the Saudis. And without a doubt, the Saudis have manipulated the price of oil before in order to achieve geopolitical goals. The following is an excerpt from a recent article by Andrew Topf…
We don’t have to look too far back in history to see Saudi Arabia, the world’s largest oil exporter and producer, using the oil price to achieve its foreign policy objectives. In 1973, Egyptian President Anwar Sadat convinced Saudi King Faisal to cut production and raise prices, then to go as far as embargoing oil exports, all with the goal of punishing the United States for supporting Israel against the Arab states. It worked. The “oil price shock” quadrupled prices.
It happened again in 1986, when Saudi Arabia-led OPEC allowed prices to drop precipitously, and then in 1990, when the Saudis sent prices plummeting as a way of taking out Russia, which was seen as a threat to their oil supremacy. In 1998, they succeeded. When the oil price was halved from $25 to $12, Russia defaulted on its debt.
The Saudis and other OPEC members have, of course, used the oil price for the obverse effect, that is, suppressing production to keep prices artificially high and member states swimming in “petrodollars”. In 2008, oil peaked at $147 a barrel.
Turning to the current price drop, the Saudis and OPEC have a vested interest in taking out higher-cost competitors, such as US shale oil producers, who will certainly be hurt by the lower price. Even before the price drop, the Saudis were selling their oil to China at a discount. OPEC’s refusal on Nov. 27 to cut production seemed like the baldest evidence yet that the oil price drop was really an oil price war between Saudi Arabia and the US.
If the Saudis wanted to stabilize the price of oil, they could do that immediately by announcing a production cutback.
The fact that they have chosen not to do this says volumes.
In addition to wanting to harm U.S. shale producers, some believe that the Saudis are determined to crush Iran. This next excerpt comes from a recent Daily Mail article…
Above all, Saudi Arabia and its Gulf allies see Iran — a bitter religious and political opponent — as their main regional adversary.
They know that Iran, dominated by the Shia Muslim sect, supports a resentful underclass of more than a million under-privileged and angry Shia people living in the gulf peninsula — a potential uprising waiting to happen against the Saudi regime.
The Saudis, who are overwhelmingly Sunni Muslims, also loathe the way Iran supports President Assad’s regime in Syria — with which the Iranians have a religious affiliation. They also know that Iran, its economy plagued by corruption and crippled by Western sanctions, desperately needs the oil price to rise. And they have no intention of helping out.
The fact is that the Saudis remain in a strong position because oil is cheap to produce there, and the country has such vast reserves. It can withstand a year — or three — of low oil prices.
There are others out there that are fully convinced that the Saudis and the U.S. are actually colluding to drive down the price of oil, and that their real goal is to destroy Russia.
In fact, Venezuela’s President Nicolas Maduro openly promoted this theory during a recent speech on Venezuelan national television…
“Did you know there’s an oil war? And the war has an objective: to destroy Russia,” he said in a speech to state businessmen carried live on state TV.
“It’s a strategically planned war … also aimed at Venezuela, to try and destroy our revolution and cause an economic collapse,” he added, accusing the United States of trying to flood the market with shale oil.
Venezuela and Russia, which both have fractious ties with Washington, are widely considered the nations hardest hit by the global oil price fall.
And as I discussed just the other day, Russian President Vladimir Putin seems to agree with this theory…
“We all see the lowering of oil prices. There’s lots of talk about what’s causing it. Could it be an agreement between the U.S. and Saudi Arabia to punish Iran and affect the economies of Russia and Venezuela? It could.”
Without a doubt, Obama wants to “punish” Russia for what has been going on in Ukraine. Going after oil is one of the best ways to do that. And if the U.S. shale industry gets hurt in the process, that is a bonus for the radical environmentalists in Obama’s administration.
There are yet others that see this oil war as being even more complicated.
Marin Katusa believes that this is actually a three-way war between OPEC, Russia and the United States…
“It’s a three-way oil war between OPEC, Russia and North American shale,” says Marin Katusa, author of “The Colder War,” and chief energy investment strategist at Casey Research.
Katusa doesn’t see production slowing in 2015: “We know that OPEC will not be cutting back production. They’re going to increase it. Russia has increased production to all-time highs.” With Russia and OPEC refusing to give up market share how will the shale industry compete?
Katusa thinks the longevity and staying power of the shale industry will keep it viable and profitable. “The versatility and the survivability of a lot of these shale producers will surprise people. I don’t see that the shale sector is going to collapse over night,” he says. Shale sweet spots like North Dakota’s Bakken region and Texas’ Eagle Ford area will help keep production levels up and output steady.
Whatever the true motivation for this oil war is, it does not appear that it is going to end any time soon.
And so that means that the price of oil is going to go lower.
How much lower?
One analyst recently told CNN that we could see the price of oil dip into the $30s next year…
Few saw the energy meltdown coming. Now that it’s here, industry analysts warn another move lower is possible as the momentum remains firmly to the downside.
“If this doesn’t hold, we could go back to price levels in late 2008 and early 2009 — down in the $30s. There’s no reason why it couldn’t happen,” said Darin Newsom, senior analyst at Telvent DTN.
Others are even more pessimistic. For instance, Jeremy Warner of the Sydney Morning Herald, who correctly predicted that the price of oil would fall below $80 this year, is now forecasting that the price of oil could fall all the way down to $20 next year…
Revisiting the past year’s predictions is, for most columnists a frequently humbling experience. The howlers tend to far outweigh the successes. Yet, for a change, I can genuinely claim to have got my main call for markets – that oil would sink to $US80 a barrel or less – spot on, and for the right reasons, too.
Just in case you think I’m making it up, this is what I said 12 months ago: “My big prediction is for $US80 oil, from which much of the rest of my outlook for the coming year flows. It’s hard to overstate the significance of a much lower oil price – Brent at, say, $US80 a barrel, or perhaps lower still – yet this is a surprisingly likely prospect, the implications of which have been largely missed by mainstream economic forecasters.”
If on to a good thing, you might as well stick with it; so for the coming year, I’m doubling up on this forecast. Far from bouncing back to the post crisis “normal” of something over $US100 a barrel, as many oil traders seem to expect, my view is that the oil price will remain low for a long time, sinking to perhaps as little as $US20 a barrel over the coming year before recovering a little.
But even Warner’s chilling prediction is not the most bearish.
A technical analyst named Abigail Doolittle recently told CNBC that under a worst case scenario the price of oil could fall as low as $14 a barrel…
No one really saw 2014’s dramatic plunge in oil price coming, so it’s probably fair to say that any predictions about where it’s going from here fall somewhere between educated guesses and picking a number out of a hat.
In that light, it’s less than shocking to see one analyst making a case—albeit in a pure outlier sense—for a drop all the way below $14 a barrel.
Abigail Doolittle, who does business under the name Peak Theories Research, posits that current chart trends point to the possibility that crude has three downside target areas where it could find support—$44, $35 and the nightmare scenario of, yes, $13.65.
But the truth is that none of those scenarios need to happen in order for this oil war to absolutely devastate the U.S. economy and the U.S. financial system.
There is a very strong correlation between the price of oil and the performance of energy stocks and energy bonds. But over the past couple of weeks this correlation has been broken. The following chart comes from Zero Hedge…
It is inevitable that at some point we will see energy stocks and energy bonds come back into line with the price of crude oil.
And it isn’t just energy stocks and bonds that we need to be concerned about. There is only one other time in all of history when the price of oil has crashed by more than 50 dollars in less than a year. That was in 2008 – just before the great financial crisis that erupted in the fall of that year. For much, much more on this, please see my previous article entitled “Guess What Happened The Last Time The Price Of Oil Crashed Like This?…”
Whether the price of oil crashed or not, we were already on the verge of massive financial troubles.
But the fact that the price of oil has collapsed makes all of our potential problems much, much worse.
As we enter 2015, keep an eye on energy stocks, energy bonds and listen for any mention of problems with derivatives. The next great financial crisis is right around the corner, but most people will never see it coming until they are blindsided by it.
In general, over the last several decades the world has experienced an unprecedented era of peace and prosperity. The opening up of relations with China and the “end of the Cold War” resulted in an extended period of cooperation between east and west that was truly unique in the annals of history. But now things are shifting. The civil war in Ukraine and the crash of MH17 have created an enormous amount of tension between the United States and Russia, and many analysts believe that relations between the two superpowers are now even worse than they were during the end of the Cold War era. In addition, the indictment of five PLA officers for cyber espionage and sharp disagreements over China’s territorial claims in the South China Sea (among other issues) have caused U.S. relations with China to dip to their lowest point since at least 1989. So could the emerging division between the east and the west ultimately plunge us into a period of global chaos? And what would that mean for the world economy?
For as long as most Americans can remember, the U.S. dollar and the U.S. financial system have been overwhelmingly dominant. But now the powers of the east appear to be determined to break this monopoly. Four of the BRICS nations (China, Russia, India and Brazil) are on the list of the top ten biggest economies on the planet, and they are starting to make moves to become much less dependent on the U.S.-centered financial system of the western world. For example, just last week the BRICS nations established two new institutions which are intended to be alternatives to the World Bank and the IMF…
So in their summit, from July 14 to 16, the five BRICS announced two major initiatives aimed squarely at increasing their power in global finance. They announced the launch of the New Development Bank, headquartered in Shanghai, that will offer financing for development projects in the emerging world. The bank will act as an alternative to the Washington, D.C.—based World Bank. The BRICS also formed what they’re calling a Contingent Reserve Arrangement, a series of currency agreements which can be utilized to help them smooth over financial imbalances with the rest of the world. That’s something the IMF does now.
Clearly, the idea is to create institutions and processes to supplement — and perhaps eventually supplant — the functions of those managed by U.S. and Europe. And they would be resources that they could control on their own, without the annoying conditions that the World Bank and the IMF always slap on their loans and assistance.
This comes at a time when both China and Russia are seeking to emphasize their own currencies and move away from using the U.S. dollar so much.
Even in the western media, it is being admitted that China’s yuan is “a growing force in global finance“, and according to CNBC the use of Chinese currency in international trade is growing very rapidly…
Of the German companies profiled, 23 percent are using the renminbi to settle trades, up from 9 percent last year, while usage in Hong Kong rose to 58 percent from 50 percent and to 17 percent from 9 percent in the U.S.
Usage of the renminbi among French companies – a new addition to this year’s list – was high at 26 percent.
And of course Russia has been actively pursuing a “de-dollarization strategy” for months now. Each new round of economic sanctions pushes Russia even further in the direction of independence from the U.S. dollar, and Gazprom has been working hard to get large customers to switch from paying for natural gas in dollars to paying for natural gas in euros and other currencies. For much more on this, please see my previous article entitled “Russia Is Doing It – Russia Is Actually Abandoning The Dollar“.
At this point, it seems clear that Russia plans to permanently decouple from the U.S. economy and the U.S. financial system. Just today we learned that Vladimir Putin plans to make Russia less dependent on U.S. companies such as IBM and Microsoft, and any future rounds of sanctions are likely to cause even more damage to U.S. firms that do business in Russia.
But potentially much more troubling for the U.S. economy is the startling deterioration in the relationship between the Obama administration and China. Some analysts are even describing this as “a tipping point”…
One day, the United States indicts five PLA officers for cybercrimes; the next, the United States claims victory in WTO disputes over car tariffs and rare earth minerals. All this is happening while the United States promises enduring support for Asian allies, and it has moved openly to challenge the legitimacy of Chinese territorial claims in the South China Sea. Meanwhile, China is busy creating facts on the ground and water. Last month, a $1 billion Chinese oil rig set up operations in territorial waters claimed by Vietnam. In the East China Sea, Chinese SU-27 fighter jets have come within 100 feet of Japanese surveillance aircraft.
This was all capped at the recent Shangri-La Asian Security dialogue in Singapore (Asia’s annual defense-ministers meeting): Defense Secretary Chuck Hagel bluntly described China’s behavior as “destabilizing, unilateral actions.” The PLA deputy chief of staff, Lt. Gen. Wang Guanzhong, accused the United States of “hegemonism.”
The mood has soured, more than the usual ups and downs of big-power relationships. The question now is not whether a “new type of relationship” is in the offing, but rather, whether U.S.-Chinese relations have reached a tipping point.
Most Americans could not care less about what China is doing in the South China Sea, but to the Chinese this is a very, very big deal. In fact, China just sent a surveillance vessel to Hawaii as a bit of payback for what they regard as U.S. “provocations” in the region.
In the old days, China would have probably never have done such a thing. But China is gaining confidence as the gap between the U.S. military and the Chinese military rapidly closes…
Away from the Chinese military’s expanding capabilities in cyberspace and electronic warfare, Beijing is growing the size and reach of its naval fleet, advancing its air force and testing a host of new missiles, the Pentagon said Thursday.
An annual report to Congress on China’s evolving military capability concluded that the modernization was being driven in part by growing territorial disputes in the East and South China seas, as well as by Beijing’s desire to expand its presence and influence abroad.
In fact, the Chinese military has grown so powerful that we are now seeing headlines such as this one in The Week: “China thinks it can defeat America in battle”.
And the Russian military has made tremendous strides as well. Putin has been working hard to modernize the Russian nuclear arsenal, the Russians now have a “fifth generation” fighter jet that is supposedly far superior to the F-22 Raptor, and they have nuclear submarines that are so incredibly quiet that the U.S. Navy refers to them as “black holes“.
If Russia and China stay united, they are more than capable of providing a counterbalance to U.S. power around the globe.
But even if military conflict is not in our immediate future, the breakdown in relations between east and west could still have a dramatic impact on the global economy.
Over the years, the U.S. and China have developed a highly symbiotic relationship that fuels a tremendous amount of economic activity all over the planet. Each year, we buy hundreds of billions of dollars of products from the Chinese. Just imagine what our stores would look like if we took everything that was “made in China” out of them. And after we send them giant piles of our money, we beg the Chinese to lend it back to us at ultra-low interest rates. This arrangement has allowed China to become extremely wealthy and it has allowed Americans to enjoy a massively inflated standard of living fueled by ever increasing amounts of debt.
So what happens if this relationship starts breaking down?
Without a doubt, it could potentially lead to global chaos.
So keep a close eye on this emerging division between the east and the west. It could end up being far more important than most Americans would ever dare to imagine.
Is Detroit destined to become a Chinese city? Chinese homebuyers and Chinese businesses are starting to flood into the Motor City, and the governor of Michigan is greatly encouraging this. In fact, he has formally asked the Obama administration for 50,000 special federal immigration visas to encourage even more immigration from China and elsewhere. So will Detroit be the first major city in the United States to be dominated by China? It could happen. Once upon a time, Detroit was the greatest manufacturing city in the history of the world and it had the highest per capita income in the entire country. But now it is a rotting, decaying, bankrupt hellhole that is in desperate need of a savior, and Michigan Governor Rick Snyder appears to be fully convinced that China can be that savior.
To Snyder, encouraging foreigners to invest money and buy up properties won’t cost the state government much, but it could potentially have great benefits…
Under a plan to be unveiled Thursday, Gov. Rick Snyder will request 50,000 special federal immigration visas over the next five years to attract foreign professionals who are willing to work and live in the city.
Mr. Snyder, in an interview Wednesday, said that “this is one way for the federal government to step up to provide significant value without cost that could have a huge impact on the city’s future.”
At a news conference announcing his plan, Snyder was not shy about declaring his intentions…
“Let’s send a message to the entire world: Detroit, Michigan, is open to the world.“
In other words, Snyder wants China to save Detroit since nobody in this country is going to.
Snyder has also taken a couple of additional steps to encourage immigration and foreign investment, including opening up something called “an Office for New Americans”…
Opening an Office for New Americans to attract and help immigrants better adjust to life in Michigan, and designating the state as an Employer Based or EB-5 center to expedite visas and permits for immigrants who want to open business in the state with investments of at least $500,000 and 10 employees.
In essence, Snyder has done just about everything except roll out the welcome mat for the Chinese.
But this is nothing new for Governor Snyder. In fact, he has been making overtures to China for years…
Snyder, who was a businessman before starting his political career, believes that automobiles can no longer change the fate of Detroit. He said that he has learned from the history of the United States that what has made the nation great is immigrants.
In the early 1990s, Snyder went to China to develop the automobile market. After he was elected as the governor of Michigan, he made at least one trip to China every year, with the aim of recruiting talent.
He hopes that well-educated Chinese people can revitalize the Motor City in the new era. And as he desired, after Detroit announced its bankruptcy in 2013, the Chinese began to take the dying city by storm.
Rich Chinese men see Detroit as a rare opportunity for investment outside their home country.
In 2013, without any field investigation, Dongdu International Group of Shanghai — whose assets total 5 billion yuan (US$800 million) — spent US$13.6 million to buy the David Stott building and the Detroit Free Press building at auctions in September.
And when we talk about the Chinese domination of Detroit, this is not something that is just future tense. This is something that is already happening right now. For example, the following is an excerpt from a CNBC article that discussed how Chinese companies are already aggressively “putting down roots in Detroit”…
Dozens of companies from China are putting down roots in Detroit, part of the country’s steady push into the American auto industry.
Chinese-owned companies are investing in American businesses and new vehicle technology, selling everything from seat belts to shock absorbers in retail stores, and hiring experienced engineers and designers in an effort to soak up the talent and expertise of domestic automakers and their suppliers.
The transformation that has taken place in that region of the country is absolutely remarkable.
48 percent of the manufacturing jobs in the state of Michigan were lost between December 2000 and December 2010. Our trade deficit with China was largely responsible for that.
And now we are relying on China to come in and salvage the ruins of our gutted economic infrastructure.
Not only that, but the Chinese are also eagerly buying up homes at extremely depressed prices all over Detroit.
According to CNN, Detroit is already number four on the list of the top 10 destinations for Chinese homebuyers. In many cases, Chinese buyers are scooping up properties without even looking at them first. Just check out what one Detroit real estate broker told Quartz last July…
“I have people calling and saying, ‘I’m serious—I wanna buy 100, 200 properties,’” she tells Quartz, noting that one of her colleagues recently sold 30 properties to a Chinese buyer. “They say ‘We don’t need to see them. Just pick the good ones.’”
And they aren’t just interested in Detroit. As I have written about previously, one Chinese company known as “Sino-Michigan Properties LLC” actually had plans to buy 200 acres of land near the little town of Milan, Michigan and turn it into a “China City” with artificial lakes, a Chinese cultural center and hundreds of housing units for Chinese citizens. For much more on how Chinese buyers are gobbling up real estate all over the nation, please see my previous article entitled “The Chinese Are Acquiring Large Chunks Of Land In Communities All Over America“.
All of this is just another indication of how rapidly the global economic landscape is changing.
Since the late 19th Century, the United States has been the most dominant economic power in the world.
But now that reign is ending.
Just recently, a new study released by the World Bank indicated that China is now the largest economy in the world in terms of purchasing power…
A report out of the World Bank shows rapidly expanding China is poised to overtake the once invincible United States as the world’s largest economy by the end of 2014.
The International Comparison Program looks at exchange rates to reveal purchasing power of different currencies and found that yuan in China will soon pack more punch than the mighty dollar.
Meanwhile, Chinese officials bashed the report as flawed, likely for fear of losing its status as a developing nation and the pollution-spewing perks that come with it.
And a couple of years ago China passed the United States and become the leader in global trade.
As the Chinese economy continues to rise and the U.S. economy continues to decline, the shift in global power is going to become even more dramatic.
Yes, let us hope for the best for our failing economy, but you also might want to teach your kids to speak Chinese just in case.
What the people of Ukraine are being put through is absolutely horrible. They are caught in the middle of a massive tug of war between the East and the West, and they are paying a great price for it. Ultimately, Ukraine will end up either being dominated by Russia (a bad outcome) or by the EU and the United States (another bad outcome). Most Ukrainians just want to be free and want to be able to build a better future for themselves and their families, but it is extremely unlikely that they will be able to escape the specter of foreign domination. Meanwhile, the violence in Ukraine is planting the seeds for a potentially much larger conflict down the road. The days of “friendly relations” between the United States and Russia are now gone. Russia is absolutely furious that the U.S. has fueled a violent revolution on its own border, and it is something that Russian officials will not forget for a very long time. In return, U.S. officials are taking an increasingly harsh stance toward Russia. In the end, the seeds that are being planted right now could ultimately blossom into a full-blown conflict between the superpowers in the years to come.
Let there be no mistake – the United States is heavily involved in what is going on in Ukraine. Even the New York Times admits this. And the U.S. Ambassador to Ukraine and the Assistant Secretary of State have been caught on tape discussing their next moves in getting a new government installed in Ukraine.
In addition, a number of non-governmental organizations inside the United States have allegedly been assisting and organizing the revolution in Ukraine for a long time. At least a few of these organizations have ties to George Soros. This is something that I discussed in a previous article.
Some of the “progressive” NGOs that have been accused of fueling the violent revolution in Ukraine include the National Endowment for Democracy, Freedom House, and the Open Society Foundations (formerly known as the Open Society Institute).
Please don’t misunderstand me. I am not taking sides. I am just pointing out that both sides in Ukraine are controlled. If I was living in Ukraine, I would want both Russia and the United States to go away and leave Ukraine alone.
Instead, Ukraine is being used as a battleground to fight a proxy war between the East and the West. Now that the opposition has gained the upper hand, it does not appear that Russian officials are in any mood to recognize the new “government”…
Prime Minister Dmitry Medvedev on Monday said Russia had grave doubts about the legitimacy of those in power in Ukraine following President Viktor Yanukovich’s ouster, saying their recognition by some states was an “aberration”.
Medvedev also stated that he has “big doubts about the legitimacy of a whole series of organs of power that are now functioning there.”
Last Friday, an agreement was signed by the two sides in Ukraine that was supposed to bring about a peaceful resolution to all of this. But the revolutionaries reneged on the deal and toppled the government instead. Needless to say, Russia was quite horrified by this…
The Russian Foreign Ministry criticized the West for turning a blind eye to what Moscow described as the opposition reneging on its agreement signed Friday to form a unity government and aiming to “suppress dissent in various regions of Ukraine with dictatorial and, sometimes, even terrorist methods.”
So what does Russia plan to do?
That is the big question that everyone is asking.
They are not doing much of anything just yet. But there have been rumors that we could potentially see some economic blowback…
Russia and the Customs Union could temporarily limit increased-risk food imports from Ukraine, given fears of loose safety control, said Sergei Dankvert, head of the Russian veterinary and phytosanitary oversight service Rosselkhoznadzor.
“My Belarusian colleague and I are extremely concerned about the situation in Ukraine. We do not rule out that curbs could be introduced on the imports of products of high veterinary and phytosanitary risks from Ukraine,” Dankvert told Interfax after talks with his Belarusian counterpart Yury Pivovarchik in Bryansk, and telephone talks with Ukraine’s Deputy Agrarian Policy Minister Ivan Bisyuk.
Of course what the U.S. government is most concerned about is any military action that Russia might take.
National Security Adviser Susan Rice says that what has happened in Ukraine reflects “the will of the Ukrainian people and the interests of the United States and Europe” and that it would be a “grave mistake” for Russia to get militarily involved.
But whatever happens over the next few days, nobody should think that the Russians are simply going to abandon their interests in Ukraine. Russia has a very important military base down in the Crimea, and the eastern half of the country is very pro-Russian.
So the struggle between East and West in Ukraine is likely to continue for quite some time to come. The following is an excerpt from a recent WND article…
The issue with Ukraine is whether it will join the E.U. or Putin’s Eurasian Union. The country is roughly divided on this issue between eastern and western Ukraine. The eastern portion wants to remain with Russia while the western side wants to move closer with the West.
In southern Ukraine, where the Crimea is located, Russian influence remains strong.
Because demonstrators who want to see Ukraine lean westward have become emboldened with their immediate success of ousting Yanukovich, it could make it more difficult for them to come to terms with any settlement agreement to reunify the country.
Moscow has a large naval military facility in Sevastopol in the Crimea and recently received a 25-year lease extension to 2042, with another five-year renewal option until 2047. In exchange, Ukraine received a multiyear discounted contract for much-needed natural gas.
And the pro-Russian eastern half of the country is actually the stronger of the two halves economically. So this will likely complicate matters for the EU and the U.S. as they try to bring Ukraine into their sphere of influence…
Seven of Ukraine’s 10 largest private companies by revenue are either headquartered or maintain the majority of their operations in eastern Ukraine. These firms are owned by some of Ukraine’s wealthiest and most influential individuals. Three of these 10 corporations — mining and steel company Metinvest, energy firm DTEK and its subsidiary Donetskstal — are based in the eastern industrial city of Donetsk and are owned by Ukraine’s wealthiest man, Rinat Akhmetov. Interpipe, the company that controls 10 percent of the world market share of railway wheels and more than 11 percent of the world market share of manganese ferroalloys, is based in Dnipropetrovsk and belongs to businessman and politician Victor Pinchuk.
The country’s most important businessmen are embedded in the east, where their businesses make disproportionately high contributions to the Ukrainian economy and national budget.
In the end, this proxy war between the East and the West has left Ukraine with a collapsed economy and on the brink of civil war.
And what has happened in Ukraine has caused permanent damage in the relationship between the United States and Russia.
It won’t happen this month or even this year, but someday the U.S. may end up bitterly regretting antagonizing the Russian Bear.
At least that is what I think.
So what do you think?
Please feel free to share your thoughts by posting a comment below…
Americans have never had less economic freedom than they do right now. The 2014 Index of Economic Freedom has just been released, and it turns out that the level of economic freedom in the United States has now fallen for seven consecutive years. But of course none of us need a report or a survey to tell us that. All we have to do is open our eyes and look around. At this point our entire society is completely dominated by control freaks and bureaucrats. Our economy is literally being suffocated to death by millions of laws, rules and regulations and each year brings a fresh tsunami of red tape. As you will see below, the U.S. government issued more than 80,000 pages of brand new rules and regulations last year on top of what we already had. Even if we didn’t have all of the other monumental economic problems that we are currently facing, all of this bureaucracy alone would be enough to kill our economy.
Yes, every society needs a few basic rules. We would have total chaos if we did not have any laws at all. But in general, when there is more economic freedom there tends to be more economic prosperity. In fact, the greatest period of economic growth in U.S. history was during a time when the federal government was much smaller, there was no Federal Reserve and there was no income tax. Most Americans do not know this.
Those that founded this nation intended for it to be a place where freedom was maximized and government intrusion into our lives was minimized.
If they were still alive today, they would be absolutely horrified. We are literally drowning in red tape.
The photo posted below was shared by U.S. Senator Mike Lee on his Facebook page. Study it carefully…
The following is what he had to say about this photo…
“Behold my display of the 2013 Federal Register. It contains over 80,000 pages of new rules, regulations, and notices all written and passed by unelected bureaucrats. The small stack of papers on top of the display are the laws passed by elected members of Congress and signed into law by the president.”
I didn’t even see the small stack of paper at the top of the cabinet until I read his explanation. Most of the time everyone is so focused on what Congress is doing, but the truth is that the real oppression is happening behind the scenes as unelected federal bureaucrats pump out millions upon millions of useless regulations that are systematically killing our economic freedom.
On Tuesday, an article about the 2014 Index of Economic Freedom was published by the Wall Street Journal. As I mentioned above, the United States has fallen for seven years in a row…
World economic freedom has reached record levels, according to the 2014 Index of Economic Freedom, released Tuesday by the Heritage Foundation and The Wall Street Journal. But after seven straight years of decline, the U.S. has dropped out of the top 10 most economically free countries.
That same article mentioned some of the reasons why the United States is falling…
It’s not hard to see why the U.S. is losing ground. Even marginal tax rates exceeding 43% cannot finance runaway government spending, which has caused the national debt to skyrocket. The Obama administration continues to shackle entire sectors of the economy with regulation, including health care, finance and energy. The intervention impedes both personal freedom and national prosperity.
And of course the results are predictable. Our economy has been steadily declining for many years, and that decline appears to be ready to start picking up speed once again. The following is an excerpt from a recent article by Dave in Denver…
In the latest retail sales report for December, auto sales were nailed – down 1.8%. The only reason overall retail sales from November to December showed a slight “gain” that November’s number was revised lower. Electronics fell off of a cliff. The housing market is about to get crushed. Feedback I’m getting from my Seeking Alpha articles and blog posts on housing from housing market professionals all around the country tells me that the housing market hit a wall at the end of 2013, as I have been forecasting.
What he said about the housing market is definitely true. In recent months, mortgage originations have been falling like a rock. Just check out this chart.
And as I wrote about the other day, there has been absolutely no employment recovery since the end of the last recession. In fact, 1,687,000 fewer Americans have jobs today compared to exactly six years ago even though the population has grown significantly since then.
Unfortunately, these are not just “cyclical problems”. Long ago we abandoned the fundamental principles that once made our economy great, and now we are paying a tremendous price for that.
Posted below is a story that has been circulating all over the Internet for quite some time. It is a fake story. Once again, let me repeat that. This is a fake story. But I think that it does a great job of illustrating what is happening to America as we march toward full-fledged socialism…
An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama’s socialism worked and that no one would be poor and no one would be rich, a great equalizer.
The professor then said, “OK, we will have an experiment in this class on Obama’s plan”.. All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A…. (substituting grades for dollars – something closer to home and more readily understood by all).
After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.
The second test average was a D! No one was happy. When the 3rd test rolled around, the average was an F. As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.
To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed. Could not be any simpler than that.
But of course it would be disingenuous to pin all of the blame for this just on Obama. The truth is that our nation has continued to march toward socialism no matter who has been in the White House and no matter who has been in control of Congress. So if you want to place some of the blame on a “Bush” or a “Clinton” or a “Boehner” or a “Pelosi” please feel free.
And the American people are getting sick and tired of this one party system that has two heads. According to a recent Gallup survey, only 29 percent of all Americans consider themselves to be Democrats right now. And the news was even worse for Republicans. According to that survey, only 24 percent of all Americans consider themselves to be Republicans at this point.
A staggering 45 percent of all Americans now consider themselves to be Independents. Deep down, most Americans know that something is seriously wrong with our nation and that they are being lied to be our politicians and the mainstream media.
Unfortunately, there is very little agreement about how to fix things because Americans do not have a set of shared values that we all agree on anymore.
So what do you think? Do you believe that you know how to fix things? If so, please feel free to share your plan by posting a comment below…
Why has the little nation of Qatar spent 3 billion dollars to support the rebels in Syria? Could it be because Qatar is the largest exporter of liquid natural gas in the world and Assad won’t let them build a natural gas pipeline through Syria? Of course. Qatar wants to install a puppet regime in Syria that will allow them to build a pipeline which will enable them to sell lots and lots of natural gas to Europe. Why is Saudi Arabia spending huge amounts of money to help the rebels and why has Saudi Prince Bandar bin Sultan been “jetting from covert command centers near the Syrian front lines to the Élysée Palace in Paris and the Kremlin in Moscow, seeking to undermine the Assad regime”? Well, it turns out that Saudi Arabia intends to install their own puppet government in Syria which will allow the Saudis to control the flow of energy through the region. On the other side, Russia very much prefers the Assad regime for a whole bunch of reasons. One of those reasons is that Assad is helping to block the flow of natural gas out of the Persian Gulf into Europe, thus ensuring higher profits for Gazprom. Now the United States is getting directly involved in the conflict. If the U.S. is successful in getting rid of the Assad regime, it will be good for either the Saudis or Qatar (and possibly for both), and it will be really bad for Russia. This is a strategic geopolitical conflict about natural resources, religion and money, and it really has nothing to do with chemical weapons at all.
It has been common knowledge that Qatar has desperately wanted to construct a natural gas pipeline that will enable it to get natural gas to Europe for a very long time. The following is an excerpt from an article from 2009…
Qatar has proposed a gas pipeline from the Gulf to Turkey in a sign the emirate is considering a further expansion of exports from the world’s biggest gasfield after it finishes an ambitious programme to more than double its capacity to produce liquefied natural gas (LNG).
“We are eager to have a gas pipeline from Qatar to Turkey,” Sheikh Hamad bin Khalifa Al Thani, the ruler of Qatar, said last week, following talks with the Turkish president Abdullah Gul and the prime minister Recep Tayyip Erdogan in the western Turkish resort town of Bodrum. “We discussed this matter in the framework of co-operation in the field of energy. In this regard, a working group will be set up that will come up with concrete results in the shortest possible time,” he said, according to Turkey’s Anatolia news agency.
Other reports in the Turkish press said the two states were exploring the possibility of Qatar supplying gas to the strategic Nabucco pipeline project, which would transport Central Asian and Middle Eastern gas to Europe, bypassing Russia. A Qatar-to-Turkey pipeline might hook up with Nabucco at its proposed starting point in eastern Turkey. Last month, Mr Erdogan and the prime ministers of four European countries signed a transit agreement for Nabucco, clearing the way for a final investment decision next year on the EU-backed project to reduce European dependence on Russian gas.
“For this aim, I think a gas pipeline between Turkey and Qatar would solve the issue once and for all,” Mr Erdogan added, according to reports in several newspapers. The reports said two different routes for such a pipeline were possible. One would lead from Qatar through Saudi Arabia, Kuwait and Iraq to Turkey. The other would go through Saudi Arabia, Jordan, Syria and on to Turkey. It was not clear whether the second option would be connected to the Pan-Arab pipeline, carrying Egyptian gas through Jordan to Syria. That pipeline, which is due to be extended to Turkey, has also been proposed as a source of gas for Nabucco.
Based on production from the massive North Field in the Gulf, Qatar has established a commanding position as the world’s leading LNG exporter. It is consolidating that through a construction programme aimed at increasing its annual LNG production capacity to 77 million tonnes by the end of next year, from 31 million tonnes last year. However, in 2005, the emirate placed a moratorium on plans for further development of the North Field in order to conduct a reservoir study.
As you just read, there were two proposed routes for the pipeline. Unfortunately for Qatar, Saudi Arabia said no to the first route and Syria said no to the second route. The following is from an absolutely outstanding article in the Guardian…
In 2009 – the same year former French foreign minister Dumas alleges the British began planning operations in Syria – Assad refused to sign a proposed agreement with Qatar that would run a pipeline from the latter’s North field, contiguous with Iran’s South Pars field, through Saudi Arabia, Jordan, Syria and on to Turkey, with a view to supply European markets – albeit crucially bypassing Russia. Assad’s rationale was “to protect the interests of [his] Russian ally, which is Europe’s top supplier of natural gas.”
Instead, the following year, Assad pursued negotiations for an alternative $10 billion pipeline plan with Iran, across Iraq to Syria, that would also potentially allow Iran to supply gas to Europe from its South Pars field shared with Qatar. The Memorandum of Understanding (MoU) for the project was signed in July 2012 – just as Syria’s civil war was spreading to Damascus and Aleppo – and earlier this year Iraq signed a framework agreement for construction of the gas pipelines.
The Iran-Iraq-Syria pipeline plan was a “direct slap in the face” to Qatar’s plans. No wonder Saudi Prince Bandar bin Sultan, in a failed attempt to bribe Russia to switch sides, told President Vladmir Putin that “whatever regime comes after” Assad, it will be “completely” in Saudi Arabia’s hands and will “not sign any agreement allowing any Gulf country to transport its gas across Syria to Europe and compete with Russian gas exports”, according to diplomatic sources. When Putin refused, the Prince vowed military action.
If Qatar is able to get natural gas flowing into Europe, that will be a significant blow to Russia. So the conflict in Syria is actually much more about a pipeline than it is about the future of the Syrian people. In a recent article, Paul McGuire summarized things quite nicely…
The Nabucco Agreement was signed by a handful of European nations and Turkey back in 2009. It was an agreement to run a natural gas pipeline across Turkey into Austria, bypassing Russia again with Qatar in the mix as a supplier to a feeder pipeline via the proposed Arab pipeline from Libya to Egypt to Nabucco (is the picture getting clearer?). The problem with all of this is that a Russian backed Syria stands in the way.
Qatar would love to sell its LNG to the EU and the hot Mediterranean markets. The problem for Qatar in achieving this is Saudi Arabia. The Saudis have already said “NO” to an overland pipe cutting across the Land of Saud. The only solution for Qatar if it wants to sell its oil is to cut a deal with the U.S.
Recently Exxon Mobile and Qatar Petroleum International have made a $10 Billion deal that allows Exxon Mobile to sell natural gas through a port in Texas to the UK and Mediterranean markets. Qatar stands to make a lot of money and the only thing standing in the way of their aspirations is Syria.
The US plays into this in that it has vast wells of natural gas, in fact the largest known supply in the world. There is a reason why natural gas prices have been suppressed for so long in the US. This is to set the stage for US involvement in the Natural Gas market in Europe while smashing the monopoly that the Russians have enjoyed for so long. What appears to be a conflict with Syria is really a conflict between the U.S. and Russia!
The main cities of turmoil and conflict in Syria right now are Damascus, Homs, and Aleppo. These are the same cities that the proposed gas pipelines happen to run through. Qatar is the biggest financier of the Syrian uprising, having spent over $3 billion so far on the conflict. The other side of the story is Saudi Arabia, which finances anti-Assad groups in Syria. The Saudis do not want to be marginalized by Qatar; thus they too want to topple Assad and implant their own puppet government, one that would sign off on a pipeline deal and charge Qatar for running their pipes through to Nabucco.
Yes, I know that this is all very complicated.
But no matter how you slice it, there is absolutely no reason for the United States to be getting involved in this conflict.
If the U.S. does get involved, we will actually be helping al-Qaeda terrorists that behead mothers and their infants…
Al-Qaeda linked terrorists in Syria have beheaded all 24 Syrian passengers traveling from Tartus to Ras al-Ain in northeast of Syria, among them a mother and a 40-days old infant.
Gunmen from the terrorist Islamic State of Iraq and Levant stopped the bus on the road in Talkalakh and killed everyone before setting the bus on fire.
Is this really who we want to be “allied” with?
And of course once we strike Syria, the war could escalate into a full-blown conflict very easily.
If you believe that the Obama administration would never send U.S. troops into Syria, you are just being naive. In fact, according to Jack Goldsmith, a professor at Harvard Law School, the proposed authorization to use military force that has been sent to Congress would leave the door wide open for American “boots on the ground”…
The proposed AUMF focuses on Syrian WMD but is otherwise very broad. It authorizes the President to use any element of the U.S. Armed Forces and any method of force. It does not contain specific limits on targets – either in terms of the identity of the targets (e.g. the Syrian government, Syrian rebels, Hezbollah, Iran) or the geography of the targets. Its main limit comes on the purposes for which force can be used. Four points are worth making about these purposes. First, the proposed AUMF authorizes the President to use force “in connection with” the use of WMD in the Syrian civil war. (It does not limit the President’s use force to the territory of Syria, but rather says that the use of force must have a connection to the use of WMD in the Syrian conflict. Activities outside Syria can and certainly do have a connection to the use of WMD in the Syrian civil war.). Second, the use of force must be designed to “prevent or deter the use or proliferation” of WMDs “within, to or from Syria” or (broader yet) to “protect the United States and its allies and partners against the threat posed by such weapons.” Third, the proposed AUMF gives the President final interpretive authority to determine when these criteria are satisfied (“as he determines to be necessary and appropriate”). Fourth, the proposed AUMF contemplates no procedural restrictions on the President’s powers (such as a time limit).
I think this AUMF has much broader implications than Ilya Somin described. Some questions for Congress to ponder:
(1) Does the proposed AUMF authorize the President to take sides in the Syrian Civil War, or to attack Syrian rebels associated with al Qaeda, or to remove Assad from power? Yes, as long as the President determines that any of these entities has a (mere) connection to the use of WMD in the Syrian civil war, and that the use of force against one of them would prevent or deter the use or proliferation of WMD within, or to and from, Syria, or protect the U.S. or its allies (e.g. Israel) against the (mere) threat posed by those weapons. It is very easy to imagine the President making such determinations with regard to Assad or one or more of the rebel groups.
(2) Does the proposed AUMF authorize the President to use force against Iran or Hezbollah, in Iran or Lebanon? Again, yes, as long as the President determines that Iran or Hezbollah has a (mere) a connection to the use of WMD in the Syrian civil war, and the use of force against Iran or Hezbollah would prevent or deter the use or proliferation of WMD within, or to and from, Syria, or protect the U.S. or its allies (e.g. Israel) against the (mere) threat posed by those weapons.
Would you like to send your own son or your own daughter to fight in Syria just so that a natural gas pipeline can be built?
What the United States should be doing in this situation is so obvious that even the five-year-old grandson of Nancy Pelosi can figure it out…
I’ll tell you this story and then I really do have to go. My five-year-old grandson, as I was leaving San Francisco yesterday, he said to me, Mimi, my name, Mimi, war with Syria, are you yes war with Syria, no, war with Syria. And he’s five years old. We’re not talking about war; we’re talking about action. Yes war with Syria, no with war in Syria. I said, ‘Well, what do you think?’ He said, ‘I think no war.’
Unfortunately, his grandmother and most of our other insane “leaders” in Washington D.C. seem absolutely determined to take us to war.
In the end, how much American blood will be spilled over a stupid natural gas pipeline?
What is America going to look like when the middle class is dead? Once upon a time, the United States has the largest and most vibrant middle class in the history of the world. When I was growing up, it seemed like almost everyone was “middle class” and it was very rare to hear of someone that was out of work. Of course life wasn’t perfect, but most families owned a home, most families had more than one vehicle, and most families could afford nice vacations and save for retirement at the same time. Sadly, things have dramatically changed in America since that time. There just aren’t as many “middle class jobs” as there used to be. In fact, just six years ago there were about six million more full-time jobs in our economy than there are right now. Those jobs are being replaced by part-time jobs and temp jobs. The number one employer in America today is Wal-Mart and the number two employer in America today is a temp agency (Kelly Services). But you can’t support a family on those kinds of jobs. We live at a time when incomes are going down but the cost of living just keeps going up. As a result, the middle class in America is being absolutely shredded and the ranks of the poor are steadily growing. The following are 44 facts about the death of the middle class that every American should know…
1. According to one recent survey, “four out of five U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives”.
2. The growth rate of real disposable personal income is the lowest that it has been in decades.
3. Median household income (adjusted for inflation) has fallen by 7.8 percent since the year 2000.
4. According to the U.S. Census Bureau, the middle class is taking home a smaller share of the overall income pie than has ever been recorded before.
5. The home ownership rate in the United States is the lowest that it has been in 18 years.
6. It is more expensive to rent a home in America than ever before. In fact, median asking rent for vacant rental units just hit a brand new all-time record high.
7. According to one recent survey, 76 percent of all Americans are living paycheck to paycheck.
8. The U.S. economy actually lost 240,000 full-time jobs last month, and the number of full-time workers in the United States is now about 6 million below the old record that was set back in 2007.
9. The largest employer in the United States right now is Wal-Mart. The second largest employer in the United States right now is a temp agency (Kelly Services).
10. One out of every ten jobs in the United States is now filled through a temp agency.
11. According to the Social Security Administration, 40 percent of all workers in the United States make less than $20,000 a year.
12. The ratio of wages and salaries to GDP is near an all-time record low.
13. The U.S. economy continues to trade good paying jobs for low paying jobs. 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.
14. Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.
15. At this point, one out of every four American workers has a job that pays $10 an hour or less.
16. According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 declined by 27 percent after you account for inflation.
17. In the year 2000, about 17 million Americans were employed in manufacturing. Today, only about 12 million Americans are employed in manufacturing.
18. The United States has lost more than 56,000 manufacturing facilities since 2001.
19. The average number of hours worked per employed person per year has fallen by about 100 since the year 2000.
20. Back in the year 2000, more than 64 percent of all working age Americans had a job. Today, only 58.7 percent of all working age Americans have a job.
21. When you total up all working age Americans that do not have a job, it comes to more than 100 million.
22. The average duration of unemployment in the United States is nearly three times as long as it was back in the year 2000.
23. The percentage of Americans that are self-employed has steadily declined over the past decade and is now at an all-time low.
24. Right now there are 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.
25. In 1989, the debt to income ratio of the average American family was about 58 percent. Today it is up to 154 percent.
26. Total U.S. household debt grew from just 1.4 trillion dollars in 1980 to a whopping 13.7 trillion dollars in 2007. This played a huge role in the financial crisis of 2008, and the problem still has not been solved.
27. The total amount of student loan debt in the United States recently surpassed the one trillion dollar mark.
28. Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.
29. Back in the year 2000, the mortgage delinquency rate was about 2 percent. Today, it is nearly 10 percent.
30. Consumer debt in the United States has risen by a whopping 1700% since 1971, and 46% of all Americans carry a credit card balance from month to month.
31. 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.
32. One study discovered that approximately 41 percent of all working age Americans either have medical bill problems or are currently paying off medical debt, and according to a report published in The American Journal of Medicine medical bills are a major factor in more than 60 percent of all personal bankruptcies in the United States.
33. Each year, the average American must work 107 days just to make enough money to pay local, state and federal taxes.
34. Today, approximately 46.2 million Americans are living in poverty.
35. The number of Americans living in poverty has increased by more than 15 million since the year 2000.
36. Families that have a head of household under the age of 30 have a poverty rate of 37 percent.
37. At this point, approximately 25 million American adults are living with their parents.
38. In the year 2000, there were only 17 million Americans on food stamps. Today, there are more than 47 million Americans on food stamps.
39. Back in the 1970s, about one out of every 50 Americans was on food stamps. Today, about one out of every 6.5 Americans is on food stamps.
40. Right now, the number of Americans on food stamps exceeds the entire population of the nation of Spain.
41. According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”
42. At this point, 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. That number has risen by 57 percent since the 2006-2007 school year.
43. According to U.S. Census data, 57 percent of all American children live in a home that is either considered to be “poor” or “low income”.
44. In the year 2000, the ratio of social welfare benefits to salaries and wages was approximately 21 percent. Today, the ratio of social welfare benefits to salaries and wages is approximately 35 percent.
And not only is the middle class being systematically destroyed right now, we are also destroying the bright economic future that our children and our grandchildren were supposed to have by accumulating gigantic mountains of debt in their names. The following is from a recent article by Bill Bonner…
Today, the U.S. lumbers into the future with total debt equal to about 350% of GDP. In Britain and Japan, the total is over 500%. Debt, remember, is the homage that the future pays to the past. It has to be carried, serviced… and paid. It has to be reckoned with… one way or another.
And the cost of carrying debt is going up! Over the last few weeks, interest rates have moved up by about 15% — an astounding increase for the sluggish debt market. How long will it be before long-term borrowing rates are back to “normal”?
At 5% interest, a debt that measures 3.5 times your revenue will cost about one-sixth of your income. Before taxes. After tax, you will have to work about one day a week to keep up with it (to say nothing of paying it off!).
That’s a heavy burden. It is especially disagreeable when someone else ran up the debt. Then you are a debt slave. That is the situation of young people today. They must face their parents’ debt. Even serfs in the Dark Ages had it better. They had to work only one day out of 10 for their lords and masters.
We were handed the keys to the greatest economic machine in the history of the planet and we wrecked it.
As young people realize that their futures have been destroyed, many of them are going to totally lose hope and give in to despair.
And desperate people do desperate things. As our economy continues to crumble, we are going to see crime greatly increase as people do what they feel they need to do in order to survive. In fact, we are already starting to see this happen. Just this week, CNBC reported on the raging epidemic of copper theft that we are seeing all over the nation right now…
Copper is such a hot commodity that thieves are going after the metal anywhere they can find it: an electrical power station in Wichita, Kan., or half a dozen middle-class homes in Morris Township, N.J. Even on a Utah highway construction site, crooks managed to abscond with six miles of copper wire.
Those are just a handful of recent targets across the U.S. in the $1 billion business of copper theft.
“There’s no question the theft has gotten much, much worse,” said Mike Adelizzi, president of the American Supply Association, a nonprofit group representing distributors and suppliers in the plumbing, heating, cooling and industrial pipe industries.
The United States once had the greatest middle class in the history of the world, but now it it dying.
This is causing a tremendous amount of anger and frustration to build in this nation, and when the next major wave of the economic collapse strikes, a lot of that anger and frustration will likely be unleashed.
The American people don’t understand that these problems have taken decades to develop. They just want someone to fix things. They just want things to go back to the way that they used to be.
Unfortunately, the great economic storm that is coming is not going to be averted.
Get ready while you still can. Time is running out.