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The Federal Reserve Is Systematically Destroying Social Security And The Retirement Plans Of Millions Of Americans

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Last week the mainstream media hailed QE3 as the “quick fix” that the U.S. economy desperately needs, but the truth is that the policies that the Federal Reserve is pursuing are going to be absolutely devastating for our senior citizens.  By keeping interest rates at exceptionally low levels, the Federal Reserve is absolutely crushing savers and is systematically destroying Social Security.  Meanwhile, the inflation that QE3 will cause is going to be absolutely crippling for the millions upon millions of retired Americans that are on a fixed income.  Sadly, most elderly Americans have no idea what the Federal Reserve is doing to their financial futures.  Most Americans that are approaching retirement age have not adequately saved for retirement, and the Social Security system that they are depending on is going to completely and totally collapse in the coming years.  Right now, approximately 56 million Americans are collecting Social Security benefits.  By 2035, that number is projected to grow to a whopping 91 million.  By law, the Social Security trust fund must be invested in U.S. government securities.  But thanks to the low interest rate policies of the Federal Reserve, the average interest rate on those securities just keeps dropping and dropping.  The trustees of the Social Security system had projected that the Social Security trust fund would be completely gone by 2033, but because of the Fed policy of keeping interest rates exceptionally low for the foreseeable future it is now being projected by some analysts that Social Security will be bankrupt by 2023.  Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.  Yes, you read that correctly.  The collapse of Social Security is inevitable, and the foolish policies of the Federal Reserve are going to make that collapse happen much more rapidly.

The only way that the Social Security system is going to be able to stay solvent is for the Social Security trust fund to earn a healthy level of interest.

By law, all money deposited in the Social Security trust fund must be invested in U.S. government securities.  The following is from the official website of the Social Security Administration….

By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are “special issues” of the United States Treasury. Such securities are available only to the trust funds.

In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash.

So in order for the Social Security Ponzi scheme to work, those investments in government securities need to produce healthy returns.

Unfortunately, the ultra-low interest rate policy of the Federal Reserve is making this impossible.

The average rate of interest earned by the Social Security trust fund has declined from 6.1 percent in January 2003 to 3.9 percent today, and it is going to continue to go even lower as long as the Fed continues to keep interest rates super low.

A recent article by Bruce Krasting detailed how this works.  Just check out the following example….

$135 billion of old bonds matured this year. This money was rolled over into new bonds with a yield of only 1.375%. The average yield on the maturing securities was 5.64%. The drop in yield on the new securities lowers SSA’s income by $5.7B annually. Over the fifteen year term of the investments, that comes to a lumpy $86 billion.

So what happens when the Social Security trust fund runs dry?

As Bruce Krasting also noted, all Social Security payments would immediately be cut by 25 percent…..

Anyone who is 55 or older should be worried about this. Based on current law, all SS benefit payments must be cut by (approximately) 25% when the TF is exhausted. This will affect 72 million people. The economic consequences will be severe.

In other words, it would be a complete and total nightmare.

Sadly, the truth is that the Social Security trust fund might not even make it into the next decade.  Most Social Security trust fund projections assume that there will be no recessions and that there will be a very healthy rate of growth for the U.S. economy over the next decade.

So what happens if we have another major recession or worse?

And most Americans know that something is up with Social Security.  According to a Gallup survey, 67 percent of all Americans believe that there will be a Social Security crisis within 10 years.

Part of the problem is that there are way too many people retiring and not nearly enough workers to support them.

Back in 1950, each retiree’s Social Security benefit was paid for by 16 U.S. workers.  But now things are much different.  According to new data from the U.S. Bureau of Labor Statistics, there are now only 1.75 full-time private sector workers for each person that is receiving Social Security benefits in the United States.

And remember, the number of Americans drawing on Social Security will increase by another 35 million by the year 2035.

Another factor that is rapidly becoming a major problem is the growth of the Social Security disability program.

Since 2008, 3.6 million more Americans have been added to the rolls of the Social Security disability insurance program.

Today, more than 8.7 million Americans are collecting Social Security disability payments.

So how does this compare to the past?

Back in August 1967, there were approximately 65 workers for each American that was collecting Social Security disability payments.

Today, there are only 16.2 workers for each American that is collecting Social Security disability payments.

The Social Security Ponzi scheme is rapidly approaching a crisis point.

Sadly, the Federal Reserve has made it incredibly difficult to save for your own retirement.

Millions upon millions of Baby Boomers that diligently saved money for retirement are finding that their savings accounts are paying out next to nothing thanks to the ultra-low interest rate policies of the Federal Reserve.

The following is one example of how the low interest rate policies of the Fed have completely devastated the retirement plans of many elderly Americans….

You can understand the impact of the invisible tax on the elderly by watching the decline of interest income from $50,000 invested in a five-year Treasury obligation. As recently as 2000, this would have yielded about 6.15 percent and an interest income of $3,075 a year. Now the same obligation is yielding 0.7 percent and an interest income of $350 a year. This is the lowest yield on this maturity of Treasury debt since the Federal Reserve started keeping an index of the yields in 1953.

But it’s more than a low interest rate. It’s an income decline of nearly 89 percent in just 12 years.

And after you account for inflation, those that put money into savings accounts today are actually losing money.

Of course most Americans have not saved up much money for retirement anyway.  According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.

Overall, a study conducted by Boston College’s Center for Retirement Research discovered that American workers are $6.6 trillion short of what they need to retire comfortably.

So needless to say, we have a major problem.

Baby Boomers are just starting to retire and the Social Security system is still solvent at the moment, and yet the number of elderly Americans that are experiencing financial problems is already soaring.

For example, between 1991 and 2007 the number of Americans between the ages of 65 and 74 that filed for bankruptcy rose by a staggering 178 percent.

Also, at this point one out of every six elderly Americans is already living below the federal poverty line.

So how bad are things going to be when Social Security collapses?

That is frightening to think about.

In the short-term, millions upon millions of retired Americans that are living on fixed incomes are going to be absolutely crushed by the inflation that QE3 is going to cause.

Just like we saw with QE1 and QE2, a lot of the money from QE3 is going to end up in agricultural commodities and oil.  That means that retirees (and all the rest of us) are going to end up paying more for food at the supermarket and gasoline at the pump.

But those on fixed incomes are not going to see a corresponding increase in their incomes.  That means that their standards of living will go down.

Things are tough for retirees right now, but they are going to get a lot tougher.

Right now, there are somewhere around 40 million senior citizens.  By 2050 that number is projected to increase to 89 million.

So how will our society cope with more than twice as many senior citizens?

Sadly, we will likely never get to find out.

The truth is that our system is almost certainly going to totally collapse long before then.

We are rapidly approaching a financial crisis unlike anything we have ever seen before in U.S. history, and the foolish policies of the Federal Reserve just keep making things even worse.

  • Gay Veteran

    Medicare/Medicaid is even worse

  • McKinley Morganfield

    There is no conspiracy, this is out in the light of day for those with eyes that see. The effort to kick the can and keep the big banks and insolvent governments afloat is destroying everything else. Prep and find commonality with like minded people. The train wreck is gaining speed.

    • Eisenkreutz

      The obvious is obvious to anyone who knows what to look for.

    • k

      well said !!

  • Alvin

    Guess What, not just people on Social Security. It’s anybody living on a fixed income. It anybody living off their savings such as US Savings Bonds, Bank Accounts, Insurance Annunities – etc.
    Even Pension Plans that have inflation adjustments, BECAUSE GOVERNMENTS LIE about inflation rates. So if your pension says that starting in 10 years they will pay you $ 50,000 a year and they promise to raise it each year by the inflation rate well guess what if they lie about what the REAL inflation rate is – you lose each year REAL PURCHASING POWER.

  • Doug

    At least the generations who added all the debt will share in the pain that debt creates. Nothing ticks me off more than spending the money of future generations before they earn it. If we default via inflation, the elderly and boomers who ran up the bills won’t be able to skip the check and leave our toddlers with the full tab!

    • OLdFART

      Home run! The boomers bear a large portion of the responsibility for the problem. They voted in people who promised them goodies that their grandchildren would have to pay for, and then did not have enough kids to produce the needed number of grandchildren. Boomers are hardly innocent victims here.

      More bad news–What grandchildren they did have (if they have even jobs) are not going to be willing to be taxed at 75% in order to allow the boomers to hit the casino every weekend.

      • dorothea

        and my hubby and i are on SS and did have savings , we live very modestly and DO NOT GAMBLE , my grandkids consider us the least materialisc so don’t lump us all together , i paid into SS from the time i was 16 and got screwed by them here is a stat if you work for 40 ot 50 years and for the first 15 years you work at very min wage part time jobs while raising your children . SS counts that as full employment and when you go to collect your SS SURPRISE they pro-rate over those whole 40 to 50 years . if you wait for your kids to grow up and just work for lets say 15 years you get double what the person who worked 40 or 50 years gets . If you an immigrant come to this country work 10 years you still get double what im getting , i still have to work part time to put bread on the table

      • liberranter

        Home run! The boomers bear a large portion of the responsibility for the problem.

        A large portion of it, yes, but absolutely not the full portion. No, the toss-up for who gets THAT “honor” is between the so-called “Silent” Generation (those born between roughly 1925 and 1939) and the ridiculously-named “Greatest” [*b******t!*] Generation, the first two generations to swallow the government’s lies, whole, and abdicate responsibility for themselves and their futures by picking the pockets of their fellow Amerikans to fund their old age. These people KNOWINGLY stole from their own children and grandchildren and felt no compunction whatsoever about doing so (it took every ounce of my self-control recently to keep from smashing in the face of a 90-something geezer who said –AND I QUOTE DIRECTLY– “I earned my social security and if you young people get stiffed because of it, that’s tough!”).

        In other words, these selfish and economically innumerate Clovers (thank you, Eric Peters!) played the role of Aesop’s grasshopper and frittered their savings away. They just knew that “everyone else” would underwrite their retirement, apparently not being smart enough to recognize a Ponzi scheme when they saw one.

        Now the piper demands to be paid and the chickens are coming home to roost, but these generations have no Guilders or feed to fork over and suddenly realize that they’ll soon be up a certain fecal body of water without a manual propulsion device. The Ponzi scheme called Social Security is in its final, terminal stages, not having lasted even a century, and the people who could have stopped this crime dead in its tracks are instead going to be the first ones to be underneath the roof when the house comes crashing down. I, for one, won’t feel a damned bit sorry for any of them!

        “Mean-spirited?” “Spiteful?” “Hateful?” Sure, but isn’t that how most people treat thieves?

        So, for those of you in the aforementioned generations who are depending on the State for your survival, you’d better pray that you have sympathetic (or clueless) children and grandchildren to fall back on, descendants who don’t yet realize how completely and shamelessly you’ve been ripping them off for the last several decades. You’re going to need all the support you can get when TSHTF. Good luck. Those of us in succeeding generations who’ve come of age aren’t stupid enough to have continued believing in Santa Claus, the Tooth Fairy, the Easter Bunny, or Social Security.

        By the way, if those of us who are part of the younger generation, supposedly less well educated and less aware than previous generations can figure out the obvious, what’s YOUR excuse?

    • chunkeroo

      You are absolutely right!

      The most self-absorbed generation in history thought they could live large devil-may-care off the future generations and basically kick the can down the road. This is highly immoral.

      What is the Bible teaches “A righteous man leaves a inheritance for his children’s children….”? They have stolen from their children and their childrens children.

  • Jake

    I fear for the worst in the immediate future and I feel as though America is going to be especially hard hit, my heart goes out to all of you across the Atlantic. I know as a U.K resident, I too am likely to suffer terrible economic woes once our precariously perched western empires come crashing down. I’m sure America’s financial demise will cause an immediate and devastating chain reaction, sure to resonate around the world. Maybe we are witnessing the fall of another, once great empire like the collapse of the U.K’s empire early in the 20th century. Whatever happens, in my opinion I unfortunately believe it to be necessary, as callous as that may seem. The fundamental ideas that underpin our modern world are totally unsustainable, the very notion of ‘GDP’ seems ludicrous. How can we grow indefinitely in a finite system? The simple answer is we cannot, and therefore it is inevitable that our current economic models will one day collapse. The consumerist societies of the planet place an unbearable pressure on this tiny, miraculous pinprick called Earth. To contemplate it’s size among the vast void it resides in, is akin to a bacteria on a grain of sand on an incredibly large beach. The economic policies of our species are driven by greed and a desire for more and more money which will push Earth to the brink if the status quo continues. Maybe civilised humanity will too will one day face collapse as a byproduct of our modern lifestyles. I hope once the collapse of the current economic models occur and the chaos subsides, a new and sustainable approach to the planet will come forth like a phoenix from the ashes. I hope you will ok in the U.S once the proverbial hits the fan. I look forward to reading more of your work. By the way, I too feared QE3 and am equally disgusted and surprised by the shortsightedness of Ben Bernanke. His name has become an offensive term among my peers. He is ruining future prospects for millions of Americans daily with his destructive policies. Good luck to you all.

    • you are an enlightened person 🙂

    • McKinley Morganfield

      The great collapse will start in the EU zone, this will trigger the collapse in the USA and the entire global financial system. For many months now residents of Greece, Spain, Portugal, and elsewhere have been pulling money of of their bank accounts. The run on the banks is accelerating:

    • Paranoid

      Thanks: but relax. We have had these warnings for 40 years. Anyone that’s not ready is useless bait. Social Sec did a fine job getting old people through into the new world. Us baby boomers have had all the best times to get ready. I’m ready, and can provide enough to get Kids off safely. So have a lot of people. The rest will never do anything no matter how much warning they get

      • Optimistic Pessimist

        Paranoid: Sad but true.

        I was stunned when Ben decided to print indefinitely. This helps the markets only temporarily and pushes gold up artificially. There will be a tipping point when the markets will no longer react positively to this action and when that happens a lot of people will realise how their pensions and future lives will be affected.

        What concerns me being under 30 years old is how few of my peers are a) remotely knowledgeable about what is going on and b) actually care. It seems each new generation doesn’t learn that history repeats, largely because small groups of people make decisions for larger groups who don’t understand the situation.

        Over the last 2 years I have been educating myself on monetary history and how previous populations dealt with extremely difficult times such as the Great Depression / World wars and how they not just survived but in some cases prospered.

        Good luck to all and take 5 minutes each day to educate yourself.


  • Let’s also not forget that when housing prices were gutted, many seniors lost what they thought was going to be a big part of their retirement money.

    We never bought into that nonsense and so never over-extended on a mortgage or what we initially paid for our houses. The most we ever paid was 90K (hard to believe that was only 13 years ago) and it’s now valued at about 325K after dropping 100K from a high of 425K.

    Of course, that presupposes that there will actually be someone who wants to or is capable of purchasing it.

    My motto? Something is only worth what someone will pay for it.

    • Optimistic Pessimist

      Adrienne – I’d like to adapt your motto to:

      Something is only worth what someone else is able and willing to pay for it.


      • liberranter

        Or, the cynic would modify that to read “Something is worth only what someone else is STUPID ENOUGH to pay for it.”

  • Mondobeyondo

    Clear out that extra bedroom! Grandpa and Grandma are moving back home again! Don’t worry, they can use their Social Security checks to help pay for the rent, and that’s probably as far as those checks will go. So the grandkids will have to chip in to help, so that Grandpa and Grandma will be able to eat more than just Mighty Dog twice a week. Oh wait, the grandkids are broke too! They can’t find jobs, and they’re eating ramen soup and mac and cheese to survive. Then there’s that student loan debt, you know…

    Yeah, we’re in a Mess.

    • paul

      MAC? Better cook something from scratch. For the price of a Big Mac I cooked a chicken-vegetable curry with rice for two people for two days this week.

    • Bill

      Grandma already lives with me and we’re moving up to the family farm so we can be close to my son’s other grandma & grandpa who already take care of great-grandma.

      See a pattern?

      • Optimistic Pessimist

        Silver lining to the Depression: Families are brought closer together as they once were.

        We all better start adapting to getting on well with the relatives or else it will be a very hard time.


        • liberranter

          Silver lining to the Depression: Families are brought closer together as they once were.

          Or not. Given the (deliberately engineered) destruction of the family, we’re probably going to see mostly single, desperate people without connections or resources struggling to survive – often in competition with each other.

          • Optimistic Pessimist

            For those people where they don’t have family nearby it is time to start making friends and getting to know the neighbours.

    • Rikki

      Funny but I was raised in a 2 fam house owned by grandma and grandpa….then my father built HIS 2 fam house and 30 years later HIS mother sold her house and lived upstairs for 15 years

      But how would this work today in all the new 4-5 bedroom McMansions that cant be converted to separate apartments because of poor layout (all bedrooms on the 2nd or 3rd floors) no yard to sit in or plant a garden like lots of old folks have,or strict zoning codes that wont allow a Mother in law type apartment?

      Clear out that extra bedroom! Grandpa and Grandma are moving back home again

    • dorothea

      over my dead body , would never move in with my kids i like my independance and they would drive me nuts ,would rather starve

  • If the economy collapes at any given time what good would social security
    be to anyone anyway? Who would print the check and where could you cash it?
    I have already accepted the fact that social security will not exist by retirement time so the need to look at other options has arrived like the ability to be self sufficent- barter/trade-services-etc.Our forefathers/mothers were doing this way before social security was a gleam in anybodies eye and they survived so i would not count these people out of the picure as alot of them grew up during the great depresssion and the world wars and they may be a lot tougher and smarter then some and may have some very good ideas that everybody should listen to in regards to living in tough and trying times.

    • Derpliving

      SS will absolutely not exist by the time I retire being only 25 now. This is where self sustainability comes in. I make a decent amount of money right now, am living very frugally and saving what I can. My plan is too have a piece of property out in the boonies in an area with rich soil. I want to build my own house (Inventor at heart),generators and gardens. I plan on being very far away from civilization when SHTF. I have many great ideas of how to pull this off, but civilization as we know it needs to last at least long enough to get my plan rolling. Also, don’t forget your guns. When this country falls to anarchy, along with the rest of the world (which it will, 10, 20 maybe 50 years down the road), you are really going to need them to defend your family. But who knows? Maybe I am wrong. Maybe we get the right leaders to fix this whole mess (Along with the rest of the countries help). However humans naturally tend to go alongside with greed and corruption, so it is a long shot.

      Thinking about it our entire government needs an overhaul. We don’t need senators and representatives any more. You know why we needed them back in the day? Because people weren’t going to hop on their wagons and travel cross country to vote. We live in an age of information where everyone can now be heard. I think our representatives need to be replaced with servers that collect information from the people. That way the people really have a say what is going on. And this way people would be forced to educate themselves because what you get out is exactly what you put in. Even if they were to give 1 seat in the house to a server collecting data, our government would be forced to deal with the people.

      Too much? I am starting to think I am a loon.

  • Tim

    Government “trust funds”, including the Social Security “trust fund”, are just accounting mechanisms. There is no money in them. The balances of Treasury securities held in these “trust funds”–$4.7 trillion as of yesterday–are a component of the national debt known as Intragovernmental Debt Holdings. The other component of the national debt is Debt Held by the Public, the biggest holders of which are China and Japan.

    It is appropriate to refer to Social Security as a ponzi scheme as the withholdings of American workers go the General Fund at the U.S. Treasury and are used to finance the federal government’s operations. They do NOT go into the so-called Social Security trust fund.

    It’s only because the Federal Reserve can create U.S. Dollars ex nihilo and the fact that the U.S. Dollar is the world’s reserve currency that this system hasn’t collapsed already. But collapse is inevitable.

    • Michael

      You make a very good point. The Social Security trust fund is just a bunch of IOUs.


      • Alvin

        I call it the wimpy economic policy, remember wimpy in the Popeye cartoons, I’ll gladly pay you Tuesday for a hamburger today, but in this case Tuesday WILL NEVER COME

    • mark

      You are correct Tim. According to Helvring vs Davis from May of 1937 the proceeds from the employer and the employee money collected has to go into the general fund. That money cannot be earmarked for any pension use. After congress has the money in the general fund they can spend it as they wish. They have chosen to spend the funds as Social Security. Like it or not, that makes Social Security like any other government program. Do any of you out there claim the government owes you for the property tax or sales tax or income tax or any of all the other taxes or fees they charge you? FICA is just a flat tax that you pay on earned income. When the government started SS, the average life span was about 59 years old. This was a great cash cow for congress for many years. Now with the longer life spans, the government is caught with their pants down.

    • Eisenkreutz

      I loved at the Republican debate when that sniveling jackass Romey asked Perry if Social Security was a Ponzi scheme and Perry sissied out and said no.

    • Stuey

      Yes, you make a good point. I still remember Al Gore during his campaign for president saying “we will keep the social security funds in their lock box”. What funds in what lock box?

      Although, China and Japan are not the biggest holders of the USA national debt, although they are the biggest holders by countries. The biggest holders are actually private banks, mainly the Federal Reserve which holds(depending on what numbers you believe) 4-5 trillion while other private banks hold another 2-3 trillion combined.

      So the Federal Reserve has the ability to “make” money(federal reserve notes) out of thin air which have the backing of NOTHING or NOBODY and buy US Treasury notes/bonds which are backed by the full faith of the USA government, ie the taxpayers. What a brillant scam!

      I wish I could print money up out of thin air and then loan it to you and you put up your house as collateral to me if you don’t pay me back with money you must work to get. What a deal that would be for me!

      How in the world did Americans ever fall for this?

    • liberranter

      Yep, and ALL of this information has been common knowledge for decades. Yet millions of delusional people during these same decades ignored these obvious facts and are about to pay the price for doing so.

  • markthetruth

    I Can’t stand his face!!!!!!!!!!!!!!!

    the end.

  • Orange Jean

    Thanks for the info Michael!

    Gee… three years after I’m “eligible” to get the maximum of “my” social security (which I’ve been paying for since I was 16, and I’m 62 in a few months).

    Not that I was planning on retiring (can’t afford to, not with the economy being the way it is and the fact that for most of my life I didn’t make enough to save a lot – a bit, but not “enough” to retire). But I was at least hoping SOMETHING would be there in an emergency, say if I got sick or something.

    Bye bye … “golden” years (actually, some of my older friends .. a few now in their 80s… tell me that’s definitely a pipe dream anyway, and that it’s all down hill from here). Oh well!

    • John W.

      Just wait until the full cost of the Obama care premiums starts to be collected. People think they are broke now, with the increase in premiums most private companies will have to drop their plans leaving the employee with the problem of finding insurance or paying the fine which eventually will be quite large. Good luck suckers. Just heard that if the election were held today Obama would be re elected. ************ real what dopes Americans are.

      • Gary2

        tax the wealthy to keep us healthy

  • RICH99

    Well look at the dates projected and what year are we in ?
    So for anybody to think we I’ll have noticeable increase in inflation or even hyper inflation this year or even next is a tad nutty

    • John W.

      If the dollar loses it petro dollar status inflation will take off like a rocket. The only thing that has been holding inflation down is the lack of wages and that most of the QE money was just taken by the banks but never put into the economy.

  • Mondobeyondo

    Oh, and by the way, the Fed Head said that interest rates are likely to remain close to zero percent until at least 2015. Ewwwww.

    This is disaster for anyone investing in a savings account, a CD or Treasury bonds. If your money is in any of those, it isn’t earning any interest to speak of. Isn’t the whole idea of having a savings account to allow your money to “grow” by earning interest?!! It’s also disaster for people living on a fixed income. And because of QE3, the purchasing power of your dollar is about to become weaker. Much weaker. That $5.00 ear of corn may not be that far off in the future. This does not bode well for our nation’s future, financial or otherwise.

    Translation to English: You’re about to pay more for EVERYTHING, and get much less product/service in return. Not just for food, either. The doctor, dentist, gasoline, water, telephone, pool guy, night out at the local pub, movie tickets to see the re-release of “Finding Nemo”, tickets for your favorite NFL or NBA team, etc. are all going to cost more. What a deal, huh? Thanks, Mr. Bernanke!

    And if it’s imported, you are really, REALLY going to pay more! Why? QE3 will cause the value of the dollar to plunge. Imported items? Scotch, BMW’s, caviar, French wine, and anything made in China, which is pretty much everything you buy these days. Prices at Walmart are going up, guaranteed. You’ve been warned. So, get ready and brace yourselves. Stock up on scotch while you still can! Ha!!

    Will your get a raise to compensate for it? Good question. Ask your boss about that (assuming you still have a job, of course. If you’re unemployed, like so many of us are, it’s kind of a moot point.)

    • Mondobeyondo

      Captain Kirk: “McCoy, give me your medical opinion. What is the future of the U.S. economy?”
      Dr. McCoy: “She’s dead, Jim.”

      • TtT Engine

        Think of the thousands of dollars we’ve paid in. I delivered newspapers @ 7 years old. I been donating to this bankrupt government program for 34 years. I would take as low as a 50% buyout to get back my liberty back.-> “The Enemy Within” has created “The Doomsday Machine” says “The Savage Curtain”. Star Date 2023 the entitlement sun will explode. We need “Spocks Brain” to free us from the Left Wing’s “Tholian Web” and “Paradise Syndrome”. A “Wolf in the Fold”‘s “Obsession” may bring us “The Balance of Terror” and a “Taste of Armageddon”. May the “Devil in the Dark” be defeated by Michael the Archangel. Christi Fidelis !

      • OLdFART

        What does the starship Enterprise have in common with a piece of toilet paper?

        They both circle Uranus wiping out Klingons.

      • Tim

        Captain Kirk in Washington, DC: “Beam me up Scotty. There’s no intelligent life down here.”


  • K

    Michael, it is only a problem, if that many of us old folks live that long. If the economy collapses, there goes easy access to meds. Or maybe they will have an accident with the 1918 flu sample. Remember a few years ago, they dug up some bodies in Antarctica. That is what they were after. Or even today, when DHS ordered another 200 million rounds of ammunition. The total for
    this year alone 1.4 billion rounds of ammo. Yeah, it sounds like they are getting ready, to work on that little math problem.

    • Alvin

      Don’t worry – Obamacare will take care of the old folks, on January 1 2014 20 – 30 maybe 40 million people will suddenly have low cost or free health insurance. These are the people who bought smokes, booze, drugs etc instead of health insurance.
      The waiting rooms will be FULL for months if not years with people who haven’t seen a doctor in years and think of all the tests that will have to be done.

  • Mustard Seeds

    People don’t believe an economic collapse can happen world wide or in America.

    It already is happening.

    The financial system is dead.

    Bernanke knows his actions are just buying time.

    We should all take advantage of the time we have left.

    Soon Americans won’t be thinking about social security or retirement.

    They will be thinking about survival.

    • Mondobeyondo

      Of course it can happen here. The laws of economics work the same for every country, whether it happens to be the only superpower on Earth, or if it is a third world banana republic basket case. Those who think the U.S. is immune from financial catastrophe because “we’re number 1” and “we have the world’s #1 economy”, are either simply ignorant, or refuse to see the evidence to the contrary.

    • John W.

      QE3 is just another opportunity for the wise guys to pump the stock market for more gains. Explain how a broke dick economy like ours can have a booming stock market without the manipulation made possible with all the QE money.

  • T-Bone

    Tax the Federal Reserve!

    • Scott

      Now there’s a tax I could like!

  • Scott

    “The only way that the Social Security system is going to be able to stay solvent is for the Social Security trust fund to earn a healthy level of interest.”

    If interest rates go up and they will regardless of FED meddling, the government will no longer be able to pay its debt obligations. So either way Social Security is doomed.

    • Michael

      You are very right about that.


      • Scott

        Of course the government could just continue to monetize it’s debt via the FED and print more money to pay its obligations, Social Security recipients would still get their benefits, only they will be payed in worthless dollars. So no matter how you slice it, things are not looking good.

    • Gary2

      The following quote from this article is total bull *******. simply remove the cap on income subject to SSI tax. Problem permanently solved. Very disappointing that Michael does not even say this.

      “The only way that the Social Security system is going to be able to stay solvent is for the Social Security trust fund to earn a healthy level of interest.”

      • John W.

        Really? Just how many people would that effect? Not very many as the number that make more than the current cap is pretty small. You are just an economic illiterate. Maybe the morons in charge could stop the mass immigration, that would really cut costs.

        • Gary2

          all economists agree that eliminating the cap will solve the SSI shortfall permanently. I would also tax cap gains ssi tax as cap gains are simply income by another name. I would not allow any rich too get ssi when they retire even though they will pay a lot more into it.

        • Gary2

          I agree with the stopping ALL immigration except where is directly benefits us such as doctors scientists. We do not need more unskilled people, we already have too many here already.

      • McKinley Morganfield

        When you do not understand 6th grade math, including exponents and compound interest, and you are clueless about demographics you come up with frenzied, silly solutions. You words are but foam from the jaws of a rabid raccoon. Go ahead and eat the rich, next eat the middle class, next eat the working poor, and after the third course you will find that you are the fourth course. Bon appetite!

      • Stella Horgan

        regarding removing the cap on ss contributions..wouldn’t that mean that those who put more in should get more when they collect.I don’t see where removing the cap, solves the problem, unless payments stayed in the same ball park.

        • Gary2

          do not let the rich get ANY social security but make them pay ssi tax on all cap gains etc.

    • Stuey

      Yes, this is exactly what I was going to say. Low interest rates are bad for savers and retirees but very good for the governments who have to borrow money to fund their operations. So if interest rates were to go up the national debt would explode.

      So either way, like you say, social security and the USA is doomed.

  • a,p,

    Do not worry. Just catch a ride on Bernanke’s helicopter. There will be plenty of money (toilet paper) aboard. The only problem is where to land, as the USA will be in ruins.

  • Dan P

    his beard…. is weird

  • “Follow me I know the way”,
    (said the blind man)
    As they marched single file off the cliff…
    To the last man…
    Don’t follow, LEAD and buy food, water, water filters, guns, ammo, propane, solar panels, bank of batteries, 12 volt lights, first aid kit, and thing and every thing you think you will need for when SHTF cause it’s coming brother and our politicians and the FED are making sure it’s coming. (Only buy Gold and Silver after you buy your prep supplies (if you have anything left). They are doing everything in their power to push us “Over That Cliff”. Be prepared, get prepared, Bad times are coming and much sooner than you think. Prep Hard – Prep Fast, Time is Short

  • David Gurney

    Hannity,Levin,and Savage will really be screaming when the cap on Social Security comes off,much as did the one for Medicare some years back.At the time,free agent pitcher David Cone took a big up front bonus payment in lieu of salary to avoid the tax.

  • David Gurney

    One more thing:The shortfall is exacerbated by the huge number of jobs not paying what bhey formerly did.

  • Gary2

    Michael–it sucks to be a saver, however, QE3 is great if you are in debt. Mortgage rates are rock bottom if you can qualify.

    Maybe the savers should not have been so dumb and saved up. Looks like they are the dupes. They could have enjoyed life more saving less. If their debt got unmanageable they could do some wealth redistribution and filed chap 7 and walk away.

    With the value of the dollar going down the savers look especially dumb. All that saving for a rainy day and it did them no good and in fact did them harm.

    I appreciate all the preppers prepping for me as if/when SHTF all your hard work prepping will be appreciated as the unpreppers simply overwhelm ands take your ******. The numbers are way against you preppers.

    • Kevin2


      Your promoting being irresponsible as the correct way to run your life. Don’t save, don’t prepare and steal from those that do either by dollar devaluation or outright theft of those that prepped is immoral if not illegal. Promoting this makes you no different than “The Rich” you blame.

      I’m with you regarding organized labor, the downward mobility of free trade with slave labor nations and the US being the policeman for Wall Street.

      “I appreciate all the preppers prepping for me as if/when SHTF all your hard work prepping will be appreciated as the unpreppers simply overwhelm ands take your ******.”

      Beware attempting to take a bone away from a hungry dog with large teeth.

      • Gary2

        Beware attempting to take a bone away from a hungry dog with large teeth.

        Only true if your teeth are not bigger and you are not hungrier

        • Optimistic Pessimist

          History has shown what happens to people who steal from others – the populace do not like it and inflict judgement and punishment on the offending.

          Gary, I don’t think this is a solution you should put forward when times get really tough as you will not be popular and may find you are the victim.

          I’d advise you look into finding the things that you are good at and bring those to the table.

          A sharp wit and a comedian are always welcome.


    • nowwthen

      I sincerely hope you are the first overwhelming unprepper to show up at our place!

    • John W.

      Why is it not surprising that you would rather steal than plan ahead and take care of yourself. Hopefully someone will put you out of your misery when you try it.

    • MisterC

      Gary,here are some numbers that will be against unprepared leeches like you:
      .308, 30/30, 30-06, 7.62x54r, .338, ect.

    • McKinley Morganfield

      This as easy as shooting fish in a barrel…..

      “Maybe the savers should not have been so dumb and saved up. Looks like they are the dupes. They could have enjoyed life more saving less. If their debt got unmanageable they could do some wealth redistribution and filed chap 7 and walk away.”

      A sound, stable economy requires interest rates sufficient to reward savings and thrift. That is how real capital (investment) is build up and results in real wealth to be conservatively invested. The over leveraged, big banksters receiving inflated digital money from Uncle Ben to play the markets and Uncle Ben’s purchase of 75% of all of Little Timmy’s bonds is no a way to create a real economy on main street. Its merely kicking the can into the abyss. Don’t bother to reach for a lifeline when you fall off the edge. To Ben & Timmy & the DC clowns you are an ant at a picnic and you are climbing onto the key lime pie. Hide little Gary 2 for soon they will stomp on you.

  • Gary2

    How to permanently fix social security: Simply remove the cap on the amount of income subject to tax. Also should tax cap gains for ssi. Cap gains are simply income by another name.

    Every economist agrees removing the tax on income subject to SSI tax will permanently fix the problem.

    I would also say that the rich should have to pay but not be able to collect any SSI but that is somewhat more contriversial to some.

    • adam

      Gary2 you are so dumb. Don’t you know the main thing everyone preps with is guns and ammo. So yes, I have plenty of them for you and other useless people like yourself

    • McKinley Morganfield

      “Every economist agrees removing the tax on income subject to SSI tax will permanently fix the problem.”

      Every economist?!?! What utter blather. SS liabilities over the next 20 years can not be met by your and “every economist” wildest dreams. There is no point in communicating real numbers and real demographics to you. You are a zombie locked onto a target that tells you to eat the rich and the rich is anyone who has more wealth than you. Chomp on those brains zombie boy. All you have to fear is double ought 12 gauge to your tiny brain pan. 😉 I urge you to join BHO and his motley crew and hasten the day of reckoning.

  • Gary2

    Michael–your right wing bias and your disingeniousness is so blatent in that you do not simply tell readers the entire SSI problem could be fixed by simply removing the cap on income that is subject to SSI tax.

    This is a very grossly one sided article. You are lucky I come along and balance you out. 🙂

    • Rodster

      Actually we’re glad you show up so we can laugh at your stupidity. 😆

    • Malcolm Reynolds

      You sure showed him Gary!! Man, you’re a veritable Scrappy Doo. ‘Lemme at em, I’ll splat em’. You go scrappy!

      Why dont you try researching and posting something for us how all the problems magically go away by taxing the rich. Like Rodster said – LOL!

  • callmecordelia1

    Hey, speaking of the Fed, I just read The Creature from Jekyll Island. Did he reference you in the book? (5th edition, footnote on page 200) At any rate, if anyone who reads this blog hasn’t read that book, they should. Everything really came in to focus for me after reading it.

    • Michael

      So many readers have been recommending this book lately that I have decided to add it to the front page of The Economic Collapse Bookstore….

      It is a great book and it will really help you understand where the Fed came from and how it works.


  • Tim

    I was born in a country whose economy collapsed when I was a child.And I can tell how this played out: the state continued paying out benefits , pensions etc. but the value of the currency massively went down so that pensioners for example started living way below the poverty line although their pensions nominally rose.I think that the very same thing is gonna happen in the US , the state will not allow social security to fail , it will not stop fulfilling it’s financial obligations but it will have to significantly reduce the buying power of the US Dollar without significantly increasing the amount of payouts.I am sorry folks but I can’t see how the US elite can avoid it , there is simply no other way for them apart from declaring default and officially dropping most of the financial obligations but this would mean an open conflict with the population – I am certain they won’t risk it

    • Rodster

      Totally agree and how politicians primarily the left promised so much entitlements and engrained them into the US society that it’s impossible to take them back.

      The least painful way of getting back to basics is to eliminate ALL entitlements with a cutoff for future recipients.

      Unfortunately our politicians are gutless and only give the masses what they want for votes. That’s why we are now facing a complete global economic collapse.

    • Optimistic Pessimist

      I’ll third that. I’m concerned that we (UK) are following the US down a similar line.

      Sadly the penny has not dropped with the masses yet. The older generation know how to deal with bad situations having lived through and after the wars or had parents who taught them how to adapt.


  • Bill

    Now this, just tonight’s “good news” on the Drudge Report:

    REPORT: Median Income Worse Now Than During ‘Great Recession’…

    ‘Unprecedented’ Jump in Food Stamps…

    Analyst: Fed’s ‘QE-Infinity’ Will Push Gold Up to $2,400…

    Mortgage Lending Slides to 16-Year Low…but, Gary is happy to hear that obummer does “believe in redistribution of wealth”.

  • Gary2

    More proof conservatives are clueless:

    If anyone hasn’t learned the righty playbook yet, the “47%” talking point is the “attack where you are weak” tactic, one of their favorites.

    I first noticed it when they ran a vietnam draft dodger against a vietnam vet. You might think they’d run away from any talk of military service, but no, they attacked and smeared the vet, successfully.

    Now, their whole agenda is class warfare and they have done a marvelous job of redistributing the wealth of the middle class to the top, so you might think they would run from any mention of class warfare. But no, they accuse anyone who challenges their policies of class warfare – a great “Big Lie”.

    Now, top tax rates are second lowest since 1928, and financial con men like romney who can claim the 15% rate have the lowest rates. You’d think they would run like crazy from any discussion of who pays. But no – attack where you are weak! Go on the offensive about those who have so little that they pay no tax. Good tactic!

    The beautiful thing is that, as more income is redistributed to the top, the oligarchs WILL pay more tax, even with absurdly low rates, and the peons who have less will pay less. So, the more their class warfare succeeds making the rich even richer, the more they can howl about the huge burden the poor rich people bear. Pretty good, huh? The richer they are, the more they are suffering! ROTFL.

    As always, the sad thing for the USA is that conservative voters can’t tell the difference between reality and propaganda.

    • Alvin

      Tax rate percentages are pure BS, sort of like Fed Government stated inflation rate or unemployment, all BS. Tax laws are DESIGNED to give loop holes to the rich like Nancy Pelosi and her friends and catch the middle class. Abolish ALL tax deductions and charge a flat tax rate on all income. If it is 10% then if you make a $ 1000 you pay $ 100, If you make a $ million then you pay $ 100,000
      Enough of GE paying nothing

    • nowwthen

      Obvious cut and paste job Gary. Oh, it’s your brand of BS allright but it’s easy to see it’s BS written by someone who’d been educated prior to becoming indoctrinated.

    • Malcolm Reynolds

      LOL! Thanks for playin Gary, but yer foamin at the mouth about random nonsense.

    • John W.

      Hey moron. The really rich do not do it with wages so there is nothing to tax. Most of their income is hidden in trusts and other methods of hiding income. There is no there there anyway as the number of high earners is very limited and will become even more so as the good jobs continue to disappear. As for class warfare I think you buttbuddy Obama is doing that. The only solution is to raise the retirement age to greater than the life expectancy just like it was when Social Security was started. They never intended to pay on it, however medical advances fouled them up. Obamacare will fix that little problem.

  • So, people will need to get some kind of jobs to get along, but that is a huge problem too. I like what that fellow on Naked Capitalism said the other day:

    7) Obama Pushing Offshoring of American Jobs – The massive Trans-Pacific Partnership, or NAFTA on steroids, is a global secret deal to subordinate American sovereignty to international tribunals of private corporate lawyers and offshoring whatever jobs are left in America. I’m not kidding. It’s that bad. And it’s being negotiated right now.

    The black community especially begins to transition from entitlement mentality to work mentality. But, this is the worst time to make that transition because there just aren’t any manfucturing jobs. A lot of us white guys would love to have a good manufacturing job too, but there aren’t any. In all honesty it doesn’t look good. Isn’t it funny how both Romney and Obambam just now started talking about the middle class a couple of months before the election? When has Obambam talked about the middle class jobs situation in the past 3.5 years of his presidency?

  • Eisenkreutz

    The only way forward is by going back. The most equitable distribution of wealth in world history was America after WWII because we didnt have huge corporations and we had the gold standard. Under perfect capitalism the distribution of wealth would be a flatline because you would have a infinate number of infinately small businesses in perfect competition. The driver of wealth inequality is concentrations of money and power such as central banking and corporatism. AMERICA IS BEING DESTROYED BECAUSE WE HAVE DEGENERATED FROM A REPUBLIC INTO A DEMOCRACY. WE HAVE FIND INNOVATIVE WAYS OF LIMITING THE POWER OF THE IDIOT POPULACE FROM DESTROYING ITSELF.

  • Eisenkreutz

    Michael or Anyone Knowledgeable:

    When the politicals “raid the SS fund”, how do they get around the legal requirement for the SS trust fund to be invested in US government securities?

  • stevef

    The DEMS are quite happy about this….after all, the vast majority of the elderly are white, the race the DEMS have declared war on.

  • All the numbers you have produced are surely alarming. This time is really bad for people how are near retirement, especially the baby boomers generation, as most of them are facing retirement now. If this situation is not being controlled soon, things will be even worse for our elderly citizens.

  • paul

    75 years? That’s a sensationalist claim.
    Economists can’t even predict a financial crisis 2 Years in advance!

  • Michael I don’t ever recall you doing an article on the impact of illegal immigration. Maybe you have. Saw this on Neil Cavuto today:

    They come to America. The movie trailer is very interesting.

  • Nickelthrower

    I am of the opinion the hubris and exceptionalism will buy us a little more time. Americans tend to think that they are the best at everything and will be #1 forever and ever. They will be slow to accept defeat and will only come kicking and screaming to the realization that their currency, investments and savings are worthless.

    That most Americans are ignorant of how the Federal Reserve works is a blessing otherwise there would be a run on the banks tomorrow.

    • Mondobeyondo

      “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” – Henry Ford

      • Michael

        That is a great quote Mondo.


  • john duncan

    Buy gold!!!!

  • R,E

    If i remember my economics correctly, the interest rate ultimately is the price of money. You know, Supply & Demand curves meet and the intersection point is the agreed price. And of course, QE3 will increase the money supply. And you can’t save cheap money, it’s not worth saving so you have to spend it. You don’t earn enough interest on it, and the banks love that. And income is falling. And so is people’s savings account, so then they borrow money now. And the result is…oh wait, who cares??? I try to explain this to some people and they act like it won’t happen. That we’re special. Yeah, we’re America right? The cheap money is great for the guys in the financial markets who like to speculate, since this is what it’s all about, speculation. Speculation of oil, food & commodities, gas, stocks, bonds, etc. It’s a game that can make you RICH, off others of course.

    Anyways, wouldn’t the Social Security be destroyed sooner then, since Russia, China, & other countries want to do business without using our cheap U.S dollars (and not all their economies are looking so great either), which in turn would reduce global DEMAND for the U.S dollar, which would then lead to something else? lol. Oh, and we can’t forget about the U.S government debt bubble and our downgraded debt. The next few months will be fun.

    I’m starting to have some respect for these banking families. How could so many people continue accept this ********** and not end this game today?

  • GA

    Pensions and 401’s are doomed as well as soon as the inflation kicks in. Even if the gov’t does not take the capital and replace it with worthless IOU Treasury Bonds, the Fed monetary policy will absolutely destroy the purchasing power of these accounts.

  • Pechez

    My husband works for a elderly highrise and was told the following yesterday by one of his 75 year old residents. “Her son called her Saturday from Washington DC where he works and told her he wanted her to come live with him. He told her things were going to get real bad real fast and that it was very likely that there would be no elections in November and likely no one in the Whitehouse.” He told her that he couldn’t elaborate but she should make plans to come live with him very soon. Granted it’s only one person making one statement but I found it very interesting given the current environment. I believe a bank collapse possibly because of the derivatives is to happen soon but it’s only speculation on my part. Prepare prepare prepare!! God Bless and Stay safe.

    • William

      The 75-yr old resident has a son that needs her retirement income added to his household income. Your husband’s highrise will see alot of old people going back to live with their families, needing the retirement checks.

  • Rowell

    Millions of people are going to die.

  • Bill

    True – US Treasury bonds are worse than worthless.

    Let’s assume for a moment that we believe the Government’s numbers about inflation. They’re a lie, but just play with me for a moment. According to the Government, inflation averages out to about 3% per year. Yesterday, the yield on at 10-year note is 1.82%! That’s 1.18% LOWER than the government’s own inflation estimate.

    So let’s run some numbers. Let’s assume that the Social Security Trust Fund purchased a $10 million Treasury bond at yesterday’s rate of 1.82%. Let’s also assume they bought it at Par.

    Bond Purchase Price: $10,000,000
    Total Collected interest over 10 years: $1,820,000
    Inflation effect on origianal purchase: (assumes 3% inflation) $3,000,000
    Total present value of bond at maturity: $8,820,000

    That’s a total loss of $1.18 million that’s gone from your parents’ retirement income and that’s taking the government’s inflation rate as a given.

    If the TRUE inflation rate remains the way it is or spikes up suddenly due to the Fed’s efforts to pour trillions of dollars into the money supply, the bonds purchased by the SSTF today will be just about worthless ten years from now.

  • CatNap

    When seniors realize they can’t afford their morning bran muffin anymore, they will put their homes up on the market. So, if you’re thinking of selling your house, but think now is a bad time…waiting until the glut of senior’s homes hit the market will be an even worse time to sell. Too much supply and not enough demand will crush prices.

    I expect to see a lot of abandoned homes as those seniors who are unable to sell and cannot afford the upkeep of living alone move back with family or in with friends. Those that actually HAVE family or friends that will have them, that is.

    Most of the younger generation would rather stick granny in a government-run hell-hole than put up with her meddling in their day-to-day lives. They certainly don’t want any financial responsibility for them. Might cut into their iPad fund.

    I read someplace once that you can judge a society by how well they treat their weakest members. We’re all about to see just how morally corrupt Americans really are.

    If you have elderly parents barely making ends meet, encourage them to sell their home and move in with you now while their homes still have some value. There’s lots of dual-living homes on the market (duplexes, double master suites, etc.), so consider purchasing one, if your current home lacks space/privacy.

    Take care of the ones who took care of you when you were dependent. If there’s a rift between you and your parents, NOW is the time to mend it. Swallow pride.

    Their survival, and possibly your own, may depend upon it.

    • TX4Life

      Over the past week, my neighbor has moved his grandmother in with his family due to her no longer being able to afford her assisted living apartment.

      • William

        Your neighbor may likely have wanted his grandmother’s retirement checks added to his household income. This will become increasingly common.

    • My Generation

      I think this is an unfair assessment. My parent generation was and is selfish. My husbands parents have claimed bankruptcy 3 times in their 40 years of marriage, not due to hardships but do to buying too much crap. It seems it is falling to my husband and me to care for them even though there are 4 adult children. Two are selfish and wouldn’t care, the other lives in a climate that is harmful to FIL health. He smoked and drank for years but his health is now my responsibility? We have lived on one income for most of our marriage, raising good children and always paid our bills. Why should I have to care for my elders when they squandered their lives on booze and gambling? If my generation is selfish it is because we had excellent teachers.

  • Selaretus

    It is interesting to hear talk of ‘robbing our grandchildrens’ futures’. I think that is a very very optimistic and wishful fantasy; that there will BE future generations over which to be concerned, let alone inherit our debt. As we sit here over halfway through 2012, all the hype about the Mayan calender and the end of this epoch or cycle sure takes on a different hue compared to what I was thinking would be happening looking at this date say ten years ago. The convergence of climate change (whether you believe it or not…the climate DOES and HAS changed many many times in the past; nature abhores equilibrium; something WILL come along to shift that equlibrium), the unsustainability of modern life, diminishing viability of our financial system, decrease in Earth’s planetesimal stability (earthquakes, volcanism, disruption of the ocean’s thermohaline cycle etc) and social unrest around the world (due to all the above). All this talk about our future takes on a hollow ring when you weigh all we are up against. Simply put, our technology will fail totally and completely; always has always will. Just wish it would all crash at once instead of this lingering painful death in bits and pieces here and there. My girlfriend, who prefers to live in light and hope, always says I should try to think positively, to which I reply, OK, I’m POSITIVE there will be a total collapse.

  • Kathy Smith

    I read yesterday on MSNBC where the FED is now blaming all of us for not spending enough money because we have lost faith, trust, & belief in the system. If we would spend more it would create more jobs. UNBELIEVABLE!!! Now it’s our fault NOT the FEDS. Ben needs to jump out of the helicopter.

    • John W.

      What they really mean is that the Chinese are feeling the pinch of less Americans spending on crap made in China. The have to be able to keep buying our debt afterall. The whole system is sick. Had all those Social Security contributions been put in individual accounts and invested in interest bearing instruments most of this coming disaster would have been avoided.




    • Michael

      Yes, I am afraid that you are right about that.


    • Mondobeyondo

      Don’t be surprised if Uncle Sam decides to go after your private pensions, 401(k), and IRA’s. It’s already happened in Argentina.

      • John W.

        Mark Levin was discussing that very thing this evening on his show. Probably the only real recourse is cash out and pay off your house, then again when they move us all to FEMA camps it probably won’t matter as most will not be leaving.

  • Washington

    Department of Homeland Security buys even more hollow point rounds  DEPARTMENT OF HOMELAND SECURITY SEPTEMBER 14, 2012 BY: RYAN KELLER

  • Don Levit

    “All securities held by the trust fund are ‘special issues’ of the U.S. Treasury. Such securities are available only to the trust funds.”
    That sounds like the principal and interest (albeit, now low interest) of the trust funds are available to be liquidated when needed.
    For example, since 2010, the cash outgo has exceeded the cash income – thus, the need to liquidate the special issue Treasuries.
    How are they liquidated? By tapping new general revenues from the Treasury, the same way we pay all pay-as-you-go expenses.
    The excess taxes (and “interest”) were loaned to the Treasury over the years to pay for current expenses.
    Hmm. I wonder why that was done if “such securities are available only to the trust funds.”?
    Don Levit

  • El Pollo de Oro

    I’ve said it before and I’ll say it again: Ron Paul is absolutely right—the Federal Reserve needs to be audited, and the sooner, the better.

    If you run a small business and have an individual retirement account (a SEP IRA), you can thank the Federal Reserve and their pathetically low interest rates for the fact that your IRA is much smaller than it should be. Of course, the Fed wants to coerce you into gambling your life savings on risky, unsafe investments that aren’t FDIC-insured. The Fed wants to force you into the stock market, and at this point, the roulette wheel in Atlantic City is probably safer than the stock market.

    Welcome to The Banana Republic of America, land of the corrupt and home of the desperate.

  • TheRandyGuy

    In addition to this, municipal bonds are experiencing defaults in increasing amounts. Why does this matter? Many seniors were (rightly) steered to munis by investment advisers because of the historically low default rates and almost guaranteed repayment rates. Now, with no money being made on interest and bonds unreliable, many seniors are scared to death and should be. The formation of the Perfect Financial Storm continues. Obama or Romney? Does it really matter?

  • marc

    If and when the time comes, America will take over Saudi-Arabia and oil price will go from whatever price it is by then to $9.99/barrel…that should shut you up guys…and put us back to work

  • William

    Greece shows the future: Young people remove their elderly relatives out of nursing homes and into their homes to have their retirement incomes added to their household income.

  • Mondobeyondo

    Interest rates, doing that beach party limbo dance.

    How looooow can they gooooo?


    I’d say that about 50% of people who are collecting Welfare of all types including Wall Street and Co., Social Security, Medicare and Medicaid, should not receive benefits…There are people who invest tremendous amount of time and energy trying to get scam their way into these programs because they want the security of Uncle Sam for everything they want for their lives..Food, housing, “Jobs”, Medical, raise a whole (3-4-5-6-7-8-9) family, insured profits, and so much more….If we cut entitlements across the board, it would solve our financial problems overnight..

  • Washington

    Published on Aug 15, 2012 Reality Check takes a look at Wisconsin Congressman Paul Ryan’s spending record during his seven terms in office.

  • William

    Abandon hope, all yee who live in Amerika. The 235 year old plans of Weishaupt are speeding up. Having gotten away scott free with the false flag, inside job, attacks on 911, the Illuminati are rapidly advancing their scheme for total domination. So, “Sheeple”, sit there and play with a smart phone and continue to believe in America. America died on 911. The Chekist Napolitano has control, and 1.4 Billion cartridges now. Do not expect the US military to save the country. DOD was up to it’s eyeballs in 911.

  • Mountain Goat

    Thirty-two percent of Americans now say they are in the lower class, up from 25% in 2008. (Pew Research Center, report released Septmeber 10, 2012.

  • Richard Lewis

    Here is my plan for coping with the future of SSDI which I am on now. Take 10% of your check every month and invest it in Gold or Silver. Not one ounce Gold but 1 gram Gold or 1/10 ounce Gold or if you like Silver an ounce or two of Silver per month. Put that away every month in storage and let your holdings dollar cost average. 1 gram Gold is 1/33.1 the price of an ounce of Gold. If you’re thinking about the retirement income you lost as the dollar weakens the price of Gold or Silver goes up. The same can go for your CD’s and savings accounts. Cash them in and put them in Gold or Silver also. If you are not Retirement age, this is also a good strategy.

  • dorothea

    Dorothea Gustowski Coppola•2 minutes ago

    my hubby and i are on a fixed income SS and we are considered poor , at one time we did have savings but because bush then Obama kept interest rates so low we had to start using the prin. so now we have nothing , we know what the fed is doing and we know why ,the fed (would LOVE to know WHO is in the fed) is trying to destroy the savers of this country ,i think this was well planned long ago , Bush was involved also , under Paulson the interest rates were low too ,they want people to put their savings into the stock market then loose it all ,no more middle class , AND we might have white hair and it might take us a little longer to do things as well as being a little stooped over BUT WE ARE NOT STUPID I STILL HAVE ALL MY MARBLES !!


  • mark

    This is a lead-in piece to try to get the average stooge to believe we need to let wall street manage social security! If the fed had not treated our money like a slush fund we would not be in this mess. The fed is simply the biggest financial pimp on the block!

  • Washington

    What does Quantitative Easing even refer to?

    Published on Sep 19, 2012 by Ben Swann Reality Check explains QE3 and what it means for you.

  • Abraham

    What’s more the pity is that everyone in the USA needs to read this. Obama says things are great. Plus, I heard today that 85% of Dems believe that our economy is doing just fine. 85%!!!!! What, me worry? Pathetic.

  • Michael, you got it all right, but you left out one crucial detail. If we remove the cap, the “problem” is solved forever!! Do any math you chose. Make any assumptions you wish. It still comes out the same way. There is no funding problem, not now, not ever.

    And as inflation (which you correctly predict) occurs, wages will increase and the SS % deducted will increase. Of course, there will be something of a lag, but we can deal with that easily enough.

    So join a small, exclusive group consisting of Robert Reich, Bernie Sanders, Michael Hiltzik, me and one lady who wrote to the Los Angeles Times to point out this fact.

    Now if you would just help us expand the club, you would be doing the whole country a really big favor!!

    And just to make sure, we are ONLY talking about Social Security here. Healthcare costs are a whole nuther set of problems without an easy solution.

  • Washington

    New Obama slogan has long ties to Marxism, socialism ← return to Inside Politics By Victor MortonApril 30, 2012

  • Owen

    This would explain why the government keeps buying so many bullets…

  • Steve

    What amazes me about this article is that it copies my complaint I made over a week before this article was published wondering why the author left out Social Security when he was addressing what the Fed was doing to savings.

    Glad to see this article but I do find it strange that it comes after comment with no thank you for the idea.

    Other than that nice article and I hope it sinks in to every one just how bad the returns have been on Gov’t Bonds. Just to make the point if your Stock Broker or Insurance Agent sold you an investment with such a low rate of return, if not a negative rate of return, he/she could be Criminally And Civility prosecuted by the Securities and Exchange Commission and You.

    So why is not Congress facing this charge of fudicary malfeasance?

  • People are living longer in retirement which means that they need to pay more in while they’re working so either extend the working age or increase the contribution levels.

  • Washington

    Wow… interesting this wasn’t on the MSM (including Fox)…. Lindsey Williams: “The most significant day in the history of the American dollar, since its inception, happened on Thursday, Sept. 6. On that day, something took place that is going to affect your life, your family, your dinner table more than you can possibly imagine.” “On Thursday, Sept. 6… just a few days ago, China made the official announcement. China said on that day, our banking system is ready, all of our communication systems are ready, all of the transfer systems are ready, and as of that day, Thursday, Sept. 6, any nation in the world that wishes from this point on, to buy, sell, or trade crude oil, can do using the Chinese currency, not the American dollar. Dollar no longer primary oil currency as China begins to sell oil using Yuan

  • LadyLiberty

    I wish you would write more about this here are my thoughts

    Social Security will be paid unless the entire government collapses since it is a legally enforceable debt just like any other. Even left as is the only thing that would happen is the benefits would be reduced in the future. The fund does not have the authority to tax, by law it cannot deficit spent. Social Security is an entirely self funded program ZERO government money goes into Social Security something many don’t seem to understand. It has NO EFFECT on the budget period other then when the fund actually cash’s in some of it’s IOU’s like it just started doing. Even then it isn’t adding to the debt it is just collecting what it is owed. Social Security owned 19% of the debt last year far more then China or any foreign creditor. When/if it doesn’t have enough funds it will have to cut benefits.

    It doesn’t matter if our government has been borrowing from Social Security for years ($2.7 Trillion so far). Social Security holds more of our debt then China and for the first time in history people will get back less then they were FORCED to pay in.

    “According to a 2011 study by the Urban Institute, a married couple retiring last year after both spouses had worked throughout their lifetimes wound up paying about $598,000 in Social Security taxes. If the man lives to 82 and the woman to 85, they can expect to collect about $556,000 in benefits.”

    The public has been duped with lies about Social Security and obama’s reduction in the payroll tax $166 Billion hurt Social Security even more. Many people act like it’s the Senior’s stealing from them. That claim is ridiculous as Social Security is an entirely self funded program paid for by Employers/Employee’s not the government.

    Think about this since it is a legally enforceable debt if anyone actually tried to dismantle the program right now where would they get the money to pay it off remember it was the largest holder of our debt last year. If you use entitlement in reference to Social Security in the sense that people are entitled to get back the money they were FORCED to pay in you are correct it’s the law. Doesn’t matter if it was a Ponzi scheme or not the fault lies with the politicians who passed it into law to begin with long before the boomers who are starting to collect now had any say in it. I’m all for reform or getting rid of the program since I don’t believe it was Constitutional to begin with but that’s water over the damn now for the people who already paid into it. If you want to correctly phrase something as a welfare program obamacare would be the one that’s full of taxes that DO affect the budget.

    Medicare is the real issue right now that’s why they are campaigning on it.

    For those who WHINE about the Senior’s wanting the money back they were forced to pay in they have no moral highground when they complain about a corrupt government because they themselves are advocating theft from Seniors. By LAW our government is obligated to pay it back .

    “Far from being “worthless IOUs,” the investments held by the trust funds are backed by the full faith and credit of the U. S. Government.”

    In addition our Constitution has this to say…

    Sect. 4 of the 14th Amendment. It reads in part:

    ”… .the validity of the public debt of the United States, authorized by law… shall not be questioned”

    I think that threatening to create conditions that may cause the US not to pay the debt owed it’s own citizen’s falls under questioning the validity of that debt. A prior ruling by the Supreme Court albeit on an unrelated issue appears to back this up.

    And second, there is this Criminal Mischief statute

    18 US 1361. Government property or contracts

    “Whoever willfully injures or commits any depredation against any property of the United States, or of any department or agency thereof, or any property which has been or is being manufactured or constructed for the United States, or any department or agency thereof, or attempts to commit any of the foregoing offenses, shall be punished as follows:

    If the damage or attempted damage to such property exceeds the sum of $1,000, by a fine under this title or imprisonment for not more than ten years, or both; if the damage or attempted damage to such property does not exceed the sum of $1,000, by a fine under this title or by imprisonment for not more than one year, or both.”

    The TRUTH About Who Really Owns All Of America’s Debt


    Social Security Trust Fund

    Percent of US Debt that they own: 19%


    Percent of US Debt that they own: 8%

    in full

    It is a DEBT just like any other debt and every debt is someone’s elses assets in this case the Seniors. The people who set it up and the politicians who borrowed from it they are the problem yet they have successfully misdirected the anger.

    “Here’s how it works: For nearly three decades Social Security produced big surpluses, collecting more in taxes than it paid in benefits. The government, however, spent that money on other programs, reducing the amount it had to borrow from the public, including foreign investors. That’s why some advocates complain that Congress has “raided” Social Security.

    In return, the Treasury Department issued special bonds to Social Security. The bonds are now valued at $2.7 trillion.

    The bonds pay interest like other Treasury notes and are backed by the full faith and credit of the U.S. government.”

    I am not saying Social Security is unlike a Ponzi Scheme but that isn’t the fault of the people who paid into it, that’s the fault of the Politicians who set it up and lack of leadership to either fix it for the coming generations or dismantle it.

  • Robert Cooper

    Since we all know that all the goverment, the Exec. Branch, the Senate and Congress and the Supreme court are guilty of the violiation many laws concerning all these issues and of course the biggie, obozo’s inelibity why are we not insisting that they are prosecuted.

  • Washington

    Mitt Romney vs Barack Obama First Debate Preview

    Are Romney and Obama the same on most issues? Try, ALL ISSUES!

    Comparing side by side the words and political stances of Republican and Democratic presidential candidates Mitt Romney and President Barack Obama. Includes topics like universal health care, gun rights, energy, NDAA, the Patriot Act, Iran, sanctions, economic stimulus. bank and auto bailouts, civil rights, TARP, the Federal Reserve, Ben Bernanke, campaign donations, and more.

    Published on Aug 15, 2012 Reality Check takes a look at Wisconsin Congressman Paul Ryan’s spending record during his seven terms in office.

  • Washington

    Land of The Freebies, Home of the Enslaved

  • lynda scott

    people are going to starve to death in the coming inflationary depression. no interest on savings. higher food prices. no jobs. something tells me that after years of working and paying taxes into the system now they just want the boomers all dead. the govt knew 50 years ago that the boomers would be old, they had 40-50 years to plan for this event. FISCAL MALFEASANCE!

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