Banksters

What Have The Central Banks Of The World Done Now?

The central banks of the world are acting as if it is 2008 all over again.  Desperate times call for desperate measures, and right now the central bankers are pulling out all the stops.  The Federal Reserve, the European Central Bank, the Bank of England, the Bank of Canada, the Bank of Japan and the Swiss National Bank have announced a coordinated plan to provide liquidity support to the global financial system.  According to the plan, the Federal Reserve is going to substantially reduce the interest rate that it charges the European Central Bank to borrow dollars.  In turn, that will enable the ECB to lend dollars to European banks at a much cheaper rate.  The hope is that this will alleviate the credit crunch which has gripped the European financial system by the throat.  So where is the Federal Reserve going to get all of these dollars that it will be loaning out at very low interest rates?  You guessed it – the Fed is just going to create them out of thin air.  Our currency is being debased so that Europe can be helped out.  Unfortunately, the impact of this move will be mostly “psychological” because it really does nothing to address the fundamental problems that Europe is facing.  It is up to Europe to solve those problems, and so far Europe has shown no signs of being able to do that.

The major central banks of the world say that they want to “enhance their capacity to provide liquidity support to the global financial system.”  But essentially what is happening is that the Federal Reserve is going to be zapping large amounts of dollars into existence and loaning them out to the ECB very, very cheaply.  Think of it as a type of “quantitative easing” on a global scale.

The decision to do this was reportedly made by the Federal Reserve on Monday morning.  For the moment, this move seems to have stabilized the European financial system.  It is quite unlikely that any major European banks will fail this weekend now.

But as mentioned above, this move does nothing to solve the very serious financial problems that Europe is facing.  This intervention by the central banks is merely just a speed bump on the road to financial oblivion.

Most Americans are not going to understand what the central banks of the world just did, but it really is not that complicated.

The following is how CNN chief business correspondent Ali Velshi broke down what the central banks have done….

In an attempt to stave off the consequences of a global credit freeze, the Federal Reserve, in coordination with major central banks, has created a credit line available to those central banks, whereby they can borrow dollars at reduced interest rates for periods of three months. The central banks, in turn, can lend to commercial banks in their respective countries. This is meant to reduce the cost of short-term borrowing for troubled European banks and to give them immediate access to dollars.

This was done immediately after the collapse of Lehman Brothers as well, to alleviate the consequences of banks being largely unwilling to lend to other banks, even for short periods, for fear that the borrowing banks could fail.

Okay – so the Federal Reserve is loaning giant piles of cheap money to the European Central Bank.

So where in the world does all of that money come from?

As a CNBC article recently explained, all of this money is created right out of thin air by the Federal Reserve….

Neither the dollars nor the Euros come from anywhere. They aren’t moved or debited from anywhere. They are invented right on the spot with a few taps on the key pad. And that’s all. There’s no printing press fired up to make new dollars or euros.

This is sometimes called “fiat money.” But that makes it sound as if some command from a sovereign created the money. It’s really closer to “keyboard money,” since it is created by data entry in a computer.

Does that sound bizarre to you?

It should.

But that is how the global financial system really works.

We live in a crazy world.

So what did the financial markets of the world think of this move by the Federal Reserve?

It turns out that they absolutely loved it.

The Dow was up 490 points, and that was the biggest gain of the year so far.

Unfortunately, this stock market rally is not going to last indefinitely.  If you are still in the market, enjoy this while you can because eventually a whole lot of pain is going to be coming.

Again, nothing has been solved.  Europe is still in a massive amount of trouble.  But the announcement did make everyone feel all “warm and fuzzy” for at least a day.

Michelle Girard, a senior economist at RBS Securities, said the following about this move….

“The impact is more psychological than anything else”

Just think of it as “comfort food” for the financial markets.

It was also a very desperate move.

In fact, some even believe that this move happened because a major European bank was in danger of failing.

Just check out some of the things that Jim Cramer of CNBC has been saying on Twitter….

If the Fed didn’t act we would have had the largest bank failure ever this weekend, i believe.

The actions the governments took today shows that there was without a doubt a major bank about to fall this weekend.  That’s very dire….

I believe a major European bank would have gone under this weekend…. That’s why they did this….

An article in Forbes has also speculated that this move was made because a major European bank was in imminent danger of failing….

Did a big European bank come close to failing last night?  European banks, especially French banks, rely heavily on funding in the wholesale money markets.  Given the actions of the world’s largest central banks last night, it raises the question of whether a major bank was having difficulty funding its immediate liquidity needs.

Perhaps we will never know the truth, but the reality is that the Federal Reserve and the European Central Bank would have never taken coordinated action like this if they did not believe that there was some sort of imminent threat to the global financial system.

Sadly, this latest move is also going to have some side effects.

Pimco senior vice president Tony Crescenzi says that all of this “liquidity” is going to dramatically increase the size of the U.S. monetary base….

Keep in mind that any use of the Fed’s swap facility expands the Fed’s monetary base: all dollars, no matter where they are deposited, whether it be Kazakhstan, Japan, or Mexico, wind up back in an American bank. This means that any time a foreign central bank engages in a swap with the Federal Reserve, the Fed will create new money in order to make the swap. Use of the Fed’s liquidity swap line in late 2008 was the main cause of a surge in the Fed’s monetary base at that time. The peak for the swap line was about $600 billion in December 2008. Some observers will therefore say that the swap line is a backdoor way to engage in more quantitative easing.

When there is more money floating around out there but the same amount of goods and services, prices go up.

So will we eventually see more inflation in the United States because of all this?

That is what some are fearing.

Meanwhile, politicians in Europe have failed to come up with a plan to address the European financial crisis once again.

They are calling it a “delay”, but the truth is that it should be called a “failure”.  The following comes from an article in USA Today….

The ministers delayed action on major financial issues — such as the concept of a closer fiscal union that would guarantee more budgetary discipline — until the heads of state meet next week in Brussels.

So will European politicians come up with a real plan next week in Brussels?

That seems unlikely.

The reality is that this latest move by the major central banks of the world does not change the fact that Europe is in a huge amount of trouble and is most likely headed for a very painful financial collapse.

One more thing that this latest move by the central banks of the world highlights is the fact that we do not have any control over what they do.

All of these central banks are run by unelected bureaucrats that answer to nobody.  The decisions that these central bankers make affect all of our lives in a very significant way, and yet we have zero input into these decisions.

Most of the decisions that these central bankers make seem to benefit big banks and big financial institutions.  They always claim that the benefits will “filter down” to the rest of us.  But most of the time what ends up filtering down to us is the economic pain that comes from their bad decisions.

As I have written about so many times before, these central banks need to be abolished.  The American people need to tell Congress to shut down the Federal Reserve and to start issuing debt-free United States currency.

We do not want a bunch of unelected central bankers to “centrally plan” the U.S. economy or to “centrally plan” the global economy.

The more these central bankers monkey with things, the more they mess things up.

Yes, this latest move has stabilized things for the moment, but big trouble is on the horizon for the global financial system.

Count on it.

Let Them Eat Cake: 10 Examples Of How The Elite Are Savagely Mocking The Poor

There is absolutely nothing wrong with working hard and making a lot of money, but there is something wrong with being completely arrogant and smug about it.  Today, many among the elite are savagely mocking the poor, and that is a huge mistake.  You shouldn’t kick people when they are down.  There are tens of millions of Americans that are deeply frustrated about losing their homes, losing their jobs or barely being able to survive in this economy.  These frustrations have been one of the primary reasons for the rise of the Tea Party movement and the rise of the Occupy Wall Street movement.  What these movements have in common is that people in both movements are sick and tired of the status quo and they want something to be done about our broken system.  There are huge numbers of families out there right now that have just about reached the end of their ropes.  Instead of showing compassion, many of the ultra-wealthy have decided that it is funny to mock the poor and those that are suffering.  So how are all of these protesters going to respond to the “let them eat cake” attitude of the Wall Street elite?  The protesters are being told that nothing that they can do will change anything and that they should be grateful for what Wall Street and the ultra-wealthy have done for them.  They are essentially being told that they should just shut up and go home.  So will we see these protest movements become discouraged and die down, or will the patronizing attitudes of so many among the elite just inflame them even further?

Right now, there really are two different “Americas”.  In one America, the stock market is surging, corporate profits are soaring and BMW is operating factories at 110% of capacity just to keep up with demand.

In the other America, unemployment is rampant, millions of families are being kicked out of their homes and more than 45 million Americans are on food stamps.

There is more economic frustration in this country today than there has been at any other time since the Great Depression.  We are watching pressure build to very dangerous levels.

It is important to note that I certainly do not agree at all with the solutions being put forward by the organizers of the Occupy Wall Street protests.  As I have written about previously, collectivism is one of our biggest problems, and more collectivism is not going to solve anything.

But it is definitely understandable that people are incredibly upset about this economy and that they want to protest.  Most Americans realize that something is fundamentally wrong with our economic system.

Unfortunately, most of them do not understand how we have gotten to this point or what it is going to take to fix things.  That is one of the reasons why I write about economic issues so much.  We desperately need to educate America.

But what is undeniable is that there is a growing rage in this country that protest movements such as the Occupy Wall Street are giving a voice to.

Our system is badly broken.  The people out there protesting in the streets may not understand much, but they do understand that something needs to change.

The Wall Street elite should be taking these protests as a signal that they need to get their house in order.  The status quo just is not going to cut it.  But instead of taking leadership and calling for significant change, many among the elite are openly mocking the protesters.

The incredible arrogance displayed by so many on Wall Street and by so many in Washington D.C. is absolutely appalling.

The following are 10 examples of how the elite are openly mocking the poor in America today….

#1 According to an article in The New York Times, poor families that lost their homes to foreclosure were openly mocked during a Halloween party thrown by the law firm of Steven J. Baum.  This particular law firm represents many of the largest mortgage lenders in the United States….

The firm, which is located near Buffalo, is what is commonly referred to as a “foreclosure mill” firm, meaning it represents banks and mortgage servicers as they attempt to foreclose on homeowners and evict them from their homes. Steven J. Baum is, in fact, the largest such firm in New York; it represents virtually all the giant mortgage lenders, including Citigroup, JPMorgan Chase, Bank of America and Wells Fargo.

Photos from this Halloween party are posted on The New York Times website.  To say that they are appalling would be a huge understatement.  The following is how The New York Times described one of the photos….

In one, two Baum employees are dressed like homeless people. One is holding a bottle of liquor. The other has a sign around her neck that reads: “3rd party squatter. I lost my home and I was never served.” My source said that “I was never served” is meant to mock “the typical excuse” of the homeowner trying to evade a foreclosure proceeding.

#2 To many on Wall Street, the OWS protests are one big joke.  In fact, Wall Street executives have been spotted sipping champagne while watching the Occupy Wall Street protests from their balconies.

#3 In response to the Occupy Chicago protests, signs were put up in the windows of the building where the Chicago Board of Trade is located that spelled out this sentence: “We Are The 1%“.

#4 Many columnists for major financial publications have had no fear of mocking the Occupy Wall Street protesters.  For example, Doug Hirschhorn recently wrote the following for Forbes….

As your Occupation of Wall Street continues, you may want to grasp a few things. First, it is not going to change anything in the short term and probably not much in the long-term either.

I hate to be the bearer of that news, but money makes the world go round and “Wall Street” is all about money. Second, the top traders, banks and hedge funds are still going to out earn and generate substantial profits from speculating on the disconnects in the prices of things generated from all the moving parts in the global economy and it has nothing to do with why you lost your house or job or can’t find a job. If anything the successful ones are helping you, your pensions funds, retirement savings and the economy in general. If Wall Street stops. The world stops. Period.

#5 Instead of attempting a balanced report on the Occupy Wall Street protests, Erin Burnett of CNN openly made fun of them during a recent broadcast.  After being a stalwart on CNBC for so many years, Burnett has very close ties to Wall Street and apparently she does not like anyone criticizing her friends.  You can see video of Burnett mocking the Occupy Wall Street movement right here.

#6 Barack Obama continues to mock the poor by telling them to cut back on vacations and little luxuries like going out to eat while at the same time sending his own family out on incredibly expensive vacations.  The following is one example I noted in an article earlier this year….

Barack Obama recently made the following statement to American families that are struggling to survive in this economy: “If you’re a family trying to cut back, you might skip going out to dinner, or you might put off a vacation.” A few days after making that statement Obama sent his wife and children off on yet another vacation, this time to a luxury ski hotel in Vail, Colorado.

Later on in that same article I mentioned another outrageously expensive vacation taken by the Obamas that was paid for by our taxes….

Back in August, Michelle Obama took her daughter Sasha and 40 of her friends for a vacation in Spain.

So what was the bill to the taxpayers for that little jaunt across the pond?

It is estimated that vacation alone cost U.S. taxpayers $375,000.

During a time when so many millions of American families are deeply, deeply suffering it is truly appalling that the residents of the White House would be so insensitive.

#7 Republican presidential candidate Herman Cain recently declared that anyone that is unemployed or poor in America should only blame themselves….

“Don’t blame the big banks. If you don’t have a job and you’re not rich, blame yourself.”

#8 Sometimes our politicians are so insensitive that it is almost hard to believe.  In an interview with George Stephanopoulos of ABC News while she was still the Speaker of the House, Nancy Pelosi stated that we need poor people to have less children because it costs the government so much money to take care of them….

PELOSI: Well, the family planning services reduce cost. They reduce cost. The states are in terrible fiscal budget crises now and part of what we do for children’s health, education and some of those elements are to help the states meet their financial needs. One of those – one of the initiatives you mentioned, the contraception, will reduce costs to the states and to the federal government.

STEPHANOPOULOS: So no apologies for that?

PELOSI: No apologies. No. we have to deal with the consequences of the downturn in our economy.

#9 Warren Buffett has some interesting observations on class warfare.  He is one of the few wealthy Americans that is willing to say what everyone else is thinking.  Back in 2006, Buffett was quoted as saying the following in an article in The New York Times….

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”

Buffett was not taking pride in the fact that the elite have won, but there are many others among the elite that are very proud of what they have done and they are not afraid to look down on the poor.

The level of income inequality that we have in the United States today is absolutely amazing.  According to data from a few years ago, the average household income for the top 0.01% of all Americans was $27,342,212.  According to that same data, for the bottom 90% of all Americans the average household income was just $31,244.

#10 Every single day, our “representatives” in Washington D.C. are living the high life at our expense.  It is amazing that out of the entire population of the United States, we continue to overwhelming elect rich people to Congress.  As I noted in a recent article, more than half of all the members of Congress are millionaires, and the median wealth of a U.S. Senator in 2009 was 2.38 million dollars.

Without a doubt, the wealthy rule over us all and they intend to maintain control and perpetuate the system which has rewarded them so handsomely.

When necessary, they are not afraid to call in the police to bust some skulls.  Sadly, we are already seeing some brutally violent confrontations between law enforcement authorities and Occupy Wall Street protesters in many areas of the country.  The other day, I wrote about the horrific violence that took place in Oakland recently….

Unfortunately, the authorities are not just going to sit by and watch these protests happen.  In fact, they are already clamping down hard in many areas of the nation.  For example, police in Oakland recently used tear gas and rubber bullets to break up the Occupy protest in that city.  When police opened fire, the streets of Oakland literally became a war zone for a few minutes.  You can see shocking videos of the violence here, here and here.

Power and wealth have become incredibly concentrated in the United States today.  As one scientific study demonstrated recently, the elite control almost the entire global economy.  In fact, the University of Zurich study discovered that there are just 147 gigantic corporations at the core of it all.

It is not a good thing that such a very small group of people completely dominates all the rest of us.

Once again, there is absolutely nothing wrong with working hard, making great contributions to society and becoming very wealthy.

However, what we have today is a fundamentally broken system that funnels most of the wealth and most of the power into the hands of the ultra-wealthy and the gigantic corporations that they own.

It would be great if the American people could come together and work to make some positive changes to our system.

But right now, it appears that strife, discord and hatred are going to continue to rapidly grow in this country.  We have become a very divided nation and we are watching anger and frustration grow to very dangerous levels.

All of this is a recipe for mass chaos.  Our country is marching toward a date with disaster and right now we show no signs of changing course.

Please pray for America.

We definitely need it.

Labor Day 2011: What Are We Celebrating? The Lack Of Jobs In America?

If you still have a good job, you certainly have something to celebrate on Labor Day 2011.  So far you have survived the decline of the U.S. economy.  But your day may be coming soon.  This weekend, there will be millions of Americans that will not be doing any celebrating.  They are not enjoying a break from their jobs because they don’t have any jobs.  In fact, it seems kind of heartless for the rest of us to be celebrating while so many of our countrymen are destitute.  What are we celebrating on Labor Day 2011?  The lack of jobs in America?  At this point, the U.S. economy closely resembles a gigantic game of musical chairs.  Every time the music stops, even more good jobs are pulled out of the game and even more workers are added.  Once upon a time, if you really wanted a job in America you could get one.  But now the competition for even the most basic jobs is absolutely brutal.  If you gathered together all of the unemployed people in the United States, they would constitute the 68th largest country in the world.  It would be a nation larger than Greece.  All of those unemployed people are not going to be taking trips with their families this holiday weekend.  Instead, most of them are going to be trying to figure out what to do with their shattered lives.

With the economy in such a mess, you would think that someone out there would be suggesting that Labor Day 2011 should really be a day of mourning.  This economic downturn has shredded the lives of millions of American families.

Is there any other crisis in recent years that has had more of an impact on a national level?

On Friday, the U.S. Bureau of Labor Statistics reported that no new jobs were created during the month of August and that the official unemployment rate remained steady at 9.1 percent.

Wait, aren’t we supposed to be in the middle of an economic recovery?

Actually, we need at least 125,000 new jobs or so each month just to keep up with the growth of the U.S. population.  So it seems odd that the economy would add zero jobs but the unemployment rate would not increase.

But that is what the government is saying.

In any event, things don’t look good.  According to the U.S. Bureau of Labor Statistics, the civilian employment-population ratio was at 58.2 percent last month.  This is an incredibly low figure.

In a recent article, John Mauldin explained what would have to happen to return the employment-population ratio to where it was in the year 2000….

The US has roughly the same number of jobs today as it had in 2000, but the population is well over 30,000,000 larger. To get to a civilian employment-to-population ratio equal to that in 2000, we would have to gain some 18 MILLION jobs.

Does anyone have an extra 18 million jobs laying around somewhere?  The following is a chart showing what has happened to the employment-population ratio over the last several decades….

What makes this chart even more startling is that the number of women in the workforce was constantly rising for most of the time period reflected in this chart.  So when you take that into account our current situation is far worse.

For example, back in 1969 95 percent of all men between the ages of 25 and 54 had a job.  Pretty much any man in his prime working years that wanted a job could get a job.

In July, only 81.2 percent of men in that age group had a job.

But that is only part of the story.  Another significant trend has been how flat wages have been.  Average hourly earnings fell 0.1% in August.  Meanwhile, the prices in the stores continue to go up.

In this column, I write a lot about how the middle class is being destroyed in this country.  When you look at the ratio of employee compensation to GDP, it is now the lowest that is has been in about 50 years.  In other words, U.S. workers are taking home a smaller share of the pie than at any other time in modern U.S. history.

But at this point those that still actually do have jobs consider themselves to be the lucky ones.

Tonight, there will be millions of desperate unemployed Americans that will blankly stare at their televisions as they try to figure out how their dreams got flushed down the toilet.

Remember how I mentioned at the beginning of the article that unemployed Americans would constitute a country larger than Greece?  Well, 42 percent of all of those unemployed Americans have been out of a job for 27 weeks or longer.

What would you do if you lost your job and you were unemployed for half a year?

Would you be able to survive?

In America today, the longer that you are unemployed, the harder it is for you to get another job.  If you have been unemployed for at least one year, there is a 91 percent chance that you will not find a new job within the next month.

Out of sheer desperation, many Americans have taken jobs that they never even dreamed that they would take.

Only 47 percent of the U.S. workforce is “fully employed” at this point.  Right now there are hordes of Americans that are waiting tables, flipping burgers or stocking shelves at Wal-Mart because that is all that they can find right now.

Sadly, this is all part of a long-term trend.

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.

This middle class is being pummeled out of existence, and most Americans don’t even understand what is happening.

It certainly does not help that both the Republicans and the Democrats have stood by as millions upon millions of our jobs have been shipped out of the country.

It also certainly does not help that both the Republicans and the Democrats have stood by as millions upon millions of illegal immigrants have taken jobs away from American citizens.

It also certainly does not help that both the Republicans and the Democrats have stood by as U.S. businesses have been absolutely crushed by mountains of nightmarish regulations and have been taxed into oblivion.

The decade that just ended was the worst decade for job growth in America since the Great Depression.  In fact, even though thirty million people were added to the U.S. population during the decade, there was essentially zero job growth.

Sadly, things look like they are going to continue to get even worse.  For example, the United States Postal Service is in such trouble that it is asking Congress to allow it to lay off 120,000 workers. Overall, the Postal Service wants to eliminate 220,000 positions by 2015.

So is this big speech that Obama is going to give on Thursday going to solve anything?

Of course not.

The reality is that if Obama or any of his advisors had any grand ideas for fixing our situation they would have implemented them by now.

And what is the big deal in making us wait until Thursday to hear these “new ideas”?  Why not just tell us now?

Sadly, the truth is that everything that our politicians do now is about setting themselves up for the 2012 election.

Most likely, Obama is just going to take a bunch of tired ideas that do not work and “spin” them into a grand new plan.

Millions of Americans will actually buy into it.

But it is not as if establishment Republican candidates have anything to offer either.

You know, if Obama wanted to do something substantial, one place to start would be to order the Federal Reserve to stop paying banks not to make loans to individual and small businesses.

But just like all of our other weak-minded recent presidents, Barack Obama is not going to confront the Federal Reserve.

In fact, everything that Obama actually does “for the economy” only seems to make things worse.

As I have outlined before, we know exactly why our economy is losing jobs and we know things that we could start doing right now to reverse the long-term trends that are absolutely killing us.

But Barack Obama is not talking about real solutions and neither are the establishment Republican candidates.

So things are going to continue to get worse.  The number of Americans on food stamps has increased 74% since 2007.  Every month we have been setting a new record.  The middle class is going to continue to disappear as the number of good jobs continues to decrease.

So, no, there are not too many reasons to celebrate on Labor Day 2011.  Our economy is dying and millions upon millions of our fellow citizens are deeply suffering.

Urgent action is required in order to prevent our situation from rapidly getting worse, but right now the vast majority of our politicians are asleep at the switch.

So instead of celebrating this Labor Day, why don’t you say a prayer for America instead?

We really could use it.

Even Goldman Sachs Secretly Believes That An Economic Collapse Is Coming

Goldman Sachs is doing it again.  Goldman is telling the public that everything is going to be just fine, but meanwhile they are advising their top clients to bet on a huge financial collapse.  On August 16th, a 54 page report authored by Goldman strategist Alan Brazil was distributed to institutional clients.  The general public was not intended to see this report.  Fortunately, some folks over at the Wall Street Journal got their hands on a copy and they have filled us in on some of the details.  It turns out that Goldman Sachs secretly believes that an economic collapse is coming, and they have some very interesting ideas about how to make money in the turbulent financial environment that we will soon be entering.  In the report, Brazil says that the U.S. debt problem cannot be solved with more debt, that the European sovereign debt crisis is going to get even worse and that there are large numbers of financial institutions in Europe that are on the verge of collapse.  If this is what people at the highest levels of the financial world are talking about, perhaps we should all start paying attention.

There is a tremendous amount of fear in the global financial community right now.  As I wrote about the other day, the financial world is about to hit the panic button.  Things could start falling apart at any time.  Most of these big banks will not admit how bad things are publicly, but privately there is a whole lot of freaking out going on.

According to the Wall Street Journal, Brazil believes that “as much as $1 trillion in capital may be needed to shore up European banks; that small businesses in the U.S., a past driver of job production, are still languishing; and that China’s growth may not be sustainable.”

Perhaps most startling of all is what the report has to say about the debt problems of the United States and Europe.

For example, this following excerpt from the report sounds like it could have come straight from The Economic Collapse Blog….

“Solving a debt problem with more debt has not solved the underlying problem. In the US, Treasury debt growth financed the US consumer but has not had enough of an impact on job growth. Can the US continue to depreciate the world’s base currency?”

Remember, this statement was not written by some guy on the Internet.  A top Goldman Sachs analyst put it into a report for institutional investors.

The report also goes into great detail about the financial crisis in Europe.  Brazil writes about how the euro is headed for trouble and about how dozens of financial institutions in Europe could potentially be in danger of collapse.

But in any environment Goldman Sachs thinks that it can make money.  The following is how Business Insider summarized the advice that Brazil gave in the report regarding how to make money off of the impending collapse in Europe….

  • Buy a six-month put option on the Euro versus the Swiss Franc, thus betting the Euro will drop against the Franc (the Franc being the currency that an official Goldman report recently referred to as the most overvalued in the world)
  • Buy a five-year credit default swap on an index of European corporate debt—the iTraxx 9. This is a bet that some of these companies will default, and your insurance policy, the CDS, will pay off

This is so typical of Goldman Sachs.  They will say one thing publicly and then turn around and do the total opposite privately.

For example, prior to the financial crisis of 2008, Goldman Sachs was putting together mortgage-backed securities that they knew were garbage and marketing them to investors as AAA-rated investments.  On top of that, Goldman then often privately bet against those exact same securities.

The CEO of Goldman Sachs has even acknowledged that the investment bank engaged in “improper” behavior during 2006 and 2007.

For much more on the history of all this, please see this article: “How Goldman Sachs Made Tens Of Billions Of Dollars From The Economic Collapse Of America In Four Easy Steps“.

So will Goldman Sachs ever get into serious trouble for any of this?

No, of course not.

Yeah, they will get a slap on the wrist from time to time, but the reality is that the top levels of the federal government are absolutely littered with ex-employees of Goldman Sachs.  Goldman is one of the “too big to fail” banks and they are going to continue to do pretty much whatever they feel like doing.

Sadly, the power of the “too big to fail” banks just continues to grow.  At this point, the “big six” U.S. banks (Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo) now possess assets equivalent to approximately 60 percent of America’s gross national product.

Goldman Sachs was the second biggest donor to Barack Obama’s campaign in 2008, so don’t expect Obama to do anything about any of this.

We have a financial system that is deeply, deeply corrupt and all of that corruption is a big reason why things are falling apart.

Sadly, the 54 page report mentioned above is right – we really are facing a global debt meltdown and we really are heading for an economic collapse.

You aren’t going to hear the truth from the mainstream media or from our politicians because “keeping people calm” is much more of a priority to them than telling the truth is.

The debt crisis in the United States is unsustainable and the debt crisis in Europe is unsustainable.  Right now we are in the calm before the storm, and nobody knows exactly when the storm is going to strike.

But let there be no doubt – it is coming.

The amazing prosperity that we have enjoyed for the last several decades has largely been a debt-fueled illusion.  It was a great party while it lasted, but now it is coming to an end and the aftermath of the coming crash is going to be absolutely horrific.

Keep watch and get prepared.  We don’t know exactly when the collapse is going to happen, but it is definitely on the way and now even Goldman Sachs is admitting that.

Too Big To Fail?: 10 Banks Own 77 Percent Of All U.S. Banking Assets

Back during the financial crisis of 2008, the American people were told that the largest banks in the United States were “too big to fail” and that was why it was necessary for the federal government to step in and bail them out.  The idea was that if several of our biggest banks collapsed at the same time the financial system would not be strong enough to keep things going and economic activity all across America would simply come to a standstill.  Congress was told that if the “too big to fail” banks did not receive bailouts that there would be chaos in the streets and this country would plunge into another Great Depression.  Since that time, however, essentially no efforts have been made to decentralize the U.S. banking system.  Instead, the “too big to fail” banks just keep getting larger and larger and larger.  Back in 2002, the top 10 banks controlled 55 percent of all U.S. banking assets.  Today, the top 10 banks control 77 percent of all U.S. banking assets.  Unfortunately, these giant banks are also colossal mountains of risk, debt and leverage.  They are incredibly unstable and they could start coming apart again at any time.  None of the major problems that caused the crash of 2008 have been fixed.  In fact, the U.S. banking system is more centralized and more vulnerable today than it ever has been before.

It really is difficult for ordinary Americans to get a handle on just how large these financial institutions are.  For example, the “big six” U.S. banks (Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo) now possess assets equivalent to approximately 60 percent of America’s gross national product.

These huge banks are giant financial vacuum cleaners.  Over the past couple of decades we have witnessed a financial consolidation in this country that is absolutely unprecedented.

This trend accelerated during the recent financial crisis.  While the big boys were receiving massive bailouts, the hundreds of small banks that were failing were either allowed to collapse or they were told that they should find a big bank that was willing to buy them.

As a group, Citigroup, JPMorgan Chase, Bank of America and Wells Fargo held approximately 22 percent of all banking deposits in FDIC-insured institutions back in 2000.

By the middle of 2009 that figure was up to 39 percent.

That is not just a trend – that is a landslide.

Sadly, smaller banks continue to fail in large numbers and the big banks just keep growing and getting more power.

Today, there are more than 1,000 U.S. banks that are on the “unofficial list” of problem banking institutions.

In the absence of fundamental changes, the consolidation of the banking industry is going to continue.

Meanwhile, the “too big to fail” banks are flush with cash and they are getting serious about expanding.  The Federal Reserve has been extremely good to the big boys and they are eager to grow.

For example, Citigroup is becoming extremely aggressive about expanding….

Citigroup has been hiring dozens of investment bankers, dialing up advertising and drawing up plans to add several hundred branches worldwide, including more than 200 in major cities across the United States.

Hopefully the big banks will start lending again.  The whole idea behind the bailouts and all of the “quantitative easing” that the Federal Reserve did was to get money into the hands of the big banks so that they would lend it out to ordinary Americans and get the economy rolling again.

Well, a funny thing happened.  The big banks just sat on a lot of that money.

In particular, what they did was they deposited much of it at the Fed and drew interest on it.

Since 2008, excess reserves parked at the Fed have grown by nearly 1.7 trillion dollars.  Just check out the chart posted below….

The American people were promised that TARP and all of the other bailouts would enable the big banks to lend out lots of money which would help get the economy going for ordinary Americans again.

Well, it turns out that in 2009 (the first full year after Congress passed the bailout legislation) U.S. banks posted their sharpest decline in lending since 1942.

Lending has never fully recovered since the crash of 2008.  The big financial institutions like Goldman Sachs, Morgan Stanley and JPMorgan Chase have been able to get all the cash that they need, but they have not passed that generosity along to ordinary Americans.

In fact, the biggest U.S. banks have actually reduced small business lending by about 50 percent since the crash of 2008.

That doesn’t sound like what we were promised.

These “too big to fail” banks have been able to borrow gigantic amounts of money from the Fed for next to nothing and yet they still refuse to let credit flow to local communities.  Instead, the big banks have found other purposes for all of the super cheap money that they have been getting from the Fed as Ellen Brown recently explained….

It can be very profitable indeed for the big Wall Street banks, but the purpose of the near-zero interest rates was supposed to be to get banks to lend again. Instead, they are, indeed, paying “outrageous bonuses to their top executives;” using the money to engage in the same sort of unregulated speculation that nearly brought down the economy in 2008; buying up smaller banks; or investing this virtually interest-free money in risk-free government bonds, on which taxpayers are paying 2.5 percent interest (more for longer-term securities).

What makes things even worse is that these big banks often pay next to nothing in taxes.

For example, between 2008 and 2010, Wells Fargo made a total profit of 49.37 billion dollars.

Over that same time period, their tax bill was negative 681 million dollars.

Do you understand what that means?  Over that 3 year time period, Wells Fargo actually got 681 million dollars back from the U.S. government.

Isn’t that just peachy?

Meanwhile, the big financial giants have not learned their lessons and they continue to do business pretty much as they did it prior to 2008.

The big banks continue to roll up massive amounts of risk, debt and leverage.

Today, Wall Street has become one giant financial casino.  More money is made on Wall Street by making side bets (commonly referred to as “derivatives“) than on the investments themselves.

If the bets pay off for the big financial institutions, mind blowing profits can be made.  But if the bets go against the big financial institutions (as we saw in 2008), firms can collapse almost overnight.

In fact, it was derivatives that almost brought down AIG.  The biggest insurance company in the world almost folded in 2008 because of a whole bunch of really bad bets.

The danger from derivatives is so great that Warren Buffet once called them “financial weapons of mass destruction”.  It has been estimated that the notional value of the worldwide derivatives market is somewhere in the neighborhood of a quadrillion dollars.

The largest banks have tens of trillions of dollars of exposure to derivatives.  When the next great financial collapse happens, derivatives will almost certainly be at the center of it once again.  These side bets do not create anything real for the economy – they just make and lose huge amounts of money.  We never know when the next great derivatives crisis will strike.  Derivatives are essentially like a “sword of Damocles” that perpetually hangs over the U.S. financial system.

When I start talking about derivatives I get a lot of people in the financial community mad at me.  On Wall Street today you can bet on just about anything you can imagine.  Almost everyone in the financial world has gotten so used to making wild bets that they couldn’t even imagine a world without them.  If anyone even tried to put significant limits on futures, options and swaps it would cause Wall Street to throw a hissy fit.

But someday the dominoes are going to start to fall and the house of cards is going to come crashing down.  It is an open secret that our financial system is fundamentally unsound.  Even a lot of people working on Wall Street will admit that.  It is just that people are so busy making such big piles of money that nobody wants the party to stop.

It is only a matter of time until some of these big banks get into a huge amount of trouble again.  When that happens, we might really find out whether they are “too big to fail” or whether we could get along just fine without them.

Will The Banksters And The Corpocracy Eventually Own It All? 29 Statistics About Extreme Income Inequality In America That Will Blow Your Mind

Today, average Americans have less power relative to the monolithic corporate and governmental institutions that dominate our society than at any other point in U.S. history.  Sadly, this is not what our founding fathers ever envisioned.  Our founding fathers established a government “of the people, by the people, for the people”, but what we have today is very far from that ideal.  In America today, wealth and power are very highly concentrated, and if you have neither wealth nor power than most of our politicians really do not have any interest in you.  Over the past several decades, those with huge amounts of money and power have been busy rigging the game so that the rest of the money and power slowly but surely funnels into their hands.  If current trends continue, the banksters and the corpocracy will eventually own it all.  Below you will find 29 statistics about extreme income inequality in America.  Sadly, most of these statistics will be out of date in a year or two because wealth and power will be much more concentrated by that time.

If you are a “Kool-Aid drinking Democrat” you are going to be really upset by this article.  If you are a “Kool-Aid drinking Republican” you are going to be really upset by this article.

Most Republicans have been brainwashed into believing that “capitalism” means cheerleading while the big corporations hoover up money and power.

Most Democrats have no trouble with big corporations either because most establishment Democrats have been brainwashed into believing that large concentrations of power (whether governmental or corporate) are generally good.  Most Democrats just wish that big corporations were a little less greedy and were a little more “socially responsible”.

Today, the big banks, the big corporations and the federal government are all in bed with one another and it is average Americans that always lose out.

Our founding fathers tried to warn us about large concentrations of power.  They attempted to establish a very limited central government, they wanted to keep us free from the tyranny of the big banks and they were very suspicious of large corporations.

In a 2010 article, Rick Ungar noted that corporations were very seriously restricted in the early days of America….

After the nation’s founding, corporations were, as they are today, the result of charters granted by the state. However, unlike today, they were limited in how long they were permitted to exist (typically 20 or 30 years), only permitted to deal in one commodity, they could not own shares in other corporations, and their property holdings were expressly limited to what they needed to accomplish their corporate business goals.

My how things have changed.

“Capitalism” is supposed to be about the empowerment of individuals and families and small businesses.

Instead, today “capitalism” has come to mean something completely different.  Today, the biggest, meanest concentrations of wealth devour everyone else with a big assist from the government.

At this point, average Americans mean next to nothing in the political process.  This point was eloquently made in a recent column by Robert Reich….

The unemployed are politically invisible. They don’t make major campaign donations. They don’t lobby Congress. There’s no National Association of Unemployed People.

Their ranks are filled with women who had been public employees, single mothers, minorities, young people trying to enter the labor force, and middle-aged men who have been out of work for longer than six months. You couldn’t find a collection of people with less political clout.

I would not normally quote Robert Reich, but he made a good point.  If you don’t have an army of lobbyists or any money to give to them then most of our politicians don’t really care what you think or how much you are hurting.

Just think about the amount of power and money that Exxon Mobil or Wal-Mart has compared to the amount of power and money that an average American has.

Our society has veered very far from the egalitarian ideal that our founding fathers once hoped for.

The corporate giants are so powerful that it is next to impossible for small businesses to directly compete with them.

Just try it some time.

Many banks and corporations have become so big that the world literally cannot afford for them to fail.

For example, three U.S. corporations control approximately 90% of the world’s grain trade.

So what happens if those three corporations collapse?

That is something to think about.

But of course average Americans are never “too big to fail”.  The big banks begged and begged for bailouts, but if you are late on your debt payments they will chuck you into prison.

Also, when wealth and power are so highly concentrated, economic rewards flow only to a few.  Corporatism (as opposed to true capitalism) produces a handful of winners and a whole lot of losers.

As I have written about previously, the middle class is being destroyed.  If current trends are allowed to continue long enough we eventually won’t have much of a middle class left at all.

The following are 29 statistics about extreme income inequality in America that will blow your mind….

#1 In the United States today, the richest one percent of all Americans have a greater net worth than the bottom 90 percent combined.

#2 The wealthiest 1% of all Americans now own more than a third of all the wealth in the United States.

#3 The wealthiest 1% of all Americans own over 50% of all the stocks and bonds.

#4 The poorest 50% of all Americans collectively own just 2.5% of all the wealth in the United States.

#5 According to a joint House and Senate report entitled “Income Inequality and the Great Recession“, the top one percent of income earners in the United States brought in a total of 10.0 percent of all income income in 1980, but by the time 2008 had rolled around that figure had skyrocketed to 21.0 percent.

#6 Between 1979 and and 2007, the average household income of the top 1% of all Americans soared from $346,600 to $1.3 million.  During that same time period the average household income for middle class Americans increased only slightly.

#7 According to Harvard Magazine, 66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.

#8 More than 3 billion people, close to half the world’s population, live on less than 2 dollar a day.

#9 According to a new report from the AFL-CIO, the average CEO made 343 times more money than the average American did last year.

#10 The number of “low income jobs” in the U.S. has risen steadily over the past 30 years and they now account for 41 percent of all jobs in the United States.

#11 Since 1979, real median weekly earnings for high school dropouts has declined by 22 percent.

#12 During this economic downturn, employee compensation in the United States has been the lowest that it has been relative to gross domestic product in over 50 years.

#13 Half of all American workers now earn $505 or less per week.

#14 Since the year 2000, we have lost 10% of our middle class jobs.  In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.  Meanwhile, our population has gotten significantly larger.

#15 Ten years ago, the United States was ranked number one in average wealth per adult.  In 2010, the United States fell to seventh.

#16 According to one recent study, approximately 21 percent of all children in the United States were living below the poverty line in 2010. In the UK and in France that figure is well under 10 percent.

#17 Today, one out of every four American children is on food stamps.

#18 It is being projected that approximately 50 percent of all U.S. children will be on food stamps at some point in their lives before they reach the age of 18.

#19 According to Moody’s Analytics, the wealthiest 5% of households in the United States now account for approximately 37% of all consumer spending.

#20 The number of Americans that are going to food pantries and soup kitchens has increased by 46% since 2006.

#21 The U.S. poverty rate is now the third worst among the developed nations tracked by the Organization for Economic Cooperation and Development.

#22 Approximately half of all American workers make $25,000 a year or less.

#23 The wealthiest 1% of the earth’s population controls 39% of the wealth.

#24 It is estimated that over 80 percent of the world’s population lives in countries where the income gap between the rich and the poor is widening.

#25 One year after the recent financial collapse the top 25 hedge fund managers earned a total of approximately $25 billion.  That breaks down to an average of $1 billion each.

#26 Bill Gates has a net worth of somewhere in the neighborhood of 50 billion dollars.  That means that there are approximately 140 different nations that have a yearly GDP which is smaller than the amount of money Bill Gates has.

#27 It is estimated that the entire continent of Africa owns approximately 1 percent of the total wealth of the world.

#28 The top 0.01% of Americans make an average of $27,342,212.  The bottom 90% make an average of $31,244.

#29 58 percent of the members of Congress are millionaires while only about 1 percent of the general population is made up of millionaires.

So what is the solution?

Well, our liberal friends insist that the solution to all of this inequality is to tax the rich and to distribute the wealth to the poor.

Well, there are three major problems with that.

Number one, when you raise taxes too high you eliminate the incentive to work hard.

Number two, when you make it too easy to depend on government handouts you create an underclass of economic parasites.

Number three, the big corporations and the ultra-wealthy have become masters at avoiding taxation no matter what the rates are.

Before you tax the rich too much, you might want to consider the consequences of doing so.

Why should someone bust his or her rear end to run a business and make a lot of money if the government is just going to come along and take over half of all the money that is made?

Personally, if I ever get into a tax bracket where over half the money I make goes to the government then I simply will not work nearly as hard at that point.

But if that starts happening on a large scale, then you have a significant loss of economic activity which hurts the economy overall.

Already, the top 20 percent of all income earners in the United States pay approximately 86 percent of all federal income taxes.

When the government “steals from the rich” and “gives to the poor”, that also tends to create a large group of people that decides that it is easier to take from the government than it is to work for a living.

In 1980, government transfer payments accounted for just 11.7% of all income.  Today, government transfer payments account for 18.4% of all income.

That is not a good trend.

At this point, U.S. households are now receiving more income from the U.S. government than they are paying to the government in taxes.

That is not even close to sustainable, but nobody wants to give up their “government benefits”.

Today, 59 percent of all Americans receive money from the federal government in one form or another.

Yes, there will always be those that cannot help themselves and we should always have a “safety net”.

But when you look around it doesn’t take a genius to figure out that things have gotten completely and totally out of control.

Right now, an all-time record 44 million Americans are on food stamps.

Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, one out of every 6 Americans is on Medicaid.

The U.S. government is even handing out billions of dollars to homeowners that are delinquent on their mortgages.

This is not a formula for long-term economic success.

When people get addicted to government checks they never want to stop.

But this is not what the poor need.

What the poor need are good jobs that pay good wages.  Unfortunately, we keep shipping millions of those jobs overseas.  So now the Chinese economy is thriving and our formerly great manufacturing cities are turning into hellholes.

Handouts do not give people hope, dignity and a future, but jobs can.

Also, as I have written about before, the big corporations and the ultra-wealthy have become masters at avoiding taxes.  There is a reason why approximately a third of all the wealth in the world is held in “offshore” tax havens.

What U.S. corporations are able to get away with is absolutely amazing.

The following figures come directly out of a report by Citizens for Tax Justice.  These are combined figures for the tax years 2008, 2009 and 2010.

During those three years, all of the corporations below made a lot of money.  Yet all of them paid net taxes that were below zero for those three years combined.

How is that possible?  Well, it turns out that instead of paying in taxes to the federal government, they were actually getting money back.

So for these corporations, their rate of taxation was actually below zero.

If you have not seen these before, you are going to have a hard time believing some of these statistics…..

*Honeywell*

Profits: $4.9 billion

Taxes: -$34 million

*Fed Ex*

Profits: $3 billion

Taxes: -$23 million

*Wells Fargo*

Profits: $49.37 billion

Taxes: -$681 million

*Boeing*

Profits: $9.7 billion

Taxes: -$178 million

*Verizon*

Profits: $32.5 billion

Taxes: -$951 million

*Dupont*

Profits: $2.1 billion

Taxes -$72 million

*American Electric Power*

Profits: $5.89 billion

Taxes -$545 million

*General Electric*

Profits: $7.7 billion

Taxes: -$4.7 billion

Are you starting to get the picture?

I wish I could make $7.7 billion, pay no taxes and have the government give me $4.7 billion on top of it.

Our system has become corrupted beyond all recognition.

We need to throw out the current system of taxation and come up with something entirely new.

In fact, the truth is that for most of U.S. history there was not a federal income tax at all.  But that is a story for another day.

If you believe in the U.S. Constitution and in the republic that our founding fathers established, then the very high concentrations of wealth and power in our society today should greatly concern you.  Income inequality is not a “Democrat” or a “Republican” issue.  A vibrant, thriving middle class should be a goal all of us can embrace.

But I have a feeling a whole lot of “Democrats” and a whole lot of “Republicans” were deeply offended by this article.  Feel free to express your opinion by leaving a comment below….

65 Ways That Everything That You Think That You Own Is Being Systematically Taken Away From You

Everything that you own is slowly being taken away from you.  It is being done purposely and it is being done by design.  Many Americans like to think of themselves as “well off”, but as will be demonstrated below, we don’t “own” nearly as much as we think that we do.  The truth is that most of us have to frantically run around accumulating wealth as rapidly as we can so that we can somehow stay ahead of the rate that wealth is being taken away from us.  The entire system is designed to take what you have away from you.  There are many ways that this is accomplished – taxation, inflation, debt, interest, fines, fees, tickets, government seizures and good old-fashioned corporate greed.  If you tried to just sit back and do nothing but hold on to the wealth that you already have you would find out that it would disappear rather quickly.  When you take the time to really analyze our system the conclusion is undeniable – everything that you think that you own is being systematically taken away from you.

There is a reason why the wealthiest one percent of all Americans control 40 percent of all the wealth in the United States.  The system is designed to funnel all of the wealth to them and to the government.  Average Americans are experiencing a declining standard of living and it is not by accident.

Just check out some of the ways that our wealth is being taken from us….

#1 Do you think that you own your house?  You might want to think again.  Most Americans that “own a home” are paying a mortgage.  If you stop paying that mortgage you will lose that home.  Over a million American families were kicked out of their homes last year.  This year a million more American families will get the boot.

But when those families get booted out onto the street they don’t get their down payments back.  They don’t get all the mortgage payments that they have made back.  The banks get to keep all of the money and all of the houses.

Perhaps you don’t have a mortgage.  Does that mean that you “own your home”?

No, not really.  Just refuse to pay your property taxes and watch what happens.  At best you can say that you have the right to rent your home from the government.

In any event, the reality is that the banks now own more of “our homes” than we do.  During the most recent recession, the total amount of U.S. home equity owned by the banks surpassed the total amount of U.S. home equity owned by the rest of us for the first time ever.

Things used to be far different in this country.  Once upon a time American families owned most of the houses and most of the land in this nation.

But now the banks own most of it.  Sadly, most American families that believe that they “own homes” are actually enslaved to 20 or 30 year debt contracts.

#2 Do you think that you own your car?  You don’t own it if you are still making payments on it.  If you stop making payments you will rapidly lose that car.

But even if your car is paid off, you can only operate that car if you do the following….

*You must pay the license fee

*You must pay the car registration fee

*You must pay the emissions inspection fee

*You must pay the property taxes on that car (if that applies in your area)

*You must pay the tire taxes

*You must pay the gas taxes

If you have paid all of those taxes, then you are permitted to drive only where the government allows you to drive and only under the rules that the government sets for you.

But at least you “own” your car, right?

#3 What about your possessions?  Do you own them?

Well, yes, you probably own some possessions.

But that doesn’t mean that they are not enslaving you.

After all, did you use a credit card to pay for any of them?

If so, you could end up paying much more for your possessions than you originally thought that they cost.

For example, if you only make the minimum payment on your credit card each month, a $6,000 credit card bill could end up costing you over $30,000 (depending on the interest rate).

#4 Do you own your education?  Well, it is undeniable that nobody can ever take it away from you.  But if you took out student loans that debt may end up enslaving you for decades.

The borrower is the servant of the lender and student loan debt is more of a financial drain on Americans than ever before.  Americans now owe more on student loans than they do on credit cards.  As hard as that is to believe, that is actually true.  Americans now owe more than $903 billion on student loans, which is a new all-time record.

#5 Will you protect your wealth if you put your money in the bank?

No, in fact your wealth will be systematically destroyed in the bank.

Inflation is a hidden tax on every single dollar that you own.  It destroys the value of all dollars in existence.  There are some Americans that have been saving money for decades, but those savings are being taxed into oblivion by inflation.  Many experts are now projecting that the average price of a gallon of gasoline will hit $5 by the end of the year.  So the next time you go to the gas pump just take a moment to think about how your wealth is being drained away by inflation.

#6 Insurance costs continue to soar.  After insuring everything in our lives many of us barely have any money left over to actually live our lives with.  In particular, health insurance premiums have become completely and totally ridiculous.  According to the Los Angeles Times, Blue Shield of California plans to raise rates an average of 30% to 35%, and some individual policy holders could see their health insurance premiums rise by a whopping 59 percent this year alone.  So how are American families supposed to survive if they keep on handing over bigger and bigger chunks of their income to the health care industry?

#7 State and local governments all over the nation have turned to ticket writing as a primary revenue source.  In fact, in some areas of the country traffic citations are soaring at a crazy rate.  For example, 110,000 more traffic citations were written in Los Angeles County last fiscal year than were written in the fiscal year immediately prior to the last recession.

The truth is that the police even realize what is going on.  Just consider the following quote from from Police Chief Michael Reaves of Utica, Michigan….

“When I first started in this job 30 years ago, police work was never about revenue enhancement, but if you’re a chief now, you have to look at whether your department produces revenues.”

#8 Some states have decided to simply confiscate wealth even if nothing has been done wrong.  For example, the state of California is aggressively seizing “unclaimed” safe deposit boxes.  If you have a safe deposit box that you have not checked on in a while you might want to make sure that it is still there.

#9 You might end up losing your valuables when you cross the border.  It is being reported that U.S. border agents are now regularly seizing laptops and other electronic devices as people cross the border.  In many cases those items are never returned.

#10 If you don’t pay your property taxes, you will lose your house and it will likely be a big Wall Street bank that will be taking it from you.  As I have written about previously, the big Wall Street banks are buying up thousands upon thousands of tax liens and are making a killing by socking distressed homeowners with predatory interest, outrageous penalties and almost unbelievable legal fees.

#11 Of course the biggest way that our wealth is being drained is through federal income taxes.  The reason that the Federal Reserve and the IRS were established back in 1913 was to redistribute wealth.  Wealth is transferred from the American people to the U.S. government and then ultimately to the elite and to the causes that the elite favor.

But federal taxes are only one of the taxes that we pay.  The truth is that the average American pays dozens of different taxes each year.  Just check out a few examples of the different taxes that drain our wealth….

#12 Accounts Receivable Taxes

#13 Building Permit Taxes

#14 Capital Gains Taxes

#15 CDL License Taxes

#16 Cigarette Taxes

#17 Corporate Income Taxes

#18 Court Fines (indirect taxes)

#19 Dog License Taxes

#20 Federal Unemployment Taxes (FUTA)

#21 Fishing License Taxes

#22 Food License Taxes

#23 Gasoline Taxes

#24 Gift Taxes

#25 Hunting License Taxes

#26 Inheritance Taxes

#27 Inventory Taxes

#28 IRS Interest Charges (tax on top of tax)

#29 IRS Penalties (tax on top of tax)

#30 Liquor Taxes

#31 Local Income Taxes

#32 Luxury Taxes

#33 Marriage License Taxes

#34 Medicare Taxes

#35 Payroll Taxes

#36 Property Taxes

#37 Real Estate Taxes

#38 Recreational Vehicle Taxes

#39 Road Toll Booth Taxes

#40 Road Usage Taxes (Truckers)

#41 Sales Taxes

#42 Self-Employment Taxes

#43 School Taxes

#44 Septic Permit Taxes

#45 Service Charge Taxes

#46 Social Security Taxes

#47 State Income Taxes

#48 State Unemployment Taxes (SUTA)

#49 Telephone federal excise taxes

#50 Telephone federal universal service fee taxes

#51 Telephone federal, state and local surcharge taxes

#52 Telephone minimum usage surcharge taxes

#53 Telephone recurring and non-recurring taxes

#54 Telephone state and local taxes

#55 Telephone usage charge taxes

#56 Toll Bridge Taxes

#57 Toll Tunnel Taxes

#58 Traffic Fines (indirect taxation)

#59 Trailer Registration Taxes

#60 Utility Taxes

#61 Vehicle License Registration Taxes

#62 Vehicle Sales Taxes

#63 Watercraft Registration Taxes

#64 Well Permit Taxes

#65 Workers Compensation Taxes

Even the future is being taken away from us.  The future is literally being stolen from our children and our grandchildren.  They will be inheriting the 14 trillion dollar (and still rising) national debt that we have accumulated.  What we have done to future generations is unthinkable, and yet we continue to endlessly borrow more money.  The Congressional Research Service estimates that the U.S. government will need to borrow $738 billion between April 1st and September 30th.  Faith in U.S. Treasuries is falling so rapidly that now the biggest bond fund in the world, PIMCO, is actually shorting U.S. Treasuries.

When you base an entire economy on debt, eventually you end up with money problems that never seem to end.  As a nation we are now enslaved to a vicious spiral of debt that is going to destroy everything that our forefathers worked so hard to build.

As the debt loads of our federal, state and local governments become even more burdensome, they are going to want even more money from us.  For decades we gave in to new tax after new tax thinking that it would finally satisfy them.  But it never seems to be enough.  They always want more.

It is the same thing with the banksters.  They are never satisfied either.  They always want more assets and they always want more Americans to be enslaved to debt.

Unfortunately, most Americans are so caught up in the “rat race” that they never take much time to think about who designed the race or why they are running it.

Hopefully more Americans will wake up and will realize that our entire economy and our entire financial system need to be reformed.  Our current system is inherently flawed and it will eventually impoverish the vast majority of us if we allow it to.

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