2011

Will The Day Of Rage In Saudi Arabia On March 11 Send The Price Of Oil Into Unprecedented Territory?

The price of oil is shaping up to be the number one economic story of 2011, and right now the eyes of the investing world are closely watching the developing situation in Saudi Arabia.  All of the other recent Middle East revolutions have been organized on the Internet, and now all over Facebook and Twitter there are calls for a “Day of Rage” in Saudi Arabia on March 11.  The Saudi monarchy is attempting to head off any protests by promising to give $37 billion in “benefits” to the people and by publicly proclaiming that all political demonstrations are specifically banned.  In addition, the Saudi government is stationing thousands of security forces at various potential “hot spots” around the country.  So far similar measures have not done much to quell unrest in other nations in the Middle East, but Saudi Arabia will be a true test of the revolutionary fervor that is sweeping the region.  The Saudis have a long history of brutally repressing their own people.  They simply do not mess around.  So a revolution in Saudi Arabia will not be nearly as “easy” as it was in Tunisia, Egypt or Libya.  However, if a revolution does sweep across Saudi Arabia, it is going to send the price of oil into unprecedented territory.  Saudi Arabia is the number one exporter of oil in the world, and if their oil fields get shut down even for a little while it is going to have a dramatic effect on the global economy.  With the world already on the verge of a major sovereign debt crisis, the last thing it needs is for the price of oil to start soaring into the stratosphere.

Right now the investing world is not sure what to think about all of this, and financial markets do not like uncertainty.  One piece of really bad news could send markets all over the globe crashing down.

Speculation in oil futures is absolutely rampant.  A recent report on CNN noted the following….

The speculative fervor is so remarkable that the big trading firms now have nearly twice as many long contracts open as they did in 2008, when oil spiked to $147 in the summer, a development that either foreshadowed or caused the global economic meltdown, depending on how you look at it.

In particular, the number of investors that are betting that a revolution in Saudi Arabia is going to send the price of oil up to $200 a barrel has exploded in recent days.

$200 a barrel?

Are people actually betting that is going to happen?

The all-time record is only $147 a barrel.  Just a few months ago it was absolutely unthinkable to most economists that we could potentially see $200 oil in 2011.

But it would be a mistake to assume that a full-blown revolution is guaranteed to break out in Saudi Arabia.  Remember, this is a nation that has a very, very long history of denying even the most basic freedoms to the people.

For example, in Saudi Arabia the practice of any religion other than Islam is strictly forbidden.  By law, citizens of Saudi Arabia are not permitted to change religion.  Even foreign visitors are forbidden to openly practice any other religion.  It is a whole different world.  You cannot go to the store and buy a Bible in Saudi Arabia.  In fact, if you try to pass out Bibles in Saudi Arabia you will be thrown into prison.

Beheadings and other brutal public executions still happen in Saudi Arabia to this day.

So if you plan of being a revolutionary in Saudi Arabia you had better put your big boy pants on, because the Saudis play hardball.

Much of the rest of the globe is desperately hoping that a revolution does not happen in Saudi Arabia because the global economic situation is precarious at best.

In Europe, if the price of oil causes a significant economic slowdown right now it could have global implications.  Moody’s Investors Service just slashed Greece’s debt rating three levels all the way down to B1.  But Greece is far from alone.  Several European governments are finding it much more expensive to finance their debts these days.  We are right on the edge of a major European sovereign debt crisis and the chaos in the Middle East could potentially be just the thing to spark a panic.

The United States could feel a rise in the price of oil even more than Europe because the U.S. economy is so spread out and it is so dependent on products from overseas.

Did you know that in 1960 only 8 percent of the things Americans bought were made overseas but that today 60 percent of the things Americans buy are made overseas?

It’s true.

So what would happen if the cost of transporting all of those products suddenly doubled?  All of the products we buy must be transported somehow, and a rise in transportation costs will be passed on to U.S. consumers.

But the truth is that the pain is already here.  Already, millions of American families are starting to feel some very real financial pain from the chaos in the Middle East.

From February 18th to March 4th, the average price of gasoline in the United States rose 33 cents.  That was the biggest two week increase ever recorded.

Ouch.

The rise in the price of oil has some broader economic implications as well.

The more the price of oil goes up the bigger our trade deficit is going become.  As the trade deficit gets bigger, that means that more money is going out of the country and less money is going to support American businesses and American workers.  When American workers lose jobs, that means that they aren’t producing wealth anymore and they aren’t paying taxes anymore.  Instead, they become a drain on the system as they start receiving government handouts.

When millions of Americans go from being productive, taxpaying workers to unemployed welfare cases it causes our federal budget deficit to become even larger.

Most Americans do not understand how connected our trade deficit and our federal budget deficit really are.  One feeds right into the other.

Unfortunately, the Federal Reserve seems to think that the solution to any economic problem these days is to print more money.

According to Atlanta Fed President Dennis Lockhart, if the price of oil goes up high enough, it could force the Federal Reserve to do even more quantitative easing.

Really?

One of the reasons why the price of oil and other commodities has been going up over the last six months is because of all of this reckless money printing.

Now Lockhart is saying that because of the oil price increases they may have to do more money printing?

How bizarre is that?

Unfortunately, several other top Fed officials have dropped hints about a possible “QE3” lately.  It just seems like the insanity never stops.

Let us hope that the Fed does not go there because the U.S. dollar is falling apart fast enough already.

In any event, the rest of 2011 is certainly going to be very interesting to watch.

Even if a revolution does not happen in Saudi Arabia, the price of oil will most likely continue to slowly move higher just as it has been doing for months.

But if a full-blown revolution does happen in Saudi Arabia, it could literally change the global economy almost overnight.  The entire world financial system would be thrown into a state of chaos.

Oil is the lifeblood of the world economy.  Without a continuous supply of very inexpensive oil, life as we know it would dramatically change.  Most of us just assumed that we would always live in a world where we would always have an endless supply of very cheap oil.

Well, the times they are a changing.

You had better buckle up because it is going to be a bumpy ride.

Stagflation 2011: Why It Is Here And Why It Is Going To Be Very Painful

Are you ready for an economy that has high inflation and high unemployment at the same time? Well, welcome to “Stagflation 2011”.  Stagflation exists when inflation and unemployment are both at high levels at the same time.  Of course we all know about the high unemployment situation already.  Gallup’s daily tracking poll says that the U.S. unemployment rate has been hovering around 10 percent all year so far.  But now thanks to rapidly rising food prices and the exploding price of oil, rampant inflation is being added to the equation.  Normally inflation is a sign of increased economic activity, but when the basic commodities that we depend on to run our economy (such as oil) go up in price it actually causes a slowdown in economy activity.  When the price of oil goes up high enough, it fundamentally changes the behavior of individuals and businesses.  Suddenly certain types of economic activities that were feasible when oil was very cheap are not profitable any longer.  When the price of oil rises to a new level and it stays there, essentially what is happening is that more “blood” is being drained out of our economy.  Our economy will continue to function when there are higher oil prices, it will just be a lot more sluggish.

In some way, shape or form the price of oil factors into the production of most of our goods and services and it also factors into the transportation of most of our goods and services.  A significant rise in the price of oil changes the economic equation for almost every business in the United States.

Today, the price of WTI crude soared past 100 dollars a barrel before closing at $98.10.  The price of Brent crude increased 5.3 percent to $111.25.  The protests in Libya are certainly causing a lot of the price activity that we have seen over the past few days, but the truth is that oil has been going up for a number of months.  Right now we are only seeing an acceleration of the long-term trend.

Things are likely to get far worse if the “day of rage” planned for Saudi Arabia next month turns into a full-blown revolution.  Up to this point, the revolutions that have been sweeping the Middle East have been organized largely on Facebook, and now there are calls all over Facebook for the “Saudi revolution” to start on March 20th.

That date is less than 4 weeks away.  If Saudi Arabia plunges into chaos, the price of oil is going to go through the roof.

A rapidly rising price for oil is really bad news for the U.S. economy, because it is going to mean lots of inflation.  Unfortunately, this also comes at a time when the economy is also feeling the inflationary effects of more quantitative easing by the Federal Reserve.

So if rising oil prices are going to cause more inflation and if rising oil prices are also going to cause our economy to become even more sluggish, what does all of that add up to?

It adds up to stagflation.

Wikipedia defines stagflation in the following manner….

In economics, stagflation is the situation when both the inflation rate and the unemployment rate are persistently high.

This is going to rapidly become the “new normal” for America.  High oil prices are going to cause the cost of just about everything to go up, and high oil prices are also going to cause the economy to slow down thus making the unemployment numbers even worse.

It is going to be just like the 1970s all over again.

Only worse.

Economists differ as to how much rising oil prices affect U.S. GDP, but almost all of them agree that rising oil prices do cause a decline in U.S. GDP at least to some extent.

If American families have to spend $10 or $20 more each time they visit a gas station, that means that they are going to have less discretionary income.  They won’t be able to spend as much at the stores.

Not only that, but since the price of oil affects the price of almost everything else, Americans will find that their dollars have reduced purchasing power.

An oil crisis would force American families to stretch their already overburdened budgets even farther.

So where is the price of gasoline going from here?  Well, the average price of gasoline in the United States is rapidly sneaking up on the $3.20 a gallon mark.  Almost everyone believes that it is going to be going significantly higher.

Tom Kloza, the chief analyst for the Oil Price Information Service, was recently quoted in USA Today as saying that he believes that the average price for gasoline in the United States will reach somewhere between $3.50 and $3.75 a gallon by April.

As I wrote about yesterday, there are other analysts that believe that we are going to see $4.00 gasoline in the United States by the end of the year, and there are some that believe that we could see $5.00 gasoline if revolution sweeps Saudi Arabia.

If gasoline becomes that expensive and it stays there for a while, it is going to seriously start affecting the behavior of American businesses and American consumers.

Just remember what happened back in 2008.  Andrew Busch of BMO Capital Markets recently told CNBC the following….

“Remember when oil was last at $140 (a barrel), Americans reacted and cut the amount of miles they drove.”

Can you imagine what it would do to the economy if millions of Americans start sitting in their homes instead of doing their normal amounts of driving and flying?

In addition, one of the biggest problems with a higher price for oil is that it would cause our trade deficit to explode.  According to the U.S. government, more than half of the oil that we use is imported.  So every month we send the rest of the world billions and billions of our dollars and they send us massive amounts of oil.  We rapidly consume all of the oil they send us and we continually need more.  So we keep sending larger and larger amounts of money overseas and they keep sending us larger amounts of oil.  In the process, our national wealth is being drained at an astounding rate.  It is one of the greatest transfers of wealth the world has ever seen.

When the price of oil rises substantially, the transfer of wealth accelerates.  This is a very bad thing for the U.S. economy.  For example, when oil prices were above $100 a barrel back in 2008 our trade deficit for the year was almost 700 billion dollars.

It would be great if the Middle East would settle down and oil prices would start declining because that would really help out the U.S. economy.  Unfortunately, it does not look like that is going to happen.  Instead, it appears that we are steamrolling directly towards stagflation.  Anyone that lived through the stagflation of the 1970s knows that it is not a lot of fun.

The cold, hard reality of the matter is that without cheap oil our lifestyles are going to change.  Our economy was not set up to run on expensive oil.  If oil moves well above $100 a barrel and it stays there it is going to bring about significant societal changes.

For the rest of 2011, the price of oil will be the number one economic indicator to watch.  If it gets too high it is going to be an absolute disaster for the U.S. economy.

75 Ways That The Government And The Financial Elite Will Be Sucking Even More Of The Life Blood Out Of The American People In 2011

The American people are experiencing financial death by a thousand cuts and most of them don’t even realize it.  The U.S. government, state governments, local governments and the financial elite are draining us financially in dozens upon dozens of different ways, and yet we have become so programmed to accept it that it just seems normal to us.  2011 is rapidly approaching, and a whole slate of federal taxes is scheduled to go up, state taxes are being increased from coast to coast, local governments are finding new and creative ways to stick it to us and the financial elite are becoming more predatory than ever.  Meanwhile, the incomes of many average Americans are actually going down.  According to the Census Bureau’s annual survey of income and poverty in the United States, of the 52 largest metro areas in the nation, only the city of San Antonio did not see a decline in median household income during 2009.  Tens of millions of Americans are flat broke and they are getting pissed off.  According to a new poll conducted by CNBC, 92 percent of Americans believe that the U.S. economy is either “fair” or “poor”.  The American people desperately want someone to fix the economy, but instead our “leaders” are trying to come up with new and creative ways to drain even more money out of us.

In no particular order, the following are 75 ways that the U.S. government, state governments, local governments and the financial elite will be sucking even more of the life blood out of the American people in 2011….

#1 State governments across the U.S. are raising fees and taxes in so many different ways it is staggering.  A reader named Richard recently sent me an email in which he described the shock that he experienced when he recently received his license plate renewal notice in the mail….

I just got a license plate renewal notice from the Oregon Department of Motor Vehicles. When I opened the envelope and saw the amount of the renewal, I was shocked. The amount seemed much higher than usual.

I have a computerized record of all my financial transactions over the last many years. I looked up previous DMV license plate renewals and I saw that my vehicle license plate fees were up 187% in only 8 years! In other words, they were almost triple what they were 8 years ago!

#2 The cost of health care also continues to escalate out of control.  Americans already pay more for health care than anyone else in the world, and yet costs continue to explode.  Health insurance companies from coast to coast are already announcing that they must raise health insurance premiums substantially due to the new health care law that Barack Obama and the Democrats have pushed through.  For example, I am in perfect health and I have never had a single claim on my health insurance policy and yet I received notice earlier this year that my monthly health insurance premiums were going to be increasing by about 50 percent.

Unfortunately, I am far from alone.  Crazy rate hikes are being reported from coast to coast.  According to The Wall Street Journal, the following are just some of the health insurance companies that have announced rate hikes that are at least partially attributed to the new health care law….

*Aetna says that the extra benefits that the new health care reform law is forcing it to cover are behind rate increases for new individual plans of 5.4% to 7.4% in California and 5.5% to 6.8% in Nevada.

*Regence BlueCross BlueShield of Oregon claims that the cost of providing additional benefits under the new health care law will account for 3.4% of a 17.1% premium rise for small employers.

*Celtic Insurance claims that half of a whopping 18% health insurance premium increase it is seeking comes from complying with mandates in the new health care law.

But do the financial elite in the health care industry really need more of our money?  According to a report by Health Care for America Now, America’s five biggest for-profit health insurance companies ended 2009 with a combined profit of $12.2 billion.

#3 But it isn’t just our health insurance premiums that are going up because of the new health care law.  One review of the health care legislation identified at least 19 different tax increases.  Not only that, according to an analysis by the Congressional Joint Committee on Taxation, the health care reform law will generate $409.2 billion in additional taxes from the American people by the year 2019.

#4 From coast to coast, 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.  The article which I published yesterday, “The Big Wall Street Banks Have Found A New Way To Strangle The American People: Predatory Property Tax Collection” elicited a very strong reaction from many readers.  In particular, Walter Burien, who has done some great work exposing financial fraud at the government level, left a message explaining how this kind of predatory property tax collection is being done by design….

Per the article “Predatory Property Tax Collection” here is the why government did this. The feds put it through last year at the recommendation of a few private associations that represented many local governments and it was the government that pushed forward to require the banks and mortgage companies to do the tax collection tied directly into the mortgage. (Quicker money for the local governments) Read the new mortgage documentation and the banks have been required to collect property taxation up front for the local government.

Government in most venues had to wait four (4) years to move forward with foreclosure for delinquent property taxes. Well now that they have assigned the banks to do the collection, the banks usually move on foreclosure in six months which gets a new head in the door to pay the same levied property taxes quicker.

But the biggest drain on all of our incomes is excessive taxation by the government.  If the U.S. Congress does not act, and there is little reason to believe that they will, the following tax increases will go into effect in 2011….

#5 The lowest bracket for the personal income tax is going to increase from 10 percent to 15 percent.

#6 The next lowest bracket for the personal income tax is going to increase from 25 percent to 28 percent.

#7 The 28 percent tax bracket is going to increase to 31 percent.

#8 The 33 percent tax bracket is going to increase to 36 percent.

#9 The 35 percent tax bracket is going to increase to 39.6 percent.

#10 In 2011, the death tax is scheduled to return.  So instead of paying zero percent, estates of $1 million or more are going to be taxed at a rate of 55 percent.

#11 The capital gains tax is going to increase from 15 percent to 20 percent.

#12 The tax on dividends is going to increase from 15 percent to 39.6 percent.

#13 The “marriage penalty” is also scheduled to be reinstated in 2011.  Members of Congress keep promising to do something about this, but so far nothing has happened. 

#14 Many American businesses are going to get hit with a very significant tax increase in 2011.  Small businesses had been able to “expense”, rather than slowly depreciate, equipment purchases of up to $250,000 a year.  Now that will be slashed down to $25,000.  Larger businesses had been able to expense half of their purchases of equipment.  Now all of it will have to be depreciated. 

#15 They keep talking about it, but so far Congress has not passed a “fix” for the Alternative Minimum Tax.  If a fix is not passed, one out of every six U.S. taxpayers is going to be hit by the Alternative Minimum Tax.  The taxpayers most likely to be affected are married couples, very large families, home owners and taxpayers in states that have high state and local taxes.  The average tax increase that these taxpayers will be facing is going to be approximately $3,900 and most of them have no idea that it is coming.  If nothing changes, 27.2 million American households will pay AMT in 2010.

The following are a whole bunch of other taxes that Americans must pay each and every year and which seem to continually go up….

#16 Accounts Receivable Taxes

#17 Building Permit Taxes

#18 Capital Gains Taxes

#19 CDL license Taxes

#20 Cigarette Taxes

#21 Corporate Income Taxes

#22 Court Fines (indirect taxes)

#23 Dog License Taxes

#24 Federal Income Taxes

#25 Federal Unemployment Taxes (FUTA)

#26 Fishing License Taxes

#27 Food License Taxes

#28 Fuel permit taxes

#29 Gasoline Taxes

#30 Gift Taxes

#31 Hunting License Taxes

#32 Inheritance Taxes

#33 Inventory tax IRS Interest Charges (tax on top of tax)

#34 IRS Penalties (tax on top of tax)

#35 Liquor Taxes

#36 Local Income Taxes

#37 Luxury Taxes

#38 Marriage License Taxes

#39 Medicare Taxes

#40 Payroll Taxes

#41 Property Taxes

#42 Real Estate Taxes

#43 Recreational Vehicle Taxes

#44 Road Toll Booth Taxes

#45 Road Usage Taxes (Truckers)

#46 Sales Taxes

#47 Self-Employment Taxes

#48 School Taxes

#49 Septic Permit Taxes

#50 Service Charge Taxes

#51 Social Security Taxes

#52 State Income Taxes

#53 State Unemployment Taxes (SUTA)

#54 Telephone federal excise taxes

#55 Telephone federal universal service fee taxes

#56 Telephone federal, state and local surcharge taxes

#57 Telephone minimum usage surcharge taxes

#58 Telephone recurring and non-recurring charges taxes

#59 Telephone state and local taxes

#60 Telephone usage charge taxes

#61 Toll Bridge Taxes

#62 Toll Tunnel Taxes

#63 Traffic Fines (indirect taxation)

#64 Trailer registration taxes

#65 Utility Taxes

#66 Vehicle License Registration Taxes

#67 Vehicle Sales Taxes

#68 Watercraft registration Taxes

#69 Well Permit Taxes

#70 Workers Compensation Taxes

#71 The Internet is increasingly being viewed as a potential major revenue source.  Many U.S. states are working harder than ever to collect taxes that they feel they are owed from online transactions on the Internet.

#72 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 $849 billion on student loans, which is a new all-time record.

#73 More Americans than ever find themselves unable to pay their bills, and an increasing number of frustrated creditors are actually resorting to wage garnishment.  Yes, you read the correctly.  Creditors are starting to ruthlessly go after the weekly paychecks of debtors.

The following is an excerpt from a recent New York Times article that discussed the rise of wage garnishment as a weapon against debtors….

After winning, creditors can secure a court order to seize part of the debtor’s paycheck or the funds in a bank account, a procedure called garnishment. No national statistics are kept, but the pay seizures are rising fast in some areas — up 121 percent in the Phoenix area since 2005, and 55 percent in the Atlanta area since 2004. In Cleveland, garnishments jumped 30 percent between 2008 and 2009 alone.

So if you are getting behind on your debt, you better watch out – your creditors may soon decide to garnish your wages.

#74 Many state and local governments throughout the United States are now viewing their police forces primarily as revenue raising organizations.  For example, earlier this year a federally funded ticketing blitz in the state of Virginia resulted in a total of 6996 traffic tickets being handed out in a single weekend.  Sure the roads are a little safer, but it also brought in a ton of money for the government.

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.”

#75 If all of this wasn’t bad enough, now there is an increasing amount of talk in international circles about the need for global taxes.  The IMF and the World Health Organization are both proposing new global taxes that would be imposed on all of us.  Not only that, but representatives from 60 different nations recently met at the UN to discuss a tax on global financial transactions that would be used to battle poverty and “climate change”.

If all of these methods of draining us financially were combined into one, the American people would be screaming bloody murder.  But because all of them are so small, and they go up so gradually, most Americans don’t seem to notice.

It is like the story of the frog in the kettle.  If you tried to drop a frog into a pot of boiling water, it would hop out immediately.

But if you put a frog into a kettle of warm water and turn up the heat very gradually, it will just sit there until it boils to death.

Well, we are that frog.  Every single year, they drain us a little more rapidly.  Tens of millions of us are flat broke and yet they keep coming back for more. 

Never before in American history has money been drained out of us in so many different ways.  They are literally bleeding us dry, and eventually there will simply be nothing left to drain.

The Depression Of 2011? 23 Economic Warning Signs From Financial Authorities All Over The Globe

Could the world economy be headed for a depression in 2011?  As inconceivable as that may seem to a lot of people, the truth is that top economists and governmental authorities all over the globe say that the economic warning signs are there and that we need to start paying attention to them.  The two primary ingredients for a depression are debt and fear, and the reality is that we have both of them in abundance in the financial world today.  In response to the global financial meltdown of 2007 and 2008, governments around the world spent unprecedented amounts of money and got into a ton of debt.  All of that spending did help bail out the global banking system, but now that an increasing number of governments around the world are in need of bailouts themselves, what is going to happen?  We have already seen the fear that is generated when one small little nation like Greece even hints at defaulting.  When it becomes apparent that quite a few governments around the globe cannot handle their debt burdens, what kind of shockwave is that going to send through financial markets?

The truth is that we are facing the greatest sovereign debt crisis in modern history.  There is no way out of this financial mess that does not include a significant amount of economic pain.

When you add mountains of debt to paralyzing fear to strict austerity measures, what do you get?

What you get is deflationary pressure and financial markets that seize up.

Some of the top financial authorities in the world are warning us that unless something substantial is done, that is exactly what we are going to be seeing as 2010 turns into 2011.

Of course some governments around the world could try to put these economic problems off for a while by printing and borrowing even more money, but we all know by now that only makes the long-term problems even worse.

For now, however, it seems as though most governments are opting for the austerity measures that the IMF seems determined to cram down the throats of everyone.

So what will austerity measures mean for the global economy?

Think “stimulus” in reverse.

Yes, things are going to get messy.

It looks like there is going to be a great deal of economic fear and a great deal of economic pain in 2011 and the years beyond that.

So are we headed for “the depression of 2011”?

Well, let’s hear what some of the top financial experts in the world have to say….

#1) Economist Nouriel Roubini:

“We are still in the middle of this crisis and there is more trouble ahead of us, even if there is a recovery. During the great depression the economy contracted between 1929 and 1933, there was the beginning of a recovery, but then a second recession from 1937 to 1939. If you don’t address the issues, you risk having a double-dip recession and one which is at least as severe as the first one.”

#2) Bank of England Governor Mervyn King:

“Dealing with a banking crisis was difficult enough, but at least there were public-sector balance sheets on to which the problems could be moved. Once you move into sovereign debt, there is no answer; there’s no backstop.”

#3) German Chancellor Angela Merkel:

“The current crisis facing the euro is the biggest test Europe has faced for decades, even since the Treaty of Rome was signed in 1957.”

#4) Paul Donovan, the Senior Economist at UBS:

“Now people are questioning if the euro will even exist in three years.”

#5) Michael Pento, Chief Economist at Delta Global Advisors:

“The crisis in Greece is going to spread to Spain and it’s going to be very difficult to deal with. They are bailing out debt with more debt and it isn’t sustainable. It’s a wonderful scenario for gold.”

#6) LEAP/E2020:

“LEAP/E2020 believes that the global systemic crisis will experience a new tipping point from Spring 2010. Indeed, at that time, the public finances of the major Western countries are going to become unmanageable, as it will simultaneously become clear that new support measures for the economy are needed because of the failure of the various stimuli in 2009, and that the size of budget deficits preclude any significant new expenditures.”

#7) Telegraph Columnist Edmund Conway:

“Whatever yardstick you care to choose – share-price moves, the rates at which banks lend to each other, measures of volatility – we are now in a similar position to 2008.”

#8) Peter Morici, an Economics Professor at the University of Maryland:

“The next financial tsunami is emerging and will ripple to America.”

#9) Bob Chapman of the International Forecaster:

“The green shoots of recovery have now turned into poison ivy. The abyss has again been filled with more debt and more fiat currency. In the process the Fed and now the ECB have lost all credibility.”

#10) Telegraph Columnist Ambrose Evans-Pritchard:

“The M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal blitz in history.”

#11) Professor Tim Congdon from International Monetary Research:

“The plunge in M3 has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly.”

#12) Reuters Columnist Iliana Jonas:

“The default rate for commercial mortgages held by banks in the first quarter hit its highest level since at least 1992 and is expected to surpass that by year-end and peak in 2011, according to a study by Real Capital Analytics.”

#13) Paul Krugman, a Nobel Prize-winning Economist:

“It’s not hard to see Japan-style deflation emerging if the economy stays weak.”

#14) Stan Humphries, Chief Economist for Zillow.com:

“Anyone expecting a robust rebound in the housing market … will be sorely disappointed.”

#15) Fox News:

“As the national debt clock ticked past the ignominious $13 trillion mark overnight, Congress pressed to pass a host of supplemental spending bills.”

#16) Bloomberg:

“The U.S. government’s Aaa bond rating will come under pressure in the future unless additional measures are taken to reduce projected record budget deficits, according to Moody’s Investors Service Inc.”

#17) Peter Schiff:

“When creditors ultimately decide to curtail loans to America, U.S. interest rates will finally spike, and we will be confronted with even more difficult choices than those now facing Greece. Given the short maturity of our national debt, a jump in short-term rates would either result in default or massive austerity. If we choose neither, and opt to print money instead, the run-a-way inflation that will ensue will produce an even greater austerity than the one our leaders lacked the courage to impose. Those who believe rates will never rise as long as the Fed remains accommodative, or that inflation will not flare up as long as unemployment remains high, are just as foolish as those who assured us that the mortgage market was sound because national real estate prices could never fall.”

#18) The National League of Cities:

“City budget shortfalls will become more severe over the next two years as tax collections catch up with economic conditions.  These will inevitably result in new rounds of layoffs, service cuts, and canceled projects and contracts.”

#19) Dan Domenech, Executive Director of the American Association of School Administrators:

“Faced with continued budgetary constraints, school leaders across the nation are forced to consider an unprecedented level of layoffs that would negatively impact economic recovery and deal a devastating blow to public education.”

#20) Mike Whitney:

“Without another boost of stimulus, the economy will lapse back into recession sometime by the end of 2010.”

#21) Kevin Giddis, Managing Director of Fixed Income at Morgan Keegan:

“There is big money making big bets that at a minimum we we’ll have a recession if not a depression that could last for years.”

#22) John P. Hussman, Ph.D.:

“In my estimation, there is still close to an 80% probability (Bayes’ Rule) that a second market plunge and economic downturn will unfold during the coming year. This is not certainty, but the evidence that we’ve observed in the equity market, labor market, and credit markets to-date is simply much more consistent with the recent advance being a component of a more drawn-out and painful deleveraging cycle.”

#23) Richard Russell, the Famous Author of the Dow Theory Letters:

“Do your friends a favor. Tell them to “batten down the hatches” because there’s a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don’t need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won’t recognize the country. They’ll retort, “How the dickens does Russell know — who told him?” Tell them the stock market told him.”