Debts

Millions Of Unemployed Americans Now Live As Paupers Even As Foreign Nations Use Sovereign Wealth Funds To Buy Up Huge Chunks Of American Infrastructure

Most Americans still do not understand just how bad the economic horror we are facing really is.  Today, millions of Americans are living as paupers in the land that their foreathers built even as America’s infrastructure is literally being sold out from under their feet by corrupt politicians.  The “official” unemployment rate in the United States has been at nine and a half percent or above for 14 consecutive months, and today it takes the average unemployed American about 35 weeks to find a job.  However, the “official” unemployment rate is misleading, because it does not include workers that have quit looking for work or that have had their hours cut back to part-time.  According to 60 Minutes, when you add those “discouraged workers” and “underemployed workers” into the equation the actual rate is about 17 percent, and in the state of California the actual rate is about 22 percent.  Meanwhile, foreign nations are using sovereign wealth funds to buy up staggering amounts of U.S. infrastructure.  America is quite literally for sale in 2010.  All across the United States, highways, ports, toll roads and even parking meters are being gobbled up by foreign powers.  We have shipped massive amounts of wealth and jobs to other nations, and now those very same countries are turning around and buying huge amounts of U.S. infrastructure with the gigantic piles of dollars that they have accumulated.    

Widespread long-term chronic unemployment was something that America was never supposed to see again.  Our leaders promised us that the U.S. financial system was so strong that we would never have another “Great Depression” in our lifetimes.  But then the financial crisis of 2008 happened.  Unprecedented numbers of Americans started losing their jobs and the U.S. Congress did something that it had never done before.  Congress decided to extend unemployment benefits all the way out to 99 weeks.

Doing that has cost U.S. taxpayers approximately $100 billion dollars to this point, but we were promised that it was a “temporary” fix and that it would give displaced U.S. workers a chance to find new jobs. 

Surely any industrious American worker could get another job within 99 weeks, right?

Wrong.

Today, there are at least 1.5 milion “99ers” – those Americans that have completely exhausted all 99 weeks of unemployment benefits and that still do not have jobs. 

Sadly, as bad as that number sounds, it is likely to keep growing.  Today, over one-third of all unemployed Americans have already been unemployed for at least one year.  If this trend continues, we are going to end up with millions of “99ers”.

60 Minutes recently did a report on some of these “99ers”.  Many of them are very highly educated and very highly qualified.  If you have not seen this 60 Minutes report yet, you have got to take few minutes to sit down and watch it.  This video is so shocking that many of you will have your jaws on the floor by the time you finish watching it….  

http://www.youtube.com/watch?feature=player_embedded&v=CwpdGyIY2fQ

So is there much reason for these “99ers” to be optimistic?

No, not really.

In fact, there are some indications that unemployment in America is actually getting worse.  Gallup’s measure of unemployment, which is not adjusted for “seasonal factors”, exhibited a sharp increase in the month of September.  According to Gallup, unemployment has increased from 8.9% in July to 9.3% in August and to 10.1% in September.

In addition, the seasonally-adjusted “Alternate Unemployment Rate” compiled by Shadow Government Statistics also indicates that unemployment in the U.S. is going up once again.  The Alternate Unemployment Rate calculated by SGS reflects estimated “long-term discouraged workers”, which the U.S. government stopped keeping track of back in 1994….

But it is not just the massive number of Americans that are completely unemployed that we need to be concerned about.  The truth is that more Americans than at any other time in recent history are working part-time jobs because that is all they can find.  The number of Americans working part-time jobs “for economic reasons” is now the highest it has been in at least five decades.

Meanwhile, sovereign wealth funds from nations such as Saudi Arabia, China, Kuwait, Libya, Singapore and the United Arab Emirates are buying up highways, ports, toll roads and even parking meters from coast to coast.

So exactly what is a sovereign wealth fund?

Well, just think of it as a huge mountain of state-owned money that roams about the countryside looking for assets to gobble up.

In a recent piece for Rolling Stone, Matt Taibbi described some of the U.S. infrastructure assets that these sovereign wealth funds are buying up….

A toll highway in Indiana. The Chicago Skyway. A stretch of highway in Florida. Parking meters in Nashville, Pittsburgh, Los Angeles, and other cities. A port in Virginia. And a whole bevy of Californian public infrastructure projects, all either already leased or set to be leased for fifty or seventy-five years or more in exchange for one-off lump sum payments of a few billion bucks at best, usually just to help patch a hole or two in a single budget year.

It turns out that U.S. politicians have figured out that they can help solve their budget problems by selling off or leasing out pieces of infrastructure.  Foreign nations with money to burn have been glad to come in and start buying a lot of this infrastructure up.  Today, it is estimated that the rest of the world currently owns several trillion dollars more of America than America owns of the rest of the world.  Later on in his article, Taibbi noted that the trend toward selling off pieces of infrastructure only seems to be accelerating….

At this writing Nashville and Pittsburgh are speeding ahead with their own parking meter deals, as is L.A. New York has considered it, and the city of Miami just announced its own plans for a leasing deal. There are now highways, airports, parking garages, toll roads — almost everything you can think of that isn’t nailed down and some things that are — for sale, to bidders unknown, around the world.

Sadly, both the number and the value of major acquisitions made by sovereign wealth funds approximately doubled during the first half of 2010.

Instead of being the “land of the free”, we are rapidly becoming the “land that has been leased out to foreign nations”.

So where in the world did these sovereign wealth funds get all this money?

Well, they got it from us of course.

Every single month, the United States buys massive amounts of oil from the Middle East and massive amounts of cheap plastic crap from China.  The rest of the world buys a bunch of stuff from us too, but not nearly as much as we buy from the rest of the world.

So every single month tens of billions of dollars that used to belong to the American people ends up in the hands of foreigners.  Now some of that money is returning to this country and is being used to buy up our infrastructure.

Many of these highways and toll roads that are being sold off had already been completely paid for.  Can you imagine the frustration of the taxpayers in many of these areas when they realize that a road that they have already completely paid for with their tax dollars has been sold out from underneath them?

Another place that all these U.S. dollars held by foreigners is going is into U.S. Treasuries.  In fact, the federal government very much encourages this.  After all, we have to finance our exploding debt somehow. 

In essence, first we made some folks in the Middle East and in Asia incredibly wealthy, and now we are asking them to please lend that money back to us so that we can continue living far beyond our means.

Today, the national debt of the United States is rapidly approaching 14 trillion dollars.  An increasing percentage of this debt is owned by foreigners.

The borrower is the servant of the lender, and we are rapidly becoming enslaved to the rest of the world.

This is national economic suicide, but our politicians have become so addicted to debt that there doesn’t seem to be much hope that things can be turned around any time soon.

100 Dollar Oil Is Coming

The price of oil has been hovering around 80 dollars a barrel for quite some time now, but get ready, because it is going to move significantly higher.  Oil prices have already risen about 9 percent over the past month, and many believe that this could very well be the start of a new trend.  Lawrence Eagles, a top analyst at JP Morgan, recently made headlines across the globe when he stated that oil could hit 100 dollars a barrel “much sooner than we expect”.  Not only that, but a number of top OPEC officials are also publicly discussing the possibility of 100 dollar oil.  But just because a few people are talking about it does not mean that it is going to happen.  So are there any other reasons why we should anticipate a significant increase in the price of oil?

Well, yes there is.

*The Decline Of The U.S. Dollar

Since August 27th, the U.S. dollar has declined approximately 4.8% against the currencies of major U.S. trading partners.  Unfortunately, there seems to be every indication that the dollar is going to continue to decline.  As the U.S. dollar continues to display weakness, just about everything priced in dollars (including oil) is going to continue to rise.

*The Threat Of Quantitative Easing By The Federal Reserve

For weeks, top Federal Reserve officials have been making public statements about the need for more quantitative easing.  If the Fed does initiate a significant program of quantitative easing in the coming months, that is going to put even more downward pressure on the U.S. dollar and even more upward pressure on the price of oil. 

*Other Commodities Have Been Skyrocketing

Over recent weeks, the prices of a wide array of key commodities have been absolutely skyrocketing.  As I noted in a previous article, not only has the price of gold been setting records, the truth is that almost every major commodity has been spiking.  In a recent column entitled “An Inflationary Cocktail In The Making“, Richard Benson noted some of the commodity price increases that he has been tracking this year….

-Agricultural Raw Materials: 24%

-Industrial Inputs Index: 25%

-Metals Price Index: 26%

-Coffee: 45%

-Barley: 32%

-Oranges: 35%

-Beef: 23%

-Pork: 68%

-Salmon: 30%

-Sugar: 24%

-Wool: 20%

-Cotton: 40%

-Palm Oil: 26%

-Hides: 25%

-Rubber: 62%

-Iron Ore: 103%

The increase in the price of oil is just part of a larger trend of soaring commodity prices.  As long as this trend in commodity prices continues it is unlikely that the price of oil will go down.

*The Strikes In France

The austerity strikes in France have interrupted the flow of gasoline in that country.  Once the strikes are over there will be an increase in demand as inventories are restocked.

*Increased Demand From China And Other Emerging Nations

Most analysts are forecasting that the demand for oil in China and other emerging nations will continue to grow at an impressive pace.  This growing demand will also cause upward pressure on the price of oil.

*The Potential Of War In The Middle East

As always, war could break out in the Middle East at any time.  A minor conflict in the Middle East would likely push the price of oil over 100 dollars a barrel very quickly.  A major conflict would likely push it over 200 dollars or even beyond.  War is very, very difficult to predict, but it does seem quite likely that some kind of conflict will break out in the Middle East at some point over the next several years.

So how soon will oil reach the 100 dollar mark?

That is very hard to say. 

But even now, Americans are already having to dig deeper into their wallets at the gas pump.

For the two week period ending October 22nd, the average price of gasoline in the United States increased 5.23 cents to $2.82 a gallon.

As the price of oil continues to rise significantly over the long-term, it is going to have an impact on thousands of other prices.  Virtually all products must be transported, and an increase in the price of oil will cause those transportation costs to go up.

So an increase in the price of oil would be really bad news. 

If we do see 100 dollar oil, that will be a huge challenge for the U.S. economy.

If we end up seeing 150 dollar oil (especially for an extended period of time) it will be an absolute nightmare for the U.S. economy.

So where do you think the price of oil is going?  Feel free to leave a comment with your opinion….

California Is Broke – 19 Reasons Why It May Be Time For Everyone To Leave The State Of California For Good

Back in the 1960s and 1970s, there was a seemingly endless parade of pop songs about how great life was in California, and millions of young Americans dreamed of moving to the land of sandy beaches and golden sunshine.  But now all of that has changed.  Today, millions of Californians are dreaming about leaving the state for good.  The truth is that California is broke.  The economy of the state is in shambles.  The official unemployment rate has been sitting above 12 percent for an extended period of time, and poverty is everywhere.  For many Californians today, there are very few reasons to stay in the state but a whole lot of reasons to leave: falling housing prices, rising crime, budget cuts, rampant illegal immigration, horrific traffic, some of the most brutal tax rates in the nation, increasing gang violence and the ever present threat of wildfires, mudslides and natural disasters.  The truth is that it is easy to understand why there are now more Americans moving out of California each year than there are Americans moving into the state.  California has become a complete and total disaster zone in more ways than one, and an increasing number of Californians are deciding that enough is enough and they are getting out for good.

Sadly, the state of California is facing such a wide array of social, economic, and political problems that it is hard to even document them all.  It is really one huge gigantic mess at this point.

Just consider the following facts about what life is like in the state of California today…. 

#1 Unemployment in the state of California was 12.4% in September – one of the highest rates in the nation.

#2 The number of people unemployed in the state of California is approximately equivalent to the populations of Nevada, New Hampshire and Vermont combined.

#3 Not even state government jobs are safe in California these days.  Last month, government agencies in California slashed a total of 37,300 jobs.

#4 California has the third highest state income tax in the nation: a 9.55% tax bracket at $47,055 and a 10.55% bracket at $1,000,000.

#5 California has the highest state sales tax rate in the nation by far at 8.25%.  Indiana has the next highest at 7%.

#6 Residents of California pay the highest gasoline taxes (over 67 cents per gallon) in the United States.

#7 Even with all of the taxes, the budget deficit for the California state government for the current year is approximately 19 billion dollars.

#8 According to an article in the Wall Street Journal, California’s unfunded pension liability is estimated to be somewhere between $120 billion and $500 billion.

#9 20 percent of the residents of Los Angeles County are now receiving public aid.

#10 Budget cuts are making life very difficult in many California cities.  For example, Oakland, California Police Chief Anthony Batts says that due to severe budget cuts there are a number of crimes that his department will simply not be able to respond to any longer.  The crimes that the Oakland police will no longer be responding to include grand theft, burglary, car wrecks, identity theft and vandalism. 

Things have gotten so bad in Stockton, California that the police union put up a billboard with the following message: “Welcome to the 2nd most dangerous city in California. Stop laying off cops.”

#11 According to one survey, approximately 1 in 4 Californians under the age of 65 had absolutely no health insurance last year.

#12 California’s poverty rate soared to 15.3 percent in 2009, which was the highest in 11 years.

#13 California’s overstretched health care system is also on the verge of collapse.  Dozens of California hospitals and emergency rooms have shut down over the last decade because they could not afford to stay open after being endlessly swamped by illegal immigrants and poor Californians who were simply not able to pay for the services they were receiving.  As a result, the remainder of the health care system in the state of California is now beyond overloaded.  This had led to brutally long waits, diverted ambulances and even unnecessary patient deaths.

#14 California home builders began construction on 1,811 homes during the month of August, which was down 77% from August 2006.

#15 Earlier this year, it was reported that in the area around Sacramento, California there was one closed business for every six that were still open.

#16 The “lawsuit climate” in California is ranked number 46 out of all 50 states. 

#17 Residents of California pay some of the highest electricity prices in the entire nation.

#18 Over 20 percent of California homeowners are now underwater on their mortgages.

#19 Large tent cities have been springing up all over the state of California.  Just check out the following shocking video news report….

http://www.youtube.com/watch?v=cRLupIRhrmg

So why doesn’t the state government of California just fix many of these problems?  Well, the truth is that it simply cannot.  The state government is flat broke.  Earlier this year, Bob Herbert of the New York Times described California’s massive budget problems this way….

California has cut billions of dollars from its education system, including its renowned network of public colleges and universities. Many thousands of teachers have been let go. Budget officials travel the state with a glazed look in their eyes, having tried everything they can think of to balance the state budget. And still the deficits persist.

So is there any hope that all this can be turned around?

Is there any hope that the economy of California will recover?

Or will California continue to experience a rapid decline?

Please feel free to leave a comment with your opinion….

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 Big Wall Street Banks Have Found A New Way To Strangle The American People: Predatory Property Tax Collection

It turns out that the big Wall Street banks have found a dirty new way to make loads of cash from U.S. homeowners, and they really, really don’t want to talk about it.  So what is this dirty new business?  America’s biggest financial institutions have become property tax collectors, and it is extremely lucrative.  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.  In some areas, the big banks are able to foreclose on these homes in as little as six months.  The elderly and the poor are the most common targets of these practices.  An absolutely brilliant expose in the Huffington Post has brought these issues to light, and it is creating quite a controversy in the financial world.  The big banks are doing nothing illegal here.  Local governments are offering to sell thousands of tax liens and somebody is going to end up buying them.  But something seems extremely unsavory about the big Wall Street banks capitalizing on the economic downturn that they were so instrumental in causing in such a predatory manner. 

Today, millions of American families are barely hanging on to their homes by their fingernails.  Millions are out of work and millions of others are barely making enough to put food on the table.  Meanwhile, property taxes have absolutely soared in most areas of the nation over the past decade.  Many Americans are finding that when that time rolls around they simply do not have a big chunk of extra money to pay a property tax bill. 

So millions of American families, including many that have completely paid off their homes, now find themselves in danger of being thrown out on to the street over an unpaid property tax bill.

For many local governments, the headache of trying to collect on thousands of property tax liens is just too much, so they are glad to “outsource” the work of collection.

So how do the big Wall Street banks get involved?  Well, it goes something like this….

1) The big Wall Street banks set up or invest in shell companies that will disguise who they really are.

2) These shell companies run around and buy up all of the tax liens that they can get their hands on.

3) Predatory levels of interest (in some states as high as 18 percent), fees and penalties rapidly pile up on these unpaid tax liens.  The affected homeowners quickly end up owing much, much more than what the original tax bills were for.    

4) If the collecting firm has to hire a lawyer, then that gets charged to the homeowner as well.  The bloated legal fees for some of these lawyers can end up being the biggest expense of all.

5) If the tax liens do not get paid, the collecting firms move in to foreclose as quickly as legally possible.       

According to the Huffington Post, Wall Street banks such as Bank of America and JPMorgan Chase have been gobbling up several hundred thousand tax liens from local governments.  It appears that “distressed housing markets” are being particularly targeted.

Many of these tax liens are sold in online auctions, so it is unclear if many local government officials even realize who the big money behind many of these shell companies is. 

Once again, this is all perfectly legal, but it is more than a little distasteful.

The following video by the Huffington Post does a good job of summarizing what they found….

The truth is that there is a huge difference between the letter of the law and true justice.

Just consider the following tragic story from the Huffington Post article….

Barbara Carpenter, a 58-year-old disabled Ohio retiree, found herself in such a situation. The former worker for the American Red Cross struggled to save her Toledo home from a JPMorgan entity called Plymouth Park Tax Services, which in recent years has been among the nation’s top buyers of tax liens.

“It’s a great neighborhood and the house is in good condition,”said Carpenter, who paid $67,000 for the one-story home in 2004. But she fell behind in paying her taxes and a certificate for $1,500 in unpaid taxes was sold off to Plymouth Park, which is based in New Jersey.

Carpenter’s lawyer, Joseph Westmeyer, said Plymouth Park routinely charges an upfront fee of around $1,500 as soon as it buys the lien and 18 percent interest on the debt. If they don’t get paid, they foreclose.

“It’s not a good deal for poor customers,” said Westmeyer. Carpenter wound up selling the house in August for less than half what she had paid. Plymouth Park received about $12,000 in legal fees and other charges, including some additional taxes, Westmeyer said, quoting from court records.

Does that sound like an honorable way of making money to you?

Would you like to make your living by throwing elderly women out of their homes and into the street over unpaid tax bills?

Unfortunately, this problem is not going to go away any time soon.  One out of every six Americans is enrolled in a government anti-poverty program.  Tens of millions of Americans are barely hanging in there.  In addition, tens of millions of elderly Americans live on fixed incomes.  Meanwhile, property taxes just continue to go up in many areas of the United States.

Unless the U.S. economy experiences a dramatic turnaround, we are going to continue to see large numbers of Americans get behind on their property taxes, and the big banks will continue to be there to scoop up the tax liens.

Large numbers of poor and elderly Americans that don’t even have a mortgage will lose their homes and it will all be perfectly legal.  Executives at the big banks will be having a good laugh about their huge bonus checks as thousands upon thousands of our most vulnerable citizens are dumped out into the street.

But weren’t the big banks largely responsible for causing the housing crash and the economic meltdown that followed? 

Yes.

But so far none of them is really paying any kind of a price.  The big banks got bailed out by the U.S. government, and now it looks like the Federal Reserve is preparing another round of “backdoor bailouts” to help them out again.

But do the big banks show any mercy on the poor and the elderly who have gotten behind on their property taxes?

Not at all.

This is 2010 – a time when greed dominates the financial world and when most banks don’t seem to know a thing about kindness or mercy.

Unfair Trade: 10 Questions About Our Globalized Economy That Neither Conservative Or Liberal Supporters Of Current U.S. Trade Policies Can Answer

Most Americans still seem to be convinced that “free trade” is “fair trade” and that to be against current U.S. trade policies and globalization means that you are anti-business, anti-free enterprise and anti-American.  In the mainstream media, any unfair trade practices that are brought up are treated as minor nuisances that will be ironed out as we march towards the glorious globalized economy of the future.  But the truth is that the kind of world trade that is going on today is neither “free” nor is it “fair”.  Major exporting countries around the globe are openly manipulating their currencies, they are heavily subsidizing their major industries and they are erecting huge tariffs against many U.S. goods in order to protect their own domestic companies.  Meanwhile, U.S. consumers enjoy mountains of cheap goods, but thousands of factories, hundreds of thousands of jobs and hundreds of billions of dollars of national wealth leave our country for good every year.  So how in the world is that good for us?  It is kind of like ripping apart your house to get more firewood just to keep the fire going.  Eventually you aren’t going to have a house anymore.

The other day, my article entitled “The Number One U.S. Export To China: Waste Paper And Scrap Metal” really struck a chord with many advocates of current U.S. trade practices.  For example, one reader identified only as “Someone” left a comment that was typical of many that were posted on the article….

“The author of this article has shown no knowledge of economics.”

Well, it doesn’t take a genius to look at the numbers and figure out that something is wrong.  In 1985, the U.S. trade deficit with China was 6 million dollars for the entire year.  In the month of August alone, the U.S. trade deficit with China was over 28 billion dollars.

Can anyone else spot a disturbing trend there?

Years ago, I was also one of those who believed that because I was “pro-business” that also meant that I had to defend “free trade” and trade agreements such as NAFTA and the WTO.

After all, I didn’t want to be labeled “anti-business” or “anti-American” did I?

But the truth is that merging our economy with socialist and communist economies that allow their workers to be paid slave labor wages is not “pro-business” and it certainly is not “pro-American”.  Allowing entire U.S. industries to be destroyed because of the unfair predatory trade practices of socialist and communist economies is not “pro-business” and it certainly is not “pro-American”. 

If you want to have “free trade”, then by definition you must have a level playing field.  For example, trade with Canada (although not perfect) is mostly a very, very good thing.  Trade with China is not.

Many readers have suggested that all we have to do is get rid of the horrific regulations and taxes that are holding U.S. businesses back and our trade situation will be fixed.

And yes, the U.S. government has piled so many rules, so many taxes and so much paperwork on U.S. businesses that it is becoming very, very difficult to operate a profitable business inside the United States.  There has never been a more oppressive environment for business in the United States than we have today.

But would fixing that solve all our trade problems?  Would fixing that bring back all of our factories and jobs?

No, but of course it would help to an extent.

However, the reality is that unless we address the fundamental problems with global trade we are in a heap of trouble.

Unfortunately, not all of my readers agree.  One reader named Puzzled was quite blunt is his analysis of my recent article on trade: “I’d recommend a class on basic economics.”  Well, it turns out that I did take a number of courses in economics at one of the finest universities in the United States, but our education system has become so dumbed-down that I didn’t learn much.

So let’s hear from someone who is considered to be an expert in economics.

Just how dangerous is the trade deficit?  Well, world famous investor Warren Buffett once put it this way….

“The U.S trade deficit is a bigger threat to the domestic economy than either the federal budget deficit or consumer debt and could lead to political turmoil… Right now, the rest of the world owns $3 trillion more of us than we own of them.”

Advocates of current U.S. trade policies usually respond by saying something like this….

“The global economy is here to stay so you better get used to it.  There is no going back.  It is a good thing for factories and jobs to be going to China because they can produce things cheaper than we can.  We benefit because we get to enjoy large amounts of cheap products.  Yes, American workers are going to have a significantly reduced standard of living, but this is necessary as we merge all the countries of the world into a globalized economy which will be better for everyone in the end.  After all, it is better for goods and services to cross borders than it is for armies to cross borders.  U.S. citizens are just going to have to learn to live within their means.  If the United States cannot provide jobs for all of their people in this new global economy, then maybe they need to start implementing some population control measures.  Quit blaming China because they aren’t doing anything wrong.  Everyone knows that free trade is always the best alternative.  Are you an idiot?  Go take a class in basic economics you moron.”

The following is a sampling of actual comments that have been recently posted in response to my articles on globalism by advocates of current U.S. trade policies.

A reader named Frodo apparently thinks that I am “anti-freedom”….

You are totally wrong about free trade. “free trade” is part of “freedom” like the freedom of consumers to buy stuff they want made somewhere else.

A reader named John seems convinced that that United States has never lost even a single job to China….

No American has ever lost a job to China: what happens is due to USA govt industrial policy (get big or get out), new jobs are placed in new factories where there will be better stability in the future – China. Those “lost jobs” are not coming back because like buggy whips, we don’t use them anymore.

A reader named Dave believes that “free trade” is precisely what we need to revitalize manufacturing in America again….

Free trade is EXACTLY what’s needed if we ever hope to get manufacturing back in North America.

In the face of such overwhelming logic how can I continue to maintain that the current state of global trade is deeply flawed and deeply broken?

Well, I have a challenge for advocates of current U.S. trade policies.

I challenge you to answer the following 10 questions about our globalized economy.  Please answer these questions and tell me why I am wrong….  

#1 How can trade be considered “fair” when other major exporting nations openly manipulate their currencies, provide massive subsidies for their national industries and erect massive tariffs against many U.S. goods while we allow them to wipe out many of our domestic industries by flooding our shores with endless amounts of cheap products?

#2 How is it possible that it is good for American workers to be merged into a global labor pool where they must compete for jobs with workers on the other side of the globe that make less than ten percent of what an average American worker makes?

#3 As millions of manufacturing jobs continue to flow to where “labor is cheaper”, can you please explain how in the world we are going to provide nearly enough jobs for blue collar American workers?

#4 If there are not nearly enough jobs for everyone, then millions upon millions of Americans will not be able to take care of themselves.  We simply are not going to let them starve to death in the streets.  Already, over 41 million Americans are on food stamps.  One way or another we are going to pay to take care of American workers.  Either we are going to give them jobs or we are going to give them welfare.  Are you willing to have your taxes raised substantially to pay for all of the welfare cases that “free trade” is creating?

#5 As U.S. workers are merged into the new global labor pool, can you please explain how wages will not be forced down and the standard of living for average, hard-working Americans will not diminish substantially?

#6 How can any conservative ever justify trading with a nation (China) that has a “one-child policy” and that has mobile abortion vans driving around the country to enforce this mandate?

#7 How can any liberal ever justify trading with a nation (China) that is rapidly becoming an environmental wasteland and where millions of people work in horrific conditions for what is essentially slave labor pay?

#8 The House National Security Oversight Subcommittee recently heard stunning testimony from a number of experts that told them that the rapid decline of manufacturing in the United States has resulted in America losing its edge in numerous industries that are absolutely vital to national security.  How is it possible that putting our national security in such peril is a “good thing”?

#9 The United States spends 40 to 50 billion more on goods and services from the rest of the world each month than they spend on goods and services from us.  That means that the United States is becoming 40 to 50 billion dollars poorer each and every month.  How is that good for the U.S. economy?

#10 Over the past few decades, the communist Chinese have been able to accumulate approximately $2.5 trillion in foreign currency reserves, and the U.S. government now owes them close to 900 billion dollars.  We constantly have to send top government officials over there to beg them to continue to lend us money.  This would have never happened without the insane trade policies of the last several decades.  So how in the world can advocates of current U.S. trade policies ever justify this?

The Biggest Bank Robbery In History? More Quantitative Easing = Backdoor Bailouts For The Big Banks Without Having To Go Through Congress

The U.S. Federal Reserve is getting ready to conduct another gigantic bailout of the big banks, but this time virtually nobody in the mainstream media will use the term “bailout” and the American people are going to get a lot less upset about it.  You see, one lesson that was learned during the last round of bank bailouts was that the American people really, really do not like it when the U.S. Congress votes to give money to the big banks.  So this time, the financial “powers that be” have figured out a way around that.  Instead of going through the massive headache of dealing with the U.S. Congress, the Federal Reserve is simply going to print money and give it directly to the banks.  To be more precise, the Federal Reserve is going to use a procedure known as “quantitative easing” to print money out of thin air in order to purchase large quantities of “troubled assets” (such as mortgage-backed securities) from the biggest U.S. banks at well above market price.  Some are already openly wondering if this next round of quantitative easing is going to be the biggest bank robbery in history.  Most Americans won’t understand these “backdoor bailouts” well enough to get upset about them, but that doesn’t mean that they won’t be just as bad (or even worse) than the last round of bailouts.  In the end, all of the inflation that this new round of quantitative easing is going to cause is going to be a “hidden tax” on all of us.

These new backdoor bailouts are going to work something like this….

1) The big U.S. banks have massive quantities of junk mortgage-backed securities that are worth little to nothing that they desperately want to get rid of.

2) They convince the Federal Reserve (which the big banks are part-owners of) to buy up these “toxic assets” at way above market price.

3) The Federal Reserve creates massive amounts of money out of thin air to buy up all of these troubled assets.  The public is told that all of this “quantitative easing” is necessary to stimulate the U.S. economy.

4) The big banks are re-capitalized and have gotten massive amounts of bad mortgage securities off their hands, the Federal Reserve has found a way to pump hundreds of billions (if not trillions) of dollars into the economy, and most of the American people are none the wiser.

During a recent appearance on MSNBC, Matt Taibbi of Rolling Stone did a great job of explaining how this all works….

http://www.youtube.com/watch?v=uwhMVB0XzPU&feature=player_embedded

But this isn’t the only way that the Federal Reserve forks over massive amounts of cash to the big U.S. banks.  In a previous article, I described how the U.S. Federal Reserve lends huge quantities of nearly interest-free money to big U.S. banks which they turn around and invest in U.S. Treasuries which bring in a return of three percent or so.  In essence, it is a legalized way for the big U.S. banks to make mountains and mountains of free money.

The truth is that the Federal Reserve does whatever it can to ensure that the big U.S. banks stay fat and happy. 

So what about the small banks?  What happens to them?

Well, the vast majority of the small banks are considered “not big enough for bailouts” and they are allowed to die like dogs.

Don’t let anyone ever fool you into thinking that the U.S. banking system has a level playing field.

For weeks, Federal Reserve officials have been coming out and have been dropping hints about how important it is for them to take “action” and implement another round of quantitative easing in order to help stimulate the U.S. economy.

In fact, during his speech on Friday, you could almost hear Ben Bernanke salivating at the thought of printing more money.

But nobody ever really asks who is going to be the first to get their hands on all this money that the Fed is going to pump into the economy.

The answer, of course, is obvious.

It is going to be the big banks – the same banks that are part-owners of the Federal Reserve and that have tremendous influence over Fed policies.

But even though this is all more than a little shady, is it such a bad thing for the rest of us if the Federal Reserve bails out the big banks and brings some much needed stability back to the U.S. financial system?

After all, if “Foreclosure-Gate” could potentially cause a nightmarish financial meltdown, isn’t it better for the Federal Reserve to step in and soak up large amounts of these toxic assets?

Those are legitimate questions.

Certainly the Federal Reserve has the power to step in and smooth over all sorts of short-term problems by papering them with money, but in the end printing more money will just make our long-term problems even worse.

Whenever a new dollar is introduced into the system, every other dollar in existence loses a little bit of value.

When trillions of new dollars get introduced into the system, it has the potential to create an inflationary nightmare. 

Already, a number of top Fed officials are publicly saying that inflation is “too low” and that we need to purposely generate more inflation in order to “stimulate” the U.S. economy.

Yes, that is just as insane as it sounds, but that is what they are actually proposing.

Apparently many top Federal Reserve officials honestly believe that they can pump trillions into the economy, jack up inflation significantly, and little harm will be done.

But even before “QE2” has begun, we are already starting to see all kinds of little bubbles beginning to develop in the financial system.  For example, commodity prices are skyrocketing right now, and that will soon be affecting the price we pay for food at the supermarket.

We are already on the road to serious inflation and the Federal Reserve has not even fired up the money hoses yet.  So what is going to happen after they pump trillions more into the economy?

Printing more money and giving it to the banks is not going to solve our economic problems.  It is just going to make them worse.

But unfortunately, American voters get no say about any of this.  Our national monetary policy is in the hands of an unelected central bank that does pretty much whatever it wants.   

An economic nightmare is coming, and you had better get ready.

The Number One U.S. Export To China: Waste Paper And Scrap Metal

Historians tell us that by the very end of the Roman Empire, goods were pouring into Rome from all over the known world, but about the only thing being sent out of Rome was human waste and garbage.  America has not yet reached that point, but we are certainly well on our way.  In 2010, the number one U.S. export to China is “scrap and trash”.  Yes, you read the correctly.  The number one thing that China buys from us is our garbage.  According to author Clyde Prestowitz, China’s number one export to the U.S. is computer equipment (nearly $50 billion) while our number one export to them is waste paper and scrap metal (approximately $8 billion).  When it comes to world trade, China is literally wiping the floor with the United States.  In August, the U.S. trade deficit with China set a new one month record of $28 billion dollars.  Our insane trade policies are making China (along with several of our other “trade partners”) incredibly wealthy, and the U.S. government ends up begging China to lend that money back to us to fund the exploding U.S. national debt.  That just isn’t stupidity – that is insanity.

The truth is that our “twin deficits” are literally bankrupting this nation.  We are completely and totally destroying the economic future of our children and grandchildren.

But hey, the Vikings beat the Cowboys, Dancing With The Stars is heating up and we all have a bunch of DVDs to get caught up on so why worry ourselves, right?

Unfortunately, the reality is that we can’t afford to be “comfortably numb” any longer if we hope to have any kind of a future.

It is time to wake up people.

Sadly, a significant percentage of young Americans these days can’t even tell you what a “trade deficit” is. 

If you don’t believe this, just try a little experiment some time.  Just go up to a few young Americans on the street and ask them to define “trade deficit” for you.

But fortunately, the vast majority of the readers of this column are quite informed.  Unfortunately, I still don’t believe that most of you really understand how incredibly dangerous the trade deficit is.

So just how dangerous is the trade deficit?  Well, world famous investor Warren Buffett once put it this way….

“The U.S trade deficit is a bigger threat to the domestic economy than either the federal budget deficit or consumer debt and could lead to political turmoil… Right now, the rest of the world owns $3 trillion more of us than we own of them.”

Between 2000 and 2009, America’s trade deficit with China skyrocketed nearly 300 percent.  Wealth, factories and jobs are leaving the United States at an astounding pace.  The danger that this represents to our economy is so vast that it is hard to even describe.

If you ever find yourself in a debate with proponents of “free trade”, you can almost always get them to eventually admit that “free trade” will raise the standard of living for workers in countries like China while significantly lowering the standard of living for U.S. workers, but that this must be done for the good of the emerging “global economy”.

Of course U.S politicians never really mention this nasty little fact when they give speeches about how wonderful our trade policies are.  They never really get around to mentioning that “free trade” is one of the key foundations of “globalism” and that we are being merged into a one world economy.

Today, American workers do not just compete with other American workers.  Instead, U.S. workers now find themselves in direct competition for jobs with workers in China that makes less than a tenth of what an American worker would make.  In China, a garment worker makes approximately 86 cents an hour.  Apple iPhones are manufactured in China by workers making about 293 dollars a month (and that was after a big raise).

So exactly how long do you think you and your family would be able to survive on 293 dollars a month?

But unfortunately, millions more Americans will lose their jobs and millions more Americans will be forced to take a cut in pay in order to compete in the new global economy.

According to a disturbing new study by the Economic Policy Institute, if the trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.

The sad truth is that it is NOT a good time to be a blue collar worker in America.  If your job does not get offshored or outsourced, then it is likely to be made obsolete by computers and automation. 

The need for manual labor is rapidly declining in today’s world.  For example, there is a Japanese firm called Fanuc, Ltd. that actually has industrial robots manufacturing other industrial robots in a “lights out” factory.

How bizarre is that?

But things wouldn’t be quite as bad for U.S. workers if China was not cheating so badly.  The truth is that they just do not play the game fairly.

For instance, it is estimated that the Chinese government is keeping China’s currency valued about 40 percent lower than it should be.  This is essentially a de facto subsidy to China’s exporters.

There has been a little bit of rumbling in the Obama administration about this in recent weeks, but it is quite unlikely that they will push China too far on this issue.  After all, the Obama administration desperately needs China to keep loaning us massive quantities of money so that we can keep funding our runaway debt.

If you sit back and objectively analyze the facts, it quickly becomes undeniable that China is beating the living crap out of us economically.  In fact, one prominent economist is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040 if current trends continue.

This all could have been turned around a decade or two ago, but now China has us by the throat.  At any time, China could decide to start selling off massive quantities of U.S. Treasuries.  At any time, China could decide to cut off our supply of rare earth elements (of which they have a virtual monopoly).   

China is now even the number one supplier of components that are critical to the operation of U.S. defense systems.  How smart were we to allow that to happen?

It is a direct threat to national security for China to have so much leverage over us.  But you rarely hear anyone talking about this.

The truth is that trade with China is not a left/right issue.  As I have written about previously, it is impossible for any self-respecting conservative to justify our trade policies with China and it is impossible for any self-respecting liberal to justify our trade policies with China.

Yet very few current members of the U.S. Congress ever discuss the possibility of sweeping changes to our trade policies.

So we will continue to lose thousands of factories, we will continue to lose millions of jobs and we will continue to see the biggest transfer of wealth in the history of the world accelerate.

So do any of you think that I am wrong about this?  Please feel free to leave a comment with your opinion below….

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