Economic Conditions

8 Economic Threats That We Were Not Even Talking About At The Beginning Of The Summer

In the crazy times in which we live, it helps to expect the unexpected.  Sometimes you can think that you have it all figured out and then this world can throw a real curveball at you. Very few people anticipated that we would see a massive outbreak of the West Nile Virus in Texas this year or that the Mississippi River would be in danger of drying up after experiencing historic flooding last year.  Who would have thought that we would see the worst drought in more than 50 years or that horrific wildfires would burn nearly 7 million acres of land?  This is why economic conditions are always so hard to predict.  A single “black swan event” can come along and change everything almost overnight.  Our world has become incredibly unstable, and so who really knows what the rest of 2012 will bring?  Will we see a stock market crash?  Will the hurricane season be unusually bad?  Will war erupt in the Middle East?  Will we see a major earthquake on the west coast or even a volcanic eruption?  Will the upcoming election cause an eruption of anger and frustration in America?  We don’t know the answers to those questions yet, and the truth is that we will probably see some things happen that very few of us are anticipating at this point.

This is an exciting time to be a “news junkie”, but unfortunately the vast majority of the news these days is bad.

It is almost as if a “perfect storm” is developing.  Our weather is going crazy, our financial system is on the verge of collapse, our politicians seem more insane than ever, there is evidence of social decay all around us and the drumbeats of war in the Middle East grow louder with each passing day.

As strange as 2012 has been so far, I fear that things are about to get a whole lot stranger.

Not that we haven’t had some very unanticipated events happen this year up to this point.

The following are 8 economic threats that we were not even talking about at the beginning of the summer….

#1 West Nile Virus

What is up with all of the strange disease outbreaks that we have seen so far this year?

Flesh eating disease and the bird flu have both been making global headlines this summer, but in the U.S. right now it is the West Nile Virus that is getting the most attention.

So far more than 1,100 cases of the West Nile Virus have been diagnosed in the United States and more than 41 people have died from it.

More than half of the cases so far have been in Texas, but we have also seen people come down with West Nile Virus in Mississippi, Louisiana, South Dakota, and Oklahoma.

If you live in any of those areas, you might want to do your best to avoid mosquitos for the rest of the summer.

#2 Historic Drought

This summer, the United States has experienced the worst drought that it has seen in more than 50 years.

This weather has been absolutely crippling for farmers and ranchers all over the nation.  As I wrote about the other day, about half of all corn being grown in the U.S. is currently either in “poor” or “very poor” condition.

As the drought has dragged on, many farmers and ranchers have become increasingly desperate.  In fact, one farmer has even been feeding his cows candy in an attempt to deal with rising feed prices.

Needless to say, this drought has been causing commodity prices to soar.

On Tuesday, the price of corn closed at a record $8.38 a bushel, and the price of soybeans closed at $17.30 a bushel.

#3 The Mississippi River Is Drying Up

Thanks to this drought, rivers and lakes all over the United States are drying up.  In fact, there have been reports that millions of fish have been dying because water levels have gotten so low in many areas.

Even the mighty Mississippi River has dropped to dangerously low levels.

At this point, the Mississippi is lower than most people living along the river can ever remember.  If it drops much lower, it could potentially have an absolutely devastating impact on the U.S. economy.

A recent NBC News report described what is at stake….

About $180 billion worth of goods move up and down the river on barges, 500 million tons of the basic ingredients for much of the U.S. economy, according to the American Waterways Operators, a trade group. It carries 60 percent of the nation’s grain, 22 percent of the oil and gas and 20 percent of the coal, according to American Waterways Operators. It would take 60 trailer trucks to carry the cargo in just one barge, 144 18-wheeler tankers to carry the oil and gas in one petroleum barge.

If all traffic along the Mississippi was forced to stop, it is estimated that it would cost the U.S. economy about 300 million dollars a day.

And already there have been stoppages along one 11 mile stretch of the river….

Nearly 100 boats and barges were waiting for passage Monday along an 11-mile stretch of the Mississippi River that has been closed because of low water levels, the U.S. Coast Guard said. New Orleans-based Coast Guard spokesman Ryan Tippets said the stretch of river near Greenville, Miss., has been closed intermittently since Aug. 11, when a vessel ran aground.

So what happens if the Mississippi gets even lower?

#4 Wildfires

The extreme heat has also been responsible for the horrific outbreak of wildfires that we have seen in the western United States this year.

So far in 2012, nearly 7 million acres have been burned up.

That is an area about as big as the states of Maryland and Delaware combined.

#5 The Global Elite Hoarding Gold

In the past, the global elite and the mainstream media would mock those who are hoarding gold in anticipation of a major financial collapse.

But now it is the global elite who are hoarding gold.

In a previous article, I discussed how men such as George Soros and John Paulson are investing mind-boggling amounts of money in gold right now.  The amount of money that these two individuals are investing in gold is difficult to comprehend….

There was also news last week in an SEC filing that both George Soros and John Paulson had increased their investment in SPDR Gold Trust, the world’s largest publicly traded physical gold exchange traded fund (ETF).

Mr Soros upped his stake in the ETF to 884,400 shares from 319,550 and Mr Paulson bought 4.53m shares, bringing his stake to 21.3m.

At the current price of about $156 a share, these are new investments of about $88m of Mr Soros’ cash and more than $700m from Mr Paulson’s funds. These are significant positions.

Combined, Soros and Paulson dumped more than three quarters of a billion dollars into gold during the second quarter of 2012 alone.

So what are they anticipating?

The central banks of the world have been very busy hoarding gold as well.  According to the World Gold Council, global central banks were net buyers of 157.5 metric tons of gold during the second quarter of 2012.

Over the past 20 years there has never been a time when global central banks have accumulated that much gold during a single quarter.

So just what in the world is going on?

#6 Recession In The UK

Everyone knew that Greece was in deep trouble.

And everyone knew that Italy and Spain were in deep trouble.

But it was a surprise to see the UK economy plunge deep into recession.  During the second quarter of 2012 alone, the UK economy shrunk by 0.7 percent.

At this point the British economy has contracted for three quarters in a row.

Hopefully things will not get even worse over there.

#7 Major Economic Slowdown In The United States

Considering the fact that the U.S. economy never even came close to recovering from the last recession, it is a bit disheartening to see that it looks like we are headed for another major downturn.

According to Michael Panzer of Financial Armageddon, measurements of economic activity compiled by the Federal Reserve Bank of Philadelphia indicate that the U.S. economy is rapidly heading into another recession.  If you doubt this, just check out this chart.

And for a lot more reasons why the U.S. economy is entering another recession, check out this article.

#8 Hauled Off To A Mental Institution For What You Believe

Do you ever worry that what you post on Facebook could get you involuntarily committed to a mental institution?

Well, that is exactly what happened to one military vet recently.

A former Marine named Brandon Raub was hauled off to a mental institution because of what he posted on his Facebook page.

This is how the Economic Policy Journal summarized what happened to Raub….

The muscle used to grab Brandon Raub was local Chesterfield County, VA police. Also present during the grab were agents of the FBI and of the Secret Service.

Both the FBI and the Secret Service claim that they were only observing and not participating in the grab. The Chesterfield County police initially stated that they were only carrying out a request from the federal agencies.

The police also claim Raub is not under arrest, even though he was led away in handcuffs and is not permitted to leave the psychiatric ward of a hospital—even though it appears that Raub is not in  any way in need of psychological care.

I note this happened in the United States of America, with local police, FBI agents and Secret Service taking part.

The claim that Raub is “not under arrest” is completely and totally ridiculous.  The authorities came to his door, slapped handcuffs on him and are holding him in a mental institution against his will.

And now he has been transferred to a facility that is 3 hours away from his family, his supporters and his legal team.

What in the world is America turning into?

The Rutherford Institute is defending Raub, and the following is an excerpt from a statement about this case on their website….

“This is not how justice in America is supposed to work—with Americans being arrested for doing nothing more than exercising their First Amendment rights, forced to undergo psychological evaluations, detained against their will and isolated from their family, friends and attorneys. This is a scary new chapter in our history,” said John W. Whitehead, president of The Rutherford Institute. “Brandon Raub is no different from the majority of Americans who use their private Facebook pages to post a variety of content, ranging from song lyrics and political hyperbole to trash talking their neighbors, friends and government leaders.”

This is the kind of thing that we have seen under brutal totalitarian regimes in the past.  Dissidents are grabbed by authorities and taken to mental institutions where they are conveniently “disappeared”.

This kind of thing is not supposed to happen in America.

But it is happening.

And you know what?  Before the authorities start attacking people for exercising free speech on Facebook perhaps they should clean up their own house.

It turns out that thousands of DHS employees have been convicted of crimes in recent years.  The following is from a recent CNS News article….

There have been 2,527 Department of Homeland Security (DHS) employees and co-conspirators convicted of corruption and other criminal misconduct since 2004, according to a federal auditor.

Our world is becoming a very crazy place.

One thing that most people did see coming this summer was the continuing economic decline in Greece.

At this point Greece is experiencing a full-blown economic depression and it gets worse by the day.

If you can believe it, 1,250 companies have shut down in the second largest city in Greece in 2012 alone.

Ouch.

And many in the financial world believe the the situation in Greece is going to go beyond the breaking point fairly soon.

In fact, analysts at Citibank believe that there is a 90 percent chance that Greece will leave the euro over the next 12 to 18 months.

90 percent?

They sound pretty sure of themselves.

Not that the rest of Europe is in such great shape either.

According to Bloomberg, it looks like Europe will soon be losing about half a million auto industry jobs….

Efforts by PSA Peugeot Citroen (UG) and Fiat SpA (F) to end losses in Europe could cost more than 500,000 people their jobs as automakers and parts suppliers grapple with the effects of the European sovereign debt crisis.

We live in very unusual times.

Things are falling apart all around us and we seem to be rapidly approaching another major economic crisis.

Central banks, governments and Wall Street insiders all seem to be preparing for the worst.

Are you?

Just Open Up Your Eyes And Look – 65 Signs That The Economic Collapse Is Already Happening

Do you want to know when the “economic collapse” is going to happen?  Just open up your eyes and take a look.  The “economic collapse” is already happening all around us.  So many people talk about the coming economic collapse as if it is some massively hyped event that they will be able to point to on the calendar, and a lot of writers spend a lot of time speculating about exactly when it will happen.  But as I have written about before, the economic collapse is not a single event.  The economic collapse has been happening, it is happening right now, and it will be getting a lot worse.  Yes, there will be moments of great crisis.  We saw one of those “waves” back in 2008 and another “wave” is rapidly approaching.  But all of the waves are part of a process that is continually unfolding.  Over the past 40 years, the United States and Europe have piled up the greatest mountain of debt in the history of the world, and now a tremendous amount of pain is heading our way.  Economic conditions in the United States and Europe have already deteriorated badly and they are going to continue to deteriorate.  Nothing is going to stop what is coming.

But many people are still in denial about our economic decline.  Some people still believe that everything is going to be just fine.  Way too often I get comments on my site that go something like this….

“I just don’t know what you are talking about.  Where I live everything is just fine.  The malls are packed, the restaurants are full and everybody I know is going on vacation this summer.  Personally, I am doing great.  I just bought a 60 inch television and a new boat.  Every year all the ‘doom and gloom’ types such as yourself proclaim that an economic collapse is right around the corner but it never happens.  And you know what?  It is not going to happen.  Those in charge know what they are doing and America has the greatest economy on earth.  We have overcome challenges before and we will be able to handle whatever comes this time.  Your lack of faith in America and in the American people astounds me.  Everything is going to be just fine, so why don’t you just *************************************.”

You get the idea.

I definitely understand that most Americans are terribly self-involved these days, but when I read comments like this I am once again amazed at just how delusional some people can be.

Why can’t people just open their eyes and look at the evidence of economic collapse that is all around us?

Yes, there are wealthy enclaves all over the country where things may seem better than ever, but that is not the reality for most Americans.

All over the country, our infrastructure is in shambles.

All over the country, our once proud cities are being transformed into hellholes.

All over the country, formerly middle class families are living in their cars.

There are dozens and dozens of economic statistics that clearly show that we are in the midst of a long-term economic decline.  I have listed 65 of them below, but I could have easily doubled or tripled the size of the list.

I simply do not understand how anyone can believe that things are “great” or that the U.S. economy is going to be “just fine”.

We are living through a complete and total economic nightmare, and hopefully we can get more Americans to wake up from their entertainment-induced comas so that they can begin to understand exactly what is happening to this country.

The following are 65 signs that the economic collapse is already happening all around us….

1. Since Barack Obama entered the White House, the number of long-term unemployed Americans has doubled from 2.7 million to 5.4 million.

2. The average duration of unemployment in the United States is nearly three times as long as it was back in the year 2000.

3. The unemployment rate in the U.S. has been above 8 percent for 40 months in a row, and 42 percent of all unemployed Americans have been out of work for at least half a year.

4. Unemployment in the eurozone has hit another brand new record high.  It is now sitting at 11.2 percent.  It has risen for 14 months in a row.

5. The U.S. economy lost more than 220,000 small businesses during the recent recession.

6. The percentage of Americans that are self-employed fell by more than 20 percent between 1991 and 2010.

7. Overall, the number of “new entrepreneurs and business owners” dropped by a staggering 53 percent between 1977 and 2010.

8. The unemployment rate in Spain is now up to 24.6 percent.

9. Morgan Stanley is projecting that the unemployment rate in Greece will exceed 25 percent in 2013.

10. Since Barack Obama became president, the price of a gallon of gasoline has risen from $1.85 to $3.49.

11. The average American household spent approximately $4,155 on gasoline during 2011, and electricity bills in the U.S. have risen faster than the overall rate of inflation for five years in a row.

12. About three times as many new homes were sold in the United States in 2005 as will be sold in 2012.

13. While Barack Obama has been in the White House, home values in the United States have declined by 12 percent.

14. According to AARP, 600,000 American homeowners that are 50 years of age or older are currently in foreclosure.

15. Right now there are now 20.2 million Americans that spend more than half of their incomes on housing.  That represents a 46 percent increase from 2001.

16. According to Gallup, the current level of homeownership in the United States is the lowest that they have ever measured.

17. Federal housing assistance increased by a whopping 42 percent between 2006 and 2010.

18. In some areas of Detroit, Michigan you can buy a three bedroom home for just $500.

19. All around us our cities are crumbling.  According to the American Society of Civil Engineers, 2.2 trillion dollars is needed just to repair critical infrastructure in the United States.

20. The unemployment rate in New York City is now back up to 10 percent.  That equals the peak unemployment rate in New York City during the last recession.

21. Back in 1950, more than 80 percent of all men in the United States had jobs.  Today, less than 65 percent of all men in the United States have jobs.

22. The U.S. Postal Service is about to default on a 5.5 billion dollar payment for future retiree health benefits.

23. According to Graham Summers, “when we account for all the backdoor schemes Germany has engaged in to prop up the EU, Germany’s REAL Debt to GDP is closer to 300%.”

24. According to the Federal Reserve, the median net worth of families in the United States declined “from $126,400 in 2007 to $77,300 in 2010“.

25. The U.S. trade deficit with China during 2011 was 28 times larger than it was back in 1990.

26. The United States has lost more than 56,000 manufacturing facilities since 2001.

27. During 2010 alone, an average of 23 manufacturing facilities permanently shut down in the United States every single day.

28. The U.S. government says that the number of Americans “not in the labor force” rose by 17.9 million between 2000 and 2011.  During the entire decade of the 1980s, the number of Americans “not in the labor force” rose by only 1.7 million.

29. Eight million Americans have “left the labor force” since the recession supposedly ended.  If those Americans were added back into the unemployment figures, the unemployment rate would be somewhere up around 12 percent.

30. Approximately 53 percent of all U.S. college graduates under the age of 25 were either unemployed or underemployed last year.

31. At this point, one out of every four American workers has a job that pays $10 an hour or less.  If that sounds like a high figure, that is because it is.  Today, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.

32. Back in 1980, less than 30% of all jobs in the United States were low income jobs.  Today, more than 40% of all jobs in the United States are low income jobs.

33. According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 declined by 27 percent after you account for inflation.

34. In 2007, the unemployment rate for the 20 to 29 age bracket was about 6.5 percent.  Today, the unemployment rate for that same age group is about 13 percent.

35. According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980.  Today they account for approximately 16.3%.

36. Medicare spending increased by 138 percent between 1999 and 2010.

37. Over the next 75 years, Medicare is facing unfunded liabilities of more than 38 trillion dollars.  That comes to $328,404 for each and every household in the United States.

38. Back in 1990, the federal government accounted for 32 percent of all health care spending in America.  Today, that figure is up to 45 percent and it is projected to surpass 50 percent very shortly.

39. Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, one out of every 6 Americans is on Medicaid, and things are about to get a whole lot worse.  It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.

40. Since 2008, the U.S. economy has lost 1.3 million jobs while at the same time 3.6 million more Americans have been added to Social Security’s disability insurance program.

41. Since Barack Obama entered the White House, the number of Americans living in poverty has risen by 6.4 million.

42. The number of Americans on food stamps has risen from 32 million to 46 million since Barack Obama became president.

43. Right now the poverty rate for children living in the United States is 22 percent, and approximately one-fourth of all American children are enrolled in the food stamp program at this point.

44. The number of children living in poverty in the state of California has increased by 30 percent since 2007.

45. Child homelessness in the United States has risen by 33 percent since 2007.

46. According to the National Center for Children in Poverty, 36.4 percent of all children that live in Philadelphia are living in poverty, 40.1 percent of all children that live in Atlanta are living in poverty, 52.6 percent of all children that live in Cleveland are living in poverty and 53.6 percent of all children that live in Detroit are living in poverty.

47. Approximately 57 percent of all children in the United States are living in homes that are either considered to be either “low income” or impoverished.

48. According to the U.S. Census Bureau, the percentage of Americans living in “extreme poverty” is now sitting at an all-time high.

49. In the United States today, somewhere around 100 million Americans are considered to be either “poor” or “near poor”.

50. It is now being projected that about half of all American adults will spend at least some time living below the poverty line before they turn 65.

51. Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.

52. Total consumer debt in the United States has risen by 1700 percent since 1971.

53. Recently it was announced that total student loan debt in the United States has passed the one trillion dollar mark.

54. According to one recent survey, approximately one-third of all Americans are not paying their bills on time at this point.

55. In 1983, the bottom 95 percent of all income earners in the United States had 62 cents of debt for ever dollar that they earned.  Today, the bottom 95 percent of all income earners in the United States have $1.48 of debt for every dollar that they earn.

56. The United States was once ranked #1 in the world in GDP per capita.  Today we have slipped to #12.

57. According to the U.S. Census Bureau, 49 percent of all Americans live in a home where at least one person receives benefits from the federal government.  Back in 1983, that number was below 30 percent.

58. Incredibly, 37 percent of all U.S. households that are led by someone under the age of 35 have a net worth of zero or less than zero.

59. Today there are approximately 25 million American adults that are living with their parents.

60. The U.S. dollar has lost more than 96 percent of its value since 1900.  You can thank the Federal Reserve system for that.

61. During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.

62. Overall, the U.S. national debt has grown by nearly 10 trillion dollars over the past decade.

63. The U.S. national debt is now more than 22 times larger than it was when Jimmy Carter became president.

64. 40 years ago the total amount of debt in America (government, business and consumer) was less than 2 trillion dollars.  Today it is nearly 55 trillion dollars.

65. As Financial Armageddon recently point out, so many homeless people are pooping on the escalators at San Francisco’s Civic Center Station at night that the escalators are breaking down and repair teams have been called in to clean up the mess.  As the economy gets even worse, will scenes like this start playing out in all of our cities?

20 Things We Can Learn About The Future Of America From The Death Of Detroit

Do you want to know what the future of America is going to look like?  Just check out what is happening to Detroit.  The city of Detroit was once one of the greatest industrial cities in the history of the world, but today it is a rotting, decaying, post-apocalyptic hellhole.  Nearly half the men are unemployed, nearly half the population is functionally illiterate, more than half of the children are living in poverty and the city government is drowning in debt.  As economic conditions have gotten worse, crime has absolutely exploded.  Every single night in Detroit there are frightening confrontations between desperate criminals and exasperated homeowners.  Unfortunately, the police force in Detroit has been dramatically reduced in size.  When the police in Detroit are called, they often show up very late if they even show up at all. Detroit has become a lawless hellhole where violence is the currency of the streets.  If you want to survive in Detroit, you better be ready to fight because there are hordes of desperate criminals that are quite eager to take literally everything that you have got.  But don’t look down on Detroit too much, because what is happening in Detroit will soon be happening all over America.

The following are 20 things we can learn about the future of America from the death of Detroit….

#1 People don’t want to live where the stench of failure and decay is constantly in the air.  Back in the 1950s, Detroit was a teeming metropolis of approximately 2 million people.  According to the 2010 census, only 713,000 people live in Detroit today.  The U.S. Census Bureau says that Detroit lost a resident every 22 minutes during the first decade of this century.

#2 When the economy falls apart, desperate people will do desperate things and many homeowners will fight back.  Justifiable homicide in Detroit rose by a staggering 79 percent during 2011.

#3 In major cities where people are scrambling just to survive, any confrontation can quickly escalate into a life or death affair.  The rate of self-defense killings in Detroit is currently 2200% above the national average.

#4 When there is not enough money to go around, a lot of local governments will choose to cut back on police protection.  Ten years ago, there were approximately 5,000 police for the city of Detroit.  Today, there are less than 3,000.

#5 The essential social services that you are enjoying today will not always be there in the future.  Officials in Detroit recently announced that due to budget constraints, all police stations will be closed to the public for 16 hours a day.

#6 Economic decay is a breeding ground for chaos and violence.  Last Friday and Saturday, a total of nine shootings were reported in the city of Detroit.

#7 More Americans than ever are realizing the benefits of self-defense.  The following is what 73-year-old Julia Brown recently told the Daily….

The last time Brown, 73, called the Detroit police, they didn’t show up until the next day. So she applied for a permit to carry a handgun and says she’s prepared to use it against the young thugs who have taken over her neighborhood, burglarizing entire blocks, opening fire at will and terrorizing the elderly with impunity.

#8 When crime gets go bad that the police are powerless to stop it, vigilante groups begin to form….

In fact, crime has gotten so bad and the citizens are so frustrated by the lack of police assistance that they have resorted to forming their own organizations to fight back.  One group, known as “Detroit 300”, was formed after a 90-year-old woman on Detroit’s northwest side was brutally raped in August.

#9 When criminals become desperate, they will steal literally anything that is not bolted down.  In Detroit today, thieves have stripped so much copper wiring out of the street lights that half of all the lights in some neighborhoods no longer work.

#10 As things fall apart, eventually a time comes when it is not even safe to drive down the road in the middle of the day.  100 bus drivers in Detroit recently refused to drive their routes out of fear of being attacked on the streets.  The head of the bus drivers union, Henry Gaffney, said that the drivers were literally “scared for their lives“….

“Our drivers are scared, they’re scared for their lives. This has been an ongoing situation about security. I think yesterday kind of just topped it off, when one of my drivers was beat up by some teenagers down in the middle of Rosa Parks and it took the police almost 30 minutes to get there, in downtown Detroit,” said Gaffney.

#11 One of the clearest signs of decline in America is the state of our education system.  Only 25 percent of all students in Detroit end up graduating from high school.  Many other major cities will soon have graduation rates similar to Detroit.

#12 When local governments run out of money they are forced to make tough choices.  After already shutting down dozens of schools, officials in Detroit have announced plans to close down 16 more schools.

#13 A growing percentage of Americans cannot even read or write.  This is a very frightening indication of what the future of America could look like.  According to one stunning report, 47 percent of all people living in the city of Detroit are functionally illiterate.

#14 Sadly, child poverty is absolutely exploding all over the United States.  Today, 53.6 percent of all children that live in Detroit are living below the poverty line.

#15 The employment situation in America is a lot worse than the government is telling us.  An analysis of census figures found that 48.5% of all men living in Detroit from age 20 to age 64 did not have a job in 2008.

#16 When a major city becomes a hellhole, home prices fall like a rock.  The median price of a home in Detroit is now just $6000.

#17 When crime and looting become commonplace, homes in an area can become absolutely worthless.  Some homes in Detroit have been sold for a single dollar.

#18 When depression-like conditions exist in an area for a number of years, large numbers of people will move on to greener pastures.  As of a few years ago, there were more than 40,000 vacant properties in the city of Detroit.

#19 Just because we have a high standard of living today does not mean that will always be the case.  Detroit is just a rotting shell of what it once was, and what is happening to Detroit will happen to much of the rest of America very soon.  The following is what one British reporter found during his visit to Detroit….

Much of Detroit is horribly dangerous for its own residents, who in many cases only stay because they have nowhere else to go. Property crime is double the American average, violent crime triple. The isolated, peeling homes, the flooded roads, the clunky, rusted old cars and the neglected front yards amid trees and groin-high grassland make you think you are in rural Alabama, not in one of the greatest industrial cities that ever existed.

#20 When government finances collapse, politicians look for things to sell off and “privatize”.  Unfortunately, the Detroit city government is so broke that it is now considering selling off some of its most famous assets….

Now, the city of Detroit’s most venerable assets — from Belle Isle to the Detroit-Windsor Tunnel — could end up on the auction block as the city fights for its financial life.

Facing mounting debt and the prospect of a state-appointed emergency manager, the city is looking at all options to shed expenses and raise revenue. If city officials can’t come up with a viable budget plan, an emergency manager would have the power to sell assets as part of a financial takeover of Detroit.

But Detroit is not alone.

Lots of other cities all over America are flat broke and out of options.

For example, just check out what is happening in Scranton, Pennsylvania….

Mayor Christopher Doherty is blunt when asked about a court order forcing his Pennsylvania city to pay about $30 million in wages withheld from police and firefighters under a state-approved fiscal recovery plan.

“I don’t have the money,” said Doherty, 53. As for the chance of borrowing the cash, more than half of the city’s projected general-fund revenue, he added, “there’s no financial institution that’s going to give me $30 million to pay it.”

The U.S. economy never recovered from the last major financial crisis, and now another one is on the way.

As the economy crumbles, so will the fabric of our society.

The American people are terribly spoiled and they do not possess the character to handle depression-like conditions with grace and dignity.

In the years ahead, we are going to see rampant rioting and looting in our major cities.  The crime sprees that we will witness in future years will be absolutely unprecedented.

Things did not have to turn out this way, but unfortunately the consequences of decades of really bad decisions are starting to catch up with us.

So what do you think the future of America will look like?  Feel free to leave a comment with your opinion below….

Uh Oh: 90 Percent Of Americans Rate Economic Conditions In The U.S. As “Poor”

Uh oh – are we rapidly reaching another major economic tipping point?  According to a new CNN/ORC International Poll, 90 percent of the American people believe that economic conditions in the United States are “poor”.  This represents a significant increase from when the same question was asked in June.  Back then, 81 percent of the American people considered economic conditions to be “poor”.  To put this in perspective, only 11 percent of Americans rated economic conditions in the U.S. as “poor” back in January of 1999.  The Federal Reserve and the Obama administration keep telling us that we are in the middle of an “economic recovery”, but obviously what average Americans are experiencing on the street is a different story.  Millions of families have been absolutely devastated by mass layoffs, heartless foreclosures or bad debts.  All of the recent polls show that satisfaction with government is at an all-time low and anger at Wall Street and the financial community is rising to dangerous levels.  In the United States today, the economy is the most important issue for most Americans.  When you have 9 out of 10 Americans rating economic conditions as “poor”, that is a very troubling sign.

Many wealthy Americans consider it to be very painful when their investment portfolios go down by a few percentage points, but that is not the kind of economic pain that we are talking about.

The truth is that the vast majority of Americans in the bottom half of society do not even have investment portfolios.

What we are talking about is real economic pain.

As I have written about previously, the average American family is barely making it right now.  Tonight, a whole lot of American families will gather around their kitchen tables and will have some very nervous conversations about things such as making the next mortgage payment or how to pay the heating bill this upcoming winter.

Have you ever been at a point where you work as hard as you can and yet it is still not good enough to provide for your family?

If you have never been completely broke and at the end of your rope financially, then you should not judge the people who are going through it right now.

There are very real reasons why so many Americans are so incredibly depressed about the economy at the moment.

One recent poll found that 80 percent of the American people believe that we are actually in a recession right now.

Things have gotten so bad that Hallmark recently unveiled a 6 card line of “job loss” greeting cards.

Yes, that really is true.

Every month, tens of thousands of American families are still losing their homes to foreclosure, and we are on pace for record low new home sales once again in 2011.

Many families have gotten in debt up to their eyeballs in an effort to stay afloat.  According to a new study conducted by the BlackRock Investment Institute, the ratio of household debt to personal income in the United States is now 154 percent.

In case you are wondering, that is not good.

Our founders intended for us to live in a capitalist system that allows all Americans to have an opportunity to better themselves, but instead what we have developed is a system where the vast majority of the money and the vast majority of the economic power are in the hands of the biggest banks and the biggest corporations.

If you work for the system and you are near the top of the pyramid, life is good.

For nearly everyone else, life is a struggle.

Back in 1980, the top 1% of all income earners in America brought in about 10% of all income.  Today, the top 1% of all income earners bring in about 20% of all income.

If the ranks of the top income earners were populated by a huge number of entrepreneurs and small business owners, it wouldn’t be such a bad thing.

But instead, the reality is that most of the very wealthy either work in the financial community or they work for the biggest corporations.

True capitalism is supposed to create a very healthy environment for small businesses.

Instead, our current system suffocates them out of existence.

According to the Bureau of Labor Statistics, 16.6 million Americans were self-employed back in December 2006.  Today, that number has shrunk to 14.5 million.

Our entire system is now tremendously slanted in favor of “the big guy” and against “the little guy”.

Millions of Americans are starting to get sick and tired of all of the economic injustice and the vast corruption that is endemic in our financial system.

As the economy has continued to decline, the anger and the frustration of average of Americans has reached a boiling point.

This is a big reason why we have seen the rise of new political movements in recent years.

First, we saw the Tea Party arise to challenge the establishment in the Republican Party.  But sadly there are already signs that the establishment has taken over the Tea Party to a large extent.

Now, we are seeing the rise of the Occupy Wall Street movement.  Large numbers of frustrated Americans are flocking to these protests because they want an outlet for expressing the anger and frustration that they are feeling.  Unfortunately, there is quite a bit of evidence that the Occupy Wall Street movement was started and is being greatly aided by the liberal political establishment in this country.

What the American people need to do is to wake up and break out of the stale two party system.

Unfortunately, the American people have become so “dumbed down” that large chunks of them are absolutely clueless about what is really going on in this country.

For example, according to the new CNN/ORC International Poll mentioned above, 27 percent of Americans have never heard of Federal Reserve Chairman Ben Bernanke and 15 percent of Americans have no opinion about him at all.

Do you understand what that means?

It means that only 58 percent of Americans know enough about Federal Reserve Chairman Ben Bernanke to have an opinion about him.

According to the survey, the way that the 58 percent breaks down is that 28 percent of Americans have a favorable view of Bernanke and 30 percent of Americans have an unfavorable view of him.

That is so sad.

Ben Bernanke has more power over our economic problems than anyone else in the country, and yet only 30 percent of Americans have an unfavorable view of him.

Nearly as many Americans say that they have never heard of him as say that they do not view him favorably.

How pathetic is that?

That is one of the reasons why I write about the Federal Reserve so much.

We need to get the American people educated.

If the American people get educated, they will feel empowered.

Where there is a lack of knowledge, the people perish.

The other day, a 51-year-old father of three daughters up in Minnesota that had just lost his job locked himself in his car and shot himself in the head in front of some of his former co-workers.

I don’t want to see anymore of that.

We need to give the American people some hope.  We need to explain to them exactly why this economic crisis is happening and what can be done to turn things around.

We also need to reach out to people that are in pain and love them and let them know that there is always hope.

All of us know people out there that are really hurting right now.  Please don’t forget about them.  Please don’t let them quietly slip into depression.  Please don’t let them become the next victims of this economy.

There is always hope.  A reader of this column named “JD” went through all kinds of hell in recent years.  He lost his job, he lost his lady, he stayed in run down motels, he got meals wherever he could and he even slept in his car for a time.  But today he has a new job and his outlook on life is brighter than it has been in ages.

In 1941, Winston Churchill gave a speech during which he uttered the following words: “never give in, never give in, never, never, never, never-in nothing, great or small, large or petty – never give in except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy.”

Things may not look good for you right now, but you must never give in.

No matter how bad things are, they can always be turned around.

Yes, the U.S. economy is going to continue to decline if we stay on our current path, but none of us must ever use that as an excuse to give up.

There is always hope.  You just have to keep on fighting.

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