Economic

Economic Recovery?

If this is supposed to be an “economic recovery” it sure is pathetic.  In fact, as you will read below, the numbers tell us that this is the worst economic recovery that the American economy has ever seen.  If what we had experienced was a “normal” recession and a “normal” recovery, then jobs, economic growth and home values would have come roaring back by now.  But they haven’t.  The Federal Reserve injected unprecedented amounts of new money into the system and the federal government went into unprecedented amounts of new debt, but all of that effort has not accomplished much.  It did buy us a little bit of time and a period of relative economic stability, but now there are all kinds of signs that we are about to go into another recession (or something even worse).  So is it really honest for Ben Bernanke and Barack Obama to be using the term “economic recovery” to describe what is happening?

The truth is that what is really taking place is that the long-term economic decline of the United States is beginning to accelerate.

But most Americans simply don’t understand what is going on.

The mainstream media teaches us to blame our politicians for the economy.  One recent survey found that 44 percent of the American people believe that the U.S. economy is “worse than when Obama was inaugurated”.

Yes, Barack Obama is a horrible president.  But the economic downfall of this nation is not all his fault.  George W. Bush was a horrible president too.  So was Bill Clinton.  Congress has been corrupt and incompetent for decades.

Of course the institution that is most responsible for our economic problems is the Federal Reserve.  Thankfully, more Americans than ever are starting to realize this.

But if you listen to Ben Bernanke and Barack Obama, you would think that a great “economic recovery” has begun.  They would have us believe that they know exactly what our problems are and that they know exactly how to get us out of this mess.

Unfortunately, what we have experienced is not much of an “economic recovery” at all.  According to the Wall Street Journal, this is the worst “recovery” from a recession that the U.S. economy has ever seen….

On economic growth, real GDP has risen 0.8% over the 13 quarters since the recession began, compared to an average increase of 9.9% in past recoveries. From the beginning of the recession to April 2011, real personal income has grown just .9% compared to 9.4% for the same period in previous post 1960 recessions.

So what is really going on?

Sadly, what we are experiencing right now is a brief period of stability in the middle of a downward spiral toward economic oblivion.

The CEO of Pimco, Mohamed El-Erian, says that it should now be obvious to everyone that all of the efforts of the U.S. government and the Federal Reserve to stimulate the economy simply have not been enough to solve the structural economic challenges that we are facing….

“It’s clear that the stimulus-induced recovery hasn’t overcome the structural challenges to large-scale job creation.”

The U.S. economy is not producing enough jobs.  Today, there are 25 million Americans that are either unemployed or underemployed.

But the inability to create jobs is not a new phenomenon for the U.S. economy.  The truth is that between 2000 and 2007, the U.S. economy had its poorest stretch of job creation since the Great Depression.

However, since 2007 the employment situation in this country has gotten a lot worse.  Take a minute and watch the stunning video posted below.  It shows how rampant unemployment swept across this country between 2007 and 2011….

Our politicians promised us that globalization would be great for the U.S. economy.

Well, it was great for the big corporations to be able to pay slave labor wages to workers on the other side of the globe, but things have not worked out so well for workers in this country.

Millions of our jobs have been lost.  Millions more jobs are being lost.  Yet our politicians do nothing to stop the bleeding.

Things have gotten so bad that even the top of the food chain is shipping jobs overseas.

Just consider this recent headline which appeared in Business Insider: “Goldman Sachs Is Firing Employees In The US So It Can Hire 1,000 In Singapore”

If even jobs at Goldman Sachs are being sent out of the country, are any of our jobs safe?

Many Americans would love to start a business instead of having to work for someone else, but the economic environment has become incredibly toxic for small businesses in the United States.

The rate of new business creation in the United States has been declining steadily since the 1980s.  Our politicians are literally choking the entrepreneurial spirit to death in this country.

Today, more Americans than ever are dependent on the government.  In fact, it has gotten to the point where the U.S. economy itself is highly dependent on the government.

So what is going to happen when the government is not handing out so many goodies?

The era of rampant spending in Washington D.C. seems to be coming to an end, at least for now.  The U.S. national debt has become so outrageous that many members of Congress are finally determined to start making some cuts.

While it is true that cutting government spending is long overdue, most Americans don’t realize that cutting government spending will also mean that “the economic sugar high” that we have been experiencing will start to wear off.

If we try to live within our means, that is going to cause a lot of economic pain, and the American people are not too good about making sacrifices these days.

Look, whoever is elected in 2012 is going to be in for a rough ride.  Some very difficult economic times are ahead, and whoever is elected in 2012 is going to get blamed.  By 2016, the president is probably going to be the most hated person in America.

But the truth is that these economic problems have been building for decades.

We didn’t get here by accident, and our economic problems are not going to be solved overnight.

In fact, many financial analysts are warning that they are about to get a lot worse.

For example, David Rosenberg of Gluskin Sheff says that there is a 99 percent chance that the U.S. will fall into another recession by the end of 2012.

As the economy continues to crumble, U.S. cities will become increasingly hostile places in which to live.

According to a recent Rasmussen Reports national telephone survey, 41 percent of Americans say that crime has increased where they live over the past year and only 6 percent of Americans say that crime has decreased where they live over the past year.

But just wait until the economy really collapses – that is when all hell will break loose.

In a recent article entitled “Is The Economy Improving?“, I quoted statistic after statistic that showed that the U.S. economy is actually continuing to decline.

The American people are starting to lose patience.  In fact, people all over the country are starting to get more than a little crazy.  For example, there is a now a national “epidemic” of people robbing pharmacies in order to get a hold of painkillers.

Pharmacists all over the country are being robbed at gunpoint.  Some prescription painkillers will reportedly sell for as much as 80 dollars a pill on the street.  As a recent article in the Washington Post noted, things are getting really dangerous out there for pharmacists….

“It’s an epidemic,” said Michael Fox, a pharmacist on New York’s Staten Island who has been stuck up twice in the last year. “These people are depraved. They’ll kill you.”

Armed robberies at pharmacies rose 81 percent between 2006 and 2010, from 380 to 686, the U.S. Drug Enforcement Administration says. The number of pills stolen went from 706,000 to 1.3 million. Thieves are overwhelmingly taking oxycodone painkillers like OxyContin or Roxicodone, or hydrocodone-based painkillers like Vicodin and Norco. Both narcotics are highly addictive.

But this is what our country is turning into.

We are a nation of addicts.

Our national addiction to debt and our national addiction to greed have brought us to the brink of economic disaster.

If you are waiting for an “economic recovery”, you should stop waiting.

This is about as good as things are going to get.

From here on out, things are just going to keep going downhill.

Most Americans are going to be absolutely blindsided by the economic collapse that is coming.

But that doesn’t have to be you.

You still have some time to get prepared.

Rich Dad, Poor Dad, Prepper Dad? Even Robert Kiyosaki Is Warning That An Economic Collapse Is Coming

Are you familiar with Robert Kiyosaki? He is best known for the “Rich Dad, Poor Dad” series of books.  Over 26 million books authored by Kiyosaki have been sold and he is recognized as a financial expert by millions of people across the globe.  Well, guess what?  Even Robert Kiyosaki is warning that an economic collapse is coming.  In fact, Kiyosaki and his team of financial experts are encouraging Americans to stock up on food, guns and precious metals.  This is yet another sign of just how close we are to the total collapse of the U.S. Economy.  Kiyosaki, who once co-authored a book with Donald Trump entitled “Why We Want You To Be Rich” is now a full-fledged prepper.  As even more prominent Americans start warning that an “economic collapse” is coming do you think that the American people will finally wake up and start paying attention?

The statements that Robert Kiyosaki makes in the video posted below are absolutely jaw-dropping.  Once upon a time he was all about teaching people how they could get rich, but now he is talking about storing food, buying guns, investing in precious metals and preparing for the coming crash.

The following are 11 of the best Kiyosaki “sound bites” from the video below….

#1 “when the economy crashes as we predict”

#2 “the crowds come rushing in to buy gold and silver”

#3 “we could either go into a depression or we go to hyperinflation”

#4 “or we could also go to war”

#5 “buy a gun”

#6 “I’m preparing”

#7 “I’m prepared for the worst”

#8 “so come to my house and I’m armed and dangerous and I’ll welcome you”

#9 “we have food, we have water, we have guns, gold and silver, and cash”

#10 “the credit card system shuts down, the world shuts down”

#11 “the supermarkets have less than 3 days supply”

If you have not seen this video yet, it is definitely worth the 8 minutes that it takes to watch it.  Robert Kiyosaki seems to be extremely alarmed about the future of the U.S. economy….

It certainly seems as though the entire financial culture in America is changing.

Once upon a time everyone wanted to know how to get rich.

Now everyone wants to know how to survive the collapse that is coming.

As I have written about previously, even people like Tony Robbins and Donald Trump are warning that an economic collapse is coming.

Economic pessimism is seemingly everywhere and almost every recent survey indicates that the American people are losing faith in the U.S. economy.

For example, in a recent article I noted that 48 percent of Americans believe that it is likely that another great Depression will begin within the next 12 months.

According to Gallup, the percentage of Americans that lack confidence in U.S. banks is now at an all-time high of 36%.  Back in 2007, just 14% of Americans lacked confidence in U.S. banks.

In order for society to function correctly, people need to be able to trust each other and they need to be able to trust the major institutions that hold society together.

Once confidence in our major societal institutions is gone, it is going to be incredibly difficult to get it back.

Sadly, the reality is that many of our major financial institutions have been untrustworthy for a very long time.  It is just that the American people are only just now starting to wake up to that fact.

For example, the Federal Reserve has been at the heart of our economic problems for decades but most Americans have not realized it.

But now that is starting to change.  According to one recent poll, only 30% of Americans currently view Federal Reserve Chairman Ben Bernanke favorably.

The American people are becoming increasingly dissatisfied with an economic system where the vast majority of the rewards flow to Wall Street, the big banks, the biggest corporations and the ultra-wealthy.

According to the Washington Post, the top 0.1% of all income earners in the United States took home 2.6% of the nation’s earnings in 1975.  By 2008, the top 0.1% were taking home 10.4% of the nation’s earnings.

The Washington Post also says that after adjusting for inflation, the average income of the top 0.1% of all Americans jumped by 385 percent between 1970 and 2008 while the average income for the bottom 90 percent of all Americans actually fell by one percent.

The sad truth is that income inequality in the United States has become a major problem.  A very small sliver of the population is reaping almost all of the rewards and the middle class is being ripped to shreds.  Conservatives, liberals, Democrats, Republicans and libertarians should all be alarmed by this.

Meanwhile, the national debt continues to explode.  Right now, U.S. government debt is expanding at a rate of $40,000 per second.

Every single minute we steal another 2 million dollars away from our children and our grandchildren.

But if we stop this theft it would throw the U.S. economy into a horrible economic crisis that would be far worse than what we are experiencing right now.

That is why the vast majority of our politicians do not have the guts to do it.

We truly are caught between a rock and a hard place.

But people like Robert Kiyosaki can see what is coming, and they are getting prepared.

Are you prepared?

Many of our young people have come up with their own versions of an “economic stimulus plan”.  In past articles I have documented many of the signs that society is collapsing, including the disturbing rise of the “mob robbery” phenomenon.

Well, just the other day there was another very shocking mob robbery in the city of Philadelphia.

On Thursday, a mob of 40 teens and young adults invaded a Sears department store on 69th Street, grabbed all of the merchandise that they could carry, and stormed right back out again.

We are starting to see these kinds of large scale crimes happen from coast to coast.

So what is going to happen to America if the economy experiences the kind of full out collapse that Robert Kiyosaki is talking about?

We live in very interesting times.

I hope that you are getting prepared.

The State Of The Economy

The U.S. economy is like a rubber band that is being pulled in several different directions at the same time.  Everyone knows that at some point it is going to snap, but nobody is quite sure exactly when it is going to happen.  Right now, the state of the economy is not good, and it is going to get a whole lot worse.  Sadly, most Americans don’t even understand the economic fundamentals well enough to be able to ask the right questions to our politicians.  Today, the United States consumes far more wealth than it produces every single month.  That means we are continually getting poorer.  U.S. debt is also rising at a far greater rate than U.S. GDP is.  On an individual level, if your assets were going down every single month and if you were going into more debt every single single month it would be easy to understand what was happening.  However, most Americans can’t really seem to grasp what is taking place on a national level.  Our politicians and the mainstream media just keep telling them that everything is going to be okay and they just keep believing it.

These days our leaders are resorting to increasingly desperate measures in order to help revive the economy.  On Thursday, Barack Obama decided to release 30 million barrels of oil from the U.S. strategic oil reserve.

Yes, that will drive down oil prices for a few days, but what is going to happen someday if we actually need to use that strategic oil reserve?

But in many ways you can’t blame Obama for trying.  He desperately wants to get reelected and he knows that his campaign will be highly dependent on the state of the economy.  Look for Obama to pull out all the stops as we get closer to the fall of 2012.

Sadly, the truth is that it almost does not matter what the Democrats or the Republicans do at this point.  The long-term trends are so powerful now that it would take a miracle to reverse them. We are facing an “economic tsunami” that is just going to keep on destroying middle class America.

If you went to a store today, and there were two somewhat similar products sitting on the shelf and one cost ten times more than the other one, which one would you buy?

Well, that is the situation facing American workers today.  They have been pushed into one giant globalized labor pool, but big corporations are allowed to pay workers on the other side of the globe slave labor wages.  It costs ten times more (at least) to hire a blue collar American worker than it does to hire a blue collar worker in most areas of Asia.

As a result of the globalization of labor, we have seen a mass exodus of jobs out of the United States, and wages for many of the jobs that remain have been significantly depressed.

There simply are not nearly enough jobs for all Americans at this point.

Recent college grads are finding this out.  A new study that was conducted by Rutgers University discovered that over 30 percent of all those that graduated from college between 2006 and 2010 were not able to get a job within six months of graduation.

But unemployment is only part of the story.  There are millions upon millions of Americans that are “underemployed” today.

There are hordes of highly educated, hard working Americans that are working temporary or part-time jobs at close to minimum wage because that is all they can get.

With good jobs being so scarce, American families are finding it more difficult than ever to make ends meet.

One recent survey found that 9 out of 10 U.S. workers do not expect their wages to keep up with the rising cost of basics such as food and gasoline over the next year.

I talked about the rising cost of food in my recent article entitled “Why Are Food Prices Rising So Fast?”  Today, one out of every seven Americans is already on food stamps, and if the cost of living keeps rising this quickly we are going to see millions more of our fellow citizens clamoring for government assistance.

The decline of the American consumer is having other effects as well.

For example, pre-orders for Christmas toys from China are way down.

It looks like this holiday season is not going to be as “merry” as usual.

It would be nice if we could say that the economy is improving, but that simply is not the case.

American households are in a far different place than they were prior to the recent recession.

For example, did you know that home values in the United States have plummeted $6.6 trillion since the peak back in 2007?

U.S. homeowners have taken the brunt of that decline.  According to the Federal Reserve, average home equity has fallen from 61 percent in 2001 to 38 percent in the first quarter of 2011.

That is a colossal shift.

If U.S. homeowners only own 38 percent of their homes, then who owns the rest?

The banks do.

Doesn’t that just make you feel all warm and fuzzy inside?

Health care is another area where American families are getting squeezed.

Today, the United States spends more on health care per person than any other country in the world.

Sadly, we are also one of the sickest populations on the planet.

What is up with that?

Once upon a time the United States had a middle class that was the envy of the entire globe.

Now it is being ripped to shreds at every turn.

Today, approximately half of all Americans say that they could not come up with $2,000 within 30 days without selling away some possessions.

The vast majority of us are basically flat broke and surviving from month to month.

Meanwhile, our vaunted financial system just may be on the verge of another meltdown.

There has been all sorts of volatility in the marketplace recently and there are all kinds of signs that Wall Street is about to go into panic mode.

For example, Moody’s recently warned that it may downgrade the debt ratings of Bank of America, Citigroup and Wells Fargo.

Barclays Capital, Goldman Sachs, Bank of America, JPMorgan Chase and Morgan Stanley are all either already laying workers off or are rumored to be considering it.

Frank Davis, director of sales and trading with LEK Securities, says that there is a lot of pessimism on Wall Street right now….

“There’s a lot of emotion in this market at the moment, and the conversations among traders are nearly all leaning toward the bear side”

As the financial system spins out of control, the Federal Reserve is increasing the number of workers that it is “embedding” at the big Wall Street banks.

I guess the Fed wants to keep a closer eye on things as they come crashing down.

Sadly, so much of this would be much easier to fix if our nation was not drowning in debt.

Since Barack Obama was elected, the national debt has increased by nearly 4 trillion dollars. If you and I went out today and started repaying that 4 trillion dollars at a rate of one dollar per second, it would take over 120,000 years to do it.

Most Americans have a hard time comprehending these kinds of numbers. Janet Tavakoli tried to put our debt situation into perspective in her latest column….

David Walker, the former U.S. comptroller general, says it’s even worse than that. When he takes into account future obligations for Medicare, Social Security, Federal debt, Military retirement, Civil servant retirement, and more, we owe $546,663 per household. That doesn’t even include your local debt — it may not be as bad as if you lived in Illinois, but it’s substantial nonetheless — and personal debt including mortgages and consumer debt that average more than $120,000 per household.

But you don’t have to toss wild numbers around to get an idea of how much trouble we are in.

As I have written about recently, there is increasing evidence all around us that the collapse of society is accelerating.  We are seeing disturbing reports of civil unrest pop up all over the U.S. at an alarming rate.

According to a CBS affiliate in Chicago, earlier this week approximately 50 young people conducted a shocking mob robbery of a drug store located on the Magnificent Mile in Chicago….

Some 50 young people barged into a Walgreens at Michigan and Chicago on the Magnificent Mile on Tuesday afternoon. They took bottled drinks and sandwiches off the shelves, then ran off, CBS 2′s Suzanne Le Mignot reports.

When large groups of young people get together and agree to commit crimes that should be a huge red flag for all of us.

We are a nation that is deeply, deeply divided.  Hatred is growing and the love of most Americans is growing cold.

As I have written about previously on “The American Dream“, the American people are actually encouraged to hate one another these days….

The truth is that the “establishment” is constantly trying to divide us and get us fighting with one another.  They pit the Republicans against the Democrats (even as though control both sides).  They pit one race against another.  They pit one gender against another.  We are told that the rich are against the poor, the north is against the south, urban is against rural and that there are even “generational battles” going on.  Frustration and hate are rapidly growing in the United States today, and a lot of that frustration and hate is unfortunately aimed at the targets that the mainstream media has programmed all of us to hate.  Meanwhile, those at the top of the pyramid who are controlling the whole game love it when we are divided because we can never become united and challenge their control.

We need to come together as a nation.  If we don’t, we are going to face an unprecedented nightmare when the economy collapses.

So what do you think about the state of the economy?  Please feel free to leave a comment with your opinion below….

Barack Obama’s White House Rural Council: Central Economic Planning For America’s Heartland

Barack Obama has issued a brand new executive order that establishes a White House Rural Council.  This Rural Council has been given the task of developing “public-private partnerships” that will seek to bring the “economic prosperity” of our big cities to rural America.  In other words, the U.S. government and the big corporations are going to team up to dominate the economies of our small towns and rural communities just like they dominate the economies of all of our big cities.  So should those that live in rural America be excited about this?  After all, the U.S. government and the big corporations have done such a great job of bringing “economic prosperity” to places like Detroit, Michigan and Camden, New Jersey.  Won’t it be great to have the federal government come in and tell rural communities how they should be doing things?

The chair of the White House Rural Council will be Agriculture Secretary Tom Vilsack.  Vilsack is a former governor of Iowa and a Democrat.  Swing states like Iowa will be key in 2012, and so perhaps Obama is trying to show that he really cares for middle America.

But it is really hard to forget the remarks that Obama made about rural Americans during the 2008 campaign.

In particular, the following quote about the “bitterness” of those living in rural America got a lot of attention at the time….

“And it’s not surprising then they get bitter, they cling to guns or religion or antipathy to people who aren’t like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations.”

Look, the vast majority of the people who live in rural America do not want to hear that they need to let go of their guns or their religion.

And most of them certainly do not want the federal government to come in and tell them how to run their local economies.

But according to Obama, the U.S. government “has an important role to play” in managing the economies of rural communities.  The following is a direct quote from the executive order establishing the White House Rural Council….

Though rural communities face numerous challenges, they also present enormous economic potential. The Federal Government has an important role to play in order to expand access to the capital necessary for economic growth, promote innovation, improve access to health care and education, and expand outdoor recreational activities on public lands.

To many Americans, all of this will sound really great.  The federal government is going to come in and help the “backwoods folk” catch up with the rest of us.  What could be wrong with that?

Well, the truth is that whenever the federal government gets its fingers into something it tends to really mess it up.  Many of the biggest problems our country is facing today can be traced directly back to Washington D.C.

Many small towns and rural communities are doing just fine without the interference of the federal government.  In fact, large numbers of Americans have purposely moved out to rural areas because they don’t want the interference of the federal government in their lives.

But according to this new executive order, the Obama administration plans to stick its itchy little fingers into just about every aspect of rural life.  One of the stated goals of the White House Rural Council is to do the following….

coordinate and increase the effectiveness of Federal engagement with rural stakeholders, including agricultural organizations, small businesses, education and training institutions, health-care providers, telecommunications services providers, research and land grant institutions, law enforcement, State, local, and tribal governments, and nongovernmental organizations regarding the needs of rural America

This is yet another example of how we are rapidly becoming a centrally-planned economy.

Today, there are way too many Americans that expect the federal government to solve all their problems and take care of them from birth to death.

But that is not what our founding fathers intended, and our federal government has become so corrupt and so incompetent that it could not do those things even if we wanted it to.

Before the federal government “fixes” the problems of rural America, perhaps it should focus on “fixing” many of the other problems it has created first….

*Growing numbers of military veterans cannot find jobs once they leave the U.S. military.  In fiscal 2008, the Pentagon spent $450 million on unemployment benefits for military vets.  In fiscal 2010, the Pentagon spent almost twice as much – $882 million.  According to the U.S. Bureau of Labor Statistics, the unemployment rate for military veterans between the ages of 18 and 24 is more than 30%.

*The housing collapse that the Federal Reserve and the U.S. government caused is a nightmare that never seems to end.  According to the New York Times, at the current pace it will take 62 years for the banks to repossess all of the homes that are in severe default or foreclosure in the state of New York.

*The recent commodity price increases caused by the Federal Reserve have resulted in much higher prices at the gas pump and at the grocery store.  These higher prices are hitting the poor and the lower middle class much harder than they are hitting the wealthy.

*The federal government has piled up the biggest debt in the history of the world and the U.S. dollar is dying.  Standard & Poor’s has altered its outlook on U.S. government debt from “stable” to “negative” and is warning that the U.S. could soon lose its prized AAA rating.  Russian presidential economic adviser Arkady Dvorkovich says that his nation is going to keep dumping U.S. government debt.  China has been dumping U.S. government debt.  The entire U.S. financial system is on the verge of financial collapse and the federal government seems to be powerless to make any meaningful changes.

But instead of fixing the glaring problems that are staring them directly in the face, the control freaks and the bureaucrats in Washington D.C. seem obsessed with figuring out more ways to interfere in our lives.

Over the past couple of months, bad economic news has been pouring in almost constantly.  Our economy appears to be in danger of breaking apart.  We are in the midst of a horrific economic crisis and nobody is sure what is going to happen next.

So please excuse the good folks of rural America if they are not in the mood to put up with federal government interference in their communities.

The federal government has failed so dramatically so many times before that it is really hard to have any faith that the federal government can do much of anything right at this point.

Stock Prices Have Fallen For Six Weeks In A Row

Well, it’s official.  U.S. stock prices have fallen for six weeks in a row.  So will next week make it seven?  The last time stocks declined for seven weeks in a row was back in May 2001 when the “dot-com” bubble was bursting.  At this point, the Dow has declined by approximately 5 percent since the beginning of June.  Things don’t look good.  So exactly what is going on here?  Well, it is undeniable that the recent mini-bubble in stocks has been too good to be true.  The S&P 500 had surged nearly 30 percent since last September.  Much of this has been fueled by the Federal Reserve’s latest round of quantitative easing, but now that is coming to an end in a few weeks and investors are a bit spooked.  Meanwhile, wars and revolutions are sweeping the Middle East, Japan is dealing with the damage caused by the tsunami and by Fukushima, Europe is trying to figure out how to bail out Greece again and the U.S. debt crisis is continually getting worse.  In addition, wave after wave of bad economic news is certainly not helping the mood on Wall Street.  In many ways, a “perfect storm” is developing and many are now extremely concerned about what the rest of 2011 is going to bring for Wall Street.

QE2 is slated to conclude at the end of June, and many investors are deeply disappointed that it does not appear that we are not going to see QE3 right away.  Many fear that the end of quantitative easing will pop the current mini-bubble in stocks and commodities.  At the moment, financial markets are more jittery than they have been in a long time.

Frank Davis, director of sales and trading with LEK Securities, says that there is a lot of pessimism on Wall Street right now….

“There’s a lot of emotion in this market at the moment, and the conversations among traders are nearly all leaning toward the bear side”

So what are some of the signs that this downturn on Wall Street may turn into a full-blown crash?

Well, according to the Wall Street Journal, junk bonds are being sold off at an alarming rate right now.  Does the following quote from the Journal remind anyone of 2008 at least a little bit?….

A steep decline in prices of bonds backed by subprime mortgages has spread through the riskiest segments of the credit markets, ending rallies in high-yield corporate bonds and commercial real-estate debt.

Also, many of the big Wall Street banks are already laying off workers.  In a previous article I wrote about the potential for Wall Street to go into “panic mode“, I noted that Goldman Sachs, Bank of America, JPMorgan Chase and Morgan Stanley are all laying people off or are considering staff cuts.

The truth is that the big banks on Wall Street are not nearly as stable as most people think that they are.  Moody’s recently warned that it may downgrade the debt ratings of Bank of America, Citigroup and Wells Fargo.

Another major story on Wall Street right now is oil.  OPEC recently announced that oil production levels will not be raised, even though the price of oil has been hovering around $100 a barrel.

World oil supplies are very tight right now.  In fact, the globe actually consumed 5 million barrels per day more oil than it produced during 2010.  This was possible because the difference was apparently made up by drawing down reserves.

But if oil supplies are this tight already, what is going to happen if a major war (as opposed to all of the minor wars that are already happening) erupts in the Middle East?

The world is sitting on the edge of a financial disaster.

It is important to keep in mind that Europe is also in far worse financial condition than it was just prior to the financial collapse of 2008.

It is being reported that German finance minister Wolfgang Schaeuble is convinced that a “full-blown” financial meltdown by Greece is a very real possibility. The cost of insuring Greek debt has soared to a brand new record high, and officials all over Europe are in panic mode.

But financial problems are not just happening in Greece.  The largest bank in France has just cut in half the amount of cash that customers can withdraw from ATMs each week.

Most Americans don’t spend much time thinking about the financial condition of Europe, but the truth is that what happens in Europe is going to play a major role in the months and years ahead.

Of course most Americans already know that the U.S. government is a financial mess.

As the “debt ceiling deadline” of August 2nd draws closer, the U.S. government has been raiding retirement funds in order to stay under the debt limit.

Many investors are quite nervous about what may happen if the U.S. government actually does start defaulting on debt on August 2nd.

Others claim that the U.S. government is already in default.

The only Chinese agency that gives credit ratings on sovereign debt says that the U.S. government “has already been defaulting” and the Chinese government has been repeatedly warning that the U.S. needs to get its finances in order.

In any event, this debt ceiling drama will get resolved one way or another.

The bigger question is this….

How is the U.S. government going to respond when the next financial crash happens?

Back in 2008, the Federal Reserve and the U.S. government took unprecedented steps to prop up Wall Street.

But can they really do that again if we see another major crash in 2011 or 2012?

Many believe that things will be totally different this time around.  Just check out what Jim Rogers recently told CNBC….

“The debts that are in this country are skyrocketing,” he said. “In the last three years the government has spent staggering amounts of money and the Federal Reserve is taking on staggering amounts of debt.

“When the problems arise  next time…what are they going to do? They can’t quadruple the debt again. They cannot print that much more money. It’s gonna be worse the next time around.”

Jim Rogers is right about that.

The next time we see a collapse on the scale of 2008 it is going to be a much bigger mess.

Global financial markets are extremely vulnerable right now and there are a whole host of potential “tipping points” which could push them over the edge.

The Federal Reserve and the U.S. government more or less used up all of their ammunition on the 2008 crisis.

If we see another collapse in 2011 or 2012 there is not going to be much of a safety net available.

The entire world financial system is simply swamped with way too much debt.  The world has never seen anything even remotely close to the gigantic mountains of debt that have been accumulated around the world today.

The current global financial system is not sustainable.  More crashes are inevitable.  A lot of people are going to get steamrolled.

Hopefully you will not be one of them.

18 Signs The Collapse Of Society Is Accelerating

As the U.S. economy collapses, the thin veneer of civilization that we all take for granted is going to begin to disappear.  In fact, there are already an increasing number of signs that the collapse of society is accelerating.  In cities such as Chicago, roving packs of young people are “mob robbing” local businesses, randomly assaulting tourists and shoppers and are even pulling people out of vehicles.  This isn’t just happening in the “bad areas” anymore. Over the past couple of months this type of crime has been common in some of the wealthiest areas of Chicago.  In fact, many Chicago residents are now referring to “the Magnificent Mile” as “the Mug Mile”.  But it isn’t just in Chicago that this is happening.  During this past Memorial Day weekend, cities all over the United States experienced a stunning wave of mass violence.  We are supposed to be an “example” for the rest of the world, but as our economic wealth crumbles we are witnessing the collapse of society all around us.  So what is going to happen when the economy gets even worse?

The United States used to be a fairly civilized society.  But now very few people seem to care how they treat others.  That is even the case with our own government.  As you will see below, the government is now sending SWAT teams in and dragging people out of their homes over unpaid student loans.

So if the government is going to be so brutal, what kind of message does that send to our young people?

Today our young people are facing a future that looks incredibly bleak.  It is hard to have faith in the “system” when the “system” simply does not work any longer.

What are you supposed to say to a young person when you know very well that there are no jobs and that there is very little hope?

Most Americans don’t understand what is causing the collapse of the economy, but most of them do have a sinking feeling that something has seriously gone wrong.

For the last few years the American people have waited patiently for our politicians to “fix things”, but they have not gotten the job done.

Instead, our economic situation is still declining.

So now frustration is starting to boil over, and it is only going to get worse.

The following are 18 signs that the collapse of society is accelerating….

#1 In a brand new article, Janet Tavakoli has vividly described the wave of shocking violence that is currently sweeping the city of Chicago.  What she says is happening to Chicago right now is beyond alarming….

This year, all hell has broken loose in downtown Chicago. Years of under-hiring have resulted in a police force that is unprepared for wildings and gang violence. Moreover, concealed carry in Chicago is illegal, unless one follows the Constitution.

Tourists and residents have been attacked by mobs of youths on buses, on beaches, on bicycle paths, near the shops of the Magnificent Mile, and outside their homes. Mobs of shoplifters plagued “Mug Mile” stores.

Terror has descended on many of the wealthiest areas of Chicago.  Some are even calling on Chicago residents to completely avoid areas like the Magnificent Mile during the weekends until more police are brought in.

Mobs of young people are “swarming” retail stores, assaulting shoppers and pedestrians and even pulling people out of their cars.

The following is one eyewitness account of the “wildings” in Chicago that Tavakoli included in her recent article….

At about 11pm last Friday night, June 3rd, I heard shouting, screaming, horns blaring and tires screeching from my apartment…When I looked out my window to the street below I saw a crowd of about 20 young people…directly across the street from the entrance to my building. They were leaning on parked cars and clogging the street. They were screaming at people walking and driving by. I watched them stop vehicles, including taxi cabs, and pull people from the vehicles…It was a frightening scene and I was sure someone was going to be hurt.

#2 If you don’t pay your student loans you may find yourself getting dragged out of your home by a SWAT team.

You doubt this?

The following is how an article in The Daily Mail recently described one recent SWAT team raid in California that was apparently ordered by the Department of Education….

A father was dragged from his home and handcuffed in front of his children by a SWAT team looking for his estranged wife – to collect her unpaid student loans.

A stunned Kenneth Wright had his front door kicked in by the raiding party at 6 am yesterday before being dragged onto his front porch, handcuffed and led to a police car with his three children.

He says he was then detained for six hours while officers looked for his wife – who no longer lives at the house.

#3 One town in Connecticut was forced to shut down a beautiful new fountain because too many people were using it as a toilet.

#4 This most recent Memorial Day weekend, cities all over America literally turned into war zones.  There were reports of mass violence in Miami, New York, Chicago, Charlotte, Myrtle Beach, Nashville and Boston among other places.

If you want to see video of some of the violence in Miami as it was happening, you can view it here.  The video is quite disturbing so please don’t let any small children view it.

#5 One of the hottest books in America right now is a “children’s book” entitled “Go The F*k To Sleep“.

#6 A teenage girl in Washington state recently shot her Dad with a hunting bow because he took away her cell phone.

#7 In New York City, one 32-year-old man was recently charged with sexually assaulting an 85-year-old woman.

#8 Democratic strategist James Carville recently made national headlines when he told talk show host Don Imus the following….

“You know, look — this is a humanitarian — you know, you’re smart enough to see this . . . People, you know, if it continues, we’re going to start to see civil unrest in this country. I hate to say that, but I think it’s imminently possible.”

#9 According to one new study, the percentage of U.S. households that contain a married couple with children has fallen from 44.3% in 1960 to 20.2% today.

#10 In Atlanta, two dozen teens recently violently assaulted two Delta flight attendants on a train for no apparent reason.  The following is how a local Atlanta newspaper described the attacks….

Their “Clockwork Orange” style blitz was over soon after it began. The teens boarded the train, headed to Hartsfield-Jackson International Airport, at the Garnett station a little after midnight seemingly intent on instilling fear. They succeeded.

“There was blood everywhere, people were hollering and screaming,” a witness told Channel 2 Action News. “We were intimidated. People were terrified. People were trying to run. But there was nowhere to run.”

#11 Federal prosecutors in Indianapolis have announced that they have broken up one of the largest child pornography rings ever discovered.  It was based in Bloomington, Indiana.

Are any small towns still safe?

#12 Barack Obama’s food safety chief is defending armed raids of raw milk producers (including a raid on an Amish farmer) and he says that the FDA will “keep doing our public health job“.

#13 In Florida, a 45-year-old Polk County sheriff’s deputy has been charged with strapping children to a desk and spanking them with sex toys.

#14 In Sioux City, Iowa a 41 year old man recently walked into the office where his boss worked and beat the living daylights out of him.  The boss suffered four chipped teeth and needed surgery to repair his nose.  Apparently the boss was planning to fire the man.

#15 A 20-year-old woman in Oklahoma has been charged with killing the family cat and using the blood as part of a costume she planned to wear to a Lady Gaga concert.

#16 McDonald’s recently held a “National Hiring Day” and about a million Americans showed up to apply for jobs at McDonald’s restaurants all around the nation.  Well, in Cleveland a horrible fight broke out between some girls and it ended up with three people being run over by a car.  You can view video of this incident right here.  Please do not watch the video if you are sensitive to graphic violence.

#17 All over the United States, vicious restaurant brawls have been erupting with alarming frequency and many of them are being posted up on YouTube for the world to see.  You can see one example of this phenomenon right here.

#18 From coast to coast, “mob robbing” has become a very disturbing trend.

So what is a “mob robbing”?

Well, basically dozens of young people storm into a store together, grab whatever they want, and storm back out again.

Recent examples of this have been caught on video in Washington D.C. and in Las Vegas.

So does anyone still doubt that we are starting to see the collapse of society?

Sadly, things are going to get a whole lot worse.

In response to a recent article entitled “The Coming Economic Hell For American Families“, a frequent commenter on my site known as “El Pollo De Oro” left the following comment about the collapse of society that is beginning to unfold….

Yes, it’s going to be VERY violent in The Banana Republic of America. Carjacking, kidnapping, drug trafficking, armed robbery and murder for hire will be major growth industries in the BRA when millions of formerly middle class Americans, now the neo-poor/neo-peasants, become increasingly desperate. The horrifying violence in Mexico will become a fact of life on this side of the border, the brutal kidnappings of the Philippines and Papua New Guinea will plague the BRA as well. Formerly middle class Americans who find themselves living in shantytown slums won’t like their new accommodations, and many of them will turn to violent crime in the hope of improving their miserable circumstances.

The truth is that about the only thing keeping our society together has been the unprecedented affluence that we have been enjoying over the past few decades.

Once that affluence is gone, the true character of the American people will come out, and we may not like what we see.

That is one reason why I pound on the economic crisis this nation is facing day after day.  Once our wealth is gone, there is going to be chaos in the streets of America.

So what are you seeing in your area of the country?  Do you see signs that the collapse of society is accelerating where you live?  Please feel free to leave a comment with your opinion below….

The Coming Economic Hell For American Families

Tens of millions of American families are about to go through economic hell and most of them don’t even realize it. Most Americans don’t spend a whole lot of time thinking about things like “monetary policy” or “economic cycles”.  The vast majority of people just want to be able to get up in the morning, go to work and provide for their families.  Most Americans realize that things seem “harder” these days, but most of them also have faith that things will eventually get better.  Unfortunately, things aren’t going to get any better.  The number of good jobs continues to decline, the number of Americans losing their homes continues to go up, people are having a much more difficult time paying their bills and our federal government is drowning in debt.  Sadly, this is only just the beginning.

Since the financial collapse of 2008, the Federal Reserve and the U.S. government have taken unprecedented steps to stimulate the economy.  But even with all of those efforts, we are still living in an economic wasteland.

So what is going to happen when the next wave of the economic crisis hits?

During one recent interview, Peter Schiff made the following statement….

If you look at the economic relapse that’s going on right now, look at Friday’s abysmal job numbers, look at the housing numbers, understand that all of this is taking place with record monetary and fiscal stimulus. What happens if we remove those supports?

At the end of June, the Federal Reserve’s quantitative easing program is slated to end.  The U.S. Congress and state legislatures from coast to coast are talking about budget cuts.  The amount of borrowing and spending that has been going on is clearly unsustainable, but will the U.S. economy start shrinking again once the current “financial sugar high” has worn off?

Already, all sorts of bad economic news has been coming out and all kinds of economic indicators are turning south.  The American people are becoming increasingly restless.  One new poll has found that 59 percent of the American people disapprove of Barack Obama’s handling of the economy (which is a new high).  According to another recent poll, 63% of Americans say that they feel “not good” or “bad” about how the U.S. economy is performing.

If most Americans had good jobs, could afford their mortgages and could pay their bills, the economy would not be such a big issue.

Unfortunately, times are really tough for American families right now and they are about to get a lot tougher.

*Jobs*

The official unemployment rate just went up to 9.1 percent, but that figure only tells part of the picture.

There are some areas of the country where it seems nearly impossible to find a decent job.  Millions of Americans have fallen into depression as they find themselves unable to provide for their families.

According to CBS News, 45.1 percent of all unemployed Americans have been out of work for at least six months.  That is a higher percentage than at any point during the Great Depression.

Just two years ago, the number of “long-term unemployed” in the United States was only 2.6 million.  Today, that number is up to 6.2 million.

Can you imagine being out of work for 6 months or more?

How would you survive?

Just look at the chart below.  What we are going through now is really unprecedented.  The average duration of unemployment in this country is now close to 40 weeks….

So will things get any better soon?  Well, there were only about 3 million job openings in the United States during the month of April.  Normally there should be about 4.5 million job openings.  The economy is slowing down once again.  Good jobs are going to become even more rare.

There are millions of other Americans that are “underemployed”.  All over the United States you will find hard working Americans that are flipping burgers or working in retail stores because that is all they can get right now.

Most temp jobs and most part-time jobs don’t pay enough to be able to provide for a family.  But there are not nearly enough full-time jobs for everyone.

Sadly, the number of “middle class jobs” is about 10 percent lower than a decade ago.  There are simply less tickets to the “good life” than there used to be.

*Homes*

But without good jobs, the American people cannot afford to buy homes.

Without good jobs, the American people cannot even afford the homes that they are in now.

U.S. home prices have fallen 33 percent since the peak of the housing bubble.  That is more than they fell during the Great Depression.

This decline in housing prices has caused a lot of problems.

28 percent of all homes with a mortgage in the United States are in negative equity at this point.  There are millions of American families that are now paying on mortgages that are for far more than their homes are worth.

Millions of American families literally feel trapped in their homes.  They can’t afford to sell their homes, and if they simply walk away nobody will approve them for new home loans for many years to come.

Many Americans are sticking it out and are staying in their homes until they simply can’t pay for them anymore.

As the number of good jobs continues to decline, the number of Americans that are losing their homes continues to rise.

For the first time ever, more than a million U.S. families lost their homes to foreclosure in a single year during 2010.

If the economy slows down once again and millions more Americans lose their jobs this problem is going to get a lot worse.

*Bills*

Even if they aren’t losing their homes yet, millions of other Americans families are finding it increasingly difficult to pay the bills.

Wages have been very flat over the past few years and yet the cost of most of the basics just seems to keep going up and up.

According to Brent Meyer, a senior economic analyst at the Federal Reserve Bank of Cleveland, the cost of food and the cost of energy have risen at an annualized rate of 17 percent over the past six months.

Have your wages gone up by 17 percent over the past six months?

As 2009 began, the average price of a gallon of gasoline in the United States was $1.83.  Today it is $3.77.

American families are finding that their paychecks are going a lot less farther than they used to, but Ben Bernanke keeps insisting that we have very little inflation in 2011.

Most Americans don’t care much about economic statistics – they just want to be able to do basic things like take their children to the doctor.

According to one recent survey, 26 percent of Americans have put off doctor visits because of the economy.

Sadly, soon a lot more American families will not be able to afford to go to the doctor.

According to one recent survey, 30 percent of all U.S. employers will “definitely or probably” quit offering employer-sponsored health coverage once Obamacare is fully implemented in 2014.

As the economic situation has unraveled, an increasing number of people are being forced to turn to the federal government for assistance.

One out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government.

Some of the hardest hit members of our society have been our children.  Today, one out of every four American children is on food stamps.

Back in the old days, a large percentage of American families were self-sufficient, but that is no longer the case.

Back in 1850, approximately 50 percent of all Americans worked on farms.

Today, less than 2 percent of Americans do.

So these days when American families can’t feed themselves what do they do?

They turn to the federal government of course.

At the moment, approximately 44 million Americans are on food stamps.

But our federal government cannot afford to spend money like this forever.

According to a recent USA Today analysis, the U.S. federal government took on $5.3 trillion in new financial obligations during 2010.  USA Today says that the U.S. government now has $61.6 trillion in financial obligations that have not been paid for yet.

Wow!

Who is going to end up paying that bill?

So with so much bad news, are our leaders alarmed?

Not really.

According to Federal Reserve Chairman Ben Bernanke, “growth seems likely to pick up somewhat in the second half of the year.”

Yeah, we’ll see how that prediction works out.

Others are not so sure that everything is going to turn out okay.

Recently, James Carville warned that we could literally see rioting in the streets if the economic situation does not turn around soon.  Just check out the last part of the video below….

The truth is that America is in decline.  Just like with all of the great empires of the past, our empire is starting to crumble too.

A recent article in the Guardian touched on some of the reasons for America’s decline….

The experience of both Rome and Britain suggests that it is hard to stop the rot once it has set in, so here are the a few of the warning signs of trouble ahead: military overstretch, a widening gulf between rich and poor, a hollowed-out economy, citizens using debt to live beyond their means, and once-effective policies no longer working. The high levels of violent crime, epidemic of obesity, addiction to pornography and excessive use of energy may be telling us something: the US is in an advanced state of cultural decadence.

The economic news is only part of the puzzle.  This country has rejected the ancient wisdom that was passed down to us and we have rejected the principles of our founding fathers.

We have piled up the biggest mountain of debt in the history of the world and yet somehow we expected that everything would turn out okay.

Well, everything is not going to turn out okay.

All of this debt is going to come down on us like a ton of bricks and the U.S. economy is going to continue to fall apart.  Millions of American families are going to lose their jobs and their homes.

Economic hell is coming.

You better get ready.

10 Tipping Points Which Could Potentially Plunge The World Into A Horrific Economic Nightmare

The global economy has become so incredibly unstable at this point that it is not going to take much to plunge the world into a horrific economic nightmare.  The foundations of the world economic system are so decayed and so corrupted that even a stiff breeze could potentially topple the entire structure over.  Over the past couple of months a constant parade of bad economic news has come streaming in from Europe, Asia and the United States.  Signs of an impending economic slowdown are everywhere.  So what “tipping point” will trigger the next global economic downturn?  Nobody knows for sure, but potential tipping points are all around us.

Today, the global economic system is even more vulnerable than it was back in 2008.  Virtually none of the systemic problems that contributed to the 2008 collapse have been fixed.

Mark Mobius, the head of the emerging markets desk at Templeton Asset Management, was recently was quoted in Forbes as saying the following….

“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis.”

The “financial reform” law that Barack Obama and the Congress passed a while back was a complete and total joke.  They might as well have written the law on toilet paper for all the good that it is doing.

We did not learn from our mistakes and our future economic lessons are going to be even more painful.

The world is drowning in a mountain of debt, the global financial system is packed to the gills with toxic derivatives, everyone is leveraged to the hilt and the dominoes could start falling at any time.

I am not the only one that is warning that another financial collapse is coming.  In fact, a whole lot of people have been warning about the next financial collapse lately.

So what will the tipping point for the next collapse be?

The following are some potential nominees….

Tipping Point #1: Syria

Syria is a situation to watch very, very closely.  The Syrian government is in a lot of trouble right now.  Sadly, the instability inside Syria probably makes war with Israel even more likely.

Make no mistake – a war between Israel and Syria has been brewing for a long, long time and at some point it will happen.  When it happens, the entire Middle East may erupt in warfare.

Just the other day, a very troubling incident happened in the area around the Golan Heights.  The following is an excerpt from a report by The Daily Mail about the incident….

“About 20 pro-Palestinian demonstrators were killed and 325 injured yesterday when Israeli forces opened fire on them as they crossed the border from Syria into occupied territories, according to reports.”

At this point, the Syrian government is probably glad that the attention has been taken off of them at least for a while.  The Syrian government has been getting a lot of bad press lately.  The following is an excerpt from a recent report by Human Rights Watch about the treatment of protesters inside Syria….

“The methods of torture included prolonged beatings with sticks, twisted wires, and other devices; electric shocks administered with Tasers and electric batons; use of improvised metal and wooden ‘racks’; and, in at least one case documented by Human Rights Watch, the rape of a male detainee with a baton.

“Interrogators and guards also subjected detainees to various forms of humiliating treatment, such as urinating on the detainees, stepping on their faces, and making them kiss the officers’ shoes. Several detainees said they were repeatedly threatened with imminent execution.”

So in light of the “precedent” that we recently set in Libya, does this mean that we will be “forced” to conduct a “humanitarian mission” inside Syria as well?

Syria is one tipping point that we all need to keep a close eye on.

Tipping Point #2: Iran

The Iranian nuclear program is in the news again. A new report by RAND Corporation researcher Gregory S. Jones claims that Iran could have a nuclear weapon within 2 months.  His report is based on recent findings by the International Atomic Energy Agency.  According to Jones, airstrikes alone would be incapable of stopping Iran’s nuclear weapons program at this point.  Instead, Jones says that a “military occupation” would be required.

It is a minor miracle that a war with Iran has not erupted yet.  It seems almost inevitable that at some point either the United States or Israel will use military force to try to stop Iran’s nuclear program.

When that happens, it is going to cause a major shock to the global economy.

Tipping Point #3: Libya

NATO has made it abundantly clear that Moammar Gadhafi will no longer be tolerated.  In fact, NATO apparently plans to reduce Tripoli to a heap of smoking ruins if that is what it takes to bring about the fall of Gadhafi.

What a “humanitarian mission” we have going in Libya, eh?  It turns out that NATO believes that the United Nations gave it permission to bomb television stations and to make attack runs with helicopters.

Russian Deputy Prime Minister Sergei Ivanov recently said that by using attack helicopters, NATO has moved dangerously close to turning the Libya operation into a ground invasion….

“Using attack helicopters, in my view, is the last but one step before the land operation.”

So why is Libya a potential tipping point?

It isn’t because Gadhafi is a threat.  He is toast.

It is because the rest of the world is watching what is happening in Libya, and that is raising global tensions.

Even if Gadhafi falls, the Libyan operation will still be a failure because it has brought us all significantly closer to World War III.

Tipping Point #4: More Revolutions In The Middle East

The revolutions throughout the Middle East earlier this year sent oil prices absolutely skyrocketing and they have remained at elevated levels.

And in case you haven’t noticed, revolutions continue to sweep the Middle East.

Have you seen what has been happening in Yemen lately?

Yemeni President Ali Abdullah Saleh has burns over 40% of his body and he has suffered a collapsed lung as a result of a recent attack.

If violence and protests throughout the Middle East become even more intense as the weather warms up this summer that could have a very significant impact on world financial markets.

Tipping Point #5: Fukushima

The mainstream news has gotten a bit tired of covering it, but the situation at Fukushima is still a complete and total disaster.

Japan’s Nuclear Emergency Response Headquarters admitted on Monday that three reactors experienced “full meltdowns” in the aftermath of the earthquake and tsunami in March.

Did it really take them nearly three months to figure this out, or were they lying to the rest of the world all of this time?

The truth is that the nuclear disaster at Fukushima is far worse than the mainstream media has been telling us.  If you doubt this, just check out this excellent article or this article by Natural News: “Land around Fukushima now radioactive dead zone; resembles target struck by atomic bomb“.

The economic impact of the Fukushima disaster is going to continue to unfold over an extended period of time.  It turns out that Japan is now officially in a recession.  Their economy contracted at a 3.7 percent annualized rate during the first quarter.

Look for more bad economic numbers to come out of Japan for the rest of the year.  Considering the fact that the Japanese economy is the third largest economy in the world, the fact that they are struggling so badly right now is not a good sign for the rest of us.

Tipping Point #6: Oil Prices

The price of oil is going to continue to be one of the biggest economic stories for the rest of this year and for 2012 as well.

The last time U.S. energy expenditures were over 9 percent of GDP was in 2008 and we quickly plunged into the deepest economic downturn since the Great Depression.

Well, we have reached the significant 9 percent figure once again in 2011, and many fear that once again high oil prices will cause another major economic decline.

Tipping Point #7: Government Austerity

In the United States, it is not just the federal government that is drowning in debt.

All over America, there are state and local governments that are financial basket cases.

I don’t always agree with the time frames that Meredith Whitney puts out there, but she is absolutely correct that we are going to see a massive municipal bond crisis. The following is an excerpt from a recent report about Whitney’s predictions on CNN….

“Meredith Whitney is issuing a fresh warning to mutual funds, banks, and politicians: The state of state finances is far worse than what you think, or at least than what you’ve been willing to tell the investors and taxpayers who will eventually carry the burden.”

Many state and local governments are attempting to get their budgets balanced by making huge budget cuts.  But most of the time these austerity programs also include the elimination of a lot of government jobs.

UBS Investment Research is projecting that state and local governments will combine to slash a whopping 450,000 jobs by the end of next year.

So where will the half a million good jobs come from to replace all of those lost jobs?

Tipping Point #8: The European Sovereign Debt Crisis

Greece is just the tip of the iceberg in Europe.

Moody’s downgraded Greek debt again last Wednesday.  This time Moody’s downgraded Greek debt by three levels all the way down to Caa1.  At this point, the yield on 10-year Greek bonds is over 15 percent.

The EU has been going crazy trying to deal with the Greek debt crisis.  The truth is that a default by the Greek government would be absolutely catastrophic. If you do not understand the kind of chaos a Greek default would set off on world financial markets, just read this editorial.

But Greece is not the only major European nation with a massive debt problem.

The government of Ireland is already indicating that they may need another bailout.

Portugal, Spain and Italy are also on the verge of collapse.

So will the EU bail all of these nations out for years and years to come?

At some point will the whole house of cards come crashing down?

Everyone needs to keep watching what is going on in Europe.  The status quo is not sustainable and it cannot go on forever.

Tipping Point #9: The Dying U.S. Dollar

The euro is not the only major currency that is in trouble.

The U.S. dollar is also slowly dying.

On April 18th, Standard & Poor’s altered its outlook on U.S. government debt from “stable” to “negative” and warned that the U.S. could soon lose its prized AAA rating.

The sad truth is that faith in the U.S. dollar and in U.S. Treasuries is rapidly declining.  The mainstream news is not reporting on it much, but right now the Chinese are rapidly dumping U.S. government debt.

As the dollar declines, so will the purchasing power of average Americans.  We are already seeing a tremendous amount of inflation in 2011.

But this is just the beginning.

A lot worse is going to be coming down the road.

Tipping Point #10: Drought

A lot of people that read my articles doubt that we will ever see a major global food crisis.

But one is coming.

It is just a matter of time.

Even now, many areas of the world are experiencing very serious droughts.  The following is from a recent  Bloomberg article….

Parts of China, the biggest grower, had the least rain in a century, some European regions are the driest in 50 years and almost half the winter-wheat crop in the U.S., the largest exporter, is rated poor or worse. Inventory is dropping 8.8 percent, the most in five years, Rabobank International says. Prices will advance 20 percent to as high as $9.25 a bushel by Dec. 31, a Bloomberg survey of 14 analysts and traders shows.

Are you concerned yet?

You should be.

But if you prefer some mindless pablum that will make you feel better, we have some of that for you too.

Larry Summers, the former director of the National Economic Council under Barack Obama, recently told CNBC the following….

“We definitely hit a slower patch, but I think the basic fact that the terrible financial strains we had are abating, remains in place, and I expect this recovery to continue for a substantial period of time.”

Does that make you feel better?

Larry Summers says that everything is going to be okay.

It would be great if Summers was actually right, but sadly he is not.

In fact, the worst economic times that America has ever seen are ahead.

The following is a brief excerpt from a recent interview with Dmitry Orlov about the coming economic collapse that was posted on shtfplan.com….

First you have financial collapse, which is basically the volume of debt that has to be taken on in order for the economy to continue functioning, cannot continue. We’re seeing that right now in Greece, we’re probably going to see that in Japan, we’re definitely at a point now in the United States where even if you raised the income tax to 100 percent, there’s absolutely no way of covering the liabilities of the U.S. federal government. So, we’re at that point now but the workout of the financial collapse is not all quite there. We don’t quite have a worthless currency but that’s in the works.

That, of course, is followed by commercial collapse especially in a country like the United States that imports two thirds of its oil. A lot of that is on credit and if a little bit of that oil goes missing then the economy starts to fall apart because nothing moves unless you burn oil in the United States and, of course, a lot of goods that are sold everywhere are imported again, on credit.

When the U.S. dollar dies and our financial system collapses we are not going to be able to get all of the things that we need from the rest of the world so cheaply any longer.

That is going to cause fundamental changes inside the United States.

Right now, the economic news just seems to get worse and worse, but this is just the beginning.

What is eventually going to happen in this country is going to be so nightmarish that most Americans could not even imagine it right now.

So are our leaders doing anything to prepare for the coming economic crisis?

No, they are too busy with other things.

The big political news of the day was U.S. Representative Anthony Weiner finally admitting that he sent out lewd photos of himself over Twitter to women that he was not married to.

We have become the laughingstock of the world and the economic collapse has not even happened yet.

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