Financial Markets

Global Financial Markets Plunge As The World Watches Japan Descend Into A Nuclear Nightmare

Global financial markets are in turmoil as the situation in Japan continues to deteriorate.  Stock markets are plunging all over the world as investors flock to investments that are considered to be safer.  The 9.0 earthquake and the unprecedented tsunami in Japan would have been more than enough to spook investors and unleash chaos on world financial markets, but now the unfolding nightmare at the Fukushima Dai-ichi nuclear facility is really starting to cause panic.  Right now there is a mass exodus out of the city of Tokyo.  But not everyone can leave the city.  There are over 30 million people living in and around Tokyo.  So where in the world could you possibly put 30 million refugees?  Sadly, the truth is that millions of Japanese are going to stay in Tokyo no matter how high the radiation gets.  Let us hope that Japanese authorities can get the situation at the Fukushima Dai-ichi nuclear facility under control, but the fact that they have resorted to dropping water from helicopters and shooting water cannons at these nuclear reactors is not comforting.

World financial markets are certainly not expressing a lot of confidence right now.  This week alone, $300 billion in U.S. stock values have been wiped out.  The Dow Jones industrial average lost about 2 percent of its total value on Wednesday.  The Nikkei 225 stock index has lost about 10 percent of its total value since the beginning of this crisis.  At one point it was down more than 16 percent, but a gigantic monetary injection from the Bank of Japan has helped to stabilize things at least for now.  There are also some that believe that the Japanese government is now directly buying up stocks to keep them from falling even further.

Stock markets across Europe have been plunging as well.  An article posted on the USA Today website described some of the carnage on Wednesday….

In Europe, the FTSE 100 index of leading British shares closed down 97.05 points, or 1.7% at 5,598.23 while France’s CAC-40 fell 84.29 points, or 2.2%, to 3,696.56. Germany’s DAX ended 133.82 points, or 2%, lower at 6,513.84.

The financial ripples from this crisis are going to be felt for a long, long time.

In order to rebuild Japan, the Japanese government is somehow going to have to borrow massive amounts of money.  But the Japanese national debt was already projected to reach 228 percent of GDP this year.

The Japanese government has become an incredibly bad credit risk, but lowering their credit rating right now would seem to be in very bad taste.  So far, all three major credit rating agencies are taking a “wait and see” approach when it comes to Japan.

Unfortunately, the crisis in Japan is far from over.

The situation at the Fukushima Dai-ichi nuclear facility just seems to grow more dire with each passing day.  Right now, the primary concern is the 40 years of spent fuel rods that are stored throughout the complex.

Ed Lyman, a physicist at the Union of Concerned Scientists, recently explained why the pools that store the spent fuel rods are the biggest problem at this point….

“For the time being, the greatest concern is the spent fuel pools because there is a clear pathway for release of radioactivity from the pools into the environment.”

The phrase “spent fuel rods” may make it sound like they should no longer be a threat, but the truth is that these fuel rods remain extremely hot and extremely radioactive for years after they are done being used.  For some reason, someone thought that it would be a good idea to store these spent fuel rods in huge pools of water near the top of each of the nuclear reactor buildings at the Fukushima Dai-ichi complex.

These spent fuel rod pools are not housed in the same kind of containment vessels that the nuclear reactors are.  Therefore there is a much greater danger that radiation from these spent fuel rods could be released into the surrounding environment.

A recent article by Paul Joseph Watson did a great job of explaining just how big of a problem these spent fuel rods represent….

The Fukushima Daiichi plant has seven pools dedicated to spent fuel rods. These are located at the top of six reactor buildings – or were until explosions and fires ravaged the plant. On the ground level there is a common pool in a separate building that was critically damaged by the tsunami. Each reactor building pool holds 3,450 fuel rod assemblies and the common pool holds 6,291 fuel rod assemblies. Each assembly holds sixty-three fuel rods. In short, the Fukushima Daiichi plant contains over 600,000 spent fuel rods – a massive amount of radiation that will soon be released into the atmosphere.

Each of these 600,000 spent fuel rods is a potential “dirty bomb”.

Are you starting to grasp just how serious this all is?

It is absolutely critical that all of these spent fuel rods remain submerged in water.

If the water drops in the spent fuel pools there will be nothing to keep the spent fuel rods cool and they will start to degrade very, very quickly.

Unfortunately, things don’t look good right now.  U.S. authorities today expressed their belief that the spent fuel rods in unit 4 are now exposed and that a great deal of radiation is being released.  In fact, Gregory Jaczko, the chairman of the Nuclear Regulatory Commission, stated during Congressional testimony today that he believes that an extremely high level of radiation is being released by exposed spent fuel rods at the Fukushima Dai-ichi nuclear facility at this point….

We believe that radiation levels are extremely high, which could possibly impact the ability to take corrective measures.

It would be hard to understate the courage of those that are working inside the Fukushima Dai-ichi nuclear facility right now. They all likely realize that they are all going to die very quickly. They are laying down their lives in an effort to save their countrymen. According to a recent report from CBS News these workers say that they are not afraid to die….

Although communication with the workers inside the nuclear plant is nearly impossible, a CBS News consultant spoke to a Japanese official who made contact with one of the workers inside the control center.

The official said that his friend told him that he was not afraid to die, that that was his job.

Would all of us respond the same way?

Even the media that are reporting on this disaster in Japan are starting to be affected by this radiation.  Lester Holt revealed this morning that his entire crew had tested positive for radiation after returning from an assignment.

Meanwhile, Barack Obama is acting as if all of this stuff going on in Japan is no big deal. In fact, as Keith Koffler recently observed, Obama seems to be really enjoying himself in the midst of this crisis….

This morning, as Japan’s nuclear crisis enters a potentially catastrophic phase, we are told that Obama is videotaping his NCAA tournament picks and that we’ll be able to tune into ESPN Wednesday to find out who he likes.

Saturday, he made his 61st outing to the golf course as president, and got back to the White House with just enough time for a quick shower before heading out to party with Washington’s elite journalists at the annual Gridiron Dinner.

If you are curious about Obama’s picks for the NCAA tourney, they are posted on the official White House website.

This weekend, the Obamas are headed down to Brazil. According to an article in Forbes, the Obama plan to do a good bit of sightseeing while they are there….

The Obama family will also take in the sights in Rio. A trip to Corcovado mountain, where the Christ the Redeemer statue stands (France gave us Lady Liberty, gave Brazil Jesus) is supposedly on the itinerary. What trip to Rio would be complete without it?

Isn’t it great to see Obama acting like a true leader in the midst of one of the greatest moments of crisis that the world has seen since World War 2?

What in the world is Obama possibly thinking?

One thing about a major crisis is that it reveals the true character of those affected by it.  Many are responding to this crisis in Japan with great acts of courage and heroism.

Others are not rising to the occasion.

Let us just hope and pray that the Japanese figure out a way to get the situation at the Fukushima Dai-ichi nuclear complex under control.  If a “worst case scenario” happens we could soon be facing an unprecedented nuclear nightmare.

Should We Be Alarmed That The Biggest Bond Fund In The World Has Dumped All Of Their U.S. Treasury Bonds?

Bill Gross, the manager of the biggest bond fund in the world, has forgotten more about bonds than most of us will ever learn. That is why the big move that PIMCO has just made is so unsettling.  At one time PIMCO held more U.S. government debt than any other bond fund on the globe, but now news has come out that they have gotten rid of all their U.S. government-related securities.  So should we be alarmed?  For months Gross has been warning that the bull market in bonds is coming to an end, and now it looks like he is putting his words into action.s  Gross has often publicly decried the rampant government spending that has been going on over the last several years, and apparently he has seen enough.  He is taking his ball and he is going home.  This really is a stunning move by PIMCO.  Gross must really believe that something fundamental has shifted.    Gross didn’t get to where he is today by being stupid.  But so far world financial markets are taking this news in stride.  Nobody seems all that alarmed that the largest bond fund in the world has dumped all of their U.S. Treasuries.  But with world financial markets in such a state of chaos right now, shouldn’t we all take note when one of the biggest players in the game makes such a bold move?

Gross believes that interest rates on U.S. Treasuries are way too low right now and that they will start going up when the Federal Reserve ends the current round of quantitative easing in June.  Gross has indicated that if interest rates on U.S. Treasuries go up high enough, PIMCO might get back in.

But if interest rates do start going up that is going to make servicing the monolithic U.S. national debt much more expensive, and that would not be good news for U.S. government finances.

But would the Federal Reserve really allow interest rates on U.S. Treasuries to go up substantially?  Wouldn’t they just step in at some point and start buying U.S. government debt again?

Probably.

But the truth is that the Ponzi Scheme of the U.S. Treasury issuing bonds and the Federal Reserve buying them up cannot last forever as Gross noted in his March newsletter….

“Basically, the recent game plan is as simple as the Ohio State Buckeyes’ “three yards and a cloud of dust” in the 1960s. When applied to the Treasury market it translates to this: The Treasury issues bonds and the Fed buys them. What could be simpler, and who’s to worry? This Sammy Scheme as I’ve described it in recent Outlooks is as foolproof as Ponzi and Madoff until… until… well, until it isn’t.”

Gross also noted in his newsletter that the Federal Reserve is currently buying up about 70 percent of all new U.S. government debt.

So what is going to happen when that stops?

Nobody knows for certain, but it sure is going to be interesting to watch.

The market for U.S. Treasuries has not been working “normally” for quite some time now, and there is some legitimate doubt as to whether it will ever fully get back to “normal” again.

Meanwhile, the sovereign debt crisis in Europe continues to get even worse.

The yield on 10-year Portuguese bonds is now above 7 percent, the yield on 10-year Irish bonds is now above 9 percent and the yield on 10-year Greek bonds is now above 12 percent.

Most people expect European leaders to soon come to an agreement to add billions more to existing bailout funds, but there is no guarantee that is actually going to happen.

In fact, the Germans are making waves by insisting that the financially troubled nations in the EU must be willing to agree to limits on their future budget deficits.  A recent article on CNBC described the situation this way….

Before the Germans will agree to pump in extra cash from their taxpayers, backed by the French, they want each leader to agree to legislation at home that will limit the size of their future national deficits. The Greeks are already refusing point blank. Things may boil to the surface at an extraordinary summit on Friday.

So what if an agreement can’t be reached?

Could the dominoes in Europe start to fall?

Very few people actually want to see a wave of sovereign defaults in Europe, but the current situation cannot go on forever.  At some point the Germans are going to get sick and tired of bailing out other members of the EU.

The global addiction to debt is about to start having some very serious consequences.

For decades, most of the governments of the industrialized world have been running up debt as if it would never come back to haunt them.  Now the world is absolutely covered in red ink and everyone is looking for a way to solve the problem.

But there is not going to be a debt jubilee to come along and save everyone.  This debt bubble is either going to keep expanding or it is going to burst.

At one point, at least some of the debt-ridden nations will try to inflate their way out of debt by recklessly printing money.  To a certain extent that has already been going on.  But it will not work.  It will only cause a whole lot of inflation.

This is just more evidence that any economic system based on debt is destined to fall.  When we allowed a private central bank to start issuing debt-based currency in this country back in 1913 we set ourselves up to fail.  As I have written about previously, the Federal Reserve should never have been allowed to come into existence, and it should have been shut down by Congress long before now.

But now the United States is caught in the same debt trap that most of the other nations around the world are caught in.  The global addiction to debt is going to have some very, very serious consequences.  Instead of moving into a great time of peace and prosperity, everything is about to come falling apart.

Things could have been different.  Things did not have to turn out this way.  But here we are on the edge of one of the biggest financial disasters in human history and most Americans still don’t understand what is happening.

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

Wars, Rumors Of Wars, Skyrocketing Oil Prices And Global Economic Chaos – Why Is All Of This Happening?

Did anyone out there anticipate that 2011 would be such a wild year?  The year is barely over two months old and we have already seen multiple civil wars erupt, rumors of more wars all over the mainstream media (potentially even including the United States), riots and revolutions breaking out all over the globe, oil prices soaring into the stratosphere and chaos on global financial markets.  So why is all of this happening?  Is all of this one big coincidence or is there a reason why we are witnessing such global chaos right now?  Is it just coincidence that revolutions have broken out in over a dozen countries in the Middle East all at the same time?  Is it just a coincidence that global prices for oil, food and precious metals are all skyrocketing?  Is it just a coincidence that world financial markets suddenly seem more vulnerable than at any time since 2008?  Looking at what is going on in the world right now, it is very tempting to use the phrase “a perfect storm” to describe it.  Unfortunately, this “perfect storm” is very likely to plunge the global economy into yet another financial collapse if it continues to get even worse.

After decades of relative stability, the Middle East has erupted in chaos in 2011.  In the post-World War 2 era, we have never seen a time when there have been so many major internal revolutions all at once.  All of these simultaneous revolutions are driving the price of oil rapidly upwards.

The price of West Texas crude is now over $102 a barrel and the price of Brent crude is now over $116 a barrel and if the chaos in the Middle East continues those numbers are likely to go a lot higher.

Meanwhile, gold has set a new all-time record this week and the price of silver is absolutely exploding.

In fact, just about every kind of “hard asset” that you can possibly name is going up in price.  Investors don’t like all of this instability and they are looking for safe places to put their money.

Unfortunately, the global situation looks like it may become even more heated.

The calls for military action against Libya are rapidly reaching a crescendo.

The U.S. Senate has unanimously passed a resolution calling for the UN Security Council to impose a no-fly zone over Libya, and many members of Congress are openly declaring that the U.S. and NATO should take unilateral action no matter what the UN ultimately decides.

But implementing a no-fly zone is not a simple thing.  It is not just a matter of telling Libya not to fly their planes.  Rather, imposing a no-fly zone over Libya would constitute a major military operation.

U.S. Secretary of Defense Robert Gates is even admitting that enforcing a no-fly zone over Libya would begin with a huge military strike…..

“Let’s just call a spade a spade. A no-fly zone begins with an attack on Libya to destroy the air defenses … and then you can fly planes around the country and not worry about our guys being shot down.”

U.S. commander General James Mattis made a similar comment on Tuesday….

You would have to remove the air defense capability in order to establish the no-fly zone so it – no illusions here, it would be a military operation.

Essentially, imposing a no-fly zone over Libya would be an act of war.

Most of our representatives in Washington D.C. seem to be quite ready to go to war in Libya, but it is another story entirely when it comes to the American people.  A recent Rasmussen poll found that a whopping 67 percent of Americans do not want the U.S. to get more involved in the unrest going on in Arab countries and only 17 percent of Americans do want the U.S. to get more directly involved.

But the American people don’t get to decide whether we go to war or not.  Our leaders in Washington D.C. do.  The USS Enterprise and other major warships are on their way to Libya, and U.S. forces throughout the Mediterranean are on high alert.

So could the U.S. really get involved in another war in the Middle East?

Well, if the U.S. and NATO choose to get involved they will do it without the approval of the rest of the world.

On Wednesday, the Arab League issued a statement which specifically rejected “any foreign interference within Libya on behalf of the opposition”.

Not only that, but any military action by the UN will most likely be blocked by both China and Russia.

Russia’s ambassador to NATO, Dmitry Rogozin, says that any military action against Libya without UN approval would be a violation of international law….

“If someone in Washington is seeking a blitzkrieg in Libya, it is a serious mistake because any use of military force outside the NATO responsibility zone will be considered a violation of international law.”

But Libya is far from the only crisis point in the Middle East.

In fact, a much larger problem may be brewing in Saudi Arabia.

On Facebook, a “Day of Rage” is being hyped for March 11th.  Other dates being promoted for “revolution” in Saudi Arabia include March 20th and March 21st.

But if Saudi Arabia sees the same kind of chaos that we have seen in other countries in the Middle East there is no telling how high the price of oil could go.

Could we see $125 oil?

Could we see $150 oil?

Could we see $200 oil?

Saudi Arabia exports more oil than anyone else in the world, so if their oil production gets interrupted it is going to have a dramatic impact on the global economy.

For example, are you ready to pay 5 dollars for a gallon of gasoline in the United States?

For decades, the entire globe has been blessed with very cheap oil and this has resulted in a massive economic boom.

But times are changing.

The economic situation over in Europe is already deteriorating and any additional bad news could plunge that entire continent into a major crisis.  A recently released report from Ernst & Young is warning that if oil goes up to 150 dollars a barrel and it stays there, “at least” one eurozone country will default and the entire eurozone will be plunged back into recession.

A much higher price for oil would obviously not be good for the U.S. economy either.  Do you remember what happened back in 2008?  The price of oil hit a record high in June and then the entire financial system came unglued just a few months later.

But if we see a repeat of 2008 it may be a lot worse this time because the global financial system is now more unstable than ever.

The truth is that the entire world is still trying to recover from the last financial crisis.  The Federal Reserve is pumping massive quantities of dollars into the U.S. economy in an attempt to stimulate it back to life, but so far it is not working too well.

The rest of the world does not appreciate all of this “money printing” and the inflation that this is causing is beginning to create massive imbalances on global financial markets.

The world is starting to lose faith in the U.S. dollar.  Right now, approximately 85% of all foreign-exchange transactions in the world involve the U.S. dollar.  Not only that, 60% of all the currency reserves in the world are in U.S. dollars.  With the U.S. dollar rapidly becoming less stable, many are now wondering if it should continue to be used as the reserve currency of the world.

The truth is that if the U.S. dollar falls, it is going to create a tremendous amount of financial chaos in almost every nation on the globe.

Unfortunately, as I have written about so many times previously, the U.S. economy is dying.  The U.S. government is absolutely drowning in debt, and leaders all over the planet are calling for the establishment of a new global reserve currency.

The days of the United States being the “economic engine of the planet” are rapidly coming to an end.

The U.S. economy is not ever going to fully “recover”.  In fact, the U.S. economy is basically “running on empty” at this point as Gerald Celente recently noted during an interview on RT television….

The entire U.S. economy was designed to operate on massive amounts of very cheap oil.  Americans do more driving than anyone else in the world.  Many of us are so lazy that we won’t even walk to a store if it is on the other side of the parking lot.

If oil hits record levels in 2011, it is going to be a massive shock to the U.S. economic system.  Any hopes for an “economic recovery” will be completely dashed.

In fact, if one wanted to “take down” the U.S. economy, driving up the price of oil would be a perfect way to do it.

And if one wanted to drive up the price of oil, a perfect way to do that would be to create all kinds of chaos in the Middle East.

So is all of this craziness that we are seeing in 2011 just a big coincidence or is there a reason why all of this is happening?

Please feel free to leave a comment with your opinion on the matter below….

18 Sobering Facts Which Prove That The Middle Class Is Not Being Included In This “Economic Recovery”

Have you heard the news?  The stock market is absolutely soaring and according to the U.S. government and the Federal Reserve we are in the beginning stages of a robust economic recovery.  Yippee!  The S&P 500 is up 6.8 percent so far in 2011, and the stock market recently hit a two and a half year high.  So shouldn’t we all be celebrating?  Well, if stock market performance was an accurate measure of economic health, then Zimbabwe would have had one of the healthiest economies on the entire globe during the last decade.  But just like Zimbabwe’s stock market was artificially pumped up with “funny money” that was rapidly being devalued, so is ours.  All of the “quantitative easing” that the Federal Reserve has been doing is pumping plenty of money into the financial markets and is helping to inflate a false stock market bubble, but it is doing very little to alleviate the suffering of the U.S. middle class.  In fact, when you take a closer look at the numbers you quickly find out that the suffering of the middle class is getting even worse.

According to Gallup, the unemployment rate is now over 10%.  The number of Americans that have given up looking for work recently set a new all-time record.  The number of mortgages in foreclosure tied a record high during the fourth quarter of 2010.  Gas and food prices are rising rapidly.  The number of Americans on food stamps continues to increase every single month.

Yes, right now the economic situation is not in free fall like it was a couple years ago.  We should be thankful for that.  Periods of relative stability such as we are enjoying now will be few and far between in the years ahead.  This “bubble” of economic calm is a great opportunity that we should all be taking advantage of.

However, those that are hoping that this is an economic “turning point” and that things will soon be back to “normal” are going to be greatly disappointed.  This is about as “normal” as things are going to be ever again.

Even during this time of relative economic stability, the U.S. middle class is still being ripped to shreds.  If there are those among your family and friends that are somehow convinced that the U.S. economy is recovering nicely, you might want want to show them the following 18 very sobering facts….

#1 According to Gallup, the U.S. unemployment rate is currently 10.3 percent.  When you add in part-time American workers that want full-time employment, that number rises to 20.2 percent.

#2 According to the U.S. Bureau of Labor Statistics, the number of job openings in the United States declined for a second straight month during December.

#3 There are currently more than 4 million Americans that have been unemployed for more than a year.

#4 The number of Americans that have become so discouraged that they have given up searching for work completely now stands at an all-time high.

#5 Gasoline prices in the United States recently hit a 28-month high.

#6 During the 4th quarter of 2010, 4.63 percent of all U.S. home loans were in foreclosure.  That matched the all-time high, and it was up significantly from 4.39 percent in the 3rd quarter.

#7 It is estimated that there are about 5 million homeowners in the United States that are at least two months behind on their mortgages, and it is being projected that over a million American families will be booted out of their homes this year alone.

#8 Almost 14 percent of all credit card accounts in the United States are currently 90 days or more delinquent.

#9 The average credit card rate in the United States had increased to a whopping 13.44 percent at the end of 2010.

#10 Americans now owe more than $890 billion on student loans, which is even more than they owe on credit cards.

#11 Average household debt in the United States has now reached a level of 136% of average household income.  In China, average household debt is only 17% of average household income.

#12 U.S. life expectancy at birth is now three years less than Canada and four years less than Japan.

#13 New home sales in the state of California were at the lowest level ever recorded in the month of January.

#14 43 percent of all mortgages in south Florida are currently underwater.

#15 Prior to the most recent economic downturn, there were usually somewhere around four to five million job openings in America.  Today there are about 3 million.

#16 When you adjust wages for inflation, middle class workers in the United States make less money today than they did back in 1971.

#17 One out of every seven Americans is now on food stamps.

#18 One out of every six elderly Americans now lives below the federal poverty line.

You know things are bad when articles start popping up in the mainstream news instructing us how to interact socially with the hordes of unemployed Americans that are out there today.  A recent USA Today article entitled “What not to say to someone who is unemployed” listed some of the things that you should not say to someone that does not have a job.  The following are some of their suggestions on what NOT to say….

“Hey, have you found anything yet?”

“How’s the search going?”

“You just have to pound the pavement.”

“Something will turn up.”

“It’s tough out there.”

“Other people are going through the same thing.”

“Maybe you’re asking for too much money.”

“Maybe you should go back to school.”

“There are plenty of jobs out there.”

I am sure most of us have heard things like this at one time or another.  It can be a soul-crushing thing to have others like at you in pity because you don’t have a job and you can’t pay the mortgage and feed your family.

Most unemployed Americans are not lazy.  The vast majority of them desperately want jobs.  But the U.S. economy is not producing nearly enough jobs today.  As noted above, the U.S. economy currently has about 3 million job openings, but approximately 20 percent of the workforce wants to find a full-time job.  The demand for jobs is far, far, far greater than the supply.

Unfortunately, this is the legacy of decades of bad economic decision-making.  The U.S. economy should be able to provide work for every single person that wants it, but because of the choices that have been made that will never be the case again.

The middle class in America is being ripped to shreds right in front of our eyes and very little is being done to stop it.  Desperation is rising across the nation.  More Americans slip into poverty every single day.  It is almost as if a cloud of gloom and despair has descended upon the U.S. economy and every single month the situation only seems to get darker.

So what about you?  How has this economy affected you and your family?  Please feel free to leave a comment with your thoughts below….

Is Ben Bernanke A Liar, A Lunatic Or Is He Just Completely And Totally Incompetent?

Did you see Ben Bernanke’s testimony before the House Budget Committee on Wednesday? It was quite a show. Bernanke seems to believe that if he just keeps on repeating the same mantras over and over that somehow they will become true. Bernanke insists that the economy is getting much better, that quantitative easing will lower long-term interest rates, that all of this money printing by the Federal Reserve is not causing inflation and that the Fed knows exactly what needs to be done to dramatically reduce unemployment inside the United States.  So is anyone out there still actually buying what Bernanke is selling?  Sure, a handful of people in the mainstream media still have complete faith in Bernanke.  But for the rest of us, it is becoming increasingly clear that there is something really “off” about Bernanke.  So just what is going on with him?  Is he lying to all of us on purpose?  Could he be insane?  Is he just completely and totally incompetent?

Bernanke’s track record of failure is absolutely stunning.  Before discussing some of his most recent comments, let’s review some of the pearls of wisdom that Bernanke has shared with us in recent years….

2005:  “House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals.”

2005: “We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.”

2006: “Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”

2007: “At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”

2007: “It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions.”

2008: “The Federal Reserve is not currently forecasting a recession.”

So should we believe anything that Bernanke is saying now?

Of course not.

Obviously Bernanke has been feeding us all a whole bunch of nonsense for a very long time.

So what conclusion should we come to about Bernanke at this point?

Well, as I see it, there are three primary alternatives….

1 – Bernanke knows that what he is telling us is wrong and he is purposely trying to deceive us.  That would make him a liar.

2 – Bernanke actually believes what he is saying because he is completely delusional.  That would make him a lunatic.

3– Bernanke actually believes what he is saying because he simply does not understand economics.  This would make him completely and totally incompetent.

In any event, someone with Bernanke’s track record should not still have such a high level job.  He should have been asked to resign long, long ago.

But instead, Obama nominated him for another term and he was approved by our incompetent Congress.

It is a crazy world in which we live.

So what is Bernanke saying now?

Let’s take a look at some of his main points…..

Bernanke Says That One Of The Main Goals Of Quantitative Easing Is To Reduce Long-Term Interest Rates

During one interview about QE2, Bernanke made the following statement….

“The money supply is not changing in any significant way. What we’re doing is lowering interest rates by buying Treasury securities.”

In fact, Bernanke elaborated on that point during his remarks on Wednesday….

Conventional monetary policy easing works by lowering market expectations for the future path of short-term interest rates … By comparison, the Federal Reserve’s purchases of longer-term securities do not affect very short-term interest rates, which remain close to zero, but instead put downward pressure directly on longer-term interest rates.  With the Fed funds rate at the zero bound, the Fed had to resort to unconventional policy to provide further accommodation.

So how is all that working out?

Terribly.

The yield on 10-year U.S. Treasury notes has risen from 2.49 percent back in November to 3.65 percent at the close of business on Wednesday.

Oops.

Long-term interest rates were supposed to go down as a result of quantitative easing, but instead they have increased substantially.

Looks like Bernanke was wrong about another one.

Bernanke Says That Quantitative Easing Is Not Going To Cause Inflation

The price of wheat has roughly doubled since last summer, the price of corn has roughly doubled since last summer and the price of oil is marching up towards $100 a barrel.

But oh, there is no inflation so there is no need to worry according to Bernanke.

Food riots are breaking out around the globe, but Bernanke says that the inflation in those countries is being caused by their own central banks.

Bernanke says that the Federal Reserve has nothing to do with international inflation even though the U.S. dollar is the primary reserve currency of the world.

Bernanke says that even though consumers are seeing huge price increases in the supermarket and at the gas pump that we aren’t really seeing any real inflation because the fraudulent U.S. consumer price index says so.

It is a wonder that anyone still considers this guy to be credible.

Bernanke Says That Quantitative Easing Is Helping The Economy Recover And Is Reducing Unemployment

During his remarks on Wednesday, Bernanke said that the recent decline in the U.S. unemployment rate was “grounds for optimism”.

And, of course, he is glad to take part of the credit for the “recovery”.

Oh really?

Things are getting better?

As I wrote about a few days ago, the “decline” in the U.S. unemployment rate during January to 9.0% is no reason to celebrate.

First of all, the U.S. economy must add 150,000 jobs each month just to keep up with population growth.

During January, the U.S. economy only added 36,000 jobs.

So why did the unemployment rate go down?

Well, the U.S. government said that 504,000 American workers “dropped out of the labor force” in January.

Well, isn’t that convenient.

Let’s just pretend a half million unemployed workers are not even there.

Yeah, that will make the numbers look better!

Sadly, the number of Americans that are “not in the labor force” but that would like a job right now has hit an all-time record high.  If you add all of those people into the official unemployment figure it would jump to 12.8%.

The truth is that the employment situation in America is not getting any better.  In fact, according to Gallup, the unemployment rate actually increased to 9.8% at the end of January.

Perhaps Bernanke should reconsider how much “better” things are really getting.

Bernanke Says That Now Is Not The Time To Reduce The Deficit

When it comes to the national debt, Ben Bernanke is constantly talking out of both sides of his mouth.

Bernanke is constantly saying that the exploding U.S. national debt is very dangerous (and he is very right about that point), but Bernanke also says that now is definitely not the time to do anything about it.

In fact, recently Bernanke has been purposely stepping into the partisan debate about whether to raise the debt ceiling or not.

Bernanke says that Republicans should stand down and that now is not the time to be playing political games with the debt ceiling.  Bernanke has been warning that the consequences for not raising the debt ceiling could be catastrophic….

“We do not want to default on our debts. It would be very destructive.”

Over and over Bernanke has been saying that the economic recovery is still fragile and that now is not the time be cutting deeply into the federal budget.

So when is the right time?

Well, with these central bankers it seems like it is never time to address all of this debt.  It seems like they always want us to “have a long-term plan” to tackle the debt in the future but to keep borrowing and spending in the present.

Well, it looks like that is exactly what the Obama administration plans to keep doing.  This year it is being projected that the U.S. government will have the biggest budget deficit ever recorded – approximately 1.5 trillion dollars.

Keep in mind that the total U.S. national debt did not surpass 1.5 trillion dollars until the mid-1980s.

That means that this year we will accumulate more debt than we did for over the first 200 years that this nation was in existence.

Oh, but according to Bernanke we better not do anything to address our out of control debt because that would “harm the economic recovery”.

In the end, all of this government debt is going to become so monstrous that it is going to swallow us whole.  We can try to keep running from it, but we can’t hide.  Someday the gigantic debt monster that we have created is going to catch up with us.

So, yes, there are a whole lot of reasons to be really upset with Ben Bernanke.

Perhaps he would be a fun guy to sit down and talk to at a backyard barbecue, but he isn’t the type of person that you would want to entrust with any real responsibility, and he most definitely is not someone that should be running the largest economy in the history of the planet.

The Riots In Egypt And The Price Of Oil

As if the world economy did not have enough problems already, now the riots in Egypt threaten to send the price of oil soaring into the stratosphere.  On Friday, the price of U.S. crude soared 4 percent.  A 4 percent rise in a single day is pretty staggering.  The price of Brent crude in London closed just under the magic $100 a barrel mark at $99.42.  The incredibly violent riots in Egypt have financial markets all over the globe on edge right now.  Any time there is violence or war in the Middle East it has a dramatic impact on financial markets, but this time things seem even more serious than usual.  Many believe that we could see an entirely new Egyptian government emerge out of this crisis, and the uncertainty that would bring would make investors all around the globe nervous.  Financial markets like predictability, peace and security.  If Egyptian President Hosni Mubarak’s 30 year reign is brought to an end, it will severely shake up the entire region, and that will not be good news for the global economy.

Have you seen how violent these protests have become?  Cars and buildings are on fire all over the place.  Even the headquarters of Hosni Mubarak’s political party was burned down.  The Egyptian military has been deployed on the streets of Cairo.  Protesters have been showering government forces with stones, firebombs and anything else that they can find to throw.  Security forces have been using rubber bullets, water cannons and tear gas to try to disperse the protesters but those efforts seem to be doing little good.  Deaths and injuries are being reported all over the place.  There are even rumors that the wife and son of Hosni Mubarak have already left the country.

At this point, Mubarak has gone on national television and has announced that he has asked his cabinet to resign.  That is an absolutely stunning move, but it is doubtful that the protesters will be satisfied.  All over Cairo protesters continue to chant for Mubarak to resign.

The following is a short compilation of some raw video from the riots in Egypt….

These riots in Egypt come on the heels of violent uprisings in Algeria and Tunisia.  In fact, it seems like virtually the entire Middle East is in a very foul mood right now.  Riots have been reported in Lebanon, in Jordan and in Yemen over the past few days.

Some of the rioting has been motivated by economic factors, but unfortunately all of this rioting is only going to make the global economic situation even worse.  Concern over all of these riots is driving up the price of oil and driving up the prices of agricultural commodities.  These higher prices are going to make it even harder for the poor people in the Middle East to afford food.

But also it must be acknowledged that much of this rioting is being done for very deep political and religious reasons as well.  Many westerners are cheering the protests in Egypt because they envision the protesters to be some sort of “freedom fighters”.  But the vast majority of these protesters do not desire “American-style democracy”.  The Muslim Brotherhood is one of the groups at the heart of these protests.  The government that they intend to set up would not give “liberty and freedom for all”.  Rather, it would be a hardline Islamic government based on Shariah law.  According to Wikipedia, the Muslim Brotherhood bills itself as the “world’s most influential Islamist movement”, and their goal is to impose their version of Islam on society….

The Brotherhood’s stated goal is to instill the Qur’an and Sunnah as the “sole reference point for … ordering the life of the Muslim family, individual, community … and state”

So unless your version of “freedom” includes being forced to live like the Taliban, then you probably would not enjoy the “liberty” that the Muslim Brotherhood wishes to impose on you.

Coptic Christians all over Egypt are already being slaughtered even with a relatively pro-western president in power.  On New Year’s Day, an attack on a Coptic Christian church in Egypt killed 21 people.  The following is how one eyewitness described the scene to a reporter from the New York Times….

“There were bodies on the streets,” said Sherif Ibrahim, who saw the blast’s aftermath. “Hands, legs, stomachs. Girls, women and men.”

Once a radical Islamic government is installed in Egypt it will be open season on all Christians.

Yes, there is a whole lot of blame to be passed around to other nations, organizations and individuals in the Middle East for things they have done as well, but that does not excuse the horrific persecution of the Coptic Christians in Egypt.

We have to call a spade a spade.  We cannot condemn some forms of tyranny and persecution and then make excuses for other forms of tyranny and persecution just because those doing it are on “our side”.

Replacing one form of tyranny (Mubarak) with an even more repressive form of tyranny (The Muslim Brotherhood) is not something that those who love liberty and freedom should be celebrating.

In any event, everyone should be able to agree that these events are going to severely rattle world financial markets that were already very nervous about 2011.

If these violent riots in Egypt and other countries in the Middle East keep going on, the global price of oil and the global price of food will continue to soar.

Not that oil and food were not going to be heading in that direction anyway.  Yesterday I wrote about the warning signs for the global economy that we are starting to see.  Wheat and corn have absolutely skyrocketed in price over the past 6 months.  The UN had already been projecting that we would see a 30 percent increase in the global price of food in 2011 even before these riots.

If you add rampant political instability into the mix, there is no telling how bad food inflation could get this year.

Many experts have already been forecasting substantial food shortages throughout the world this year based on all the extreme weather we have been having.  So what is going to happen if something causes those food shortages to be even worse than anticipated?

We live in very interesting times my friends.  The globe is becoming an increasingly unstable place.  Even nations that seemed perfectly stable just a few months ago can erupt in rioting at almost any moment.

People around the world are getting angry.  Thanks to the Internet, people are able to circumvent official government propaganda more easily than ever before.  This is making it harder and harder for governments to control people.

Egypt tried to regain some of that control during the riots by shutting down cell phones and by shutting down the Internet but it did not work.

Let’s just hope that Egypt can soon find peace and that the changes that are made in the Egyptian government are good for freedom and liberty.

Warning Signs

Do you see all of the warning signs that are flashing all around you?  These days it seems like there is more bad economic news in a single week than there used to be in an entire month.  2011 is already shaping up to be a very dark year for the world economy.  The price of food is shooting through the roof and we have already seen violent food riots in countries like Egypt, Algeria and Tunisia.  World financial markets are becoming increasingly unstable as the sovereign debt crisis continues to get worse.  Meanwhile, the number of Americans applying for unemployment benefits is up, foreclosures are up and poverty continues to spread like a plague throughout the United States.  What we are starting to see around the globe is a lot like the “stagflation” of the 1970s.  All of the crazy money printing that has been going on is overheating prices for agricultural commodities and precious metals, but all of this new money is not doing much to help the average man or woman on the street.

Do you remember what the economy was like in America during the 70s?  We had high unemployment and high inflation at the same time.  It was horrible.  Well, all the warning signs are there for a stagflation repeat.  Unemployment is at epidemic levels and it isn’t showing any signs of decreasing much any time soon.  Meanwhile, the crazy money printing that the Federal Reserve and other central banks have been doing is starting to cause significant inflation.  The price of oil is about to cross the 100 dollar a barrel mark and the UN is forecasting that the global price of food is going to increase by 30 percent by the end of the year.

So, yes, there are some really, really good reasons to be incredibly concerned about the global economy in 2011.

Meanwhile, the only solutions that our global leaders seem to be offering are more money printing, more government debt and more financial control by international organizations.

The truth is that we have a real mess on our hands.  The following are 20 economic warning signs that should be of great concern to all of us….

#1 Over the past seven days, the price of wheat has risen by 11 percent as concerns about food shortages continue to grow around the world.

#2 The price of corn is up a staggering 94 percent since last June.

#3 The United Nations is projecting that the global price of food will increase by 30 percent in 2011.

#4 According to the U.S. Department of Labor, the number of Americans applying for unemployment benefits rose last week to the highest level since last October.

#5 According to the Pew Charitable Trusts, of the 14 million Americans “officially” unemployed in December, 30% of them had been unemployed for one year or longer.

#6 Beginning in the month of March, the U.S. Postal Service will begin shutting down up to 2,000 post offices across the United States.

#7 In an absolutely stunning move, Standard & Poor’s has downgraded Japanese government debt from AA to AA-.

#8 72 percent of the major metropolitan areas in the United States had more foreclosures in 2010 than they did in 2009.

#9 Approximately 5 million homeowners in the United States are at least two months behind on their mortgages, and it is being projected that over a million American families will be booted out of their homes this year alone.

#10 According to the Congressional Budget Office, the Social Security system will run a deficit of 45 billion dollars this year.  When the new payroll tax breaks are factored in, the projected “Social Security deficit” for this year swells to 130 billion dollars.

#11 The U.S. money supply has been rising at a pace that is absolutely unprecedented.

#12 Right now, money is flowing out of bonds at an absolutely staggering pace.

#13 The U.S. Bureau of Labor Statistics says that the price of food increased 50 percent faster than the overall rate of inflation during 2010.

#14 According to the U.S. Conference of Mayors, visits to soup kitchens are up 24 percent over the past year.

#15 During the last school year, almost half of all school children in the state of Illinois came from families that were considered to be “low-income”.

#16 Those living in the town of Discovery Bay, California will soon not be permitted to use cash to pay for any public services.  Could this be another disturbing step in the direction of a cashless society?

#17 French President Nicolas Sarkozy says that the IMF should be given the power to enforce new rules that would be designed to prevent “global economic imbalances” from happening.

#18 The U.S. government is currently borrowing about 40 cents of every single dollar that it spends.

#19 According to the Congressional Budget Office, the U.S. government will have the biggest budget deficit ever recorded (approximately 1.5 trillion dollars) this year.

#20 It is being projected that the U.S. national debt will increase by $150,000 per U.S. household between 2009 and 2021.

So is there any good news?

Well, yes there is.

U.S. Representative Ron Paul has introduced a new bill to audit the Federal Reserve.  Let us hope that the move to audit the Fed fares better in the 112th Congress than it did in the 111th Congress.  It would be wonderful if the American people could actually learn what has been going on inside the Fed all this time.

But mostly the news about the global economy is really bad.  There have been some people that have been warning for decades that all of this money printing and all of this government debt would eventually catch up with us.  Now we have almost reached the moment of reckoning that the doomsayers have been warning about for so long, and it is going to be really painful to go through it.

Thanks to the greatest debt bubble in the history of the world, we have been living beyond our means for decades.  When “times were good” it was not because either the Republicans or the Democrats were doing something right.  The truth is that both political parties have been horribly addicted to government debt.  The debt-fueled prosperity that our politicians purchased for us is starting to come to an end, and an economic implosion is coming that most Americans will never see coming.

But hopefully most of the readers of this article are much wiser than the average American.  The warning signs are there.  Now is the time to take action and get prepared.

Shut Down The Federal Reserve, Break Up The Big Banks And 16 Other Ideas Barack Obama Could Have Proposed If He Actually Wanted To Fix The Economy

How do we fix the economy?  That is a question that tens of millions of Americans are asking right now.  Republicans are harshly criticizing the empty economic proposals being put forward by Barack Obama and the Democrats, but the Republicans don’t seem to have any real solutions either.  There is talk of cutting taxes a little bit more, reducing federal spending a little bit and getting rid of a few useless federal regulations but doing any of those things would essentially be like spitting into Niagara Falls – the effect would not really be noticeable at all.  As this column has documented over and over and over, the economic and financial problems that we are facing are so enormous that radical solutions are needed.  In essence, what we need is not an “economic bandage” or two – what we need is major reconstructive surgery.  If dramatic action is not taken, our economy is going to completely collapse.

Is anything that Barack Obama is currently proposing going to help fix the economy?  No, of course not.  As I wrote about the other day, Obama’s address to the nation was packed with empty promises and a whole lot of inspirational nonsense.  There were no real solutions to the very real problems we are facing.

So is there anything that we could do to actually start fixing things?

Yes, but the solutions are radical.  They would cause quite a bit of chaos.  They would not be easy for people to accept.

But the truth is that our economy and our financial system have terminal cancer.  If something radical is not done quickly we are going to lose the patient.

The following are 16 ideas that Barack Obama could have proposed if he actually wanted to fix the economy….

#1 We Must Shut Down The Federal Reserve

If you are not willing to accept this, you may as well not read the rest of the solutions.  The truth is that the U.S. government will never be able to solve the national debt problem until the Federal Reserve is shut down.  The U.S. government should nationalize all Federal Reserve assets and start issuing currency that is completely and totally debt-free.

Under such a system, it is conceivable that U.S. budget deficits could be eliminated entirely and that over time the entire U.S. government debt could be retired.

One of the biggest threats of going to such a system would be inflation, but remember, the United States has only had a major, ongoing problem with inflation since the Federal Reserve was created back in 1913.  The U.S. dollar has lost well over 95 percent of its value since the Federal Reserve was created, and so it is hard to imagine that we would do even worse without the Federal Reserve.

In any event, it is the fundamental right of any sovereign nation to be able to issue and control its own currency.  This right was given to the U.S. government by the U.S. Constitution and it is time for the U.S. government to reclaim that right.

#2 We Must End Trade With All Nations That Allow Their Citizens To Be Paid Slave Labor Wages Or That Do Not Respect Basic Human Rights

This would dramatically reduce the “outsourcing” of our jobs and our industries almost overnight.  The truth is that it was never a good idea to put American workers in direct competition with hundreds of millions of workers that are making slave labor wages on the other side of the globe.

Trading with nations that have a similar wage structure to ours and that respect basic human rights (Canada, for example) is a very good thing.  However, all of the “free trade” agreements that politicians from both parties have been pushing down our throats for decades are literally wrecking the U.S. economy.

Since 2001, over 42,000 factories have been shut down in the United States.  This proposal would go a long way towards stopping the bleeding, and if some of these countries are willing to raise their wage levels significantly then we would be able to resume trade with them in the future on a much more level playing field.

#3 We Must Radically Reduce The Size Of The Federal Government

Our big, fat government is a big, fat drain on our economy.  We have millions of paper pushers that don’t contribute much of anything of real value.

Not only that, but some of the things that the U.S. government wastes money on are absolutely mind blowing.  There is a reason why our founders insisted that we have a very limited government.  It is time to get back to those principles.

The Congressional Budget Office is projecting that the U.S. government budget deficit for this year will be nearly $1.5 trillion.

Talk about ridiculous!

I estimate that we could easily cut the size of government in half without hampering how effective it is.

We could start by abolishing the Department of Education.  After that, there are several dozen other government agencies and institutions which are worthy candidates for elimination.

#4 We Must Provide Temporary Jobs For The American People During The Economic Transition

If the Federal Reserve is shut down and the size of the federal government is cut in half, it would cause quite a bit of economic chaos.  During this transition it will be important to help people survive.

Instead of just passing out a bunch of handouts, a better alternative would be getting the American people working on something constructive.

During this time, the U.S. government could use all of the untapped labor of the unemployed to build massive infrastructure projects.

According to the American Society of Civil Engineers, we need to spend approximately $2.2 trillion on infrastructure repairs and upgrades just to bring our existing infrastructure up to “good condition”.

So there is certainly a lot to do.

These jobs would just be temporary until new manufacturing facilities are set up and jobs in private industry are plentiful again.

Having the American people produce something of value is better than just handing them endless unemployment checks.

#5 We Must Ban All Short Selling

When you allow greedy individuals the opportunity to make lots of money by betting against the U.S. economy, it gives those individuals an incentive to make sure that those bets pay off.

Yes, this proposal is controversial, but it just makes sense.  If people want to make money, it should be because a company is doing well and not because someone is failing.

#6 We Must Ban Virtually All Derivatives

Once upon a time, derivatives were for hedging risk, but that is not what they are primarily being used for anymore.

Now derivatives are being used to bet on almost anything that you can possibly imagine.

Our financial markets have been turned into a gigantic financial casino.

The derivatives bubble is somewhere in the neighborhood of one quadrillion dollars and it could burst at any moment.

These weapons of financial mass destruction must be banned.

#7 We Must Break Up The Big Wall Street Banks

The big Wall Street banks have far too much power and far too much control.  They have come to dominate our entire financial system.

In a capitalist system, too much power concentrated in too few hands is not a good thing.  The corruption that has gone on at many of these institutions is absolutely unbelievable.

These banks need to be broken up into much smaller pieces for the good of our country.

#8 We Must Initiate A Massive Law Enforcement Crackdown On Our Financial Markets

As noted above, the corruption that has been going on down on Wall Street has been absolutely sickening.  We need a massive law enforcement crackdown on all of this fraud in order to restore faith in the financial system.

Just one small example of this corruption happened during the recent housing crash.  Goldman Sachs sold mortgage-related securities that were absolute junk to trusting clients at vastly overinflated prices and then made huge profits betting against those exact same securities.

So do you think that Goldman Sachs or any of the other major players on Wall Street will ever receive more than a slap on the wrist for all the things that have gone on in recent years?

Of course they won’t – unless the American people start demanding it.

#9 We Must Order U.S. Oil Companies To Use Untapped Oil Reserves In The United States And We Must Aggressively Develop Alternative Energy Sources

Right now, the price of oil is pushing up towards 100 dollars a barrel.  If oil passes that mark, it is going to put tremendous inflationary pressure on the entire global economy.

Sadly, there is no need for such a high price for oil.  There are vast, vast reserves of oil that are virtually untapped inside the United States.  These are mostly in the western states and up in Alaska.  We have enough to supply very cheap oil to the entire country for decades.

The U.S. government needs to order these oil companies to quit playing games and to start pumping this oil.

However, it is undeniable that we also need to develop alternative energy sources.  In fact, we should set up a “Manhattan Project”-style team to aggressively pursue this goal.

In the past, U.S. oil and car companies have blatantly repressed alternative energy projects.  The U.S. government should tell U.S. corporate executives that if they ever even think of doing such a thing again that they will be locked away so fast that it will make their heads swim.

#10 We Must Stop Paying Farmers Not To Grow Food

Instead of paying farmers not to grow food, we need to find ways to encourage them to grow as much food as possible.  A horrible global food crisis is coming and we are going to need huge stockpiles of everything.

#11 We Must Secure The U.S. border With Mexico

Illegal immigration costs the U.S. economy tens of billions of dollars (conservatively) every single year.  We need to secure the border and make sure that all of our immigrants are coming through the “front door”.

#12 We Must Shut Down The IRS

Did you know that the United States has only had an income tax for less than 100 years?  For most of our history, the U.S. government got along just fine without taxing personal income.

The IRS is massive waste of time, energy and resources.  There are many alternatives that could easily replace the income tax and the ridiculous tax code that we have right now.

For example, a flat tax or a national sales tax could both potentially work, although both have their problems.

Personally, I am convinced that we could have a system that would not require any taxation of income by the U.S. government whatsoever.

Just imagine how much time, how much energy and how many resources would be saved!

#13 We Must Slash Red Tape And The Miles Of Ridiculous Regulations

In the United States today, you almost have to be insane to start up a new business.  When you consider all sources of taxation, U.S. businesses face one of the highest overall levels of taxation in the entire world.  Not only that, but U.S. businesses face miles and miles of absolutely ridiculous regulations and red tape.

As I wrote about in a previous article, if you want to do business in the United States today, you better be prepared for a regulatory nightmare….

If you plan to start a business in America today, you better get a hold of a good lawyer.  In fact, if you want to be safe, you better get a small army of lawyers.  You are going to need an expert on the federal regulations that apply to your business, you are going to need an expert on the state regulations that apply to your business and you are going to need an expert on the local regulations that apply to your business.

There are going to literally be thousands of regulations that apply to any business started inside the United States today.  There is no way that you will ever be able to learn them all.  Not only that, but the truth is that your lawyers will only be aware of a small fraction of them.

Until the regulatory environment in this country dramatically changes, companies are going to continue to be motivated to leave the United States.

#14 We Must Conduct A Massive Law Enforcement Crackdown On The Health Care Industry

It should not cost $30,000 for a one day stay in the hospital in this country.

The truth is that the American people are being ripped off big time.

We need to conduct a massive law enforcement crackdown on all the big hospitals and all the big health care companies.

We need to conduct a massive law enforcement crackdown on all the big health insurance companies.

We need to conduct a massive law enforcement crackdown on all the big pharmaceutical companies.

We also need massive medical malpractice reform.

Not only that, we also should end the monopoly of the AMA immediately.  We need to reintroduce honest, legitimate competition back into the medical system.

In addition, we need to make sure that natural health practitioners are able to compete on a fair and equal basis in this country.

As I have written about previously, the health care industry in the United States has become all about making as much money as possible.

That must change.

#15 We Must Stop Trying To Police The World

We will always need a very strong military force, but it is absolutely ridiculous that we have troops stationed in approximately 130 different countries today.

This is a tremendous drain on our national resources and we are spread way too thin militarily.  It is about time that many off these other countries started protecting themselves for a while.

#16 We Must Pull Out Of The United Nations And We Must Dramatically Reduce Foreign Aid

The United Nations is a massive waste of time, energy and resources.  We should have pulled the plug on that ridiculous globalist organization long before now.

In addition, we need to dramatically cut back on foreign aid until we get our own house in order.  We should only help the most desperate nations until we get our own economy back on track.

#17 We Must End All Of The Ridiculous Police State Measures Which Are Chasing Tourists Away From Our Soil

Tourism is a very, very important industry to the United States.  But today, all of the incredibly intrusive police state measures that the past few administrations have introduced are chasing millions of tourists away and are ruining our national reputation.

For example, there are many cultures around the globe where it would be unthinkable to have anonymous security goons feel up the private areas of women and children before they are allowed to get on an airplane.  Rather than put up with such nonsense, millions of tourists are simply going to choose to spend their money somewhere else.

#18 We Must Seize The Assets Of The Ultra-Wealthy Individuals And International Banks That Have Been Committing Fraud Against The U.S. Government For Decades

Once the Federal Reserve is shut down, it will be important to hold those that have been defrauding the U.S. government responsible.  Once a full audit of the Federal Reserve is conducted and evidence of criminal activity is uncovered, those involved should be arrested and all of their assets should be seized and frozen pending trial.

If the things that have been going on inside the Federal Reserve are ever fully exposed, it will make the whole Bernie Madoff scandal look like a nickel and dime operation.

But that is why there has never been a full, comprehensive audit of the Federal Reserve since it was created back in 1913.  The American people are not supposed to see what happens inside that institution.

Unfortunately, even though economic times are a little rough, things are still good enough that the vast majority of Americans are not ready to start demanding the kind of radical changes listed above.

Not only that, but the kind of radical changes listed above would be fought against by the establishment every step of the way.  Those with money and power are not going to step aside just because “justice” demands it.

What is probably going to happen is that the “establishment politicians” that the establishment has bought and paid for are just going to continue to propose half-baked solutions to our problems as this country continues to tumble towards economic oblivion.

So what do all of you readers think?  Is there hope that someday we will see some real economic solutions implemented in this country?

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