Mortgage Debt

Foreclosure Fraud: 6 Things You Need To Know About The Crisis That Could Potentially Rip The U.S. Economy To Shreds

The foreclosure fraud crisis seems to escalate with each passing now.  It is being reported that all 50 U.S. states have launched a joint investigation into alleged fraud in the mortgage industry.  This is a huge story that is not going to go away any time soon.  The truth is that it would be hard to understate the amount of fraud that has gone on in the U.S. mortgage industry, and we are watching events unfold that could potentially rip the U.S. economy to shreds.  Many are now referring to this crisis as “Foreclosure-Gate“, and already it is shaping up to be the worst thing that has ever happened to the U.S. mortgage industry.  At this point, it seems inevitable that some financial institutions will go under as a result of this mess.  In fact, by the end of this thing we might see a whole bunch of lending institutions crash and burn.  This crisis is very hard to describe because it is just so darn complicated, but it is worth it to try to dig into this thing and understand what is going on because it has the potential to absolutely decimate the entire U.S. mortgage industry.

The truth is that there was fraud going on in every segment of the mortgage industry over the past decade.  Predatory lending institutions were aggressively signing consumers up for mortgages that they knew they could never repay.  Many consumers were also committing fraud because a lot of them also knew that they could never possibly repay the mortgages.  These bad mortgages were fraudulently bundled up and securitized, and these securitized financial instruments were fraudulently marketed as solid investments.  Those who certified that these junk securities were “AAA rated” also committed fraud.  Then these securities were traded at lightning speed all over the globe and a ton of mortgage paperwork became “lost” or “missing”. 

Then, when it came time to foreclose on these bad mortgages, a whole bunch more fraud started being committed.  The reality is that the “robo-signing” scandal is just the tip of the iceberg.  The following are six things that you should know about how deep this foreclosure fraud crisis really goes….   

#1 According to the Associated Press, financial institutions were hiring just about whoever they could find, including hair stylists and Wal-Mart employees, as “foreclosure experts” to help them rush through the massive backlog of foreclosures that were rapidly piling up.

Apparently many of these “foreclosure experts” barely even knew what a “mortgage” was according to the AP….

In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn’t define the word “affidavit.” Others didn’t know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers’ accusations about document fraud.

#2 There is soon going to be a colossal legal scramble to figure out who actually owns millions of U.S. mortgages.

In his recent article entitled “Invasion Of The Robot Home Snatchers“, Robert Scheer described the complete and total mess that the U.S. mortgage industry has created….

How do you foreclose on a home when you can’t figure out who owns it because the original mortgage is part of a derivatives package that has been sliced and diced so many ways that its legal ownership is often unrecognizable? You cannot get much help from those who signed off on the process because they turn out to be robot signers acting on automatic pilot. Fully 65 million homes in question are tied to a computerized program, the national Mortgage Electronic Registration Systems (MERS), that is often identified in foreclosure proceedings as the owner of record.

Meanwhile, more organizations are stepping forward to help homeowners fight foreclosures.  National People’s Action, PICO National Network, Industrial Areas Foundation, Alliance of Californians for Community Empowerment and the Northwest Federation of Community Organizations have all partnered with the SEIU to launch the “Where’s The Note” campaign which is going to encourage homeowners to demand to see the note before submitting to a foreclosure.  Campaigns such as this are going to make foreclosures much more costly for banks.

#3 Legal battles over foreclosure documents could soon spawn thousands upon thousands of lawsuits across the United States.

Adam Levitin, a Georgetown University Law professor who specializes in mortgage finance and financial regulatory issues was recently quoted in an article on CNBC as saying the following about the situation we are currently in….

The mortgage is still owed, but there’s going to be a problem figuring out who actually holds the mortgage, and they would be the ones bringing the foreclosure. You have a trust that has been getting payments from borrowers for years that it has no right to receive. So you might see borrowers suing the trusts saying give me my money back, you’re stealing my money. You’re going to then have trusts that don’t have any assets that have been issuing securities that say they’re backed by a whole bunch of assets, and you’re going to have investors suing the trustees for failing to inspect the collateral files, which the trustees say they’re going to do, and you’re going to have trustees suing the securitization sponsors for violating their representations and warrantees about what they were transferring.

#4 The problems with foreclosure paperwork may be more widespread than anyone would have dared to imagine.

Attorney Richard Kessler recently conducted a study in which he found “serious errors” in approximately 75 percent of the court filings related to home repossessions that he examined.  Now he says that the foreclosure crisis could haunt the U.S. mortgage industry for the next ten years….

“Defective documentation has created millions of blighted titles that will plague the nation for the next decade.”

#5 If some banks discover that they are missing the paperwork for large numbers of mortgages (as is currently being alleged), those banks could be forced to significantly revalue those assets (as in “close to zero”) on their balance sheets. 

John Carney of CNBC recently described it this way….

The most damaging thing that could happen to banks would be the discovery that they simply cannot prove they hold a mortgage on a house. In that case, the loan would probably have to be written down to near zero. Even for current loans, the regulatory reserve requirements would double as the loan would no longer be a functional mortgage but an ordinary consumer loan. Depending on the size of the “no docs” portion of the loan portfolio, this might be a minor blip or require a bank to raise new capital to fill the hole in the balance sheet.

#6 Renowned investor Jim Sinclair is actually warning that the collapse of securitized mortgage debt could be the “final shot” that will wipe out many financial institutions across the United States. 

The recent warning that Sinclair posted on his blog is more than a little sobering…. 

I am asking for your attention again because of the depth of the fraud and now the size of the securitized mortgage debt OTC derivative pile of garbage that is in the trillions. This entire mountain of weapons of mass financial and social destruction is now in question. I have been telling you this for more than 2 years since the manufacturers and distributors of this crap were called by the NY Fed due to the loss of control over the paperwork.

I had dinner with my former partner, then lead director of and CEO of Bear Stearns. I could not contain myself so I asked him why he did so much business in OTC derivatives which were certain to bankrupt them. The answer I got was it was more than 50% of their profit. The right answer should have been it was more than 80% of their earnings.

Securitized mortgage debt is going to be the final shot that kills all kinds of financial entities in the Western world. The biggest holder of this putrid junk is pension funds.

Meanwhile, the stock market continues to go up, up, up as if everything is right in the world and as if a juicy new bull market is now upon us.

Well, let’s all join hands and sing happy songs around the campfire.

Perhaps if we all close our eyes and wish real hard all of this foreclosure fraud will just go away.

Then again, maybe not.

Foreclosure-Gate

If you work in the mortgage industry or for a title insurer, you might not want to make any plans for the next six months.  Foreclosure-Gate is about to explode.  It is being alleged that many prominent mortgage lenders have been using materially flawed paperwork to evict homeowners.  Apparently officials at quite a few of these firms have been signing thousands upon thousands of foreclosure documents without even looking at them.  In addition, it is being alleged that much of the documentation for these mortgages that are being foreclosed upon is either “improper” or is actually “missing”.  As lawyers start to smell blood in the water, lawsuits challenging these foreclosures have already started springing up from coast to coast.  In fact, some are already calling Foreclosure-Gate the biggest fraud in the history of the capital markets.  JPMorgan Chase, Ally Bank’s GMAC Mortgage and PNC Financial have all suspended foreclosures in the 23 U.S. states where foreclosures must be approved by a judge.  Bank of America has actually suspended foreclosures in all 50 states.  Now, law enforcement authorities from coast to coast are calling for investigations into this controversy and it could be years before this thing gets unraveled.

This thing just seems to escalate with each passing day.  It is being reported that the attorneys general of up to 40 U.S. states will be working together on a joint investigation into this foreclosure crisis.  Lawmakers in both houses of the U.S. Congress, including Nancy Pelosi and Christopher Dodd, have called for an investigation to begin on the national level.  U.S. Attorney General Eric Holder said last week that he is looking into the issue.  Things are certainly getting very serious out there.  Never before has there ever been such a national focus on foreclosure paperwork.

But apparently there are good reasons for such scrutiny….

*One GMAC Mortgage official admitted during a December 2009 deposition that his team of 13 people signed approximately 10,000 foreclosure documents a month without reading them.

*One Bank of America employee confessed during a Massachusetts bankruptcy case that she signed up to 8,000 foreclosure documents a month and typically did not look them over “because of the volume”.

But the “robo-signing” aspect of Foreclosure-Gate is just the tip of the iceberg.  Apparently there is a whole lot more going on than just a bunch of bad signatures. 

Peter J. Henning, a professor at Wayne State University Law School in Detroit, was recently quoted by MSNBC as saying the following about Foreclosure-Gate….

“You’ve got so many potential avenues of liability. You don’t even know the parameters of this yet.”

The sad truth is that potentially millions of foreclosures across the United States could potentially be invalid because the securitization process has muddied the chain of ownership.  In fact, an increasing number of judges from coast to coast have been ruling that the “owners” of the mortgage have no right to foreclose on a property because they lack clear title.

At the core of this title controversy is MERS – Mortgage Electronic Registration Systems.  MERS is based in Reston, Virginia and it was created by the mortgage industry to enable that big financial firms to securitize and swap mortgages at high speed.  MERS allowed these big financial firms to largely avoid the hassle of filling out more forms and submitting new filing fees every time that a mortgage was traded.

But now MERS is facing some very serious legal challenges.  A recent article in Businessweek described the situation this way….

A lawsuit filed on September 28th in federal court in Louisville on behalf of all Kentucky homeowners claims that MERS was part of a conspiracy to create false promissory notes, affidavits, and mortgage assignments to be used in mortgage foreclosures. Similar class actions have been filed on behalf of homeowners in Florida and New York. Karmela Lejarde, a MERS spokeswoman, declined to comment on any pending litigation.

The reality is that as millions of U.S. mortgages have been bunched together and traded around the globe at lightning speed, it has become increasingly unclear who actually has title to them and who actually has the right to foreclose on these properties.

Title insurers have backed the titles of millions of these foreclosed properties and now potentially find themselves in a heap of trouble.  Some of the biggest title insurers have already begun circling the wagons in an attempt at damage control.  For example, one of the biggest title insurance companies in the United States, Old Republic National Title Insurance, has already declared that it will no longer write new policies for homes that have been foreclosed on by JPMorgan Chase and GMAC Mortgage.

So what happens if nearly all title insurers start avoiding foreclosed properties? 

Won’t that make it much more difficult for the banks to sell the massive backlog of foreclosed properties that they have accumulated?

In addition, Americans that have purchased foreclosed homes may now be facing some serious problems themselves.  Millions of Americans may now “own” homes that they do not have clear title for.  When it comes times to sell those homes, many Americans may find themselves unable to do so. 

Needless to say, this is a complete and total mess.

Already, U.S. banks have a record number of foreclosed properties that they need to clear out, and now all of this scrutiny on foreclosure paperwork and all of these lawsuits are going to grind the process of getting these homes sold off to a standstill.

In fact, the true legacy of Foreclosure-Gate may be the massive amount of bank failures that it causes.

It would be difficult to understate how much of a nightmare Foreclosure-Gate is going to be for U.S. mortgage lenders.  Having to go back through the paperwork of millions of old mortgages is going to be a complete and total disaster.  If banks end up being unable to foreclose on a large number of bad mortgages, it could potentially be enough to put many banks out of commission for good.  Not only that, but the legal fees that many of these banks will accumulate defending lawsuits related to Foreclosure-Gate will be astronomical.

The U.S. mortgage industry was already on the verge of death, and Foreclosure-Gate may just be the straw that broke the camel’s back.

The reality is that U.S. banks are drowning in foreclosures and this current crisis is just going to make things a lot worse.  Back in 2005, there were approximately 100,000 home repossessions in the United States.  In 2009, there were approximately 1 million home repossessions in the U.S. and RealtyTrac is now projecting that there will be an all-time record of 1.2 million home repossessions in the United States this year.

For the U.S. mortgage industry, Foreclosure-Gate must feel like someone has dropped a bomb on them after they have already been beaten up and doused with gasoline.

Attorney Richard Kessler, who recently conducted a study that found serious errors in approximately three-fourths of court filings related to home repossessions, says that Foreclosure-Gate could haunt the U.S. mortgage industry for the next ten years….

“Defective documentation has created millions of blighted titles that will plague the nation for the next decade.”

While it may be easy to beat up U.S. mortgage lenders and say that they deserve all this, let us not forget that this is going to impact a whole lot of other people too.

It is going to become much harder to get a mortgage.  It is going to become much harder to buy a home.  It is going to become much harder to sell a home.  The U.S. housing industry is likely to suffer a significant downturn due to all of this.  There is even a good chance that the entire U.S. economy could be dragged down for an extended period of time.

So no, Foreclosure-Gate is not good news for anyone. 

Well, except maybe for lawyers. 

But for virtually everyone else this is really bad news.  Any hope that the U.S. housing industry would experience a quick recovery is completely and totally gone.

20 Signs That The Economic Collapse Has Already Begun For One Out Of Every Seven Americans

For most Americans, the economic collapse is something that is happening to someone else.  Most of us have become so isolated from each other and so self-involved that unless something is directly affecting us or a close family member than we really don’t feel it.  But even though most of us enjoy a much closer relationship with our television sets than we do with our neighbors at this point, it is quickly becoming undeniable that a fundamental shift is taking place in society.  Perhaps you noticed it when two or three foreclosure signs went up on your street.  Or perhaps it got your attention when that nice fellow down the street lost his job, and he and his family seemingly just disappeared from the neighborhood one day.  The Census Bureau made front page headlines all over the nation this week when they announced that one out of every seven Americans was living in poverty in 2009.  Every single day more Americans are getting sucked out of the middle class and into soul-crushing poverty.   

Unfortunately, most Americans don’t really care because it has not affected them yet.

But this year, millions more Americans will discover that the music has stopped playing and they are left without a seat at the table.

Meanwhile, neither political party has a workable solution.  They just like to point fingers and blame each other.

The Democrats blame Bush for all the poverty and advocate expanding programs for the poor.  Not that there is anything wrong with a safety net.  But the “safety net” was never meant to hold 50 million people on Medicaid and 40 million people on food stamps.  The number of Americans on food stamps has more than doubled since 2007.  So do we just double it again as things get even worse?

The truth is that welfare programs are only short-term solutions.  Unfortunately, the Democrats do not understand this.  What Americans really need are good jobs.

The Republicans are so boneheaded that they don’t even like to talk about poverty because they think it is a “liberal issue”.  Some conservative commentators have even been so brutally cold as to mock the “99ers” (those who have been unemployed so long that even their extended federal benefits have run out).

Instead of showing some compassion and being the party of the American worker (as they should be), the Republicans are often very uncompassionate and they allow the Democrats to be “the party of the poor” by default.

Both political parties need a big wakeup call.  There is a tsunami of poverty sweeping the United States, and somebody better wake up and do something about it.  More handouts will help people get by in the short-term, but there is no way that the federal government can financially support tens of millions more poor Americans.

How long is it going to be before the “safety net” simply collapses under the weight of all this poverty?

The path we are on is not sustainable.

The economy is falling apart, and somebody better wake up and do something before even more Americans find themselves drowning in poverty.

The following are 20 signs that the economic collapse has already begun for one out of every seven Americans…..

#1 The Census Bureau says that 43.6 million Americans are now living in poverty and according to them that is the highest number of poor Americans in 51 years of record-keeping.

#2 In the year 2000, 11.3 percent of Americans were living in poverty.  In 2008, 13.2 percent of Americans were living in poverty.  In 2009, 14.3 percent of Americans were living in poverty.  Needless to say the trend is moving in the wrong direction. 

#3 In 2009 alone, approximately 4 million more Americans joined the ranks of the poor.

#4 According to the Associated Press, experts believe that 2009 saw the largest single year increase in the U.S. poverty rate since the U.S. government began calculating poverty figures back in 1959.

#5 The U.S. poverty rate is now the third worst among the developed nations tracked by the Organization for Economic Cooperation and Development.

#6 Today the United States has approximately 4 million fewer wage earners than it did in 2007.

#7 Nearly 10 million Americans now receive unemployment insurance, which is almost four times as many as were receiving it in 2007.

#8 U.S. banks repossessed 25 percent more homes in August 2010 than they did in August 2009.

#9 One out of every seven mortgages in the United States was either delinquent or in foreclosure during the first quarter of 2010.

#10 There are now 50.7 million Americans who do not have health insurance.  One trip to the emergency room would be all it would take to bankrupt a significant percentage of them.

#11 More than 50 million Americans are now on Medicaid, the U.S. government health care program designed principally to help the poor.

#12 There are now over 41 million Americans on food stamps.

#13 The number of Americans enrolled in the food stamp program increased a whopping 55 percent from December 2007 to June 2010.

#14 One out of every six Americans is now being served by at least one government anti-poverty program.

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

#16 According to an analysis by Isabel Sawhill and Emily Monea of the Brookings Institution, 10 million more Americans (including 6 million more children) will slip into poverty over the next decade.

#17 According to a recently released Federal Reserve report, Americans experienced a $1.5 trillion loss in combined household net worth in the second quarter of 2010.

#18 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.

#19 Median U.S. household income is down 5 percent from its peak of more than $52,000 in 1999.

#20 A study recently released by the Center for Retirement Research at Boston College University found that Americans are $6.6 trillion short of what they need for retirement.

How anyone can look at those numbers and think that things are about to “get better” absolutely boggles the mind.

It is time to wake up.

Things are not going to get better.

Things are only going to get worse.

The United States is rapidly becoming a nation where poverty is absolutely rampant.

As poverty continues to spread, crime will not be far behind.

Meanwhile, the international community wants to impose a global tax on us so that they can “redistribute” even more of our wealth around the world.

The following was just reported by CNSNews.com….

A group of 60 nations will meet next week at the United Nations to push for a tax on foreign currency transactions as a way to generate revenue to meet global poverty-reduction goals, including “climate change” mitigation.

Well isn’t that great?  As American descends into poverty, the rest of the world is pushing for a global tax that will drain us of wealth even more.

It is just a tax on foreign currency transactions, but history has taught us that once taxers get their foot in the door they always go for more eventually.

Sadly, it is not just the United Nations that is discussing a global tax.  In fact, the IMF and the World Health Organization have both been very open about the fact that they want to impose global taxes of their own.

Not that we aren’t taxed enough already.  We already pay dozens of different kinds of taxes each year, and 2011 is already being dubbed as “the year of the tax increase“.

But most Americans don’t have any more to give.  Most Americans can barely make it from month to month.  More Americans than ever are slipping into poverty. 

What a mess we have on our hands.

Do any of you have any suggestions for how we should go about fixing all of this?

15 Shocking Poverty Statistics That Are Skyrocketing As The American Middle Class Continues To Be Slowly Wiped Out

The “America” that so many of us have taken for granted for so many decades is literally disintegrating right in front of our eyes.  Most Americans are still operating under the delusion that the United States will always be “the wealthiest nation” in the world and that our economy will always produce large numbers of high paying jobs and that the U.S. will always have a very large middle class.  But that is not what is happening.  The very foundations of the U.S. economy have rotted away and we now find ourselves on the verge of an economic collapse.  Already, millions upon millions of Americans are slipping out of the middle class and into the devastating grip of poverty.  Statistic after statistic proves that the middle class in the United States is shrinking month after month after month.  Meanwhile, millions of Americans are starting to wake up and are beginning to realize that we have very serious problems on our hands, but they have no idea what is causing our economic distress and they are unaware that most of our politicians have absolutely no idea how to fix the economic disaster that we have created.

On the mainstream news, the American people are treated to endless footage of leaders from both political parties proclaiming that the primary reason that we are in the midst of such an economic mess is because of what the other political party has done.

Republicans proclaim that we are experiencing all of this economic chaos because of the Democrats.

Democrats proclaim that we are experiencing all of this economic chaos because of the Republicans.

Even many readers of this column (who are generally more educated and more informed than most average Americans) leave comment after comment blaming either the Democrats of the Republicans for our current economic mess.  

But do you really want to know who is to blame for our economic problems?

Both of them.

This economic nightmare has taken literally decades to develop, and both Democrats and Republicans have contributed greatly to this disaster.

Both parties have absolutely refused to stand up to the Federal Reserve and the horrific economic policies that they have been shoving down our throats for decades.

Both parties have stood idly by as the U.S. trade deficit has absolutely exploded in size and the United States has become significantly poorer month after month after month.

Both parties have refused to do anything as month after month after month large numbers of factories and good paying jobs leave the United States.

Both parties have shoved the spending accelerator to the floor when they have been in power and now we have the largest national debt in the history of the world.

Both parties have done essentially nothing as the health care industry, which was once the envy of the world, has degenerated into a cesspool of corruption and greed and now seems designed to do little more than to provide pharmaceutical companies and health insurance crooks with obscene profits. 

If factories keep leaving the United States and jobs keep leaving the United States and the federal government keeps going into more debt and state governments keep going into more debt and local governments keep going into more debt, then things are going to keep getting worse. 

It does not take a genius to figure that out.

The United States is continually getting poorer and is continually going into more debt.

Can anyone out there explain how that is a formula for economic prosperity?

Seriously.

Can anyone explain how that would work?

Please leave a comment and explain that to all of us if you can.

The truth is that as wealth continues to leave the United States and as the U.S. gets even deeper into debt, more Americans are going to become poor.

It really is that simple.

The following are 15 shocking poverty statistics that are skyrocketing as the American middle class continues to be slowly wiped out….

#1 Approximately 45 million Americans were living in poverty in 2009.

#2 According to the Associated Press, experts believe that 2009 saw the largest single year increase in the U.S. poverty rate since the U.S. government began calculating poverty figures back in 1959.

#3 The U.S. poverty rate is now the third worst among the developed nations tracked by the Organization for Economic Cooperation and Development.

#4 According to the U.S. Department of Agriculture, on a year-over-year basis, household participation in the food stamp program has increased 20.28%.

#5 The number of Americans on food stamps surpassed 41 million for the first time ever in June.

#6 As of June, the number of Americans on food stamps had set a new all-time record for 19 consecutive months.

#7 One out of every six Americans is now being served by at least one government anti-poverty program.

#8 More than 50 million Americans are now on Medicaid, the U.S. government health care program designed principally to help the poor.

#9 One out of every seven mortgages in the United States was either delinquent or in foreclosure during the first quarter of 2010.

#10 Nearly 10 million Americans now receive unemployment insurance, which is almost four times as many as were receiving it in 2007.

#11 The number of Americans receiving long-term unemployment benefits has risen over 60 percent in just the past year.

#12 According to one recent survey, 28% of all U.S. households have at least one member that is looking for a full-time job.

#13 Nationwide, bankruptcy filings rose 20 percent in the 12 month period ending June 30th.

#14 More than 25 percent of all Americans now have a credit score below 599.

#15 One out of every five children in the United States is now living in poverty.

As millions more Americans continue to climb on to the “safety net”, how long is it going to be before it breaks?

The reality is that the system can only support so many people.  We are now at a point where our anti-poverty programs are clearly unsustainable in the long-term, but nobody has a solution for how we are going to get all of these people off of these programs or how we are going to provide good jobs for all of them.

The cost of every U.S. government anti-poverty program is absolutely soaring.  Meanwhile, the U.S. government is already running a budget deficit that is approaching 1.5 trillion dollars every year.  If you cannot understand that we have a very serious problem on our hands then you are probably not awake.

The U.S. economic system is dying.  Blaming the other political party is not a solution.  Running around the country offering “hope” and “change” and giving people a vague sense that things will get “better” soon is not going to cut it either.

The American people need very real economic solutions to very real economic problems. 

But nearly all of our politicians are way too busy either trying to get elected or trying to stay in office to tackle the very serious problems which are destroying our economy.

Unfortunately, the American people love to watch our politicians play politics.  They love to watch the little ping-pong ball of blame go back and forth.  They love to pick sides and to cheer for their “team”.

None of that is doing any good.  Right now millions of Americans are getting sucked into poverty each year and neither major political party is doing anything real to address the very real economic problems that are causing that to happen. 

But most Americans have become so “dumbed down” that they don’t even understand what the real problems are anymore.

All most Americans seem to want these days is to watch a good show.

So send in the clowns.

There are certainly enough of them in Washington D.C. to keep Americans entertained for quite a long time.

The Green Police

Is someone out behind your house digging through your trash?  Don’t worry, it is probably just the government.  When Audi ran their now famous “Green Police” commercial during the Super Bowl last year, most Americans laughed it off and thought that nothing like that could ever happen in America.  Well, it turns out that it is happening in America.  A growing number of U.S. cities are actually putting RFID tracking chips in trash cans and recycling bins and are starting to fine residents who do not recycle “properly”. This kind of thing has been going on over in the U.K. for some time now, but very few people expected those living in “the land of the free” to be subjected to RFID trash tracking so quickly.  But it is here.  In many areas, government RFID tracker chips will now be monitoring what you throw away, how much you throw away and if you are recycling properly.  Rather than spending money on things that will actually get the U.S. economy headed in the right direction, government officials across America seem obsessed with forcing the “green agenda” down the throats of the American people – even if it means chasing factories, jobs and economic activity out of their communities.  

Not that there is anything wrong with recycling.  I personally recycle large amounts of trash each week.  But there is a huge difference between recycling as a free individual and being coerced by law to adhere to the sustainable development policies of the United Nations.  The truth is that “Agenda 21” is being pushed down all of our throats whether we like it or not.  It is all part of the Big Brother police state control grid which is being implemented in the name of “saving the environment” and which is being paid for by “economic stimulus” money in many areas.

That’s right.  Government snooping on your trash apparently meets the definition of “economic stimulus” in 2010.  Perhaps this is what Barack Obama meant when he talked about creating “green jobs”.  Local governments are going to need a lot of “trash snoopers” to make certain that we are all recycling acceptably.

In fact, John McCain almost flipped his lid when he found out that Dayton, Ohio was given a half million dollars in “stimulus funds” to put RFID tracking chips in recycle bins.  Not that McCain is a friend of liberty and freedom either.  The truth is that the vast majority of the politicians in Washington D.C. have been helping to advance the “sustainable development” agenda in one way or another.

But can you imagine spending “economic stimulus” money to spy on the trash of the American people?

No wonder all of the “stimulus packages” didn’t do that much good for the economy.  In fact, the amount of waste in the stimulus packages was absolutely mind blowing.  

But those “green jobs” must be created one way or another, eh?

Even if it means spying on Americans.

So now even though we are in the midst of a horrific economic downturn, lots of communities from coast to coast have plenty of money to track our trash with RFID microchips.

Cities that are now using these chips to spy on our trash include….

*Cleveland, Ohio

*Charlotte, North Carolina

*Alexandria, Virginia

*Boise, Idaho

*Dayton, Ohio

*Flint, Michigan

Now how in the world does Flint, Michigan have money for anything?

Flint, Michigan is one of the poster children for the deindustrialization of the United States.  It is a crime-infested war zone where thousands upon thousands of Americans live in desperate poverty.

And yet somehow they have money to monitor trash with RFID tracking chips?

It is almost as if we have stepped into “Bizarro America” where everything is the opposite of what it should be.

Unless the American people speak up and renounce this militant green agenda it is going to continue to be forced down our throats.

The scenes in Audi’s “Green Police” commercial are not going to be so “funny” when they start becoming real….

So far, the worst city of all for snooping on the trash of citizens is Cleveland, Ohio.  The truth is that Cleveland should be worried about how to put hundreds of thousands of people without jobs in the region back to work, but instead city officials seem obsessed with enforcing the radical green agenda of the United Nations.  The new RFID chips being installed will allow Cleveland officials to monitor exactly how often residents roll their carts out to the curb for collection.

According to news reports, if an RFID tracking chip signals that a recycle bin has not been brought out to the curb within a certain period of time, a “trash supervisor” will actually sort through the trash produced by that home for recyclables.

Yes, this is now going on in America.

So what will the penalties be?

Well, according to Waste Collection Commissioner Ronnie Owens, trash bins that contain over 10 percent recyclable material will be subject to a $100 fine.

How ridiculous is that?

I recycle constantly, but I am sure that if I lived in Cleveland they could get me for being over the “10 percent limit” at least half the time.

Is there anyone who could honestly say that they will be able to stay under the 10 percent limit each and every time?

But that isn’t the only fine in the new system.

If you set out an “excessive” amount of trash you will be fined between $250 and $500.

In addition, residents of Cleveland are also fined for putting out their trash too early and for failing to bring in their garbage cans from the curb in a timely manner.

Meanwhile, the city of Cleveland has hordes of unemployed workers and it is literally falling apart.

How completely and utterly ridiculous can one city possibly be?

But a city that is broke has to raise money some how.

In 2009, the city of Cleveland has issued 2,900 tickets for trash violations,  which was almost five times more tickets than in 2008.

In 2010, the city of Cleveland is on track to issue over 4,000 tickets for trash violations.

One of the bizarre aspects of Cleveland’s trash regulations is that it is always the property owner that receives the ticket.

That means that landlords in Cleveland are now forced to become spies in order to ensure that their tenants follow the law.

It is almost as if we are back in East Germany once again.

Has everyone simply forgotten that we have something called the Fourth Amendment to the U.S. Constitution?

According to the Fourth Amendment, the American people are guaranteed the right to be free from unreasonable searches and seizures.

But these RFID tracking chips spy on us and our trash 24 hours a day.

What has happened to America?

As more insane measures like this are implemented across the United States, more factories, more jobs and more economic activity will continue to be chased overseas.

Meanwhile, the “smart growth” agenda is about to get a big boost by the U.S. Congress.  Retiring Senator Christopher Dodd’s last major piece of legislation, the Livable Communities Act, will create a new federal bureaucracy to make sure that “sustainable development” principles are being followed on every inch of land in the United States.

This new bureaucracy, the Office of Sustainable Housing and Communities, would be given approximately $4 billion in federal money to pressure local governments to implement a more “green” agenda.

Not that the federal government has an extra $4 billion to throw around and waste, but that has never stopped them before.

The truth is that the U.S. is absolutely drowning in debt and the economy is coming apart at the seams.  That is what the Congress and the White House should be worried about.

Instead, most of our “representatives” in Washington D.C. seem to have no trouble using “Big Brother tactics” to enforce the green agenda that so many of them are so obsessed with.

Sadly, most Americans actually still believe that we are “free”.

But we are not free.  The government controls and regulates us in tens of thousands of different ways, and each year the controls and the regulations just get tighter and tighter.  It’s just that we have lost our freedoms so slowly that most Americans have not become alarmed.

It is like the old story of the frog in the kettle.  If you put a frog right into boiling water it will hop right out.

However, if you put a frog into water that is cool and then turn up the heat little by little it will sit there until it has boiled to death.

America, you are that frog. 

It is time to hop out of the water.

50 Mind Blowing Facts About America That Our Founding Fathers Never Would Have Believed

If our Founding Fathers were alive today, what would they think of America?  Surely they would be very proud that the United States stretches from the Atlantic to the Pacific and has built some of the most amazing cities that the world has ever seen.  They would probably be surprised that the country they founded went on to become the greatest economic machine in the history of the world, and they would be absolutely astounded by things like our interstate highway system and the Internet.  However, there are quite a number of things that they would be horrified about as well.  The fact that over 40 million Americans are dependent on the federal government for their daily food would be deeply disturbing to our founders.  Also, the fact that the U.S. government has accumulated the greatest mountain of debt in human history would be incredibly distressing to George Washington, Thomas Jefferson and the rest of the founders.  But perhaps most of all, our founders would be absolutely disgusted that the land where Americans could once be free to pursue life, liberty and the pursuit of happiness has become so tightly regulated and controlled that Americans dare not even squeak without the permission of the federal government.

Needless to say, our founders would certainly not understand many of our institutions or many of the advanced technologies that we have today.  But without a doubt they would be able to grasp how far we have fallen as a nation and how far we have strayed from the fundamental principles that they enshrined in our founding documents.  The United States is a much different place today than it was in 1776, and unfortunately many of the changes have been for the worse.

The following are 50 mind blowing facts about modern America that our Founding Fathers never would have believed….

#1 In 2010, not only does the United States have a central bank, but it also runs our economy and issues all of our currency.  The Federal Reserve has devalued the U.S. dollar by over 95 percent since 1913 and it has been used to create the biggest mountain of government debt in the history of the world. 

#2 The U.S. Court of Appeals for the Ninth Circuit has ruled that U.S. government agents can legally sneak onto your property in the middle of the night, place a secret GPS device on the bottom of your car and keep track of you everywhere that you go.

#3 The 50 wealthiest members of Congress saw their collective fortunes increase by 85.1 million dollars to $1.4 billion in 2009.

#4 The U.S. government has accumulated a national debt that is rapidly approaching the 14 trillion dollar mark.

#5 All over the United States, asphalt roads are being ground up and are being replaced with gravel because it is cheaper to maintain.  The state of South Dakota has transformed over 100 miles of asphalt road into gravel over the past year, and 38 out of the 83 counties in the state of Michigan have now turned some of their asphalt roads into gravel roads.

#6 Americans now owe more than $849 billion on student loans, which is more than the total amount that Americans owe on their credit cards.

#7 In 2010, Americans waste an astounding amount of food.  According to a study by the California Integrated Waste Management board, 63 percent of the average supermarket’s waste stream is food. When you break that down, it means that each supermarket wastes approximately 3,000 pounds of food each year.

#8 The city of Cleveland plans to sort through curbside trash to ensure that people are actually recycling properly.  If it is discovered that some citizens are not recycling they will be hit with very large fines.

#9 Once upon a time, U.S. industry was the envy of the world.  But since 1979, manufacturing employment in the United States has fallen by 40 percent.

#10 Even though the U.S. population has exploded in size, the number of Americans with manufacturing jobs today is smaller than the number of Americans who were employed in manufacturing in 1950.

#11 Having one out of every eight Americans enrolled in the food stamp program is now considered “the new normal” and Americans continue to drop into poverty in astounding numbers.

#12 One out of every six Americans is now being served by at least one government anti-poverty program.

#13 A family of four actually has difficulty surviving on an income of $50,000 a year in America in 2010.

#14 Barack Obama is backing a proposal to create a national database that will store the DNA of all individuals who have been arrested, even if they end up not being convicted of a crime.

#15 In 2010, it takes the average unemployed American worker over 8 months to find a job.

#16 The U.S. government has made some parts of Arizona off limits to U.S. citizens because of the threat of violence from Mexican drug smugglers.  The federal government has actually posted signs more than 100 miles north of the Mexican border warning travelers that certain areas are unsafe because of drug and alien smugglers.

#17 One recent survey of last year’s college graduates discovered that 80 percent moved right back home with their parents after graduation.

#18 In one of the very first military commissions held under the Obama administration, a U.S. military judge ruled that confessions obtained by threatening the subject with rape are admissible in court.

#19 The average American worker now pays literally dozens of different kinds of taxes each year.

#20 In recent years the U.S. government has spent $2.6 million tax dollars to study the drinking habits of Chinese prostitutes and $400,000 tax dollars to pay researchers to cruise six bars in Buenos Aires, Argentina to find out why gay men engage in risky sexual behavior when drunk.

#21 Christians are being arrested and thrown in jail in some areas of the United States for quietly passing out Christian literature on public sidewalks.

#22 The Florida State Department of Juvenile Justice has announced that it will begin using cutting edge analysis software to predict crime by young delinquents and will place “potential offenders” in prevention and education programs.

#23 Organic milk is now considered such a national crisis that the FDA has been conducting military style raids on Amish farmers in the state of Pennsylvania.

#24 The U.S. Environmental Protection Agency recently announced that they are considering a crackdown on farm dust.

#25 According to a new CDC report, nearly half of all Americans now use prescription drugs on a regular basis.

#26 Oakland, California Police Chief Anthony Batts says that due to severe budget cuts there are a number of crimes that his department will simply not be able to respond to any longer.  The crimes that the Oakland police will no longer be responding to include grand theft, burglary, car wrecks, identity theft and vandalism.

#27 Today, Americans are losing their homes in staggering numbers.  One out of every seven mortgages was delinquent or in foreclosure during the first quarter of 2010.

#28 Many of our leading scientists are now calling themselves “transhumanists” and are openly proclaiming that a future where men have fully merged with machines is inevitable.

#29 Americans who spend large amounts of cash are viewed as “potential criminals” by the U.S. government in 2010.

#30 New full body security scanners going into airports all across the United States can actually see through our clothing and produce very clear and very detailed images of our exposed bodies as we walk through them.

#31 The U.S. financial system has become a massive gambling parlor in 2010.  As a result, a horrific derivatives bubble has developed that threatens to destroy our entire economy at any moment.  Nobody knows exactly how big the derivatives bubble is, but low estimates place it at around 600 trillion dollars and high estimates put it at around 1.5 quadrillion dollars.  Once that bubble pops there simply will not be enough money in the entire world to fix it.

#32 The U.S. government is spending an amount of money equivalent to approximately 25.4 percent of GDP this year.

#33 Today, 10,000 people make 30% of the total income in the United States.

#34 A 2006 Immigration and Customs Enforcement investigation discovered that 250 employees of the Defense Department used credit cards or PayPal to purchase images of children in sexual situations.  However, the investigation also found that the Pentagon investigated only a handful of those cases.

#35 According to a recent poll of Americans between the ages of 44 and 75, 61% said that running out money was their biggest fear. The remaining 39% thought death was scarier.

#36 Approximately 57 percent of Barack Obama’s 3.8 trillion dollar budget for 2011 consists of direct payments to individual Americans or is money that is spent on their behalf.

#37 A recent Department of Justice guide for investigators of criminal and extremist groups lists “constitutionalists” and “survivalists” alongside organizations like Al-Qaeda and the Aryan Brotherhood.

#38 The U.S. trade deficit has exploded to nightmarish proportions over the past two decades.  Every single month tens of billions more dollars goes out of the United States than comes into it.  Essentially, the United States is becoming far poorer as a nation each and every month.

#39 Factories are closing in droves across the United States because the American people would rather buy things made in China.

#40 Millions upon millions of good paying middle class jobs are being shipped off to China and they are never coming back.  Meanwhile, U.S. politicians stand by idly and do nothing.

#41 Some analysts now believe that China could become the largest economy in the world by the year 2020.

#42 If the U.S. government was forced to use GAAP accounting principles (like all publicly-traded corporations must), the annual U.S. government budget deficit would be somewhere in the neighborhood of four to five trillion dollars.

#43 According to one recent survey, 28% of all U.S. households have at least one person that is currently searching for a full-time job.

#44 The U.S. dollar continues to rapidly decline in value.  An item that cost $20.00 in 1970 will cost you $112.35 today.  An item that cost $20.00 in 1913 will cost you $440.33 today.

#45 Major international organizations are actually proposing that the United States start considering the adoption of a truly global currency.

#46 Students at a high school in Missouri have built a car that they claim can get up to 450 miles per gallon.  On another note, some of the top energy experts in the world believe that thorium could solve our energy problems and supply very cheap energy for society for hundreds of thousands of years.  But in today’s world technologies such as these are endlessly suppressed by the rich and powerful.

#47 One Colorado high school student is seeking an explanation from officials at his school after he was ordered by security guards to remove American flags from his truck because they might make other students at the high school “uncomfortable”.

#48 Three California high school students were recently forced to remove their American flag T-shirts on Cinco de Mayo.

#49 Memorial crosses erected along Utah public roads to honor fallen state troopers have been found unconstitutional by a federal appeals court and now must be removed permanently.

#50 One group of high school students made national headlines recently when they revealed that a security guard ordered them to stop singing the national anthem during a visit to the Lincoln Memorial.

Record Low Mortgage Rates, A Record Low Federal Funds Rate And Obscene Economic Stimulus Spending Have All Failed – Will Nothing Stimulate This Dead Horse Of An Economy?

Over the past several years, the Federal Reserve and the U.S. government have tried everything that they can think of to stimulate this dead horse of an economy but nothing has worked.  The Fed has slashed the federal funds rate to record low levels, mortgage rates have been pushed to all-time lows and the U.S. government has spent hundreds of billions of dollars in an effort to get the economy going.  But despite all these of these extraordinary efforts, the U.S. economy continues to just lie there like a dead corpse.  Never before have the Federal Reserve and the U.S. government done more to try to stimulate the economy and never before have their efforts produced such poor results.  Home sales continue to set new record lows, more than 14 million Americans continue to be unemployed, foreclosures continue to soar, personal bankruptcies continue to soar and an increasing number of Americans continue to sign up for food stamps and other anti-poverty programs.  All of the things that once worked so well to stimulate the U.S. economy seem to be doing next to nothing here in 2010, and the American people are becoming increasingly frustrated by economic problems that just keep getting worse.

Once upon a time, a big drop in mortgage rates would get Americans running out to buy homes in big numbers.  But that is just not happening this time. 

As you can see from the chart below, mortgage rates are at ridiculously low levels right now.  The average rate for a 30-year fixed mortgage was 4.32 percent this week.  That is the lowest it has ever been since Freddie Mac began tracking mortgage rates back in 1971.

These low rates have motivated millions of Americans to refinance their existing home loans, but sales of new and existing loans remain at record low levels.  In fact, the number of Americans refinancing their homes is now at its highest level since May 2009, but the U.S. housing crisis just continues to get worse.  Despite these record low mortgage rates, existing home sales declined 27 percent during the month of July and new homes sales dropped to the lowest level ever recorded in July.

So if Americans are not buying houses when mortgage rates are this ridiculously low, what in the world is going to cause a turnaround in the U.S. housing market?

The Federal Reserve has sure been trying to do what it can to resuscitate the U.S. economy.  For decades, a drop in the federal funds rate could always be counted on to give the economy a jump start.  But the Fed has dropped the federal funds rate almost to zero for quite some time now and it has done next to nothing to get things moving again. 

So is the Federal Reserve out of ammunition?  Well, let’s just say that they have used up all of their “best” ammunition.  The Fed has been telling us since March 2009 that the federal funds rate will remain between zero and 25 basis points “for an extended period” of time, but the U.S. economy doesn’t seem to care. 

Of course Ben Bernanke insists that the Fed is not out of ammunition and that everything is going to be okay, but at this point there is just not a lot left of Bernanke’s fading credibility.

The U.S. government tried to do their best to help the economy by passing stimulus bill after stimulus bill, but it just has not helped much.  The government spent hundreds and hundreds of billions of dollars on some of the most wasteful things imaginable, and while the massive injection of cash may have helped temporarily stabilize the economy, it has not brought about the “recovery” that our politicians were hoping for.

Now the pendulum has swung the other way in Congress and there is very little appetite for more economic stimulus spending.  But if the economy was not recovering when the government was throwing giant piles of money at it, what is going to happen as the economic stimulus totally dries up?

Already there are signs that the U.S. economy is in big, big trouble.  General Motors announced this week that U.S. sales in August fell 24.9% to 185,176 vehicles from 246,479 vehicles in August 2009.

But don’t let up and down sales reports fool you.  One month they may be down and the next month they may be up a bit.  The important thing is to keep your eyes on the truly disturbing long-term trends.

Thanks to the nightmarish U.S. trade deficit, far more wealth leaves the United States each month than enters it.  That means that the United States is getting significantly poorer each month.  As I noted yesterday, the United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States.  That is not sustainable and China is going to continue to bleed us dry for as long as we allow it to continue.

In addition, the United States continues to go into more debt every single month.  Each month the U.S. national debt gets bigger, state governments go into more debt and local governments go into more debt.

So what we have is a nation that is getting poorer and that is going into more debt month after month after month.

We are on the road to economic hell, and the American people don’t even realize it because things are still relatively good – at least for now.

But as the economy continues to unravel, is there anything that the folks over at the Federal Reserve can do?

Well, yes there is.  It is called “quantitative easing” and the Fed has already indicated that they are going to start doing it again.  Essentially, quantitative easing is when the Federal Reserve creates money out of thin air and starts buying things like U.S. Treasuries, mortgage-backed securities and corporate debt.

But isn’t there a good chance that this could cause inflation?

Well, yes.

But “Helicopter Ben Bernanke” seems determined to live up to his nickname.  Anyone who thinks that Bernanke is going to just sit there and do nothing is delusional.  At some point he is going to fire up his helicopter and start showering the economy with money. 

And the reality is that feeding massive quantities into the economy will create more economic activity.  However, it will also come with a price.

Someday soon, you may wake up to newspaper headlines that declare that our economy is growing at a 10% annual rate, but what they won’t tell you is that the real rate of inflation will be running about 15 or 20 percent at the same time.  In fact, the U.S. government will probably try to convince us that the “official” rate of inflation is only about 5 or 6 percent.

The cold, hard truth is that the U.S. economy is going to continue to get worse.  Whether it will be a deflationary decline or an inflationary decline depends on the boys over at the Fed.  But it is going to be a decline.

Meanwhile, millions of American families are hanging on by their fingernails and are hoping in vain for the great economic recovery which is never going to come.

The Number One Tool Of Financial Enslavement

Today there is a great awakening going on across the United States and all around the world.  Tens of millions of people are becoming aware of the growing tyranny of the global financial elite.  Yet millions of those same people willingly enslave themselves to those very same financial powers.  So how is this happening?  It is called debt.  The financial powers of the world use it to enslave individuals, corporations and governments.  For thousands of years humanity has been taught the proverb that “the borrower is the servant of the lender”, and yet today hundreds of millions of people around the globe willingly have run out and have made themselves servants of the money powers.  You see, when you borrow money from a financial institution, you not only have to pay that money back, but you also have to pay a significant amount of interest.  In fact, often the interest ends up being much more than the principal of the loan.  Thus the borrower ends up devoting a great deal of his or her labor to earning money for the lender.  Certainly there are times when it is necessary to borrow money.  But what Americans have been doing over the last 30 years goes far beyond “necessary” borrowing.  In fact, the massive debt binge of the last three decades has been nothing short of a huge percentage of the American population entering into willing financial enslavement.

Do you think that is an exaggeration?  Just consider the chart below.  The word “insanity” does not even begin to describe the growth of household credit in the United States over the last 30 years….

So why is debt so bad?

Well, there are a lot of reasons.  Debt strips you of your freedom and slowly drains you of your wealth.  It puts the fruits of your labor into the pockets of others.

Getting others enslaved by debt is how the most powerful financial institutions in the world got so dominant.  It is one of the most profitable ways of making money ever invented.

What many people don’t realize is just how much interest they end up paying on some of their debts.

For example, if you go to mortgagecalculator.org, you can calculate the amount of interest that you will pay over the life of your home mortgage.  According to that calculator, someone with a $250,000 mortgage at an interest rate of 6.5% over 30 years will end up paying over $300,000 in interest before it is all paid off.    

So when those 30 years are over, you have bought a house for yourself and you have also bought a house for the bankers.

But there are many forms of credit that are far worse than mortgage debt.

So what are they?

Just look in your wallet.

Do you have a credit card in there?

If so, and if you carry a balance each month, then you are “feeding the monster” and you have financially enslaved yourself.

But you are far from alone.

According to the United States Census Bureau, there are approximately 1.5 billion credit cards in use in the United States.

In fact, 78 percent of American households had at least one credit card at the end of 2008.

So it is a rare person who does not have at least one credit card.

But not only do the vast majority of us have credit cards, we are using them at unprecedented rates.

At the end of 2008, the total credit card debt piled up by American consumers was more than 972 billion dollars.  That is an amount that is greater than the GDP of the world’s 122 poorest nations combined.

So why is credit card debt bad?

Well, because it can drain your wealth faster than almost any other method ever created.

For example, according to the credit card repayment calculator, if you owe $6000 on a credit card with a 20 percent interest rate and only pay the minimum payment each time, it will take you 54 years to pay off that credit card.

During those 54 years you will pay $26,168 in interest rate charges in addition to the $6000 in principal that you are required to pay back.

That is before you include any fees or penalties you might accumulate along the way.

Are you starting to get the picture?

Do you really want to repay over $30,000 for a $6,000 purchase?

Of course not.

So what should you do?

Stop feeding the monster.

They are getting insanely wealthy off of your financial enslavement.

It is time to get out of debt.

One of the most common financial questions that people ask today is what they should do with their money.

Well, the answer to that question is a lot more obvious than people may think.

After purchasing all of the food and supplies that are needed for the hard times that are coming, people need to get out of debt.

There are very, very few investments that will add to your wealth faster than debt is draining it.

So don’t let your money sit there and earn a couple of percentage points if you are carrying any debt that you can easily pay off.

Paying off debt will reduce your living expenses and will give you much more flexibility.  It will also put you in a much better position to weather the very difficult financial times that are coming.

When you get into more debt, you are playing the game that the Federal Reserve, JPMorgan Chase, Morgan Stanley, Citigroup, Bank of America and Goldman Sachs want you to play.  There are always going to be financial predators that are ready to drain your wealth.

But you don’t have to play that game.  Work to get yourself free.  You will be glad that you did.

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