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

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

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

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

What we are talking about is real economic pain.

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

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

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

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

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

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

Yes, that really is true.

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

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

In case you are wondering, that is not good.

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

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

For nearly everyone else, life is a struggle.

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

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

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

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

Instead, our current system suffocates them out of existence.

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

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

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

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

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

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

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

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

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

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

Do you understand what that means?

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

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

That is so sad.

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

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

How pathetic is that?

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

We need to get the American people educated.

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

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

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

I don’t want to see anymore of that.

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

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

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

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

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

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

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

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

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

Even Goldman Sachs Secretly Believes That An Economic Collapse Is Coming

Goldman Sachs is doing it again.  Goldman is telling the public that everything is going to be just fine, but meanwhile they are advising their top clients to bet on a huge financial collapse.  On August 16th, a 54 page report authored by Goldman strategist Alan Brazil was distributed to institutional clients.  The general public was not intended to see this report.  Fortunately, some folks over at the Wall Street Journal got their hands on a copy and they have filled us in on some of the details.  It turns out that Goldman Sachs secretly believes that an economic collapse is coming, and they have some very interesting ideas about how to make money in the turbulent financial environment that we will soon be entering.  In the report, Brazil says that the U.S. debt problem cannot be solved with more debt, that the European sovereign debt crisis is going to get even worse and that there are large numbers of financial institutions in Europe that are on the verge of collapse.  If this is what people at the highest levels of the financial world are talking about, perhaps we should all start paying attention.

There is a tremendous amount of fear in the global financial community right now.  As I wrote about the other day, the financial world is about to hit the panic button.  Things could start falling apart at any time.  Most of these big banks will not admit how bad things are publicly, but privately there is a whole lot of freaking out going on.

According to the Wall Street Journal, Brazil believes that “as much as $1 trillion in capital may be needed to shore up European banks; that small businesses in the U.S., a past driver of job production, are still languishing; and that China’s growth may not be sustainable.”

Perhaps most startling of all is what the report has to say about the debt problems of the United States and Europe.

For example, this following excerpt from the report sounds like it could have come straight from The Economic Collapse Blog….

“Solving a debt problem with more debt has not solved the underlying problem. In the US, Treasury debt growth financed the US consumer but has not had enough of an impact on job growth. Can the US continue to depreciate the world’s base currency?”

Remember, this statement was not written by some guy on the Internet.  A top Goldman Sachs analyst put it into a report for institutional investors.

The report also goes into great detail about the financial crisis in Europe.  Brazil writes about how the euro is headed for trouble and about how dozens of financial institutions in Europe could potentially be in danger of collapse.

But in any environment Goldman Sachs thinks that it can make money.  The following is how Business Insider summarized the advice that Brazil gave in the report regarding how to make money off of the impending collapse in Europe….

  • Buy a six-month put option on the Euro versus the Swiss Franc, thus betting the Euro will drop against the Franc (the Franc being the currency that an official Goldman report recently referred to as the most overvalued in the world)
  • Buy a five-year credit default swap on an index of European corporate debt—the iTraxx 9. This is a bet that some of these companies will default, and your insurance policy, the CDS, will pay off

This is so typical of Goldman Sachs.  They will say one thing publicly and then turn around and do the total opposite privately.

For example, prior to the financial crisis of 2008, Goldman Sachs was putting together mortgage-backed securities that they knew were garbage and marketing them to investors as AAA-rated investments.  On top of that, Goldman then often privately bet against those exact same securities.

The CEO of Goldman Sachs has even acknowledged that the investment bank engaged in “improper” behavior during 2006 and 2007.

For much more on the history of all this, please see this article: “How Goldman Sachs Made Tens Of Billions Of Dollars From The Economic Collapse Of America In Four Easy Steps“.

So will Goldman Sachs ever get into serious trouble for any of this?

No, of course not.

Yeah, they will get a slap on the wrist from time to time, but the reality is that the top levels of the federal government are absolutely littered with ex-employees of Goldman Sachs.  Goldman is one of the “too big to fail” banks and they are going to continue to do pretty much whatever they feel like doing.

Sadly, the power of the “too big to fail” banks just continues to grow.  At this point, the “big six” U.S. banks (Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo) now possess assets equivalent to approximately 60 percent of America’s gross national product.

Goldman Sachs was the second biggest donor to Barack Obama’s campaign in 2008, so don’t expect Obama to do anything about any of this.

We have a financial system that is deeply, deeply corrupt and all of that corruption is a big reason why things are falling apart.

Sadly, the 54 page report mentioned above is right – we really are facing a global debt meltdown and we really are heading for an economic collapse.

You aren’t going to hear the truth from the mainstream media or from our politicians because “keeping people calm” is much more of a priority to them than telling the truth is.

The debt crisis in the United States is unsustainable and the debt crisis in Europe is unsustainable.  Right now we are in the calm before the storm, and nobody knows exactly when the storm is going to strike.

But let there be no doubt – it is coming.

The amazing prosperity that we have enjoyed for the last several decades has largely been a debt-fueled illusion.  It was a great party while it lasted, but now it is coming to an end and the aftermath of the coming crash is going to be absolutely horrific.

Keep watch and get prepared.  We don’t know exactly when the collapse is going to happen, but it is definitely on the way and now even Goldman Sachs is admitting that.

Layoffs, Layoffs Everywhere You Look There Are Layoffs

The competition for jobs in the United States is absolutely brutal right now, and it is about to get worse.  A new wave of layoffs is sweeping across America.  During tough economic times, Wall Street favors companies that are able to cut costs, and the fastest way to “cut costs” is to eliminate employees.  After a period of relative stability, the employment picture in the U.S. is starting to get bleaker again.  New applications for unemployment benefits have now been above 400,000 for 15 straight weeks.  Finding a good job is kind of like winning the lottery in this economy. Our federal government and the state governments have made it incredibly complicated and extremely expensive to have employees on the payroll.  It is getting harder and harder to get a large enough return to justify the time and expense that hiring employees requires.  So many firms now find themselves trying to do more with the employees that they already have.  Other companies are turning to temp agencies as a way to reduce costs and increase workplace flexibility.  A lot of the big corporations are sending as much work as they can overseas where the wages are far lower and where the regulatory environment is much simpler.  All of this is really bad news for American workers that just want good jobs that will enable them to provide for their families.

When we first started seeing huge numbers of layoffs a few years ago, I encouraged people to look into government jobs because I thought that they would be a lot more stable in this economic environment.

But today that is no longer true.  In fact, state and local governments all over the United States are responding to massive budget problems by slashing payrolls in an unprecedented fashion.

Sadly, the reality is that the number of “secure jobs” is rapidly declining in America.  If you have a “job” (“just over broke”) right now, you might not have it for long.  That is one reason why everyone should be trying to become more independent of the system.

Once upon a time the U.S. economy produced a seemingly endless supply of good jobs.  This helped us develop the largest and most vibrant middle class in modern world history.

But now employees are regarded as “costly liabilities”, and businesses and governments alike are trying to reduce those “liabilities” as much as they can.

This summer the pace of layoffs seems to be accelerating all over the nation.  Just check out what has been happening over the past few weeks….

-Lockheed Martin has made “voluntary layoff offers” to 6,500 employees.

-Detroit is losing even more jobs. American Axle & Manufacturing Holdings has told the remaining 300 workers at its manufacturing facility in Detroit that their jobs will be ending in early 2012.

-Layoff notices have been sent to 519 employees of Milwaukee Public Schools, and more than 400 open positions are going to go unfilled.

-The Gap has announced that up to 200 stores will be closed over the next two years.

-Cisco has announced plans to lay off 9 percent of their total workforce.

-Chicago Mayor Rahm Emanuel says that 625 city employees will be losing their jobs as a result of cutbacks.

-Pharmaceutical giant Merck recently dumped 51 workers from an office in Raleigh, North Carolina.

-Perkins has revealed that they will be closing 58 restaurants.

-This week, Goldman Sachs announced that they will be eliminating 1,000 jobs.

-Cracker Barrel is rapidly reducing staff at its headquarters.

-Telecommunications and web marketing firm Crexendo has announced that it will be laying off about 30 percent of its workforce.

-Borders has announced that they will be shutting down their remaining 399 stores and that 10,700 employees will lose their jobs.

-Now that the space shuttle program has ended, thousands of NASA employees will be losing their jobs.

Sadly, there are hundreds of more examples of recent layoffs and job losses.  One website that tracks these layoffs daily is Daily Job Cuts.  It is pretty sad when there are entire websites that are devoted to chronicling how fast our economy is bleeding jobs.

What is worse is that it looks like the pace of layoffs is going to keep increasing.

One report that was recently released found that the number of job cuts being planned by U.S. employers increased by 11.6% in June.

That is not good news.

Things don’t look good for employees of state and local governments either.

State and local governments have eliminated approximately 142,000 jobs so far this year.

That is bad, but this is just the beginning.

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

Ouch.

Barack Obama and Ben Bernanke keep trying to tell us that the economy is improving, but that simply is not the case.  Yes, some of the largest corporations have announced big earnings, but that is not translating into lots of jobs for American workers.

Today, most large corporations only want to have as many U.S. workers as absolutely necessary.  In a world where labor has been globalized, it just doesn’t make sense for corporations to shell out massive amounts of money to American workers when they can legally get away with paying slave labor wages to workers on the other side of the globe.

So if it seems like it is far harder to get a good job in America today than it used to be, the truth is that you are not imagining things.

Our entire system discourages job creation inside the United States.  Every single year, even more ridiculous job-killing regulations are being passed on the federal and state levels.  It has become extremely expensive and ridiculously complicated to hire people.

So how are American families surviving?  Those that still do have jobs are finding that wages are not going up but the cost of living rapidly is.  Many American families are making up the difference by using their credit cards more.

In June, credit card purchases in the U.S. increased by 10.7 percent compared to the same month a year ago.

It looks like a whole lot of people have not learned their lessons about how bad credit card debt is.

Millions of other American families have fallen out of the middle class completely.  Today, one out of every six Americans is enrolled in at least one government anti-poverty program.  The level of economic suffering in this country continues to soar.

In fact, the number of Americans that are now sleeping in their cars or living in tent cities remains at staggering levels.

What we are witnessing in this country is not just a “recession” or an “economic downturn”.  What we are witnessing are fundamental economic changes.

Until there are fundamental policy changes in the United States, there will continue to be huge waves of layoffs and millions of jobs will continue to be shipped out of the country.

In the old days, one could go to college, get a good job with one company for 30 years and retire with a big, fat pension.

Now, that way of doing things is completely and totally dead.

Today, there is virtually no loyalty out there.  It doesn’t matter how long you have been working at a particular job.  When it becomes financially expedient to get rid of you, that is exactly what is going to happen.

It is a cold, cruel world out there right now.  Don’t assume that you will always have a good job.  The world is rapidly changing.

Don’t get caught in the trap of believing that the way that things were is the way that things are always going to be in the future.

As The Obamas And The Ultra-Wealthy Live The High Life Most Americans Are Going Through Economic Hell

Barack Obama recently made the following statement to American families that are struggling to survive in this economy: “If you’re a family trying to cut back, you might skip going out to dinner, or you might put off a vacation.” A few days after making that statement Obama sent his wife and children off on yet another vacation, this time to a luxury ski hotel in Vail, Colorado.  But the Obamas are not the only ones enjoying the high life.  Wealthy corporate executives and greedy Wall Street fatcats insist that profit margins are too tight to hire more American workers, and yet sales of luxury cars, private jets and vacation homes are soaring.  Meanwhile, most American families are going through economic hell right now.  In 2010, more Americans than ever before were living below the poverty line.  Over 4 million Americans have been unemployed for more than a year, and over 5 million Americans are at least two months behind on their mortgage payments.  As the Obamas and wealthy corporate executives jet off to fancy ski resorts, half of all American workers are earning $505 or less per week and 55 percent of American families are living paycheck to paycheck.  Something is very wrong with this picture.

So is there anything wrong with working hard and enjoying the fruits of success?  Of course not, as long as it was done honestly and not on the backs of the American taxpayers.  But the truth is that many of the corporate executives that are enjoying luxury vacations right now would not even have companies to run if the American taxpayers had not stepped in and bailed them out during the financial crisis.  Thanks to the U.S. government and the Federal Reserve, Wall Street bankers and top corporate executives are once again enjoying bonuses that most of us would consider obscene.

Meanwhile, most of the rest of the country is suffering very deeply.

Over the past several decades, the biggest financial institutions and the biggest corporations have worked really hard to “fix” the rules of the game in their favor.  The truth is that our economy is no longer a “free market” capitalist system.  Rather, what we have now is more accurately described as “corporatism” or “neo-feudalism”.  The big corporations dominate almost everything, and whatever they don’t dominate the government does.

One of the key features of a “corporatist” system is that it tends to funnel all the wealth to the very top.

Back in 1976, the top 1 percent of earners in the United States took in 8.9 percent of all income.  By 2007, that number had risen to 23.5 percent.

Ouch.

There are two different Americas today.  There is the America of the gated communities, the private planes and the good life, and there is the America of declining wages, thrift stores and rising desperation.

What is saddest of all is that the most vulnerable people in society often suffer the most from all of this.

According to one recent study, approximately 21 percent of all children in the United States were living below the poverty line in 2010.

Do you think that the Obamas are thinking about any of this while they are enjoying their stay at a luxury ski hotel in Vail, Colorado?

The truth is that leadership is not just about words.  Leadership is about setting an example.

Back in August, Michelle Obama took her daughter Sasha and 40 of her friends for a vacation in Spain.

So what was the bill to the taxpayers for that little jaunt across the pond?

It is estimated that vacation alone cost U.S. taxpayers $375,000.

Hey, Barack Obama won the most votes in 2008 and so if he wants his family to get as much enjoyment out of these four years as they can that is his prerogative.

However, if he wants to tell American families that they “might put off a vacation” after all the vacations that the Obamas have taken over the past two years then he is just being a massive hypocrite.

According to the New York Post, Barack Obama enjoyed a total of 10 separate vacations that stretched over a total of 90 vacation days during the years of 2009 and 2010.

During his first two years in office, he also managed to play 29 rounds of golf.

Oh, but it is the rest of us that have to cut back on our vacations.

But it is not just the Obamas that are enjoying the high life right now.

The wealthy have recovered nicely from the “recession” and now they are spending money by the gobs once again.

According to Moody’s Analytics, the wealthiest 5% of households in the United States account for approximately 37% of all consumer spending.

Life is very good in America if you have got enough money.

A recent article in USA Today detailed some of the things that wealthy corporate executives are spending money on in 2011….

Luxury and high-end marketers have picked up on what they hope is a growing trend, offering products that bank on a looming spending spree. Germany’s PG-Bikes is rolling out the $80,000 Black Trail, a battery-powered bicycle. Swiss watchmaker Richard Mille is selling $525,000 timepieces. Steinway has launched a John Lennon-themed grand piano — at $90,000 and up. After selling out a $245,000 model, automaker Porsche is planning the 918 Spyder, a hybrid car that could sell for more than $630,000.

Nearly all luxury brands experienced a resurgence in 2010.  Just check out some of the sales increases for luxury car brands….

Porsche: 29%

Cadillac 36%

Rolls-Royce 171%

At the exact same time, however, life is getting really, really hard for the rest of America.

As I wrote about yesterday, the U.S. middle class continues to be decimated even in the midst of this “economic recovery”.

There are tens of millions of Americans that would like to have a full-time job that are not able to get a full-time job.  The number of Americans on food stamps has gone from about 26 million at the start of 2007 to 43 million today and it continues to set a brand new record every single month.  One out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government.

Our economy has become a complete and total nightmare.

Over the past couple of days some of the readers of this column have been sharing some of their economic horror stories.  But they are far from alone.  There are literally millions of Americans with economic horror stories out there.  It is just that we don’t get to hear too many stories from the “other America” on our televisions.

The following stories of economic pain are from people just like you and me.  Times are incredibly hard for most of America right now, and they are only getting harder with each passing month….

Colin:

My mother is unemployed. She is 61 years old, has 25 years of experience working for a major telecommunications corporation, and has a four-year degree. I watch her send application after application to employers with no response. I watch her get contacted by recruiters who say she is a ‘perfect fit’ for a job and never deliver. I watch her slide into depression and staying in bed many hours of the day.

I am 38 years old, I have mental illness, and I recently lost my job as a delivery driver because the owner sold his business to a competitor.

I don’t believe that either my mother or I will ever be employed again. I am beginning to feel that I am permanently in the world of the unemployed.

Jeff:

I graduated college in May 2000 with a Bachelors degree in Broadcasting/Minored in History. I have worked for major corporations as an Enterprise Sales Consultant selling Servers. I was a Network Engineer for Qwest Communications. I even worked for the Federal Government and held a Security Clearance for 4 years. I also won Dell Small Business Sales Consultant of the quarter as well. But since I don’t have an active clearance anymore no one wants to hire me in D.C. I lost my job in 07/2010 and from 07/2010-Present I have been unemployed. My food stamps were also recently cut off last month since the State of Virginia decided that for a household of 1 you can’t make more than $1178 a month. I make $1250 a month in Unemployment compensation before taxes so according to the Government I am too rich to receive Food stamps now. My Rent, Gas and Car insurance is $1000 a month and I am holding on for dear life. I am currently in the process of declaring Chapter 7 Bankruptcy and using my tax return to pay the attorney $1500 to file. That leaves me with only #250 a month for food, water and cell phone.

I have a list compiled in my Google email with approximately 784 applications I have filled out for every government agency, defense contractor and job available in the Washington, DC area. I even applied to Carmax and my old job in college waiting tables at red Lobster and the moving company I used to work at during the summers in college. If its bad for someone like me with over 10 years of Sales, Server/computer experience, Investigations and Network Engineering than I can’t imagine how bad it is for people that just have a high school diploma. I have been on one interview out of the almost 1000 jobs I have applied to (It takes about 2 hours to apply to one job). The one interview I went on offered me less than my unemployment gives me at $8 an hour. I can sit at home and make more money on unemployment than 80% of the jobs that I have applied too and even those jobs don’t call me. Is this what America has become? Is this what I sacrificed 5 years of my life in college from 17 years old to 21 years old and spent $40,000 to get a worthless degree that won’t even get you hired?

Todd:

Well, My family has been ripped to shreds alright.

Overall combined (My father, and myself) make about 60k a year. We can barely survive we keep looking to cut things, and make things cheaper but it’s just not working fast enough.

My wife can’t find a job, and now student loans are starting to become issues. (won’t go in to further details).

Tax returns taken, and various other things, Can’t even afford dental care. We don’t even get to go out anymore, and lucky to get any type of snacks. Just so you know there are 5 people living in this house.

Sharonsj:

The only reason I am not out on the street is that when I had money I paid off my mortgage.

However, because I did that, my food stamp allotment is only $25 a month. The heating assistance I get only paid for less than one months’ heat out of the six months I need here in Pennsylvania. All other expenses use up what’s left, so you learn to eat at home; I try not to leave the house because it’s going to cost me money.

I blame Congress for destroying America. They have given tax breaks to themselves and their rich friends at our expense. Did you know that anybody who serves 5 years in Congress gets a FULL pension at age 62? Us peasants work for 45 years and then if we retire at age 62 we are forced to give up 25% of what we earned.

Niles:

I lost my house, my family was split, and all my savings is gone.

I have lost hope. I served in the military, went to college and have high tech skills. My country doesn’t give a ***** about me. The bankers are as evil as the communists and I hate them.

Michael:

I’m also 38, and have worked in IT since the mid 90s. I lost my full time job in April ’03, and have only been able to find short term temporary work since. The contracts started to get shorter and fewer as the years went on, so in spring ’10 I retrained to be an Emergency Medical Technician (EMT) but have not been able to find work in the last 9 months. An ambulance company I applied with said that they have hundreds of applications in several Northern CA counties but no job openings. And health care jobs are supposed to be on the the only areas of growth. I deliver pizzas for cash on and off and am getting unemployment.

Mondobeyondo:

I lost track of how many resumes I’ve sent out during the past several months. My neighbors think I’m trying to win the Publishers Clearing House sweepstakes or something (yeah, that would help too! Ha!)

Maybe I should go back to school and become an RLP (Rejection Letter Professional).

Dorothy:

The rent at the place I lived was so high that I couldn’t afford it on a school bus driver’s salary, which I was doing for the past few years, because in spite of 30 years clerical experience, where I performed every function from clerk typist to executive legal secretary, I could not find employment. So I applied for subsidized housing and was forced to move back to Chicago, where the crime rate is very high in certain areas.

Before I moved I was getting $200 in food stamps, but now that I am in subsidized housing, I have to go and reapply and if I get anything at all, I have heard that it will be about $52 a month! Although the rent is subsidized, I have to pay for my own heat, and the building in which I live is completely electric! Energy assistance doesn’t cover it. They give with one hand and take away with the other.

All of the people above are still “surviving”, but what do you think is going to happen to many of them as the cost of living goes up dramatically?  Brent crude just hit $108 a barrel and the UN says that the global price of food recently hit a new all-time high.

Americans on fixed incomes or that are on government assistance are going to be absolutely devastated if prices for basics such as food and gas rise substantially.

Not only that, but budget cuts on the federal, state and local levels are also going to hurt many of these people deeply.

But this is where we are at as a nation.  A small privileged class is enjoying the high life while a rapidly growing poverty class pleads for the government to toss them some more crumbs.

The American people deserve better than this.  They deserve an economy that will provide them with good jobs which will enable them to pay their mortgages and feed their families.

Unfortunately, the U.S. economy is dying.  The number of good jobs is actually declining.  The middle class is being systematically wiped out.

The answer is not to “tax the rich” so that we can toss the rapidly growing poverty class a few more crumbs.  The answer is to radically transform our economy back into the kind of economy our founding fathers originally intended.

But wealthy corporate executives and politicians such as Barack Obama are not going to have any of that.  Those sitting on top don’t want any real change to happen.  Sadly, the general population has become so dumbed-down that they don’t even know the questions that they should be asking.

So unfortunately it appears we are going to keep heading down the exact same economic path that we have been heading for decades.  The middle class will keep being ripped apart and politicians like George W. Bush and Barack Obama will just keep on smiling.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Yes.

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

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

Not at all.

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

11 Long-Term Trends That Are Absolutely Destroying The U.S. Economy

The U.S. economy is being slowly but surely destroyed and many Americans have no idea that it is happening.  That is at least partially due to the fact that most financial news is entirely focused on the short-term.  Whenever a key economic statistic goes up the financial markets surge and analysts rejoice.  Whenever a key economic statistic goes down the financial markets decline and analysts speak of the potential for a “double-dip” recession.  You could literally get whiplash as you watch the financial ping pong ball bounce back and forth between good news and bad news.  But focusing on short-term statistics is not the correct way to analyze the U.S. economy.  It is the long-term trends that reveal the truth.  The reality is that there are certain underlying foundational problems that are destroying the U.S. economy a little bit more every single day.

11 of those foundational problems are discussed below.  They are undeniable and they are constantly getting worse.  If they are not corrected (and there is no indication that they will be) they will destroy not only our economy but also our entire way of life.  The sad truth is that it would be hard to understate just how desperate the situation is for the U.S. economy. 

Long-Term Trend #1: The Deindustrialization Of America

The United States is being deindustrialized at a pace that is almost impossible to believe.  But now that millions upon millions of people have lost their jobs, more Americans than ever are starting to wake up and believe it.

A recent NBC News/Wall Street Journal poll found that 69 percent of Americans now believe that free trade agreements have cost America jobs.  Ten years ago the majority of Americans had great faith in the new “global economy” that we were all being merged into, but now the tide has turned.

So why have Americans lost faith in “free trade”?

Well, it turns out that the current system is neither “free trade” nor “fair trade”.  Many other nations impose extremely high tariffs on U.S. goods and put up ridiculous barriers to American products and yet the United States has generally let everyone else openly manipulate currency rates and flood our shores with whatever cheap products they want.

The results have been disastrous.  Jobs and factories have been leaving the United States at a blinding pace.

The United States has lost approximately 42,400 factories since 2001.  An economy without a manufacturing base does not have a bright long-term future.  Yet our politicians have allowed our manufacturing base to be systematically dismantled.

As of the end of 2009, less than 12 million Americans worked in manufacturing.  The last time that less than 12 million Americans were employed in manufacturing was in 1941.

How is the United States supposed to have a bright economic future if it consumes everything in sight and yet makes very little?

Something needs to be done.

In 1959, manufacturing represented 28 percent of all U.S. economic output.  In 2008, it represented only 11.5 percent and it continues to fall.

Needless to say, millions of blue collar workers now find themselves unable to find jobs.  Today, 28% of all U.S. households have at least one person that is looking for a full-time job and there is no sign that things are going to improve much any time soon.

Long-Term Trend #2: The Exploding U.S. Trade Deficit

Each month, tens of billions more dollars go out of the United States than come into it.  In other words, every single month the United States gets poorer.

Recently, the U.S. trade deficit has been coming in at around 40 to 50 billion dollars a month.  About half of that is with communist China.

Between 2000 and 2009, America’s trade deficit with China increased nearly 300 percent.

Sadly, things are getting even worse.

As of the end of July, the U.S. trade deficit with China had risen 18 percent compared to the same time period a year ago.

There is a reason why China has been able to loan the U.S. government nearly a trillion dollars.  They have literally been bleeding us dry.

The United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States.

Does that sound like “fair trade” to you?

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

Half a million jobs in just one year?

And that doesn’t even take into account the trade deficit that we have with all the other nations around the world.

We have literally built China into a superpower.

One prominent economist is now projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040.

But it isn’t just China that is a problem.

Since the implementation of NAFTA in 1994, 300,000 U.S. farms have gone out of business.

Globalism has forced U.S. workers to directly compete with the cheapest labor in the world for jobs.  That is not good for American workers and it is not good for America.

Long-Term Trend #3: The Shrinking Middle Class

As jobs continue to flee the United States and as wages continue to be depressed, America’s middle class is shrinking at an alarming rate.

According to a poll taken in 2009, 61 percent of Americans “always or usually” live paycheck to paycheck.  That was up substantially from 49 percent in 2008 and 43 percent in 2007.

Unfortunately, a growing number of Americans have found it impossible to make it from month to month without direct financial assistance from the federal government.

41 million Americans are now on food stamps.  One out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government.  Economic pain is everywhere.

Tens of millions of Americans now live in poverty.  The U.S. 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 that they have ever recorded in 51 years of record-keeping.

Long-Term Trend #4: The Growing Size Of The U.S. Government

No matter whether it is a Republican or a Democrat in the White House, the size of the U.S. government has continued to grow by leaps and bounds in recent years.

This is a tremendous drain on the U.S. economy.  The government produces very little value for the economy and yet costs a colossal amount to maintain.

In addition, multiplying government regulations have caused the United States to be a very difficult environment to operate a business in. 

The Federal Register is the main source of regulations for U.S. government agencies.  In 1936, the number of pages in the Federal Register was about 2,600.  Today, the Federal Register is over 80,000 pages long.

Long-Term Trend #5: The Constantly Growing U.S. National Debt

The United States has accumulated the biggest mountain of debt in the history of the world and every single month it gets worse.

According to an official U.S. Treasury Department report to Congress, the U.S. national debt will top $13.6 trillion this year and will climb to an estimated $19.6 trillion by 2015.

Do we really want to pass on a 20 trillion dollar debt to our children and grandchildren?

But the truth is that the situation is actually a lot worse than that.

If the U.S. government was forced to use GAAP accounting principles (like all publicly-traded corporations must), the U.S. government budget deficit would be somewhere in the neighborhood of $4 trillion to $5 trillion each and every year.

Needless to say, that is not anywhere close to sustainable.  We are literally destroying our economic future with all of this debt.

Long-Term Trend #6: The Ongoing Devaluation Of The U.S. Dollar

The Federal Reserve constantly destroys the value of the U.S. dollar.  Since the Federal Reserve was created in 1913, the U.S. dollar has lost over 95 percent of its purchasing power.

An item that cost $20.00 in 1970 would cost you $112.35 today.  An item that cost $20.00 in 1913 would cost you $440.33 today.

Inflation is like a hidden tax.  The value of the dollars you are holding right now will decline a little bit more each and every month. 

And now that the Federal Reserve is threatening to unleash another round of quantitative easing, it appears that the value of our dollars will soon be declining even more rapidly.

Long-Term Trend #7: The Derivatives Bubble

The one thing that the “Wall Street reform bill” should have done was that it should have done something about the horrific abuses in the derivatives markets.  Instead, the Wall Street reform bill did next to nothing about derivatives and instead imposed hundreds of other useless regulations on Wall Street.

Most Americans don’t even know what derivatives are.  Basically, they are side bets.  They have no underlying value of their own.  But today derivatives have taken center stage on Wall Street.  Our financial markets have become a gigantic casino.

The total value of all derivatives worldwide is estimated to be somewhere between 600 trillion and 1.5 quadrillion dollars.  And thanks to the U.S. Congress, the derivatives bubble is still growing.

It would be hard to understate the danger that the derivatives bubble represents.  The danger from derivatives is so great that Warren Buffet once called them “financial weapons of mass destruction”.  

When the derivatives bubble finally pops, there will not be enough money in the entire world to fix it.

Long-Term Trend #8: The Health Care Industry

The United States health care system is completely and totally broken.  It has become a gigantic money making machine for health insurance companies, pharmaceutical corporations and greedy lawyers.

Americans pay more for health care than anyone else in the world and yet they get shockingly little in return.

Health care expenses are the number one reason why people file for personal bankrupty in the United States.  Surprisingly, most of those who get bankrupted by health care expenses actually have health insurance.

The health insurance system in the United States is a complete and total mess.  Health insurance premiums are busting the budgets of tens of millions of American families and yet they are getting ready to go up yet once again. 

Already, large numbers of health insurance companies across the United States have announced that they plan to increase health insurance premiums in response to the new health care law.

But do health insurance companies actually need more money?  Even as the rest of the U.S. economy deeply struggles, America’s health insurance companies increased their profits by 56 percent in 2009.

At least someone is doing well in this economy.

The truth is that the U.S. health care system needs to be totally and completely reinvented.  The system we had before did not work.  Barack Obama’s new health care system will be far worse.  Meanwhile, the health care industry is literally choking the life out of the U.S. economy.

Long-Term Trend #9: Financial Power Is Becoming Concentrated In Fewer And Fewer Hands

Once upon a time, the United States had a very diverse financial system.  But today financial power is becoming concentrated in fewer and fewer hands with each passing year.

More U.S. banks fail every single week.  In fact, the number of bank failures is on pace to far surpass the total of 140 U.S. banks that failed last year.

There are now nearly 900 banks (well over 10 percent of all U.S. banks) on the FDIC list of problem banks.

Meanwhile, the “too big to fail” banks continue to pick up market share.  The “big four” U.S. banks (Citigroup, JPMorgan Chase, Bank of America and Wells Fargo) had approximately 22 percent of all deposits in FDIC-insured institutions back in 2000.  As of June 30th of last year that figure was up to 39 percent.

Putting an increasing amount of financial power into the hands of just a few elite banks is a recipe for disaster any way you want to cut it.

Long-Term Trend #10: Rampant Corruption On Wall Street

Our financial system has become an absolute cesspool of corruption.  In the past I have written extensively about all of the corruption that Goldman Sachs has been involved in, but they are far from alone.

In fact, it seems like new stories of financial corruption emerge almost daily now.

For example, just recently Bank of America, JPMorgan Chase and GMAC Mortgage have all suspended foreclosures in many U.S. states due to serious concerns about foreclosure procedures.

But there is a lot of corruption that is a lot worse than that.  The rampant manipulation of the gold and silver markets was completely blown open by an industry insider earlier this year, but the U.S. government had to be publicly shamed before they would even agree to look into it. 

The truth is that corruption on Wall Street has become so common that it is almost impossible to keep up with it all.  It seems like no matter what stone you turn over on Wall Street these days you find yet more corruption.

But if the core of our financial system is so incredibly corrupt, how long will it be before it collapses in on itself?

Long-Term Trend #11: The Growing Retirement Crisis That Threatens To Bankrupt America

The Baby Boomers may end up bankrupting America after all.  A retirement tsunami is coming that threatens to drown our nation in a sea of red ink.

The truth is that Americans have not been preparing for retirement on their own.  One shocking new study indicates that Americans are $6.6 trillion short of what they need to retire comfortably.

In fact, approximately half of all workers in the United States have less than $2000 saved up for retirement.

So what about corporate pension plans?

Are they in good shape?

No.

One recent study found that America’s 100 largest corporate pension plans were underfunded by $217 billion as of the end of 2008.

But sadly, the pension plans run by U.S. state governments are in even worse shape.

Robert Novy-Marx of the University of Chicago and Joshua D. Rauh of Northwestern’s Kellogg School of Management recently calculated the combined pension liability of all 50 U.S. states.  What they found was that the 50 states are collectively facing $5.17 trillion in pension obligations, but they only have $1.94 trillion set aside in state pension funds.  That means that collectively, the 50 U.S. state governments are 3.2 trillion dollars short of what they need to meet their pension obligations.

But the biggest mess of all may be the U.S. Social Security system.

The sad reality is that anyone that has studied it closely knows that it is nothing more than a Ponzi scheme, and the scam has just about run its course.

According to the Congressional Budget Office, the Social Security system will pay out more in benefits than it receives in payroll taxes in 2010.  That was not supposed to happen until at least 2016.

Oops.

But things get really hairy when you start looking down the road.

The present value of projected scheduled benefits surpasses earmarked revenues for entitlement programs such as Social Security and Medicare by about 46 trillion dollars over the next 75 years.

Ouch.

It is time to face facts people.

We are in deep, deep, deep trouble.

An increasing number of Americans are starting to realize this.  They may not always know the specifics of what is going wrong, but more people than ever realize that something is broken.  According to one recent survey, 63 percent of Americans believe that the United States is on the wrong track.

And we are very much on the wrong track.  We have squandered the great wealth that our parents and grandparents left us and we are wrecking the greatest economic machine that the world has ever seen.

If we do not get our act together, someday people will look back and will curse this generation for how incredibly stupid we were.

What Does The Financial Reform Bill Do Other Than Being Completely And Utterly Worthless?

Is it possible to write a 2,300 page piece of legislation that accomplishes next to nothing and is pretty much completely and utterly worthless?  The answer is yes.  Barack Obama has been trumpeting the Dodd-Frank financial reform bill as the “biggest rewrite of Wall Street rules since the Great Depression”, but the truth is that after the Wall Street lobbyists got done carving it up, the bill that was left was so watered down and so toothless that it essentially accomplishes nothing except creating even more government bureaucracy and even more mind-numbing paperwork.  The bill is so riddled with loopholes for the big banks that it is basically the legislative equivalent of Swiss cheese.  The Democrats in the Senate were ecstatic when they announced that they had secured the 60 votes needed to pass this legislation, but when they are asked about what the financial reform bill will do, most of them are left stammering for some kind of cohesive response.  The sad truth is that most of them probably don’t understand the bill and none of them will probably ever read the entire thing.

So will the financial reform bill do any good at all?

Well, yes.

A very, very small amount.

Essentially, it is kind of like going over to the Pacific Ocean and scooping out a couple of cups of water.

That is about how much good this bill is going to do.

But U.S. Senate Majority Leader Harry Reid is making this sound like this is some kind of history-changing legislation….

“We’re cleaning up Wall Street.”

Oh really?

Charles Geisst, professor of finance at Manhattan College recently had the following to say about this absolutely toothless bill….

Like health-care reform, this bill is being drawn up to grab headlines but its details betray it as nothing more than a slap on the wrist for Wall Street. It is true that Wall Street can commit grand theft and apparently get off with nothing more than community service.

The truth is that most of us never expected the U.S. government to truly take on Wall Street.  The relationship between the two is just way too cozy for that to happen.

So does the financial reform bill actually accomplish anything?

Yes.

Let’s take a look at the “sweeping changes” contained in the bill….

*Federal regulators will receive more authority to monitor everything from mortgages to complex derivatives.  (Oh goody!  Just what we needed – more federal regulation!  As if federal agencies have ever been very good at regulating the financial industry…) 

*Financial firms will be required to reduce the debt they take on and to hold more capital in reserve.  (This will make financial firms marginally more stable, but the truth is that the big banks are so good at accounting tricks that this will not really make much of a difference.  When a big firm is going to fail a few extra bucks in reserve is NOT going to make a difference.) 

*The U.S. government will be given extensive power to seize collapsing financial firms.  Federal regulators would keep collapsing firms operating long enough to prevent a massive panic and would slowly sell off its pieces.  (This does not eliminate “too big to fail” – instead it enshrines “too big to fail” into law permanently.  The bill institutes “orderly procedures” for exactly how to proceed when the U.S. government steps in and takes over failing financial firms.  Just what we need – more socialism!)

*The financial reform bill creates a new Bureau of Consumer Financial Protection at the Federal Reserve that is supposed to help prevent abusive lending by mortgage and credit card companies.  (Wait a second – this bill gives the Federal Reserve more power?  Who came up with that grand idea?  Yeah, let’s give the fox more power to guard the hen house.  The truth is that the Federal Reserve is one of the core problems with our economic system as we have written about previously.)  

*Some rather toothless regulations will be placed on the derivatives markets, hedge funds and credit rating agencies.  (A big emphasis on “toothless”.)

So what does this legislation not do?

-It does not eliminate “too big to fail”.  The truth is that the biggest banks and financial institutions have been systematically gobbling up a bigger and bigger share of the market and this legislation does nothing to change that.  Anthony Sanders, a professor of finance in the School of Management at George Mason University, says that this bill essentially does nothing about the “too big to fail” problem….

“As far as I can see the ‘too big to fail’ problem is still in place.”

In fact, this legislation may cause even more consolidation in the financial industry, because small firms are going to have an especially difficult time complying with all of the new rules, regulations and paperwork created by this bill.

-The financial reform bill does nothing about the horrific bubble in the derivatives market.  Originally it was believed that some tough regulations were going to be imposed on derivatives trading, but the Wall Street lobbyists were all over those provisions like rabid dogs. 

So now there is loophole after loophole in the bill and the “derivatives problem” still ominously hangs over Wall Street.  Not that there is any way to fix it. 

Nobody actually knows the true total value of all the derivatives in the world, but estimates place it at somewhere between 600 trillion dollars and 1.5 quadrillion dollars.

When the derivatives bubble pops, and it will, there won’t be enough money in the entire world to fix it.

-The financial reform bill does nothing about mortgage giants Fannie Mae and Freddie Mac.  They remain financial black holes that the U.S. government will be forced to pour hundreds of billions (if not trillions) of dollars into.

-A proposal to conduct yearly comprehensive audits of the Federal Reserve was left out of the financial reform bill.  Instead, a very, very, very limited one-time audit of a few of the transactions that the Federal Reserve conducted during the height of the financial crisis was included. 

What we really need is a true audit of the Fed.  The Federal Reserve has never been the subject of a true, comprehensive audit since it was created in 1913.  Considering the fact that the Federal Reserve issues our currency, controls our banking system, sets our interest rates and is basically the core of the U.S. economy, you would think that the American people should have the right to see what is going on over there.

But Ben Bernanke and the rest of the folks over at the Fed fought against the comprehensive audit proposal with everything that they had.  They seemed extremely alarmed that the American people might actually get to take a look inside their books.

The truth is that unless something is done about the Federal Reserve, no true “financial reform” is really going to take place.

But the U.S. Congress could have done at least some good with this bill.

Instead, they have given us a 2,300 page mess that is pretty much completely and utterly worthless.

So what do you think about the “financial reform” bill.  Feel free to leave a comment with your opinion….