Economic Despair

The Declining Value Of Work

One of the great joys that men in free societies have long enjoyed is the ability to earn an honest wage for an honest day of work.  In particular, the amazing capitalist engine that powered the U.S. economy for decade after decade greatly rewarded the incredible hard work and industriousness of the American people.  America was known as the land of opportunity, and we built the largest middle class in the history of the world by working incredibly hard.  But today, all of that is fundamentally changing.  Thanks to rapid advances in technology, and thanks to the globalization of the work force, the labor of American workers is rapidly losing value.  Automation, robotics and computers have made many jobs obsolete.  Today one man can do the work that a hundred men used to do.  Not only that, but today American workers literally have to compete against workers from all over the globe.  Global corporations often find themselves having to choose whether to build a factory in the United States or in the third world.  But in the third world workers often earn less than 10% of what American workers earn, corporations are often not required to provide any benefits to workers, and there are usually hardly any oppressive government regulations.  How can American workers compete against that?

The truth is that labor is now a global commodity.  How can an American worker compete against a desperate, half-starving worker in the third world that will work like mad for a dollar an hour?

But this is what we get for letting the politicians push “free trade” down our throats.

Most American workers had no idea that free trade would mean that they would suddenly be competing for jobs against workers in the Philippines and Malaysia.

But that is the cold, hard reality of globalism.

All of this free trade has been very hard on American workers as factory after factory has closed, but it has allowed the big corporations to get exceedingly wealthy.

The top executives at the big global corporations are certainly enjoying all of this free trade.  Their salaries have soared.

In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1.  Since the year 2000, that ratio has ranged between 300 to 500 to one.

The rich are getting richer and the poor are getting poorer.

That is what globalism is all about.

The elite make out like bandits as they exploit third world labor pools, while the American middle class finds itself slowly being crushed out of existence.

According to the United Nations Gini Coefficient (which measures distribution of income), the United States has the highest level of inequality of all of the highly industrialized nations.

Increasingly, all of the rewards are going to those at the top, while the vast majority of Americans are left wondering why things just don’t seem to work out for them.

According to economists Thomas Piketty and Emmanuel Saez, two-thirds of income increases between 2002 and 2007 went to the wealthiest 1% of Americans.

Life is good if you are in the top one percent.

Unfortunately, that does not include any of us.

Instead, the American middle class is gradually being pushed into lower paying service jobs.  But it is really hard to feed a family by cutting hair or by greeting the folks who come walking into the local Wal-Mart.

If you talk to many Americans, they just can’t seem to figure out why they can’t make things work out even though they are working as hard as they can.  Millions of Americans have found themselves taking on second (and in many cases third) jobs in an attempt to provide for their families.

But what they don’t understand is that the global elite have turned labor into a globalized commodity.

American workers are not faced with a level playing field.  Just check out some of the pay levels around the world that American workers must compete against….

In Bangladesh, a garment worker makes 22 cents an hour. The wage in Cambodia is 33 cents an hour; in Pakistan, 37 cents an hour; in Vietnam, 38 cents; in Sri Lanka, 43 cents; Indonesia, 44 cents; India, 55 cents; China, 86 cents; the Philippines, $1.07; and Malaysia, $1.18.

Do any of you want to work for $1.18 an hour with no benefits?

But that is your competition.

Wages are being driven down and big global corporations are loving it.

This isn’t capitalism.

This is the global elite pushing us into a cruel system of economic slavery where they control all of the wealth and the rest of us struggle to survive as we work our tails off for them.

Already we are seeing large numbers of Americans becoming absolutely desperate to get even a low paying job.

For example, over one three day period, approximately 10,000 people showed up to apply for 90 jobs making washing machines in Kentucky for $27,000 a year.

Can your family live on $27,000 a year?

But that is considered a good wage now.

Actually, the folks who are making really good wages now are those who work for the U.S. government.

Yes, life is good if you are a servant of the system.

Today, the average federal worker now earns about twice as much as the average worker in the private sector.

Of course government employees basically produce next to nothing except red tape.

The U.S. government doesn’t seem to care if they are productive or not.  They just keep borrowing more money and getting us into even more financial trouble.

But at least there is somewhere for middle class families to get decent jobs.

In fact, it is getting really hard to live a middle class lifestyle in America without relying on the government in some way.

The truth is that good jobs are becoming increasingly scarce.

That is why it is absolutely imperative for all of us to try to become as independent as possible.

That means getting out of debt.

That means starting our own businesses.

That means learning how to grow a garden.

Many of those who continue to blindly rely on the system to provide them with a “job” (“just over broke”) will end up bitterly disappointed in the end.

Millions of Americans have already lost their jobs and millions more Americans will lose their jobs as we move along through the next few years.

In fact, with all of the amazing advances in technology that we have seen over the past couple of decades, the global elite are starting to realize that they really don’t need 6 billion workers after all.

Instead, those among the global elite are increasingly viewing all of us as a burden.  They openly ask why they should have to take care of so many “useless eaters”.  After all, if the system does not need all of us to keep functioning, then what good are we to them?

So these days you are starting to hear a lot about the dangers of “overpopulation” and the need to control population growth.

In fact, just over one year ago Bill Gates, David Rockefeller, Warren Buffett, George Soros, Michael Bloomberg, Ted Turner, Oprah Winfrey and other very wealthy power brokers held a clandestine meeting in New York.

So what was the topic?

Population control.

One anonymous attendee of the meeting was quoted in a U.K. newspaper as saying that overpopulation “is something so nightmarish that everyone in this group agreed it needs big-brain answers.”

Are you starting to get the idea?

Instead of being viewed as valuable workers, now we are being viewed by the elite as pests that have multiplied to the point where we are now out of control.

What a strange world we live in now.

We need to get back to the America where good workers are valued and where hard work is rewarded.

We need to get back to the America where having a large middle class is an important national goal.

We need to get back to the America where we build American businesses, where we hire American workers and where we buy American products.

But unless the American people wake up, American workers are going to continue to be devalued.

Are we actually going to sit back and let American living standards decline to third world standards?

It is up to this generation to reject globalism and to reclaim the great free enterprise principles that this nation was founded on.

If someday our children and grandchildren exist in a world where they are considered just another part of the third world labor pool they will know who to blame.

The Extreme Frustration Of Unemployed Americans

When Barack Obama visited Buffalo recently, he was greeted by a billboard advertisement with a very pointed message about unemployment.  In just a few words it summarized the frustrations of an entire region.  The billboard along I-190 had this very simple message for Obama: “Dear Mr. President, I need a freakin job. Period. Sincerely, inafj.org.”  As word about this billboard got out, it quickly made headlines all over the United States.  Why?  Well, the truth is that millions of hard working Americans are extremely frustrated about their lack of work right now.  When you don’t have a job and you can’t provide for your family, very little else seems to matter.  In fact, according to a recent Gallup poll, unemployment is now the second most important issue to American voters.  The number one issue is the economy.

The reality is that the American people don’t want excuses.

They want jobs.

And some are getting so desperate that they are even putting up billboards to express their frustrations.

So who sponsored the billboard in Buffalo?

Well, it was actually sponsored by a group organized by Buffalo businessman Jeff Baker.  It turns out that Baker lost his own small business 15 months ago.  His business had employed 25 people, and when he was forced to close it he described it as “the most heartbreaking situation” of his entire life.

Baker’s group, INAFJ (“I Need A Freakin Job”), says that they are not about playing politics.  What they want is only one thing.

Jobs.

They want someone to put the American people back to work.  Baker recently explained it this way….

“Nothing else matters unless the American people are working.”

In some areas of the United States, the situation is beyond desperate.  Detroit is a great example of this.  Not only does the city resemble a war zone at this point, but Detroit’s mayor says that the unemployment rate in his city is somewhere around 50 percent.

So how in the world is a major city supposed to function when 40 to 50 percent of the people living there can’t get the work that they need?

The sad thing is that Detroit used to be one of the most prosperous areas in the United States.  Once upon a time, the auto industry was booming and there were lots of great jobs available for blue collar workers.

But that all seems so far away now.

For decades, the politicians in Washington D.C. have allowed (or even encouraged) the offshoring of our manufacturing jobs, and now we are a nation with a dwindling manufacturing base that is rapidly bleeding cash.

In fact, the U.S. trade deficit widened for the second consecutive month in March to its highest level since December 2008.  Every single month we buy much more from the rest of the world than they buy from us.  That means that wealth is constantly flowing out of this nation, and no end to the bleeding is in sight.

The truth is that America’s twin deficits (the trade deficit and the massive U.S. government budget deficit) are absolutely destroying the financial condition of this nation.  For years and years economists have warned that these deficits would bring about a day of reckoning at some point, and now that day is here.

We are told by the media that we have entered an economic recovery, but with tens of millions of Americans not able to get the work that they need, most people are not convinced.  In fact, a new poll shows that 76 percent of Americans believe that the U.S. economy is still in a recession.

But this is nothing compared to what is coming.

The truth is that the United States is rapidly becoming a service economy.  Service jobs pay less than manufacturing jobs do, and the rapid advance of technology in recent decades has made human labor increasingly unnecessary.

That means that the “system” does not need our labor as much as it once did.

This is leading to a situation where there is a widening gap between the “haves” and the “have nots”.  In fact, the bottom 40 percent of those living in the United States now collectively own less than 1 percent of the nation’s wealth.

But not everyone has been hurting during this financial crisis.

Did you know that the number of millionaires in the United States rose 16 percent to 7.8 million in 2009?

Not only that, but an analysis of income-tax data by the Congressional Budget Office a few years ago found that the top 1% of households in the United States own nearly twice as much of the corporate wealth as they did just 15 years ago.

The elite are getting richer, while at the same time tens of millions of other Americans are finding it increasingly more difficult to survive.

That is why groups like INAFJ are becoming so popular.  They are tapping into the frustration of the growing number of Americans who are desperately trying to make it from month to month.  The following is a short video that INAFJ posted on YouTube about their organization….

So do have a story of economic frustration that you would like to share with the world?

Have you found yourself working harder and harder for less and less?

Does it seem like you come up short at the end of every month no matter how hard you try?

If you have a story, we would love to share it with our readers.  Please feel free to post your tale of economic frustration in the comments section below….

Get Ready To Taste The Bitter Side Of Keynesian Economics

Most Americans have no idea what the term “Keynesian economics” means, but the truth is that it has been deeply influencing U.S. economic policy for decades.  Essentially, it is an economic theory that originated with a 20th century British economist named John Maynard Keynes, and it advocates government intervention in the economy in order to smooth out economic cycles.  The general idea was that lower interest rates and increased government spending could be used to increase aggregate demand when the economy was experiencing a downturn, thus increasing economic activity and reducing unemployment.

And you know what?

To a certain degree, Keynesian economic theory actually does work.

Increased government spending DOES stimulate the economy.

But the problem is that governments all over the world decided that they would just run constant budget deficits and stimulate the economy all the time.

All of this debt has brought a temporary prosperity to many of the nations around the globe, but there is one huge problem with debt.

It has to be paid back eventually.

With interest.

So what happens when nations have to start spending huge chunks of their national budgets just to service all the debt that they have piled up?

Well, that is when they taste the bitter side of Keynesian economics.

In fact, we see that starting to happen all over the world right now.

All of a sudden, governments all over the globe are talking about huge budget cuts, pay decreases, and higher taxes.

We all know about what is going on in Greece right now, but suddenly it seems like “austerity measures” are being implemented all over the place.  Just consider the following examples….

*Portugal has pledged to impose fresh austerity measures that include much higher taxes and dramatic budget cuts.

*Barack Obama is personally pressuring Spain to make severe austerity cuts.

*It’s not just Southern Europe that is facing these austerity measures either.  It is being reported that Germans are bracing themselves for a “bitter” round of budget cuts.

*The exploding debt situation in the U.K.was a major issue in the most recent election.  Bank of England governor Mervyn King has even gone so far as to warn that public anger over the “austerity measures” that soon must be implemented in the U.K. will be so painful that whichever party is seen as responsible will be out of power for a generation.

*Federal Reserve Chairman Ben Bernanke says that United States citizens will soon have to make difficult choices between higher taxes and reduced government spending.

*California Governor Arnold Schwarzenegger is reportedly planning to seek “terrible cuts” to eliminate an $18.6 billion budget deficit facing the most-populous U.S. state through June 2011.

*In fact, many U.S. states are getting ready for their biggest budget cuts in decades.

Austerity measures for everyone?

That is the way it is shaping up.

So what happens when austerity measures are implemented?

Well, just as Keynesian economics correctly predicts that economic growth goes up when government spending increases, it also correctly tells us that economic growth goes down when government spending decreases.

So all of these austerity measures are going to mean economic pain for a whole lot of people.

Not only that, but there are now whispers that this European debt crisis could potentially cause the break up of the euro.

Whether or not that is actually the case, officials in Europe are sure seizing on this crisis to advocate for increased centralization of power in the EU.

For example, senior administrators of the European Union are proposing that they be given unprecedented power to scrutinize the spending plans of member countries before national parliaments can vote on those budgets.

Talk about a loss of sovereignty.

But not only that, the Governor of the Bank of England, Mervyn King, has come right out and said that he believes that the European Union must become a federalized fiscal union if it is to survive.

Doesn’t it seem like whenever there is a crisis the solution that is always being proposed is to give centralized institutions even more power?

There has also been talk that nations such as Greece could end up being ejected from the euro, but the reality is that such a scenario is not very likely.

For one thing, the ECB has already come out and said that under current EU law, ejection of a nation from the monetary union is “legally next to impossible”.

In addition, leaders throughout Europe realize that if the euro fails then the entire EU may fail as well.  German Chancellor Angela Merkel made this very clear when she recently warned that if the euro collapses, “then Europe and the idea of European union will fail.”

For many in Europe that would seem like a disaster, but the truth is that it would be a wonderful, wonderful thing if the euro failed.

Why?

Because it would represent a major defeat for those who are seeking to drag us towards a “world currency” and a “global government”.

It would also be a huge victory for those who still believe in national sovereignty and the decentralization of economic power.

So let us hope that the euro breaks up.

But don’t count on it.

Meanwhile, the one thing that we can count on is all of the economic pain that all of these new austerity measures are going to bring.

8 Reasons Why The Pain From The Gulf Of Mexico Oil Spill Is Going To Be Felt For Decades

As oil continues to pour into the Gulf of Mexico at a staggering rate, many are now starting to realize that the pain from this oil spill will be felt not just for months or years – but for decades.  At least 4.2 million gallons of oil (and some estimates put the total at far higher than that) are already in the Gulf of Mexico causing untold damage to the ecologically fragile Louisiana coast.  The oil has already made contact with the Chandeleur Islands off of the coast of Louisiana, and over the next few days more areas are expected to see oil come ashore.  But just because this disaster is unfolding in slow-motion does not mean that this is not going to be a complete and utter tragedy for the Gulf Coast region.  In fact, many of those living along the Gulf Coast now fear that this oil spill is going to do far more damage to the region than Hurricane Katrina did.  And after Hurricane Katrina and everything else that folks living down there have been through over the past several years, the thought of weathering another massive tragedy is almost too much.

It certainly doesn’t help that those attempting to stop the leak don’t really seem to know what they are doing.  After failing to contain the oil spill with a giant concrete and steel dome, BP announced on Monday that it will make a second attempt this week using a smaller version of the dome dubbed the “Top Hat”.

“Top Hat”?

If BP was as good at stopping oil leaks as they are at coming up with cute little code names for their operations perhaps this crisis would be over by now.

But the truth is that attempting to do anything at depths of up to one mile below the surface of the Gulf of Mexico is extremely difficult.

It kind of makes you wonder what in the world we were doing drilling for oil down there in the first place.

In any event, BP is not just relying on the “Top Hat” to stop the leak.

BP is also considering plugging the damaged blowout preventer on the underwater well by pumping debris into it at high pressure.  This technique is known as a “junk shot”.

Or, in other words, BP would be plugging the leak by shooting a bunch of garbage into it.  One official recently described this method to CBS News this way….

“They are actually going to take a bunch of debris — some shredded up tires, golf balls and things like that — and under very high pressure shoot it into the preventer itself and see if they can clog it up to stop the leak.”

But what many media outlets are not admitting is that the “junk shot” procedure is extremely risky.  In fact, some experts are warning that tinkering with the damaged blowout preventer could make the leak much worse.

But something has got to be done.  Even members of the U.S. Congress are admitting that this oil could end up getting into the Loop Current and going up the east coast of the United States….

“If this gusher continues for several months, it’s going to cover up the Gulf Coast and it’s going to get down into the Loop Current and that’s going to take it down into the Florida Keys and up the east coast of Florida,” Florida Democratic Senator Bill Nelson told CNN.

To get an idea of just how devastating the oil spill in the Gulf of Mexico is already, check out the aerial footage in the video below.  As you watch this video, just try to imagine how horrific this crisis is going to be if oil continues to gush into the Gulf for weeks or months….

The truth is that this has the potential to be one of the greatest tragedies in the history of the United States.  The following are 8 of the reasons why the pain from the Gulf of Mexico oil spill is going to be felt for decades to come….

#1) The Fishing, Shrimping And Oyster Industries In The Gulf Are Being Destroyed

Seafood is a 2.4 billion dollar industry in the state of Louisiana.  In fact, Louisiana produces more than 30 percent of the seafood originating in the continental United States.

But that is about to dramatically change.  As the waters off Louisiana are being progressively poisoned by all the oil, fishermen and shrimpers are starting to realize that their lives will never be the same.

In fact, some local shrimpers in Louisiana are already predicting that it will be seven years before they can set to sea again.

So are they being overly dramatic?

No, especially when you consider the fact that fishermen in Cordova, Alaska are still struggling 21 years after the 1989 Exxon Valdez oil spill devastated the fishing industry in that region.

#2) The Damage To The Environment And Wildlife In the Gulf Is Going To Be Unprecedented

Already, environmentalists are warning that the oil spill in the Gulf of Mexico could absolutely devastate the bird population of the region.  You see, nearly 75 percent of all U.S. waterfowl use Louisiana’s three million acres of wetlands to rest or nest.  Once the oil spill gets into those wetlands it is going to be an absolute nightmare for those waterfowl.

But it isn’t just waterfowl that are at risk.  Literally hundreds of different species that inhabit the coastal areas surrounding the Gulf of Mexico will soon be facing an oily nightmare that they don’t even know is coming.  Entire ecosystems are going to be permanently altered.  Florida Governor Charlie Crist recently put it this way….

“Florida is currently preparing for what we all know is an environmental disaster of unprecedented proportions for our state and Gulf of Mexico partner states.”

In fact, Richard Charter of the Defenders of Wildlife says that we are looking at an environmental impact that is going to last for decades….

“It is so big and expanding so fast that it’s pretty much beyond human response that can be effective. … You’re looking at a long-term poisoning of the area. Ultimately, this will have a multidecade impact.”

#3) The Natural Beauty Of The Gulf Coast Region Will Never Be The Same

Anyone who has ever been to the Gulf Coast knows how amazingly beautiful that it can be.  But once it is covered with millions of gallons of oil it will never be the same.

Brenda Prosser of Mobile, Alabama said that she wept when she saw the workers attempting to try to prevent the oil spill from spreading….

“I just started crying. I couldn’t quit crying. I’m shaking now.  To know that our beach may be black or brown, or that we can’t get in the water, it’s so sad.”

And it is a great tragedy.  This didn’t have to happen.  But now the great natural beauty of our coasts is being destroyed and we aren’t going to be able to get it back for a long, long time as Public Service Commissioner Benjamin Stevens recently explained….

“You get hit by a hurricane and you can rebuild. But when that stuff washes up on the white sands of Pensacola Beach, you can’t just go and get more white sand.”

Louis Miller of the Mississippi Sierra Club was a bit more dramatic in describing what this oil spill means for the region….

“This is going to destroy the Mississippi and the Gulf Coast as we know it.”

#4) Tourism Along The Gulf Coast Is Now Dead

Needless to say, very few people are going to want to vacation along the Gulf Coast for quite a long time.

Hotel Owner Dodie Vegas put it this way….

“It’s just going to kill us. It’s going to destroy us.”

#5) The Gulf Of Mexico Oil Spill Is Going To Greatly Contribute To The Ongoing Poisoning Of The World’s Water Supply

Over the past twenty years, the world has witnessed 30 oil spills larger than the Exxon Valdez tragedy.  Both the global food chain and the world’s waters are being progressively poisoned by all of this oil.  In fact, nature can simply not keep up with how fast we are poisoning the water all over the world.  This current oil spill in the Gulf of Mexico is not going to help things at all.

#6) This Oil Spill Is Going To Have A Dramatic Chilling Effect On Oil Exploration

The head of the International Energy Agency is warning that this disaster will slow the exploration and development of offshore oil projects worldwide.  Now that the danger of offshore drilling has become more apparent, approval of new projects is going to be much more difficult around the world, and oil companies are going to be less inclined to invest in such projects.

#7) Oil Prices Around The Globe Are Going To Rise

Oil prices have already gone up as a result of this oil spill, and they are likely to stay high for the long-term as demand continues to increase while supplies grow less quickly.  As noted in point #6, this crisis is going to have a chilling effect on oil exploration, and that is going to mean less oil as we move forward.  Less oil and increasing demand means that prices are going to rise, and that is not good news for the U.S. economy.

#8) The Economy Of The Gulf Coast Region Is Going To Be Devastated

Two of the major industries in the Gulf region, seafood and tourism, are going to be pretty much wiped out in the short-term.  Many areas along the Gulf, particularly in Louisiana, were already economic disaster areas even before this oil spill.  The truth is that economic conditions down there are simply not strong enough to weather another major tragedy.

The oil spill in the Gulf of Mexico is essentially “a slow-motion Katrina” which is going to alter the economy of the Gulf region permanently.

One anonymous Louisiana resident put it this way….

“A hurricane is like closing your bank account for a few days, but this here has the capacity to destroy our bank accounts.”

It is hard to even imagine the despair that those living along the Gulf Coast are feeling right now.  Let’s pray for them and assist them in any way that we can, and let us hope that they get that darn leak stopped as quickly as possible.

Austin Coins

 

Will The Gulf Of Mexico Oil Spill Be An Economic Disaster That The Gulf Coast Will Never Recover From?

As a silent blanket of black goo that is now about the size of the state of Florida slowly but relentlessly drifts towards the Gulf Coast, communities in the region are bracing for an economic catastrophe that is being described as a “slow motion Katrina”.  Still reeling from the effects of Hurricane Katrina after all these years, many who depend on the Gulf of Mexico for their livelihood fear that the massive oil spill heading their way could prove to be an economic disaster from which they will never recover.  Thousands of businesses in the region could go under before all of this is over, and millions could lose their jobs.  As the gigantic mass of black oil kills and maims all the wildlife it encounters, and as it pushes dangerously close to the coastal wetlands, many residents are predicting that two of the most important industries in the region – seafood and tourism – will be completely and totally destroyed.

Already, the edges of the massive oil spill in the Gulf of Mexico have grazed the barrier islands off Louisiana’s Chandeleur and Breton sounds.  BP spokeswoman Ayana McIntosh-Lee announced on Monday that the damaged well is releasing 210,000 gallons of oil a day into the Gulf of Mexico.  At this point there is no end in sight.

In fact, the oil spill in the Gulf Of Mexico is now larger than the entire state of Florida, and each day it grows larger and more insidious.

Scientists in the region tell us that the Gulf oil spill could actually get into what’s called the “Loop Current” within a day, eventually carrying oil south along the Florida coast and into the Florida Keys.  In fact, one prominent oceanographer says that he cannot think of any scenario where the oil spill doesn’t eventually reach the Florida Keys.

And there are indications that things could get a whole lot worse before they get better.

It is being reported that a confidential government report on the oil spill in the Gulf makes it clear that the Coast Guard now fears that the damaged well could become an unchecked gusher shooting millions of gallons of oil per day into the Gulf.  One Alabama newspaper has posted excerpts from this alarming report….

“The following is not public,” reads the National Oceanic and Atmospheric Administration’s Emergency Response document dated April 28th that was posted on . “Two additional release points were found today in the tangled riser. If the riser pipe deteriorates further, the flow could become unchecked resulting in a release volume an order of magnitude higher than previously thought.”

How bad could it get?

Well, if the riser pipe blows out, experts tell us that we could see 5 to 10 times as much oil flowing into the Gulf as we are now.

That would be a nightmare of Biblical proportions.

Not that we aren’t facing a complete and total nightmare already.

Both Obama administration and BP are  indicating that it might take up to three months to completely seal off the leaking oil well.

3 more months of oil flowing into the Gulf?

How in the world could the Gulf Coast ever recover from that?

And once the oil spill gets into the wetlands along the coast it will never, ever be able to be totally cleaned up.

Already, environmentalists are warning that the oil spill in the Gulf of Mexico could absolutely devastate the bird population of the region.

You see, nearly 75 percent of all U.S. waterfowl use Louisiana’s three million acres of wetlands to rest or nest.  Once the oil spill gets into those wetlands it is over for those waterfowl.

Not only that, but Louisiana produces more fish and seafood than anywhere in the United States except for Alaska.  The cost of this disaster to the fishing industry in Louisiana alone could top 3 billion dollars, and it is being projected that the tourism industry in Florida could lose even more than that.

In fact, some local shrimpers in the region are gloomily forecasting that it will be seven years before they can set to sea again.

Are you starting to get the picture?

Entire industries are going to be wiped out by this thing.

In economic terms, this is far bigger than Katrina.

What we are witnessing is the potential economic death of an entire region.

To get an idea of just what kind of a nightmare the residents of the Gulf Coast are facing, just read some of the quotes that have been popping up in mainstream media sources over the last couple of days….

The Telegraph:

“Worst case scenarios almost never happen,” Professor Robert Thomas, of New Orleans’ Loyola University, was quoted as saying yesterday. “In this case, almost everyone I have known with technical knowledge of oil spills – people who have worked in the industry 30, 40 years – say it is upon us.”

Louis Miller of the Mississippi Sierra Club:

This is going to destroy the Mississippi and the Gulf Coast as we know it.

The Los Angeles Times:

“A major oil spill would devastate the ecosystem and the economy based on that ecosystem,” said Larry Crowder, professor of marine biology at Duke University’s Nicholas School of the Environment. “It’s a particularly bad time of year because just about everything is nesting or replicating.

“In the Gulf of Mexico giant blue fin tuna are spawning, and their eggs and larvae float on the surface,” he said. “Seabirds and gulls are nesting. For nesting sea turtles, obviously, oiling the beaches could have a devastating impact.”

An anonymous Louisiana resident:

“A hurricane is like closing your bank account for a few days, but this here has the capacity to destroy our bank accounts.”

Even if you have a heart that is cold as a stone, now is the time to pray for those who live along the Gulf Coast.  The oil spill relentlessly pushing towards the shore threatens to destroy countless numbers of lives.

Hopefully BP (or someone else) will find a way to keep this disaster from escalating out of control.

If not, there are going to be a whole lot of people who are going to need our help.

Emergency Seed Bank

Emergency Seed Bank

“Things Are Never Going To Get THAT Bad”

Our recent article, “20 Things You Will Need To Survive When The Economy Collapses And The Next Great Depression Begins“, has drawn some intense criticism from those who believe that the U.S. economy is so strong that it could never completely and totally collapse.  In fact, this blog is being accused of officially going off the deep end.  Why?  It’s not because we are pointing out that the economy is bad.  After all, according to a recent Pew Research national poll, 88 percent of Americans rate national economic conditions as only fair or poor.  No, rather it is because we are projecting the eventual complete and total collapse of the U.S. economy.  There still seems to be a belief among a large number of Americans “that things are never going to get THAT bad”.  But they are going to get that bad.  It’s just that most people do not realize it yet.

But while times are still good (and what we are experiencing now is rip-roaring prosperity compared to what is coming), large numbers of people are going to continue to live in denial.  In fact, those who try to warn people about what is coming are going to be accused of “fear-mongering”.  One recent commenter even accused us of totally going off the deep end like many of the Y2K alarmists did….

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“Ok – you’ve officially fallen off the deep end. This blog went from legitimate economic concerns to grand fear mongering. This is the same as Y2K all over again. I have friends who still have bunkers and thousands of dollars of expired canned food and you’re suggesting they go do it again…”

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First of all, it was completely and totally obvious that Y2K was going to be a non-event to anyone with a bit of common sense.  There was simply no way that a “computer glitch” that was foreseeable years ahead of time was going to cause the collapse of society.

What is happening with the U.S. economy now is completely different.  We have built an entire economic system on ever-increasing amounts of debt and paper money, and anyone with half a brain should be able to see that such a system is not sustainable in the long-term.  The collapse of the economy is inevitable due to the way that it was constructed.

As for having “thousands of dollars of expired canned food”, that would not be a problem if you rotated the food that you have stored.  You eat the old stuff first and you replace it with new food that you have purchased.

But the commenter above was not the only one to accuse us of trying to scare people….

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“How does the economic collapse lead to a complete halt to all economic activity? More people may be poorer, but they will still have some money to motivate others to produce for a market. The natural disaster scenario seems more plausible for this type of warning. More and more foreclosures don’t. This posting is a bit much for me, seems just some much scaremongering.”

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The commenter is right about one thing – a few bad economic statistics are not enough to run out and start preparing for the collapse of society.  After all, the American economy has always recovered no matter what happened before.  If we made it through the Great Depression, we can make it through this, right?

Well, the truth is that there are some fundamental differences between what is happening now and what happened during the Great Depression.

During the Great Depression, most Americans were not up to their eyeballs in credit card debt, car payments, student loans and mortgage debt.

During the Great Depression, most Americans either owned their land or had a great deal of equity in their land.  As we wrote about recently, today that is not the case.  Equity as a percentage of home value in the United States has been hitting all-time record lows.

During the Great Depression, most Americans were not dependent on giant corporations to feed and supply us.  Back then, the majority of Americans knew how to live off the land and grew at least some of their own food.  Today that is most definitely not the case.

During the Great Depression, America still had the greatest manufacturing base in the entire world.  Today we have “offshored” our once great manufacturing base, and we have become a fat, spoiled society that consumes everything in sight but manufactures very little.

During the Great Depression, America did not have a colossal trade deficit.  Today we have got the biggest trade deficit in the history of the world.

During the Great Depression, the wealth of Americans was not being sucked dry by dozens of different kinds of taxes.  Today we are being taxed in so many various ways that many Americans actually end up spending over half their incomes just in taxes.

During the Great Depression, the U.S. government had debt, but it was not threatening to collapse the entire global economy.  Today the U.S. government has piled up the biggest mountain of debt in the history of the world.

During the Great Depression, derivatives were not even an issue.  Today, we have created a derivatives bubble that is now well beyond a quadrillion dollars.

Just think about that.

Over 1,000,000,000,000,000 dollars.

Counting at one dollar per second, it would take 32 million years to count to one quadrillion.

In fact, renowned investor Warren Buffett has warned that derivatives are “financial weapons of mass destruction” that could bring down the entire world economic system.

And he is right.

When derivatives collapse, there is not enough money in the world to fix the mess that will be created.  All of the governments in the world working together would not be able to print money fast enough to even make a dent in the colossal wave of red ink that would be created.

The truth is that the U.S. economy (and the world economy for that matter) is teetering on top of a giant pyramid of debt and paper that is on the verge of coming down like a house of cards.

But if you do not want to believe this blog, perhaps you will listen to some of the top financial experts in the world who are also warning that a complete and total economic collapse is coming.

For example, Gerald Celente, the CEO of Trends Research Institute, is forecasting that we are going to see a devastating economic collapse by the year 2012.  It would be easy to dismiss him, except for the fact that he has a sterling track record of forecasts going back 3 decades, and he has appeared on almost all of the major news networks who have no problem relying on him as a source.  What Celente says is on the way for America is absolutely bone chilling….

But if you don’t want to listen to Celente, perhaps you will listen to Peter Schiff, the president of Euro Pacific Capital.  He accurately predicted the recent financial crisis, and he is also forecasting that a depression is on the way.  Schiff is convinced that we need to allow the current “Ponzi economy” to collapse so that something more substantial can arise from the ashes….

Jim Rogers is another financial expert that is forecasting a major economic collapse.  Jim Rogers was a co-founder of the Quantum Fund, and is a college professor, author, economic commentator, and creator of the Rogers International Commodities Index.  He says that civil unrest is on the way and that now is a good time to take up farming if you want to make it through what is coming….

The truth is that the vast majority of Americans have no idea just how vulnerable the U.S. economic system is.  A new Gallup poll has found that 44 percent of Americans believe that they could barely go a month before experiencing severe economic hardship if they lost their jobs.

How long could you go if you suddenly lost your job?

Right now the U.S. economy is being kept afloat by unprecedented U.S. government intervention and spending, but we all know that the U.S. government cannot keep spending money like it is water forever without very serious economic consequences.  To give you an idea of how desperate things have become, just check out the following graphic about the U.S. national debt that was featured in the Chicago Tribune….

Anyone who believes that such a tidal wave of red ink is sustainable please raise your hand.

The truth is that the U.S. economy is caught in a death spiral.

Already there are some areas of the United States that are literally dying.

For those who do not believe this fact, the following is a challenge for you….

Head down to Detroit and buy one of those houses that are on sale for less than a thousand dollars (in fact there have even been reports of some houses selling for a single dollar in Detroit), and try to live there for a month.

You will quickly learn what it is like to live in an area that is literally dying economically.

When people are hungry and they can’t get jobs they get desperate.

So far this year in Detroit, car thefts are up 83%, robberies are up 50%, burglaries are up 20% and property destruction is up 42%.

What is happening in Detroit is a preview of what is soon going to happen all over America.

So doubt it all you want, but all the doubting in the world is not going to stop what is coming.  The U.S. economy is dying so you better start getting ready.

The Prep Room

The Economic Recovery Is Moving Along Quite Well – For The Boys Down On Wall Street

If you are part of the Wall Street establishment, the economic recovery is moving along quite well.  Many of the biggest firms on Wall Street just handed out record-setting bonuses, the Stock Market has been moving up steadily and the DOW is back up to around 11,000.  Profits at the top banks have been quite impressive lately.  Bank of America, JPMorgan Chase, Citigroup and Wells Fargo combined for first quarter profits of $13.4 billion – the most in almost three years.  Yes, life is quite good down on Wall Street these days.  People are still buying fast cars, big yachts and homes in the Hamptons.  It is almost as if “the greatest financial crisis since the Great Depression” didn’t even happen.  Things are quickly getting back to “normal” for the banking elite and to many it seems like there are a lot more smiles down on Wall Street than there have been in a long, long time.

Bank of America’s chief executive officer, Brian T. Moynihan, is being quoted by Reuters as saying that “the worst of the credit cycle is clearly behind us” and that the economic growth we are experiencing is “real”.

JPMorgan CEO Jamie Dimon is quoted as saying that the U.S. economy may be poised for “a strong recovery”.

And why wouldn’t they say these things?  Profits are up.  Their stock portfolios are up.  They are getting record bonuses.  They know that if anything does go wrong again that their friends in Washington D.C. will bail them out because they are “too big to fail”.

But for tens of millions of other Americans, the economy seems like it is getting worse than ever.  It is hard to explain the gut-wrenching agony that many highly-educated and highly-qualified American workers are going through as they send out hundreds of resumes only to get no response.  Or the absolute frustration of only being able to get a very low paying retail job and realizing that it will not even be able to pay the mortgage – much less support an entire family.  Or the soul-crushing despair of working two or three jobs and still not being able to pay the bills at the end of the month.

But these are the daily realities that millions of Americans must face now.  The truth is that there are not nearly enough jobs for everyone.  The number of unemployed Americans per job opening hit 5.5 in February.  It is like we are all caught in some bizarre game of musical chairs, and the losers end up destitute and out in the street.

Even many of those who can get jobs find themselves in bad situations.  Gallup’s underemployment measure hit 20.0% on March 15th.  That was up from 19.7% two weeks earlier and 19.5% at the start of the year.  A lot of very educated, very qualified people find themselves slaving away at jobs that high school students are qualified for.

But the ones being hurt the worst by this unemployment epidemic are the poor.  Check out the following chart.  At the end of 2009, the unemployment rate for those at the top end of the income scale in the United States was about 3%.  For those at the bottom of the income scale, the unemployment rate was about 30%….

It isn’t the boys down on Wall Street that are losing their homes and their jobs.

No, they are “too big to fail”.

It is millions of ordinary Americans that are losing their homes and their jobs.

And things keep getting worse.

According to RealtyTrac, foreclosure filings were reported on 367,056 properties in the month of March.  This was an increase of almost 19 percent from February, and it was the highest monthly total since RealtyTrac began issuing its report in January 2005.

Not only that, but RealtyTrac projects that there will be a total of 4.5 million home foreclosures by the end 2010.  If you figure that there are approximately 4 people per household, that is another 18 million people that will be facing the pain of a foreclosure filing.

For many Americans, losing their home to foreclosure is just too much.  For example, one man in Ohio actually decided to bulldoze his own home rather than let the bank take it in foreclosure proceedings.

Because of the extreme economic conditions, millions of Americans are in severe pain and are becoming increasingly desperate.  In some of the most depressed areas, crime is absolutely spiralling out of control.  So far this year in Detroit, car thefts are up 83%, robberies are up 50%, burglaries are up 20% and property destruction is up 42%.

Adding to all of this economic despair is the fact that food and gas prices are starting to shoot up.

In some areas of the United States, people are already paying as much as $3.50 for a gallon of gasoline, and many experts are now predicting that gasoline could hit $4.00 a gallon by the end of 2010.

Not only that, but wholesale food prices rose 2.4% in March, matching the biggest gain in 26 years.

So while the economic recovery is buzzing along quite well down on Wall Street, the reality is that for millions of other Americans things are really hard.  In fact, not even the smaller banks are experiencing much of a recovery.  The FDIC’s list of problem banks just hit a 17-year high.

No, the main beneficiaries of this “economic recovery” are the boys over on Wall Street.  They should enjoy it while it lasts, because even harder economic times are on the way, and the reality is that none of us will be able to completely escape the economic pain that is coming.

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Paupers In The Land Our Forefathers Conquered

A long time ago, in an America now far, far away, the majority of the American people owned the land that they live on.  The term “my land” actually meant something back then.  But today that has fundamentally changed.  Now the majority of the American people owe on the land that they live on.  In fact, most of them owe big money to the giant corporate banking interests that control the mortgage industry.  So how did the American people come to be debtors and paupers in the land that our forefathers conquered?  Today when someone says that they “bought a house” what they really mean is that they have signed up for 30 years (or more) of bloated mortgage payments which they care barely afford.  As you will see below, the percentage of residential mortgage debt to total home equity (housing net worth) in the United States continues to rise at a staggering pace.  In fact, thanks to the housing crash, for the first time in American history residential mortgage debt far surpasses the total home equity owned by all Americans.  So what does that mean?  It means that the big corporate banks have more of an interest in America’s homes than we do now.

So how are we getting our land taken from us?

Well, you can thank rampant inflation and the housing bubble.

Back in 1980, the United States was pushing up towards a total of $1 billion in total residential mortgage debt.  It took us over 200 years to get to that point as a nation.

By 1990, the United States approximately doubled that amount and was sitting at about $2 trillion  in total residential mortgage debt.

By the year 2000, the United States had just about $5 trillion in total residential mortgage debt.

By 2008, the United States had over $10 trillion in total residential mortgage debt.

Do you notice a trend?

In just the past 30 years the amount of residential mortgage debt in the United States has increased tenfold.

Meanwhile, thanks to the housing crash, home equity has taken a nosedive.  As you can see from the chart below, total residential mortgage debt in the U.S. now far exceeds total home equity….

So what does this mean?  It means that the banks have more of a financial interest in America’s homes than we do.  It means that we are quickly becoming paupers and debt slaves.

As you can see from the chart below, back in 1945 total home equity as a percentage of home value was extremely high (80%).  Home equity exceeded total residential mortgage debt by about a 4 to 1 margin.  But today total residential mortgage debt exceeds home equity and the situation is rapidly becoming worse….

We were all told to buy into the system and we could live the American Dream.  We were told to get a “good job” with one of the big global corporations and we were told to get a mortgage so that we could build up equity.  Well, that has turned out great for most of us, hasn’t it?

The reality is that the system so many of us trusted is dying.  We are now at the point where the system cannot provide jobs for millions of us anymore.  If unemployment continues to soar as it has, millions more of us will find ourselves destitute and homeless on the continent our forefathers conquered….

So how did all of this happen?

Back in 1913, the U.S. Congress gave control over U.S. currency to the Federal Reserve.  Since that time, the value of the U.S. dollar has slowly been eroded.  $1.00 in 1914 (the year after the Federal Reserve was established) had about the same buying power as $21.59 in 2010.  That means that the U.S. dollar has lost over 95 percent of its purchasing power since then.

So the accumulated wealth that our parents and grandparents hand down to us is being constantly devalued.  The only way to keep up with rising prices on land and on everything else is to go out into the system to get more of the “currency” that is controlled and manipulated by the Federal Reserve and the big corporate banks.  But what most of us don’t realize is that the game is rigged to slowly transfer the wealth of the nation over to them.

The house always wins in the end.

Thanks to the greed and stupidity of the American people, we have accumulated the biggest mountain of debt in the history of the world.  It was a fun party while we were piling up all the debt, but now the bankers have us where they want us.

If only we had listened to those among our founding fathers who warned us about this trap.

For example, the words of Thomas Jefferson in a letter to John Taylor dated May 28th, 1816 ring more true today than they ever have….

And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

The truth is that the American people are being swindled and most of them don’t even realize it.  The wealth of America is slowly being transferred to the big banks.  All of the interest that we pay month after month after month makes them rich.

The financial system of the United States is broken.  But until the U.S. economy totally collapses most Americans will not realize it.  By then it will be far too late.

FINCA BAYANO

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