The Next Great Depression

20 Questions To Ask Anyone Foolish Enough To Believe The Economic Crisis Is Over

If you listen to Ben Bernanke, Barack Obama and the mainstream media long enough, and if you didn’t know any better, you might be tempted to think that the economic crisis is long gone and that we are in the midst of a burgeoning economic recovery.  Unfortunately, the truth is that the economic crisis is far from over.  In 2010, more homes were repossessed than ever before, more Americans were on food stamps than ever before and a smaller percentage of American men had jobs than ever before.  The reality is that the United States is an economic basket case and all of these natural disasters certainly are not helping things.  The Federal Reserve has been printing gigantic piles of money and the U.S. government has been borrowing and spending cash at a dizzying pace in an all-out effort to stabilize things.  They have succeeded for the moment, but our long-term economic problems are worse then ever.  We are still in the middle of a full-blown economic crisis and things are about to get even worse.

If you know someone that is foolish enough to believe that the economic crisis is over and that our economic problems are behind us, just ask that person the following questions….

#1 During the 23 months of the “Obama recovery”, an average of about 23,000 jobs a month have been created.  It takes somewhere in the neighborhood of 150,000 jobs a month just to keep up with population growth.  So shouldn’t we hold off a bit before we declare the economic crisis to be over?

#2 During the “recession”, somewhere between 6.3 million and 7.5 million jobs were lost.  During the “Obama recovery”, approximately 535,000 jobs have been added.  When will the rest of the jobs finally come back?

#3 Of the 535,000 jobs that have been created during the “Obama recovery”, only about 35,000 of them are permanent full-time jobs. Today, “low income jobs” account for 41 percent of all jobs in the United States. If our economy is recovering, then why can’t it produce large numbers of good jobs that will enable people to provide for their families?

#4 Agricultural commodities have been absolutely soaring this decade.  The combined price of cotton, wheat, gasoline and hogs is now more than 3 times higher than it was back in 2002.  So how in the world can the Federal Reserve claim that inflation has been at minimal levels all this time?

#5 Back in 2008, banks had a total of 27 billion dollars in excess reserves at the Fed.  Today, banks have a total of approximately 1.5 trillion dollars in excess reserves at the Fed.  So what is going to happen when all of this money eventually hits the economy?….

#6 If the U.S. economy is recovering, then why are shipments by U.S. factories still substantially below 2008 levels?

#7 Why are imports of goods from overseas growing much more rapidly than shipments of goods from U.S. factories?

#8 According to Zillow, the average price of a home in the U.S. is about 8 percent lower than it was a year ago and that it continues to fall about 1 percent a month. During the first quarter of 2011, home values declined at the fastest rate since late 2008. So can we really talk about a “recovery” when the real estate crisis continues to get worse?

#9 According to a shocking new survey, 54 percent of Americans believe that a housing recovery is “unlikely” until at least 2014.  So how is the housing industry supposed to improve if so many people are convinced that it will not?

#10 The latest GDP numbers out of Japan are a complete and total disaster.  During the first quarter GDP declined by a stunning 3.7 percent.  Of course I have been saying for months that the Japanese economy is collapsing, but most mainstream economists were absolutely stunned by the latest figures.  So will the rest of the world be able to avoid slipping into a recession as well?

#11 Next week, Republicans in the House of Representatives are going to allow a vote on raising the debt ceiling.  Everyone knows that this is an opportunity for Republican lawmakers to “look tough” to their constituents (the vast majority of which do not want the debt ceiling raised).  Everyone also knows that eventually the Republicans are almost certainly going to cave on the debt ceiling after minimal concessions by the Democrats.  The truth is that neither “establishment Republicans” nor “establishment Democrats” are actually serious about significantly cutting government debt.  So why do we need all of this political theater?

#12 Why are so many of our once great manufacturing cities being transformed into hellholes?  In the city of Detroit today, there are over 33,000 abandoned houses, 70 schools are being permanently closed down, the mayor wants to bulldoze one-fourth of the city and you can literally buy a house for one dollar in the worst areas.

#13 According to one new survey, about half of all Baby Boomers fear that when they retire they are going to end up living in poverty.  So who is going to take care of them all when the money runs out?

#14 According to the U.S. Bureau of Labor Statistics, an average of about 5 million Americans were being hired every single month during 2006.  Today, an average of about 3.5 million Americans are being hired every single month.  So why are our politicians talking about “economic recovery” instead of “the collapse of the economy” when hiring remains about 50 percent below normal?

#15 Since August, 2 million more Americans have left the labor force.  But the entire period from August to today was supposed to have been a time of economic growth and recovery.  So why are so many Americans giving up on looking for a job?

#16 According to Gallup, 41 percent of Americans believed that the economy was “getting better” at this time last year.  Today, that number is at just 27 percent.  Are Americans losing faith in the U.S. economy?

#17 According to the U.S. Census, the number of children living in poverty has gone up by about 2 million in just the past 2 years, and one out of every four American children is currently on food stamps.  During this same time period, Barack Obama and Ben Bernanke have told us over and over that the U.S. economy has been getting better. So what is the truth?

#18 America has become absolutely addicted to government money. 59 percent of all Americans now receive money from the federal government in one form or another. U.S. households are now receiving more income from the U.S. government than they are paying to the government in taxes. Americans hate having their taxes raised and they hate having their government benefits cut.  So is there any hope that this will ever be turned around before disaster strikes?

#19 The combined debt of the major GSEs (Fannie Mae, Freddie Mac and Sallie Mae) has increased from 3.2 trillion in 2008 to 6.4 trillion in 2011.  How in the world is the U.S. government going to be able to afford to guarantee all of that debt on top of everything else?

#20 If the U.S. national debt (more than 14 trillion dollars) was reduced to a stack of 5 dollar bills, it would reach three quarters of the way to the moon.  The U.S. government borrows about 168 million dollars every single hour.  If Bill Gates gave every penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for 15 days.  So how in the world can our politicians tell us that everything is going to be okay?

50 Things Every American Should Know About The Collapse Of The Economy

Right now, we are witnessing a truly historic collapse of the economy, and yet most Americans do not understand what is going on.  One of the biggest reasons why the American people do not understand what is happening to the economy is because our politicians and the mainstream media are not telling the truth.  Barack Obama and Federal Reserve Chairman Ben Bernanke keep repeating the phrase “economic recovery” over and over, and this is really confusing for most Americans because things sure don’t seem to be getting much better where they live.  There are millions upon millions of Americans that are sitting at home on their couches right now wondering why they lost their jobs and why nobody will hire them.  Millions of others are wondering why the only jobs they can get are jobs that a high school student could do.  Families all across America are wondering why it seems like their wages never go up but the price of food and the price of gas continue to skyrocket.  We are facing some very serious long-term economic problems in this country, and we need to educate the American people about why the collapse of the economy is happening.  If the American people don’t understand why they are losing their jobs, why they are losing their homes and why they are drowning in debt then they are going to keep on doing all of the same things that they have been doing.  They will also keep sending the same idiot politicians back to Washington to represent us.  There are some fundamental things about the economy that every American should know.  The American people need to be shocked out of their entertainment-induced stupor long enough to understand what is really going on and what needs to be done to solve our nightmarish economic problems.  If we do not wake up enough Americans in time, the economic collapse that is coming could tear this nation to shreds.

The U.S. economy was once the greatest economic machine in modern world history.  It was truly a wonder to behold.  It worked so well that entire generations of Americans came to believe that America would enjoy boundless prosperity indefinitely.

But sadly, prosperity is not guaranteed for any nation.  Over the past several decades, some very alarming long-term economic trends have developed that are absolutely destroying the economy.  If dramatic changes are not made soon, a complete and total economic collapse will be unavoidable.

Unfortunately, the American people will never agree to fundamental changes to our economic and financial systems unless they are fully educated about what is causing our problems.  We have turned our backs on the principles of our forefathers and the principles of those that founded this nation.  We have rejected the ancient wisdom that was handed down to us.

It has been said that those that sow the wind, shall reap the whirlwind.

We are about to experience the consequences of decades of really bad decisions.

Hopefully we can get the American people to wake up.

The following are 50 things that every American should know about the collapse of the economy….

#1 Do you remember how much was made of the “Misery Index” during the presidency of Jimmy Carter?  At that time, the “Misery Index” was constantly making headlines in newspapers all across the country.  Well, according to John Williams of Shadow Government Statistics, if we calculated unemployment and inflation the same way that we did back during the Carter administration, then the Misery Index today would actually be higher than at any point during the presidency of Jimmy Carter.

#2 According to the U.S. Bureau of Labor Statistics, an average of about 5 million Americans were being hired every single month during 2006.  Today, an average of about 3.5 million Americans are being hired every single month.

#3 According to the Wall Street Journal, there are 5.5 million Americans that are currently unemployed and yet are not receiving unemployment benefits.

#4 All over America, state and local governments are selling off buildings just to pay the bills.  Investors can now buy up government-owned power plants, prisons and municipal buildings from coast to coast.  For example, the mayor of Newark, New Jersey recently sold off 16 government buildings (including the police and fire headquarters) just to pay some bills.

#5 When Americans think of “government debt”, most of them only think of the federal government, but it is not just the federal government that has a massive debt problem.  State and local government debt has reached an all-time high of 22 percent of U.S. GDP.

#6 If you can believe it, one out of every seven Americans has at least 10 credit cards.

#7 Credit card usage in the United States is on the increase once again.  During the month of March, revolving consumer credit jumped 2.9%.  Sadly, it looks like Americans have not learned their lessons about the dangers of credit card debt.

#8 Last year, Social Security ran a deficit for the first time since 1983, and the “Social Security deficits” in future years are projected to be absolutely horrific.

#9 The U.S. government now says that the Medicare trust fund will run out five years faster than they were projecting just last year.

#10 Right now we are watching what could potentially be the worst Mississippi River flood ever recorded play out right in front of our eyes.  One agricultural economist at Mississippi State University believes that this disaster could do 2 billion dollars of damage just to farms alone.

#11 The “tornadoes of 2011” that we just saw in the southeast United States are being called the worst natural disaster that the U.S. has seen since Hurricane Katrina.  It has been estimated that up to 25 percent of all of the poultry houses in Alabama were either significantly damaged or destroyed.  It is also believed that millions of birds were killed.

#12 The economic effects of the BP oil spill just seem to go on and on and on.  The number of very sick fish in the Gulf of Mexico is really starting to alarm scientists.  The following is how one local newspaper recently described the situation….

Scientists are alarmed by the discovery of unusual numbers of fish in the Gulf of Mexico and inland waterways with skin lesions, fin rot, spots, liver blood clots and other health problems.

#13 The number of “low income jobs” in the U.S. has risen steadily over the past 30 years and they now account for 41 percent of all jobs in the United States.

#14 All over America, hospitals that care for the poor and needy are so overwhelmed and are so broke that they are being forced to shut down.  Recently, a local newspaper in Florida ran an article about two prominent charity hospitals in Illinois that have served the poor for more than 100 years but are now asking for permission to shut down….

Two charity hospitals in Illinois are facing a life-or-death decision. There’s not much left of either of them – one in Chicago’s south suburbs, the other in impoverished East St. Louis – aside from emergency rooms crowded with patients seeking free care. Now they would like the state’s permission to shut down.

#15 The U.S. dollar is in such bad shape that now even Steve Forbes is predicting that the U.S. is “likely” to go back to a gold standard within the next five years.

#16 Most Americans don’t realize how much the U.S. dollar has been devalued over the years.  An item that cost $20.00 in 1970 would cost you $115.93 today.  An item that cost $20.00 in 1913 would cost you $454.36 today.

#17 Over the past 12 months the average price of gasoline in the United States has gone up by about 30%.

#18 U.S. oil companies will bring in about $200 billion in pre-tax profits this year.  They will also receive about $4.4 billion in specialized tax breaks from the U.S. government.

#19 It is being projected that for the first time ever, the OPEC nations are going to bring in over a trillion dollars from exporting oil this year.  Their biggest customer is the United States.

#20 According to the Pentagon, there are minerals worth over a trillion dollars under the ground in Afghanistan.  Now, J.P. Morgan is starting to tap those riches with the help of the U.S. military.

#21 Speaking of J.P. Morgan, most Americans don’t realize that they are actually the largest processor of food stamp benefits in the United States.  In fact, the more Americans that go on food stamps the more money that J.P. Morgan makes.

#22 When 2007 began, there were about 26 million Americans on food stamps.  Today, there are over 44 million on food stamps, and one out of every four American children is on food stamps.

#23 Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, one out of every 6 Americans is on Medicaid.

#24 Only 66.8% of American men had a job last year.  That was the lowest level that has ever been recorded in all of U.S. history.

#25 The financial system is more vulnerable today than it was back in 2008 before the financial panic. Today, the world financial system has been turned into a giant financial casino where bets are made on just about anything you can possibly imagine, and the major Wall Street banks make a ton of money from this betting system.  The system is largely unregulated (the new “Wall Street reform” law has only changed this slightly) and it is totally dominated by the big international banks. The danger from derivatives is so great that Warren Buffet once called them “financial weapons of mass destruction”. It is estimated that the “derivatives bubble” is somewhere in the neighborhood of a quadrillion dollars, and once it pops there isn’t going to be enough money in the entire world to bail everyone out.

#26 Between December 2000 and December 2010, the United States ran a total trade deficit of 6.1 trillion dollars with the rest of the world, and the U.S. has had a negative trade balance every single year since 1976.

#27 The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001, and the U.S. trade deficit with China is now 27 times larger than it was back in 1990.

#28 In 2010, the number one U.S. export to China was “scrap and trash”.

#29 All over the United States, many of our once great manufacturing cities are being transformed into hellholes.  In the city of Detroit today, there are over 33,000 abandoned houses, 70 schools are being permanently closed down, the mayor wants to bulldoze one-fourth of the city and you can literally buy a house for one dollar in the worst areas.

#30 During the first three months of this year, less new homes were sold in the U.S. than in any three month period ever recorded.

#31 New home sales in the United States are now down 80% from the peak in July 2005.

#32 America’s real estate crisis just seems to get worse and worse.  U.S. home prices have now fallen a whopping 33% from where they were at during the peak of the housing bubble.

#33 According to a new report from the AFL-CIO, the average CEO made 343 times more money than the average American did last year.

#34 The European debt crisis could cause a global financial collapse like the one that we saw in 2008 at any time.  The world economy is incredibly interconnected today, and the United States would not be immune.  A recent IMF report stated the following about the growing sovereign debt crisis in Europe….

Strong policy responses have successfully contained the sovereign debt and financial-sector troubles in the euro area periphery so far. But contagion to the core euro area and then onward to emerging Europe remains a tangible risk.

#35 According to one study, the 50 U.S. state governments are collectively 3.2 trillion dollars short of what they need to meet their pension obligations.

#36 A different study has shown that individual Americans are $6.6 trillion short of what they need to retire comfortably.

#37 The cost of college tuition in the United States has gone up by over 900 percent since 1978.

#38 According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980.  Today they account for approximately 16.3%.

#39 One study found that approximately 41 percent of working age Americans either have medical bill problems or are currently paying off medical debt.

#40 The combined debt of the major GSEs (Fannie Mae, Freddie Mac and Sallie Mae) has increased from 3.2 trillion in 2008 to 6.4 trillion in 2011.  Thanks to our politicians, U.S. taxpayers are standing behind that debt.

#41 The U.S. government is over 14 trillion dollars in debt and the budget deficit for this year is projected to be about 1.5 trillion dollars.  However, 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.

#42 Most Americans don’t understand that the Federal Reserve and the debt-based monetary system that it runs are at the very heart of our economic problems.  All of this debt is absolutely crushing us.  The U.S. government spent over 413 billion dollars on interest on the national debt during fiscal 2010, and it is being projected that the U.S. government will be shelling out 900 billion dollars just in interest on the national debt by the year 2019.

#43 Standard & Poor’s has altered its outlook on U.S. government debt from “stable” to “negative” and is warning that the U.S. could soon lose its AAA rating.

#44 In 1980, government transfer payments accounted for just 11.7% of all income.  Today, government transfer payments account for 18.4% of all income.

#45 U.S. households are now receiving more income from the U.S. government than they are paying to the government in taxes.

#46 59 percent of all Americans now receive money from the federal government in one form or another.

#47 According to Gallup, 41 percent of Americans believed that the economy was “getting better” at this time last year.  Today, that number is at just 27 percent.

#48 The wealthiest 1% of all Americans now own more than a third of all the wealth in the United States.

#49 The poorest 50% of all Americans collectively own just 2.5% of all the wealth in the United States.

#50 The percentage of millionaires in Congress is more than 50 times higher than the percentage of millionaires in the general population.

The Greek Debt Crisis Escalates: Is Greece Threatening To Leave The Euro?

Is the Greek debt crisis about to explode out of control?  According to Der Spiegel, the government of Greece is considering leaving the Euro and reestablishing its own currency.  If that happened, it would throw global financial markets into chaos and it might mean the end of the euro as a pan-European currency.  But the Greek government has to do something about all of these debts.  At this point Greece is literally drowning in debt.  The yield on 10-year Greek bonds has now reached an astounding 15.51%.  There is no way that is sustainable even for the short-term.  Greece is rapidly going bankrupt.  Even with absolutely brutal austerity measures in place, the debt just continues to explode.  There are protests against the government almost daily and Greece is in a state of chaos.  Unfortunately, because Greece is part of the euro they can’t just start printing lots of money as a way to get out of this crisis.  Now there are persistent rumors that Greece really is thinking about leaving the euro, and that could potentially mean big trouble for the world financial system.

It was a new article in Der Spiegel that brought these rumors to the forefront again.  Der Spiegel says that it possesses secret Greek government documents that discuss plans to leave the euro.  Der Spiegel also claims that a secret crisis meeting was held in Luxembourg on Friday night to discuss this crisis.

The following is a brief excerpt from the Der Spiegel article that caused the financial community in Europe to be in such an uproar today….

“The debt crisis in Greece has taken on a dramatic new twist. Sources with information about the government’s actions have informed SPIEGEL ONLINE that Athens is considering withdrawing from the euro zone. The common currency area’s finance ministers and representatives of the European Commission are holding a secret crisis meeting in Luxembourg on Friday night.”

So was there such a meeting in Luxembourg on Friday night?

Well, it turns out that there was a meeting of a small group of European finance ministers.  But according to German government spokesman Steffen Seibert, this meeting was planned well in advance and had nothing to do with Greece leaving the euro….

“There is a meeting of some finance ministers that has long been planned. Greece exiting the Eurozone is not on the agenda of that meeting, and it has never been.”

So is Greece actually thinking about leaving the euro?  All over Europe this notion is being denied.

Perhaps the strongest denial was issued by the Greek Finance Ministry….

“The report on an imminent Greek exit from the eurozone, as well as being untrue, has been written with incomprehensible levity despite the fact that this has been repeatedly denied by the Greek government, and the governments of other EU member states.”

What was probably being discussed at this meeting of European finance ministers is a restructuring of Greek debt.  This is something that Germany has apparently wanted for quite some time according to a recent article posted on Business Insider….

For weeks, German officials have been hinting that they want a Greek restructuring to happen. German economic advisor Lars Feld recently said that the restructuring should happen “sooner than later.” He’s previously also said “restructuring is the only road to take.”

So what would a restructuring of this debt look like?  A recent article on CNBC gives us some clues….

More importantly, tonight’s finance ministers meeting might lay the groundwork for “extending the maturities” on those loans — giving Athens a little more oxygen until it probably ends up restructuring its $470 billion existing debt by either extending maturities or exchanging Greek bonds, at a discount, for EU-guaranteed bonds, Brady Bond-style from the 1980s.

What Germany does not want is for Greece to even think about leaving the euro.  According to the article on Der Spiegel, German Finance Minister Wolfgang Schäuble is ready to play hardball with the Greeks.  Der Spiegel says that a report has been prepared that would lay out for the Greeks the severe consequences of leaving the euro….

“It would lead to a considerable devaluation of the new (Greek) domestic currency against the euro,” the paper states. According to German Finance Ministry estimates, the currency could lose as much as 50 percent of its value, leading to a drastic increase in Greek national debt. Schäuble’s staff have calculated that Greece’s national deficit would rise to 200 percent of gross domestic product after such a devaluation. “A debt restructuring would be inevitable,” his experts warn in the paper. In other words: Greece would go bankrupt.

Greece is really in a tough position.  They are going to go bankrupt if they stay with the euro and they are going to go bankrupt if they leave the euro.

Meanwhile, the anti-government protests continue.  The Greek people are not happy.  The Greek economy is coming apart like a 20 dollar suit.  Greece could end up being the spark that sets off a massive financial panic in Europe.

As I have written about previously, the European debt crisis is on the verge of spinning wildly out of control.  It is not just Greece that is facing a horrific debt crisis.  The financial problems in Europe literally span the entire continent.

A lot of Americans are obsessed with the death of the U.S. dollar, but the truth is that there is a strong possibility that the euro could end up collapsing before the dollar does.

Keep an eye on Europe.  The European debt crisis could plunge the entire global financial system into chaos at any time.  Things are not nearly as stable as they seem.

Losing Faith (In The U.S. Economy)

Are the American people losing faith in the U.S. economy?  The statistics that you are about to read might surprise you.  Not everyone believes that the U.S. economy is dying (there are still millions out there that will swallow anything that the mainstream media tells them), but the reality is that there is a growing chunk of the population that has completely lost faith in our leaders and in our economic system.  A brand new Gallup poll has found that the number of Americans that believe that we are in a “depression” is actually larger than the number of Americans that believe that the economy is “growing”.  That is absolutely shocking because according to official government figures, the U.S. economy is growing right now and virtually nobody in the mainstream media or the government has used the term “depression” to describe the economic downturn that we went through recently.  In fact, according to Gallup a total of 55% of the American people believe that we are either in a recession or a depression right now.  This is clear evidence that the American people are losing faith in U.S. government economic statistics and instead they are basing their opinions on what they see in their own communities.  Despite the pablum about an “economic recovery” constantly being spewed by Ben Bernanke and Barack Obama, faith in our economic system continues to decline.  The truth is that the American people are not stupid.  They can see what is happening to the economy.

Back when I was a teenager, one day I walked over to the local McDonald’s and filled out an application and was immediately hired.

But that is not how it works today.

Recently, McDonald’s made headlines when they held a National Hiring Day.  Some commentators pointed to that event as evidence that the economy was recovering.

Well, you know what?  McDonald’s ended up receiving approximately one million applications.

So how many of those people did McDonald’s hire?

They hired about 62,000 people.

That means that somewhere around 938,000 eager job applicants were turned away.

Just think about that.

Only about 6.2 percent of those that applied for a job at McDonald’s were accepted.

As Joe Weisenthal of Business Insider recently pointed out, that means that Harvard now has a higher acceptance rate than McDonald’s does.

Harvard accepts about 7% of those that apply to go to school there.

Who ever thought we would see the day when a higher percentage of applicants get accepted into Harvard than get hired at McDonald’s?

Sadly, the number of jobs continues to shrink.  The competition for good jobs has become absolutely crazy.

Only 66.8% of American men had a job last year.  That was the lowest level that has ever been recorded in all of U.S. history.

So why is this happening?  Well, there are a lot of reasons, but as I have written about previously, the fact that millions of our jobs are being shipped overseas is a huge factor.

Without good jobs, an increasing number of Americans are being forced to turn to government assistance in order to survive.

Today, more than 44 million Americans are on food stamps.  In addition, government transfer payments now make up 18 percent of all personal income in the United States.

That is frightening.

Things have gotten so bad that now even Wal-Mart is warning that their customers are running out of money.

A large percentage of Wal-Mart customers are just surviving month to month and Wal-Mart has been noticing a huge drop off in sales towards the end of the month when their customers run out of cash.  The following is what the CEO of Wal-Mart had to say about this phenomenon recently….

“Purchases are really dropping off by the end of the month even more than last year.”

People are starting to get desperate.  When economic times get tough, crime tends to increase.  Sadly, as a report in USA Today recently noted, thefts of gasoline are increasing all over the nation.

We never had this kind of a problem back when a gallon of gas only was about a dollar a gallon.

Do you remember those days?

They weren’t that long ago.

Now it takes some people over a hundred dollars to fill up their gas tanks.

Our leaders keep promising that they know what is happening and that they are going to fix things, but most Americans are not buying it.  Many Americans are completely losing faith in the system altogether.

Our economic decline has been one of the things that has fueled the growth of the prepper movement.  Millions of Americans have decided that they want to start becoming independent of the system.  One recent article described what some residents of Colorado are doing to prepare, but the truth is that this phenomenon is happening all over the nation….

A Black Forest resident has erected a geodesic dome on her 5-acre spread to grow vegetables, keeps horses for emergency transportation, in case she can’t get gasoline for her car, and plans to acquire chickens and goats as food sources.

A husband and wife who have a cabin on 100 acres of secluded land in Park County have weaned their property from the electric grid, acquired a three-year food supply and taken other measures to become self-sufficient.

Of course the mainstream media loves to portray preppers as “crazies”, but as the U.S. economy continues to die it would be a bit crazy not to prepare.

No job is completely safe today.  Millions of Americans that assumed that their “good jobs” would always be there have had their lives shattered over the past couple of years.

There is nothing wrong with trying to become more self-sufficient.

Everyone should be thinking about either starting up a business or developing alternative sources of income.  Yes, it can be exhausting to work on a side business during evening and weekends, but the time for loafing is over.  Those that are going to make it through the times ahead are those that are going to be willing to work really hard.

People need to start thinking about becoming less dependent on “the system” however they can.  One way to insulate yourself against rising food prices is to learn how to grow your own food.

Even if you only have a very small amount of room you can still grow your own food.  For example, there is one family that is actually producing 6000 pounds of produce on just 1/10th of an acre right in the middle of Pasadena, California.

Just because we have lost some of the basic skills that previous generations possessed doesn’t mean that we can’t get them back.  Back during World War II, “victory gardens” enabled Americans to grow 40 percent of all the vegetables that they needed.  Those gardens greatly contributed to the war effort and helped Americans get through some very difficult times.

There are a lot of preppers out there that are totally out of debt, that own their own land, that are entirely off the electrical grid and that grow most of their own food.  Many Americans would look at such people as “crazies” but those preppers will be in a much better position than most people when the economy totally collapses.

Don’t wait until it is too late to prepare.  Millions of Americans are completely losing faith in our economic system.  People are smart.  They can see that we are living in the biggest debt bubble in the history of the world.  They can see that the guts of our economic infrastructure are being ripped out and shredded.  They can see that the number of people living in poverty continues to increase year after year.  They can see the the number of good jobs continues to decrease year after year.

When you see a horrible storm coming the rational thing to do is to prepare.  Just think about all of those tornadoes that ravaged the southeast U.S. the other day.  Most of the people directly in the path of those tornadoes did whatever they could to survive when they realized the twisters were about to hit.

Well, a horrific economic storm is coming.  Every American will be affected by this economic storm at least to some extent.  We all need to prepare while we still can.

American Hellholes

The U.S. economy is dying and we are heading for the next Great Depression.  The talking heads in the mainstream media love to spin the economic numbers around and around and they love to make it sound like the economy is improving, but the truth is that it doesn’t take a genius to see what is happening to the U.S. economic system.  All over the nation many of our greatest cities are being slowly but surely transformed into post-apocalyptic wastelands.  All over the mid-Atlantic, all along the Gulf coast, all throughout the “rust belt” and all over the entire state of California cities that once had incredibly vibrant economies are being turned into rotting, post-industrial hellholes. In many U.S. cities, the “real” rate of unemployment is over 30 percent. There are some communities that will start depressing you almost the moment that you drive into them. It is almost as if all of the hope has been sucked right out of those communities.  If you live in one of those American hellholes you know what I am talking about.  Sadly, it is not just a few cities that are becoming hellholes.  This is happening in the east, in the west, in the north and in the south.  America is literally being transformed right in front of our eyes.

If you still live in an area of the United States that is prosperous, do not mock the cities that you are about to read about.  The cold, hard reality of the matter is that economic decline and economic despair are spreading rapidly and they will come to your area soon enough.  Right now we are still talking about “American hellholes”, but if the long-term economic trends that are destroying this nation are not turned around eventually we will just be talking about one gigantic “American hellhole”.  In the end, no area of the country will completely escape the economic hell that is coming.

Let’s take a closer look at what is currently happening in some of the worst areas of the country….

Detroit, Michigan

In the city of Detroit today, there are over 33,000 abandoned houses, 70 schools are being permanently closed down, the mayor wants to bulldoze one-fourth of the city and you can literally buy a house for one dollar in the worst areas.

During the boom days of the 1950s, Detroit was a teeming metropolis of approximately 2 million people, but today the current population is less than half that.  The city of Detroit, once a shining example of middle class America, is now a rotting cesspool of economic decline and it actually saw its population decline by 25 percent during the decade that recently ended.  According to the U.S. Census Bureau, Detroit lost a resident every 22 minutes between the years of 2000 and 2010.

So why are people leaving Detroit so rapidly?

There simply are no jobs.

At the height of the economic downturn, the mayor of Detroit admitted that while the “official” unemployment rate in Detroit was about 27 percent, the “real” unemployment rate in his city was actually somewhere around 50 percent.

Since there are not enough jobs, that also means that not enough tax money is coming in.  Detroit is essentially insolvent at this point.

Detroit officials are trying to implement some austerity measures in a desperate attempt to get city finances under control.

For example, the state of Michigan recently granted approval to a plan that would shut down nearly half of the public schools in Detroit.  Under the plan, 70 schools will be closed and 72 will continue operating.

It has been estimated that the remaining public schools will have class sizes of up to 60 students.

Detroit Mayor Dave Bing also wants to cut off 20 percent of the entire city from police and trash services in order to save money.

Essentially that would mean abandoning 20 percent of the city of Detroit to the gangs and to the homeless.

The mayor of Detroit has also discussed a plan in which authorities would bulldoze one-fourth of the city in order to save money on services.

So with all of this going on, is Detroit a pleasant place to live at this point?

No way.

Today, Detroit is considered to be the third most violent city in the United States.

In fact, crime has gotten so bad and the citizens are so frustrated by the lack of police assistance that they have resorted to forming their own organizations to fight back.  One group, known as “Detroit 300”, was formed after a 90-year-old woman on Detroit’s northwest side was brutally raped in August.

If you want to see what the future of America looks like, just take a few hours and go driving through Detroit some time.  But please only do this during the day.  Do not do this at night.  Detroit is not a safe place anymore, and you cannot count on the police to help you in a timely manner.

Detroit was once one of the greatest cities in the world.

But today it is an absolute hellhole.

Camden, New Jersey

So is there any place in America that is worse than Detroit?

Well, many would nominate Camden, New Jersey.

Many years ago, Camden was actually thriving and prosperous.  But today the city of Camden is known as “the second most dangerous city in America”.

In a recent article entitled “City of Ruins“, Chris Hedges did an amazing job of documenting the horrific decline of Camden.  Hedges estimates that the real rate of unemployment in Camden is somewhere around 30 to 40 percent, and he makes it sound like nobody in their right mind would want to live there now….

Camden is where those discarded as human refuse are dumped, along with the physical refuse of postindustrial America. A sprawling sewage treatment plant on forty acres of riverfront land processes 58 million gallons of wastewater a day for Camden County. The stench of sewage lingers in the streets. There is a huge trash-burning plant that releases noxious clouds, a prison, a massive cement plant and mountains of scrap metal feeding into a giant shredder. The city is scarred with several thousand decaying abandoned row houses; the skeletal remains of windowless brick factories and gutted gas stations; overgrown vacant lots filled with garbage and old tires; neglected, weed-filled cemeteries; and boarded-up store fronts.

Gangs have stepped into the gaping void left by industry.  In Camden today, drugs and prostitution are two of the only viable businesses left – especially for those who cannot find employment anywhere else.  The following is how Hedges describes the current state of affairs….

There are perhaps a hundred open-air drug markets, most run by gangs like the Bloods, the Latin Kings, Los Nietos and MS-13. Knots of young men in black leather jackets and baggy sweatshirts sell weed and crack to clients, many of whom drive in from the suburbs. The drug trade is one of the city’s few thriving businesses. A weapon, police say, is never more than a few feet away, usually stashed behind a trash can, in the grass or on a porch.

But before we all start judging Camden for being such a horrible place to live, it is important to realize that this is happening in communities from coast to coast.  All over the United States industries are leaving and deep social decay is setting in.

Even the criminals in Camden are struggling.  Things have gotten so bad in Camden, New Jersey that not even the drug dealers are spending their money anymore.

So where are the police?

Unfortunately, there is very little money for police.  Authorities in Camden recently decided to lay off half of the city police force.

So now the gangs and the drug dealers have more room to operate.

Sadly, this is not just happening in Camden.  It is happening all over New Jersey.

Of 315 municipalities the New Jersey State Police union recently surveyed, more than half indicated that they were planning to lay off police officers.

So why doesn’t the state government step in and help out?

Well, the state of New Jersey is in such bad shape that they still are facing a $10 billion budget deficit for this year even after cutting a billion dollars from the education budget and laying off thousands of teachers.

New Jersey also has $46 billion in unfunded pension liabilities and $65 billion in unfunded health care liabilities.  Nobody is quite sure how New Jersey is even going to come close to meeting those obligations.

Meanwhile, cities like Camden are rotting a little bit more every single day.

New Orleans, Louisiana

New Orleans had a struggling economy even before Hurricane Katrina struck back in 2005.  But that event changed everything.  It is now almost 6 years later and virtually the entire region is still a disaster zone.

New Orleans permanently lost 29% of its population after Hurricane Katrina.  There are many areas of New Orleans that still look as if they have just been bombed.

21.5 percent of all houses in New Orleans, Louisiana are currently standing vacant.  Many of those homes will never be inhabited again.

What made things even worse for New Orleans (and for residents all along the Gulf coast) was the horrific BP oil spill last year.  The mainstream news does not talk about the oil spill much anymore, but those living in the area have to deal with the effects every single day.

Some of the industries in the Gulf region were really starting to recover from Hurricane Katrina but the BP oil spill put a stop to that.

Before the oil spill, Louisiana produced more fish and seafood than anywhere in the United States except for Alaska.  But now the seafood industry has been absolutely devastated.  It has been estimated that the cost of the BP oil spill to the fishing industry in Louisiana alone could top 3 billion dollars.

Some local shrimpers in the region are projecting that it will be about seven years before they can set to sea again.

New Orleans keeps trying to bounce back from all of these disasters, but times are tough down there.

Today, New Orleans is the 13th most violent city in America.  That is actually an improvement.  Before Katrina New Orleans had even more violent crime.

The truth is that other areas along the Gulf coast are doing a lot worse than New Orleans is doing.  A ton of big corporate money has flowed into New Orleans.  Officials are trying to clean up the city and make it a huge tourist destination once again.

But in the surrounding areas things are not looking so bright.  There are areas along the coasts of Louisiana, Mississippi, Alabama and the panhandle of Florida that are some of the most depressing places in the nation.

It is almost as if there are hundreds of thousands of people that time forgot.  In some rural areas along the Gulf coast the poverty is absolutely mind blowing.  There are very few jobs and there is very little hope.  Meanwhile, large numbers of people in the region continue to get sick from the toxic dispersants used to clean up the oil spill.

Let us hope that we don’t see another major disaster in the Gulf of Mexico any time soon.  As it is, it is going to take decades for that region to fully recover.  There are a lot of really good people that live down there, and they deserve our prayers.

Vallejo, California (And Virtually The Rest Of The State Of California)

Almost the entire state of California is an economic disaster zone. Austerity measures are being implemented in city after city as tax revenues have nosedived.

The following is an excerpt from a recent New York Times article that describes the brutal austerity that has been implemented in Vallejo, California….

Vallejo is still in bankruptcy. The police force has shrunk from 153 officers to 92. Calls for any but the most serious crimes go unanswered. Residents who complain about prostitutes or vandals are told to fill out a form. Three of the city’s firehouses were closed. Last summer, a fire ravaged a house in one of the city’s better neighborhoods; one of the firetrucks came from another town, 15 miles away. Is this America’s future?

Sadly, that is what the future of America is going to look like.  Public services are being slashed all over the nation due to budget crunches.

Unless there is a major jobs recovery, the situation in California is going to continue to degenerate.  The truth is that the state of California needs millions and millions of new jobs just to get back to “normal”.  For example, near the end of last year it was reported that 24.3 percent of the residents of El Centro, California were unemployed.  Not only that, as of the end of last year the number of people unemployed in the state of California was approximately equivalent to the entire populations of Nevada, New Hampshire and Vermont combined.

Businesses are closing in California at an astounding pace.  At one point last year it was reported that in the area around Sacramento, California there was one closed business for every six that were still open.

As a result of all of this, home prices in many areas of California have completely fallen off a cliff.  For example, the average home in Merced, California has declined in value by 63 percent over the past four years.

California also had more foreclosure filings that any other U.S. state in 2010.  The 546,669 total foreclosure filings during the year means that over 4 percent of all the housing units in the state of California received a foreclosure filing at some point during 2010.

Sadly, things don’t look like they are going to turn around in California any time soon.  Forbes recently compiled a list entitled “Cities Where The Economy May Get Worse“.

Six of the top seven spots were held by cities in California.

California is becoming a very frightening place.  When you combine high unemployment with unchecked illegal immigration what you get is rampant poverty.

20 percent of the residents of Los Angeles County are now receiving public aid of one form or another.

In particular, the number of children that are considered to be in need of public assistance is truly scary.

Incredibly, 60 percent of all the students attending California public schools now qualify for free or reduced-price school lunches.

Poverty and illegal immigration have also caused a tremendous health care crisis in the state.  The hordes of illegal aliens taking advantage of “free” medical care at hospital emergency rooms have caused dozens of hospitals across the state of California to completely shut down.  As a result, the state of California now ranks dead last out of all 50 states in the number of emergency rooms per million people.

The bozos in Sacramento keep passing hundreds of new laws in an attempt to “fix” the state, but the truth is that for the poorest residents of the state all of those new laws don’t make a shred of difference.

The following is how Victor Davis Hansen describes what he saw during his recent tour of the “forgotten areas of central California”….

Many of the rural trailer-house compounds I saw appear to the naked eye no different from what I have seen in the Third World . There is a Caribbean look to the junked cars, electric wires crisscrossing between various outbuildings, plastic tarps substituting for replacement shingles, lean-tos cobbled together as auxiliary housing, pit bulls unleashed, and geese, goats, and chickens roaming around the yards. The public hears about all sorts of tough California regulations that stymie business – rigid zoning laws, strict building codes, constant inspections – but apparently none of that applies out here.

Hansen also says that he observed that people in these areas are doing whatever they can to get by….

At crossroads, peddlers in a counter-California economy sell almost anything. Here is what I noticed at an intersection on the west side last week: shovels, rakes, hoes, gas pumps, lawnmowers, edgers, blowers, jackets, gloves, and caps. The merchandise was all new. I doubt whether in high-tax California sales taxes or income taxes were paid on any of these stop-and-go transactions.

In two supermarkets 50 miles apart, I was the only one in line who did not pay with a social-service plastic card (gone are the days when “food stamps” were embarrassing bulky coupons).

Are you frightened yet?

You know what they say – “as goes California, so goes the nation”.

What is happening in California now is eventually going to come to your area.

Right now California is also having a huge problem with gangs.  Gang violence in America is getting totally out of control.  According to authorities, there are now over 1 million members of criminal gangs operating inside the country, and those gangs are responsible for up to 80% of the violent crimes committed in the U.S. each year.

But instead of ramping up to fight crime and fight illegal immigration, police forces all over California are being cut back.

For example, because of extreme budget cuts and police layoffs, Oakland, California Police Chief Anthony Batts has announced that there are a number of crimes that his department simply will no longer respond to due to a lack of resources.  The following is a partial list of the crimes that police officers in Oakland will no longer be responding to….

  • burglary
  • theft
  • embezzlement
  • grand theft
  • grand theft: dog
  • identity theft
  • false information to peace officer
  • required to register as sex or arson offender
  • dump waste or offensive matter
  • loud music
  • possess forged notes
  • pass fictitious check
  • obtain money by false voucher
  • fraudulent use of access cards
  • stolen license plate
  • embezzlement by an employee
  • extortion
  • attempted extortion
  • false personification of other
  • injure telephone/power line
  • interfere with power line
  • unauthorized cable tv connection
  • vandalism

Not that Oakland wasn’t already a mess before all this, but now how long do you think it will be before total chaos and anarchy reigns on the streets of Oakland?

Today, Oakland is considered the 5th most violent city in the United States.

Will it soon become the most violent?

But Oakland is not the only major California city that is facing these kinds of issues.

Things have gotten so bad in Stockton, California that the police union put up a billboard with the following message: “Welcome to the 2nd most dangerous city in California. Stop laying off cops.”

Already the police force in Stockton has been stripped down to almost nothing.

A while back, the Stockton Police Department dropped this bombshell….

“We absolutely do not have any narcotics officers, narcotics sergeants working any kind of investigative narcotics type cases at this point in time.”

Do you think drug dealers will be flocking to Stockton after they hear that?

California was once the envy of the world.

Now it is becoming one gigantic hellhole.

During one recent 23 year period, the state of California built 23 prisons but just one university.

So is there any hope for California?

No, unfortunately there is not.

In another article, I wrote about some of the reasons why millions of people have been leaving California for good….

Meanwhile, the standard of living in California is going right into the toilet.  Housing values are plummeting.  Unemployment has risen above 20 percent in many areas of the state.  Crime and gang activity is on the rise even as police budgets are being hacked to the bone.  The health care system is an absolute disaster.  At this point California has the fewest emergency rooms per million people out of all 50 states.   While all of this has been going on, the state legislature in Sacramento has been very busy passing hundreds of new laws that are mostly about promoting one radical agenda or another.  The state government has become so radically anti-business that it is a wonder that any businesses have remained in the state.  It seems like the moving vans never stop as an endless parade of businesses and families leave California as quickly as they can.

But this is not just a “California thing”.  The truth is that what is happening in California, in Detroit, in Camden and in hundreds of other communities is also going to happen where you live.

The U.S. economy is slowly dying. Only 66.8% of American men had a job last year.  That was the lowest level that has ever been recorded in U.S. history.

People are getting desperate.  There are ten percent fewer middle class jobs than there were a decade ago and the competition for good jobs has become insane.  More than 44 million Americans are now on food stamps and that number grows every single month.  Millions more American families fall into poverty every single year.

It is time to face the truth about what is happening to America.  Our economy is not growing and becoming stronger.  Rather, the cold, hard reality of the matter is that our economy is very sick and it is dying.  The seemingly boundless prosperity that we have enjoyed for decade after decade is coming to an end.  Our communities are being transformed into absolute hellholes.

Those that are telling you that the U.S. economy will soon be better than ever are lying to you.  The U.S. economy is going to go down and it is going to go down hard.

You better get ready.

Even Ben Stein Is Warning That An Economic Collapse Is Coming

He sure has come a long way since “Ferris Bueller’s Day Off”.  During a recent television segment for CBS, Ben Stein declared that “the tea leaves are ominous” and he warned that an economic collapse may be coming.  In particular, Ben Stein is deeply concerned about inflation.  During his recent appearance on CBS, Stein proclaimed that the Federal Reserve is “just shoving money out the door as fast as it can” and that this could have horrific consequences for the U.S. financial system.  Sadly, Ben Stein is exactly right on this point.  The Federal Reserve has already injected enough money into the financial system to create an inflationary disaster.  Fortunately most of this liquidity is still being held by the banks (this will be further explored below), but once all of that money starts getting released into the financial system it is going to unleash economic chaos.

In the video that you are about to watch, Ben Stein states that “when serious inflation hits, it hits everyone”.

And that is absolutely true.  Inflation is a hidden tax on ever single dollar that each one of us holds.  Nobody can cheat that hidden tax and nobody can escape from it.

You may have noticed that the price of gas is going up.

In fact, just the other day UPI reported that the price of gas at one station in the Washington D.C. area was up to 5 dollars a gallon.

Can it get much worse?

Well, actually yes it can.

Richard Hastings, a strategist at Global Hunter Securities, recently told CNBC that he believes that we could potentially see $6 gas at some point this summer.

Do you think that a lot of American families will rethink their summer vacations if that happens?

You betcha.

Perhaps Americans will just fly instead.

Well, that is rapidly becoming more expensive as well.  Just check out what one recent CNN article had to say about rising airfares….

Late Tuesday, Southwest Airlines raised all of its round-trip fares by $10. Delta (DAL, Fortune 500) initiated this latest round of price increases on Monday, and as of midday Wednesday American Airlines (AMR, Fortune 500), JetBlue (JBLU) and United Airlines (UAL) had matched it.

As Ben Stein also notes in the video below, food prices are soaring as well.  Rampant money printing by the Federal Reserve and serious crop problems all over the globe have created a “perfect storm” for agricultural commodities.  In the video, Stein sounds downright apocalyptic as he describes crop failures around the world….

But now, we are getting serious crop shortfalls in China – an enormously important agricultural producer and consumer. U.S. crop forecasts are also disappointing. There are huge problems in Australia, South America, and Russia. Corn, wheat, rice and other foodstuff prices are just going wild.

And you know what?

Ben Stein is right.

In a recent article about the global food crisis, I detailed some of the agricultural commodity price increases that we have seen….

*According to the World Bank, the global price of food has risen 36% over the past 12 months.

*The commodity price of wheat has approximately doubled since last summer.

*The commodity price of corn has also about doubled since last summer.

*The commodity price of soybeans is up about 50% since last June.

*The commodity price of orange juice has doubled since 2009.

But it isn’t just food and gas that are going up.  We are seeing inflation everywhere.  The value of virtually all “hard assets” is going up.

Investors are running to precious metals such as gold and silver in a desperate attempt to preserve their wealth.  Gold and silver have been absolutely skyrocketing.  The price of gold set another brand new all-time record high this week.  The price of silver hit a 31-year high today.

So why is this happening?

One of the biggest reasons for all of this is that the Federal Reserve has been flooding the system with new money.  In the video below, Ben Stein points to quantitative easing as the primary reason why we are seeing so much inflation….

But most important of all, the Fed is just shoving money out the door as fast as it can, creating piles of cash in banks.

The Federal Reserve had hoped that economic growth would be sparked by all of this new cash, but that is only happening to a minimal degree.

Instead, what Ben Stein believes all of this new money is going to bring about is a situation known as “stagflation”.

Do you remember the 1970s and the “misery index”?

Well, we seem to be headed for a repeat of those days.

In a previous article, I defined stagflation….

Stagflation exists when inflation and unemployment are both at high levels at the same time.

Up to this point, we have had high unemployment but relatively low levels of inflation.

But now we are going to get to enjoy high unemployment and high inflation at the same time.

Oh goody!

Video of Ben Stein’s recent appearance on CBS is posted below.  You can read a transcript of his remarks here.  It is amazing that a mainstream news outlet would allow this much truth to get out….

Look, the reality is that you cannot pump this much money into the financial system without there eventually being very serious consequences.

For decades the Federal Reserve has been systematically debasing the U.S. dollar, but what the Fed has been doing to the money supply over the past couple of years is absolutely unprecedented.  Just check out the chart below….

So why hasn’t all of this new cash caused chaos in the economy already?

Well, because most of it is still trapped in the financial system.  Banks have been reluctant to loan it out.  Instead, they seem content to keep most of it on reserve at the Fed.

But if all of this new money starts leaking out into the economy it is going to drive prices up.  When you have lots more money chasing roughly the same number of goods and services it is inevitable that inflation will result.

Robert Wenzel of EconomicPolicyJournal.com believes that more quantitative easing is not even necessary to turn the U.S. economy into a hyperinflationary nightmare.  In fact, Wenzel says that there are enough excess reserves at the Fed right now to turn us into another Zimbabwe….

With over $1.4 TRILLION in excess reserves, Bernanke never has to resort to QE style monetary operations ever again, to print money. If those excess reserves leak into the system, Bernanke has enough sitting there to make Zimbabwe look like a model of prudent money management. As per usual, Bernanke has most of the media and Fed watchers looking at the wrong card.

Forget about QE3, keep your eye on excess reserves. Excess reserves are funds that are not in the system bidding up prices, but when they enter the system by banks using them to make loans, have the potential to result in a multiple of their size, when they impact the money supply. Because of this potential for multiple size impact, excess reserve entering the economy are considered high-powered money.

We would have never even been in this position if we had never allowed the Federal Reserve to be created and had never gotten 14 trillion dollars in debt.  But now America has a debt problem that can never be solved under the current system.  We are locked into a debt spiral from which there is no escape.

Last year, the U.S. government spent more on interest on the national debt than on the following departments combined….

*The Department of Health and Human Services

*The Department of Energy

*The Department of Veterans Affairs

*The Department of Justice

*The Department of Homeland Security

*The Department of Agriculture

*The Treasury Department

*The Department of Labor

Ouch!

But right now the U.S. is still able to borrow tons of money at super low interest rates.

So what happens if interest rates go up?

It could potentially be catastrophic.

That is why the decision by S&P to downgrade its outlook on U.S. government debt was such a big thing the other day.  The U.S. still has a “AAA” rating, but S&P is warning that the AAA rating is in danger.

So what would it mean if the U.S. lost the AAA rating that it currently holds?

The Washington Post recently described it this way….

A credit rating downgrade for the United States would spell even more financial trouble for the U.S. government, hampering its ability to borrow money as investors demand higher yields to make up for the increased risk. That would cause its national debt to balloon further and increase the need to hike taxes or make even more painful cuts in spending.

But the U.S. government continues to borrow money like there is no tomorrow and Ben Bernanke and his friends at the Fed continue to recklessly print money.

As bad as things may seem for many of you right now, the truth is that what we are experiencing at the moment is a “false bubble of prosperity”.  Things are eventually going to get much, much worse.

Enjoy this time of economic peace and stability while you still can.  Our leaders have absolutely destroyed our economic future and we are going to want to have some good memories to hold on to while we are living through economic hell in the years ahead.

20 Signs That A Horrific Global Food Crisis Is Coming

In case you haven’t noticed, the world is on the verge of a horrific global food crisis.  At some point, this crisis will affect you and your family.  It may not be today, and it may not be tomorrow, but it is going to happen.  Crazy weather and horrifying natural disasters have played havoc with agricultural production in many areas of the globe over the past couple of years.  Meanwhile, the price of oil has begun to skyrocket.  The entire global economy is predicated on the ability to use massive amounts of inexpensive oil to cheaply produce food and other goods and transport them over vast distances.  Without cheap oil the whole game changes.  Topsoil is being depleted at a staggering rate and key aquifers all over the world are being drained at an alarming pace.  Global food prices are already at an all-time high and they continue to move up aggressively.  So what is going to happen to our world when hundreds of millions more people cannot afford to feed themselves?

Most Americans are so accustomed to supermarkets that are absolutely packed to the gills with massive amounts of really inexpensive food that they cannot even imagine that life could be any other way.  Unfortunately, that era is ending.

There are all kinds of indications that we are now entering a time when there will not be nearly enough food for everyone in the world.  As competition for food supplies increases, food prices are going to go up.  In fact, at some point they are going to go way up.

Let’s look at some of the key reasons why an increasing number of people believe that a massive food crisis is on the horizon.

The following are 20 signs that a horrific global food crisis is coming….

#1 According to the World Bank, 44 million people around the globe have been pushed into extreme poverty since last June because of rising food prices.

#2 The world is losing topsoil at an astounding rate.  In fact, according to Lester Brown, “one third of the world’s cropland is losing topsoil faster than new soil is forming through natural processes”.

#3 Due to U.S. ethanol subsidies, almost a third of all corn grown in the United States is now used for fuel.  This is putting a lot of stress on the price of corn.

#4 Due to a lack of water, some countries in the Middle East find themselves forced to almost totally rely on other nations for basic food staples.  For example, it is being projected that there will be no more wheat production in Saudi Arabia by the year 2012.

#5 Water tables all over the globe are being depleted at an alarming rate due to “overpumping”.  According to the World Bank, there are 130 million people in China and 175 million people in India that are being fed with grain with water that is being pumped out of aquifers faster than it can be replaced.  So what happens once all of that water is gone?

#6 In the United States, the systematic depletion of the Ogallala Aquifer could eventually turn “America’s Breadbasket” back into the “Dust Bowl”.

#7 Diseases such as UG99 wheat rust are wiping out increasingly large segments of the world food supply.

#8 The tsunami and subsequent nuclear crisis in Japan have rendered vast agricultural areas in that nation unusable.  In fact, there are many that believe that eventually a significant portion of northern Japan will be considered to be uninhabitable.  Not only that, many are now convinced that the Japanese economy, the third largest economy in the world, is likely to totally collapse as a result of all this.

#9 The price of oil may be the biggest factor on this list.  The way that we produce our food is very heavily dependent on oil.  The way that we transport our food is very heavily dependent on oil.  When you have skyrocketing oil prices, our entire food production system becomes much more expensive.  If the price of oil continues to stay high, we are going to see much higher food prices and some forms of food production will no longer make economic sense at all.

#10 At some point the world could experience a very serious fertilizer shortage.  According to scientists with the Global Phosphorus Research Initiative, the world is not going to have enough phosphorous to meet agricultural demand in just 30 to 40 years.

#11 Food inflation is already devastating many economies around the globe.  For example, India is dealing with an annual food inflation rate of 18 percent.

#12 According to the United Nations, the global price of food reached a new all-time high in February.

#13 According to the World Bank, the global price of food has risen 36% over the past 12 months.

#14 The commodity price of wheat has approximately doubled since last summer.

#15 The commodity price of corn has also about doubled since last summer.

#16 The commodity price of soybeans is up about 50% since last June.

#17 The commodity price of orange juice has doubled since 2009.

#18 There are about 3 billion people around the globe that live on the equivalent of 2 dollars a day or less and the world was already on the verge of economic disaster before this year even began.

#19 2011 has already been one of the craziest years since World War 2.  Revolutions have swept across the Middle East, the United States has gotten involved in the civil war in Libya, Europe is on the verge of a financial meltdown and the U.S. dollar is dying.  None of this is good news for global food production.

#20 There have been persistent rumors of shortages at some of the biggest suppliers of emergency food in the United States.  The following is an excerpt from a recent “special alert” posted on Raiders News Network….

Look around you. Read the headlines. See the largest factories of food, potassium iodide, and other emergency product manufacturers literally closing their online stores and putting up signs like those on Mountain House’s Official Website and Thyrosafe’s Factory Webpage that explain, due to overwhelming demand, they are shutting down sales for the time being and hope to reopen someday.

So what does all of this mean?

It means that time is short.

For years, many “doom and gloomers” have been yelling and screaming that a food crisis is coming.

Well, up to this point there hasn’t been much to get alarmed about.  Food prices have started to rise, but the truth is that our stores are still packed to the rafters will gigantic amounts of relatively cheap food.

However, you would have to be an idiot not to see the warning signs.  Just look at what happened in Japan after March 11th.  Store shelves were cleared out almost instantly.

It isn’t going to happen today, and it probably isn’t going to happen tomorrow, but at some point a major league food crisis is going to strike.

So what are you and your family going to do then?

You might want to start thinking about that.

The Japanese Economy Is In Much Bigger Trouble Than Most People Think

Now that nearly a month has gone by since the horrific tsunami in Japan on March 11th, it is starting to become clear just how much economic damage has been done.  The truth is that the Japanese economy is in much bigger trouble than most people think.  This is almost certainly going to be the most expensive disaster in Japanese history.  The tsunami that struck Japan on March 11th swept up to 6 miles inland, destroying virtually everything in the way.  Thousands upon thousands of Japanese were killed and entire cities were wiped off the map.  Yes, Japan is a resilient nation, but exactly how does a nation that is already drowning in debt replace dozens of cities and towns that are suddenly gone?  The truth is that thousands of square miles have been more completely destroyed than if they had been bombed by a foreign military force. The loss of homes, cars, businesses and personal wealth is almost unimaginable. It is going to take many years to rebuild the roads, bridges, rail systems, ports, power lines and water systems that were lost.  Nobody is quite sure when the rolling blackouts are going to end, and nobody is quite sure when all of the damaged manufacturing facilities are going to be fully brought back online.

On top of everything else, the nuclear crisis at Fukushima never seems to end.  In fact, it seems to get worse with each passing day.

According to the Los Angeles Times, it has now been announced that seawater off the coast of Japan near the Fukushima facility was recently found to contain 7.5 million times the legal limit of radioactive iodine….

The operator of Japan’s stricken Fukushima nuclear plant said Tuesday that it had found radioactive iodine at 7.5 million times the legal limit in a seawater sample taken near the facility, and government officials imposed a new health limit for radioactivity in fish.

Do you think anyone is going to want any Japanese seafood after this?

In fact, at this point one must really question the long-term prospects for the seafood industry in that entire region of Asia.  There are going to be tens of millions of people (myself included) that will no longer want anything to do with any seafood that comes from that part of the world.

Sadly, some nuclear experts now claim that it could take years to bring the reactors at Fukushima fully back under control.

At the end of this crisis, how large of an area around Fukushima will be uninhabitable?

A 20 km radius?

A 30 km radius?

A 40 km radius?

More?

Japan is the third largest economy in the world, but it never was a large nation to begin with.  Now that the tsunami and the nuclear crisis at Fukushima have made the amount of usable land significantly smaller, what is that going to mean for the future of the Japanese economy?

That is a very good question.

The truth is that there are already signs that the Japanese economy is regressing into another recession.

According to The Telegraph, one major manufacturing index in Japan has already shown a very serious decline….

The purchasing mangers’ index (PMI) gave an early indication of the extent of the damage wreaked on the economy as it dropped 6.5 points to a reading of 46.4, the largest slide since the survey began in late-2001.

In particular, the auto industry is really being affected by this crisis.  Vehicle supply chains all over the globe are now in a state of chaos.

Approximately 3,000 individual parts go into every single new vehicle.  If even one of those parts is missing, a new car or truck cannot be built.

So just how big of a problem are we looking at?

Well, it was originally projected that 72 million vehicles would be built around the globe in 2011.

As a result of the crisis in Japan, approximately 5 million of those vehicles will not be built.

That is very serious.

In fact, Goldman Sachs is projecting that this crisis is currently costing automakers in Japan $200 million every single day.

Ouch!

A recent article on CNBC detailed some of the problems that Japanese automakers are facing right now….

In the weeks ahead, car buyers will have difficulty finding the model they want in certain colors, thousands of auto plant workers will likely be told to stay home, and companies such as Toyota, Honda and others will lose billions of dollars in revenue. More than two weeks since the natural disaster, inventories of crucial car supplies — from computer chips to paint pigments — are dwindling fast as Japanese factories that make them struggle to restart.

Unfortunately, the worst for the auto industry is yet to come.  AutoNation is warning that “production disruptions will significantly impact product availability from Japanese auto manufacturers in the second and third quarters of 2011.”

Because of supply chain disruptions, a number of North American manufacturing facilities look like they will be shutting down at least for a while.

For example, Toyota has announced that it will be shutting down all of its North American factories for a certain period of time because of shortages of parts from Japan.

But Toyota is far from alone as a recent report in The Globe and Mail made quite clear….

Honda Motor Co. Ltd. has already slashed output by half at its North American plants, while Nissan Motor Co. Ltd. will shut all its U.S. and Mexican plants for at least one week in April. Ford Motor Co., too, has halted production at a truck plant in Kentucky this week.

So why don’t North American facilities just switch to other suppliers?

Unfortunately, as CNN recently noted, it is just not that simple….

Japanese companies also specialized in making the array of highly specialized computer chips that control everything from the engine to the brakes in modern cars. Computer chip production is a complex process that can take weeks and involves hundreds of individual steps, Morgan Stanley analyst Noriaki Hirakata said.

Not only that, but if an automaker is forced to find a new source for an electronic chip, the process of “certifying” a new computer chip supplier — that is, determining that a new company can meet all the requirements for cost, quality and quantity — can take as long as a year, Hirakata said.

The truth is that this is a complete and total economic disaster.

The Japanese economy is not going to be the same for many years to come.  In fact, many are now warning that this could be one of the triggers that could lead to another major global financial crisis.

One of the big fears is that Japan will need to sell off a large amount of U.S. Treasuries to fund the rebuilding of that nation.

If that were to happen, it could result in a “liquidity crisis” similar to what we saw in 2008.  Already the rest of the world is really starting to lose confidence in the U.S. dollar and in U.S. Treasuries, and if Japan starts massively dumping U.S. government debt things could get out of control fairly quickly.

In any event, it is undeniable that the Japanese economy has been absolutely devastated by this crisis.  In fact, when you combine the tsunami and the nuclear crisis, this could be the biggest economic disaster that any major industrial power has faced since World War 2.

So will the crisis in Japan push the rest of the globe into another major recession?

Only time will tell.

+ More