Federal Reserve Chairman Ben Bernanke is on the way out the door, but the consequences of the bond bubble that he has helped to create will stay with us for a very, very long time. During Bernanke’s tenure, interest rates on U.S. Treasuries have fallen to record lows. This has enabled the U.S. government to pile up an extraordinary amount of debt. During his tenure we have also seen mortgage rates fall to record lows. All of this has helped to spur economic activity in the short-term, but what happens when interest rates start going back to normal? If the average rate of interest on U.S. government debt rises to just 6 percent, the U.S. government will suddenly be paying out a trillion dollars a year just in interest on the national debt. And remember, there have been times in the past when the average rate of interest on U.S. government debt has been much higher than that. In addition, when the U.S. government starts having to pay more to borrow money so will everyone else. What will that do to home sales and car sales? And of course we all remember what happened to adjustable rate mortgages when interest rates started to rise just prior to the last recession. We have gotten ourselves into a position where the U.S. economy simply cannot afford for interest rates to go up. We have become addicted to the cheap money made available by a grossly distorted financial system, and we have Ben Bernanke to thank for that. The Federal Reserve is at the very heart of the economic problems that we are facing in America, and this time is certainly no exception. (Read More...)
10 Disturbing Tales From The Side Streets And Dark Alleys Of America
Every night Americans prove that they are willing to do absolutely horrible things to their fellow human beings. Most of the time, we never even hear about the sick and twisted things that happen on the side streets and dark alleys of America. Once in a while a particularly twisted story will get picked up by the news, but usually most Americans are pretty much able to isolate themselves from the depravity that is happening all around them. Unfortunately, the social decay that is eating away at our society like cancer is spreading. It is getting harder and harder for average Americans to keep the darkness at bay. When it suddenly reaches out and touches your family, it can be absolutely shocking. America is not the kind, loving and gentle place that is portrayed in our movies and on our television shows. The sad truth is that America is becoming colder and meaner with each passing day. Yes, there are definitely some Americans that are kind and compassionate, but they are in the minority. As our economic decline becomes even more severe, the hearts of even more Americans are going to grow cold. And people with cold hearts can do some absolutely terrible things. The following are 10 disturbing tales from the side streets and dark alleys of America… (Read More...)
Whenever Margin Debt Goes Over 2.25% Of GDP The Stock Market Always Crashes
What do 1929, 2000 and 2007 all have in common? Those were all years in which we saw a dramatic spike in margin debt. In all three instances, investors became highly leveraged in order to “take advantage” of a soaring stock market. But of course we all know what happened each time. The spike in margin debt was rapidly followed by a horrifying stock market crash. Well guess what? It is happening again. In April (the last month we have a number for), margin debt rose to an all-time high of more than 384 billion dollars. The previous high was 381 billion dollars which occurred back in July 2007. Margin debt is about 29 percent higher than it was a year ago, and the S&P 500 has risen by more than 20 percent since last fall. The stock market just continues to rise even though the underlying economic fundamentals continue to get worse. So should we be alarmed? Is the stock market bubble going to burst at some point? Well, if history is any indication we are in big trouble. In the past, whenever margin debt has gone over 2.25% of GDP the stock market has crashed. That certainly does not mean that the market is going to crash this week, but it is a major red flag. (Read More...)
“This Is A Glock Block” – Frustrated Homeowners All Over America Are Taking Matters Into Their Own Hands
All over the United States, frustrated homeowners are banding together, arming themselves and patrolling their own streets. One of the primary reasons this is happening is because police budgets all over the nation are being slashed at a time when violent crime rates in the United States are increasing and many our our largest cities are being transformed into crime-infested war zones. So instead of waiting for government to come up with a solution, many Americans are taking matters into their own hands. For example, one community group in Milwaukie, Oregon has started posting flyers with an ominous message for potential criminals: “This is a Glock block. We don’t call 911.” You can see a photo of this flyer right here. One of the founders of the “Glock Block” is a breast cancer survivor named Coy Tolonen. She decided to arm herself after a thief stole one of her favorite statues out of her front yard while she was watching… (Read More...)
Rotting, Decaying And Bankrupt – If You Want To See The Future Of America Just Look At Detroit
Eventually the money runs out. Much of America was shocked when the city of Detroit defaulted on a $39.7 million debt payment and announced that it was suspending payments on $2.5 billion of unsecured debt, but those who visit my site on a regular basis were probably not too surprised. Anyone with half a brain and a calculator could see this coming from a mile away. But people kept foolishly lending money to the city of Detroit, and now many of them are going to get hit really hard. Detroit Emergency Manager Kevyn Orr has submitted a proposal that would pay unsecured creditors about 10 cents on the dollar. Similar haircuts would be made to underfunded pension and health benefits for retirees. Orr is hoping that the creditors and the unions that he will be negotiating with will accept this package, but he concedes that there is still a “50-50 chance” that the city of Detroit will be forced to formally file for bankruptcy. But what Detroit is facing is not really that unique. In fact, Detroit is a perfect example of what the future of America is going to look like. We live in a nation that is rotting, decaying, drowning in debt and racing toward insolvency. Already there are dozens of other cities across the nation that are poverty-ridden, crime-infested hellholes just like Detroit is, and hundreds of other communities are rapidly heading in that direction. So don’t look down on Detroit. They just got there before the rest of us. (Read More...)
Thousands Of Companies Have Been Handing Over Your Personal Data To The NSA
It isn’t just Internet and phone companies that are giving your personal information to the U.S. government. According to an astounding report by Bloomberg, “four people familiar with the process” say that “makers of hardware and software, banks, Internet security providers, satellite telecommunications companies” and a whole host of other sources are handing over your personal data to federal agencies. The truth is that there is so much more to this NSA snooping scandal than the American people know so far. When U.S. Representative Loretta Sanchez said that what Edward Snowden had revealed was “just the tip of the iceberg“, she wasn’t kidding. The U.S. government is trying to collect as much information about everyone on the planet as it possibly can. And this incredibly powerful intelligence machine is not going to go away just because a few activists get upset about it. The United States government spends more than 80 billion dollars a year on intelligence programs. Those that have spent their careers constructing this monolithic intelligence apparatus are doing to defend it to the bitter end, as will the corporate partners in the private sector that rake in enormous profits thanks to big fat government contracts. But if the American people don’t stand up and demand change now, it is going to be a signal to those doing the snooping that they can push the envelope even more because nobody is going to stop them. (Read More...)
Is Obama Starting A War With Syria Just To Distract Us From All The Scandals?
Well, isn’t that convenient? At the moment when the Obama administration is feeling more heat then ever before, it starts another war. Suddenly everyone in the mainstream media is talking all about Syria and not about the IRS scandal, Benghazi, NSA snooping or any of the other political scandals that have popped up in recent weeks. As if on cue, Obama made headlines all over the globe on Thursday by claiming that the Syrian government has used chemical weapons against the rebels “multiple times”, and that the U.S. was now ready to do more to assist the rebels. That assistance is reportedly going to include “military support” for the rebels and a no-fly zone over at least part of Syria is being discussed. Without a doubt, these are acts of war, and this conflict is not going to end until Assad has been ousted. But Assad will not go quietly. And all it would take is for Assad to fire a couple of missiles at Tel Aviv for a huge regional war to erupt in the Middle East. And what happens if Russia or China decides to get involved in the conflict in Syria? Obama is playing with fire, but he has shown again and again that he is willing to do virtually anything if it will benefit him politically. (Read More...)
Member Of Congress: Edward Snowden’s Revelations Are “Just The Tip Of The Iceberg”
According to U.S. Representative Loretta Sanchez, members of Congress learned “significantly more than what is out in the media today” during a closed briefing about the NSA on Tuesday, and that what has been revealed so far about NSA snooping is “just the tip of the iceberg”. During her interview with C-SPAN on Wednesday, she also stated that NSA spying is “just broader than most people even realize” but due to security restrictions she could not reveal more than that. So precisely what are the American people not being told? And do our leaders ever plan to tell us the truth? Many of our politicians have come down extremely hard on whistleblower Edward Snowden, but if it wasn’t for him most Americans would have no idea what the NSA has been up to. Is the Obama administration going to come clean on this, or do we have to wait for even more whistleblowers to come forward? The American people deserve to know that they are being spied on, and it appears that those in charge of doing this spying have been flat out lying to Congress about it. (Read More...)