Debt

The Worst In The World – The U.S. Balance Of Trade Is Mind-Blowingly Bad

Did you know that we buy about a half a trillion dollars more stuff from the rest of the world than they buy from us?  The U.S. balance of trade is not only mind-blowingly bad – it is the worst in the world.  It is being projected that the U.S. trade deficit for 2011 will be 558.2 billion dollars.  That would be an increase of more than 11 percent from last year.  As I have written about previously, the United States is the worst in the world at a lot of things, but as far as the economic well-being of our nation is concerned, our balance of trade is particularly important.  Every single month, far more money goes out of this country than comes into it.  Tax revenues are significantly reduced as all of this money gets sucked out of our communities.  The federal government, state governments and local governments borrow gigantic piles of money to try to make up the difference, but all of this borrowing just makes our debt problems a whole lot worse.  In the end, no amount of government debt is going to be able to cover over the fact that our national economic pie is shrinking.  We are continually consuming far more wealth than we produce, and that is a recipe for economic disaster.

The “current account balance” is one key indicator of how a country is doing economically.  The following is how the CIA World Factbook defines “current account balance”….

This entry records a country’s net trade in goods and services, plus net earnings from rents, interest, profits, and dividends, and net transfer payments (such as pension funds and worker remittances) to and from the rest of the world during the period specified.

If someone were to ask you what countries in the world have strong, thriving economies right now, what countries would you think of?

Would countries like China, Germany, Russia and Saudi Arabia come to mind?

Well, all of those nations have huge positive current account balances.  In fact, China has the best current account balance in the world at +$305 billion.

So who is on the other end of the scale?

The following information comes directly from a CIA World Factbook chart….

190 Turkey $ -48,420,000,000

191 Canada $ -48,500,000,000

192 India $ -51,780,000,000

193 France $ -54,400,000,000

194 United Kingdom $ -56,190,000,000

195 Spain $ -63,650,000,000

196 Italy $ -67,940,000,000

197 United States $ -470,200,000,000

The United States is rated dead last at number 197.

Just take a close look at those numbers for a minute.

The U.S. had a current account balance of negative 470 billion dollars in 2010.  That figure was almost 7 times worse than the next worst country (Italy).

Not only does the United States have the worst current account balance in the entire world, the truth is that no other country is even in the same ballpark as us.

We are bleeding wealth so fast that it is hard to even describe it.

But perhaps a real life example can help put this all into perspective.

One 22-year-old Saudi Arabian student has a collection of sports cars that is worth more than 12 million dollars.  Reportedly, his collection includes at least three Lamborghinis, five Ferraris and five Porsches.

And guess who paid for it?

You did.

Every month, billions of dollars go out of the United States to help pay for the insane lifestyles of the ultra-wealthy oil barons of the Middle East.

Meanwhile, dozens of major U.S. cities are degenerating into hellholes.

Once upon a time, Detroit was one of the greatest industrial cities that the world has ever seen.  It was the envy of the entire globe.

But now Detroit is an utter nightmare….

*An analysis of census figures found that 48.5% of all men living in Detroit from age 20 to age 64 did not have a job in 2008.

*If you can believe it, the median price of a home in Detroit is now just $6000.

*Only 25 percent of students in Detroit graduate from high school.

So what happened to Detroit?

Well, just as has been happening in so many other U.S. cities, industry has been leaving at an astounding pace.

As I have written about previously, an average of 23 manufacturing facilities a day were shut down in the United States during 2010.

Overall, the U.S. has lost a total of more than 56,000 manufacturing facilities since 2001.

This country is bleeding middle class jobs profusely, and neither major political party seems to care.

American family budgets are being stretched tighter and tighter these days.  There are not nearly enough good jobs to go around and yet the cost of everything just seems to keep going up.

Many families are going into massive amounts of debt in an attempt to make ends meet.  According to a recent CNN article, credit card use in the United States is experiencing a major upswing once again….

Purchases made with credit cards rose 8.2% in the first quarter of 2011, 9% in the second quarter and 10.6% in the third quarter, according to First Data.

Of course American consumers were out in force on Black Friday once again this year.  They gleefully filled up their carts with cheap plastic crap made overseas, and many racked up huge credit card balances in the process.

But most of us never stop to think about those that make all of these cheap plastic products for us.

Thanks to the globalization of the economy, big corporations and corrupt governments can make stuff in countries where it is legal to pay slave labor wages and then ship their products into the United States for free.

It is important for all of us to learn what actually happens to these people that are working so hard for slave labor wages.  The following comes from a recent article in the Guardian….

At the Hung Hing factory the researcher found that the 8,000 workers put in up to 100 hours of overtime a month, far in excess of the legal maximum. Workers say they have to sign a document agreeing to work additional overtime on top of the legal maximum. The basic wage was £132 a month (up to £250 with maximum overtime payments) but wages were paid up to three weeks late.

Workers complained of inadequate training with the factory machines and last year one worker died when he fell into a machine. They said there were frequent injuries and concerns over the chemicals used. There were also complaints about the standard of the dormitories, where water for washing and flushing toilets is turned off at 10pm.

How in the world are American workers supposed to “compete” for jobs at those wage levels?

As I have written about previously, Professor Alan Blinder of Princeton University is warning that 40 million more U.S. jobs could be sent offshore over the next two decades if nothing is done to stop this.

But instead, our “representatives” in Congress just keep pushing more “free trade” agreements as the answer to our problems.  Congress has passed new free trade agreements with South Korea, Colombia and Panama, and the Obama administration has made “the NAFTA of the Pacific” a very high priority.

Well, if “free trade” is supposed to create so many jobs, then why was last decade the worst decade for the creation of jobs since the Great Depression?

If you can believe it, zero jobs were created between 1999 and 2009.  The following comes from an article in Washington Monthly….

“If any single number captures the state of the American economy over the last decade, it is zero. That was the net gain in jobs between 1999 and 2009—nada, nil, zip. By painful contrast, from the 1940s through the 1990s, recessions came and went, but no decade ended without at least a 20 percent increase in the number of jobs.”

But our leaders don’t care about us.  In fact, even the members of Obama’s “jobs panel” have been shipping jobs out of the United States at a very rapid pace.

The U.S. has run a negative balance of trade with the rest of the globe every single year since 1976.  During that time, the U.S. has run up a total trade deficit of more than 7.5 trillion dollars with the rest of the planet.

That 7.5 trillion dollars could have gone to support U.S. workers and U.S. businesses.

But it didn’t.  Instead, it went out of the country and it made foreigners wealthier as our own cities slowly rotted.

Now we are actually passing laws that encourage wealthy foreigners to come in and buy up pieces of the United States.

For example, there is actually a bill in Congress that would automatically give residence visas to any foreigners that are willing to spend at least half a million dollars to buy houses inside the United States.

The idea behind the bill is that this will get the housing market moving again.

There aren’t enough Americans with good jobs to buy houses, so we have now decided to beg foreigners to buy them.

How bizarre is that?

Until our horrendous balance of trade is fixed, the employment situation in this country is going to continue to get worse.

Any politician that tries to sell you on a “jobs plan” that does not address our balance of trade is either totally incompetent or is straight out lying to you.

The economic infrastructure of America is crumbling a little bit more every single day.  If something dramatic is not done, we will continue to bleed businesses, bleed jobs and bleed wealth.

Please share this information with as many people as you can.  The American people need to understand what is happening to the economy.  We need to work to wake up as many people as we can before it is too late.

Barack Obama Is Taking A 17 Day Vacation Even As America Falls Apart All Around Him

What in the world is Barack Obama thinking?  The United States of America is falling apart all around him, and yet he decides to take a 17 day Hawaiian vacation.  Does he even understand that he is the leader of the free world?  Does he even understand that this country is mired in the worst economic downturn since the Great Depression?  Last year, a similar Hawaiian vacation by the Obamas ending up costing more than 1 million dollars.  Other than when I was in school, I don’t remember ever taking a 17 day vacation.  In fact, most Americans do not even get 17 vacation days for an entire year.  Yet the Obamas seem to think that part of occupying the White House is to take as many vacations as possible.  It has been reported that Michelle Obama spent over 10 million dollars of U.S. taxpayer money on vacations during just one recent 12 month period alone.  It would be one thing if they were taking these vacations at a time when America was thriving, but the truth is that the U.S. is facing one crisis after another right now.  Our debt is now over 15 trillion dollars.  If you can believe it, the U.S. government has not been operating under an approved budget for over 900 days.  More Americans fell into poverty last year than ever before.  More Americans are on food stamps than ever before.  An average of 23 manufacturing facilities were shut down every single day in the United States last year.  According to one recent report, only 7 percent of Americans that lost their jobs during the recession have “made it back” to where they were before the recession.  So perhaps Barack Obama should spend more time doing his job rather than taking extended vacations.

During this holiday season, tens of millions of American families are suffering horribly.  Any sane president would realize that this is not the time to be gallivanting off to Hawaii again.  The following short excerpt comes from a recent article in the Daily Mail…..

While most Americans are lucky to get a few weeks of holiday every year, it seems the country’s leader gets a little more freedom in the matter.

President Barack Obama has announced his Christmas vacation to Hawaii – for a staggering 17-day trip.

Obama, who visited the island just two weeks ago for an economic summit, will head to Honolulu on Saturday December 17 until Monday January 2.

But this is not just one isolated incident.  Obama has taken a whole bunch of vacations since he moved into the White House.  According to the New York Post, Barack Obama enjoyed a total of 10 separate vacations that stretched over a total of 90 vacation days during the years of 2009 and 2010.

In addition, Obama managed to find time for 29 rounds of golf during his first two years in office.

But reportedly the biggest “vacation junkie” of all in the Obama family is Michele Obama.

The following shocking excerpt comes from a different Daily Mail article….

The First Lady is believed to have taken 42 days of holiday in the past year, including a $375,000 break in Spain and a four-day ski trip to Vail, Colorado, where she spent $2,000 a night on a suite at the Sebastian hotel.

And the first family’s nine-day stay in Martha’s Vineyard is also proving costly, with rental of the Blue Heron Farm property alone costing an estimated $50,000 a week.

The source continued: ‘Michelle also enjoys drinking expensive booze during her trips. She favours martinis with top-shelf vodka and has a taste for rich sparking wines.

‘The vacations are totally Michelle’s idea. She’s like a junkie. She can’t schedule enough getaways, and she lives from one to the next – all the while sticking it to hardworking Americans.’

During such hard economic times, how can Michelle Obama justify spending over 10 million dollars of U.S. taxpayer money on luxurious vacations?

The American people expect a president to be at the White House working night and day to solve the problems of this nation.

Sure, it would definitely be understandable to take a day or two off here and there, but the truth is that the president should be one of the hardest working people in the country.

Instead, Obama just seems to do less and less the longer that he is in the White House.  In fact, there have been numerous reports that Barack Obama barely even interacts with members of his own party in Congress anymore.

Our country is literally falling apart and we have a total lack of leadership at the top.

Sadly, there does not appear to be much hope on the horizon at the moment.

Right now, Newt Gingrich is leading the race for the Republican nomination.  If he wins the nomination, the American people will have a choice between two candidates that are almost identical in 2012.  The sad truth is that Newt Gingrich is not a conservative, and he never will be.  Rather, he is a big time establishment stooge that would keep marching America down the same road that Bush and Obama have been taking us.  When you sit down and really compare the Obama agenda to the Gingrich agenda, you will quickly find that they are almost entirely identical.  If the Republican Party nominates Newt Gingrich, it will be a complete and utter disgrace.

The reality is that we desperately need real leadership and real solutions.  Europe is on the verge of a massive financial meltdown.  If things take a wrong turn, we could easily be looking at a financial crisis even worse than the one we saw back in 2008.

Many in the mainstream media are using the word “recovery” now that the official unemployment has fallen to 8.6%, but as Mac Slavo recently pointed out, the real rate of unemployment is still up around 22 percent.

The official government numbers assume that 315,000 Americans “left the labor force” in November.  At a time when our population is constantly expanding, that seems like a shaky assumption at best.

The reality, as many of you out there are experiencing, is that times are hard and millions of Americans are becoming increasingly desperate.

For example, just check out what happened in the Sacramento area recently.  One church was hit by copper thieves three nights in row….

Members of a Carmichael church that had been targeted by copper thieves for two nights in a row managed to help nab the suspected thieves when the greedy pair returned for a third night.

Nobody is off limits for thieves these days.  If you can believe it, people are even stealing food from food pantries now.

This country is in a massive amount of economic trouble, and we desperately need some solutions.

But perhaps we should be thankful that Obama is taking so many vacations.

After all, just about everything he has done so far has ended up making things even worse.

Perhaps it is better if he simply does nothing at all.

But at some point this country is going to need real leadership and real solutions.

So what do all of you think?

Do you think that there is any hope for this country on the horizon?

22 Reasons Why We Could See An Economic Collapse In Europe In 2012

Will 2012 be the year that we see an economic collapse in Europe?  Before you dismiss the title of this article as “alarmist”, read the facts listed in the rest of this article first.  Over the past several months, there has been an astonishing loss of confidence in the European financial system.  Right now, virtually nobody wants to loan money to financially troubled nations in the EU and virtually nobody wants to lend money to major European banks.  Remember, one of the primary reasons for the financial crisis of 2008 was a major credit crunch that happened here in the United States.  This burgeoning credit crunch in Europe is just one element of a “perfect storm” that is rapidly coming together as we get ready to go into 2012.  The signs of trouble are everywhere.  All over Europe, governments are implementing austerity measures and dramatically cutting back on spending.  European banks are substantially cutting back on lending as they seek to meet new capital requirements that are being imposed upon them.  Meanwhile, bond yields are going through the roof all over Europe as investors lose confidence and demand much higher returns for investing in European debt.  It has become clear that without a miracle happening, quite a few European nations and a significant number of European banks are not going to be able to get the funding that they need from the market in 2012.  The only thing that is going to avert a complete and total financial meltdown in Europe is dramatic action, but right now European leaders are so busy squabbling with each other that a bold plan seems out of the question.

The following are 22 reasons why we could see an economic collapse in Europe in 2012….

#1 Germany could rescue the rest of Europe, but that would take an unprecedented financial commitment, and the German people do not have the stomach for that.  It has been estimated that it would cost Germany 7 percent of GDP over several years in order to sufficiently bail out the other financially troubled EU nations.  Such an amount would far surpass the incredibly oppressive reparations that Germany was forced to pay out in the aftermath of World War I.

A host of recent surveys has shown that the German people are steadfastly against bailing out the rest of Europe.  For example, according to one recent poll 57 percent of the German people are against the creation of eurobonds.

At this point, German politicians are firmly opposed to any measure that would place an inordinate burden on German taxpayers, so unless this changes that means that Europe is not going to be saved from within.

#2 The United States could rescue Europe, but the Obama administration knows that it would be really tough to sell that to the American people during an election season.  The following is what White House Press Secretary Jay Carney said today about the potential for a bailout of Europe by the United States….

“This is something they need to solve and they have the capacity to solve, both financial capacity and political will”

Carney also said that the Obama administration does not plan to commit any “additional resources” to rescuing Europe….

“We do not in any way believe that additional resources are required from the United States and from American taxpayers.”

#3 Right now, banks all over Europe are in deleveraging mode as they attempt to meet new capital-adequacy requirements by next June.

According to renowned financial journalist Ambrose Evans-Pritchard, European banks need to reduce the amount of lending on their books by about 7 trillion dollars in order to get down to safe levels….

Europe’s banks face a $7 trillion lending contraction to bring their balance sheets in line with the US and Japan, threatening to trap the region in a credit crunch and chronic depression for a decade.

So what does that mean?

It means that European banks are going to be getting really, really stingy with loans.

That means that it is going to become really hard to buy a home or expand a business in Europe, and that means that the economy of Europe is going to slow down substantially.

#4 European banks are overloaded with “toxic assets” that they are desperate to get rid of.  Just like we saw with U.S. banks back in 2008, major European banks are busy trying to unload mountains of worthless assets that have a book value of trillions of euros, but virtually nobody wants to buy them.

#5 Government austerity programs are now being implemented all over Europe.  But government austerity programs can have very negative economic effects.  For example, we have already seen what government austerity has done to Greece. 100,000 businesses have closed and a third of the population is now living in poverty.

But now governments all over Europe have decided that austerity is the way to go.  The following comes from a recent article in the Economist….

France’s budget plans are close to being agreed on; further cuts are likely but will be delayed until after the elections in spring. Italy has yet to vote through a much-revised package of cuts. Spain’s incoming government has promised further spending cuts, especially in regional outlays, in order to meet deficit targets agreed with Brussels.

#6 The amount of debt owed by some of these European nations is so large that it is difficult to comprehend.  For example, Greece, Portugal, Ireland, Italy and Spain owe the rest of the world about 3 trillion euros combined.

So what will massive government austerity do to troubled nations such as Spain, Portugal, Ireland and Italy?  Ambrose Evans-Pritchard is very concerned about what even more joblessness will mean for many of those countries….

Even today, the jobless rate for youth is near 10pc in Japan. It is already 46pc in Spain, 43pc in Greece, 32pc in Ireland, and 27pc in Italy. We will discover over time what yet more debt deleveraging will do to these societies.

#7 Europe was able to bail out Greece and Ireland, but there is no way that Italy will be able to be rescued if they require a full-blown bailout.

Unfortunately, Italy is in the midst of a massive financial meltdown as you read this.  The yield on two year Italian bonds is now about double what it was for most of the summer.  There is no way that is sustainable.

It would be hard to overstate how much of a crisis Italy represents.  The following is how former hedge fund manager Bruce Krasting recently described the current situation….

At this point there is zero possibility that Italy can refinance any portion of its $300b of 2012 maturing debt. If there is anyone at the table who still thinks that Italy can pull off a miracle, they are wrong. I’m certain that the finance guys at the ECB and Italian CB understand this. I repeat, there is a zero chance for a market solution for Italy.

Krasting believes that either Italy gets a gigantic mountain of cash from somewhere or they will default within six months and that will mean the start of a global depression….

I think the Italian story is make or break. Either this gets fixed or Italy defaults in less than six months. The default option is not really an option that policy makers would consider. If Italy can’t make it, then there will be a very big crashing sound. It would end up taking out most of the global lenders, a fair number of countries would follow into Italy’s vortex. In my opinion a default by Italy is certain to bring a global depression; one that would take many years to crawl out of.

#8 An Italian default may be closer than most people think.  As the Telegraph recently reported, just to refinance existing debt, the Italian government must sell more than 30 billion euros worth of new bonds by the end of January….

Italy’s new government will have to sell more than EURO 30 billion of new bonds by the end of January to refinance its debts. Analysts say there is no guarantee that investors will buy all of those bonds, which could force Italy to default.

The Italian government yesterday said that in talks with German Chancellor Angela Merkel and French President Nicolas Sarkozy, Prime Minister Mario Monti had agreed that an Italian collapse “would inevitably be the end of the euro.”

#9 European nations other than just the “PIIGS” are getting into an increasing amount of trouble.  For example, S&P recently slashed the credit rating of Belgium to AA.

#10 Credit downgrades are coming fast and furious all over Europe now.  At this point it seems like we see a new downgrade almost every single week.  Some nations have been downgraded several times.  For instance, Fitch has downgraded the credit rating of Portugal again.  At this point it is being projected that Portuguese GDP will shrink by about 3 percent in 2012.

#11 The financial collapse of Hungary didn’t make many headlines in the United States, but it should have.  Moody’s has cut the credit rating of Hungarian debt to junk status, and Hungary has now submitted a formal request to the EU and the IMF for a bailout.

#12 Even faith in German debt seems to be wavering. Last week, Germany had “one of its worst bond auctions ever“.

#13 German banks are also starting to show signs of weakness.  The other day, Moody’s downgraded the ratings of 10 major German banks.

#14 As the Telegraph recently reported, the British government is now making plans based on the assumption that a collapse of the euro is only “just a matter of time”….

As the Italian government struggled to borrow and Spain considered seeking an international bail-out, British ministers privately warned that the break-up of the euro, once almost unthinkable, is now increasingly plausible.

Diplomats are preparing to help Britons abroad through a banking collapse and even riots arising from the debt crisis.

The Treasury confirmed earlier this month that contingency planning for a collapse is now under way.

A senior minister has now revealed the extent of the Government’s concern, saying that Britain is now planning on the basis that a euro collapse is now just a matter of time.

#15 The EFSF was supposed to help bring some stability to the situation, but the truth is that the EFSF is already a bad joke.  It has been reported that the EFSF has already been forced to buy up huge numbers of its own bonds.

#16 Unfortunately, it looks like a run on the banks has already begun in Europe.  The following comes from a recent article in The Economist….

“We are starting to witness signs that corporates are withdrawing deposits from banks in Spain, Italy, France and Belgium,” an analyst at Citi Group wrote in a recent report. “This is a worrying development.”

#17 Confidence in European banks has been absolutely shattered and virtually nobody wants to lend them money right now.

The following is a short excerpt from a recent CNBC article….

Money-market funds in the United States have quite dramatically slammed shut their lending windows to European banks. According to the Economist, Fitch estimates U.S. money market funds have withdrawn 42 percent of their money from European banks in general.

And for France that number is even higher — 69 percent. European money-market funds are also getting in on the act.

#18 There are dozens of major European banks that are in danger of failing.  The reality is that most major European banks are leveraged to the hilt and are massively exposed to sovereign debt.  Before it fell in 2008, Lehman Brothers was leveraged 31 to 1.  Today, major German banks are leveraged 32 to 1, and those banks are currently holding a massive amount of European sovereign debt.

#19 According to the New York Times, the economy of the EU is already projected to shrink slightly next year, and this doesn’t even take into account what is going to happen in the event of a total financial collapse.

#20 There are already signs that the European economy is seriously slowing down.  Industrial orders in the eurozone declined by 6.4 percent during September.  That was the largest decline that we have seen since the midst of the financial crisis in 2008.

#21 Panic and fear are everywhere in Europe right now.  The European Commission’s index of consumer confidence has declined for five months in a row.

#22 European leaders are really busy fighting with each other and a true consensus on how to solve the current problems seems way off at the moment.  The following is how the Express recently described rising tensions between German and British leaders….

The German Chancellor rejected outright Mr Cameron’s opposition to a new EU-wide financial tax that would have a devastating impact on the City of London.

And she refused to be persuaded by his call for the European Central Bank to support the euro. Money markets took a dip after their failure to agree.

Are you starting to get the picture?

The European financial system is in a massive amount of trouble, and when it melts down the entire globe is going to be shaken.

But it isn’t just me that is saying this.  As I mentioned in a previous article, there are huge numbers of respected economists all over the globe that are now saying that Europe is on the verge of collapse.

For example, just check out what Credit Suisse is saying about the situation in Europe….

“We seem to have entered the last days of the euro as we currently know it. That doesn’t make a break-up very likely, but it does mean some extraordinary things will almost certainly need to happen – probably by mid-January – to prevent the progressive closure of all the euro zone sovereign bond markets, potentially accompanied by escalating runs on even the strongest banks.”

Many European leaders are promoting much deeper integration and a “European superstate” as the answer to these problems, but it would take years to implement changes that drastic, and Europe does not have that kind of time.

If Europe experiences a massive economic collapse and a prolonged depression, it may seem like “the end of the world” to some people, but things will eventually stabilize.

A lot of people out there seem to think that the global economy is going to go from its present state to “Mad Max” in a matter of weeks.  Well, that is just not going to happen.  The coming troubles in Europe will just be another “wave” in the ongoing economic collapse of the western world.  There will be other “waves” after that.

Of course this current sovereign debt crisis could be entirely averted if the countries of the western world would just shut down their central banks and start issuing debt-free money.

The truth is that there is no reason why any sovereign nation on earth ever has to go a penny into debt to anyone.  If a nation is truly sovereign, then the government has the right to issue all of the debt-free money that it wants.  Yes, inflation would always be a potential danger in such a system (just as it is under central banking), but debt-free money would mean that government debt problems would be a thing of the past.

Unfortunately, most of the countries of the world operate under a system where more government debt is created when more currency is created.  The inevitable result of such a system is what we are witnessing now.  At this point, nearly the entire western world is drowning in debt.

There are alternatives to our current system.  But nobody in the mainstream media ever talks about them.

So instead of focusing on truly creative ways to deal with our current problems, we are all going to experience the bitter pain of the coming economic collapse instead.

Things did not have to turn out this way.

Trouble

The global economy is heading for a massive amount of trouble in the months ahead.  Right now we are seeing the beginning of a credit crunch that is shaping up to be very reminiscent of what we saw back in 2008.  Investors and big corporations are pulling huge amounts of money out of European banks and nobody wants to lend to those banks right now.  We could potentially see dozens of “Lehman Brothers moments” in Europe in 2012.  Meanwhile, bond yields on sovereign debt are jumping through the roof all over Europe.  That means that European nations that are already drowning in debt are going to find it much more expensive to continue funding that debt.  It would be a huge understatement to say that there is “financial chaos” in Europe right now.  The European financial system is in so much trouble that it is hard to describe.  The instant that they stop receiving bailout money, Greece is going to default.  Portugal, Italy, Ireland, Spain and quite a few other European nations are also on the verge of massive financial problems.  When the financial dominoes start to fall, the U.S. financial system is going to be dramatically affected as well, because U.S. banks have a huge amount of exposure to European debt.  The other day, I noted that investor Jim Rogers is saying that the coming global financial collapse “is going to be worse” than 2008.  Sadly, it looks like he is right on the money.  We are in a lot of trouble my friends, and things are going to get really, really ugly.

The sad thing is that we never have recovered from the last major financial crisis.  Right now, the U.S. economy is far weaker than it was back in 2007.  So what is going to happen if we get hit with another financial tsunami?  The following is what PIMCO CEO Mohamed El-Erian said recently….

“What’s most terrifying, we are having this discussion about the risk of recession at a time when unemployment is already too high, at a time when a quarter of homeowners are underwater on their mortgages, at a time then the fiscal deficit is at 9 percent and at a time when interest rates are at zero.”

Can things really get much worse than they are now?

Unfortunately, yes they can.

Not that things are not really, really bad right now.

In Los Angeles earlier this week, approximately 10,000 people lined up for free turkey dinners.

So how many people will be lining up for free food when the unemployment rate in the U.S. soars into double digits?

Right now there is so much economic pain in America that it is hard to describe.  According to a recent report from one nonprofit group, 45 percent of all people living in the United States “do not have enough money to cover housing, food, healthcare and other basic expenses”.

If this is where we are at now, how much trouble will we be in as a nation if a financial crisis worse than 2008 hits us in 2012?

The primary cause of the coming financial crisis will almost certainly be the financial meltdown that we are seeing unfold in Europe.

The economic downturn that began in 2008 caused the debt levels of quite a few European nations to soar to unprecedented heights.  It has gotten to the point where the debts of many of those nations are no longer sustainable.

So investors are starting to demand much higher returns for the much greater risk associated with investing in the bonds of those countries.

But that makes it much more expensive for those troubled nations to fund their debts, and that means that their financial troubles get even worse.

Over the past 12 months, what we have seen happen to bond yields over in Europe has been nothing short of amazing.

Just check out this chart of what has been happening to the yield on 2 year Italian bonds over the past 12 months.

And keep in mind that these bond yields have been spiking even while the European Central Bank has been buying up unprecedented mountains of bonds in an attempt to keep bond yields low.

There has been a fundamental loss of faith in the financial system, and it is not just happening in Europe.

Just check out this chart.  As that chart shows, credit default swap spreads all over the globe are absolutely skyrocketing and are now higher than we have seen at any point since the great financial crisis that shook the world during 2008 and 2009.

Panic and fear are everywhere – especially in Europe.  In fact, it looks like a run on the banks has already begun in Europe.

The following comes from a recent article in The Economist….

“We are starting to witness signs that corporates are withdrawing deposits from banks in Spain, Italy, France and Belgium,” an analyst at Citi Group wrote in a recent report. “This is a worrying development.”

Nobody wants to lend money to European banks right now.  There is a feeling that they are all vulnerable and could fail at any time, and this lack of confidence actually makes that possibility even more likely.

The following is a short excerpt from a recent CNBC article….

Money-market funds in the United States have quite dramatically slammed shut their lending windows to European banks. According to the Economist, Fitch estimates U.S. money market funds have withdrawn 42 percent of their money from European banks in general.

And for France that number is even higher — 69 percent. European money-market funds are also getting in on the act.

So what can be done?

Well, in a different CNBC article, Mitchell Goldberg was quoted as saying that even “a bazooka” is not going to be good enough to fix this situation….

“It’s too late for a bazooka,” said Mitchell Goldberg, president of ClientFirst Strategy. “Now we need inter-continental ballistic missiles. This is getting worse very quickly.”

This is kind of like watching a horrific car wreck happen in very slow motion.

The financial system of Europe is dying and everybody can see what is happening but nobody can seem to find a way to fix it.

Not that we are solving our own problems here in the United States.

The vaunted “supercommittee” that was supposed to get a handle on our debt problem was a complete and utter failure.

Barack Obama has shown that he has no clue what to do when it comes to the economy, and Ben Bernanke has been preoccupied with roaming around the country trying to get people to feel more “warm and fuzzy” about the Federal Reserve.

The Federal Reserve actually has more power over our economy than anyone else.  But instead of fixing things they only keep making things even worse.

The only people that the Fed seems to be helping are the banksters.

What you are about to read should really, really upset you.  According to a recent article in the Wall Street Journal, the Federal Reserve has actually been tipping off their upcoming moves to top financial professionals.  In turn, these financial professionals have been using that information to make a lot of money for themselves and for their clients….

Hours after an Aug. 15 meeting with Federal Reserve Chairman Ben Bernanke in his office, Nancy Lazar made a hasty call to investor clients: The Fed was dusting off an obscure 1960s-era strategy known as Operation Twist.

The news pointed to a boom in long-term bonds.

It was a good call. Over the next five weeks, prices on 10-year Treasury bonds soared, offering double-digit returns in an otherwise dismal year.

By the time the Fed announced its $400 billion Operation Twist on Sept. 21, the window for quick profits had all but slammed shut.

Ms. Lazar is among a group of well-connected investors and analysts with access to top Federal Reserve officials who give them a chance at early clues to the central bank’s next policy moves, according to interviews and hundreds of pages of documents obtained by The Wall Street Journal through open records searches.

You just can’t make stuff like this up.  The corruption at the Federal Reserve is totally out of control.  After nearly 100 years of total failure, it is time to shut down the Federal Reserve.

Not that Barack Obama should get a free pass for the role that he has played in this economic downturn.  He inherited a complete mess from Bush and has made it even worse.

Today, millions of business owners are so frustrated with Washington D.C. that they don’t know what to do.

For example, one business owner down in Georgia has posted signs with the following message on all of his company’s trucks….

“New Company Policy: We are not hiring until Obama is gone.”

The business environment in this country becomes more toxic with each passing year, and the federal government has already strangled millions of small businesses out of existence.

In addition, politicians from both parties continue to stand aside as tens of thousands of businesses, millions of jobs and hundreds of billions of dollars of our wealth get shipped out of the country.

During 2010, an average of 23 manufacturing facilities a day were shut down in the United States.  We are committing national economic suicide, and the top politicians in both political parties keep cheering for more.

Well, millions of ordinary Americans can see what is happening and they are preparing for the worst.

The following report comes from an article that was recently posted on the website of the local CBS affiliate in St. Louis….

A chain of three stores that sells survival food and gear reports a jump in sales to people who are getting prepared for the “possible collapse” of society.

“We had to order fifty cases of the meals ready to eat to keep up with the demand in the past three months,” said manager Steve Dorsey at Uncle Sam’s Safari Outfitters Inc. in Webster Groves. “That’s not normal.  Usually we sell 20 to 30 cases in a whole year.”

So are you prepared for the coming collapse?

If you still have a great job and things are still going well for you, then you should definitely be thankful.  Compared to the rest of the world, most of us are incredibly blessed.

But let there be no doubt, the U.S. economy is going to get a lot worse in the years ahead.

Just because you have a job today does not mean that you will have one tomorrow.

Just because you have a nice car and a big home today does not mean that you will have them tomorrow.

We all need to try to become a lot less dependent on “the system”, because “the system” is failing.

A whole lot of trouble is coming.

You better get ready.

17 Quotes About The Coming Global Financial Collapse That Will Make Your Hair Stand Up

Is the world on the verge of another massive global financial collapse?  Yes.  The western world is drowning in an ocean of debt unlike anything the world has ever seen before, and our financial markets are gigantic casinos that are dependent on huge mountains of risk and leverage remaining very stable.  In the end, this house of cards that has been built on a foundation of sand is going to come crashing down in a horrifying manner.  Usually in this column I go on and on about why things will soon get much worse.  But today I am going to take a bit of a break.  Today, I am going to let some of the top financial professionals in the world tell you why things will soon get much worse.  Many of the quotes that you are about to read just might make the hair on the back of your neck stand up.  Most people out there have no idea what is about to happen.  Most people out there are working hard and are busy preparing for the holidays and they are hopeful that the economy will turn around soon.  But that is not going to happen.  We are heading for another major global financial collapse, and when it happens the U.S. economy is going to get even worse.

The epicenter for the coming global financial collapse is almost certainly going to be in Europe.  As you will see below, financial professionals all over the world are sounding the alarm about Europe.  It is a disaster that everyone can see coming but that nobody seems to be able to prevent.

Of course the failure of the “supercommittee” in the United States certainly is not helping matters.  There is already talk that we may soon see another downgrade for U.S. debt.  It is hard to even describe how incompetent the U.S. Congress is.

There is a tremendous lack of leadership both in the United States and in Europe right now.  The financial world is more interconnected than ever before, and when the financial dominoes start to fall it is going to take a miracle to keep a complete and total disaster from unfolding.

So when the time comes, who is going to step forward and provide that leadership?

That is a really, really good question.

Right now, panic and fear are spreading like wildfire in the financial world and nobody knows for sure what is going to happen next.

But one thing is for certain.  Pessimism is growing stronger by the day.

The following are 17 quotes about the coming global financial collapse that will make your hair stand up….

#1 Credit Suisse’s Fixed Income Research unit: “We seem to have entered the last days of the euro as we currently know it. That doesn’t make a break-up very likely, but it does mean some extraordinary things will almost certainly need to happen – probably by mid-January – to prevent the progressive closure of all the euro zone sovereign bond markets, potentially accompanied by escalating runs on even the strongest banks.”

#2 Willem Buiter, chief economist at Citigroup: “Time is running out fast.  I think we have maybe a few months — it could be weeks, it could be days — before there is a material risk of a fundamentally unnecessary default by a country like Spain or Italy which would be a financial catastrophe dragging the European banking system and North America with it.”

#3 Jim Reid of Deutsche Bank: “If you don’t think Merkel’s tone will change then our investment advice is to dig a hole in the ground and hide.”

#4 David Rosenberg, a senior economist at Gluskin Sheff in Toronto: “Lenders are finding it difficult to finance their day-to-day operations with short-term funding. This is a lot like 2008 but with more twists.”

#5 Christian Stracke, the head of credit research for Pimco: “This is just a repeat of what we saw in 2008, when everyone wanted to see toxic assets off the banks’ balance sheets”

#6 Paul Krugman of the New York Times: “At this point I’d guess soaring rates on Italian debt leading to a gigantic bank run, both because of solvency fears about Italian banks given a default and because of fear that Italy will end up leaving the euro. This then leads to emergency bank closing, and once that happens, a decision to drop the euro and install the new lira. Next stop, France.”

#7 Paul Hickey of Bespoke Investment Group: “More and more, we are hearing anecdotal comments from individual and professionals that this is the most difficult environment they have ever experienced as the market is like a fish flopping around after being taken out of the water.”

#8 Bob Janjuah of Nomura International: “Germany appears to be adamant that full political and fiscal integration over the next decade (nothing substantive will happen over the short term, in my view) is the only option, and ECB monetisation is no longer possible. I really think it is that clear and simple. And if I am wrong, and the ECB does a U-turn and agrees to unlimited monetisation, I will simply wait for the inevitable knee-jerk rally to fade before reloading my short risk positions. Even if Germany and the ECB somehow agree to unlimited monetisation I believe it will do nothing to fix the insolvency and lack of growth in the eurozone. It will just result in a major destruction of the ECB‟s balance sheet which will force an ECB recap. At that point, I think Germany and its northern partners would walk away. Markets always want short, sharp, simple solutions.”

#9 Dan Akerson, CEO of General Motors: “The ’08 recession, which was a credit bubble that manifested itself through primarily the real estate market, that was a serious stress….This is much more serious.”

#10 Francesco Garzarelli of Goldman Sachs: “Pressures on Euro area sovereign bond markets have progressively intensified and spread like a wildfire.”

#11 Jim Rogers: “In 2002 it was bad, in 2008 it was worse and 2012 or 2013 is going to be worse still – be careful”

#12 Dr. Pippa Malmgren, the President and founder of Principalis Asset Management who once worked in the White House as an adviser to President Bush: “Market forces are increasingly determining what the options are and foreclosing on options policymakers thought they had. One option which is now under discussion involves permitting a country to temporarily leave the Euro, return to its native currency, devalue, commit to returning to the Euro at a better debt to GDP ratio, a better exchange rate and a better growth trajectory and yet not sacrifice its EU membership. I would like to say for the record that this is precisely the thought process that I expected to evolve,but when I proposed this possibility back in 2009, and again in September 2010, I had a 100% response from clients and others that this was “impossible” and many felt it was “ridiculous”. They may be right but this is the current state of the discussion. The Handelsblatt in Germany has reported this conversation, but wrongly assumes that the country that will exit is Germany. I think that Germany will have to exit if the Southern European states do not. Germany’s preference is to stay in the Euro and have the others drop out. The problem has been the Germans could not convince the others to walk away. But, now, market pressures are forcing someone to leave. Germany is pushing for that someone to be Italy. They hope that this would be a one off exception, not to be repeated by any other country. Obviously, though, if Italy leaves the Euro and reverts to Lira then the markets will immediately and forcefully attack Spain, Portugal and even whatever is left  of the already savaged Greeks. These countries will not be able to compete against a devalued Greece or Italy when it come to tourism or even infrastructure. But, the principal target will be France. The three largest French banks have roughly 450 billion Euros of exposure to Italian debt. So, further sovereign defaults are certainly inevitable, but that is true under any scenario. Growth and austerity will not do the trick, as ZeroHedge rightly points out. Ultimately, I will not be at all surprised to see Europe’s banking system shut for days while the losses and payments issues are worked out. People forget that the term “bank holiday” was invented in the 1930’s when the banks were shut for exactly the same reason.”

#13 Daniel Clifton, a policy strategist with Strategas Research Partners on the potential for more downgrades of U.S. debt: “We would expect further downgrades, a first downgrade from Moody’s and Fitch and possibly a second downgrade from S&P.”

#14 Warren Buffett on the problems in the eurozone: “The system as presently designed has revealed a major flaw. And that flaw won’t be corrected just by words. Europe will either have to come closer together or there will have to be some other rearrangement because this system is not working”

#15 David Kostin, equity strategist for Goldman Sachs: “The wide range of possible outcomes on both the super committee process and the unstable political economy in Europe drives our view that investors should assume the worst while hoping for the best.”

#16 Mark Mobius, the head of the emerging markets desk at Templeton Asset Management: “There is definitely going to be another financial crisis around the corner”

#17 Gerald Celente, founder of The Trends Research Institute: “The whole system is going down. Pull your money out your Fidelity account, your Scwhab accout, and your ETFs.”

Are you starting to get the picture?

When so many top financial professionals are freaking out like this, perhaps the rest of us should start paying attention.

They are telling us that “time is running out”.

They are telling us that “there is definitely going to be another financial crisis”.

They are telling us that this “is going to be worse” than 2008.

They are telling us that “the whole system is going down”.

Yes, a devastating financial collapse really is coming.  Just like in 2008, it will seem like the “end of the world” while it is happening, but it won’t be.  It will severely damage our financial system and our economy, but it will not finish us off.

Think of it this way.  When you build a sand castle at the beach, it doesn’t get totally wiped out by the first wave or the second wave that hits it.  Each wave does significant damage, but the destruction of your sand castle is a process.

It is the same thing with the U.S. economy.  We once had the most incredible economic machine that the world has ever seen.  It is constantly being gutted and the financial crisis of 2008 hit us really hard, but we are still doing okay.

After this next financial crisis we will be in even worse shape.  But we will still be breathing.

More “waves” will come after this next financial crisis.  If we continue on the road that we are on, our economy will progressively get worse and worse.

Not everyone will agree with this analysis, and that is okay.  In the end, time will reveal the truth to all of us.

Right now, we all need to get ready for the next wave that is about to hit us.  A lot of people are going to lose their jobs over the next few years.  Hopefully you are prepared for that.

Epic Failure: The Supercommittee Was A Super Joke

Does anyone need any additional evidence that our political system is completely broken?  The bipartisan congressional supercommittee that was given two months to come up with at least $1.2 trillion in deficit cuts over the next decade has failed to reach an agreement.  It is an epic failure and a national embarrassment.  The truth is that they never even came close to an agreement.  In fact, as you will read below, the two sides on the panel have been barely even talking to each other.  In the end, the supercommittee was a super joke.  Meanwhile, the U.S. national debt has passed the 15 trillion dollar mark and we are facing trillion dollar deficits as far as the eye can see.  We are heading directly for a national financial disaster, and our “leaders” seem powerless to do anything about it.

According to the supercommittee’s rules, any plan would have had to have been submitted to the Congressional Budget Office by Monday in order to give the CBO 48 hours to analyze how much the plan would reduce budget deficits over the coming decade.

When the supercommittee was announced, it made headlines all over the world, but now it is ending with a whimper.

The supercommittee was never a good idea in the first place, but you would have thought that they could have come up with something over the course of two months.

But instead all they are giving us are a whole bunch of excuses and a whole lot of hot air.

What a joke.

Is it really that difficult to come up with $1.2 trillion in cuts over a decade?

It isn’t as if they would even be cutting very deeply.  $1.2 trillion in cuts would not even cut the budget by $150 billion a year.  We would still be talking about trillion dollar deficits way into the future.

But instead of agreeing to some token cuts, they have chosen to do nothing and to blame each other.

So now $1.2 trillion in “automatic budget cuts” will go into effect starting in 2013.  But even that $1.2 trillion figure contains a lot of “fuzzy math”.  For example, it includes $169 billion in “projected savings” from “reduced interest costs” on the national debt.

I would love to see how they came up with that figure.

In any event, the truth is that none of these numbers really matter at all.

Why?

None of the budget cuts go into effect until after the 2012 election.  That means that this Congress can vote to repeal the automatic cuts well before then.

Some in Congress are already pushing for this.  For example, U.S. Senator John McCain said the following recently….

“It’s something we passed. We can reverse it.”

Or, even more likely, once the new president and the new Congress are elected in 2012 they will almost certainly choose to abandon this agreement.

When it comes to politics, the only thing that matters is what happens before the next election.

All of this talk of future cuts is just an illusion.  When the next president and the next Congress come to power, they will want to do their own thing.

So after all of the huffing and puffing over the last couple of years, what has actually been accomplished as far as reducing our horrific budget deficits?

Not much at all.

We racked up a $1.3 trillion budget deficit during the fiscal year that just ended, and this fiscal year we will be somewhere in the same neighborhood.

We have been living in the greatest debt bubble in the history of the world, and at some point all of this is going to end very, very badly.

The total amount of debt in this country (government, business and consumer) has been rising much, much faster than our national income has.  If you don’t believe this, just check out this chart.

In particular, government debt is totally out of control.  When Barack Obama first took office, the national debt was 10.6 trillion dollars.

It is now over 15 trillion dollars.

We are in debt up to our eyeballs and we desperately need our leaders to do something about it.

But according to a recent Politico article, the members of the supercommittee haven’t even been talking to each other….

The supercommittee last met Nov. 1 – three weeks ago! It was a public hearing featuring a history lesson, “Overview of Previous Debt Proposals,” with Alan Simpson, Erskine Bowles, Pete Domenici and Alice Rivlin. The last PRIVATE meeting was Oct. 26. You might as well stop reading right there: The 12 members (6 House, 6 Senate; 6 R, 6 D) were never going to strike a bargain, grand or otherwise, if they weren’t talking to each other. Yes, we get that real deal-making occurs in small groups. But there never WAS a functioning supercommittee: There was Republican posturing and Democratic posturing, with some side conversations across the aisle.

Can you believe that?

Could it really be true that they have not met since November 1st?

Is Congress really that much of a joke?

According to Real Clear Politics, the approval rating for Congress is sitting at about 12 percent right now.

After this, it may get even lower.

Instead of working on a solution to our problems, the members of the supercommittee have been busy going on television and telling us who to blame.

The following is a short exceprt from a recent article in the Washington Post….

Republicans on the supercommittee held a conference call Saturday morning, and aides said members from both parties continued to talk by phone. But neither side was predicting a last-minute breakthrough. Instead, seven panel members booked appearances on the Sunday talk shows, as both sides readied their best arguments for why the other is at fault.

Our politicians are obsessed with finding someone else to blame and with getting ready for the next election.

Meanwhile, the ship is going down and people are starting to panic.

And this is not going to look good to the rest of the world at all.  There is a very real risk that one of the other major credit rating agencies will decide to downgrade U.S. debt.

The second downgrade of debt is often more important than the first.  When the first downgrade happened, U.S. debt still had a AAA rating from the other two major credit rating agencies.

But after another downgrade, the average credit rating of U.S. debt will be less than AAA.  That will mean that U.S. debt will no longer be a cash proxy.  A lot of transactions that take place right now in the financial world would not be able to happen if that takes place.

So what do our leaders need to do?

Well, the truth is that we should recognize that they are in a really, really tough position.  Decades of nightmarish decisions have left us out of good options under our current financial system.

The reality is that members of Congress are damned if they do and they are damned if they don’t.

This is what I mean – if we don’t deal with our national debt now, everyone agrees that a massive day of reckoning is coming down the road.  Greece is an example of what happens when debt catches up with a nation.

However, if we did cut the federal budget very deeply right now, it would almost certainly bring on a huge economic contraction.

Right now, insane federal spending is one of the only things keeping this economy afloat.  If you were to suddenly pull half a trillion dollars (or more) of federal spending out of the economy, it would have a devastating impact.

A lot of people out there correctly argue for a huge reduction in federal spending, but they greatly underestimate the amount of pain that it would cause.

Let there be no doubt, all of this federal debt has enabled us to enjoy a “false prosperity” for several decades, and when we dramatically cut back on spending a lot of that “false prosperity” is going to disappear.

Our “real economy” is rapidly being gutted and America is becoming poorer as a nation every single day.  One way that we have been making up the difference is by going into almost unbelievable amounts of government debt.  When the government debt bubble pops, the pain is going to be enormous.

If you do not believe this right now, you will believe it soon enough.

Not that we should keep going into huge amounts of debt.

Every dollar that we “borrow” is actually being stolen from our children and our grandchildren.

In fact, that is what Thomas Jefferson believed.  According to Jefferson, when the federal government borrows money in one generation which must be paid back by future generations it is equivalent to stealing….

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.

We have got to stop stealing from future generations.  If they get the chance, they will curse us for what we have done to them.

Anyone out there that supports our current system of running endless budget deficits is supporting a horrific crime against our children and our grandchildren.

But once again, we all need to clearly understand that when the borrowed money stops flowing out of Washington D.C., our economy is going to get much worse.

Are you prepared for the unemployment rate to double?

Are you prepared for foreclosures to soar to unprecedented heights?

Are you prepared for economic pain unlike anything you have ever seen before?

According to the New York Times, there are 100 million Americans that are either living in poverty or that are considered to be among the “near poor” right now.

So how bad will things get if we plunge into a depression?

Anyone that believes that we can drastically cut the federal budget and improve the economy at the same time under our current system is not being rational.

Just look at what is happening to Greece.  They implemented substantial budget cuts (although not nearly big enough to bring them to a balanced budget) and they have plunged into a nightmarish economic depression.

Right now, we are in a position where we are going to experience a horrific amount of pain whatever we do.  If we keep piling up debt at this rate we will experience a nightmare, but if we pop the debt bubble and try to live within our means we will also experience a nightmare.

There is a way out of this, but our politicians are not talking about it.  As I have written about previously, if the federal government abolishes the Federal Reserve and starts issuing debt-free money, we could eliminate our federal budget deficits, cut taxes and improve the economy all at the same time.

But nobody is even talking about debt-free money.

Instead, all of our politicians are talking about “fixing” the current system.

Well, let me tell you, it is impossible to solve our problems under the current system.  If we insist on maintaining our current debt-based financial system, it will only end in a massive amount of pain.

The American people need to get educated about our financial system.  They need to learn that the Federal Reserve and the debt-based currency that they issue are at the very heart of our economic problems.

Back in 1913, prior to the passage of the Federal Reserve Act, the national debt was only about $2.9 billion.

Today, our national debt is over 5000 times larger.

Debt-based central banking is a perpetual debt machine.  It is at the heart of our financial problems and it is also at the heart of the financial problems that Europe is experiencing.

Unfortunately, the American people don’t understand this, and there are virtually no politicians out there that are even talking about this.

Very dark days are ahead for America.

You had better get prepared.

22 Signs That The Thin Veneer Of Civilization That We All Take For Granted Is Starting To Disappear

In order for a society to function, there has to be a certain level of trust.  Each day when we leave our homes, we take for granted that most people are not going to attack us for no reason, that there will only be isolated incidents of theft in our community and that rioting and violence are not going to erupt in the streets.   Whether we realize it or not, we depend on the fact that the vast majority of the people around us are going to act in a civilized manner.  Unfortunately, the thin veneer of civilization that we all take for granted is starting to disappear.  When I was growing up, I was taught that challenging times reveal our true character.  There are many that believe that the declining economy is causing a lot of the chaos that we are now witnessing, but perhaps what is going on is that these challenging economic times are simply revealing the character that has been there all along.  For decades, a “false prosperity” that was fueled by unprecedented amounts of debt has masked a lot of the internal rot that has taken hold in America.  But now that our prosperity is crumbling, our lack of values is becoming startlingly clear.

Greed, corruption and extreme self-centeredness have deeply infected our society.  We see this on Wall Street and in Congress, and we see this among those that are trying to survive on the mean streets of our largest cities.

Our nation is breaking down on every level.  If by some miracle we were able to fix our economy, that would mask our problems for a while, but it would not solve them.

Unfortunately, as I write about nearly every day, there are a whole host of indications that our economy is about to get even worse.  When it does, millions of Americans will become even more desperate, and as we are now seeing all over this country, desperate people do desperate things.

The following are 22 signs that the thin veneer of civilization that we all take for granted is starting to disappear….

#1 In Detroit, 100 bus drivers recently refused to drive their routes out of fear for their own personal safety.  An article posted on the website of the CBS affiliate in Detroit is quoting the head of the bus drivers union, Henry Gaffney, as saying that the drivers are “scared for their lives”….

“Our drivers are scared, they’re scared for their lives. This has been an ongoing situation about security. I think yesterday kind of just topped it off, when one of my drivers was beat up by some teenagers down in the middle of Rosa Parks and it took the police almost 30 minutes to get there, in downtown Detroit,” said Gaffney.

#2 In Wilmington, Delaware recently, a man offered to help someone carry a television down the street, but quickly realized that it was his own television which had just been stolen out of his house….

A Wilmington resident who stopped home for lunch about noon today saw a man carrying a flat screen TV down the street and asked the man if he needed help.

He then recognized the television as his own, looked up and saw the door to his home ajar, said Master Sgt. Adam Ringle.

#3 Shocking video has surfaced of a young thug walking up to a defenseless elderly man in a Chicago subway station and knocking him out cold.  In the video, the friends of the young man are cheering him on and laughing at how easy it was to knock the old man out cold.

#4 Beating up old people for no reason seems to be catching on all over the country.  Just check out the following report from a recent article posted on philly.com….

AN 84-YEAR-OLD ex-university official savagely attacked by four young punks during a walk in Wissahickon Valley Park earlier this week theorizes that the beating he endured was a cruel game of “get the old geezer.”

Jim Shea, a former vice president of university relations for Temple, from 1968 to 1983, walks up to five miles on Forbidden Drive, in Fairmount Park, three times a week, but that type of stamina wasn’t enough to stave off the lowlifes who not only beat him bloody, but dealt a blow to one of the things he holds most dear – his pride.

#5 All over the United States, police are brutalizing Occupy Wall Street protesters and spraying pepper spray directly in their faces.  Whatever you may think of the Occupy Wall Street protests, the reality is that this is not a sign that things are becoming “more stable” in America.  You can see video of one very disturbing confrontation right here.

#6 Clashes between police and protesters in Oakland, California recently became so violent that at one point the streets of Oakland resembled a war zone.

#7 Unfortunately, as the American people become increasingly frustrated with out system many of them are actually starting to consider violence as a solution.  According to one recent survey, 31 percent of all Occupy Wall Street protesters “would support violence to advance their agenda”.

#8 In New York recently, a confrontation between two female customers and a frustrated cashier ended with the cashier beating the living daylights out of them with a metal rod.  The following is how a local CBS affiliate in New York described this incident….

It appeared to have started when two female customers argued and yelled obscenities at the cashier when he questioned a $50 bill they gave him.

One of the female customers then slapped the cashier. A woman is then seen jumping over the counter while the other woman goes behind the register.

That’s when the cashier can be seen on the video disappearing into the back of the fast-food restaurant. He comes back with a metal rod and begins hitting the women.

You can see video of this violent confrontation right here.

#9 These days, many Americans are so “on edge” that just about anything will make them snap.  For example, a 60-year-old woman in New Mexico recently repeatedly stabbed her boyfriend because she thought that he was cheating during a game of Monopoly.

#10 If you thought that the above example was crazy, just check out what one man down in Georgia did recently.  He actually firebombed a Taco Bell because they did not put enough meat in his Chalupa.

#11 In Cleveland last week, a 49-year-old man was sent to the hospital after a poll monitor working for the Cuyahoga County Board of Elections tried to bite his nose off.

#12 Not only do TSA agents make us feel like dehumanized cattle as we go through airport security, some of them are evening making fun of us at the same time.  For example, one TSA agent recently scribbled “GET YOUR FREAK ON GIRL” on a TSA inspection notice after discovering a sex toy in the luggage of one female traveler.

#13 Identity theft is rising to very alarming levels all over the United States.  For example, a recent article in the Palm Beach Post described what has been going on down in Florida this year….

In the first half of this year, the Federal Trade Commission received more than 20,000 complaints from Floridians whose identities had been stolen — nearly as many as in all of 2010. More than half of those reporting their Social Security numbers or other personal information had been ripped off and used to commit fraud or theft were in South Florida, with heavy concentrations in parts of Fort Lauderdale, Hollywood and Hallandale Beach.

“That kind of increase is really shocking,” said Vance Luce, deputy special agent in charge of the U.S. Secret Service in South Florida, which investigates identity theft and financial crimes. “The fact that it’s on the upturn doesn’t surprise me at all, but that’s pretty alarming.”

#14 In the Seattle area, an elderly couple in their eighties was recently brutally attacked by a 31-year-old man armed with a crossbow and a hatchet.  The following description of this brutal crime comes from King 5 News….

Prosecutors say 31-year-old John Chase was walking down the highway when he saw Ralph Aldrich, 88, in his back yard. Detectives say Chase shot and killed Aldrich with a crossbow and then went inside the home and repeatedly hit 83-year-old June Aldrich with a hatchet.

#15 As America falls apart, more of us than ever are taking medication for depression.  At this point, more than 1 out of every 10 Americans over the age of 12 is taking prescription antidepressants.

#16 In some areas of the country, people have been literally tearing apart their own cities in an attempt to find things to sell.  I recently discussed this phenomenon on The American Dream Blog….

In Fresno, California the damage caused by thieves stealing copper wire from city street lights is costing the city about $50,000 a month.  So far, about 2,500 street lights have been stripped of their wiring.

#17 As people become more desperate, we are starting to see some truly bizarre crimes in many parts of the nation.  In northern Alabama, one team of crooks has been using a forklift to pull entire ATM machines out of the ground.

#18 Most Americans don’t realize this, but all over the U.S. livestock is being stolen from ranchers in unprecedented numbers.  The following is from a recent Associated Press article….

While the brazenness may be unusual, the theft isn’t. High beef prices have made cattle attractive as a quick score for people struggling in the sluggish economy, and other livestock are being taken too. Six thousand lambs were stolen from a feedlot in Texas, and nearly 1,000 hogs have been stolen in recent weeks from farms in Iowa and Minnesota. The thefts add up to millions of dollars in losses for U.S. ranches.

Authorities say today’s thieves are sophisticated compared to the horseback bandits of the rugged Old West. They pull up livestock trailers in the middle of the night and know how to coax the animals inside. Investigators suspect it’s then a quick trip across state lines to sell the animals at auction barns.

#19 At this point, thieves are becoming so bold that they will steal literally anything that they are able to cart away.  For example, in the San Francisco area a while back thieves actually stole a copper bell that weighs 2.7 tons.

#20 According to the FBI, the number of gang members in the United States has increased by a staggering 40 percent since 2009.  Right now, there are 1.4 million gang members terrorizing citizens on the streets of America.

#21 Down in Miami, thieves have become so bold that they have actually been breaking into parked police cruisers and stealing guns and ammo out of them.  Many of those guns undoubtedly are ending up in the hands of gangs members.

#22 Be careful who you befriend online.  They might just hold you captive and use you as part of a Satanic sex ritual.  The following description of an incident that recently happened in Milwaukee comes from thesmokinggun.com….

Two young Milwaukee women were arrested this week after an 18-year-old Arizona man–who traveled to Wisconsin by bus after meeting one of the suspects online–told cops that he was held captive in the duo’s apartment for two days and slashed and stabbed more than 300 times as part of an apparent satanic sex ritual.

Anger and frustration are growing to unprecedented levels in this country, and all of this anger and frustration is manifesting in thousands of different ways.

As I have written about previously, the rioting, the crime and the violence that we are seeing now is only just the beginning of what is coming.

Unless a miracle happens, our country is going to keep heading down the road toward societal collapse.  For even more examples that show that our country is starting to come apart at the seams, please see the following articles that I have authored previously….

-“18 Signs The Collapse Of Society Is Accelerating”

-“12 More Signs That Society Is Collapsing”

It won’t happen all at once, but unless our nation changes direction dramatically, we will see things get progressively worse and worse.

Instead of teaching our children to love and care for one another, we have taught them to be incredibly self-involved.  Today, way too many Americans deeply love themselves, deeply love money and are deeply addicted to entertainment.  Each new generation seems to be even more prideful, even more arrogant and even more violent.  As a nation, we are losing our empathy for others, our compassion for the needy and our respect for the elderly.  Our family units are breaking down and thousands of our communities are being transformed into hellholes.

What in the world is happening to America?

If you have a thought on this topic, please feel free to share your opinion by leaving a comment below….

Bernanke Says That Any Criticism Of The Federal Reserve Is Based On “Misconceptions”

Federal Reserve Chairman Ben Bernanke is taking his show on the road in at attempt to help Americans feel better about the Federal Reserve.  During a visit to the Fort Bliss headquarters of the Army’s 1st Armored Division this week, Bernanke held a town hall meeting during which he took questions from some of the soldiers.  Bernanke tried to sound as compassionate as possible as he assured the soldiers that the Federal Reserve is looking out for the American people and is doing everything that it can to help create jobs.  At one point, Bernanke even made the following statement: “For a lot of people, I know, it doesn’t feel like the recession ever ended.”  That probably helped a lot of people feel better.  A few probably even had a good cry.  But what Bernanke did not explain to the troops is that the Federal Reserve is very much responsible for the fact that unemployment is rampant, for the fact that the U.S. dollar is rapidly being devalued and for the fact that we have accumulated the largest national debt in the history of the world.

Ben Bernanke keeps insisting that the Federal Reserve has two main jobs (fighting inflation and keeping unemployment low) and that it is working incredibly hard to accomplish that dual mandate.  During his visit with the soldiers he told them that the Fed is very determined to create more jobs for the American people….

“We at the Federal Reserve have been focusing intently on supporting job creation.”

Well, if we are to judge the Federal Reserve by how well it has accomplished its “dual mandate”, then the Federal Reserve has been an abysmal failure.

Since the Federal Reserve was created, the U.S. dollar has lost well over 95 percent of its value to inflation.

Is that something Bernanke should be proud of?

Of course not.

Okay, so the Fed has failed when it comes to keeping inflation under control.

What about jobs?

Well, the first decade of this century was the worst decade for job creation that the United States has seen since the Great Depression.

The sad truth is that a total of zero jobs were created last decade.  The following is a quote from a recent article in Washington Monthly….

“If any single number captures the state of the American economy over the last decade, it is zero. That was the net gain in jobs between 1999 and 2009—nada, nil, zip. By painful contrast, from the 1940s through the 1990s, recessions came and went, but no decade ended without at least a 20 percent increase in the number of jobs.”

So what kind of a grade should we give the Federal Reserve for the job that it has done?

How about a big fat F?

The Federal Reserve has been a failure of epic proportions.  It greatly contributed to the Great Depression (even Bernanke admits this), it created the conditions for the financial bubbles that greatly contributed to the financial crisis of 2008, and it has brought us to the verge of yet another gigantic financial crisis.

But Ben Bernanke believes that all of us that are criticizing the Fed are just ignorant.  He thinks that we just don’t understand the Fed properly.  During a recent question and answer session, Bernanke stated the following….

“I think that the concerns about the Fed are based on misconceptions”

Oh, if only the rest of us understood how the Fed works and how they really care about the American people.  Then everything would be okay.

Not.

During that same session, Bernanke insisted that the Federal Reserve only has the purest motives….

“Our motives are strictly to do what is in the best interest of the broad public and I believe that our efforts to stabilize the financial system, which were ultimately proved successful, were very much in the interest of the broad public”

According to Bernanke, those that work at the Fed are unselfish guardians of our monetary system who are fighting for truth, justice and the American way of life.

Okay, perhaps I am exaggerating just a bit, but you get the point.

Bernanke is trying very hard to convince all of us that the Federal Reserve is just misunderstood and that we should just trust what the “experts” are doing.

So what will the plan be if the financial crisis in Europe blows up?

Well, during his visit to Fort Bliss one of the soldiers actually asked him about that.  The following is his answer….

“Although the Fed would obviously do all that we could to maintain stability and to keep monetary policy as easy as necessary to try to minimize the damage, I don’t think we would be able to escape the consequences of a blow-up in Europe”

Oh, he would keep monetary policy “as easy as necessary”.

Isn’t that lovely – I bet that will be great for the value of the U.S. dollar.

Bernanke also told the soldiers that he believes that happy days are ahead for the U.S. economy….

“I do believe we will return to a healthier growth rate. I don’t see any reason why we couldn’t”

So we should just trust Bernanke, right?

He has never been wrong before, right?

Well, let’s check the record….

In 2005, Bernanke said that we shouldn’t worry because housing prices had never declined on a nationwide basis before and he said that he believed that the U.S. would continue to experience close to “full employment”….

“We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.”

In 2005, Bernanke also said that he believed that derivatives were perfectly safe and posed no danger to financial markets….

“With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.”

In 2006, Bernanke said that housing prices would probably keep rising….

“Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”

In 2007, Bernanke insisted that there was not a problem with subprime mortgages….

“At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”

In 2008, Bernanke said that a recession was not coming….

“The Federal Reserve is not currently forecasting a recession.”

A few months before Fannie Mae and Freddie Mac collapsed, Bernanke insisted that they were totally secure….

“The GSEs are adequately capitalized. They are in no danger of failing.”

For many more examples that demonstrate the absolutely nightmarish track record of Federal Reserve Chairman Ben Bernanke, please see the following articles….

*”Say What? 30 Ben Bernanke Quotes That Are So Stupid That You Won’t Know Whether To Laugh Or Cry”

*”Is Ben Bernanke A Liar, A Lunatic Or Is He Just Completely And Totally Incompetent?”

But after being wrong over and over and over, Barack Obama still nominated Ben Bernanke for another term as Chairman of the Fed.

It is hard to put how stupid that was into words.

Look, if someone wrecked your car again and again would you keep handing that person your keys?

It just doesn’t make any sense.

Bernanke made another statement during his visit with the troops this week that was really bizarre….

“The Federal Reserve is not perfect … but at this point, if you look around the world, you see no alternative”

He has got to be kidding, right?

Of course there are no other alternatives for us to look at!  Only a handful of nations on earth do not have a central bank at this point.  Iran, North Korea and a handful of others don’t have a central bank dominated by the international banking community but basically everyone else does.

Just because nearly every nation on earth has a central bank does not mean that there are not alternatives to the Federal Reserve system.  I detailed a plan the other day that would transition us away from the Federal Reserve system.

It most certainly can be done.

But right now, most of our politicians are standing up for a system that allows private central bankers to spend trillions of dollars bailing out their friends while the rest of us suffer.

The other day, an article by U.S. Senator Bernie Sanders appeared in the Huffington Post that detailed what was learned during a very limited audit of transactions conducted by the Federal Reserve during the recent financial crisis.

According to Senator Sanders, the Federal Reserve made 16 trillion dollars in secret loans to big corporations, Wall Street banks, foreign nations and wealthy individuals during the financial crisis….

“…we learned that the Federal Reserve provided a jaw-dropping $16 trillion in total financial assistance to every major financial institution in the country as well as a number of corporations, wealthy individuals and central banks throughout the world.”

Senator Sanders also says that the audit revealed that many of those running the Fed are from the same institutions that the Fed has been bailing out….

“The GAO also revealed that many of the people who serve as directors of the 12 Federal Reserve Banks come from the exact same financial institutions that the Fed is in charge of regulating. Further, the GAO found that at least 18 current and former Fed board members were affiliated with banks and companies that received emergency loans from the Federal Reserve during the financial crisis.”

Wait – isn’t there a huge conflict of interest problem there?

Of course there is.

But neither major political party is making a stink about it.

Sadly, Senator Sanders says that the audit found that there was “instance after instance” where individuals used their positions at the Fed to benefit their own firms….

“The GAO has detailed instance after instance of top executives of corporations and financial institutions using their influence as Federal Reserve directors to financially benefit their firms, and, in at least one instance, themselves.”

Wow – you would think that this scandal would have been reported on the front page of every major newspaper from coast to coast.

But that didn’t happen.

In fact, both major political parties continue to insist that there is nothing wrong with the Federal Reserve and that the Fed is doing a wonderful job.

It really is sickening.

Look, we need to educate the American people about the Federal Reserve and we need to make control over our currency a major issue in the 2012 campaign.

The American people should demand that the issuing of all United States currency be immediately returned to Congress as the U.S. Constitution requires.

The American people should demand that no more debt-based Federal Reserve Notes be issued and that from now on only debt-free United States money be issued.

The Federal Reserve has a track record of nearly 100 years of failure.

It is time for it to be shut down.

The choice, America, is up to you.

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