Debt

QE3? Several Top Federal Reserve Officials Seem To Think That More Quantitative Easing Is Necessary

The end of QE2 is still several months away and yet quite a few top Federal Reserve officials are already hinting that more quantitative easing may be necessary.  Apparently the U.S. economy is not moving forward as rapidly as they would like.  So it looks like “QE3” could be on the way.  But did anyone out there actually believe that quantitative easing would come to a complete stop in June?  Whether they call it “QE3” or something else entirely, the reality of the matter is that we have now come to a time when the Federal Reserve is going to be continually purchasing a significant percentage of all new U.S. government debt.  This is essentially a gigantic Ponzi scheme, but sadly there is just not enough money in the rest of the world to be able to continue to feed the U.S. government’s voracious appetite for debt.  Right now Ben Bernanke and his cohorts are trying to break the news to us gently, but anyone with half a brain can see what is happening.  The only way for the game to keep going is for the Federal Reserve to print lots more money, and that is going to be incredibly bad for the U.S. economy in the long run.

The other day James Bullard, President of the Federal Reserve Bank of St. Louis, made national headlines when he declared that Fed officials should “never say never” when it comes to QE3 and more quantitative easing.  But the truth is that other Fed officials have been dropping public hints about the “need” for QE3 for several weeks now.  Just consider the following quotes from top Federal Reserve officials….

Federal Reserve Chairman Ben Bernanke in response to a question about the potential for QE3 at the National Press Club….

“In the end, we’ll just ask the same questions. Where’s the economy going, and what do various inflation indicator look like? We’ll ask those questions. If unemployment is still too low, then we may continue. If we’re moving towards full employment, then we won’t need to stimulate more.”

William Dudley, President of the Federal Reserve Bank of New York during a recent speech at New York University….

“The economy can be allowed to grow rapidly for quite some time before there is a real risk that shrinking slack will result in a rise in underlying inflation.”

James Bullard, President of the Federal Reserve Bank of St Louis during a recent speech at the Bowling Green Area Chamber of Commerce….

“The natural debate now is whether to complete the program, or to taper off to a somewhat lower level of asset purchases. Quantitative easing has been an effective tool, even while the policy rate is near zero. The economic outlook has improved since the program was announced.”

Charles Evans, President of the Federal Reserve Bank of Chicago during a recent interview with The Financial Times….

“The message that comes out of what I think of as high-quality research on this subject is that policy ought to remain accommodative for really quite a while, even a while after conditions start to improve.”

So how in the world did things get to the point where the Federal Reserve feels forced to recklessly print gigantic piles of money?

Well, it didn’t happen overnight.  Back during the 1980s and 1990s there were many people that desperately tried to warn about what would happen if U.S. government debt was not brought under control.

Unfortunately, our politicians did not heed those warnings.

Today, the U.S. national debt has reached a grand total of $14,137,541,098,872.71.  It is 14 times larger than it was just 30 years ago.  It is the largest single debt in the history of the world.

So why don’t our politicians just balance the budget now so that we don’t keep having to borrow so much money?

Well, there are some huge problems.  First of all, when you combine entitlement programs such as Social Security and Medicare with interest on the national debt, it comes to approximately 64 percent of all federal government spending.

But that is not the bad news.

In the years ahead, entitlement spending and interest on the national debt are both projected to absolutely explode.

We are rapidly approaching a time when spending on entitlement programs and interest on the national debt will be significantly greater than all of the revenue that the federal government brings in each year.  All federal revenues will be spoken for even before a single penny is spent on defense, education, running the government or anything else.

Either entitlement programs are going to have to be seriously reformed or the U.S. government is going to have to come up with a massive amount of extra money from somewhere or the U.S. government is going to have to borrow increasingly large piles of money from someone.

Unfortunately, there are no easy solutions and most of our politicians are scared to death to touch entitlement programs because it will mean that they will lose votes.

But our entitlement programs were never meant to be as massive as they are today.  Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, one out of every 6 American is on Medicaid.

Obviously something has to be done, because the debt that we are passing on to future generations is absolutely criminal.

For example, every single child born in America today inherits $45,000 in U.S. government debt.

Isn’t that lovely?

Of course our liberal friends believe that the answer is just to raise taxes.

Oh really?

The truth is that our taxation system is deeply broken.

Small business owners and middle class Americans are being taxed into oblivion while those at the top of the food chain often pay no federal taxes whatsoever.

For example, did you know that Citigroup did not pay a dime of federal taxes in the third quarter?  Meanwhile, their executives continue to bring in bonus packages worth millions.

Did you know that even though Boeing receives billions in federal subsidies every year and even though it has a bunch of juicy government contracts it did not pay a single penny in federal corporate income taxes from 2008 to 2010?

Did you know that while Exxon-Mobil did pay $15 billion in taxes in 2009, not a single penny went to the U.S. government?  Meanwhile, their CEO brought in over 29 million dollars in total compensation that year.

You can find a lot more examples of this phenomenon right here.

Those at the top of the food chain are experts at avoiding federal taxes.  So liberals can raise rates all they want but it won’t do much good.

As I have written about previously, the truth is that approximately a third of all the wealth in the world is now held in “offshore” banks.  The ultra-wealthy and the monolithic predator corporations that dominate the global economy don’t mess around when it comes to paying taxes.  They don’t care if they aren’t paying their “fair share”.  They simply know how to play the game and they laugh at all the rest of us.

Our entire system is broken beyond repair and needs to be reconstructed from the ground up.

But of course that simply is not going to happen.

So what can be done?

Not a whole heck of a lot.

The truth is that the U.S. economy is on the verge of a major collapse.

Marc Faber, the author of the Gloom, Boom and Doom report recently gave a speech in which he declared that the U.S. financial system is in such disastrous shape that only a “reboot” will be able to save it….

I think we are all doomed. I think what will happen is that we are in the midst of a kind of a crack-up boom that is not sustainable, that eventually the economy will deteriorate, that there will be more money-printing, and then you have inflation, and a poor economy, an extreme form of stagflation, and, eventually, in that situation, countries go to war, and, as a whole, derivatives, the market, and everything will collapse, and like a computer when it crashes, you will have to reboot it.

But can we just “reboot” the system and expect things to go back to normal?

Of course not.

The truth is that when the rest of the world completely loses faith in the U.S. dollar and in U.S. Treasuries the dominoes are going to start to fall.  Eventually we are going to see a financial panic that is going to make 2008 look like a Sunday picnic.  Our economic system will massively implode as all of the gigantic mountains of debt and paper money collapse like a house of cards.

Right now the Federal Reserve is desperately trying to hold the system together by “papering over” all of the mistakes.  But in the end it is not going to work.  In fact, what we are witnessing now are the very early stages of hyperinflation.  A lot of other nations in the past have thought that they could just print their way out of trouble, but many of those “experiments” ended in total disaster.

Marc Faber is certainly right about one thing – all of this money printing is going to give us substantial inflation to go along with the high unemployment that we already have.  This is called “stagflation” and anyone that remembers the 1970s knows that it is not a lot of fun.

But the Federal Reserve seems absolutely determined to print more money.  Fed officials are doing the same thing now that they did right before QE2.  They are dropping hints about QE3 and they are trying to break it to us gently.

Well, it is about time that someone told the American people the truth.  All of this money printing is going to end in disaster and so you had better get prepared.

Shocking Video Of Howard Dean Declaring That It Is The Job Of The Government To Redistribute Our Wealth

In the shocking video you are about to watch, Howard Dean declares that it is the job of the government to redistribute our wealth.  Not only that, he says it in such a way that indicates that he believes that such a notion should be obvious to anyone with half a brain.  Well, while it is true that the United States has become a highly socialized nation, the reality is that this is not what the founding fathers intended.  The founders intended for us to live in a land where we would have enough freedom and enough liberty to be able to work hard and enjoy life, liberty and the pursuit of happiness.  They did not intend for a gigantic federal government to take huge amounts of money from one group of people and give it to another group of people.  In any nation where a large scale redistribution of wealth is happening, the incentive to work goes right out the window.  Pretty soon you end up with an entire class of people that have learned how to “make a living” by being a parasite of the government, and that is not good for any economy.

If our founding fathers were alive today, they would be horrified by what we have turned into.  In 1816, Thomas Jefferson wrote the following….

“To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.”

The sad truth is that democracy starts to break down once people start realizing that they can vote themselves money out of the national treasury.  In fact, that is a very large part of what politics in America is all about today.  Politicians are constantly promising what they are “going to do” for various groups of people.

Benjamin Franklin once stated the following….

“When the people find that they can vote themselves money, that will herald the end of the republic.”

Not that our founding fathers were against charity.  In fact, they believed in it very much.  It is just that they did not believe in repressive taxation by a huge national government and they did not believe in large scale redistributions of wealth.

With all of that in mind, watch this shocking video of Howard Dean declaring that it is the job of the government to redistribute our wealth….

Obviously Howard Dean envisions an “America” that is very different from the one that our founding fathers intended.

But does that mean that all government welfare programs are bad?

Of course not.

In fact, if we were to cut them all off today we would have millions of people starving in the streets.

A very large percentage of Americans today don’t even know how to take care of themselves.  If we pulled away all government support all of a sudden there would be chaos and anarchy in the streets.

The sad reality is that we have tens of millions of Americans that are now deeply dependent on the socialist system that we have established.

Unfortunately, this is what socialism does – it turns people into pets of the government.  Our society should be teaching people to be self-sufficient, but instead we are teaching people to allow the government to take care of them from the cradle to the grave.

So does that mean that our founding fathers would be in favor of the rampant corporate greed that we are witnessing today?

Of course not.

As I have written about previously, the founding fathers were against all large concentrations of power.  During the Boston Tea Party, it was the tea of perhaps the most powerful corporation in the entire world at the time (the East India Trading Company) that our founders dumped into the harbor.

If you study early American history, you soon come to realize that corporations were generally very limited in scope and size for many, many years.  The era of the giant corporation is relatively new, and our founding fathers never intended for our society to be dominated by gigantic international corporations.

So when the Democrats argue that we should give more power to the federal government and the Republicans argue that we should give more power to the big corporations they are both wrong.

Our founding fathers did not intend for our federal government to have nearly so much power and they did not intend for big, wealthy corporations to have so much power either.

Fortunately, many Americans today are getting back in touch with those principles.  There is a growing dissatisfaction with the size of government, and according to Gallup two-thirds of Americans are now dissatisfied with the size and influence of major corporations in America today.

However, it is one thing to discuss the finer points of political and economic philosophy, but it is another thing altogether to deal with the reality of tens of millions of people that cannot feed themselves.

As I have mentioned many times before, there are over 43 million Americans on food stamps today.

So what are we going to do with all of them?

Allow them to starve?

Almost 53 million Americans receive Social Security payments.

What are we going to do – cut off Social Security and watch millions of elderly and disabled people freeze to death in their own homes?

Of course not.

But we have got to start swinging the pendulum back in the other direction.  Right now one out of every six Americans is enrolled in some kind of anti-poverty program run by the federal government.

How many Americans being taken care of by the federal government will be too much?

One out of five?

One out of four?

One out of three?

Eventually the entire system crumbles when there are too few people still willing to work hard.

If you ever get the chance to visit a communist country you should.  You will notice that nobody really works very hard.  That is because there is no incentive to work hard.  Very little real wealth gets produced and everyone suffers for it.

So does that mean the U.S. system works?

Of course not.

What we have in the United States today is not real capitalism.  It is more aptly called “corporatism”.  The big corporations and the big financial institutions have accumulated an absolutely stunning amount of economic power and over the decades they have gotten the government to tilt all of the rules of the game in their favor.

In America today, it is really hard for the average person to start a successful business.  The big, powerful international corporations that dominate our economy are everywhere.

So most Americans today have to rely on working for an employer.  Unfortunately, the big employers have started to realize that they can make much larger profits by shipping our jobs overseas.  That is really bad news for the U.S. middle class.

Well, can’t we just tax all of these big corporations like crazy and even everything out?

Unfortunately it just does not work that way in today’s global society.

As I have written about previously, the ultra-wealthy and many of the biggest corporations have figured out how to “minimize” their tax burdens.  While you and I are being taxed into oblivion, the global elite have figured out how to move their money around to escape taxation as much as possible.  In fact, it is estimated that today approximately a third of all the wealth in the world is held in “offshore” tax havens.

Ultra-wealthy individuals and mega-powerful corporations can call just about anywhere “home” in today’s global economy.  That is just the way the world works now.

In order to “tax the rich”, you first must get legal jurisdiction over their money.

Our tax system has become entirely unfair and it simply does not work.  The whole thing needs to be scrapped.

But as we discuss tax policy, there are tens of millions of Americans that are living in poverty.

So what are we going to do about the growing number of Americans that cannot even feed themselves without government help?

Well, the truth is that what they really need is not more handouts.

If you give people handouts, they will just need more handouts tomorrow.

No, what all of these Americans really need are good jobs.

Unfortunately, there are a whole lot less good jobs in America today than there were ten years ago.

Our politicians have stood by as the giant corporations have moved thousands of facilities over to places such as China and India where they can legally pay people slave labor wages.

Since 2001, over 42,000 U.S. factories have closed down for good, and that number is going to continue to increase unless someone stops it.

But nobody is.

Virtually all of our politicians are just standing off to the side with their hands in their pockets.

So now we have 19.3 percent of the workforce that is either unemployed or underemployed.

Our entire economic system is breaking down.  Millions of Americans families are scrambling to find some way to survive.  Over the past two years, U.S. consumers have withdrawn $311 billion more from savings and investment accounts than they have put into them.

Other Americans are going very deep into debt because they don’t have any other options.  When they finally can’t keep up with all the debt, many of these families are losing their cars and their homes.

We are in the middle of an economic nightmare that is absolutely unprecedented.  “Redistributing the wealth” would just be like rearranging the deck chairs on the Titanic at this point.  It would not fix a darn thing.

When our politicians promise that a little “change” here or a little “tweak” there will get our economy back to normal they are lying to you and most of them know it.

What we need is a comprehensive overhaul of our entire economy.  Basically what we need to do is to go back to the blueprint (the U.S. Constitution) and essentially start over.

But most Americans are not ready for that.  Most Americans are still enjoying the tremendous prosperity that the biggest debt binge in the history of the world has purchased for us.  Most Americans still do not believe that an economic collapse is really coming.

But a massive economic collapse is coming.  This whole thing is going to come crashing down and it is not going to be pretty.

10 Reasons Why It Has Become So Soul-Crushingly Difficult To Find A Job In America Today

Have you been unemployed lately?  If so, then you probably know how frustrating it is to try to find a job in the United States today. It now takes the average unemployed worker about 33 weeks to find a job.  There are millions of Americans that have not been able to find a full-time job even after searching hard for an entire year.  Some areas of the United States have been devastated so badly by the economic downturn that they are starting to resemble war zones.  Unless you have been there, it is hard to even try to describe the extreme frustration that one feels when you are unable to pay the mortgage and feed your family.  It can be absolutely soul-crushing.  But it is not the fault of those who are unemployed.  The truth is that our economy is dying and it is not producing nearly enough jobs anymore.  Unfortunately, as you will see from the facts listed below, most of the things that are causing our economy to die have no realistic chance of being changed any time soon.

The following are 10 reasons why it has become so insanely difficult to find a job in America today….

#1 There are a lot fewer job openings in the United States today.  The number of U.S. job openings declined once again in December.  Prior to the most recent economic downturn, there were usually somewhere around 4.5 to 5 million job openings in America.  Today there are about 3 million.

#2 There is a lot more competition for the very few job openings that are actually available.  According to Gallup, the U.S. unemployment rate has been hovering around 10 percent for over a year.  When Gallup includes “underemployed Americans” that have part-time jobs but really want full-time jobs in the numbers, they get a lot worse.  Currently, Gallup says that 19.3 percent of the workforce is either unemployed or underemployed.

#3 The U.S. economy is producing an extremely low number of new jobs.  The federal government says that only about 36,000 jobs were added in January.  Well,  an increase of 150,000 jobs per month is necessary just to keep up with population growth.  We continue to fall farther and farther behind.

#4 All across the nation, state and local governments are rapidly cutting jobs.  Government jobs used to be considered some of the safest jobs available, but today state and local governments all across America are facing horrific budget crunches.  In fact, things have gotten so extreme that some cities are cutting their police forces by up to 50 percent.

#5 U.S. businesses are being absolutely crushed by regulations, and yet the government just keeps piling them on.  For example, the U.S. Food and Drug Administration is projecting that the food service industry will have to spend an additional 14 million hours every single year just to comply with new federal regulations that mandate that all vending machine operators and chain restaurants must label all products that they sell with a calorie count in a location visible to the consumer.  These kinds of ridiculous regulations are chasing U.S. businesses out of the country at a blistering pace.

#6 When you combine all forms of taxation, businesses pay more taxes in the United States than just about anywhere else in the world.  Some of the biggest corporations have figured out how to get around this, but many other businesses are being absolutely crushed by this.  All of this taxation is also chasing businesses out of the country.  Now Barack Obama is at it again.  He has just proposed an increase in unemployment taxes.  This is going to make it even less likely that businesses will want to hire more employees.

#7 Advances in technology mean that less workers are needed today.  A robot can do the labor that a hundred workers used to perform.  A computer can do the work that a thousand people used to perform.  Our society now needs less manual labor than it used to, and that is not going to change.  In fact, our society is only going to become more computerized and more automated.  That means that the ultra-wealthy do not need as many of us to work for them.

#8 Nations such as China are taking jobs away from us.  Tens of thousands of factories and millions of jobs are moving to China.  There is a reason why Barack Obama mentioned China four times during his State of the Union address.  China now even makes more beer than the United States does.  China has been very shrewd.  They have invited international corporations to come over and take advantage of their vast population by paying them slave labor wages.  The U.S. middle class is being shredded by this.  Why should companies pay U.S. workers 10 or 20 times more than they could pay a Chinese worker?

#9 Every single year, the U.S. buys hundreds of billions of dollars more stuff from the rest of the world than they buy from us.  This is called a trade deficit, and it is killing the U.S. economy.  The hundreds of billions of dollars going to the rest of the world could be going to U.S. businesses, and in turn U.S. businesses would need more workers.  But instead of fixing our trade balance problem, our politicians continue to insist that “globalism” is going to be really, really “good” for us.

#10 Every single year the U.S. federal government spends hundreds of billions of dollars just on interest on the national debt.  This is money that we don’t get any economic benefit from.  If we were not in so much debt, the U.S. government would be able to spend that money on goods and services inside the United States and that would support a lot more jobs.  This is just one of the ways that our horrific national debt is a tremendous drag on our economy.

59.9 Percent? Americans Are Racking Up Huge Credit Card Balances Once Again And Some Of The Interest Rates Are Absolutely Outrageous!

Well, it was nice while it lasted.  One of the really good things that came out of the recent economic downturn was that millions of American families decided to get out of debt.  In particular, we had seen a sustained trend of reduced credit card usage in the United States.  It looked like Americans had finally wised up.  But we should have known that Americans would not be willing to tighten their belts forever.  Unfortunately, it appears that getting out of debt is no longer so “trendy”.  In fact, the month of December was the third month in a row in which consumer credit grew in the United States.  Prior to that, consumer credit in the United States had declined for 20 months in a row.  The American people were doing so, so good.  Why did they have to stop?  It appears that the American people have fallen off the wagon and have gotten a taste for credit card debt once again.  This time, however, the credit card companies are back with interest rates that are higher than ever.  In fact, one national credit card company has hundreds of thousands of customers signed up for a card that charges interest rates of up to 59.9%.

59.9%?

You mean there are people that are stupid enough to actually sign up for a credit card that will charge them 59.9% interest?

Unfortunately the answer is yes.

In fact, the top rate was 79.9% before First Premier Bank lowered it.

These cards are targeted at Americans that have a poor credit history, and these days there are a whole lot of those.

A recent story on the website of CNN described how large numbers of U.S. consumers with poor credit are gobbling up credit cards like these.  Unfortunately, many of these consumers are also not smart enough to realize what they are getting into.  The CNN story contained a quote from a woman who was in complete shock when she discovered that her interest rate was going to go up by 50 percentage points….

“I about had a heart attack when I got a disclosure notice saying that my starting rate of 29.9% was going up to 79.9%.”

First Premier Bank has since lowered the top rate on those cards to 59.9%, but that it still completely outrageous.

Not only are the interest rates on those cards super high, but they also charge a whole bunch of fees on those cards as well.  The following are some of the fees that First Premier Bank charges….

*$45 processing fee to open the account

*Annual fee of $30 for the first year

*$45 fee for every subsequent year

*A monthly servicing fee of $6.25

So you would think that nobody in their right mind would ever sign up for such a card, right?

Wrong.

CNN is reporting that almost 700,000 Americans have signed up for the card.

Ouch.

In fact, CNN says that First Premier Bank gets between 200,000 to 300,000 new applications a month for the card, but that they only open about 50,000 new accounts each month.

Are there really this many Americans that are this gullible?

If Americans would just remember the “DBS” rule they would be so much better off.

DBS = Don’t Be Stupid

Do you know how long it would take to pay off a credit card with a 59.9 percent interest rate?

Just a 20 percent interest rate is bad enough.

According to the credit card repayment calculator, if you owe $6000 on a credit card with a 20 percent interest rate and only pay the minimum payment each time, it will take you 54 years to pay off that credit card.

During that time you will pay $26,168 in interest rate charges in addition to the $6000 in principal that you are required to pay back.

Ouch!

The number one piece of financial advice that most of the “financial gurus” give is that you should get out of credit card debt – particularly credit card debt that has a high interest rate.

Unfortunately, 46% of all Americans carry a credit card balance from month to month today.

According to the United States Census Bureau, there are approximately 1.5 billion credit cards in use in the United States.

Of U.S. households that have credit card debt, the average amount owed on credit cards is $15,788.

This is how the bankers enslave us.

We end up paying them 3, 4 or even 5 times as much as we originally borrowed.

Month after month after month we slave away to make them wealthy.

So how do you stop this vicious cycle?

You quit buying stuff that you can’t afford!

Unfortunately, the vast majority of Americans have never received any formal training on how to manage finances.

Most of us were never taught any of this stuff in school.  Most of us were totally unprepared when the financial predators started preying on us in college.  Most of us got sucked in and spent years and years trapped in credit card debt.

When you carry a balance from month to month you are willingly signing up to become a debt servant to the big banks.  They get rich while you suffer.

The sad thing is that the mainstream media is pointing to increased credit card spending as a sign that the U.S. economy is getting back to normal.

But gigantic mountains of debt is what got us into all of this trouble in the first place.

Average household debt in the United States has now reached a level of 136% of average household income.

In China that figure is only 17%.

Obviously, we have a massive, massive problem with debt in this country.

Cranking the debt spiral back up is not going to cause the economy to recover.

Well, the profits of the big banks might recover, but the rest of us will suffer.

If you want to be financially free, then it is time to pay off your credit card debt and get off the debt payment treadmill for good.

The entire global economy is on the verge of collapse, so now is a great time to renounce consumerism.  Instead, we need to be preparing ourselves and our families for the hard times that are coming.

So what do you all think about the outrageous interest rates that the credit card companies are charging these days?  Feel free to post your thoughts in the comments section below….

Find A Job? Good Luck In This Economy – 10 Reasons Why The Latest Unemployment Numbers Are No Reason To Cheer

The U.S. government is telling us that the unemployment rate fell all the way down to 9.0% in January.  Should we all cheer?  Is it now going to be a lot easier to find a job?  Has the economy finally turned around?  Are happy days here again?  Well, it is a good thing to have a positive attitude, but the truth is that there is just not much to cheer about when you take a closer look at the recent unemployment numbers.  First of all, the U.S. economy only added 36,000 jobs in January.  Economists had been expecting an increase of about 145,000 jobs, and an increase of 150,000 jobs per month is necessary just to keep up with population growth.  So why did the unemployment rate go down?  Well, the government says that over half a million Americans suddenly dropped out of the labor force in January.  That doesn’t make a lot of sense, but this is how the government calculates their numbers.  So what happened to those 500,000 Americans?  Did they all win the lottery?  Have they all become independently wealthy?  Did they all die?  No, the vast majority of them are still around and the vast majority of them still desperately need jobs.  It is just that the government does not count them as “looking for work” anymore.

It would be great if the employment situation in America actually was getting better.  All the time people send me absolutely heartbreaking stories about what they have had to endure in this economy.  Soon I hope to share some of those stories with you all.  It is hard to try to describe the absolute horror that many Americans are going through right now.

People would like to believe that things are going to get better, but unfortunately that is just not going to be the case.  The government can try to massage the numbers to make them look better, but the truth is that the tens of millions of American families that are deeply suffering right now are not fooled.

The following are 10 statistics that reveal that the latest unemployment numbers from the government are no reason to cheer….

#1 According to CNBC, economists were expecting the U.S. economy to add 145,000 jobs during January. Obviously the 36,000 figure was a huge disappointment.

#2 Approximately 150,000 jobs need to be added to the economy each month just to keep up with population growth.

#3 The government jobs report also indicated that 504,000 Americans “dropped out of the labor force” in January.  That may make the unemployment numbers look better, but the truth is that the vast majority of those 500,000 Americans still need incomes and still need jobs.

#4 According to the latest numbers from Gallup, the unemployment rate actually increased to 9.8% at the end of January.

#5 Gallup’s measure of “underemployment” (those that are unemployed plus those that are working part-time but want full-time employment) was sitting at 18.9% at the end of January.

#6 As I reported yesterday, there are approximately 28 million Americans that would like full-time jobs but that don’t have full-time jobs.

#7 According to Zero Hedge, the number of Americans that are “not in the labor force” but that would like a job right now has hit an all-time record high.  If you add all of those people into the official unemployment figure it would jump to 12.8%.

#8 According to Calculated Risk, this is the deepest and most brutal employment downturn that the United States has experienced since World War II.  The current employment downturn started 37 months ago and there doesn’t seem to be any indication that we will return to pre-recession levels any time soon.

#9 The U.S. Labor Department has also announced that job growth during 2010 was much weaker than they had previously reported. The numbers for 8 months were revised down, and the numbers for 4 months were revised up. After all of the revisions are accounted for, it turns out that a total of 215,000 fewer jobs were created during 2010 than originally calculated.

#10 According to one brand new survey, 4 out of every 10 Americans are struggling “a lot” to pay the bills right now.

The situation is not pretty out there.  The U.S. needs tens of millions more jobs than we have right now.

So where are all of our jobs going?  The video posted below contains some very strong hints.  The truth is that globalism is ripping our economic infrastructure apart, and all of the crazy rules and regulations we keep heaping on business are not helping either….

U.S. workers have been merged into a “global labor pool” where we are expected to directly compete for jobs with people making slave labor wages on the other side of the globe.

The more time you spend thinking about that, the more you start realizing that the standard of living of average American families is going to continue to decline.

Unfortunately, as I wrote about in a recent article entitled “Nothing Is Stable Anymore“, the world is changing faster today than at any other time during our lifetimes.  Everything that we used to assume about employment, money, our economy and our finances is being turned upside down.  We now live in a world where very little can be taken for granted.

2011 has already been a very tumultuous year.  The world is being transformed.  Nobody knows for sure what is going to happen next.

One thing to really keep an eye on is the price of oil.  Right now, large numbers of investors are betting that the price of oil will rise to $125 a barrel by May.  Shockingly, some investors are even betting that the price of oil will rise to $250 a barrel by next December.

If oil starts to spike dramatically, it will have tremendous implications for the U.S. economy.  Our entire economic system runs on oil.  The price of oil affects the price of everything else.

If the price of oil keeps going up it is inevitably going to cause a slowdown in the U.S. economy and it will cause the unemployment situation to get even worse.

So be glad that the employment situation is at least somewhat stable for now, because if things take a bad turn for the worse in 2011 who knows what kind of unemployment numbers we’ll be talking about a year from now.

Even Donald Trump Is Warning That An Economic Collapse Is Coming

In a shocking new interview, Donald Trump has gone farther than he ever has before in discussing a potential economic collapse in America.  Using phrases such as “you’re going to pay $25 for a loaf of bread pretty soon” and “we could end up being another Egypt”, Trump explained to Newsmax that he is incredibly concerned about the direction our economy is headed.  Whatever you may think of Donald Trump on a personal level, it is undeniable that he has been extremely successful in business.  As one of the most prominent businessmen in America, he is absolutely horrified about what is happening to this nation.  In fact, he is so disturbed about the direction that this country is heading that he is seriously considering running for president in 2012.  But whether he decides to run in 2012 or not, what Trump is now saying about the U.S. economy should be a huge wake up call for all of us.

Trump says that the U.S. government is broke, that all of our jobs are being shipped overseas, that other nations are heavily taking advantage of us and that the value of the U.S. dollar is being destroyed.  The following interview with Trump was originally posted on Newsmax and it is really worth watching….

Now, you may or may not think much of Donald Trump as a politician, but when a businessman of his caliber starts using apocalyptic language to describe where the U.S. economy is headed perhaps we should all pay attention.

The following are 12 key quotes that were pulled out of Trump’s new interview along with some facts and statistics that show that what Trump is saying is really happening.

#1 “If oil prices are allowed to inflate and keep inflating, if the dollar keeps going down in value, I think there’s a very distinct possibility that things could get worse.”

Donald Trump is exactly right – we are headed for big trouble if we continue to allow the Federal Reserve to pump hundreds of billions of new dollars into the system.  As I have written about previously, all of this new money will give us the illusion of short-term economic growth and it will pump up the stock market, but in the end all of the inflation the new money is gong to cause is going to be very painful.  Just look at how rapidly M1 has been skyrocketing over the last couple of years.  Is there any way that we are going to be able to avoid paying a very serious price for all of this reckless money printing?….

Already all of this money printing has had a very serious affect on world financial markets.  The price of agricultural commodities is skyrocketing and the price of oil has almost reached $100 a barrel once again.  The last time that the price of oil soared above $100 a barrel was in the early part of 2008, and we all remember the horrific financial collapse that followed in the fall of 2008.

#2 “….you’re going to pay $25 for a loaf of bread pretty soon. Look at what’s happening with our food prices. They’re going through the roof. We could end up being another Egypt. You could have riots in our streets also.”

The price of corn has risen 88 percent over the past year and the price of wheat has soared a whopping 114 percent over the past year.  Let’s hope that we don’t have to pay $25 for a loaf of bread in the United States any time soon, but in some areas of the world that is what it now feels like.

Approximately 3 billion people in the world today live on the equivalent of $2 a day or less, and most of that money ends up getting spent on food.  When food prices go up 10 or 20 percent in deeply impoverished areas of the globe, suddenly the lives of millions are threatened.  The riots that we have seen in Egypt, Algeria, Tunisia and other nations recently were not entirely caused by rising food prices, but they were certainly a big factor.

#3 “I think gold will go up as long as people don’t have confidence in our president and our country. And they don’t have confidence in our president.”

Investors run to gold and other precious metals when they don’t feel secure.  We saw that happen a lot in 2010.  As confidence in the paper currencies and the financial systems of the world has rapidly diminished, precious metals have become increasingly attractive.

In fact, the price of gold has doubled since the beginning of the economic downturn in 2007.  As the global financial situation continues to become more unstable, the demand for precious metals is likely only going to become more intense.

#4 “The banks have really let us down. Number one, they did some bad things and caused some bad problems. Number two, if you have something that you want to buy, like a house, they’re generally not there for you.”

Banks were given massive bailouts with the understanding that they would open up the vaults and start lending money to average Americans again.

Well, that has not happened.

In particular, it has become much, much harder to get a mortgage in the United States today.  Not that the big banks didn’t need to make changes to their lending practices, but things have gotten so tight now that it is choking the real estate market to death.

#5 “I see $3.50 for a gallon of gas for cars, and cars are lined up trying to get it and it’s $3.50. It’s a shame, a ridiculous shame.”

Our lack of a cohesive energy policy is a national disgrace.  There is no way in the world that a gallon of gas should be $3.50 a gallon.

The U.S. has massive reserves of oil and natural gas that it should be using.  In addition, the lack of progress on developing alternative energy sources in light of our sickening dependence on foreign oil is very puzzling.  We should be very far along towards solving our energy problems by this point.

Meanwhile, we keep pouring billions into the pockets of foreign oil barons every single month.  Unfortunately, Trump was exactly correct in the interview – if something is not done the price of gas is going to keep going higher.

#6 “I think the biggest threat is that our jobs are being stolen by other countries. We’re not going to have any jobs here pretty soon.”

Donal Trump is one of the few prominent leaders that is openly speaking the truth about the predatory economic practices of some of our “trading partners”.  Most of our politicians have just kept endlessly promising us that free trade is “good for us” even as tens of thousands of factories and millions upon millions of jobs have been shipped overseas.

Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs.

Yes, computers and robots have replaced a lot of manual labor today, but technology does not account for most of the decline we have seen in manufacturing.

n 1959, manufacturing represented 28 percent of all U.S. economic output.  In 2008, it represented only 11.5 percent.  Meanwhile, manufacturing in the “developing world” has absolutely exploded.

#7 “We’re like a whipping post for other countries. We are standing there and just being beaten by South Korea, by Mexico, by China, by India.”

Most Americans have absolutely no idea how lopsided many of our “trade agreements” actually are.  Other nations openly manipulate their currencies in order to keep their exports dirt cheap and we allow it.  Other nations openly subsidize their domestic industries that are directly competing with businesses in the United States and we don’t complain.  Other nations make it incredibly difficult for American companies to do business in their countries while we allow foreign corporations to come on in and do pretty much whatever they want here.

Then there are certain nations (such as China) that brazenly rip off trade secrets from foreign corporations time after time after time and never get penalized for it.

Meanwhile, our economy continues to bleed jobs at a staggering pace.  The number of net jobs gained by the U.S. economy during this past decade was smaller than during any other decade since World War 2.

Fortunately, more Americans than ever seem to be waking up and are realizing that globalism is causing many of these problems.  A NBC News/Wall Street Journal poll conducted last year discovered that 69 percent of Americans now believe that free trade agreements have cost America jobs.

#8 “All of our jobs are going to China. We’re rebuilding China and other places.”

China is doing great.  China is now the number one producer in the world of wind and solar power.  They now possess the fastest supercomputer on the entire globe.  China also now has the world’s fastest train and the world’s biggest high-speed rail network.

Most Americans don’t realize that China is literally kicking the crap out of us.

Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China’s share had soared to 20 percent.

Every single month we buy about 4 times as much stuff from them as they buy from us.  Our trade deficit with China has ballooned to enormous proportions.  In fact, the U.S. trade deficit with China during this past August was more than 4,600 times larger than the U.S. trade deficit with China was for the entire year of 1985.

So when Donald Trump says that we are rebuilding China he is not joking around.

Nobel economist Robert W. Fogel of the University of Chicago is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040 if current trends continue.

Yes, that is how serious things have become.

#9 “We are a laughingstock throughout the world.”

Donald Trump has said on several occasions that his friends and business partners in China just laugh and laugh at us.  They can’t even believe what they are getting away with.

We have become an incompetent giant that is the butt of all the jokes.

According to Stanford University economics professor Ed Lazear, if the U.S. economy and the Chinese economy continue to grow at current rates, the average Chinese citizen will be wealthier than the average American citizen in just 30 years.

Our formerly great industrial cities are slowly becoming ghost towns.  The number of long-term unemployed Americans is at an all-time high.  Tens of millions of Americans can’t even survive without government assistance anymore.  The number of Americans on food stamps set a new all-time record every single month during 2010, and now well over 43 million Americans are enrolled in the program.

We really have become a joke.

#10 “The federal government has no money.”

Unfortunately, our federal government has continued to borrow and spend like there is no tomorrow.

According to the Congressional Budget Office, the U.S. government will have the biggest budget deficit ever recorded (approximately 1.5 trillion dollars) this year.

So much for fiscal discipline, eh?

It is being projected that the U.S. national debt will increase by $150,000 per U.S. household between 2009 and 2021.

Do you have an extra $150,000 to contribute for your share?

By 2015 our national debt will be somewhere in the neighborhood of 20 trillion dollars.

It is the biggest mountain of debt in the history of the world by far, and it is the gift that we are going to pass down to future generations of Americans.

If there are any future generations of Americans.

#11 “I hate what is happening to this country.”

We should all hate what is happening to this country.  Our economic guts are being ripped out, we are being abused by the rest of the world, America’s infrastructure is being sold off piece by piece, our federal government is drowning in debt, our state governments are drowning in debt and our local governments are drowning in debt.

The only way we can even keep going is to run around to the rest of the world and beg them to keep lending us more money.

The mainstream media keeps proclaiming that we are the greatest economy on earth, but the truth is that we are being transformed into a pathetic loser and our politicians are just standing there with their hands in their pockets letting it happen.

All red-blooded Americans should be horrified by what is happening to this nation.  We have been betrayed by corrupt and incompetent leaders.  As a nation, we have become fat, lazy and stupid.

Hopefully what Donald Trump and others are saying about a coming economic collapse will serve as a huge wake up call and the sleeping giant will arise once again.

If the sleeping giant does not arise, we are in a massive amount of trouble, because right now the road we are on is leading to the biggest economic collapse the world has ever seen.

Nothing Is Stable Anymore

The world is becoming a very unstable place, and the pace at which things are changing all around us has become absolutely mind-numbing.  In fact, change has become one of the only constants in today’s world.  Once upon a time, people in the United States could actually make 20 or 30 year plans and feel confident about achieving them.  But now, nothing is stable anymore.  The financial crisis showed us that some of the biggest corporations on the globe can collapse in a single day.  The events of the past few weeks have shown us that entire governments can be brought down in a single week.  We live in a world where there are now very few “guarantees” that you can count on.  One of the only things that is guaranteed is that technology and information will continue to grow at exponential speeds.  This year, the total amount of information produced on electronic devices around the globe is projected to be more than a zettabyte.  A zettabyte is equivalent to one sextillion bytes.  In other words, imagine a one with more than 21 zeroes following it.

Many of the things that we take for granted today didn’t even exist a few short years ago.  Facebook has only been with us since 2004.  YouTube has only been with us since 2005.  Can you imagine a world where those two websites did not exist?

We live in a world of information overload.  Once upon a time it would have been possible to go to sleep for a decade and wake up and everything would still be pretty much the same.  But today if you were to do that you would be in for a case of severe culture shock.

Do you remember when you could buy a set of encyclopedias and the information in them would still be good a decade or two later?

Well, things do not work that way anymore.

In fact, most of the articles on this website will be obsolete a month from now.

In today’s world, you really have to think twice before you say that something is “not possible”.

A few months ago, it was absolutely inconceivable that Egyptian President Hosni Mubarak would declare to the world that he has “spent enough time serving Egypt“.

Yet here we are.

One week the government of Tunisia seemed perfectly stable and the next week it was toppled.

Do any of you out there still think that you can make realistic “plans for the future” in today’s world?

Once upon a time in America, many of us were taught that if we worked really hard in school we could get a great job with a great company.  We were promised that if we were faithful to that company for 30 or 40 years that we would be treated fairly and given a good pension.

Well, in today’s world you might as well crumple up that plan and throw it into the wastebasket.

There is no such thing as a stable job anymore.  Businesses are coming into existence and going out of existence faster than ever before.  Today, one out of every four Americans workers has been with their empl0yer for less than a year.

Most Americans still don’t really understand that they are now part of a global economy.  They keep thinking that things were the way they used to be.  They keep thinking that the U.S. economy is invincible.

Well, those days are long gone.  The United States is being deindustrialized at lightning speed.  Tens of thousands of manufacturing facilities and millions of jobs have been sent overseas.  China, once a complete economic backwater, is now kicking the crap out of us on the global economic stage.

Our financial system is certainly on incredibly shaky ground.  Will any of us ever forget what happened in 2008?

Do any of us actually believe that it can’t happen again?

Our health care system is also incredibly unstable.  Today, 46 million Americans have absolutely no health insurance.  That means that 46 million Americans are just one major injury or illness away from financial ruin with no protection whatsoever.

Not that those that actually have health insurance are protected.  According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States.  Of those bankruptcies that were caused by medical bills, approximately 75 percent of them involved individuals that did have health insurance.

So just because you have health insurance does not mean anything.  One bad accident or one really bad disease and you could be totally wiped out.

Isn’t that comforting?

But the truth is that our entire economy is on the verge of total collapse.

World famous investor Harry Schultz recently published the last issue of his legendary financial newsletter.  After 45 years, the following is how Schultz summed up the economic collapse that we are now facing….

“Roughly speaking, the mess we are in is the worst since 17th century financial collapse. Comparisons with the 1930’s are ludicrous. We’ve gone far beyond that. And, alas, the courage & political will to recognize the mess & act wisely to reverse gears, is absent in U.S. leadership, where the problems were hatched & where the rot is by far the deepest.”

David Stockman, the former director of the Office of Management and Budget under Ronald Reagan was quoted by Schultz as saying the following about how desperate things are about to become….

“Get some gold, beans, water, anything that Bernanke can’t destroy. Ron Paul is right. We’re entering a global monetary conflagration. If a sell-off of U.S. bonds starts, it will be an Armageddon.”

Millions of Americans have become “preppers” in recent years as they have come to realize that our economy is headed down a very dark road.

But sadly, the reality is that the vast majority of Americans are not prepared for any kind of economic or natural disaster.  As this week has shown us, just the threat of a major snow storm can wipe out store shelves in a single day.

So what would this country look like if a major disaster fundamentally changed life in America and suddenly people were desperate for food and supplies?

It is a frightening thing to think about.

As the pace of change has accelerated dramatically, the U.S. government and other governments around the world have responded by trying to get a tighter grip on everyone and everything.

To get on an airplane in the United States today, you either have to allow a security goon to use a scanner to look over your completely exposed body, or you have to allow a security goon to feel up all of your private areas with the fronts of his or her hands.

Not only that, but the U.S. government has now deployed VIPR (Visible Intermodal Prevention and Response) teams to set up security checkpoints at bus terminals, subway stations and on major highways.

The America that so many of us once loved is rapidly disappearing.

But it is not just our man-made systems that are rapidly changing.  Something seems to be happening to the entire planet.  Flooding of biblical proportions has hit Australia, Brazil, China and Pakistan over the past 12 months.  Scorching heat caused massive crop failures all over Russia last summer.  Record-setting cold temperatures and snowfalls all over the northern hemisphere have scientists scratching their heads.  On top of everything else, mass deaths of birds and fish are suddenly being reported all over the globe.

Even the crust of the earth is becoming increasingly unstable.  Did you see that volcano go off in Japan the other day?  Over the past two years it seems like volcanoes have been suddenly erupting all over the world.

Not only that, but sinkholes have become an absolute epidemic all over the planet.  Some of these sinkholes have been so large that they have swallowed entire apartment buildings.

In addition, it seems like there is a magnitude 6 or magnitude 7 earthquake somewhere in the world almost every day now.  They have become so common that the mainstream media barely even takes notice of them anymore unless one happens near a very populated area.

None of us really knows what the world is going to look like ten years from now.  What will the “new” Facebooks and YouTubes be?  Will Ben Bernanke’s reckless money printing destroy our economy by then?  Will our U.S. dollars still be of any value ten years from now?  Will there even still be a U.S. dollar?

Will we still be able to feed most of the people in the world by 2011?  Will shortages of food, water and oil start driving people crazy?  Could some amazing energy discovery completely transform society?

Who will be the president of the United States?  Will there even be a president of the United States?  Will war have erupted in the Middle East by that point?  Will the United States be in another war by then?

The truth is that things are changing so fast that it is hard to even come up with the right questions to ask.  The world is going to change faster this year than it did last year.  In 2012 the pace of change will be even faster.

So buckle up and hold on tight because this is going to be one wild ride.

For much more on how incredibly fast the pace of change is in our modern society, check out the video posted below.  It is entitled “Did You Know?” and it has been viewed more than 12 million times on YouTube….

Housing Armageddon: 12 Facts Which Show That We Are In The Midst Of The Worst Housing Collapse In U.S. History

We are officially in the middle of the worst housing collapse in U.S. history – and unfortunately it is going to get even worse.  Already, U.S. housing prices have fallen further during this economic downturn (26 percent), then they did during the Great Depression (25.9 percent).  Approximately 11 percent of all homes in the United States are currently standing empty.  In fact, there are many new housing developments across the U.S. that resemble little more than ghost towns because foreclosures have wiped them out.  Mortgage delinquencies and foreclosures reached new highs in 2010, and it is being projected that banks and financial institutions will repossess at least a million more U.S. homes during 2011.  Meanwhile, unemployment is absolutely rampant and wage levels are going down at a time when mortgage lending standards have been significantly tightened.  That means that there are very few qualified buyers running around out there and that is going to continue to be the case for quite some time to come.  When you add all of those factors up, it leads to one inescapable conclusion.  The “housing Armageddon” that we have been experiencing since 2007 is going to get even worse in 2011.

Right now there is a gigantic mountain of unsold homes in the United States.  It is estimated that banks and financial institutions will repossess at least a million more homes this year and this will make the supply of unsold properties even worse.  At the same time, millions of American families have been scared out of the market by this recent crisis and millions of others cannot qualify for a home loan any longer.  That means that the demand for unsold homes is at extremely low levels.

So what happens when supply is really high and demand is really low?

That’s right – prices go down.

Hopefully housing prices don’t have too much farther to go down.  Ben Bernanke and the boys over at the Federal Reserve are doing their best to flood the system with new dollars in order to prop up asset values, but you just can’t create qualified home buyers out of thin air.

Many analysts are projecting that U.S. housing prices will decline another ten or twenty percent before they hit bottom.  In fact, quite a few economists believe that the total price decline from the peak of the market in 2006 will end up being somewhere in the neighborhood of 40 percent.

But whether prices go down any further or not, the truth is that the housing crash that we have already witnessed is absolutely unprecedented.

The following are 12 facts which show that we are in the midst of the worst housing collapse in U.S. history….

#1 Approximately 11 percent of all homes in the United States are currently standing empty.

#2 The rate of home ownership in the United States has dropped like a rock.  At this point it has fallen all the way back to 1998 levels.

#3 According to the S&P/Case-Shiller index, U.S. home prices fell 1.3 percent in October and another 1 percent in November.  In fact, November represented the fourth monthly decline in a row for U.S. housing prices.  Many economists are now openly using the term “double-dip” to describe what is happening to the housing market.

#4 The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.

#5 According to RealtyTrac, a total of 3 million homes were repossessed by mortgage lenders between January 2007 and August 2010.  This represents a huge amount of additional inventory that somehow must be sold.

#6 72 percent of the major metropolitan areas in the United States had more foreclosures in 2010 than they did in 2009.

#7 According to the Mortgage Bankers Association, at least 8 million Americans are at least one month behind on their mortgage payments.

#8 It is estimated that there are about 5 million homeowners in the United States that are at least two months behind on their mortgages, and it is being projected that over a million American families will be booted out of their homes this year alone.

#9 Deutsche Bank is projecting that 48 percent of all U.S. mortgages could have negative equity by the end of 2011.

#10 Some formerly great industrial cities are rapidly turning into ghost towns.  For example, in Dayton, Ohio today 18.9 percent of all houses are now standing empty.  21.5 percent of all houses in New Orleans, Louisiana are standing vacant.

#11 According to Zillow, U.S. home prices have already fallen further during this economic downturn (26 percent) than they did during the Great Depression (25.9 percent).

#12 There are very few signs that the employment situation in the United States is going to improve any time soon.  4.2 million Americans have been unemployed for one year or longer at this point.  While there has been some nominal improvement in the government unemployment numbers recently, other organizations are reporting that things are getting even worse.  According to Gallup, the unemployment rate actually rose to 9.6% at the end of December.  This was a significant increase from 9.3% in mid-December and 8.8% at the end of November.

But even many Americans that do have jobs are finding out that it has become very, very hard to qualify for a home loan.

In an attempt to avoid the mistakes of the past, banks and financial institutions have become very stingy with home loans.  While it was certainly wise for them to make some changes, the truth is that perhaps the pendulum has swung too far at this point.  The U.S. housing industry will never fully recover if they can’t get their customers approved for mortgages.

Congress is talking about passing even more laws that will make it even more difficult to get home loans.  Even though they give speeches about how they want to help the U.S. housing industry, the truth is that Republicans and Democrats are both backing proposals that would make home mortgages much more expensive and much more difficult to obtain as a Bloomberg article recently explained….

Government officials and lawmakers want to make the market less vulnerable to another credit crisis, and all the options lead the same general direction: Borrowers will need larger down payments than in the bubble years, have higher credit scores, and pay extra fees to cover risks and premiums for federal guarantees on government-backed mortgage bonds.

While all that may sound reasonable, the truth is that the U.S. middle class has become so cash poor that the vast majority of them cannot afford homes without the kind of mortgages that were available in the past.

Not that we should go back and repeat the mistakes of the past 20 years.  It is just that nobody should expect the U.S. housing market to “bounce back” in an environment that has fundamentally changed.

The housing market is not like other financial markets.  It is difficult to artificially pump it up with funny money.  If the U.S. housing market is going to rebound, it is going to take lots of average American families getting qualified for loans and going out and buying houses.  But they can’t do this if they do not have good jobs.  Today, only 47 percent of working-age Americans have a full-time job at this point.  Without a jobs recovery there never will be a housing recovery.

In fact, there are all kinds of warning signs that seem to indicate that the U.S. economy could get even worse in 2011.  Many economists are now openly using the word “stagflation” for the first time since the 1970s.  Back in the 70s we had both high unemployment and high inflation at the same time.

Well, we have already had very high unemployment, and thanks to the relentless money printing of the Federal Reserve, it looks like we are going to have high inflation as well.

Middle class American families are going to be spending even more of their resources just trying to survive, and this is going to make it more difficult for them to purchase homes.

In fact, in recent years average Americans have been getting significantly poorer.  Over the past two years, U.S. consumers have withdrawn $311 billion more from savings and investment accounts than they have put into them.  That is very troubling news.

Now the price of food is soaring and the price of oil is about to cross $100 a barrel again.  So what is going to happen if we have another major financial crisis and we witness another huge spike in the unemployment rate?

The Federal Reserve is trying to smooth all of our problems over with a flood of paper money, but it isn’t going to work.  Yes, increasing the money supply will produce some false highs on the stock market and some false economic growth statistics for a while, but the tremendous damage that will be done to the economy is just not worth it.

In any event, let us all hope that we see some really great real estate deals over the next couple of years, because in the times ahead land will be something very good to own.  In fact, down the road it will be much better to own land than to have your money sitting in the bank where it will continuously decline in value.

Use your paper money wisely.  It will never have more value than it does today.

So what do all of you think?  Is the “housing Armageddon” almost over, or do housing prices still need to decline a bit more?  Feel free to leave a comment with your opinion below….

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