Michael T. Snyder

11 Examples Of The Escalating Crime And Violence That Are Plaguing Communities Across America

August 6, 2013August 6, 2013 by Michael

Even though the United States has the highest incarceration rate and the largest total prison population in the world by a very wide margin, hundreds of communities all over America are being overwhelmed by crime and violence. For many years, violent crime had actually decreased in the United States, but now the trend is going the other way. Violent crime in the U.S. increased in both 2011 and 2012, and it is being projected that it will increase in 2013 as well. The frightening thing is that crime statistics are going up even though police departments in some major cities have publicly announced that they will not even respond to certain crimes anymore. This has the effect of making crime statistics look lower than they actually should be. For example, in the city of Chicago police will no longer respond in person “to 911 calls reporting vehicle theft, garage burglary or simple assault“. So if someone steals your car or breaks into your garage, you can file a report over the phone if you want, but it probably won’t do much good.

So what is causing the rise in crime and violence? Well, we live at a time when economic opportunities for young people are extremely limited. The younger you are, the more likely you are to be unemployed, and poverty in America has been steadily rising even in the midst of this so-called “economy recovery”.

When people are poor and feel like they are out of options, they tend to get desperate. And desperate people do desperate things.

Meanwhile, the condition of the family in America continues to deteriorate. We have the highest divorce rate in the world and approximately one out of every three children in the United States lives in a home without a father. Without stable families to depend on, our young people have become increasingly vulnerable to other influences.

One trend that is extremely alarming is the growth of gangs in the United States. According to the FBI, there are now 1.4 million gang members living in America. Unfortunately, the federal government appears very unconcerned about stopping illegal immigration even though it has been one of the primary factors fueling the astounding growth of criminal gangs in this country.

There is a lot of anger and frustration out on the streets of America right now, and the moral decay that has been eating away at the foundations of our country is really starting to manifest itself. The following are 11 examples of the escalating crime and violence that are plaguing communities all across America right now…

#1 Flash mob crimes are becoming increasingly common in our major cities. For example, in Washington D.C. a “flash mob” of 20 or 30 young people recently stormed a convenience store and took whatever they wanted…

“It was crazy. Beyond our control,” says the manager of the King Convenience store in the 1500 block of U Street in Southeast D.C.

He says a flash mob of teens stole candy, soda and other items from his store Saturday night.

“Bunch of kids, more than 20 or 30, grabbed everything,” he says, asking not to be identified. “They grabbed everything and then ran away from the store.”

#2 In the Bronx, police seem to be powerless to do anything about the gangs that are ruthlessly terrorizing law-abiding families…

The gun-toting teen shot by police over the weekend grew up in a gang-infested neighborhood in the Morrisania section of the Bronx where law-abiding families live in constant fear. Even if young boys try to avoid trouble, it comes looking for them.

At first glance, everything looks calm and ordinary in this community. But under the surface, the threat for boys as young as 9 or 10 from gangs and criminal crews pressuring them to join is constant.

One boy, whose identity Fox 5 is protecting, said they have no choice but to join a gang. He said he tries to stay busy and off the streets at night when the gangs are out and hunting for new members. He said most boys don’t choose to join a gang, but if they don’t, they and their families suffer consequences. He said gangs have ransacked the apartments of reluctant recruits.

#3 In Baltimore, there have been several reports recently of vicious mobs assaulting innocent pedestrians…

A man was assaulted by a group of people early Sunday morning in Baltimore’s Little Italy neighborhood and part of the attack was captured on camera.

The attack happened at around 12:45 a.m. at Bank and Exeter Streets. The victim, who works at a restaurant in the area, was walking down the street when a mob of people approached him and started beating him.

The video shows the victim trying to get away, but stumbles and the mob starts attacking him again. The victim was finally able to run into a nearby wine bar for help.

Coworkers of the victims say he is still in the hospital after having surgery on his jaw. They also say they are now taking extra steps to be safe. “A girl at my work got robbed right before that, we think, by the same people. So she’s been staying at my house just because it’s not safe for her to be by herself. But our managers are making sure that nobody’s walking to the garage anymore. So they’re driving us to our cars from now on,” coworker Jackie Quattrochi said.

#4 Drug abuse is rising all over the country, and the results are often deeply tragic. In Memphis, Tennessee one mother recently stabbed her two little boys to death because “voices told her to do it”…

A mother charged with fatally stabbing her two young sons told police she is schizophrenic and that voices told her to do it, court records show.

Jamina Briggs, 29, also told officers who arrived at her home on Wednesday night that she was sorry about the stabbings, according to an affidavit of complaint.

Officers arrested Briggs after they found the boys, 6-year-old Nicholas Briggs and 23-month-old Jeremiah Briggs, lying face down on a couch with multiple stab wounds. The boys died at a hospital.

#5 One man from Staten Island was recently charged with trying to sell his 2-month-old baby on Craigslist because he didn’t want her anymore…

A Staten Island man is accused of trying to sell a 2-month-old baby on Craigslist.

Paul Marquez, 23, posted an ad on the website twice late last month, offering a baby for sale for $100, law enforcement sources said.

The ad read, “I have a 2-month-old baby, she loves to play and have her little fun, but there’s one problem, doctors say she has asthma and if she turns a certain way she can stop breathing. She’s really getting on my nerves and I don’t want her,” WCBS 880′s Irene Cornell reported.

#6 You wouldn’t normally think of Fairfax, Virginia as a hotbed of violent crime, but a vicious mob attack was filmed there recently…

A wild assault in Fairfax, Virginia, was recently caught on video. The incident, dubbed by WJLA-TV as a “savage” and “mob-style attack,” included at least six individuals brutally punching and kicking one person (presumably a teenager or a young man).

The brawl was recorded by a local resident named Jack Webb. He had installed a security camera in an effort to nab the individuals who have been breaking into his work van, but, instead, he ended up capturing the incident — one that has residents and authorities, alike, deeply troubled.

The victim is seen in the video being stomped on and repeatedly beaten. The incident was so severe, Webb said, that it looked like the individual being attacked “wasn’t going to be getting up again.”

#7 Even young schoolchildren are going absolutely crazy these days. Just check out what happened on one school bus in Pinellas County, Florida last month…

A cell-phone video captures the 13-year-old boy’s screams for help as he’s pummeled with fists and kicked by three bigger, older youths who “ganged up” on him as he was about to get off at his bus stop.

The black teens beat the white sixth-grader for roughly a minute before opening the emergency-exit door and fleeing the bus.

As the relentless assault unfolds, the bus driver John Moody yells at the teens to leave the boy alone. He also asks dispatchers to send help.

“You gotta get somebody here quick, quick, quick, quick,” he urged. “They’re about to beat this boy to death over here.”

#8 And of course this moral decay is not just limited to the cities. What two men up in northern California did recently to one very young girl is absolutely horrifying…

Two Northern California men made brief appearances in federal court Wednesday in what began as another big pot-growing drug bust but what has become a horrifying story of one teenager’s alleged torment, captivity and sexual abuse.

The criminal complaint against the two men — Ryan Balletto, 30, and Patrick Pearmain, 24 — outlines the allegations of a 15-year-old girl’s ordeal of being held in a coffin-like box for hours on end at a marijuana-growing “farm” where she worked trimming plants.

#9 I have written extensively about the tremendous crime wave that we have seen up in Detroit in recent years, but even the police were shocked by one particular crime that took place recently…

Detroit police are wondering if they have a serial attacker on their hands after a third woman’s burned body was found on the west side.

Is a serial killer hunting women in Detroit? At this point police are not sure what to think…

Police say it’s the third case in recent weeks where a woman has been set on fire and left for dead. However, investigators aren’t yet sure if the cases are connected. In late July, two women were found just miles apart in vacant fields – both severely beaten and without any clothing.

#10 If you are the victim of a crime in Detroit, it may not even be safe to call the police. In some instances, they are actually the criminals…

A Good Samaritan snapped photos of what appeared to be two men impersonating police officers involved in a pistol-whipping and robbery outside a Citgo gas station on Detroit’s east side on July 21.

Once Fox 2 aired those photos, an even more disturbing picture developed.

“Several unidentified police officers were working this particular robbery case, recognized one of the suspects in the photographs as being a member of the Detroit Police Department,” Chief James Craig said Monday.

#11 In this day and age, the hearts of most people are growing cold. In fact, many parents don’t even seem to care for their own children anymore. Just check out what recently happened in Live Oak, Texas…

Police said a young child found was in a garbage bin and his mother was arrested for child abandonment. Police also said the mother was high on synthetic marijuana.

It happened Tuesday night in the 200 block of Shin Oak in Live Oak.

Sgt. Anita Seamans said the woman,identified as 21-year-old Brittany Ciccotti, was arrested and charged with abandoning a child, a second degree felony.

“She has put him in a garbage can in the driveway of a home and by the grace of God, the child made enough noise in this can and somebody found him,” said Sgt. Seamans.

All of these examples show that the thin veneer of civilization that we all take for granted is rapidly breaking down.

This is what happens when we throw morality out the window and we don’t teach our kids right from wrong.

And all over the country police departments are finding themselves overwhelmed right now. Due to budget cuts, many police forces are actually getting smaller at the same time that crime rates are surging.

So what can be done?

Well, in Boston they are actually setting up cardboard cutouts of police officers in an attempt to deter crime.

Does anyone believe that will actually help?

Even though communities all over America now feel under siege by the growing wave of crime and violence that we have been witnessing, the truth is that this is only just the beginning. When the next major economic downturn strikes things are going to get much worse.

The seeds that we have been planting for decades are now springing to life, and America is about to reap a very bitter harvest.

I hope that you are getting prepared.

Billionaire Issues Chilling Warning About Interest Rate Derivatives

August 5, 2013August 5, 2013 by Michael

Will rapidly rising interest rates rip through the U.S. financial system like a giant lawnmower blade? Yes, the U.S. economy survived much higher interest rates in the past, but at that time there were not hundreds of trillions of dollars worth of interest rate derivatives hanging over our financial system like a Sword of Damocles. This is something that I have been talking about for quite some time, and now a Mexican billionaire has come forward with a similar warning. Hugo Salinas Price was the founder of the Elektra retail chain down in Mexico, and he is extremely concerned that rising interest rates could burst the derivatives bubble and cause “massive bankruptcies around the globe”. Of course there are a whole lot of people out there that would be quite glad to see the “too big to fail” banks go bankrupt, but the truth is that if they go down our entire economy will go down with them. Our situation is similar to a patient with a very advanced stage of cancer. You can try to kill the cancer with drugs, but you will almost certainly kill the patient at the same time. Well, that is essentially what our relationship with the big banks is like. Our entire economic system is based on credit, and just like we saw back in 2008, if the big banks start failing credit freezes up and suddenly nobody can get any money for anything. When the next great credit crunch comes, every important number in our economy will rapidly start getting much worse.

The big banks are going to play a starring role in the next financial crash just like they did in the last one. Only this next crash may be quite a bit worse. Just check out what billionaire Hugo Salinas Price told King World News recently…

I think we are going to see a series of bankruptcies. I think the rise in interest rates is the fatal sign which is going to ignite a derivatives crisis. This is going to bring down the derivatives system (and the financial system).

There are (over) one quadrillion dollars of derivatives and most of them are related to interest rates. The spiking of interest rates in the United States may set that off. What is going to happen in the world is eventually we are going to come to a moment where there is going to be massive bankruptcies around the globe.

What is going to be left after the dust settles is gold, and some people are going to have it and some people are not. Then the problem is going to be to hold on to what you’ve got because it’s not going to be a very pleasant world.

Right now, there are about 441 trillion dollars of interest rate derivatives sitting out there. If interest rates stay about where they are right now and they don’t go much higher, we will be fine. But if they start going much higher, all bets will be off and we could see financial carnage on a scale that we have never seen before.

And at the moment the big banks have got to behave themselves because the government is investigating allegations that they have been cheating pension funds and other investors out of millions of dollars by manipulating the trading of interest rate derivatives. The following is from an article that the Telegraph posted on Friday…

The Commodity Futures Trading Commission (CFTC) is probing 15 banks over allegations that they instructed brokers to carry out trades that would move ISDAfix, the leading benchmark rate for interest rate swaps.

Pension funds and companies who invest in interest rate derivatives often deal with banks to insure against big movements in the ISDAfix rate or to speculate on changes to interest rate swaps

ISDAfix is published each morning after banks submit bids for swaps via Icap, the inter-dealer broker, in a number of currencies. The CFTC has been investigating suggestions that the banks deliberately moved the rate in order to profit on these deals.

Given the hundreds of trillions of dollars worth of interest rate derivatives trades that occur annually, even the slightest manipulation can have a substantial effect. The CFTC, which started to investigate ISDAfix after last summer’s Libor scandal has now been handed emails and phone call recordings that show the rate was deliberately moved, according to Bloomberg.

Essentially they got their hands caught in the cookie jar and so they have got to play it straight (at least for now).

Meanwhile, it looks like the Fed may not be able to keep long-term interest rates down for much longer.

The Federal Reserve has been using quantitative easing to try to keep long-term interest rates low, but now some officials over at the Fed are becoming extremely alarmed about how bloated the Fed balance sheet has become. For example, the following was recently written by the head of the Dallas Fed, Richard Fisher…

This later program is referred to as quantitative easing, or QE, by the public and as large-scale asset purchases, or LSAPs, internally at the Fed. As a result of LSAPs conducted over three stages of QE, the Fed’s System Open Market Account now holds $2 trillion of Treasury securities and $1.3 trillion of agency and mortgage-backed securities (MBS). Since last fall, when we initiated the third stage of QE, we have regularly been purchasing $45 billion a month of Treasuries and $40 billion a month in MBS, meanwhile reinvesting the proceeds from the paydowns of our mortgage-based investments. The result is that our balance sheet has ballooned to more than $3.5 trillion. That’s $3.5 trillion, or $11,300 for every man, woman and child residing in the United States.

Fisher has compared the current Fed balance sheet to a “Gordian Knot”, and he hopes that the Fed will be able to unwind this knot without creating “market havoc”…

The point is: We own a significant slice of these critical markets. This is, indeed, something of a Gordian Knot.

Those of you familiar with the Gordian legend know there were two versions to it: One holds that Alexander the Great simply dispatched with the problem by slicing the intractable knot in half with his sword; the other posits that Alexander pulled the knot out of its pole pin, exposed the two ends of the cord and proceeded to untie it. According to the myth, the oracles then divined that he would go on to conquer the world.

There is no Alexander to simply slice the complex knot that we have created with our rounds of QE. Instead, when the right time comes, we must carefully remove the program’s pole pin and gingerly unwind it so as not to prompt market havoc. For starters though, we need to stop building upon the knot. For this reason, I have advocated that we socialize the idea of the inevitability of our dialing back and eventually ending our LSAPs. In June, I argued for the Chairman to signal this possibility at his last press conference and at last week’s meeting suggested that we should gird our loins to make our first move this fall. We shall see if that recommendation obtains with the majority of the Committee.

But of course it should be obvious to everyone that the Fed is not going to be able to reduce the size of its balance sheet without causing huge distress in the financial markets. A few weeks ago, just the suggestion that the Fed may eventually begin to slow down the pace of quantitative easing caused the markets to throw an epic temper tantrum.

Unfortunately, the Fed may not be able to keep control of long-term interest rates even if they continue quantitative easing indefinitely. Over the past several weeks long-term interest rates have been rising steadily, and the yield on 10 year U.S. Treasuries crept a bit higher on Monday.

At this point, many on Wall Street are convinced that the bull market for bonds is over and that rates will eventually go much, much higher than they are right now no matter what the Fed does. The following is an excerpt from a recent CNBC article…

The Federal Reserve will lose control of interest rates as the “great rotation” out of bonds into equities takes off in full force, according to one market watcher, who sees U.S. 10-year Treasury yields hitting 5-6 percent in the next 18-24 months.

“It is our opinion that interest rates have begun their assent, that the Fed will eventually lose control of interest rates. The yield curve will first steepen and then will shift, moving rates significantly higher,” said Mike Crofton, President and CEO, Philadelphia Trust Company told CNBC on Wednesday.

If the yield on 10 year U.S. Treasuries does hit 6 percent, we are going to have a major disaster on our hands.

Hugo Salinas Price is exactly right – the derivatives bubble is the number one threat that our financial system is facing, and it could potentially bring down a whole bunch of our big banks.

But for the moment, Wall Street is still in a euphoric mood. The Dow is near a record high and many investors are hoping that this rally will last for the rest of the year.

Unfortunately, I wouldn’t count on that happening. The truth is that the stock market has become completely divorced from economic reality.

Since March 2009, the size of the U.S. economy has grown by approximately $1.3 trillion, but stock market wealth has grown by an astounding $12 trillion.

And the stock market has just kept on rising even though GDP growth forecasts have been steadily falling.

It doesn’t make any sense.

But Obama, Bernanke and the wizards on Wall Street assure us that there is no end to the party in sight.

Believe them at your own peril.

The people at the controls are completely and totally clueless and we are rapidly careening toward disaster.

Perhaps we should do what one little town in Minnesota did and put a 4-year-old kid in charge.

That kid certainly could not be much worse than our current leadership, don’t you think?

40 Percent Of U.S. Workers Make Less Than What A Full-Time Minimum Wage Worker Made In 1968

August 4, 2013August 4, 2013 by Michael

Are American workers paid enough? That is a topic that is endlessly debated all across this great land of ours. Unfortunately, what pretty much everyone can agree on is that American workers are not making as much as they used to after you account for inflation. Back in 1968, the minimum wage in the United States was $1.60 an hour. That sounds very small, but after you account for inflation a very different picture emerges. Using the inflation calculator that the Bureau of Labor Statistics provides, $1.60 in 1968 is equivalent to $10.74 today. And of course the official government inflation numbers have been heavily manipulated to make inflation look much lower than it actually is, so the number for today should actually be substantially higher than $10.74, but for purposes of this article we will use $10.74. If you were to work a full-time job at $10.74 an hour for a full year (with two weeks off for vacation), you would make about $21,480 for the year. That isn’t a lot of money, but according to the Social Security Administration, 40.28% of all workers make less than $20,000 a year in America today. So that means that more than 40 percent of all U.S. workers actually make less than what a full-time minimum wage worker made back in 1968. That is how far we have fallen.

The other day I wrote an article which discussed the transition that we are witnessing in our economy right now. Good paying full-time jobs are disappearing, and they are being replaced by low paying part-time jobs. So far this year, 76.7 percent of the jobs that have been “created” in the U.S. economy have been part-time jobs.

That would be depressing enough, but what makes it worse is that wages for many of these low paying jobs have actually been declining over the past decade even as the cost of living keeps going up. The following is from a recent USA Today article…

In the years between 2002 and 2012, real median wages dropped by at least 5% in five of the top 10 low-wage jobs, including food preparers and housekeepers.

So where have the good jobs gone?

Well, there are three long-term trends that are absolutely crushing American workers right now.

First of all, thanks to our very foolish politicians American workers have been merged into a global labor pool where they must directly compete for jobs with workers on the other side of the planet that live in countries where it is legal to pay slave labor wages. This has resulted in millions upon millions of good jobs leaving this country. Big corporations can pad their profits by taking a job from an American worker making $15 an hour with benefits and giving it to a worker on the other side of the globe that is willing to work for less than a dollar an hour with no benefits. Our politicians could do something about this, but they refuse to do so. Most of them are absolutely married to the idea of a one world economic system that will unite the globe. Unfortunately, the U.S. economy is going to continue to lose tens of thousands of businesses and millions upon millions of jobs to this one world economic system.

Secondly, big corporations are replacing as many expensive workers with machines, computers and robots as they possibly can. As technology continues to advance at a blistering pace, the need for workers (especially low-skilled workers) will continue to decrease. Unfortunately, the jobs that are being lost to technology are not coming back any time soon.

Thirdly, the overall U.S. economy has been steadily declining for more than a decade. If you doubt this, just read this article. As our economy continues to get weaker, the lack of jobs is going to become a bigger and bigger problem.

And as our economy systematically loses good jobs, more Americans are forced to become dependent on the government.

Back in 1979, there was about one American on food stamps for every manufacturing job. Today, there are about four Americans on food stamps for every manufacturing job.

When I first found that statistic I was absolutely stunned. How in the world can anyone out there deny that the U.S. economy is collapsing?

But as I mentioned above, it isn’t just that the number of jobs is not what it should be. The quality of our jobs is declining as well. For example, one study found that between 1969 and 2009 the wages earned by American men between the ages of 30 and 50 declined by 27 percent after you account for inflation.

That is a pretty stunning decline. And it has only accelerated in recent years. Median household income (adjusted for inflation) has fallen by 7.8 percent since the year 2000, and the ratio of wages and salaries to GDP in the United States is near an all-time record low.

Most Americans are finding that their bills just keep going up but their paychecks are not. This is causing the middle class to wither away, and most families are just trying to survive from month to month at this point. In fact, according to one recent survey 76 percent of all Americans are living paycheck to paycheck.

So where do we go from here?

To some people the answer is simple. They say that we should substantially raise the minimum wage. And yes, that would definitely make life a bit better for lots of low paid workers out there, but it would also have some very negative side effects. A substantially higher minimum wage would mean higher prices at retail stores and restaurants, and it would also greatly increase the incentive that corporations have to replace American workers with foreign workers or with technology. We already have rampant unemployment in this country, and right now there are more than 100 million working age Americans that do not have a job. We certainly don’t want to make that worse.

So raising the minimum wage would not solve our problems. It would just redistribute our problems.

What we really need to do is to return to the principles that once made this country great. In early America, we protected our markets with high tariffs. Access to the U.S. market was a privilege. Foreign domination was kept out, and our economy thrived.

It is definitely not “conservative” and it should not be “liberal” to stand by and watch millions upon millions of our good jobs get shipped over to communist China. We need more “economic patriots” in America today, but unfortunately they appear to be a minority at this point.

And once upon a time the U.S. economy was actually a free market system where rules, regulations and red tape were kept to a minimum. Our nation blossomed under such a system. Sadly, today we have become a nation that literally has millions of laws, rules and regulations. The control freaks seem to run everything. In fact, the Obama administration recently forced one small-time magician out in Missouri to submit a 32 page disaster plan for the little rabbit that he uses in his magic shows for kids. That is a very humorous example, but it is a perfect illustration of how absurd our system has become.

Another thing we could do to turn this around would be to get rid of the IRS and the income tax. Did you know that the greatest period of economic growth in U.S. history was during a time when there was absolutely no income tax? If you doubt this, just read this article.

And of course probably the most important thing that we could do for our economy would be to get rid of the Federal Reserve. The Fed is a massive Ponzi scheme and it has played a primary role in creating almost every single financial bubble in the post-World War II era. Right now we are living in the greatest bond bubble in the history of the planet, and when that Fed-created bubble bursts the pain is going to be absolutely excruciating. In addition, the value of our currency has declined by over 96 percent and the size of the U.S. national debt has gotten more than 5000 times larger since the Fed was created. The Federal Reserve is at the very heart of our economic problems, and we desperately need to shut it down.

Unfortunately, our politicians are not even willing to consider these solutions, and most Americans are way too busy watching Toddlers & Tiaras, Honey Boo Boo and other mindless television programs to be bothered with the real problems that our country is facing.

So needless to say, the great economic storm that is coming is not going to be averted. Most of the country is still asleep, and most people are going to get absolutely blindsided by the economic nightmare that is rapidly approaching.

America: Where Hard Working, Productive Members Of Society Pay For The Health Care Of Everyone Else

August 4, 2013August 4, 2013 by Michael

Everybody in America wants health care – but most Americans seem to want someone else to pay for it. In the United States today, the way that our system works is that the hard working, productive members of society pay for the health care of everyone else. At least under socialism everyone gets the same benefits. Our system of health care is a very twisted version of socialism where millions upon millions of very hard working people are forced to pay for the health care of others, but often can’t afford to purchase decent health insurance for themselves. Personally, I don’t have a big employer paying for my health care so I have to buy it myself, and I just got a letter from my health insurance company telling me that I have another massive rate increase coming up. Have you gotten a similar letter? Health insurance premiums are going up all over America, and this is just the beginning. In fact, the CEO of Aetna says that health insurance rates for many Americans will double when the major provisions of Obamacare kick in next year.

It would be bad enough if hard working Americans just had to pay for their own health insurance. But no, they are also expected to pay for the health care of members of Congress, employees of the IRS and other federal agencies, state and local government employees, their adult kids (because they can’t afford health insurance), the elderly, the poor, and now under Obamacare they will also be expected to subsidize the health plans of tens of millions of other Americans that are not poor enough to qualify for Medicaid.

When you add it all up, the hard working, productive members of society are at least partially subsidizing the health care of well over half of all Americans while having to pay for their own health care at the same time.

Needless to say, it isn’t too hard to see who is getting the raw end of the deal.

Members of Congress certainly don’t want to pay for their own health care. There was panic in the halls of Congress recently when they started realizing that due to certain provisions in Obamacare they may soon be forced to pay for their own health insurance plans. There was widespread moaning and complaining about how they would be facing “thousands of dollars in additional premium payments” every year.

Things got so bad that Barack Obama got personally involved in the effort to find a solution. Thankfully, members of Congress can relax because a ruling is being issued that will allow the federal government to continue to subsidize 75 percent of the cost of their health plans…

Lawmakers and staff can breathe easy — their health care tab is not going to soar next year.

The Office of Personnel Management, under heavy pressure from Capitol Hill, will issue a ruling that says the government can continue to make a contribution to the health care premiums of members of Congress and their aides, according to several Hill sources.

A White House official confirmed the deal and said the proposed regulations will be issued next week.

And the IRS, which has been put in charge of imposing the rules of Obamacare on all the rest of us, is freaking out about the fact that some members of Congress would like to force them to personally participate in Obamacare…

The union that represents IRS employees is urging its members to write to their congressmen to help get the union out of Obamacare.

The following are some excerpts from a letter that the union that represents IRS employees sent to members of Congress…

“H.R. 1780 would put federal employees in a special class where they would be prohibited from receiving health insurance through their employer. It would treat federal employees differently from state and local government employees and most employees of large private sector companies who receive health insurance benefits through their employer. The primary purpose of the Affordable Care Act was to provide a marketplace for the sale and purchase of health insurance for those who do not have such coverage – not to take coverage away from employees who already receive it through their employers,” the letter reads.

“I work hard and am proud of the services that I provide to your constituents every day. One of the main benefits I receive as a federal employee is the ability to purchase health insurance coverage through the FEHBP with an employer contribution towards those benefits. Please let me know your views on this legislation. I look forward to hearing back from you,” the letter concludes.

This is just shameful. If the IRS is going to impose Obamacare on the rest of America, then it should be good enough for them too.

Just check out acting IRS chief Danny Werfel begging for employees of his agency not to have to go on Obamacare…

But we have always had to at least partially subsidize the health plans of federal, state and local government workers.

The big change under Obamacare is that we will soon be subsidizing the health plans of tens of millions of our fellow Americans.

CNN says that 26 million Americans will be eligible for health insurance subsidies, but others believe that the true number is far, far higher than that.

For example, according to CNBC, a family of three in New York that earns $78,120 a year would be eligible for a subsidy of more than five thousand dollars…

In New York, a family of three whose annual income totals $78,120, would pay $12,784 for the second-lower-priced silver plan on that state’s insurance exchange. After getting a $5,363 tax credit, the family’s net cost for the insurance would be $7,421.

So who pays for that?

You and I do through our tax dollars.

And if you can believe it, Obamacare actually provides an incentive to not work too hard, because if you make too much money you could lose your health insurance subsidy…

Working more could ultimately mean thousands of dollars less for you under a quirk in the new health-care law going into effect this fall. This could prompt some people to cut back on their hours to avoid losing money.

“Working more can actually leave you worse off,” the price-comparison site ValuePenguin.com notes in a new analysis.

“It’s sort of an absurd scenario,” said Jonathan Wu, ValuePenguin.com’s co-founder. “It’s something for people to be aware of.”

In that scenario, an individual or family whose annual income surpasses maximums set by the federal government—if only by $1—will totally lose subsidies available to buy health insurance under the Affordable Care Act.

What a perverse system.

And of course Obamacare will allow young adults to stay on the health insurance policies of their parents until they reach 26 years of age. As I mentioned the other day, 36 percent of all young adults in the 18 to 31 age bracket are currently living with their folks. In most of those cases, the parents have to end up footing the bill for health care because the kids simply cannot afford it.

Medicaid continues to expand as well. Certainly helping the poor is a very good thing, but unfortunately the number of poor just continues to explode.

Back in 1965, only one out of every 50 Americans was on Medicaid. Today, one out of every 6 Americans is on Medicaid, and things are about to get a whole lot worse.

Right now, there are more than 56 million Americans on Medicaid, and it is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.

It is going to take a whole lot of money to support 72 million Medicaid patients.

And then of course there is Medicare.

When Medicare was first established, we were told that it would cost about $12 billion a year by the time 1990 rolled around.

Instead, it actually cost the federal government $110 billion in 1990, and it will cost the federal government close to $600 billion this year.

But if you think this is bad, just wait until all of the Baby Boomers retire. It is being projected that the number of Americans on Medicare will grow from a little bit more than 50 million today to 73.2 million in 2025. By then, we would be spending well over a trillion dollars a year on Medicare.

As you can see, under Obamacare the vast majority of all Americans will have their health care at least partially subsidized.

And it expected that our tax dollars will somehow be enough to pay for all of this.

The truth is that we have a deeply broken system. Costs are spiraling out of control and nobody is quite sure how to fix things. The following statistics come from one of my previous articles entitled “50 Signs That The U.S. Health Care System Is A Gigantic Money Making Scam“…

–This year the American people will spend approximately 2.8 trillion dollars on health care, and it is being projected that Americans will spend 4.5 trillion dollars on health care in 2019.

–The United States spends more on health care than Japan, Germany, France, China, the U.K., Italy, Canada, Brazil, Spain and Australia combined.

–If the U.S. health care system was a country, it would be the 6th largest economy on the entire planet.

–Back in 1960, an average of $147 was spent per person on health care in the United States. By 2009, that number had skyrocketed to $8,086.

The sad thing is that many hard working Americans in the private sector are being forced to subsidize the health care of others, but they can’t even afford decent health care for themselves.

For example, I know of one hard working couple that has a health plan that has a $1,000 deductible. Even with that deductible, their health insurance premiums are absolutely ridiculous. Their health care strategy is simply to avoid going to the hospital or visiting a doctor as much as possible.

And of course health insurance companies make money by providing as little health care as possible. Many Americans have discovered that when you need them the most, some health insurance companies will try to get out of covering you any way that they possibly can.

The reality is that just because you have health insurance that does not mean that you are “covered”.

According to a study that was published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of all personal bankruptcies in the United States. Of those bankruptcies that were caused by medical bills, approximately 75 percent of them involved people that actually did have health insurance.

So what is the bottom line?

The bottom line is the system stinks, and Obamacare is going to make things a whole lot worse.

If You Think The Employment Numbers Are Good, Then You Really Need To Read This Article

August 2, 2013 by Michael

Do you actually believe that the employment numbers are getting better? Do you actually believe that there is a bright future ahead for American workers? If so, then you really need to read this article. The truth is that we are in the midst of the worst employment crisis since the Great Depression, and there has been absolutely no employment recovery. In fact, the percentage of working age Americans that are employed is just about exactly where it was during the darkest days of the last recession. But the mainstream media is not telling you this. The mainstream media is instead focusing on the fact that the official “unemployment rate” declined from 7.6% in June to 7.4% in July. That sounds like great news, but when you take a deeper look at the employment numbers some very disturbing trends emerge.

Over the past several years, almost the entire decline in the unemployment rate can be accounted for by people “leaving the workforce”. The “unemployment rate” has not been going down because people are actually getting jobs. Rather, the “unemployment rate” has been going down because the government has been pretending that millions upon millions of American workers simply do not want jobs anymore. This is extremely misleading.

We are being told that 162,000 jobs were created in July. Okay, so that is just barely enough to keep up with population growth, and most of the jobs that were created last month were part-time jobs.

Meanwhile, the jobs numbers for the two previous months were both revised down…

The change in total nonfarm payroll employment for May was revised from +195,000 to +176,000, and the change for June was revised from +195,000 to +188,000. With these revisions, employment gains in May and June combined were 26,000 less than previously reported.

Will this month eventually be revised down too?

When it comes to measuring employment in the United States, I believe that a much more accurate measurement than the highly manipulated “unemployment rate” is the civilian employment-population ratio. This ratio tells us what percentage of working age Americans actually have a job.

Just prior to the last recession, about 63 percent of all working age Americans had a job. During the recession, that number plunged dramatically and ultimately fell below 59 percent, and it has stayed below 59 percent for 47 months in a row…

This is the first time in the post-World War II era that the employment-population ratio has not bounced back after a recession.

So there has not been an employment recovery. Anyone that tells you that there has been an employment recovery is lying to you.

Since the end of 2009, we have been treading water at best. But during that time, another disturbing trend has emerged. Good paying full-time jobs are rapidly being replaced by low paying part-time jobs.

And this trend has definitely accelerated this year. If you can believe it, an astounding 76.7 percent of the jobs that have been “created” in 2013 have been part-time jobs.

As I wrote about last month, the employment landscape in this country is fundamentally changing. At this point, the number one employer in this country is Wal-Mart, and the number two employer in this country is a temp agency (Kelly Services).

This is a huge reason why the middle class is dying. You simply can’t raise a family on a part-time income.

Our young adults are being hit particularly hard. According to Gallup, the percentage of working age Americans under the age of 30 with a job fell from 47.0% in June 2012 to 43.6% in June 2013…

Fewer Americans aged 18 to 29 worked full time for an employer in June 2013 (43.6%) than did so in June 2012 (47.0%), according to Gallup’s Payroll to Population employment rate. The P2P rate for young adults is also down from 45.8% in June 2011 and 46.3% in June 2010.

When our young people get out of school and enter the real world, they are finding that “good jobs” are few and far between. But unless our young people can find “breadwinner jobs”, they are not going to be able to get married, buy homes and raise families.

A lot of young people are doing their best, but things are really tough out there right now. The lack of good jobs is the primary reason why families that have a head of household under the age of 30 have a poverty rate of 37 percent.

A lot of young adults are coping with this employment crisis by moving back in with their parents. According to one recent study, 36 percent of all young adults in the 18 to 31 age bracket are currently living with their folks.

Are you starting to understand that our system is broken?

The quality of jobs in this country continues to steadily decline. Just consider the following numbers from one of my previous articles…

-The number of part-time workers in the United States has just hit a brand new all-time high, but the number of full-time workers is still nearly 6 million below the old record that was set back in 2007.

-In America today, only 47 percent of adults have a full-time job.

-At this point, one out of every four American workers has a job that pays $10 an hour or less.

-An astounding 53 percent of all American workers make less than $30,000 a year.

And as I mentioned yesterday, until we have a jobs recovery there will be no housing recovery no matter how much the Federal Reserve tries to manipulate the system.

The mainstream media continues to insist that “things are looking up” for the housing market, and yet the home ownership rate in the United States is the lowest that it has been in 18 years.

In order for the middle class to thrive, people have got to be able to get good jobs and people have got to be able to buy homes.

Instead, the percentage of good jobs in our economy continues to shrink, the level of home ownership continues to decline, and less than half of all Americans now consider themselves to be middle class.

The next wave of the economic crisis has not even hit us yet, but we continue to see poverty rates soar all over the nation. In fact, just this week there was an article about the tent cities that are starting to pop up all over New Jersey…

Tent cities have popped up across New Jersey including the state’s poorest city.

Meg Baker chased the story of Camden’s tent city. Residing off Route 38 at Wilson Boulevard under an overpass, through woods and down a path of trash lays a community of people living in tents. This particular community was relocated from Federal Street and it’s inhabited by an array of people: addicts, people who have fallen on hard times and some with mental illness.

Baker took a tour of this run down community and the pictures show just how heart-wrenching this situation really is. Among the homes are decomposing food, broken furniture, and feral cats.

This is supposed to be “the economic recovery”.

If things were going to get “better” it should have happened by now.

But things didn’t get better, and now the next wave of the economic crisis is rapidly approaching.

As I tried to explain the other day, the most important number in our economy is the yield on 10 year U.S. Treasuries. As that number goes up, interest rates all over our economic system go up. And much higher interest rates would be absolutely devastating for our economy.

Unfortunately, many analysts now believe that interest rates are going to go much, much higher than they are right now. Just check out this excerpt from a recent CNBC article…

The Federal Reserve will lose control of interest rates as the “great rotation” out of bonds into equities takes off in full force, according to one market watcher, who sees U.S. 10-year Treasury yields hitting 5-6 percent in the next 18-24 months.

“It is our opinion that interest rates have begun their assent, that the Fed will eventually lose control of interest rates. The yield curve will first steepen and then will shift, moving rates significantly higher,” said Mike Crofton, President and CEO, Philadelphia Trust Company told CNBC on Wednesday.

If interest rates do go that high, our economy simply will not be able to handle that. It would cripple the finances of state and local governments all over the nation, it would absolutely crush the housing market, and it would cause a derivatives crisis unlike anything that we have ever seen before.

The smart money knows that rising interest rates spell big trouble and they are already pulling their money out of the market as a Bloomberg article recently detailed…

Private-equity managers from Fortress Investment Group LLC (FIG) to Blackstone Group LP (BX), which made billions by buying low and selling high, say now is the time to exit investments as stocks rally and interest rates start to rise.

And Apollo Global Management LLC Chief Executive Officer Leon Black said the following back in April…

“It’s almost biblical: there is a time to reap and there’s a time to sow,” Apollo (APO)’s Black said at a conference in April. “We think it’s a fabulous environment to be selling. We’re selling everything that’s not nailed down in our portfolio.”

The smart money is getting out while the getting is good.

They know that a storm is coming.

They know what higher interest rates will do to the economy.

As bad as the employment picture is right now, this is NOTHING compared to what is coming.

This is about as good as things are going to get. It is all downhill from here.

So enjoy this false bubble of pseudo-prosperity while you still can.

When the next great wave of the economic crisis strikes, millions upon millions of Americans are going to lose their jobs and the official unemployment rate is going to soar well up into the double digits.

Why Another Great Real Estate Crash Is Coming

August 1, 2013 by Michael

There are very few segments of the U.S. economy that are more heavily affected by interest rates than the real estate market is. When mortgage rates reached all-time low levels late last year, it fueled a little “mini-bubble” in housing which was greatly celebrated by the mainstream media. Unfortunately, the tide is now turning. Interest rates are starting to move up steadily, even though the Federal Reserve has been trying very hard to keep that from happening. A few weeks ago, when Federal Reserve Chairman Ben Bernanke suggested that the Fed may start to “taper” the rate of quantitative easing eventually, the bond market had a conniption and the yield on 10 year U.S. Treasuries shot up dramatically. In an attempt to calm the market, the Fed stopped all talk of a “taper” and that helped settle things down for a brief period of time. But now the yield on 10 year U.S. Treasuries is starting to rise aggressively again. Today it closed at 2.71 percent, and many analysts believe that it will go much higher. This is important for the housing market, because mortgage rates tend to follow the yield on 10 year U.S. Treasuries. And if mortgage rates keep rising like this, another great real estate crash is inevitable.

This wasn’t supposed to happen. Federal Reserve Chairman Ben Bernanke said that he could use quantitative easing to control long-term interest rates. He assured us that he could force mortgage rates down for an extended period of time and that this would lead to a housing recovery.

But now the Fed is losing control of long-term interest rates. If this continues, either the Federal Reserve will have to substantially increase the rate of quantitative easing or else watch mortgage rates rise to absolutely crippling levels.

Three months ago, the average rate on a 30 year mortgage was 3.35 percent. It has shot up more than a full point since then…

Mortgage buyer Freddie Mac said Thursday that the average on the 30-year loan rose to 4.39% from 4.31% last week. Rates are a full percentage point higher than in early May.

And as the chart below shows, mortgage rates have a lot more room to go up…

As mortgage rates go up, so do monthly payments.

And monthly payments are already beginning to soar. Just check out this chart.

So what happens if mortgage rates eventually return to “normal” levels?

Well, it would be absolutely devastating to the housing market. As mortgage rates rise, less people will be able to afford to buy homes at current prices. This will force home prices down.

To a large degree, whether or not someone can afford to buy a particular home is determined by interest rates. The following numbers come from one of my previous articles…

A year ago, the 30 year rate was sitting at 3.66 percent. The monthly payment on a 30 year, $300,000 mortgage at that rate would be $1374.07.

If the 30 year rate rises to 8 percent, the monthly payment on a 30 year, $300,000 mortgage at that rate would be $2201.29.

Does 8 percent sound crazy to you?

It shouldn’t. 8 percent was considered to be normal back in the year 2000.

And we are already seeing rising rates impact the market. The number of mortgage applications has fallen for 11 of the past 12 weeks, and this has been the biggest 3 month decline in mortgage applications that we have witnessed since 2009.

Rising interest rates will also have a dramatic impact on other areas of the real estate industry as well. For example, public construction spending is now the lowest that it has been since 2006.

And I find the chart posted below particularly interesting. As a Christian, I am saddened that construction spending by religious institutions has dropped to a stunningly low level…

So what does all of this mean?

Well, unless interest rates reverse course it appears that we are in the very early stages of another great real estate crash.

Only this time, it might not be so easy for the big banks to swoop in and foreclose on everyone. Just check out the radical step that one city in California is taking to stop bank foreclosures…

Richmond is the first city in the country to take the controversial step of threatening to use eminent domain, the power to take private property for public use. But other cities have also explored the idea.

Banks, the real estate industry and Wall Street are vehemently opposed to the idea, calling it “unconstitutional” and a violation or property rights, and something that will likely cause a flurry of lawsuits.

Richmond has partnered with San Francisco-based Mortgage Resolution Partners on the plan. Letters have been sent to 32 servicers and trustees who hold the underwater loans. If they refuse the city’s offer, officials will condemn and seize the mortgages, then help homeowners to refinance.

If more communities around the nation start using eminent domain to stop foreclosures, that is going to change the cost of doing business for mortgage lenders and it is likely going to mean more expensive mortgages for all the rest of us.

In any event, all of this talk about a “bright future” for real estate is just a bunch of nonsense.

You can’t buy a home if you don’t have a good job. And as I wrote about the other day, there are about 6 million less full-time jobs in America today than there was back in 2007.

You can’t get blood out of a stone, and you can’t buy a house on a part-time income. The lack of breadwinner jobs is one of the primary reasons why the homeownership rate in the United States is now at its lowest level in nearly 18 years.

And we aren’t going to produce good jobs if our economy is not growing. And economic growth in the U.S. has been anemic at best, even if you believe the official numbers.

We were originally told that the GDP growth number for the first quarter of 2013 was 2.4 percent. Then it was revised down to 1.8 percent. Now it has been revised down to 1.1 percent.

So precisely what are we supposed to believe?

Overall, since Barack Obama has been president the average yearly rate of growth for the U.S. economy has been just over 1 percent.

That isn’t very good at all.

But remember, the government numbers have been heavily manipulated to look good.

The reality is even worse.

According to the alternate GDP numbers compiled by John Williams of shadowstats.com, the U.S. economy has continually been in a recession since 2005.

And now interest rates are rising rapidly, and that is very bad news for the U.S. economy.

I hope that you have your seatbelts buckled up tight, because it is going to be a bumpy ride.

The Most Important Number In The Entire U.S. Economy

July 31, 2013 by Michael

There is one vitally important number that everyone needs to be watching right now, and it doesn’t have anything to do with unemployment, inflation or housing. If this number gets too high, it will collapse the entire U.S. financial system. The number that I am talking about is the yield on 10 year U.S. Treasuries. When that number goes up, long-term interest rates all across the financial system start increasing. When long-term interest rates rise, it becomes more expensive for the federal government to borrow money, it becomes more expensive for state and local governments to borrow money, existing bonds lose value and bond investors lose a lot of money, mortgage rates go up and monthly payments on new mortgages rise, and interest rates throughout the entire economy go up and this causes economic activity to slow down. On top of everything else, there are more than 440 trillion dollars worth of interest rate derivatives sitting out there, and rapidly rising interest rates could cause that gigantic time bomb to go off and implode our entire financial system. We are living in the midst of the greatest debt bubble in the history of the world, and the only way that the game can continue is for interest rates to stay super low. Unfortunately, the yield on 10 year U.S. Treasuries has started to rise, and many experts are projecting that it is going to continue to rise.

On August 2nd of last year, the yield on 10 year U.S. Treasuries was just 1.48%, and our entire debt-based economy was basking in the glow of ultra-low interest rates. But now things are rapidly changing. On Wednesday, the yield on 10 year U.S. Treasuries hit 2.70% before falling back to 2.58% on “good news” from the Federal Reserve.

Historically speaking, rates are still super low, but what is alarming is that it looks like we hit a “bottom” last year and that interest rates are only going to go up from here. In fact, according to CNBC many experts believe that we will soon be pushing up toward the 3 percent mark…

Round numbers like 1,700 on the S&P 500 are well and good, but savvy traders have their minds on another integer: 2.75 percent

That was the high for the 10-year yield this year, and traders say yields are bound to go back to that level. The one overhanging question is how stocks will react when they see that number.

“If we start to push up to new highs on the 10-year yield so that’s the 2.75 level—I think you’d probably see a bit of anxiety creep back into the marketplace,” Bank of America Merrill Lynch’s head of global technical strategy, MacNeil Curry, told “Futures Now” on Tuesday.

And Curry sees yields getting back to that level in the short term, and then some. “In the next couple of weeks to two months or so I think we’ve got a push coming up to the 2.85, 2.95 zone,” he said.

This rise in interest rates has been expected for a very long time – it is just that nobody knew exactly when it would happen. Now that it has begun, nobody is quite sure how high interest rates will eventually go. For some very interesting technical analysis, I encourage everyone to check out an article by Peter Brandt that you can find right here.

And all of this is very bad news for stocks. The chart below was created by Chartist Friend from Pittsburgh, and it shows that stock prices have generally risen as the yield on 10 year U.S. Treasuries has steadily declined over the past 30 years…

When interest rates go down, that spurs economic activity, and that is good for stock prices.

So when interest rates start going up rapidly, that is not a good thing for the stock market at all.

The Federal Reserve has tried to keep long-term interest rates down by wildly printing money and buying bonds, and even the suggestion that the Fed may eventually “taper” quantitative easing caused the yield on 10 year U.S. Treasuries to absolutely soar a few weeks ago.

So the Fed has backed off on the “taper” talk for now, but what happens if the yield on 10 year U.S. Treasuries continues to rise even with the wild money printing that the Fed has been doing?

At that point, the Fed would begin to totally lose control over the situation. And if that happens, Bill Fleckenstein told King World News the other day that he believes that we could see the stock market suddenly plunge by 25 percent…

Let’s say Ben (Bernanke) comes out tomorrow and says, ‘We are not going to taper.’ But let’s just say the bond market trades down anyway, and the next thing you know we go through the recent highs and a month from now the 10-Year is at 3%. And people start to realize they are not even tapering and the bond market is backed up….

They will say, ‘Why is this happening?’ Then they may realize the bond market is discounting the inflation we already have.

At some point the bond markets are going to say, ‘We are not comfortable with these policies.’ Obviously you can’t print money forever or no emerging country would ever have gone broke. So the bond market starts to back up and the economy gets worse than it is now because rates are rising. So the Fed says, ‘We can’t have this,’ and they decide to print more (money) and the bond market backs up (even more).

All of the sudden it becomes clear that money printing not only isn’t the solution, but it’s the problem. Well, with rates going from where they are to 3%+ on the 10-Year, one of these days the S&P futures are going to get destroyed. And if the computers ever get loose on the downside the market could break 25% in three days.

And as I have written about previously, we have seen a huge spike in margin debt in recent months, and this could make it even easier for a stock market collapse to happen. A recent note from Deutsche Bank explained precisely why margin debt is so dangerous…

Margin debt can be described as a tool used by stock speculators to borrow money from brokerages to buy more stock than they could otherwise afford on their own. These loans are collateralized by stock holdings, so when the market goes south, investors are either required to inject more cash/assets or become forced to sell immediately to pay off their loans – sometimes leading to mass pullouts or crashes.

But of much greater concern than a stock market crash is the 441 trillion dollar interest rate derivatives bubble that could implode if interest rates continue to rise rapidly.

Deutsche Bank is the largest bank in Europe, and at this point they have 55.6 trillion euros of total exposure to derivatives.

But the GDP of the entire nation of Germany is only about 2.7 trillion euros for a whole year.

We are facing a similar situation in the United States. Our GDP for 2013 will be somewhere between 15 and 16 trillion dollars, but many of our big banks have exposure to derivatives that absolutely dwarfs our GDP. The following numbers come from one of my previous articles entitled “The Coming Derivatives Panic That Will Destroy Global Financial Markets“…

JPMorgan Chase

Total Assets: $1,812,837,000,000 (just over 1.8 trillion dollars)

Total Exposure To Derivatives: $69,238,349,000,000 (more than 69 trillion dollars)

Citibank

Total Assets: $1,347,841,000,000 (a bit more than 1.3 trillion dollars)

Total Exposure To Derivatives: $52,150,970,000,000 (more than 52 trillion dollars)

Bank Of America

Total Assets: $1,445,093,000,000 (a bit more than 1.4 trillion dollars)

Total Exposure To Derivatives: $44,405,372,000,000 (more than 44 trillion dollars)

Goldman Sachs

Total Assets: $114,693,000,000 (a bit more than 114 billion dollars – yes, you read that correctly)

Total Exposure To Derivatives: $41,580,395,000,000 (more than 41 trillion dollars)

That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 362 times greater than their total assets.

And remember, the biggest chunk of those derivatives contracts is made up of interest rate derivatives.

Just imagine what would happen if a life insurance company wrote millions upon millions of life insurance contracts and then everyone suddenly died.

What would happen to that life insurance company?

It would go completely broke of course.

Well, that is what our major banks are facing today.

They have written trillions upon trillions of dollars worth of interest rate derivatives contracts, and they are betting that interest rates will not go up rapidly.

But what if they do?

And the truth is that interest rates have a whole lot of room to go up. The chart below shows how the yield on 10 year U.S. Treasuries has moved over the past couple of decades…

As you can see, the yield on 10 year U.S. Treasuries was hovering around the 6 percent mark back in the year 2000.

Back in 1990, the yield on 10 year U.S. Treasuries hovered between 8 and 9 percent.

If we return to “normal” levels, our financial system will implode. There is no way that our debt-addicted system would be able to handle it.

So watch the yield on 10 year U.S. Treasuries very carefully. It is the most important number in the entire U.S. economy.

If that number gets too high, the game is over.

44 Facts About The Death Of The Middle Class That Every American Should Know

July 30, 2013July 30, 2013 by Michael

What is America going to look like when the middle class is dead? Once upon a time, the United States has the largest and most vibrant middle class in the history of the world. When I was growing up, it seemed like almost everyone was “middle class” and it was very rare to hear of someone that was out of work. Of course life wasn’t perfect, but most families owned a home, most families had more than one vehicle, and most families could afford nice vacations and save for retirement at the same time. Sadly, things have dramatically changed in America since that time. There just aren’t as many “middle class jobs” as there used to be. In fact, just six years ago there were about six million more full-time jobs in our economy than there are right now. Those jobs are being replaced by part-time jobs and temp jobs. The number one employer in America today is Wal-Mart and the number two employer in America today is a temp agency (Kelly Services). But you can’t support a family on those kinds of jobs. We live at a time when incomes are going down but the cost of living just keeps going up. As a result, the middle class in America is being absolutely shredded and the ranks of the poor are steadily growing. The following are 44 facts about the death of the middle class that every American should know…

1. According to one recent survey, “four out of five U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives”.

2. The growth rate of real disposable personal income is the lowest that it has been in decades.

3. Median household income (adjusted for inflation) has fallen by 7.8 percent since the year 2000.

4. According to the U.S. Census Bureau, the middle class is taking home a smaller share of the overall income pie than has ever been recorded before.

5. The home ownership rate in the United States is the lowest that it has been in 18 years.

6. It is more expensive to rent a home in America than ever before. In fact, median asking rent for vacant rental units just hit a brand new all-time record high.

7. According to one recent survey, 76 percent of all Americans are living paycheck to paycheck.

8. The U.S. economy actually lost 240,000 full-time jobs last month, and the number of full-time workers in the United States is now about 6 million below the old record that was set back in 2007.

9. The largest employer in the United States right now is Wal-Mart. The second largest employer in the United States right now is a temp agency (Kelly Services).

10. One out of every ten jobs in the United States is now filled through a temp agency.

11. According to the Social Security Administration, 40 percent of all workers in the United States make less than $20,000 a year.

12. The ratio of wages and salaries to GDP is near an all-time record low.

13. The U.S. economy continues to trade good paying jobs for low paying jobs. 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.

14. Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.

15. At this point, one out of every four American workers has a job that pays $10 an hour or less.

16. According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 declined by 27 percent after you account for inflation.

17. In the year 2000, about 17 million Americans were employed in manufacturing. Today, only about 12 million Americans are employed in manufacturing.

18. The United States has lost more than 56,000 manufacturing facilities since 2001.

19. The average number of hours worked per employed person per year has fallen by about 100 since the year 2000.

20. Back in the year 2000, more than 64 percent of all working age Americans had a job. Today, only 58.7 percent of all working age Americans have a job.

21. When you total up all working age Americans that do not have a job, it comes to more than 100 million.

22. The average duration of unemployment in the United States is nearly three times as long as it was back in the year 2000.

23. The percentage of Americans that are self-employed has steadily declined over the past decade and is now at an all-time low.

24. Right now there are 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.

25. In 1989, the debt to income ratio of the average American family was about 58 percent. Today it is up to 154 percent.

26. Total U.S. household debt grew from just 1.4 trillion dollars in 1980 to a whopping 13.7 trillion dollars in 2007. This played a huge role in the financial crisis of 2008, and the problem still has not been solved.

27. The total amount of student loan debt in the United States recently surpassed the one trillion dollar mark.

28. Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.

29. Back in the year 2000, the mortgage delinquency rate was about 2 percent. Today, it is nearly 10 percent.

30. Consumer debt in the United States has risen by a whopping 1700% since 1971, and 46% of all Americans carry a credit card balance from month to month.

31. In 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 55.1 percent are covered by employment-based health insurance.

32. One study discovered that approximately 41 percent of all working age Americans either have medical bill problems or are currently paying off medical debt, and according to a report published in The American Journal of Medicine medical bills are a major factor in more than 60 percent of all personal bankruptcies in the United States.

33. Each year, the average American must work 107 days just to make enough money to pay local, state and federal taxes.

34. Today, approximately 46.2 million Americans are living in poverty.

35. The number of Americans living in poverty has increased by more than 15 million since the year 2000.

36. Families that have a head of household under the age of 30 have a poverty rate of 37 percent.

37. At this point, approximately 25 million American adults are living with their parents.

38. In the year 2000, there were only 17 million Americans on food stamps. Today, there are more than 47 million Americans on food stamps.

39. Back in the 1970s, about one out of every 50 Americans was on food stamps. Today, about one out of every 6.5 Americans is on food stamps.

40. Right now, the number of Americans on food stamps exceeds the entire population of the nation of Spain.

41. According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”

42. At this point, more than a million public school students in the United States are homeless. This is the first time that has ever happened in our history. That number has risen by 57 percent since the 2006-2007 school year.

43. According to U.S. Census data, 57 percent of all American children live in a home that is either considered to be “poor” or “low income”.

44. In the year 2000, the ratio of social welfare benefits to salaries and wages was approximately 21 percent. Today, the ratio of social welfare benefits to salaries and wages is approximately 35 percent.

And not only is the middle class being systematically destroyed right now, we are also destroying the bright economic future that our children and our grandchildren were supposed to have by accumulating gigantic mountains of debt in their names. The following is from a recent article by Bill Bonner…

Today, the U.S. lumbers into the future with total debt equal to about 350% of GDP. In Britain and Japan, the total is over 500%. Debt, remember, is the homage that the future pays to the past. It has to be carried, serviced… and paid. It has to be reckoned with… one way or another.

And the cost of carrying debt is going up! Over the last few weeks, interest rates have moved up by about 15% — an astounding increase for the sluggish debt market. How long will it be before long-term borrowing rates are back to “normal”?

At 5% interest, a debt that measures 3.5 times your revenue will cost about one-sixth of your income. Before taxes. After tax, you will have to work about one day a week to keep up with it (to say nothing of paying it off!).

That’s a heavy burden. It is especially disagreeable when someone else ran up the debt. Then you are a debt slave. That is the situation of young people today. They must face their parents’ debt. Even serfs in the Dark Ages had it better. They had to work only one day out of 10 for their lords and masters.

We were handed the keys to the greatest economic machine in the history of the planet and we wrecked it.

As young people realize that their futures have been destroyed, many of them are going to totally lose hope and give in to despair.

And desperate people do desperate things. As our economy continues to crumble, we are going to see crime greatly increase as people do what they feel they need to do in order to survive. In fact, we are already starting to see this happen. Just this week, CNBC reported on the raging epidemic of copper theft that we are seeing all over the nation right now…

Copper is such a hot commodity that thieves are going after the metal anywhere they can find it: an electrical power station in Wichita, Kan., or half a dozen middle-class homes in Morris Township, N.J. Even on a Utah highway construction site, crooks managed to abscond with six miles of copper wire.

Those are just a handful of recent targets across the U.S. in the $1 billion business of copper theft.

“There’s no question the theft has gotten much, much worse,” said Mike Adelizzi, president of the American Supply Association, a nonprofit group representing distributors and suppliers in the plumbing, heating, cooling and industrial pipe industries.

The United States once had the greatest middle class in the history of the world, but now it it dying.

This is causing a tremendous amount of anger and frustration to build in this nation, and when the next major wave of the economic collapse strikes, a lot of that anger and frustration will likely be unleashed.

The American people don’t understand that these problems have taken decades to develop. They just want someone to fix things. They just want things to go back to the way that they used to be.

Unfortunately, the great economic storm that is coming is not going to be averted.

Get ready while you still can. Time is running out.

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