U.S. Economy

“Things Are Never Going To Get THAT Bad”

Our recent article, “20 Things You Will Need To Survive When The Economy Collapses And The Next Great Depression Begins“, has drawn some intense criticism from those who believe that the U.S. economy is so strong that it could never completely and totally collapse.  In fact, this blog is being accused of officially going off the deep end.  Why?  It’s not because we are pointing out that the economy is bad.  After all, according to a recent Pew Research national poll, 88 percent of Americans rate national economic conditions as only fair or poor.  No, rather it is because we are projecting the eventual complete and total collapse of the U.S. economy.  There still seems to be a belief among a large number of Americans “that things are never going to get THAT bad”.  But they are going to get that bad.  It’s just that most people do not realize it yet.

But while times are still good (and what we are experiencing now is rip-roaring prosperity compared to what is coming), large numbers of people are going to continue to live in denial.  In fact, those who try to warn people about what is coming are going to be accused of “fear-mongering”.  One recent commenter even accused us of totally going off the deep end like many of the Y2K alarmists did….

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“Ok – you’ve officially fallen off the deep end. This blog went from legitimate economic concerns to grand fear mongering. This is the same as Y2K all over again. I have friends who still have bunkers and thousands of dollars of expired canned food and you’re suggesting they go do it again…”

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First of all, it was completely and totally obvious that Y2K was going to be a non-event to anyone with a bit of common sense.  There was simply no way that a “computer glitch” that was foreseeable years ahead of time was going to cause the collapse of society.

What is happening with the U.S. economy now is completely different.  We have built an entire economic system on ever-increasing amounts of debt and paper money, and anyone with half a brain should be able to see that such a system is not sustainable in the long-term.  The collapse of the economy is inevitable due to the way that it was constructed.

As for having “thousands of dollars of expired canned food”, that would not be a problem if you rotated the food that you have stored.  You eat the old stuff first and you replace it with new food that you have purchased.

But the commenter above was not the only one to accuse us of trying to scare people….

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“How does the economic collapse lead to a complete halt to all economic activity? More people may be poorer, but they will still have some money to motivate others to produce for a market. The natural disaster scenario seems more plausible for this type of warning. More and more foreclosures don’t. This posting is a bit much for me, seems just some much scaremongering.”

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The commenter is right about one thing – a few bad economic statistics are not enough to run out and start preparing for the collapse of society.  After all, the American economy has always recovered no matter what happened before.  If we made it through the Great Depression, we can make it through this, right?

Well, the truth is that there are some fundamental differences between what is happening now and what happened during the Great Depression.

During the Great Depression, most Americans were not up to their eyeballs in credit card debt, car payments, student loans and mortgage debt.

During the Great Depression, most Americans either owned their land or had a great deal of equity in their land.  As we wrote about recently, today that is not the case.  Equity as a percentage of home value in the United States has been hitting all-time record lows.

During the Great Depression, most Americans were not dependent on giant corporations to feed and supply us.  Back then, the majority of Americans knew how to live off the land and grew at least some of their own food.  Today that is most definitely not the case.

During the Great Depression, America still had the greatest manufacturing base in the entire world.  Today we have “offshored” our once great manufacturing base, and we have become a fat, spoiled society that consumes everything in sight but manufactures very little.

During the Great Depression, America did not have a colossal trade deficit.  Today we have got the biggest trade deficit in the history of the world.

During the Great Depression, the wealth of Americans was not being sucked dry by dozens of different kinds of taxes.  Today we are being taxed in so many various ways that many Americans actually end up spending over half their incomes just in taxes.

During the Great Depression, the U.S. government had debt, but it was not threatening to collapse the entire global economy.  Today the U.S. government has piled up the biggest mountain of debt in the history of the world.

During the Great Depression, derivatives were not even an issue.  Today, we have created a derivatives bubble that is now well beyond a quadrillion dollars.

Just think about that.

Over 1,000,000,000,000,000 dollars.

Counting at one dollar per second, it would take 32 million years to count to one quadrillion.

In fact, renowned investor Warren Buffett has warned that derivatives are “financial weapons of mass destruction” that could bring down the entire world economic system.

And he is right.

When derivatives collapse, there is not enough money in the world to fix the mess that will be created.  All of the governments in the world working together would not be able to print money fast enough to even make a dent in the colossal wave of red ink that would be created.

The truth is that the U.S. economy (and the world economy for that matter) is teetering on top of a giant pyramid of debt and paper that is on the verge of coming down like a house of cards.

But if you do not want to believe this blog, perhaps you will listen to some of the top financial experts in the world who are also warning that a complete and total economic collapse is coming.

For example, Gerald Celente, the CEO of Trends Research Institute, is forecasting that we are going to see a devastating economic collapse by the year 2012.  It would be easy to dismiss him, except for the fact that he has a sterling track record of forecasts going back 3 decades, and he has appeared on almost all of the major news networks who have no problem relying on him as a source.  What Celente says is on the way for America is absolutely bone chilling….

But if you don’t want to listen to Celente, perhaps you will listen to Peter Schiff, the president of Euro Pacific Capital.  He accurately predicted the recent financial crisis, and he is also forecasting that a depression is on the way.  Schiff is convinced that we need to allow the current “Ponzi economy” to collapse so that something more substantial can arise from the ashes….

Jim Rogers is another financial expert that is forecasting a major economic collapse.  Jim Rogers was a co-founder of the Quantum Fund, and is a college professor, author, economic commentator, and creator of the Rogers International Commodities Index.  He says that civil unrest is on the way and that now is a good time to take up farming if you want to make it through what is coming….

The truth is that the vast majority of Americans have no idea just how vulnerable the U.S. economic system is.  A new Gallup poll has found that 44 percent of Americans believe that they could barely go a month before experiencing severe economic hardship if they lost their jobs.

How long could you go if you suddenly lost your job?

Right now the U.S. economy is being kept afloat by unprecedented U.S. government intervention and spending, but we all know that the U.S. government cannot keep spending money like it is water forever without very serious economic consequences.  To give you an idea of how desperate things have become, just check out the following graphic about the U.S. national debt that was featured in the Chicago Tribune….

Anyone who believes that such a tidal wave of red ink is sustainable please raise your hand.

The truth is that the U.S. economy is caught in a death spiral.

Already there are some areas of the United States that are literally dying.

For those who do not believe this fact, the following is a challenge for you….

Head down to Detroit and buy one of those houses that are on sale for less than a thousand dollars (in fact there have even been reports of some houses selling for a single dollar in Detroit), and try to live there for a month.

You will quickly learn what it is like to live in an area that is literally dying economically.

When people are hungry and they can’t get jobs they get desperate.

So far this year in Detroit, car thefts are up 83%, robberies are up 50%, burglaries are up 20% and property destruction is up 42%.

What is happening in Detroit is a preview of what is soon going to happen all over America.

So doubt it all you want, but all the doubting in the world is not going to stop what is coming.  The U.S. economy is dying so you better start getting ready.

The Prep Room

20 Things You Will Need To Survive When The Economy Collapses And The Next Great Depression Begins

Today, millions of Americans say that they believe that the United States is on the verge of a major economic collapse and will soon be entering another Great Depression.  But only a small percentage of those same people are prepared for that to happen.  The sad truth is that the vast majority of Americans would last little more than a month on what they have stored up in their homes.  Most of us are so used to running out to the supermarket or to Wal-Mart for whatever we need that we never even stop to consider what would happen if suddenly we were not able to do that.  Already the U.S. economy is starting to stumble about like a drunken frat boy.  All it would take for the entire U.S. to resemble New Orleans after Hurricane Katrina would be for a major war, a terror attack, a deadly pandemic or a massive natural disaster to strike at just the right time and push the teetering U.S. economy over the edge.  So just how would you survive if you suddenly could not rely on the huge international corporate giants to feed, clothe and supply you and your family?  Do you have a plan?

Unless you already live in a cave or you are a complete and total mindless follower of the establishment media, you should be able to see very clearly that our society is more vulnerable now than it ever has been.  This year there have been an unprecedented number of large earthquakes around the world and volcanoes all over the globe are awakening.  You can just take a look at what has happened in Haiti and in Iceland to see how devastating a natural disaster can be.  Not only that, but we have a world that is full of lunatics in positions of power, and if one of them decides to set off a nuclear, chemical or biological weapon in a major city it could paralyze an entire region.  War could erupt in the Middle East at literally any moment, and if it does the price of oil will double or triple (at least) and there is the possibility that much of the entire world could be drawn into the conflict.  Scientists tell us that a massive high-altitude EMP (electromagnetic pulse) blast could send large portions of the United States back to the stone age in an instant.  In addition, there is the constant threat that the outbreak of a major viral pandemic (such as what happened with the 1918 Spanish Flu) could kill tens of millions of people around the globe and paralyze the economies of the world. 

But even without all of that, the truth is that the U.S. economy is going to collapse.  So just think of what will happen if one (or more) of those things does happen on top of all the economic problems that we are having.

Are you prepared?  

The following is a list of 20 things you and your family will need to survive when the economy totally collapses and the next Great Depression begins….

#1) Storable Food

Food is going to instantly become one of the most valuable commodities in existence in the event of an economic collapse.  If you do not have food you are not going to survive.  Most American families could not last much longer than a month on what they have in their house right now.  So what about you?  If disaster struck right now, how long could you survive on what you have?  The truth is that we all need to start storing up food.  If you and your family run out of food, you will suddenly find yourselves competing with the hordes of hungry people who are looting the stores and roaming the streets looking for something to eat.

Of course you can grow your own food, but that is going to take time.  So you need to have enough food stored up until the food that you plant has time to grow.  But if you have not stored up any seeds you might as well forget it.  When the economy totally collapses, the remaining seeds will disappear very quickly.  So if you think that you are going to need seeds, now is the time to get them.

#2) Clean Water

Most people can survive for a number of weeks without food, but without water you will die in just a few days.  So where would you get water if the water suddenly stopped flowing out of your taps?  Do you have a plan?  Is there an abundant supply of clean water near your home? Would you be able to boil water if you need to?

Besides storing water and figuring out how you are going to gather water if society breaks down, another thing to consider is water purification tablets.  The water you are able to gather during a time of crisis may not be suitable for drinking.  So you may find that water purification tablets come in very, very handy.

#3) Shelter

You can’t sleep on the streets, can you?  Well, some people will be able to get by living on the streets, but the vast majority of us will need some form of shelter to survive for long.  So what would you do if you and your family lost your home or suddenly were forced from your home?  Where would you go? 

The best thing to do is to come up with several plans.  Do you have relatives that you can bunk with in case of emergency?  Do you own a tent and sleeping bags if you had to rough it?  If one day everything hits the fan and you and your family have to “bug out” somewhere, where would that be?  You need to have a plan.

#4) Warm Clothing

If you plan to survive for long in a nightmare economic situation, you are probably going to need some warm, functional clothing.  If you live in a cold climate, this is going to mean storing up plenty of blankets and cold weather clothes.  If you live in an area where it rains a lot, you will need to be sure to store up some rain gear.  If you think you may have to survive outdoors in an emergency situation, make sure that you and your family have something warm to put on your heads.  Someday after the economy has collapsed and people are scrambling to survive, a lot of folks are going to end up freezing to death.  In fact, in the coldest areas it is actually possible to freeze to death in your own home.  Don’t let that happen to you.

#5) An Axe

Staying along the theme of staying warm, you may want to consider investing in a good axe.  In the event of a major emergency, gathering firewood will be a priority.  Without a good tool to cut the wood with that will be much more difficult.

#6) Lighters Or Matches

You will also want something to start a fire with.  If you can start a fire, you can cook food, you can boil water and you can stay warm.  So in a true emergency situation, how do you plan to start a fire?  By rubbing sticks together?  Now is the time to put away a supply of lighters or matches so that you will be prepared when you really need them.

In addition, you may want to consider storing up a good supply of candles.  Candles come in quite handy whenever the electricity goes out, and in the event of a long-term economic nightmare we will all see why our forefathers relied on candles so much.

#7) Hiking Boots Or Comfortable Shoes

When you ask most people to list things necessary for survival, this is not the first or the second thing that comes to mind.  But having hiking boots or very comfortable and functional shoes will be absolutely critical.  You may very well find yourself in a situation where you and your family must walk everywhere you want to go.  So how far do you think you will get in high heels?  You will want footwear that you would feel comfortable walking in for hours if necessary.  You will also want footwear that will last a long time, because when the economy truly collapses you may not be able to run out to the shoe store and get what you need at that point. 

#8) A Flashlight And/Or Lantern

When the power goes off in your home, what is the first thing that you grab?  Just think about it.  A flashlight or a lantern of course.  In a major emergency, a flashlight or a lantern is going to be a necessity – especially if you need to go anywhere at night. 

Solar powered or “crank style” flashlights or lanterns will probably be best during a long-term emergency.  If you have battery-powered units you will want to begin storing up lots and lots of batteries.   

#9) A Radio

If a major crisis does hit the United States, what will you and your family want?  Among other things, you will all want to know what in the world is going on.  A radio can be an invaluable tool for keeping up with the news. 

Once again, solar powered or “crank style” radios will probably work best for the long term.  A battery-powered until would work as well – but only for as long as your batteries are able to last.

#10) Communication Equipment

When things really hit the fan you are going to want to communicate with your family and friends.  You will also want to be able to contact an ambulance or law enforcement if necessary.  Having an emergency cell phone is great, but it may or may not work during a time of crisis.  The Internet also may or may not be available.  Be sure to have a plan (whether it be high-tech or low-tech) for staying in communication with others during a major emergency.

#11) A Swiss Army Knife

If you have ever owned a Swiss Army knife you probably already know how incredibly handy they can be.  It can be a very valuable and versatile tool.  In a true survival situation, a Swiss Army knife can literally do dozens of different things for you.  Make sure that you have at least one stored up for emergencies.

#12) Personal Hygiene Items 

While these may not be absolute “essentials”, the truth is that life will get very unpleasant very quickly without them.  For example, what would you do without toilet paper?  Just think about it.  Imagine that you just finished your last roll of toilet paper and now you can’t get any more.  What would you do? 

The truth is that soap, toothbrushes, toothpaste, shampoo, toilet paper and other hygiene products are things that we completely take for granted in society today.  So what would happen if we could not go out and buy them any longer?

#13) A First Aid Kit And Other Medical Supplies

One  a more serious note, you may not be able to access a hospital or a doctor during a major crisis.  In your survival supplies, be absolutely certain that you have a good first aid kit and any other medical supplies that you think you may need.

#14) Extra Gasoline

There may come a day when gasoline is rationed or is simply not available at all.  If that happens, how will you get around?  Be certain to have some extra gasoline stored away just in case you find yourself really needing to get somewhere someday.

#15) A Sewing Kit

If you were not able to run out and buy new clothes for you and your family, what would you do?  Well, you would want to repair the clothes that you have and make them last as long as possible.  Without a good sewing kit that will be very difficult to do.

#16) Self-Defense Equipment

Whether it is pepper spray to fend off wild animals or something more “robust” to fend off wild humans, millions of Americans will one day be thankful that they have something to defend themselves with.

#17) A Compass

In the event of a major emergency, you and your family may find yourselves having to be on the move.  If you are in a wilderness area, it will be very hard to tell what direction you are heading without a compass.  It is always a good idea to have at least one compass stored up. 

#18) A Hiking Backpack

If you and your family suddenly have to “bug out”, what will you carry all of your survival supplies in?  Having a good hiking backpack or “survival bag” for everyone in your family is extremely important.  If something happened in the city where you live and you suddenly had to “go”, what would you put your most important stuff in?  How would you carry it all if you had to travel by foot?  These are very important things to think about. 

#19) A Community

During a long-term crisis, it is those who are willing to work together that will have the best chance of making it.  Whether it is your family, your friends, a church or a local group of people that you know, make sure that you have some people that you can rely on and work together with in the event that everything hits the fan.  Loners are going to have a really hard time of surviving for long.

#20) A Backup Plan

Lastly, it is always, always, always important to have a backup plan for everything.

If someone comes in and steals all the food that you have stored up, what are you going to do?

If travel is restricted and your can’t get to your “bug out” location immediately do you have a Plan B?

If you have built your house into an impregnable survival fortress but circumstances force you to leave do you have an alternate plan?

The truth is that crisis situations rarely unfold just as we envision.  It is important to be flexible and to be ready with backup plans when disaster strikes. 

You don’t want to end up like the folks in New Orleans after Hurricane Katrina.  You don’t want to have to rely on the government to take care of you if something really bad happens. 

Right now the U.S. strategic grain reserve contains only enough wheat to make half a loaf of bread for each of the approximately 300 million people in the United States.

How long do you think that is going to last?

Now is the time to get ready.

Now is the time to prepare.

The United States economy is going to collapse and incredibly hard times are coming.

Will you be able to survive when it happens?

Megabanks: The Banking Oligarchy That Controls Assets Equivalent To 60 Percent Of America’s GNP

Today financial power is being concentrated in the hands of fewer and fewer individuals.  In fact, the six biggest banks in the United States now possess assets equivalent to 60 percent of America’s gross national product.  Back in the 1990s that figure was less than 20 percent.  These six banks – Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo – literally dictate what goes on in the U.S. banking industry.  These entities are the poster children for “too big to fail”, and they donate massive amounts of cash to the campaigns of both Republicans and Democrats to ensure that they will continue to receive favorable treatment.  The vast majority of Americans have had a banking account, a credit card and/or a mortgage with one of these institutions at some point.  If they acted in concert, these six banks could literally bring down the U.S. economy overnight if they wanted to.  Together with the Federal Reserve, these six banks represent the real financial power in America.  They are the 800 pound gorilla in the room that influences nearly every major financial deal that gets done and virtually every major political decision that gets made.  As the last couple of years have demonstrated, top politicians from both parties (John McCain and Barack Obama for example) will instantly jump into action and start advocating that the U.S. government spend billions upon billions of dollars when the interests of these behemoths are threatened.  The frightening thing is that the power of these megabanks is growing at a frightening pace.  As dozens upon dozens of smaller U.S. banks are “allowed to fail”, they either go out of existence or the Feds actually encourage these smaller banks to sell themselves to one of the big sharks.  In either event, the banking power in the United States becomes further consolidated in the hands of the megabanks.

Bill Moyers recently interviewed Simon Johnson and James Kwak, the authors of a new book entitled 13 Bankers: The Wall St. Takeover and the Next Financial Meltdown.  During that interview Kwak described to Moyers just how explosive the growth of the power of these megabanks has been….

Bill Moyers: And you write that they control 60 percent of our gross national product?

James Kwak: They have assets equivalent to 60 percent of our gross national product. And to put this in perspective, in the mid-1990s, these six banks or their predecessors, since there have been a lot of mergers, had less than 20 percent. Their assets were less than 20 percent of the gross national product.

Does it alarm you that the banking elite have accumulated such a large amount of financial power?

It should.  These institutions have the power to wreck entire economies.  Just consider what happened in Greece lately.  Now, it is being alleged that the megabanks are ripping off American cities with the same kinds of predatory deals that brought down the financial system in Greece. 

And that is what these megabanks are.

They are predators.

In fact, a very revealing article in Rolling Stone described Goldman Sachs this way….

The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

Unfortunately, they may have actually been understating things a bit.

These megabanks have rigged the game so that the wealth of the nation is slowly transferred from us to themselves and to the international financial interests that control them.

They can make money if the markets are going up, and they can make money if the markets are going down.

For example, in a newly released email from the height of the housing crash, the CEO of Goldman Sachs bragged that his firm “made more than we lost” by betting against the housing market.

Thankfully the SEC is starting to look into the fraud that Goldman Sachs committed during this time period, but the truth is that Goldman is not likely to receive any more than a slap on the wrist for what it has done.

They are way too big, way too powerful and have too many friends in high places for them to get into any real trouble.

For example, it has come out that Barack Obama does not intend to return any of the campaign contributions that he received from Goldman Sachs.  And surely they will be glad to continue to pour big money into his political coffers.

So where does that leave the rest of us?

Well, the rest of us can expect higher taxes and a lower standard of living according to the IMF.  The IMF (which has deep connections to these megabanks) says that the party is “over” for nations that have been enjoying the good life.  In a recent article, the Washington Post summarized the message that the IMF is trying to communicate through their recent policy papers….

To keep the global economy on track, people in the United States and the rest of the developed world need to work longer before retiring, pay higher taxes and expect less from government. And the cheap imports lining the shelves of mega-chains such as Wal-Mart and Target? They need to be more expensive.

So are you ready to work longer, pay higher taxes, expect less from government and have a lower standard of living?

That is what the IMF says we are all going to be facing in the years ahead.

We are all going to financially suffer as the megabanks continue to thrive and consolidate power.

Isn’t that wonderful?

You say you don’t like that so much?

Well, good luck taking on the 800 pound gorilla.

Paupers In The Land Our Forefathers Conquered

A long time ago, in an America now far, far away, the majority of the American people owned the land that they live on.  The term “my land” actually meant something back then.  But today that has fundamentally changed.  Now the majority of the American people owe on the land that they live on.  In fact, most of them owe big money to the giant corporate banking interests that control the mortgage industry.  So how did the American people come to be debtors and paupers in the land that our forefathers conquered?  Today when someone says that they “bought a house” what they really mean is that they have signed up for 30 years (or more) of bloated mortgage payments which they care barely afford.  As you will see below, the percentage of residential mortgage debt to total home equity (housing net worth) in the United States continues to rise at a staggering pace.  In fact, thanks to the housing crash, for the first time in American history residential mortgage debt far surpasses the total home equity owned by all Americans.  So what does that mean?  It means that the big corporate banks have more of an interest in America’s homes than we do now.

So how are we getting our land taken from us?

Well, you can thank rampant inflation and the housing bubble.

Back in 1980, the United States was pushing up towards a total of $1 billion in total residential mortgage debt.  It took us over 200 years to get to that point as a nation.

By 1990, the United States approximately doubled that amount and was sitting at about $2 trillion  in total residential mortgage debt.

By the year 2000, the United States had just about $5 trillion in total residential mortgage debt.

By 2008, the United States had over $10 trillion in total residential mortgage debt.

Do you notice a trend?

In just the past 30 years the amount of residential mortgage debt in the United States has increased tenfold.

Meanwhile, thanks to the housing crash, home equity has taken a nosedive.  As you can see from the chart below, total residential mortgage debt in the U.S. now far exceeds total home equity….

So what does this mean?  It means that the banks have more of a financial interest in America’s homes than we do.  It means that we are quickly becoming paupers and debt slaves.

As you can see from the chart below, back in 1945 total home equity as a percentage of home value was extremely high (80%).  Home equity exceeded total residential mortgage debt by about a 4 to 1 margin.  But today total residential mortgage debt exceeds home equity and the situation is rapidly becoming worse….

We were all told to buy into the system and we could live the American Dream.  We were told to get a “good job” with one of the big global corporations and we were told to get a mortgage so that we could build up equity.  Well, that has turned out great for most of us, hasn’t it?

The reality is that the system so many of us trusted is dying.  We are now at the point where the system cannot provide jobs for millions of us anymore.  If unemployment continues to soar as it has, millions more of us will find ourselves destitute and homeless on the continent our forefathers conquered….

So how did all of this happen?

Back in 1913, the U.S. Congress gave control over U.S. currency to the Federal Reserve.  Since that time, the value of the U.S. dollar has slowly been eroded.  $1.00 in 1914 (the year after the Federal Reserve was established) had about the same buying power as $21.59 in 2010.  That means that the U.S. dollar has lost over 95 percent of its purchasing power since then.

So the accumulated wealth that our parents and grandparents hand down to us is being constantly devalued.  The only way to keep up with rising prices on land and on everything else is to go out into the system to get more of the “currency” that is controlled and manipulated by the Federal Reserve and the big corporate banks.  But what most of us don’t realize is that the game is rigged to slowly transfer the wealth of the nation over to them.

The house always wins in the end.

Thanks to the greed and stupidity of the American people, we have accumulated the biggest mountain of debt in the history of the world.  It was a fun party while we were piling up all the debt, but now the bankers have us where they want us.

If only we had listened to those among our founding fathers who warned us about this trap.

For example, the words of Thomas Jefferson in a letter to John Taylor dated May 28th, 1816 ring more true today than they ever have….

And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

The truth is that the American people are being swindled and most of them don’t even realize it.  The wealth of America is slowly being transferred to the big banks.  All of the interest that we pay month after month after month makes them rich.

The financial system of the United States is broken.  But until the U.S. economy totally collapses most Americans will not realize it.  By then it will be far too late.

FINCA BAYANO

America’s Crumbling Infrastructure

One of the key signs that we are in the early stages of an economic collapse and that we are heading towards another Great Depression is America’s crumbling infrastructure.  The truth is that our infrastructure is literally falling apart all around us.  Thousands of bridges are structurally deficient and there have already been some very high profile collapses.  Over 30 percent of the highways and roads in the United States are in very poor shape.  Aging sewer systems are leaking raw sewage all over the place.  The power grid is straining to keep up with the ever-increasing thirst of the American people for electricity.  There have already been some regional blackouts, and unless something is done quickly things promise to get even worse.  The truth is that a nation’s infrastructure says a lot about who they are.  So what does America’s infrastructure say about us?  It says that we are a rusting, crumbling, decaying leftover from a better, more prosperous time.

Just consider the following facts about America’s infrastructure from the Pew Research Center website…..

*According to the U.S. Department of Transportation, more than 25 percent of America’s nearly 600,000 bridges need significant repairs or are burdened with more traffic than they were designed to carry.

*According to the Federal Highway Administration, approximately a third of America’s major roadways are in substandard condition – a significant factor in a third of the more than 43,000 traffic fatalities in the United States each year.

*The Texas Transportation Institute estimates that traffic jams caused by insufficient infrastructure waste 4 billion hours of commuters’ time and nearly 3 billion gallons of gasoline a year.

*The Association of State Dam Safety Officials has found that the number of dams in the United States that could fail has grown 134% since 1999 to 3,346, and more than 1,300 of those are considered “high-hazard” – meaning that their collapse would threaten lives.

*More than a third of all dam failures or near failures since 1874 have happened in just the last decade.

*According to the U.S. Environmental Protection Agency, aging sewer systems spill an estimated 1.26 trillion gallons of untreated sewage every single year, resulting in an estimated 50.6 billion dollars in cleanup costs.

The following are some additional facts from the U.S. Chamber of Commerce….

*A decaying transportation system costs our economy more than $78 billion annually in lost time and fuel.

*The United States must invest $225 billion per year over the next 50 years to maintain and adequately enhance our surface transportation systems. Currently, we’re spending less than 40% of this amount.

*U.S. transit systems earned a D+ rating from the American Society of Civil Engineers. Transit funding is declining even as transit use increases faster than any other mode of transportation – up 21% between 1993 and 2002.

*Costs attributed to airline delays – due in large part to congestion and an antiquated air traffic control system – are expected to triple to $30 billion from 2000 to 2015.

*By 2020, every major U.S. container port is projected to be handling at least double the volume it was designed to handle.

*Throughout the United States, railroads are projected to need nearly $200 billion in investment over the next 20 years to accommodate freight increases.

Are you starting to get the picture?

America’s aging infrastructure cannot handle the number of people that we have now.  With the population of the United States expected to hit 420 million by 2050, there are serious questions about how the national infrastructure is going to hold up under such a strain.

Already the infrastructure in many areas of the United States is beginning to resemble that of a third world nation.  The video posted below contains some of the highlights from a History Channel special about America’s infrastructure from a couple of years ago that highlights many of these problems….

So can anything be done about America’s crumbling infrastructure?

Of course.

State and local governments can spend the money needed to fix and maintain our infrastructure.

But that is not going to happen.

Why?

Because state and local governments are now facing unprecedented financial shortfalls.

In fact, it is more likely that expenditures on infrastructure will actually be cut.

According to a new report from the Center on Budget and Policy Priorities, after two years cutting spending on schools, health care, and other public services, U.S. states are preparing to carve even deeper into funding for 2011.

Of course the U.S. government could step in with necessary infrastructure funding, but considering the state of the U.S. national debt, it seems unlikely that state and local governments will be able to count on much more help from the folks in Washington D.C.

So what does that mean?

It means that America’s infrastructure will continue to rust, decay and fall to pieces.  Our grandparents and great-grandparents invested a lot of time, energy and money into building up this great nation, but now we are letting it rot right in front of our eyes.

What do you think that says about us?

It’s The Economy Stupid – Nearly 80 Percent Of Americans Say They Don’t Trust The Government

Back during Bill Clinton’s 1992 presidential campaign, “It’s the economy, stupid” was a phrase that Clinton campaign officials used to keep the focus on the troubled U.S. economy.  The truth is that Americans as a whole care about very few things more than their own economic well being, and by keeping the debate focused on economic issues, Clinton was able to defeat George H. W. Bush.  Nearly 20 years later, that slogan is as true today as it ever has been.  The American people care dearly about their own wallets and bank accounts.  With the economy tanking badly and with unemployment at very high levels, dissatisfaction with the U.S. government is at record highs.  In fact, acccording to a newly released poll byPew Research Center, just 22% of Americans believe that they can trust the government in Washington almost always or most of the time.  Nearly half of the respondents said that the government has a negative effect on their daily lives.  Only 25% of those responding expressed a favorable opinion of Congress, which was the lowest favorable rating for Congress in a quarter century of Pew Research Center surveys.

So why are the American people so angry and frustrated with their government?

It’s the economy, stupid.

Millions of Americans have lost their jobs and their homes, and millions more Americans are on the verge of losing their jobs and homes.

There are approximately 5.5 unemployed Americans for every job opening.  RealtyTrac projects that there will be 4.5 million home foreclosures in 2010.  The economic nightmare just keeps going from bad to worse.

The result is a massive horde of pissed off American voters.

As long as Americans are fat and happy and their wallets are full, most of them really could care less how involved the government is in their lives.  But when things go bad economically, all of a sudden the government becomes a major annoyance.

And this is not a Republican v. Democrat thing either.  The truth is that both parties have been radically expanding the size of the U.S. government for decades.  Both parties have been spending taxpayer money like there is no tomorrow.  Both parties have mortgaged the future of America to please their constituents.  Now average Americans from both parties are alarmed at how large the government has become and how badly it is screwing things up.  Just consider the following quote from USAToday.com….

“The government’s been lying to people for years. Politicians make promises to get elected, and when they get elected, they don’t follow through,” says Cindy Wanto, 57, a registered Democrat from Pennsylvania who joined several thousand for a rally in Washington on April 15 — the tax filing deadline. “There’s too much government in my business. It was a problem before Obama, but he’s certainly not helping fix it.”

If he wants to get re-elected, the best thing that Barack Obama could do to get votes would be to get the U.S. government to spend as much money as humanly possible in a last ditch attempt to stimulate the U.S. economy with a flood of paper money.  That might work just long enough to get re-elected and buy himself another four years in the White House.  Of course that strategy would also likely create hyperinflation and would make the long-term financial problems of the U.S. government far, far worse.

But unless the American people start feeling a lot better about the economy, they are not going to look too kindly on anyone who is currently holding office either in 2010 or in 2012.

Meanwhile, playing politics is more profitable than it ever has been.

Barack Obama and his wife Michelle raked in a cool 5.5 million dollars in 2009.

Sarah Palin has earned approximately 12 million dollars since last July.

According to Forbes magazine, Glenn Beck made 32 million dollars in the 12 months ending March 1st.

Politicians may not be very popular these days, but it sure is a profitable racket if you can get into the club.

Republicans make a ton of money convincing millions of Americans that the Democrats are the cause of all the problems that they are experiencing.  Democrats make a ton of money convincing millions of Americans that that Republicans are the cause of all the problems that they are experiencing.  Meanwhile, both parties continue to pile up the biggest mountain of debt in the history of the world and continue to sell out the future of our children and our grandchildren.

Neither party seems interested in addressing the root causes of our national financial nightmare.  Instead, politicians from both parties seem to think that they can keep making all kinds of promises to get elected and then never delivering on them.

Well, the American people are starting to wake up to all of this nonsense.  Tens of millions of Americans are experiencing extreme financial pain and they are looking for answers.

Unfortunately, the U.S. economy is going to get a whole lot worse, and very few of the politicians in Washington have the guts to tell the American people the truth.

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The Federal Reserve Created This Financial Mess And Now They Expect Us To Pay Higher Taxes And Have A Lower Standard Of Living So We Can Pay Interest To Them

When you watch the mainstream news, how often do you hear them identify the Federal Reserve as the ultimate source of all of our financial problems?  Never?  Well, there is a good reason.  The Federal Reserve was created and continues to benefit the elite international bankers that are raping the United States blind financially.  Many of the same financial powers own large interests in the 6 gigantic media companies that dominate U.S. mainstream media.  So you won’t hear the truth from them.  On this website we go on and on about how bad the U.S. national debt is.  And it is really, really, really bad.  But rarely do you hear from anyone who we owe all of this money to.  Yeah, we owe large amounts to Japan and China and a bunch of other nations, but the biggest holder of our debt by far is the Federal Reserve.  Just like the owner of your mortgage or your car loan, they expect to be paid back – with interest.   

Now U.S. Federal Reserve Chairman Ben Bernanke is warning that the U.S. national debt could balloon to more than 100% of GDP by the year 2020.  For those familiar with national debt statistics, that is a very, very dangerous threshold to cross.  Basically the United States is in debt up to its eyeballs and the debt continues to grow at an exponential rate.

So what is the solution?

Well, according to Bernanke, United States citizens will soon have to make difficult choices between higher taxes and reduced social spending. 

Perhaps both. 

The truth is that either alternative will slow down the U.S. economy and will reduce our standard of living, but this is the situation that we have gotten ourselves into.

And we have got to service that gigantic debt that we owe to the Federal Reserve (among others).

In fact, a whole lot of government officials are talking about taxes these days.

And not about lowering them.

Some administration officials are floating the idea of a national sales tax and others are openly discussing adopting a European-style “value-added” tax.

Any way that they can drain more money out of us sounds good to them.

In fact, members of Barack Obama’s “fiscal reform commission” say that higher taxes must be considered as a way to handle the U.S. government’s mounting debt problem.

Of course they could just stop wasting trillions of dollars, but apparently that is too hard.

And so where will all of these new taxes go?

To managing our colossal debt of course.

The truth is that we have locked generations of Americans into debt slavery.

We have piled up the biggest mountain of debt in the history of the world, and our children and grandchildren will spend all of their lives trying to pay interest on it.

Haven’t we left them with such a wonderful legacy?

If you don’t understand who the Federal Reserve is or what they are doing to us, please watch the excellent 4 minute video below.  It does a great job of introducing people to the rotten core at the center of the U.S. financial system.  We encourage you to send this video out to as many of your friends and family as possible.  Perhaps if there is a mass awakening, Americans can elect politicians that will shut down the Fed and will reclaim America’s financial destiny….

The U.S. Senate Votes To Pile 1.9 Trillion Dollars More Debt On To Our Children And Grandchildren

On Thursday, the U.S. Senate voted to raise the U.S. government debt cap by another 1.9 trillion dollars.  This is another 1.9 trillion dollars that our children and grandchildren will have to pay interest on for the rest of their lives.  The U.S. national debt is rising at a rate that is so reckless and so catastrophic that it threatens to destroy the entire U.S. economy.  It is now becoming apparent that we have created a financial hole that is probably mathematically impossible to get out of under the current system.  Average Americans are becoming increasingly angry at the U.S. government for getting us all into this colossal financial mess.  In fact, one very strongly-worded letter to Barack Obama from a 95 year old World War 2 veteran is causing quite a stir all over the Internet.  More people than ever are waking up and are realizing the the United States is headed in the wrong direction and has been for a long time.

But what else can the politicians do?  If they quit all this reckless spending it would devastate the U.S. economy in the short run.  In turn, the voters would be even more determined to vote them out of office.  So, for their own job safety the politicians in Washington have got to try to stimulate the economy with massive amounts of government money. 

But all of this government spending is only making our long term problems much worse.  Yes, the U.S. government has been able to partially “stabilize” the U.S. economy in the short term by pumping trillions in “bailout” and “stimulus” money into the financial system, but by doing so they are making our long term problems far, far worse.

The U.S. government has piled up the biggest debt in the history of the world and it is increasing at a speed that is absolutely frightening.  What we have done to our children and grandchildren is completely immoral.  We have piled up the biggest credit card bill in all of human history and now we are dumping it on them.

They are going to have to spend the rest of their lives paying interest on the mess that we have made.

What a wonderful gift to future generations, eh?

When Reagan took office, the national debt was already a national crisis, but it was only about one trillion dollars.

Now the U.S. Senate has authorized an increase up to 14.3 trillion.  Just look at what we are doing….

 

How in the world can we ever justify what we have done to our children and grandchildren?

Honestly, how can we possibly look them in the eyes and tell them what we did?

It has been this generation that has flushed America’s financial future down the toilet.

Is anyone else out there getting upset about this?

What this generation has done to future generations is so cold and so wicked and so immoral that it is hard to find words to even describe it.

We throw around words like “billion” and “trillion” so much these days that it seems like they have almost lost their meaning.  Do we actually realize how much a trillion dollars is?  It is such a massive amount that words do not actually do it justice.  To get a really good idea of what a trillion dollars is, just watch the illustration in the short video below, and then ask yourself how we could possibly do this to future generations…. 

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