February 14, 2013
Ron Paul was on Bloomberg’s Lunch Money discussing the developing currency wars. Paul states that the currency wars have been ongoing for decades, but they are now gearing up, but that government’s always compete to devalue their fiat currencies.
Paul informs the Bloomberg host that the loss in purchasing power from currency devaluation in a currency war devastates the middle class, and cancels out any slight benefit that you might be getting temporarily in terms of trade.
Paul also states that one day soon people around the world will reject all fiat currencies, and we will move into an age where people want to buy hard assets, and that this has already started with real estate, gold, & silver.
Paul’s full interview on the coming economic collapse is below:
By Eric W. Dolan
Thursday, February 14, 2013 22:04 EST
At a Senate Banking Committee hearing on Thursday, Sen. Elizabeth Warren (D-MA) asked the nation’s top financial regulators why Wall Street firms who broke the law were not taken to trial.
“We face some very special issues with big financial institutions,” she said. “If they can break the law and drag in billions and billions in profits, and then turn around and settle — paying out of those profits — they don’t have much incentive to follow the law. It is also the case that every time there is a settlement and not a trial, we didn’t have those days and days and days of testimony about what those financial institutions had been up to.”
Warren asked how tough the financial regulators were and questioned them about the last time a major Wall Street firm had been put on trial.
Thomas Curry, the Comptroller of the Currency, said his primary duty was to correct deficiencies in the financial system and that it wasn’t necessary to bring anyone to trial. Elisse B. Walter, the chairman of the Securities and Exchange Commission, was also unable to recall when a Wall Street firm had been taken to trial.
“I just want to note on this, there are District Attorneys and U.S. Attorneys who are out there every day squeezing ordinary citizens on sometimes very thin grounds and taking them to trial in order to make an example, as they put it,” Warren said. “I’m really concerned that too big to fail has become too big for trial. That just seems wrong to me.”
Watch video, uploaded to YouTube, below:
Feb 13, 2013
We’re already at war in numerous countries all over the world.
But top economic advisers warn that economic factors could lead to a new world war.
Kyle Bass writes:
Trillions of dollars of debts will be restructured and millions of financially prudent savers will lose large percentages of their real purchasing power at exactly the wrong time in their lives. Again, the world will not end, but the social fabric of the profligate nations will be stretched and in some cases torn. Sadly, looking back through economic history, all too often war is the manifestation of simple economic entropy played to its logical conclusion. We believe that war is an inevitable consequence of the current global economic situation.
Larry Edelson wrote an email to subscribers entitled “What the “Cycles of War” are saying for 2013″, which states:
Since the 1980s, I’ve been studying the so-called “cycles of war” — the natural rhythms that predispose societies to descend into chaos, into hatred, into civil and even international war.
I’m certainly not the first person to examine these very distinctive patterns in history. There have been many before me, notably, Raymond Wheeler, who published the most authoritative chronicle of war ever, covering a period of 2,600 years of data.
However, there are very few people who are willing to even discuss the issue right now. And based on what I’m seeing, the implications could be absolutely huge in 2013.
Former Goldman Sachs technical analyst Charles Nenner – who has made some big accurate calls, and counts major hedge funds, banks, brokerage houses, and high net worth individuals as clients – saysthere will be “a major war starting at the end of 2012 to 2013”, which will drive the Dow to 5,000.
Veteran investor adviser James Dines forecast a war is epochal as World Wars I and II, starting in the Middle East.
Nouriel Roubini has warned of war with Iran. And when Roubini was asked:
Where does this all lead us? The risk in your view is of another Great Depression. But even respectable European politicians are talking not just an economic depression but possibly even worse consequences over the next decade or so. Bearing European history in mind, where does this take us?
In the 1930s, because we made a major policy mistake, we went through financial instability, defaults, currency devaluations, printing money, capital controls, trade wars, populism, a bunch of radical, populist, aggressive regimes coming to power from Germany to Italy to Spain to Japan, and then we ended up with World War II.
Now I’m not predicting World War III but seriously, if there was a global financial crisis after the first one, then we go into depression: the political and social instability in Europe and other advanced economies is going to become extremely severe. And that’s something we have to worry about.
Billionaire investor Jim Rogers notes:
A continuation of bailouts in Europe could ultimately spark another world war, says international investor Jim Rogers.
“Add debt, the situation gets worse, and eventually it just collapses. Then everybody is looking for scapegoats. Politicians blame foreigners, and we’re in World War II or World War whatever.”
Marc Faber says that the American government will start new wars in response to the economic crisis:
We’re in the middle of a global currency war – i.e. a situation where nations all compete to devalue their currencies the most in order to boost exports. And Brazilian president-elect Rousseff said in 2010:
The last time there was a series of competitive devaluations … it ended in world war two.
Jim Rickards agrees:
Currency wars lead to trade wars, which often lead to hot wars. In 2009, Rickards participated in the Pentagon’s first-ever “financial” war games. While expressing confidence in America’s ability to defeat any other nation-state in battle, Rickards says the U.S. could get dragged into “asymmetric warfare,” if currency wars lead to rising inflation and global economic uncertainty.
As does Jim Rogers:
Trade wars always lead to wars.
Moreover, former Federal Reserve chairman Alan Greenspan said that the Iraq war was really about oil , and former Treasury Secretary Paul O’Neill says that Bush planned the Iraq war before 9/11. And seethis and this. If that war was for petroleum, other oil-rich countries might be invaded as well.
And the American policy of using the military to contain China’s growing economic influence – and of considering economic rivalry to be a basis for war – are creating a tinderbox.
Finally, multi-billionaire investor Hugo Salinas Price says:
What happened to [Libya’s] Mr. Gaddafi, many speculate the real reason he was ousted was that he was planning an all-African currency for conducting trade. The same thing happened to him that happened to Saddam because the US doesn’t want any solid competing currency out there vs the dollar. You know Gaddafi was talking about a golddinar.
Indeed, senior CNBC editor John Carney noted:
Is this the first time a revolutionary group has created a central bank while it is still in the midst of fighting the entrenched political power? It certainly seems to indicate how extraordinarily powerful central bankers have become in our era.
This suggests we have a bit more than a ragtag bunch of rebels running around and that there are some pretty sophisticated influences. “I have never before heard of a central bank being created in just a matter of weeks out of a popular uprising,” Wenzel writes.
Numerous economic organizations and economists also warn of crash-induced unrest, including:
Submitted by Chris Martenson of Peak Prosperity,
We are far enough and deep enough into the most heroic monetary and fiscal efforts ever undertaken to finally ask, why aren’t these measures working?
Or at least we should be. Oddly, many in DC, on Wall Street, and the Federal Reserve continue to steadfastly refuse to include anything in their approaches and frameworks other than “more of the same.”
So we are treated to an endless parade of news items that seek to convince us that a bottom is in and that we’ve ‘turned the corner’ – often on the flimsy basis that in the past things have always gotten better by now.
The framework we operate from around here is simply encapsulated in the observation that there has never been global economic recovery with oil prices above $100 over barrel. That is shorthand for the idea that oil is the primary lubricant of economic growth and that it is not just the amount of oil one has to burn but also the quality, or net energy, of the oil that matters.
If we want to understand why all of the tried-and-true monetary and fiscal efforts have failed, we have to appreciate the headwinds that are offered by both a condition of too-much-debt and expensive energy. Neither alone can account for the economic malaise that stalks the world.
In a speech delivered earlier this week, Federal Reserve Board vice-chair Janet Yellen spilled the beans:
The unemployment rate now stands at 7.9 percent. To put this number in perspective, while that’s a big improvement from the 10 percent reached in late 2009, it is now higher than unemployment ever got in the 24 years before the Great Recession. Moreover, the government’s current estimate of 12 million unemployed doesn’t include 800,000 discouraged workers who say they have given up looking for work. And, as exhibit 6 shows, 8 million people, or 5.6 percent of the workforce, say they are working part time even though they would prefer a full-time job. A broader measure of underemployment that includes these and other potential workers stands at 14.4 percent.
She went on:
The poverty rate has risen sharply since the onset of the recession, after a decade in which it had been relatively stable, and stands at 15 percent of the population, significantly above the average of the past three decades.9 Even those today who are fortunate enough to hold jobs have seen their hourly compensation barely keep pace with the cost of living over the past three years, while labor’s share of income–as measured by the percent of production by nonfinancial corporations accruing to workers as compensation–remains near the postwar low reached in 2011[…] It will be a long road back to a healthy job market. It will be years before many workers feel like they have regained the ground lost since 2007.
We have shown divergence after divergence as an indication of the market’s relative exuberance. One of the key ‘supports’ for these hope-driven nominal levels has been forward inflation expectations. In fact, inflation expectations have become the anchor for higher equity (P/E) valuations and yet, they remain unconvinced that this time is different. As Barclays’ Jordan Kotick notes, perhaps it is inflation break-evens lack of confirmation of new equity highs that is the chart to watch for the ‘believers’ to really think this time is different.
Breakevens are NOT making new highs…
even as stock valuations are…
Charts: Barclays and Bloomberg
One of the recurring memes of the now nearly 4 years old “bull market” (assuming the recession ended in June 2009 as the NBER has opined), is that corporate profits are soaring, and that despite recent weakness in Q4 earnings (profiled most recently here), have now surpassed 2007 highs on an “actual” basis. For purely optical, sell-side research purposes that is fine: after all one has to sell the myth that the US private sector has never been healthier which is why it has to immediately respond to demands that it not only repatriate the $1+ trillion in cash held overseas, but to hand it over to shareholders post-haste (see recent “sideshow” between David Einhorn and Apple). However, a problem emerges when trying to back this number into the inverse: or how much money the US government is receiving as a result of taxes levied on these supposedly record profits. The problem is that while back in the summer 2007, or when the last secular peak in corporate profitability hit, corporate taxes peaked at well over $30 billion per month based, the most recent such number shows corporate taxes barely scraping $20 billion per month!
Does this mean that when one excludes all the usual non-cash exclusions, and all the endlessly recurring non-recurring items, all of which which feed the EPS line from a GAAP, and non-GAAP basis, and focuses solely on actual earnings generated by US companies, which form the basis for tax accounting purposes, that the real profitability of the US private sector, and by implication, the S&P, is at best two thirds of where it was at its peak in 2007, and if so does this mean that the actual earnings multiple applied to true recurring earnings is some 50% higher than where the sellside brigade wants to retail investor to believe it is?
February 13, 2013
Perhaps it’s presidents running down the whole laundry list of issues, but it seems to me the last dozen or so State of the Union speeches by presidents could put a galaxy of insomniacs to sleep.
Originally, the State of the Union was the president talking to Congress. Now we all know no one from the Senate or the House is going to move a new inch by anything the president says in his speech.
It’s just a dog and pony show. It’s also a chance for the president to talk to the television audience. That’s the real event. The president’s on TV.
It’s a stage play and it closes the night it opens. The script is always too long. It should have been cut by nine-tenths in rehearsals.
The droning of the laundry list is, of course, a reflection of the fact that big government has its paws and nose in every facet of our lives. I was waiting for Obama to talk about an adequate supply of toilet paper and paper towels in public-park restrooms, and the danger of pictures of guns brought to school.
And how about those unsightly vegetable gardens growing on front lawns? Would he bring in the FBI and the ATF and DHS to solve that problem?
Would he push for free sex-change operations for all college students? Radioactive body scanners in coffee shops? I think the system for assigning names to hurricanes and blizzards should be subjected to a task-force study.
When tonight Obama said the only way to make progress was for us all to work together, he didn’t just mean the Congress. He meant the American people, aka the television audience. But I’ve never understood that idea. What are we all working together to accomplish? What’s the program? Giving away more of our income to the federal government? Agreeing to more surveillance of our movements? Supporting the invasion of more countries? Refraining from photographing the police making arrests? Restricting our Facebook posts to happy faces and rainbows?
Are we all working together to surrender our guns in exchange for movie tickets and candy? Are we pretending to be overjoyed that the federal government wants to force everyone to get vaccinated and eat GMO food, and take SSRI antidepressants that demonstrably cause people to go crazy and kill others? Is that it?
Are we somehow working together to print endless amounts of money? Are we working together to push the percentage of Americans collecting free government money from 40 percent to 60 percent? Is that the glorious goal?
Are we working together to give money to alternative-energy companies so they can go broke and declare bankruptcy? Are we working together to protect and defend the World Trade Organization, so ravenous mega-corporations can export jobs to China and roam the global landscape, raping and pillaging resources and labor?
It was well-known that today’s 10 Year auction would price somewhere north of 2.00%, for the first 2%+ print since April of 2012, it just wasn’t known where. Sure enough, moments ago the US Treasury priced $24 billion in 10 Year paper at a high yield of 2.046% (38.76% allotted at high), the highest since last March when we had a 2.076% 10 Year auction (and a carbon copy environment in which every pundit was screaming about a great rotation out of bonds), only to see the April and especially May auction tumble in yield when Europe once again became unfixed. What was notable about today’s auction is that it tailed the When Issued modestly, which was bid 2.039% at 1 pm, implying a 0.7 bps tail. Also notable: the Bid to Cover dropped to 2.68, below January’s 2.83, and well below the 12 month TTM of 2.99. Dealers took down 47.7% of the auction, Directs as has recently been the case ended up with a sizable 24.2%, while Indirects took only 28% of the auction, higher than the December 24.2%, yet worse than all other auctions going back all the way to April 2009. For those confused – don’t be – we have been here in 2012, and 2011, and 2010, when risk assets were surging, and when yields were sliding, only to see a modest subsequent pick up in inflation, mostly in China, but certainly Europe, at which point the global liquidity glut ceased and the economy (if not the centrally-planned market) resumed on its downward glideslope.
By Agence France-Presse
Wednesday, February 13, 2013 10:17 EST
The EU and the United States are to negotiate the biggest free trade agreement ever, a global “game-changer,” boosting growth and providing much-needed jobs, European Commission head Jose Manuel Barroso said on Wednesday.
An accord between the world’s two largest trading entities would be “ground-breaking … a game-changer,” which will add 0.5 percent to the EU economy every year once it is in place, Barroso said.
Better still, “it?s a boost to our economies that does not cost a cent,” he said, noting that after previous obstacles and objections, both sides were now ready for a deal.
The EU and US economies account for nearly half of global economic output and about a third of global trade, meaning an agreement will have profound implications for all, especially emerging giants such as China, Brazil and India for whom trade is a key development driver.
The negotiations will hinge on market access, and regulation and non-tariff barriers, both of which are often used to protect domestic markets, with agriculture likely to prove especially difficult as both sides jealously guard their farming interests and exports.
Barroso hailed President Barack Obama’s commitment after he announced the talks overnight in Washington, saying an accord would be “an assurance that we mean business.”
“It shows that the EU and the United States are strategic partners who are ready to go the extra mile to strengthen their economies.”
Barroso said it was important to “get the ball rolling” as soon as possible, hoping that talks could begin in the first half of this year under Ireland’s direction as current holder of the EU’s six-month rotating presidency.
“The sooner we start, the sooner we can reach a succesful conclusion.”
Editor’s note: Howard Lindzon is co-founder and CEO of StockTwits, a social network for traders and investors to share real-time ideas and information. You can read his full bio here and find him on Twitter @howardlindzon. Earlier today Josh Constine wrote that Apple Doesn’t Care, That’s Why They are Winning. Hold the iPhone. Stop the iTablets. Apple does care. They cared enough to show up at The Goldman Sachs Conference. […]
Pity the besieged tax payers of Virginia. Government in the state may soon pass a law allowing it to impose taxes on victims without their consent.
From the Washington Post today:
This income taxing authority actually already exists in Virginia law, with one important condition: It must be approved by a public referendum. The new law would eliminate that referendum, allowing a new income tax to be imposed simply by the local city council or board of supervisors passing a new ordinance.
[Republican Sen. Walter Stosch] said the ability to impose the tax may have been hindered by the public referendum requirement, so this bill (Senate Bill 1313) removes that.
The bill is currently in the House finance committee where it may continue to live or eventually die.
You can bet statist predators around the nation are watching this one closely to see how it plays out.
By Cezary Podkul and David Sheppard
NEW YORK | Tue Feb 12, 2013 6:15pm EST
(Reuters) – U.S. motorists searching for someone to blame for the highest gasoline prices ever at this time of year have an easy target: hedge funds who have been quietly amassing winning bets on hundreds of millions of barrels of oil.
At a filling station in Midtown New York last week, several people were prepared to blame traders on Wall Street as they paid more than $4 per gallon to fill up their cars.
“It really is not supply and demand. It’s definitely speculation,” said John Keegan, an exterminator with pest control company Terminate Control, who was filling up his van. A cab driver said he was convinced the price would be just $1 a gallon if the government “stopped Wall Street trading oil.”
It is all very reminiscent of the anger in 2008 when gasoline prices were sent surging by a massive oil spike – also a time when there was a lot of speculative interest from investors.
And yet five years on, there is still no consensus among traders, analysts, and regulators over how big of an impact speculators have on the market – and what, if anything, should be done to limit their participation in oil trading.
Feb 11, 2013
How can anyone not see that the U.S. economy is collapsing all around us? It just astounds me when people try to tell me that “everything is just fine” and that “things are getting better” in America. Are there people out there that are really that blind? If you want to see the economic collapse, just open up your eyes and look around you. By almost every economic and financial measure, the U.S. economy has been steadily declining for many years. But most Americans are so tied into “the matrix” that they can only understand the cheerful propaganda that is endlessly being spoon-fed to them by the mainstream media. As I have said so many times, the economic collapse is not a single event. The economic collapse has been happening, it is is happening right now, and it will continue to happen. Yes, there will be times when our decline will be punctuated by moments of great crisis, but that will be the exception rather than the rule. A lot of people that write about “the economic collapse” hype it up as if it will be some huge “event” that will happen very rapidly and then once it is all over we will rebuild. Unfortunately, that is not how the real world works. We are living in the greatest debt bubble in the history of the world, and once it completely bursts there will be no going back to how things were before. Right now, we are living in a “credit card economy”. As long as we can keep borrowing more money, most people think that things are just fine. But anyone that has lived on credit cards knows that eventually there comes a point when the game is over, and we are rapidly approaching that point as a nation.
Have you ever been there? Have you ever desperately hoped that you could just get one more credit card or one more loan so that you could keep things going?
At first, living on credit can be a lot of fun. You can live a much higher standard of living than you otherwise would be able to.
But inevitably a day of reckoning comes.
If the federal government and the American people were forced at this moment to live within their means, the U.S. economy would immediately plunge into a depression.
That is a 100% rock solid guarantee.
But our politicians and the mainstream media continue to perpetuate the fiction that we can live in this credit card economic fantasy land indefinitely.
And most Americans could not care less about the future. As long as “things are good” today, they don’t really think much about what the future will hold.
As a result of our very foolish short-term thinking, we have now run up a national debt of 16.4 trillion dollars. It is the largest debt in the history of the world, and it has gotten more than 23 times larger since Jimmy Carter first entered the White House.
The chart that you see below is a recipe for national financial suicide…
Of course things have accelerated over the past four years. Since Barack Obama entered the White House, the U.S. government has run a budget deficit of well over a trillion dollars every single year, and we have stolen more than 100 million dollars from our children and our grandchildren every single hour of every single day.
It is the biggest theft of all time. What we are doing to our children and our grandchildren is beyond criminal.
And now our debt is at a level that most economists would consider terminal. When Barack Obama first entered the White House, the U.S. debt to GDP ratio was under 70 percent. Today, it is up to 103 percent.
We are officially in “the danger zone”.
If things really were “getting better” in America, we would not need toborrow so much money.
Our politicians are stealing from the future in order to make the present look better. During Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.
That is utter insanity!
If you started paying off just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.
So what is the solution?
Get ready to laugh.
The most prominent economic journalist in the entire country, Paul Krugman of the New York Times, recently suggested the following in an article that he wrote entitled “Kick That Can“…
Realistically, we’re not going to resolve our long-run fiscal issues any time soon, which is O.K. — not ideal, but nothing terrible will happen if we don’t fix everything this year. Meanwhile, we face the imminent threat of severe economic damage from short-term spending cuts.
So we should avoid that damage by kicking the can down the road. It’s the responsible thing to do.
You mean that we might actually do damage to the debt-fueled economic fantasy world that we are living in if we stopped stealing so much money from future generations?
Oh the humanity!
It is horrifying to think that all that one of the “top economic minds” in America can come up with is to “kick the can” down the road some more.
Unfortunately, neither Paul Krugman nor most of the American people understand that our financial system is actually designed to create government debt.
The bankers that helped create the Federal Reserve intended to permanently enslave the U.S. government to a perpetually expanding spiral of debt, and their plans worked.
At this point, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was first created.
So why don’t the American people understand what the Federal Reserve system is doing to us?
It is because most of them are still plugged into the matrix. A Zero Hedge article that I came across today put it beautifully…
US society in a nutshell: Chris Dorner has been around for a week and has 222 million results on Google; the Federal Reserve has been around for one hundred years and has 187 million results.
If nothing is done about our exploding debt, it is only a matter of time before we reach financial oblivion.
According to Boston University economist Laurence Kotlikoff, the U.S. government is facing a “present value difference between projected future spending and revenue” of 222 trillion dollars in the years ahead.
So how in the world are we going to come up with an extra 222 trillion dollars?
But it is not just the U.S. government that is drowning in debt.
Just check out this chart which shows the astounding growth of state and local government debt in recent years…
All over the United States there are state and local governments that are on the verge of bankruptcy. Just check out what is going on in Detroit. The only way that most of our state and local governments can keep going at this point is to also “kick the can” down the road some more.
And of course most of the rest of us are drowning in debt as well.
40 years ago, the total amount of debt in the U.S. economic system (government + business + consumer) was less than 2 trillion dollars.
Today, the total amount of debt in the U.S. economic system has grown to more than 55 trillion dollars.
Can anyone say bubble?
The good news is that U.S. GDP is now more than 12 times larger than it was 40 years ago.
The bad news is that the total amount of debt in our financial system is now more than 30 times larger than it was 40 years ago…
At the same time that we are going into so much debt, our ability to produce wealth continues to decline.
According to the World Bank, U.S. GDP accounted for 31.8 percent of all global economic activity in 2001. That number dropped to 21.6 percent in 2011. That is not just a decline – that is a nightmarish freefall. Just check out the chart in this article.
We are becoming less competitive as a nation with each passing year. In fact, the U.S. has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.
Most Americans don’t understand this, but the United States buys far more from the rest of the world than they buy from us each year. In 2012, we had a trade deficit of more than 500 billion dollars with the rest of the world.
That means that more than 500 billion dollars that could have gone to U.S. workers and U.S. businesses went out of the country instead.
So how does our country survive if hundreds of billions of dollars more is flowing out of the country than is flowing into it?
Well, to make up the shortfall we go to the countries that we sent our money to and we beg them to lend it back to us. If that doesn’t work, we just print and borrow even more money.
Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975.
That is 8 trillion dollars that could have saved U.S. businesses, paid the salaries of U.S. workers and that would have helped fund government.
But instead, our foolish policies have greatly enriched China and the oil barons of the Middle East.
Sadly, politicians from both political parties continue to boldly support the one world economic agenda of the global elite.
Just consider how destructive many of these “free trade” deals have been to our economy…
When NAFTA was pushed through Congress in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars.
By 2010, we had a trade deficit with Mexico of 61.6 billion dollars.
Back in 1985, our trade deficit with China was approximately 6 milliondollars (million with a little “m”) for the entire year.
In 2012, our trade deficit with China was 315 billion dollars. That was the largest trade deficit that one nation has had with another nation in the history of the world.
In particular, our trade with China is extremely unbalanced. Today, U.S. consumers spend approximately 4 dollars on goods and services from China for every one dollar that Chinese consumers spend on goods and services from the United States.
But isn’t getting cheap stuff from China good?
No, because it costs us good paying jobs.
According to the Economic Policy Institute, the United States is losinghalf a million jobs to China every single year.
Overall, more than 56,000 manufacturing facilities in the United States have been shut down since 2001. During 2010, manufacturing facilities in the United States were shutting down at a rate of 23 per day. How can anyone say that “things are getting better” when our economic infrastructure is being absolutely gutted?
The truth is that there are never going to be enough jobs in America ever again, because millions of our jobs are being sent overseas and millions of our jobs are being lost to technology.
You won’t hear this on the news, but the percentage of the civilian labor force in the United States that is employed has been steadily declining every single year since 2006.
Younger workers have been hit particularly hard. In 2007, the unemployment rate for the 20 to 29 age bracket was about 6.5 percent. Today, the unemployment rate for that same age group is about 13 percent.
If you are under the age of 30 and you aren’t living with your parents, there is a really good chance that you are living in poverty. If you can believe it, U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
Our economy has been steadily bleeding huge numbers of middle class jobs, and many of those jobs have been replaced by low paying jobs in recent years.
And at this point, an astounding 53 percent of all American workers make less than $30,000 a year.
Oh, but “things are getting better”, right?
Maybe if you live on Wall Street or if you are an employee of the federal government.
But for most families this economic decline has been a total nightmare. Median household income in America has fallen for four consecutive years. Overall, it has declined by over $4000 during that time span.
Sometimes people forget how good things were about a decade ago. About three times as many new homes were sold in the United States in 2005 as were sold in 2012.
But we like to live in denial.
In fact, a lot of families are trying to keep up their standards of living by going into tremendous amounts of debt.
Back in 1983, the bottom 95 percent of all income earners in the United States had 62 cents of debt for every dollar that they earned. By 2007, that figure had soared to $1.48.
Fake it until you make it, right?
But how much debt can our system possibly handle?
Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.
Total credit card debt in the United States is now more than 8 times larger than it was just 30 years ago.
We are a nation that is completely addicted to debt, but as the financial crisis of 2008 demonstrated, all of that debt can have horrific consequences.
As the economy has slowed in recent years, the Federal Reserve has decided that “the solution” is to recklessly print money in an attempt to get the debt spiral cranked up again.
Have they gone overboard? You be the judge…
And of course this won’t have any affect on the value of the money that you have been saving up all these years right?
Every single dollar that you own is continually losing value…
Overall, the value of the U.S. dollar has declined by more than 96 percent since the Federal Reserve was first created.
As the cost of living continues to go up and wages continue to go down, millions of American families have fallen out of the middle class and into poverty.
But “things are getting better”, right?
Incredibly, 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.
But “things are getting better”, right?
There are now 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.
But “things are getting better”, right?
But “things are getting better”, right?
Today, more Americans than ever have found themselves forced to turn to the federal government for help.
According to the U.S. Census Bureau, 49 percent of all Americans live in a home that receives direct monetary benefits from the federal government. Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.
So is it a good sign or a bad sign that the percentage of Americans that are financially dependent on the federal government is at an all-time high?
And in future years the number of Americans that are receiving benefits from the federal government is projected to absolutely skyrocket.
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. It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
If you take a look at Medicare, things are very more sobering.
At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years. That comes to approximately$328,404 for every single household in the United States.
Are you ready to contribute your share?
Social Security is a complete and total nightmare as well.
Right now, there are approximately 56 million Americans collecting Social Security benefits.
By 2035, that number is projected to soar to an astounding 91 million.
Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.
Oh, but don’t worry because “things are getting better”, right?
I honestly do not know how anyone can look at the numbers above and come to the conclusion that the economy is in good shape.
We have accumulated the largest mountain of debt in the history of the world, our economic infrastructure is being gutted, we are bleeding good jobs, government dependence is at an all-time high and we are getting poorer as a nation with each passing day.
But other than that, everything is rainbows and lollipops, right?
If you want to see the economic collapse, just open up your eyes.
And if dramatic changes are not made quickly, things are going to get much, much worse from here.
Please share this article with as many people as possible. Time is quickly running out and there are a whole lot of people out there that we need to wake up while we still can.
February 11, 2013
Though the economy may not have been brought to its knees, some Americans are starting to feel the pinch of higher payroll taxes, and they claim it is already affecting their spending, The New York Times reports.
Now a part of history, the payroll tax break lightened the load of Social Security taxes by 2 percentage points in 2011 and 2012. When it was eliminated as part of the fiscal cliff deal, many economists warned it would have an adverse effect on the economy.
The new higher rate, which went into effect at the beginning of 2013 applies to the first $113,700 of earned income. Economists estimate it will cost the typical American worker about $1,000 a year, according to The Washington Post.
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