In the United States today, the only group that is “doing better” each year financially is the folks at the very top of the income pyramid. Everyone else has seen their incomes decline. Once upon a time, America had a relatively egalitarian system where just about anyone could “pull themselves up by their bootstraps” if they just worked hard enough. But today, there are millions of Americans that can’t seem to get jobs no matter how hard they try. Millions of others feel their tenuous hold on the American Dream slipping out of their grasp just a little bit more each month. The truth is that we don’t have true capitalism in the United States anymore. Over the past several decades, the financial system in the U.S. has been carefully molded and shaped in such a way that all the wealth is funneled to the elite at the very top and to the monolithic predator corporations that now dominate the global economy. Power has become concentrated in the hands of very few individuals, and they are nearly impossible to compete against. If you doubt this, go set up a general store right next to your local Wal-Mart and see how long you can survive. In America today, the elite are becoming fabulously wealthy and the middle class is being ripped to shreds. One of the things that our Founding Fathers were extremely concerned about was not allowing too much power to be accumulated in the hands of any one person or institution, but today we have turned our backs on that principle and now we are paying the price. (Read More...)
Economic Crisis
Ford Motor Company Is Making Record Profits – By Shipping Our Jobs Overseas
On Tuesday, Ford Motor Company reported a record breaking profit for the third quarter. Ford earned 1.7 billion dollars during the quarter, which was way up from a profit of $997 million a year ago during the same time period. Ford CEO Alan Mulally is being hailed as a miracle worker, and investors are giddy about the future of the company. So is all of this success by Ford translating into good jobs for American workers? No. As described in a recent article on MSNBC, Mulally has been “revamping Ford’s U.S. and global manufacturing operation to be cheaper, more efficient and more flexible”. In other words, Mulally has been getting rid of American workers in droves. Since Mulally took over as CEO, Ford has slashed its North American work force by nearly half. Ford has shut down or plans to shut down a dozen U.S. manufacturing facilities. Today, only about 40 percent of Ford’s 178,000 workers are employed in North America, and a lot of those jobs are in Canada and Mexico. In fact, the number of Ford cars produced in Mexico continues to grow rapidly. The truth is that this is yet another example that proves that what is good for Wall Street is not necessarily good for average American workers. (Read More...)
The 2010 Commodity Bubble
Over the past several decades, the world financial system has produced a seemingly endless series of bubbles. For example, there was the “dot com bubble”, the “housing bubble” and the “yen carry trade”. So what bubbles are being created currently? Well, nobody wants much real estate right now and investors are still a bit wary of the stock market. Instead, money has been flooding into U.S. Treasuries and into commodities. In 2010, agricultural commodities have been going crazy, precious metals have been setting records and even the price of oil is now starting to move up. All over the globe, there is a growing lack of trust in paper currencies, and that is helping to fuel the move towards commodities. Unfortunately, “the 2010 commodity bubble” is going to have a very real impact on American consumers. As the prices of wheat, corn, pork and oil continue to rise on world markets, it is inevitable that those price increases will be passed on to the rest of us. (Read More...)
Mortgage Investors To Bank Of America: We’re Pissed And We Want Our 47 Billion Dollars Back
Everyone knew that the foreclosure fraud crisis was going to spawn a festival of lawsuits, and now it looks like it is already beginning. The New York Federal Reserve Bank is part of a consortium of eight large institutional investment firms that has launched an effort to force Bank of America to repurchase $47 billion worth of mortgages packaged into bonds by its Countrywide Financial unit. It turns out that most mortgage bond contracts explicitly require the repurchase of loans when the quality of the loans falls short of promises made by the sellers. As most of us know by now, many of these mortgages that were packaged together into “AAA rated” securities were actually a bunch of junk. But this is just the beginning. There are going to be hordes of lawsuits stemming from this crisis and it is going to take years and years for this thing to work through the legal system. All of the big players in the U.S. mortgage industry are going to be paralyzed for an extended period of time by this crisis, and that means that buying a home and achieving the American Dream is going to become a lot harder for millions of Americans. Not only that, if mortgage lending institutions end up being forced to take back gigantic mountains of bad mortgages it could end up sinking a whole lot of them. The implications for the U.S. financial system would be staggering. (Read More...)
16 New Records That The American Economy Has Set During The Past 12 Months – And They Are All Bad
Over the past twelve months, the U.S. economy has continued to come apart like a 20 dollar suit. During that time it seems like more bad economic news has been coming out nearly every single day. Instead of getting better, the problems facing the U.S. economy only seem to be multiplying. The U.S. government and the U.S. financial system continue to absolutely drown in debt. Factories, jobs and massive amounts of wealth continue to fly out of the United States every month at an astounding pace. Meanwhile, the number of Americans enrolled in anti-poverty programs continues to shatter records and the U.S. housing industry continues to set records for futility. The truth is that less Americans are living the American Dream today than were living it twelve months ago. The U.S. economy is in a serious state of decline, and it is time for all of us to wake up and admit the truth. (Read More...)
Out Of Control Greed? Wall Street Firms Are Projected To Pay Out $144 Billion In Compensation For 2010
Is greed out of control on Wall Street? Typically, liberals, Democrats and socialists say yes, and conservatives, Republicans and Tea Party supporters say no. But just because you are not a socialist doesn’t mean that you have to support the wild greed that is happening on Wall Street right now. As the rest of the U.S. economy deeply struggles, the major financial firms down on Wall Street are projected to pay out an all-time record of $144 billion in compensation for 2010. Just think about that. Not 144 million dollars – what we are talking about is 144 billion dollars. Not that making money is a bad thing. Capitalism is a great thing (although what the United States has now is not capitalism). Free enterprise is a great thing. But any economic system begins to break down whenever massive amounts of financial power is concentrated in just a few hands. Wall Street firms have spent hundreds of millions of dollars on lobbying to get the game rigged in their favor, and Wall Street firms have spent hundreds of millions of dollars on campaign contributions to keep things that way. For example, three of Barack Obama’s six biggest campaign donors were Wall Street firms (Goldman Sachs, JPMorgan Chase and Citigroup). These big Wall Street firms dominate the U.S. financial landscape to a degree that is almost impossible to understate. Now of course part of the American Dream is being able to work hard and make as much money as possible, but when monolithic financial firms are able to corrupt the game so severely and funnel such massive amounts of money to themselves, at what point are we going to finally admit that there is something fundamentally broken about the system? (Read More...)
21 Reasons Why Donald Trump Is Right – China Is Just Ripping This Country Like Nobody Has Ever Ripped Us Before
Earlier this week, an interview with Donald Trump on Fox & Friends made headlines all over the world. During that interview, Trump stated that he was “absolutely thinking about” running for president in 2012. But what didn’t get as much attention is why Donald Trump is so motivated to possibly run for president. It turns out that Donald Trump is horrified by how China (and other nations as well) are absolutely taking advantage of the United States in global trade. Trump put it this way during the interview: “China is just ripping this country like nobody has ever ripped us before.” And you know what? Donald Trump is absolutely right about this. You see, China has been openly manipulating its currency for years and years so that their products are far cheaper than those produced in America. This has put entire industries out of business in the United States. Not only that, but China also openly subsidizes many of their industries, thus giving them a competitive advantage over U.S. businesses and our government does nothing about it. In addition, China has exploited the fact that they allow their workers to be paid near slave labor wages to attract thousands upon thousands of factories and manufacturing facilities to their shores. China dumps massive amounts of cheap goods on our shores while openly discriminating against many U.S. good and services. This kind of unfair trade has enabled the Chinese government to pile up hundreds of billions of dollars in excess currency reserves which it ends up lending back to the U.S. government. Basically, China is running a massive scam on us and is getting tremendously wealthy in the process. (Read More...)
Inflation Or Deflation? It Is The Fourth Branch Of Government (The Federal Reserve) That Will Make That Decision For Us
Today there is a great debate in the economic community about whether we are going to have crippling deflation or unprecedented inflation in the years ahead. For decades, a never ending spiral of debt has fueled the almost unbelievable prosperity that Americans have enjoyed. We have lived way beyond our means, and in the process we have piled up the biggest mountain of debt in the history of the world. Now, the fourth branch of the U.S. government (the Federal Reserve) has a decision to make. Will the Federal Reserve allow the U.S. economy to deleverage, thus setting off a deflationary nightmare worse than the Great Depression, or will the Federal Reserve attempt to crank up the debt spiral one more time by flooding the U.S. economy with another giant wave of paper money? (Read More...)