Global leaders have tried just about everything that they can think of, but the coming global financial catastrophe continues to march steadily toward us. We have seen “stimulus packages”, quantitative easing, bond buying, interest rate cuts, emergency economic summits, bailout packages for banks, bailout packages for entire nations, “Operation Twist”, unprecedented government intervention in business and massive amounts of new government debt and yet nothing seems to revive the global economy. In fact, it looks like we are rapidly heading into the second dip of a “double dip recession”. Unfortunately, many believe that this next dip will be more like a full-blown depression. All over the world, top economic experts are warning that we are facing an unprecedented crisis of debt and insolvency that will result in a global financial catastrophe. The eurozone is drowning in debt, the U.S. government is drowning in debt and major banks all over the globe are drowning in debt. Global authorities have been trying to patch the system together and keep it going, but the incredible damage that all of this debt has done is now becoming apparent to everyone. The global debt bubble that has fueled prosperity in the western world for the last several decades is getting ready to burst, and when that happens the chaos that will result will be absolutely horrifying. (Read More...)
Financial
The Real Obama Budget Deficit For 2011: 5 Trillion Dollars
If the U.S. government used the same accounting methods that most U.S. businesses use, the real federal budget deficit for last year would have been 5 trillion dollars instead of 1.3 trillion dollars. So where does the huge difference come from? I think a simple illustration would be helpful here. When you go shopping, do you only count the transactions where you use cash, or do you also count the transactions where you signed on the dotted line and promised to pay later? Of course you count both of them. Well, the U.S. government does not count promises to pay later when calculating budget deficits. The “official” Obama budget deficit for 2011 was 1.3 trillion dollars, but according to USA Today when you add in the rise in liabilities for Social Security, Medicare and other retirement programs that adds another 3.7 trillion dollars to the total. Those are future financial promises that we have made that future taxes are not expected to cover. This analysis by USA Today squares very well with what analysts such as John Williams of shadowstats.com have been saying for years. The truth is that our federal budget deficits have actually been far worse than we have been told. (Read More...)
24 Facts That Prove That America Is A Nation Of Slobs
What would our founders say if they could see us now? Americans like to believe that the rest of the world looks up to us, but the truth is that the rest of the world is laughing at us. It may be very difficult for us to admit, but the reality is that America has become a nation of slobs. And I am not just talking about being overweight. Today, Americans are physical, mental, emotional, moral, financial and political slobs. We are addicted to entertainment, we are addicted to shopping, we are addicted to food, we are addicted to prescription drugs, and we are addicted to anything else that gives us the pleasure that we crave. We allow our televisions to do our thinking for us and our families are falling apart. Our lives center around pleasing ourselves, and we have become one of the most narcissistic societies in the history of the world. We are like a middle-aged man that has totally let himself go. You know the guy who shows up for an important event in sandals, sweatpants and a stained t-shirt? That is us. We are only a shadow of what we once were as a nation, and we desperately need to change course. (Read More...)
10 Signs That America Is On The Verge Of A Horrible Municipal Debt Crisis
Is America on the verge of a horrible municipal debt crisis? Unfortunately, the answer is yes. From coast to coast there are an increasing number of cities, towns and counties that are rapidly going broke. Financial analyst Meredith Whitney took a lot of heat when her prediction of a municipal bond crash in 2011 did not happen, but she was not fundamentally wrong in her analysis. A horrifying municipal debt crisis is starting to unfold right in front of our eyes. It just did not happen as soon as she thought that it would. When most Americans think of our “debt problem”, they think of the federal government. But the truth is that we have hundreds and hundreds of smaller “debt problems” all across the country. In 2012, cities such as Stockton, California and Harrisburg, Pennsylvania have already defaulted and a whole bunch of other cities and towns are headed down the exact same path. Once we see the first major wave of municipal defaults, creditors will become much tighter with their money and that will cause even more municipalities to get into financial trouble. This crisis could start spinning out of control at any time. (Read More...)
Who Decided That It Would Be A Good Idea….
Do you have faith in the people running this nation? When answering that question, most people would bash either the Democrats or the Republicans, but my question goes much deeper than that. Power is constantly shifting back and forth between the two major political parties, and it seems like things don’t really change no matter who is in power. What I am asking is if you have faith in the entire system. Do you have faith in the U.S. government, the Federal Reserve, the state governments, the local governments, our public schools and our financial system? Do you believe that the people that are running things in this country are doing a good job? When you look at the results, it is hard to argue that those in power are making good decisions. In fact, this country is caught in such a downward spiral that it would be easy to argue that most of our politicians should immediately resign in disgrace. Our leaders just keep coming up with one bad idea after another. Sometimes it almost seems as though it would be better for our leaders to do absolutely nothing at all because every time they try to do something they only make things worse. (Read More...)
Is Germany Secretly Maneuvering To Kick Greece Out Of The Euro?
What in the world is going on in Europe? Each day things just seem to get stranger and stranger. We are being told that a “deal” for a second Greek bailout has been reached and that Greece will not default in March. But behind the scenes it seems clear that many politicians in Germany (and in the other northern European countries as well) would like to kick Greece out of the euro. So what exactly is happening here? Well, it is complicated. The United States, along with other members of the international community, put a tremendous amount of pressure on Germany to bail out Greece one more time. Germany does not want to look like the bad guy, so they are going along with this bailout but they are also imposing conditions on Greece this time that will be almost impossible to meet. And when Greece fails to meet its “obligations”, that will give the northern Europeans the excuse that they need to kick Greece out of the euro. At this point, many politicians in northern Europe are convinced that Greece is a “lost cause” and that it is not fair to ask northern European nations to pay the price for the financial mistakes of Greece. Greece is basically completely and totally bankrupt, and the nations of northern Europe don’t want to have a “financial dependent” on their books forever. They are looking for a “way out”, and this new agreement lays the foundation for that. (Read More...)
20 Signs That Europe Is Plunging Into A Full-Blown Economic Depression
An economic nightmare is descending on Europe. With each passing month, the economic numbers across Europe get even worse. At this point it is becoming extremely difficult for anyone to deny that Europe is plunging into a full-blown economic depression. In fact, some parts of Europe are already there. In Spain the overall unemployment rate is over 22 percent, and in Greece one out of every five retail establishments has already been closed down. All over Europe, economic activity is rapidly slowing down, unemployment is skyrocketing and bad debts are unraveling. It isn’t even going to take a default by a nation such as Greece or a collapse of the euro to push Europe into an economic depression. All Europe has to do is to stay on the exact path that it is on right now and it will get there. Normally, European governments would respond to an economic slowdown by increasing government spending. But this time most of them are already drowning in debt. Instead of increasing government spending, most governments in Europe are actually cutting back. All over Europe, national governments are being encouraged to implement even more tax increases and even more budget cuts. The hope is that all of this austerity will help solve the nightmarish sovereign debt crisis that Europe is facing. But unfortunately, all of these tax increases and budget cuts are also going to involve a tremendous amount of economic pain. (Read More...)
The Debt Bomb: 7,600,000,000,000 Dollars Of Debt Must Be Rolled Over In 2012
When it comes to government debt, it is not just new debt that is the problem. Every single year, governments around the world must “roll over” gigantic mountains of debt that come due. That means that the actual borrowing that takes place each year is far greater than the yearly budget deficits that you see talked about on television. In 2012, a total of 7,600,000,000,000 dollars of debt must be rolled over by the G-7 nations, Brazil, Russia, India and China. When you add in interest payments, that number rises to over $8 trillion. And that does not even include any new borrowing that all of those nations will do in 2012. This is a debt bomb that could devastate the entire global economy at any time. Everything will be fine as long as global lenders are willing to lend these countries gigantic mountains of very cheap money. But if that changes, and there are already a multitude of signs that a massive global credit crunch has begun, it will mean a complete and total financial nightmare for the entire world. (Read More...)