Peter Schiff, who was known as “Dr. Doom” for his accurate predictions of the 2008 housing market collapse, warns that the United States’ current fiscal policy could push the country over a “financial cliff.”
“I do think we’re probably going to go to hell, I’m not sure that we’ll be fortunate enough to have the handbasket,” Schiff said in an interview with Yahoo!. “The real fiscal crisis comes when our creditors want their money back and we don’t have it.”
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Written by Morgan Kennedy.
I know that technically the Federal Reserve was established in 1913, making me more than a little premature in the anniversary department, but the way things have been going lately we may not have another year of life as we know it here in America so I wanted to share this message with you now. There is still time to pull ourselves out of the economic mess we are in, but the window of opportunity to maintain our way of life is rapidly closing here in America thanks to one institution in particular.
Most of us don’t know much about the series of banks that comprises the Federal Reserve, like the fact that the Federal Reserve is owned and controlled by private interests that have no allegiance to the United States. In essence the Fed is a supranational organization that operates outside of the scope of American politics as none of our political leaders have any control over the Federal Reserve.
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Peter Schiff, the author of the 2007 book “Crash Proof,” which accurately predicted the financial downturn of 2008, has struck again. In his new book, the author, who is the CEO and Chief Global Strategist of Euro Pacific Capital, predicts a new crash that will dwarf the recession of 2008. Schiff says that the coming financial cataclysm is not only unpreventable, but government programs meant to alleviate it will ultimately serve only to dramatically deepen the inevitable crash.
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It’s beginning to look like a trend. San Bernardino has become the latest California city to file bankruptcy, joining the growing number of cities in the state that have become overwhelmed by financial woes. Other cities that have recently filed include Stockton and Mammoth Lakes. Although experts don’t predict an epidemic of bankruptcies, cities all over California are feeling the pinch of tighter budgets and reduced revenues.
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In this video, David Rosenberg, chief economist for Gluskin Sheff, explains why the current economy has analysts so puzzled. The United States economy is not heading into the second dip of a double-dip recession as many economists believe, says Rosenberg. Rather, it is merely at the halfway mark of a full-blown depression.
To support his theory, Rosenberg points to economic statistics that, he says, all support the inescapable conclusion that not only is the economy in worse shape than anyone wants to admit, but that this recovery will be much longer and more drawn-out than any the country has seen in generations.
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Many Americans worry about the strength and stability of the United States banking system according to a new Rasmussen Reports national survey.
From June 10-11, 2012, the automated survey asked 1,000 American adults for their opinions on the state of the banking system. Respondents answered a telephone prompt that asked nine questions about the economy, including “how confident are you in the stability of the U.S. banking industry today?”
The survey’s respondents could choose from several responses to indicate their opinions. 52 percent of respondents indicated that they are at least “somewhat not confident” in the state of the banking system, while only 46 percent indicated that their opinions ranged from “somewhat confident” to “very confident”.
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Written by Morgan Kennedy
It turns out it wouldn’t be so hard to bring America to it’s knees economically, at least that is the viewpoint expressed in this video from Free Market… Simply restrict, overtax, and over-regulate energy and virtually all forms of commerce suffer. Our dependence on fossil fuels from foreign nations makes us increasingly vulnerable to market shocks. (Can anyone say Strait of Hormuz?) Without a constant stream of oil (our drug of choice) America will stop moving in about 3 days. Just imagine, empty store shelves in America, tapped out gas stations, and a complete cessation of vital services like power, water, and garbage. While this situation may be unimaginable to the average blissfully ignorant American, it is a threat that hangs over our heads everyday we remain dependent on foreign nations to supply the vast majority of our energy needs.
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A new study estimates that a terrorist attack involving the detonation of a dirty bomb in downtown Los Angeles would cost the area $16 billion, mostly in lost revenue. By contrast, the immediate cost of such an attack, loosely defined as the cost necessary to deal with the injured and restore the area to a pre-attack condition along with revenue lost due to temporary businesses closings, is estimated at a little over $1 billion. The rest of the cost would result from the psychological impact of the attack on potential shoppers, diners and employees.
The point of the study was not to generate anxiety, according to researcher William Burns of Design Research, who co-authored the study along with researchers from the University of Oregon, the USC Annenberg School for Communication and Journalism, Brown University, Monash University and ABS Consulting. Rather, the investigators hoped to increase awareness of the potential impact on the public of terrorism and to highlight the importance of establishing effective risk communication as an important part of both disaster preparedness and response.
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Due to the economic recession in the United States, the Americans find it very much difficult to get suitable jobs after they complete their education. As such, they are unable to pay off their student loans and are facing financial problems. Student loan debt may cause an economic mess in similarity with the mortgage crisis. As per the study by the National Association of Consumer Bankruptcy Attorneys, the Americans owe more on student loans than on credit cards. The total outstanding loans have exceeded to $1 trillion for the first time in the previous year. The student loan debt is becoming a rising threat to the US economy. It has reached about $870 billion surpassing the credit cards and car loans and these balances are expected to continue rising.
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It appears the eurozone has entered a deeper recession than the one caused by the 2008 financial crisis. The eurozone’s unemployment rate now stands at 10.7 percent, half a percentage point higher than at the peak of the last recession and the highest in the euro’s history. The rates for the most troubled countries are even more shocking, with 19.9 percent for Spain and 23.3 percent for Greece. Unemployment among the young is simply dismal, with rates of 48.1 percent in Greece and 49.9 in Spain for workers under 25 years of age. Carl Weinberg, chief economist at High Frequency Economics, called the numbers “appalling.”
Though world leaders praise the latest bailout for Greece, economists anticipate another global recession arising from Europe’s debt crisis, and a serious one at that. With Europe having a larger population, a larger banking system and more Fortune 500 companies than the U.S., a European financial system crash is sure to send shockwaves through markets around the globe.
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California may be the spot where economic collapse begins and we’re lucky enough have a ringside seat to see it all.
There are days when you wonder if anyone in Sacramento actually comprehends the predicament in which they’ve put the one-time Golden State. Based on a new dispute between legislators, the answer seems to be a resounding no.
Marcia Fritz, CPA and president of the California Foundation for Fiscal Responsibility (which is pushing for major public pension reform) explains:
“I was testifying on problems with using collective bargaining to negotiate pension changes when individuals on both sides gain from benefit changes, and elected officials are bribed through campaign contributions to go along,” Fritz told us. “Since kids can’t vote, and they are the ones who have to pay the unfunded liabilities created by these selfish decisions, it’s a form of abuse.”
So in her testimony, Fritz uttered these words: “It’s tantamount to fiscal child abuse.”
That’s when the feces hit the fan. The state’s social workers are horrified with the supposedy poor choice of words.
“Anyone in the public eye should not be demeaning the plight of victims,” social worker Sarah Taylor says. “It goes against nature, what I see, where the parents are inflicting violence and sexual abuse on children. To compare that to a fiscal system, it’s appalling.”
Of course, the regular cast of characters lined up to denounce Fritz. David Low of the California School Employees Association said Fritz’s simply wants to inflame people’s anger.
California is screwed. Totally, completely, absolutely screwed. No doubt, no question. And yet in these perilous times, a spokesman for the CSEA is worried about offensive words.
What he should be appalled by are the actions of the state legislature.
They’re not guilty of fiscal child abuse. They’re guilty of fiscal murder. First degree.
Source: Orange County Register
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Remember that book titled “The Millionaire Next Door?” It was about ordinary people, perhaps your neighbors, who had worked hard and lived modestly and, as a result, had accumulated millions of dollars despite relatively modest incomes.
I have an on-going argument with my lunatic mother-in-law. Actually, I have many on-going arguments with my lunatic mother-in-law, but the one I’m referring to in this case revolves around the poor. She says America is filled is poor, downtrodden wretches who have nothing. I say America’s poor are the envy of most of the world’s population.
I don’t deny the possibility that both positions are possibly true, but I think my position is reinforced by a new study by the Heritage Foundation:
For decades, the U.S. Census Bureau has reported that over 30 million Americans were living in “poverty,” but the bureau’s definition of poverty differs widely from that held by most Americans. In fact, other government surveys show that most of the persons whom the government defines as “in poverty” are not poor in any ordinary sense of the term. The overwhelming majority of the poor have air conditioning, cable TV, and a host of other modern amenities. They are well housed, have an adequate and reasonably steady supply of food, and have met their other basic needs, including medical care. Some poor Americans do experience significant hardships, including temporary food shortages or inadequate housing, but these individuals are a minority within the overall poverty population. Poverty remains an issue of serious social concern, but accurate information about that problem is essential in crafting wise public policy. Exaggeration and misinformation about poverty obscure the nature, extent, and causes of real material deprivation, thereby hampering the development of well-targeted, effective programs to reduce the problem.
This may describe the current condition of so-called poverty in the United States, but this site is called EconomicCollapse.net and I fear that this may be the high water mark for America’s lower classes.
At the rate we’re going, America’s poor may soon find out what the rest of the world means when it talks about poverty.
Source: Heritage Foundation
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Larry Summers is often quotable and Charlie Rose is occasionally watchable. Put ‘em together and you get the very definition of a blind sow finding an acorn.
The whole clip is interesting, but the money quote begins a hair after the 21:30 mark when Summers says something about left wing icon FDR that will undoubtedly result in fewer dinner invitations in the Hamptons this summer:
“Never forget, never forget, and I think it’s very important for Democrats especially to remember this, that if Hitler had not come along, Franklin Roosevelt would have left office in 1941 with an unemployment rate in excess of 15 percent and an economic recovery strategy that had basically failed.”
Why next thing you know Summers will be saying that Keynesian ecomomics don’t work.
Clip here to watch the video: CharlieRose.com
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Michael Barone is usually a pretty level-headed guy. He leans conservative (I think), but not so far that anyone would consider him an extremist. That’s what makes his correction of comments in a recent column all the more frightening.
Here’s Barone in Tuesday’s Washington Examiner:
In my Sunday Examiner column I noted that the national debt currently amounts to 62 percent of gross domestic product and I cited Kenneth Rogoff and Carmen Reinhart’s book This Time Is Different for the proposition that economic growth is impaired when debt reaches 90 percent of gross domestic product. However, it has been pointed out to me (see this paper by Senate Budget Committee Republicans) that these two measures of debt are incommensurate: the 62 percent figure refers to public debt outstanding while Rogoff and Reinhart’s 90 percent refers to total debt. This underlines rather than undermines my point, for total debt now amounts to 95 percent of gross domestic product. We may already be at the danger point, rather than heading there fast.
In other words, forget those five-year predictions of doom. Ignore those ten-year windows. Pay no attention to even longer forecasts.
We’re talking watch out, here it comes, get out of the way before it hits you. We’re talking now.
Source: Washington Examiner
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We admit that this is entirely anecdotal and that the Minnesota state government has only been shut down for a few days, but it is nevertheless enlightening to see that chaos doesn’t necessarily ensue when Medium Brother goes away.
The Minneapolis Star Tribune tells what’s happened in the Land of 10,000 Lakes when the state government shut down in a budget dispute between Republicans and Democrats:
Bob Gehlen had a whiskey and Coke in one hand, and a fistful of opinions on the state government shutdown in the other.
“I think we ought to shut down the government for a year,” said the former Marine, standing at the Elks Lodge bar on bingo night. “It really hasn’t had any impact.”
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