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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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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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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Do yourself a favor. Do not invite both Vladimir Putin and Ben Bernanke to your next dinner party. Choose one and only one. If social obligations demand that you invite both, please make sure they are seated at opposite ends of the table.
Russia is a barely more than a thugocracy, yet the head thug has a firmer grasp on economic reality than the head of the Federal Reserve:
In a speech before the of economic experts at the Russian Academy of Sciences, the Russian prime minister had the following to say: “Thank God, or unfortunately, we do not print a reserve currency but what are they doing? They are behaving like hooligans, switching on the printing press and tossing them around the whole world, forgetting their main obligations.”
What appears to have angered the former KGB spy is the end of QE2.According to RIAN: “Putin’s comments came in the wake of the completion of the US’ quantitative easing (QE) 2 program on June 30, in which the Federal Reserve bought $600 billion worth of its Treasury bonds. The Fed’s first round of QE, which ended in March last year, amounted to less than half the size of QE2.” We can’t wait to hear what expletive Putin will usher once Bernanke launches QE3.
After the break-up of the USSR, Russia’s economy was smaller than South Korea’s and we were the world’s sole super power. Now we’re being lectured by a thug.
And we’re sad to say he’s right.
Source: Zero Hedge
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Americans have always been known for their sunny optimism and firm belief that tomorrow will be better than today.
Let us just point out that any Americans who still feel optimistic about the future must be completely unconscious in the present.
Americans are deeply pessimistic about the future as economic concerns rise and White House talks on raising the U.S. debt limit sputter, according to a Reuters/Ipsos poll released on Wednesday.
The number of Americans who believe the country is on the wrong track rose to 63 percent this month, up from 60 percent in June, with stubbornly high unemployment and prolonged gridlock in Washington dashing hopes of a swift economic recovery.
22% of the work force draws paychecks from state and federal governments. If your put us in a hammer lock and forced us to take a guess, we’d venture to say that they comprise a high percentage of those who feel optimistic about the future.
And why shouldn’t they? Their wages are high. Their odds of getting fired are nil. And their pensions are sweeeet.
As for the rest of you, your pessimism is completely justified.
Source: Reuters
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Administrations in the United States always release bad news late on Friday afternoons after most reporters have taken off work a little early and lined up at their local watering holes.
Apparently Saturday morning is the Chinese equivalent.
Today China announced that inflation in June his 6.4%, solidly above the 6.2% analysts had expected, clocking in at a 3-year high (according to Bloomberg).
This is one of Beijing’s big worries, and it contradicts recent comments from Premier Wen Jiabao that inflation in China had been whipped.
If the Chinese act quickly, they can probably get a good deal on a warehouse full of “Whip Inflation Now” buttons and bumper stickers left over from the Ford administration.
On the other hand, we might want to hold on to them because it’s pretty sure that we’re going to need them soon, too.
Source: Business Insider
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Between checking the health of patients who have already achieved room temperature in Europe and trying to peer through the smoke and mirrors obscuring China’s economic health, these are very busy days for the analysts as Moody’s.
“China may have understated the debt load of local governments by Rmb 3,500bn ($541bn), a hole in public finances that is likely to inflict damage on banks, Moody’s Investors Service said on Tuesday.”
Earlier in the year, China reported that provinces, cities and counties owed Rmb10,700bn. Analysts dutifully praised the government’s authoritative reportage and nodded in agreement that the debt levels were manageable.
But now Moody’s is having second thoughts. The rating agency upgraded China’s sovereign rating just last year, but now says its audit may have missed a swath of highly “problematic” loans.
“We conclude that the potential scale of problem loans at Chinese banks may be closer to our stress case than our base case. This is clearly a negative trend for creditors,” said Yvonne Zhang, one of the authors of the report.
Three words: House of cards.
Source: Financial Times
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Let us sum up this video clip in four short words and one mathematic symbol: Economic freedom = economic success.
Unfortunately, we have short memories and no sense of history. We forget (or never knew) that economic freedom worked for Great Britain in the 18th century, it worked for America in the 19th and 20th centuries, and it’s working in the 21st century for Chile, Hong Kong and New Zealand.
Of course, there are certain bankers and government officials in the world who disagree.
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