THE GREAT AWAKENING

The Great Awakening-In God We Trust

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"You can learn to trade markets, but you can't learn to trade politicians. In truth, it'd probably be for the best if we just traded them all in."

Volatility, as we are now seeing, is the ugly lovechild of well- intentioned meddling and do-gooder policy. It expresses itself in bubbles, busts and then, more bubbles. Inflation...deflation...then Fed-conjured reflation. In such cyclonic, unpredictable markets, it's difficult to know what's real and what's make-believe. Perhaps this time next week all will be reversed; silver, gold and crude back on track to higher highs; and the dollar descending ever-quicker toward fiat currency purgatory. We'll see.
MUCH MORE TO COME
Hyperinflation and Double-Dip Recession Ahead
Guest Editor
The Casey Research Team
"The US is really in the worst condition of any major economy or country in the world," says ShadowStats Editor John Williams. In the following interview with The Gold Report, John concludes the nation is in the midst of a multiple-dip recession and headed for hyperinflation.

The Gold Report: Standard & Poor's (S&P) has given a warning to the US government that it may downgrade its rating by 2013 if nothing is done to address the debt and deficit. What's the real impact of this announcement?

John Williams: S&P is noting the US government's long-range fiscal problems. Generally, you'll find that the accounting for unfunded liabilities for Social Security, Medicare and other programs on a net- present-value (NPV) basis indicates total federal debt and obligations of about $75 trillion. That's 5 times the gross domestic product (GDP). The debt and obligations are increasing at a pace of about $5 trillion a year, which is neither
sustainable nor containable. If the US was a corporation on a parallel basis, it would be headed into bankruptcy rather quickly.

There's good reason for fear about the debt, but it would be a tremendous shock if either S&P or Moody's Investor Service actually downgraded the US sovereign-debt rating. The AAA rating on US Treasuries is the benchmark for AAA, the highest rating, meaning the lowest risk of default. With US Treasuries denominated in US dollars and the benchmark AAA security, how can you downgrade your benchmark security? That's a very awkward situation for rating agencies. As long as the US dollar retains its reserve currency status and is able to issue debt in US dollars, you'll continue to see a triple-A rating for US Treasuries. Having the US Treasuries denominated in US dollars means the government always can print the money it needs to pay off the securities, which means no default.

TGR: With the US Treasury rated AAA, everything else is rated against that. But what if another AAA-rated entity is about to default?

JW: That's the problem that rating agencies will have if they start playing around with the US rating. But there's virtually no risk of the US defaulting on its debt as long as the debt's denominated in dollars. Let's say the US wants to sell debt to Japan, but Japan doesn't like the way the US is running fiscal operations. It can say, "We don't trust the US dollar. We'll lend you money, but we'll lend it in yen." Then, the US has a real problem because it no longer has the ability to print the currency needed to pay off the debt. And if you're looking at US debt denominated in yen, most likely you would have a very different and much lower rating.

TGR: Is there a possibility that people would not buy US debt unless it's in their currency?

JW: It is possible lenders would not buy the Treasuries unless denominated in a strong and stable currency. As the USD loses its value and becomes less attractive, people will increasingly dump dollar- denominated assets and move into currencies they consider safer. And you'll see other things; OPEC might decide it no longer wants to have oil denominated in US dollars. There's been some talk about moving it to some kind of basket of currencies - something other than the US dollar, possibly including gold. This would be devastating to the US consumer. You'd get a double whammy from an inflation standpoint on oil prices in the US because the dollar would be shrinking in value against that basket of currencies.

TGR: Different countries are starting to discuss the creation of an alternative to the USD as reserve currency. How rapidly could an alternative currency appear?

JW: That would involve a consensus of major global trading countries; but just how that would break remains to be seen. Let's say OPEC decides it no longer wants to accept dollars for oil. Instead, it wants to be paid in yen. It's done. It's not a matter of creating a new currency - it's a matter of how things get shifted around...Part of the weakness in the dollar now is due to the way the world views what's happening in Washington and the ability of the government to control itself. That's a factor that may have forced S&P to make a comment. So, even having a weaker economy in Europe would not necessarily lead to relative dollar strength.

TGR: If the US experiences a continued, or even greater, recession, doesn't that impact spill over into Canada?

JW: The Canadian economy is closely tied to the US economy, and bad times here will be reflected in bad times in Canada. However, I'm not looking for a hyperinflation in Canada. Its currency will tend to remain relatively stronger than the US dollar. Canada is more fiscally sound; it generally has a better trade picture and has a lot of natural resources. Keep in mind that economic times tend to get addressed by private industry's creativity and, thus, new markets can be developed. For instance, you're already seeing significant shifts of lumber sales to China instead of to the US.

TGR: What about the effect on other countries?

JW: The world economy is going to have a difficult time. You do have ups and downs in the domestic, as well as the global, economy. People survive that. They find ways of getting around problems if a market is cut off or suffers. I view most of the factors in Canada, Australia and Switzerland as being much stronger than in the U.S Even when you look at the euro and the pound, they're generally stronger than in the US. Japan is dealing with the financial impacts of the earthquake. There's going to be a lot of rebuilding there. But, generally, it's a more stable economy with better fiscal and trade pictures. I would look for the yen to continue to be stronger. Shy of any short-term gyrations, the US is really in the worst condition of any major economy and any major country in the world and, therefore, in a weaker currency circumstance.

TGR: Then why are media analysts talking about the US being in a recovery?

JW: You're not getting a fair analysis. There's nothing new about that. No one in the popular media predicted the recession that was clearly coming upon us, and the downturn wasn't even recognized until well after the average guy on Main Street knew things were getting bad. We have some particularly poor-quality economic reporting right now. The economy has not been as strong as it advertised. Yes, there has been some upside bouncing in certain areas, but it's largely tied to short- lived stimulus factors.

Are we really seeing a surge in retail sales? If so, you should be seeing growth in consumer income or consumer borrowing - but we're not seeing that. The consumer is strapped. An average consumer's income cannot keep up with inflation. The recent credit crisis also constrained consumer credit. Without significant growth in credit or a big pick-up in consumer income, there's no way the consumer can sustain positive economic growth or personal consumption, which is more than 70% of the GDP. So, you haven't started to see a shift in the underlying fundamentals that would support stronger economic activity. That's why you're not going to have a recovery; in fact, it's beginning to turn down again as shown in the housing sales volume numbers, which are down 75% from where it was in normal times.

TGR: But we were in a housing boom. Doesn't that make those numbers reasonable?

JW: Housing starts have never been this low. Right now, they are running around 500,000 a year. We're at the lowest levels since World War II - down 75% from 2006 - and it's getting worse. I mean the bottom bouncing has turned down again. We're already seeing a second dip in the housing industry. There's been no recovery there.

In March, all the gain in retail sales was in inflation. Retail sales are turning down. You're going to see a weaker GDP number for Q111. The GDP number is probably the most valueless of the major series put out; but, as the press will have to report, growth will drop from 3.1% in Q410 to something like 1.7% in Q111.

TGR: You've stated that the most significant factors driving the inflation rate are currency- and commodity-price distortions - not economic recovery. Why is that distinction important?

JW: The popular media have stated that the only time you have to worry about inflation is when you have a strong economy, and that a strong economy drives inflation. There's such a thing as healthy inflation when it comes from a strong economy. I would much rather be in an economy that's overheating with too much demand and prices that rise. That's a relatively healthy inflation. Today, the weak dollar has spiked oil prices. Higher oil prices are driving gasoline prices higher - the average person is paying a lot more per gallon of gas. For those who can't make ends meet, they cut back in other areas.

You also have higher food prices. It's not due to stronger food or gasoline demand - it's due to monetary distortions. Unemployment is still high, even if you believe the numbers. I'll contend the economy really isn't recovering. At the same time, you're seeing a big increase in inflation that's killing the average guy.

TGR: Why isn't there more pressure on the US government to reduce the debt deficit?

JW: When you get into areas like debt and deficit, it's a little difficult to understand. The average person, though, should be feeling enough financial pain that political pressure will tend to mount before the 2012 election; but whether or not the average person will take political action remains to be seen. I don't think you have until 2012 before this gets out of control and there's hyperinflation. It could go past that to 2014, but we're seeing all sorts of things happening now that are accelerating the inflation process.

TGR: Like the dollar at an all-time low.

JW: If you compare the US dollar against the stronger currencies, such as the Australian dollar, Canadian dollar and Swiss franc, you're looking at historic lows. You're not far from historic lows in the broader dollar measure.

TGR: In your April 19 newsletter, you stated, "Though not yet commonly recognized, there is both an intensifying double-dip recession and a rapidly escalating inflation problem. Until such time as financial market expectations catch up with the underlying reality, reporting generally will continue to show higher-than-expected inflation and weaker-than-expected economic results." What do you mean by "until such time as financial market expectations catch up with the underlying reality?"

JW: A lot of people look closely at and follow the consensus of economists, which is looking at (or at least still touting) an economic recovery with contained inflation. I'm contending that the underlying reality is a weaker economy and rising inflation. I think the expectation of rising inflation is beginning to sink in. Given another month or two, I think you'll find all of a sudden the economists making projections will start lowering their economic forecasts.

TGR: Do you think economists will shift their outlooks before we get into hyperinflation or a depression?

JW: In terms of economists who have to answer to Wall Street, work for the government or hold an office like the Federal Reserve chairman, by and large, they'll err on the side of being overly optimistic. People prefer good news to bad news. If Fed Chairman Ben Bernanke said we were headed into a deeper recession, it would rattle the market. People on Wall Street want to have a happy sales pitch. What results may have little to do with underlying reality...According to the National Bureau of Economic Research, the defining authority in timing of the US business cycle, the last recession ended in June 2009. So, this current recession will be recognized as a double-dip recession. The Bureau doesn't change its timing periods.

I'll contend that we're really seeing reintensification of the downturn that began in 2007. Although it's not obvious in the headline numbers of the popular media, you'll find that September/October 2010 is when the housing market started to turn down again. That is beginning to intensify. We'll see how the retail sales look when they're revised. When all the dust settles, I think you'll see that the economy did start to turn down again in latter 2010. Somewhere in that timeframe, they'll start counting the second or next leg of a multiple-dip recession.

As many of you know I am really not happy with the economy or the way Congress is handling the situation. I believe the Tea Party and events/situations such as a Occupy Wall Street become products of the frustration. I know some don't see the problem and others only hear about it but it is starting to catch up to the college graduates as well. We are starting our own LOST GENERATION. No job, no family, no future for these young people. 

Good article from Heritage Foundation to read.

http://www.heritage.org/research/testimony/avoiding-a-lost-generati...

thanks Kevin ..... These folks are the key to winning elections!!

 

 

FACTS

 

Consider the facts:

Jobs: The president has presided over the loss of 2.2 million jobs.
Debt: Obama has increased taxpayer debt by $4.2 trillion. Every day, the nation runs a deficit of $4.2 billion.
Foreclosure and Bankruptcy: 2.4 million homes have been foreclosed on. Homeowners and businesses have declared 4 million bankruptcies.
The Stimulus: Obama promised that his $787 billion stimulus would save or create 3.5 million jobs by the end of 2010. He came up 7.3 million jobs short of his goal, according to the Heritage Foundation.
Healthcare: Obamacare did not reduce healthcare costs as promised and is in fact responsible for increasing costs in 2011. Health insurance premiums are up 13 percent.
Poverty: Nearly 3 million more Americans live in poverty than did before Obama took office.


Fed’s Fisher: Regulators Should Break Up ‘Behemoth’ Banks from Bloomberg

Federal Reserve Bank of Dallas President Richard Fisher said regulators
should break up so-called too-big-to-fail financial institutions to curtail the
risk they pose to financial stability.

“I believe that too-big-to-fail banks are too-dangerous-to-permit,” Fisher
said in the text of remarks given in New York today.

“Downsizing the
behemoths over time into institutions that can be prudently managed and
regulated across borders is the appropriate policy response. Then, creative
destruction can work its wonders in the financial sector, just as it does
elsewhere in our
economy.”



Regulators in the U.S. and abroad have attempted to address the risks posed
by such systemically important financial institutions, and if “properly
implemented,” the Dodd-Frank overhaul legislation “might assist in reining in
the pernicious threat to financial stability,” Fisher said.


Banks deemed too big to fail must hold as much as 2.5 percentage points in
additional capital as part of efforts to prevent another financial crisis,
global regulators said in June. The additional capital buffers will range from 1
percentage point to 2.5 percentage points, the Basel Committee on Banking
Supervision said.


U.S. regulators are also required under the Dodd-Frank financial overhaul
legislation to impose heightened standards on the biggest U.S. banks to curtail
systemic risk. Last month, MetLife Inc., the nation’s largest life insurer, said
the Fed rejected its plan to increase its dividend and resume share purchases.
The insurer said it will try to sell its banking businesses, thus reducing
government oversight.


More Concentrated


Fisher said the banking industry has “become more concentrated,” with five
institutions’ assets comprising half the industry’s. The assets of the 10
biggest depository institutions make up 65 percent of the banking industry’s
assets and comprise three quarters of our nation’s gross domestic product, he
said.


“Sustaining too-big-to-fail-ism and maintaining the cocoon of protection of
SIFIs is counterproductive, expensive and socially questionable,” Fisher said.


“Perhaps the financial equivalent of irreversible lap-band or gastric
bypass surgery is the only way to treat the pathology of financial obesity,
contain the relentless expansion of these banks and downsize them to manageable
proportions.”


© Copyright 2011 Bloomberg




Reich: Unemployment to Stay High for 10 Years





Monday, 28 Nov 2011 09:16 AM


By Julie Crawshaw




Economist and former Secretary of Labor Robert Reich says unemployment in the U.S. will
most likely remain high for the next 10 years.

"At the current rate of
job growth (averaging 90,000 new jobs per month over the last six months), 14
million Americans will remain permanently unemployed," Reich writes in his blog.
He adds that the consensus estimate is that at least 90,000 new jobs are needed
just to keep up with the growth of the labor force.

"Even if we get back
to a normal rate of 200,000 new jobs per month, unemployment will stay high for
at least 10 years," says Reich, now a professor of public policy at the
University of California at
Berkeley.
________________________________________________________

















71% Disapprove of Obama on the Economy — Gallup
Poll

And 76% of Americans think it will get worse! Find out how you
can immediately improve your own financial situation by watching the Aftershock Survival
Summit
now
.

________________________________________________________

"Years
of high unemployment will likely result in a vicious cycle, as relatively lower
spending by the middle-class further slows job growth," making political
compromise even more elusive than it is now.

In past years, says Reich,
politics has been greased by the expectation of better times to come – not only
more personal consumption but also upward mobility through good schools, access
to college, better jobs, improved infrastructure.







reich200ap.jpg
Robert Reich
(Associated Press
photo)
"It’s been a virtuous cycle: When the economy
grows, the wealthy more easily accept a smaller share of the gains because they
still came out ahead of where they were before. And everyone more willingly pays
taxes to finance public provision because they share in the overall economic
gains," he says.

"Now the grease is gone," says Reich, who served in
three national administrations and was a secretary of labor under President Bill
Clinton.

"Fully two-thirds of Americans recently polled by the Wall
Street Journal say they aren’t confident life for their children’s generation
will be better than it’s been for them."

"The last time our hopes for a
better life were dashed so profoundly was during the Great
Depression."

According to the Wall Street Journal, the Bureau of Labor
Statistics reported recently that the U.S. jobless rate remains a dreadful 9
percent overall, but oil and gas production, which now employs some 440,000
workers, has experienced an 80 percent increase, or 200,000 more jobs, since
2003.


Monday, 28 Nov 2011 09:16 AM



By Julie Crawshaw

 



 

 

 

 

Economist and former Secretary of Labor Robert Reich says
unemployment in the U.S. will
most likely remain high for the next 10
years.

"At the current rate of
job growth (averaging 90,000 new jobs
per month over the last six months), 14
million Americans will remain
permanently unemployed," Reich writes in his blog.
He adds that the
consensus estimate is that at least 90,000 new jobs are needed
just to keep
up with the growth of the labor force.

"Even if we get back
to a
normal rate of 200,000 new jobs per month, unemployment will stay high for

at least 10 years," says Reich, now a professor of public policy at the

University of California at

Berkeley.
_______________________________________________________


71%
Disapprove of Obama on the Economy — Gallup
Poll

And 76% of
Americans think it will get worse!

 

________________________________________________________

"Years
of high unemployment will likely result in a vicious cycle, as relatively lower

spending by the middle-class further slows job growth," making political

compromise even more elusive than it is now.

In past years, says
Reich, politics has been greased by the expectation of better times to come –
not only
more personal consumption but also upward mobility through good
schools, access
to college, better jobs, improved
infrastructure.













reich200ap.jpg
Robert Reich
(Associated Press

photo)
"It’s been a virtuous cycle: When the
economy
grows, the wealthy more easily accept a smaller share of the gains
because they
still came out ahead of where they were before. And everyone
more willingly pays
taxes to finance public provision because they share in
the overall economic
gains," he says.

"Now the grease is gone," says
Reich, who served in
three national administrations and was a secretary of
labor under President Bill
Clinton.

"Fully two-thirds of Americans
recently polled by the Wall
Street Journal say they aren’t confident life
for their children’s generation
will be better than it’s been for
them."

"The last time our hopes for a
better life were dashed so
profoundly was during the Great
Depression."

According to the Wall
Street Journal, the Bureau of Labor
Statistics reported recently that the
U.S. jobless rate remains a dreadful 9
percent overall, but oil and gas
production, which now employs some 440,000
workers, has experienced an 80
percent increase, or 200,000 more jobs, since
2003.

50 Economic Numbers From 2011 That Are Almost Too Crazy To Believe

http://theeconomiccollapseblog.com


Even though most Americans have become very frustrated with this economy, the reality is that the vast majority of them still have no idea just how bad our economic decline has been or how much trouble we are going to be in if we don't make dramatic changes immediately.
If we do not educate the American people about how deathly ill the U.S. economy has become, then they will just keep falling for the same old lies that our politicians keep telling them. Just "tweaking" things here and there is not going to fix this economy. We truly do need a fundamental change in direction. America is consuming far more wealth than it is producing and our debt is absolutely exploding.
If we stay on this current path, an economic collapse is inevitable. Hopefully the crazy economic numbers from 2011 that I have included in this article will be shocking enough to wake some people up.
At this time of the year, a lot of families get together, and in most homes the conversation usually gets around to politics at some point. Hopefully many of you will use the list below as a tool to help you share the reality of the U.S. economic crisis with your family and friends. If we all work together, hopefully we can get millions of people to wake up and realize that "business as usual" will result in a national economic apocalypse.
The following are 50 economic numbers from 2011 that are almost too crazy to believe....
#1 A staggering 48 percent of all Americans are either considered to be "low income" or are living in poverty.
#2 Approximately 57 percent of all children in the United States are living in homes that are either considered to be "low income" or impoverished.
#3 If the number of Americans that "wanted jobs" was the same today as it was back in 2007, the "official" unemployment rate put out by the U.S. government would be up to 11 percent.
#4 The average amount of time that a worker stays unemployed in the United States is now over 40 weeks.
#5 One recent survey found that 77 percent of all U.S. small businesses do not plan to hire any more workers.
#6 There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added 30 million extra people to the population since then.
#7 Since December 2007, median household income in the United States has declined by a total of 6.8% once you account for inflation.
#8 According to the Bureau of Labor Statistics, 16.6 million Americans were self-employed back in December 2006. Today, that number has shrunk to 14.5 million.
#9 A Gallup poll from earlier this year found that approximately one out of every five Americans that do have a job consider themselves to be underemployed.
#10 According to author Paul Osterman, about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.
#11 Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.
#12 Back in 1969, 95 percent of all men between the ages of 25 and 54 had a job. In July, only 81.2 percent of men in that age group had a job.
#13 One recent survey found that one out of every three Americans would not be able to make a mortgage or rent payment next month if they suddenly lost their current job.
#14 The Federal Reserve recently announced that the total net worth of U.S. households declined by 4.1 percent in the 3rd quarter of 2011 alone.
#15 According to a recent study conducted by the BlackRock Investment Institute, the ratio of household debt to personal income in the United States is now 154 percent.
#16 As the economy has slowed down, so has the number of marriages. According to a Pew Research Center analysis, only 51 percent of all Americans that are at least 18 years old are currently married. Back in 1960, 72 percent of all U.S. adults were married.
#17 The U.S. Postal Service has lost more than 5 billion dollars over the past year.
#18 In Stockton, California home prices have declined 64 percent from where they were at when the housing market peaked.
#19 Nevada has had the highest foreclosure rate in the nation for 59 months in a row.
#20 If you can believe it, the median price of a home in Detroit is now just $6000.
#21 According to the U.S. Census Bureau, 18 percent of all homes in the state of Florida are sitting vacant. That figure is 63 percent larger than it was just ten years ago.
#22 New home construction in the United States is on pace to set a brand new all-time record low in 2011.
#23 As I have written about previously, 19 percent of all American men between the ages of 25 and 34 are now living with their parents.
#24 Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.
#25 According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980. Today they account for approximately 16.3%.
#26 One study found that approximately 41 percent of all working age Americans either have medical bill problems or are currently paying off medical debt.
#27 If you can believe it, one out of every seven Americans has at least 10 credit cards.
#28 The United States spends about 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.
#29 It is being projected that the U.S. trade deficit for 2011 will be 558.2 billion dollars.
#30 The retirement crisis in the United States just continues to get worse. According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.
#31 Today, one out of every six elderly Americans lives below the federal poverty line.
#32 According to a study that was just released, CEO pay at America's biggest companies rose by 36.5% in just one recent 12 month period.
#33 Today, the "too big to fail" banks are larger than ever. The total assets of the six largest U.S. banks increased by 39 percent between September 30, 2006 and September 30, 2011.
#34 The six heirs of Wal-Mart founder Sam Walton have a net worth that is roughly equal to the bottom 30 percent of all Americans combined.
#35 According to an analysis of Census Bureau data done by the Pew Research Center, the median net worth for households led by someone 65 years of age or older is 47 times greater than the median net worth for households led by someone under the age of 35.
#36 If you can believe it, 37 percent of all U.S. households that are led by someone under the age of 35 have a net worth of zero or less than zero.
#37 A higher percentage of Americans is living in extreme poverty (6.7%) than has ever been measured before.
#38 Child homelessness in the United States is now 33 percent higher than it was back in 2007.
#39 Since 2007, the number of children living in poverty in the state of California has increased by 30 percent.
#40 Sadly, child poverty is absolutely exploding all over America. According to the National Center for Children in Poverty, 36.4% of all children that live in Philadelphia are living in poverty, 40.1% of all children that live in Atlanta are living in poverty, 52.6% of all children that live in Cleveland are living in poverty and 53.6% of all children that live in Detroit are living in poverty.
#41 Today, one out of every seven Americans is on food stamps and one out of every four American children is on food stamps.
#42 In 1980, government transfer payments accounted for just 11.7% of all income. Today, government transfer payments account for more than 18 percent of all income.
#43 A staggering 48.5% of all Americans live in a household that receives some form of government benefits. Back in 1983, that number was below 30 percent.
#44 Right now, spending by the federal government accounts for about 24 percent of GDP. Back in 2001, it accounted for just 18 percent.
#45 For fiscal year 2011, the U.S. federal government had a budget deficit of nearly 1.3 trillion dollars. That was the third year in a row that our budget deficit has topped one trillion dollars.
#46 If Bill Gates gave every single penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for about 15 days.
#47 Amazingly, the U.S. government has now accumulated a total debt of 15 trillion dollars. When Barack Obama first took office the national debt was just 10.6 trillion dollars.
#48 If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.
#49 The U.S. national debt has been increasing by an average of more than 4 billion dollars per day since the beginning of the Obama administration.
#50 During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.
Of course the heart of our economic problems is the Federal Reserve. The Federal Reserve is a perpetual debt machine, it has almost completely destroyed the value of the U.S. dollar and it has an absolutely nightmarish track record of incompetence. If the Federal Reserve system had never been created, the U.S. economy would be in far better shape. The federal government needs to shut down the Federal Reserve and start issuing currency that is not debt-based. That would be a very significant step toward restoring prosperity to America.
During 2011 we made a lot of progress in educating the American people about our economic problems, but we still have a long way to go.
Hopefully next year more Americans than ever will wake up, because 2012 is going to represent a huge turning point for this country.

40 Hard Questions That Americans Should Be Asking Right Now

http://theeconomiccollapseblog.com


If you spend much time watching the mainstream news, then you know how incredibly vapid it can be. It is amazing how they can spend so much time saying next to nothing. There seems to be a huge reluctance to tackle the tough issues and the hard questions. Perhaps I should be thankful for this, because if the mainstream media was doing their job properly, there would not be a need for the alternative media. Once upon a time, the mainstream media had a virtual monopoly on the dissemination of news in the United States, but that has changed.
Thankfully, the Internet in the United States is free and open (at least for now) and people that are hungry for the truth can go searching for it. Today, an increasing number of Americans want to understand why our economy is dying and why our national debt is skyrocketing. An increasing number of Americans are deeply frustrated with what is going on in Washington D.C. and they are alarmed that we seem to get closer to becoming a totalitarian police state with each passing year.
People want real answers about our foreign policy, about our corrupt politicians, about our corrupt financial system, about our shocking moral decline and about the increasing instability that we are seeing all over the world, and they are not getting those answers from the mainstream media.
If the mainstream media will not do it, then those of us in the alternative media will be glad to tackle the tough issues. The following are 40 hard questions that the American people should be asking right now....
#1 If Iran tries to shut down the Strait of Hormuz, what will that do to the price of oil and what will that do to the global economy?
#2 If Iran tries to shut down the Strait of Hormuz, will the United States respond by launching a military strike on Iran?
#3 Why is the Federal Reserve bailing out Europe? And why are so few members of Congress objecting to this?
#4 The U.S. dollar has lost well over 95 percent of its value since the Federal Reserve was created, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was created and Federal Reserve Chairman Ben Bernanke has a track record of incompetence that is absolutely mind blowing. So what possible justification is there for allowing the Federal Reserve to continue to issue our currency and run our economy?
#5 Why does the euro keep dropping like a rock? Is this a sign that Europe is heading for a major recession?
#6 Why are European banks parking record-setting amounts of cash at the European Central Bank? Is this evidence that banks don't want to lend to one another and that we are on the verge of a massive credit crunch?
#7 If the European financial system is going to be just fine, then why is the UK government preparing feverishly for the collapse of the euro?
#8 What did the head of the IMF mean when she recently said that we could soon see conditions "reminiscent of the 1930s depression"?
#9 How in the world can Mitt Romney say with a straight face that the individual health insurance mandate that he signed into law as governor of Massachusetts was based on "conservative principles"? Wouldn't that make the individual mandate in Obamacare "conservative" as well?
#10 If the one thing that almost everyone in the Republican Party seems to agree on is that Obamacare is bad, then why is the candidate that created the plan that much of Obamacare was based upon leading in so many of the polls?
#11 What did Mitt Romney mean when he stated that he wants “to eliminate some of the differences, repeal the bad, and keep the good” in Obamacare?
#12 If no Republican candidate is able to accumulate at least 50 percent of the delegates by the time the Republican convention rolls around, will that mean that the Republicans will have a brokered convention that will enable the Republican establishment to pick whoever they want as the nominee?
#13 Why are middle class families being taxed into oblivion while the big oil companies receive about $4.4 billion in specialized tax breaks a year from the federal government?
#14 Why have we allowed the "too big to fail" banks to become even larger?
#15 Why has the United States had a negative trade balance every single year since 1976?
#16 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of all jobs in the United States are manufacturing jobs. How in the world could we allow that to happen?
#17 If the United States has lost an average of 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001, then why don't our politicians do something about it?
#18 If you can believe it, more than 56,000 manufacturing facilities in the United States have permanently closed down since 2001. So exactly what does that say about our economy?
#19 Why was the new Martin Luther King, Jr. Memorial on the National Mall made in China? Wasn't there anyone in America that could make it?
#20 If low income jobs now account for 41 percent of all jobs in the United States, then how are we going to continue to have a vibrant middle class?
#21 Why do the poor just keep getting poorer in the United States today?
#22 How can the Obama administration be talking about an "economic recovery" when 48 percent of all Americans are either considered to be "low income" or are living in poverty?
#23 Why has the number of new cars sold in the U.S. declined by about 50 percent since 1985?
#24 How can we say that we have a successful national energy policy when the average American household will spend a whopping $4,155 on gasoline by the end of this year?
#25 Why does it take gigantic mountains of money to get a college education in America today? According to the Student Loan Debt Clock, total student loan debt in the United States will surpass the 1 trillion dollar mark in early 2012. Isn't there something very wrong about that?
#26 Why do about a third of all U.S. states allow borrowers who don’t pay their bills to be put in jail?
#27 If it costs tens of billions of dollars to take care of all of the illegal immigrants that are already in this country, why did the Obama administration go around Congress and grant "backdoor amnesty" to the vast majority of them? Won't that just encourage millions more to come in illegally?
#28 Why are gun sales setting new all-time records in America right now?
#29 Why are very elderly women being strip-searched by TSA agents at U.S. airports? Does that really keep us any safer?
#30 The last words of Steve Jobs were "Oh wow. Oh wow. Oh wow." What did he mean by that?
#31 How in the world did scientists in Europe decide that it was a good idea for them to create a new "killer bird flu" that is very easy to pass from human to human?
#32 If our founding fathers intended to set up a limited central government, then why does the federal government just continue to get bigger and bigger?
#33 Are we on the verge of an absolutely devastating retirement crisis? On January 1st, 2011 the very first of the Baby Boomers started to reach the age of 65. Now more than 10,000 Baby Boomers will be turning 65 every single day for the next two decades. So where in the world are we going to get all the money we need to pay them the retirement benefits that we have promised them?
#34 If the federal government stopped all borrowing today and began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the U.S. national debt. So does anyone out there actually still believe that the U.S. national debt will be paid off someday?
#35 If the U.S. economy is getting better, then why are an all-time record 46 million Americans now on food stamps?
#36 How can we say that we have the greatest economy on earth when we have a child poverty rate that is more than twice as high as France and one out of every four American children is on food stamps?
#37 Since 1964, the reelection rate for members of the U.S. House of Representatives has never fallen below 85 percent. So are the American people really that stupid that they would keep sending the exact same Congress critters back to Washington D.C. over and over and over?
#38 What does it say about our society that nearly one-third of all Americans are arrested by the time they reach the age of 23?
#39 Why do so many of our politicians think that it is a good idea to allow the U.S. military to arrest American citizens on American soil and indefinitely detain them without a trial?
#40 A new bill being considered by the U.S. House of Representatives would give the U.S. government power to shut down any website that is determined to "engage in, enable or facilitate" copyright infringement. Many believe that the language of the new law is so vague that it would allow the government to permanently shut down any website that even links very briefly to "infringing material".
Prominent websites such as Facebook, Twitter and YouTube would be constantly in danger of being given a "death penalty". The American people need to ask their members of Congress this question: Do you plan to vote for SOPA (The Stop Online Piracy Act)? If the answer is yes, that is a clear indication that you should never cast a single vote for that member of Congress ever again.


Larry Kudlow

A King Dollar GOP?

By Larry Kudlow - Saturday, February 11, 2012

Out on the campaign trail, Fed head Ben Bernanke is an unpopular guy.

Mitt Romney and Newt Gingrich have both said they would replace Bernanke, not reappoint him. Rep. Ron Paul would swap the whole Federal Reserve monetary system for a gold-linked dollar, making the yellow metal legal tender. And it was Gov. Rick Perry of Texas, before he dropped out of the race, who said more quantitative easing by the Fed would be “almost treasonous.”

Republicans in Washington are equally unimpressed by Bernanke. Rep. Paul Ryan recently criticized the Fed for bankrolling our huge budget deficits and thereby accommodating a profligate fiscal policy. And former Federal Reserve Board Governor Kevin Warsh, a Bernanke intimate before he left last April, just leveled criticism at the Fed’s extensive zero-interest-rate policy and its “operation twist.” (Warsh, by the way, was an economic official in the George W. Bush White House.)

Finally, former Bush Treasury Under Secretary John Taylor, author of the Taylor rule that is monitored inside the Fed, recently told me that the central bank target rate should be 2 percent, not zero.

There are two key takeaways from this onslaught of Fed criticism: First, the critics worry that the ultra-easy money pumped out by the Bernanke Fed will in the future create periodic inflationary bubbles (housing and energy), such as we had in the 2000s, which contributed mightily to the ultimate financial meltdown.

Second, and very much related to the inflation worry, the Republican Party is gradually becoming the King Dollar Party. After watching the greenback collapse almost 40 percent during the Bush years, Republican leaders are moving back to a Reaganesque dollar approach whereby a great nation with the world’s leading economy should have a strong and reliable currency.

The dollar soared and gold plunged during Ronald Reagan’s first term, just as it did during Bill Clinton’s second term. In both these eras, stocks rallied mightily and the economy grew rapidly. Supply-siders note that a good-as-gold dollar and low marginal tax rates were the ultimate prosperity tonics during these two periods.

But today we’re witnessing the opposite of supply-side prosperity. The current economic malaise seems borne of a weak-dollar/high-gold monetary policy coupled with a huge tax-hike threat looming in 2013.

To be fair, Bernanke has his supporters. They’re mostly from the canyons of Wall Street, where money-market economists are loathe to criticize him. Then there’s NYU professor Mark Gertler, who has coauthored research with Bernanke. A recent Bloomberg story cites Gertler as saying: “Criticism about the Fed being inflationary is not fact-based. In terms of an inflation record, the facts are the Fed has been as close to impeccable as you can possibly get.”

Gertler notes that during Bernanke’s six-year tenure, the consumer price index rose an average of 2.4 percent, lower than the 3.1 percent average for Alan Greenspan and the 6.3 percent for Paul Volcker. (Or course, that’s unfair to Volcker, who inherited 15 percent inflation and by targeting gold and the money supply brought it down to 3 percent.)

But the trouble is, after three years of zero interest rates (with more coming) and an outsized Fed balance sheet of more than $2 trillion, there’s still an inflation threat out there, despite the subpar economy. Bernanke has been a massive pump primer long after the financial emergency has passed.

Over the past year, the CPI has increased 3 percent. Energy prices have grown 6.6 percent, while food is up 4.7 percent. This is a big pinch on consumer pocketbooks and a drag on the economy. Inflation expectations are steadily running at 2.5 percent to 3 percent.

In Milton Friedman terms of too much money chasing too few goods, the 10 percent M2 increase of the past year is way above the 2.5 percent economy. In classical dollar-value terms, the $1,700 gold price is an ominous portent for future inflation. The tradable DXY dollar index is hovering under 80, which is massively below its 2001 peak of 120.

At the very least, one can say there’s a dollar-confidence problem in the marketplace. Over time, even though lags are long and variable, a falling greenback and a rising gold price are bound to spell higher future inflation.

So the Republican Party is absolutely right to shift toward a strong-dollar policy. (Newt Gingrich has gone so far as to propose a new gold commission, such as Reagan had, with investor Lew Lehrman and journalist James Grant as the co-chairmen.) While Bernanke was a good crisis manager, he seems to lack any conviction for a predictable rules-based policy that would create a reliable King Dollar.

Stable money is a growth incentive. And history tells us that a golden anchor for money is a key ingredient of long-term prosperity.

COPYRIGHT 2011 LARRY KUDLOW/CREATORS.COM

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