Story from Money News
Tag Archives: economy
New U.S. Treasury report showed Tuesday the government’s liabilities increased another $2 trillion in 2010: US debt exceeds assets by $13.473 trillion
Chicago union pension funds on verge of bankruptcy, and town in Rhode Island in such financial ruin it will have to “merge” with another town.
Economic collapse coming to a town near you. This from RedState.
North Carolina will face one of the largest state deficits in the country,yet the state currently owns approximately 50 planes!
In July WRAL reported that Lawmakers struggled to cut $1.3 billion from the NC budget in July for 2011-2012. I find it hard to believe that NC Lawmakers “struggled” to cut a billion out of the budget, and yet the state still owns/operates approx. 50 aircraft according to FAA records. 30% of NC’s fleet are registered to the Department of Environment and Natural Resources!
In comparison SC, Virginia, and Tennessee own approx. 19, 3, and 25 aircraft respectively.
Incredibly, Georgia owns approx 78 planes!
Pretty soon, the states are going to start lining up for bailouts. Is it just me, or should a requirement be that these states get rid of the aircraft that they are buying and maintaining on our tax dollars?
http://www.wral.com/news/local/politics/story/8049206/ NC Bugdet Deficet Story
CNBC: “The goal of Chairman Bernanke and the Federal Open Market Committee was to monetize the growing U.S. debt and generate future inflation.
Wow I actually agree with CNBC for a change.
Forbes: The Food Crisis Of 2011:When we have the first serious crop failure, which will happen,” says farm commodity expert Don Coxe, “we will then have a full-blown food crisis”
Please consider preparing your family now.
The Fed is not worried though because the Producer Price Index includes items whose prices are far too volatile: items like food and energy. Relax. You can trust the feds.
What does a basic year of long-term storable food look like? I have looked extensively on the internet and this is honestly one of the best blog posts I have been able to find. Trying to figure out how to get started storing a year’s worth of viable food for an emergency situation can be daunting.
Now I will be honest this is an ultra basic year’s worth of food that would allow someone to survive. Most “preppers” will recommend having a much better variety of foods on hand and I could not agree more. But if you are on a limited budget like my family is, what you see in this picture and this link to a post from the American Preppers Network is viable to begin on practically any budget.
If you are not preparing your family now for the coming economic collapse…what will it take for you to start?
You are running out of time.
In your household when the checking account is low, is that typically when you go have an expensive dinner, and a night out on the town? No of coarse not. You choose to stop spending money. You and I do not have a legal means of creating money to place in our checking account. The US Federal government does, in a round about way. A hybid creation that is a part private, part government entity called the Ferderal Reserve.
“Its duties today, according to official Federal Reserve documentation, are to conduct the nation’s monetary policy, supervise and regulate banking institutions, maintain the stability of the financial system and provide financial services to depository institutions, the U.S. government, and foreign official institutions.Wikipedia
The Fed ”maintains the stability of the financial system” by expanding and contracting the amount of money in circulation, and setting interest rates.
“Some economic theories have been developed that support the idea of expanding or shrinking a money supply as economic conditions warrant. Elastic currency is defined by the Federal Reserve as:
Currency that can, by the actions of the central monetary authority (The Ferderal Reserve), expand or contract in amount warranted by economic conditions.”WikiPedia
A fancy title for it is Quantitative Easing. Watch the above video for a brief but good explanation of “quantitative easing”. And bottom line whether it creates money digitally, or by having the US Treasury department print it, the Ferderal Reserve does have the ability to create money. Our country moved away from “the Gold Standard” where the amount of paper and coinage in the system had to be equal to the amount of gold on hand, to basing the worth or value of our money, on the Gross Domestic Product or GDP of the United States.
“is the market value of all final goods and services made within the borders of a country in a year” WikiPedia
Anyone that has purchased a home should have had a discussion at some point with their lender about their debt to income ratio. It is a comparison of one’s debt’s, to one’s income. Your credit score can be very negativly impacted if your debts outweigh your income. (This is budget/finance 101 for everyone outside of Washington D.C., all those inside D.C still do not understand this concept)
The concept of a debt to income ratio applies to countries as well. Our country has reached a point where our national outstanding debt is virtually the same as our GDP, $13-14 Trillion. We are litterally producing in a year as a whole, exactly as much as we owe. Our country is “living paycheck to paycheck”
Then in November 2010 the Federal Reserve announced QE2, a $600 billion buy up of long-term U.S. Treasury bonds. That is equivalent to me paying my mortage payment with a high interest credit card. It is a short term fix, that exponentially increases the amount of debt you have. And Bernanke indicated on 60 Minutes that he is not ruling out QE3 either. Which now makes Bernanke guilty of perjury, because in June of 2009 when Bernanke was asked by Rep. Hensarling if the Federal Reserve would monetize the debt, Bernanke unquivically answered no. You can view the 2 hr testimony here as well as see a transcript. http://www.c-spanvideo.org/program/StateoftheUSEconomy15
The US also announced in November it will substantially increase its contribution the International Monetary Fund for the European bailout.
”Paul Donovan, Deputy Head of Global Economics at UBS, wrote “In May 2010, the IMF and the EU announced the creation of the European Stabilization Mechanism (ESM), a 750 billion euro ($980 billion) lending facility to provide lines of credit to insolvent European countries. On December 1, 2010, Reuters reported that “The United States would be ready to support the extension of the European Financial Stability Facility via an extra commitment of money from the International Monetary Fund”
So since February of 2008: President Bush spent $152 billion on the Economic Stimulus Act of 2008 which was designed to “avert an economic resesssion”.
October 2008: President Bush spent $700 billion on TARP bill (Troubled Assest Relief Program) ”to purchase distressed assets, especially mortgage-backed securities, and make capital injections into banks.” WikePedia
February 2009: President Obama spends $800 billion on The American Recovery and Reinvestment Act (aka the Stimulus, or QE1, Quantitative Easing Part 1). This was a 1500 page bill which was intended to create jobs and promote investment and consumer spending during the recession.
In November The Federal Reserve spends $600 billion on QE2 and says QE3 is coming.
And the US continues to pour money into the IMF to bail out Europe.
We are continuing to pile up debt against a GDP that shrinks everytime unemployment increases.
I do not even think Einstein could make this math work. And IT WILL NOT END WELL. The continual printing of currencey in response to an increase in spending is the essence of unsustainability. It cannot last, and many experts are now of the opinion we have passed the point of no return to hyperinflation. A state where money loses its value very quickly, and cause the prices of everyday items to skyrocket.
It happened in Germany after World War I.
It happened in Argentina in 2001:
It happened in Zimbabwe in 2008:
It is beginning now in Greece and other European countries.
Please use the links you find on this site to get you and your family prepared.
Not only did he lie under oath to Rep. Hensarling about monetizing our debt, but he lied again to the American people on 60 Minutes this past Sunday. Mr. Bernanke had the audacity to claim that the Federal Reserve is/does not print money, when he himself explained on the very same show 2 years earlier that the Federal Reserve prints money!
I guess after OJ and Clinton perjury really does not mean anything anymore.
Over one year, several commodities that are used in the manufacturing process of 1000′s of the items you buy on a monthly basis have increased in price percentage by double digits:
Crude oil: 17.8%, Heating Oil: 22.8%, Unleaded Gas 18.7%, Corn 44.2%, Wheat 32.9%, Cotton 79..6%, Sugar 29.1%
Anything you purchase that is made in, or packed in plastic; that requires oil. And if you think the corn price just means you will have to cut back on popcorn think again. According to the National Corn Growers Association approximately 80% of all corn grown in the US is consumed by domestic and foreign cattle. I would also challenge you to examine the ingredients of most of the items in your pantry. See anything with high fructose corn syrup in it? Please visit the following site to see how you can protect your family from these inflationary prices.