And The Economy Is About To Get A Whole Lot Worse
The Economic Collapse
Wednesday, November 30, 2011
Have you ever been so poor that you had to live in your car? Have you ever been so low on funds that the only place you could afford to live was a rat-infested motel? Have you ever spent a night living in a tent city or sleeping in the streets? If not, you should consider yourself to be very fortunate.
As the recent Black Friday madnessdemonstrated, there are still lots of Americans that are doing well enough to go on wild shopping sprees, but the reality is that there are also millions of American families that are falling through the “safety net” to a place of total desperation. In a previous article I talked about the fact that the U.S. Census Bureau recently announced that a higher percentage of Americans is living in extreme poverty than has ever been measured before. Not only that, 2.6 million more Americans fell into poverty last year. That was also a new all-time record. As you read this, one out of every seven Americans is on food stamps and one our of every four U.S. children is on food stamps. Tens of millions of American families are living on the edge of desperation. In many communities across the United States, there is so much despair in the air that it is almost tangible. When you look into the eyes of many Americans these days, it almost seems as if all the hope has been sucked right out of their hearts. Economic despair is at epidemic levels, and unfortunately the economy is about to get a whole lot worse.
Did you see the report on families that are living in their cars that Scott Pelley did for 60 Minutes the other night?
If you have not seen it yet, I highly recommend that you take a few minutes to check it out.
At one school in Florida alone, Pelley met 15 children who had been living in their cars.
The following is a brief excerpt from Pelley’s report….
This is the home of the Metzger family. Arielle,15. Her brother Austin, 13. Their mother died when they were very young. Their dad, Tom, is a carpenter. And, he’s been looking for work ever since Florida’s construction industry collapsed. When foreclosure took their house, he bought the truck on Craigslist with his last thousand dollars. Tom’s a little camera shy – thought we ought to talk to the kids – and it didn’t take long to see why.
Pelley: How long have you been living in this truck?
Arielle Metzger: About five months.
Pelley: What’s that like?
Arielle Metzger: It’s an adventure.
Austin Metzger: That’s how we see it.
Pelley: When kids at school ask you where you live, what do you tell ’em?
Austin Metzger: When they see the truck they ask me if I live in it, and when I hesitate they kinda realize. And they say they won’t tell anybody.
You can view the entire 60 Minutes report below….
Did you ever think that this would happen to America?
What makes things even sadder is that there are millions upon millions of empty homes right now in the United States.
Millions of American families have been foreclosed upon in recent years and home prices keep falling with no end in sight.
In fact, today it was reported that home prices are now the lowest that they have been in eight years.
So why aren’t people renting or buying more homes?
Well, the truth is that you can’t afford a mortgage payment or a rent payment if you don’t have a decent job.
When someone can’t find a good job, then none of the other economic statistics that many of us love to talk about so much really matter.
That is why I write about what is happening to American jobs so often. Today, big corporations are shipping as many jobs as they can out of the country. An average of 23 manufacturing facilities were shut down every single day in the United States last year. Even though our population is rapidly increasing, there are 10 percent fewer middle income jobs in the U.S. today than there were a decade ago. Until this trend gets reversed, the number of American families living in their vehicles is only going to increase.
Unfortunately, the U.S. economy is about to get even worse.
Today, it was announced that American Airlines has filed for bankruptcy. Sadly, there will be many more companies filing for bankruptcy during the upcoming economic downturn.
As I wrote about yesterday, we really are on the verge of a major leaguecollapse of the financial system in Europe.
Jim Cramer of CNBC says that because of what is happening in Europe, the global financial system is at “DEFCON 3, two stages from a financial collapse that is so huge it’s hard to get your mind around.”
Unfortunately, Jim Cramer is not exaggerating. The global economy is heading for a massive amount of trouble if something dramatic is not done immediately.
This is not a drill. Bert Van Roosebeke, an economist with the Center for European Policy, recently made the following statement about the cold, hard reality now facing Europe….
“We’re actually really running out of money”
Back during the early 1930s, the flow of credit was greatly restricted and that was one of the primary causes of the Great Depression. Back in 2008, another massive credit crunch just about brought the financial world to its knees.
Well, now it is starting to happen again. A nightmarish credit crunch has already begun in Europe, and nobody seems to have any answers about how to stop it.
The following comes from an article in the New York Times….
From global airlines and shipping giants to small manufacturers, all kinds of companies are feeling the strain as European banks pull back on lending in an effort to hoard capital and shore up their balance sheets.
The result is a credit squeeze for companies from Berlin to Beijing, edging the world economy toward another slump.
When there is a credit crunch of this magnitude, it causes the money supply to start to shrink. This is already happening all over Europe as a recent article inthe Telegraph noted….
All key measures of the money supply in the eurozone contracted in October with drastic falls across parts of southern Europe, raising the risk of severe recession over coming months.
Right now, we are seeing the money supply in each of the “PIIGS” nations fall at a staggering rate. The following comes from the same Telegraph article referenced above….
Simon Ward from Henderson Global Investors said “narrow” M1 money – which includes cash and overnight deposits, and signals short-term spending plans – shows an alarming split between North and South.
While real M1 deposits are still holding up in the German bloc, the rate of fall over the last six months (annualised) has been 20.7pc in Greece, 16.3pc in Portugal, 11.8pc in Ireland, and 8.1pc in Spain, and 6.7pc in Italy. The pace of decline in Italy has been accelerating, partly due to capital flight. “This rate of contraction is greater than in early 2008 and implies an even deeper recession, both for Italy and the whole periphery,” said Mr Ward.
Those numbers are really, really bad.
But instead of doing something to prepare for the coming economic crisis, members of the U.S. Congress are focused on stripping even more of our liberties and freedoms away from us.
If this bill becomes a law, the United States of America would officially become part of the “battlefield” in the war on terror, and any American citizen could easily be flagged as a “potential terrorist”.
Once identified as a “potential terrorist”, the U.S. military would be able to arrest you, take you to a foreign prison and detain you for the rest of your life without ever having to charge you with anything.
What in the world is happening to America?
Unfortunately, as the economy gets even worse civil unrest in this country is going to intensify and the thin veneer of civilization that we all take for granted is going to start to disappear.
In response to the coming civil unrest, the U.S. Congress will try to pass laws that will be even more repressive than S. 1867.
Our nation has entered a downward spiral and things are going to become very frightening if this thing is not turned around.
So what do all of you see happening as we get ready to enter 2012? Please feel free to leave a comment with your opinion below….