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A List Of 28 Things That Will Make You Realise That There Is Something Seriously Wrong With This Country

The American Dream
March 31, 2011

What in the world is happening to America?  Perhaps you have asked yourself that question from time to time.  Today it seems like everything is falling apart.  Our economy is crumbling, our politicians are incompetent, we have just gotten involved in another war, corruption is everywhere and the Americans people are so addicted to entertainment that hardly anything can wake them from their stupor.  It is enough to make you think that there is just not much hope for America.  But the truth is that we should never give up.  It is when the times are darkest that the greatest heroes arise.  We truly do live in challenging times, but that just means that there are great victories to be won and great stories to be written.  There may be a whole lot of things that are very wrong with America right now, but that doesn’t mean that the game is over quite yet.

Unfortunately, right now most Americans are completely asleep.  Just like during the declining years of the Roman Empire, most people that live in the U.S. are spoiled, decadent and completely addicted to entertainment.

The following is how many Americans actually plan their weeks….

Monday: Watch Dancing With The Stars

Tuesday: Watch The Dancing With The Stars Results Show

Wednesday: Watch American Idol

Thursday: Watch The American Idol Results Show

At this point, most people in this country cannot even intelligently discuss the pressing issues of our day.

In fact, 63 percent of Americans between the ages of 18 and 24 cannot find Iraq on a map and 90 percent of Americans in that same age group cannot find Afghanistan on a map.

We’ve got a lot of work to do.

America is in sorry shape and it desperately needs some heroes.

The following is a list of 28 things that will make you really think that there is something seriously wrong with this country….

#1 According to the Economic Policy Institute, almost 25 percent of U.S. households now have zero net worth or negative net worth.  Back in 2007, that number was just 18.6 percent.

#2 According to the Pentagon, the cost of the first week of attacks on Libya was 600 million dollars.

#3 The major food producers are shrinking the sizes of their packages so that they won’t have to raise prices.  The New York Times recently did a story about one woman who was absolutely shocked when she started keeping track of shrinking package sizes at her local supermarket….

Ms. Stauber, 33, said she began inspecting her other purchases, aisle by aisle. Many canned vegetables dropped to 13 or 14 ounces from 16; boxes of baby wipes went to 72 from 80; and sugar was stacked in 4-pound, not 5-pound, bags, she said.

#4 It is being projected that for the first time ever, the OPEC nations are going to bring in over a trillion dollars from exporting oil this year.  Their biggest customer is the United States.

#5 According to a recent census report, 13% of all the homes in the United States are sitting empty.

#6 20 percent of all the electricity in the United States is produced by nuclear power plants.  Many of those plants are very similar to the damaged reactors at the Fukushima nuclear complex in Japan.

#7 Barack Obama promised us that radiation from the nuclear disaster in Japan would not be a problem in the United States, but already it has shown up in milk in Spokane, Washington.

#8 Dallas Federal Reserve Bank President Richard Fisher recently said the following….

“If we continue down on the path on which the fiscal authorities put us, we will become insolvent, the question is when.”

Of course the Federal Reserve system was designed to get the U.S. government trapped in perpetual debt so actually he should be blaming himself and his friends over at the Fed.



#9 China produced 19.8 percent of all the goods consumed in the world last year.  The United States only produced 19.4 percent.

#10 Back in 2005 at the peak of the housing bubble, the median property tax on a home in the United States was $1614.  Today, even though home values have sunk like a rock, that figure has risen to $1917.

#11 In New Jersey, home owners pay an average of $7576 in property taxes every single year.

#12 According to the Federal Reserve, the adjusted monetary base has nearly tripled since mid-2008.

#13 Thanks for all the money printing Bernanke – according to one unofficial estimate, the U.S. in on track to have an 8.3 percent rate of inflation for the year.

#14 According to a recent article posted on the website of the American Institute of Economic Research, the purchasing power of a U.S. dollar declined from $1.00 in 1913 to 4.6 cents in 2009.

#15 The Ogallala Aquifer stretches from South Dakota to Texas, it is the largest underground supply of fresh water in the world, and it is rapidly running dry.  So how is “America’s breadbasket” going to continue to produce massive amounts of food for the rest of the world once that happens?

#16 The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.

#17 The U.S. industrial base has disintegrated so badly that we could literally export our entire manufacturing output and still not balance our trade with the rest of the globe.

#18 Goldman Sachs almost always wins.  According to a recent regulatory filing, Goldman Sachs lost money on just 25 days in 2010 and on only 19 days in 2009.

#19 In 1994, the top 1 percent of all income earners paid 25 percent of all state taxes in New York.  Today, the top 1 percent of all income earners pay 41 percent of all state taxes in New York.

#20 The National Institutes of Health has spent approximately $442,340 to study the behavior of male prostitutes in Vietnam.

#21 According to an absolutely stunning recent poll, 40 percent of all U.S. doctors plan to leave the profession at some point during the next three years because of Obamacare.

#22 If the new health care law is so great, then why is the Obama administration allowing so many organizations to opt out of it?  According to the Department of Health and Human Services, more than 1,000 organizationshave received Obamacare waivers so far.

#23 Large American cattle farms actually feed chicken manure to cattlebecause it is so cheap and because we produce way too much of it to properly dispose of as fertilizer.

#24 Every single year, Americans spend approximately 7.6 billion hourspreparing their taxes.

#25 The IMF says that in order to fix the U.S. government budget deficit, taxes need to be doubled on every single U.S. citizen.

#26 Mandatory federal spending is going to surpass total federal revenue for the first time ever in this fiscal year.  That was not supposed to happen until 50 years from now.

#27 Today, the U.S. national debt is over 14 times larger than it was back in 1981.

#28 According to the National Inflation Association, when you factor in the unfunded liabilities of the U.S. government, total federal debt obligations now come to a grand total of 76 trillion dollars.

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Obama in 2002: Toppling Brutal Dictator a ‘Dumb War’

Wednesday, March 30, 2011
By Matt Cover

President Barack ObamaPresident Barack Obama pauses during his speech on America’s energy security, in this photo taken Wednesday, March 30, 2011, at McDonough at Gymnasium Georgetown University in Washington. (AP Photo/Pablo Martinez Monsivais)

(CNSNews.com) – President Barack Obama, as an Illinois state senator in 2002, said that using military force to topple a murderous dictator amounted to a “dumb war” and should be opposed.

The “dumb war” Obama was criticizing was the planned invasion of Iraq and the murderous dictator was its leader, Saddam Hussein. Obama, speaking at an anti-war rally in Chicago on Oct. 2, 2002 said that while Saddam was a brutal tyrant, that was not enough to justify using military force to remove him from power.

“Now, let me be clear – I suffer no illusions about Saddam Hussein,” said Obama in his speech. “He is a brutal man. A ruthless man. A man who butchers his own people to secure his own power. He has repeatedly defied U.N. resolutions, thwarted U.N. inspection teams, developed chemical and biological weapons, and coveted nuclear capacity. He’s a bad guy. The world, and the Iraqi people, would be better off without him.”

“… After September 11th, after witnessing the carnage and destruction, the dust and the tears, I supported this administration’s pledge to hunt down and root out those who would slaughter innocents in the name of intolerance, and I would willingly take up arms myself to prevent such tragedy from happening again,” said Obama. “I don’t oppose all wars.  … What I am opposed to is a dumb war. What I am opposed to is a rash war. What I am opposed to is the cynical attempt by Richard Perle and Paul Wolfowitz and other armchair, weekend warriors in this administration to shove their own ideological agendas down our throats, irrespective of the costs in lives lost and in hardships borne.”

Obama argued that deposing Saddam militarily was not necessary, because Iraq posed no “direct threat” to the United States. Obama also cited Iraq’s weakened economy and the fact that it was still possible to contain Saddam’s aggression, repudiating the Bush administration’s rationale that Saddam posed too great a threat to American interests and his own people to be left in power.

“But I also know that Saddam poses no imminent and direct threat to the United States, or to his neighbors, that the Iraqi economy is in shambles, that the Iraqi military is a fraction of its former strength, and that in concert with the international community he can be contained until, in the way of all petty dictators, he falls away into the dustbin of history,” said Sen. Obama.

However, as president of the United States, Obama has discounted those same arguments he once made against using military force against brutal dictators.

In his March 28, 2011 speech justifying his decision to attack the government of Libyan leader Moammar Gadhafi, Obama cited Gadhafi’s record of brutality, saying that allowing Gadhafi to continue his brutality was not an option.

“Qaddafi declared he would show ‘no mercy’ to his own people,” said President Obama.  “He compared them to rats, and threatened to go door to door to inflict punishment. In the past, we have seen him hang civilians in the streets, and kill over a thousand people in a single day.

“Now we saw regime forces on the outskirts of the city,” Obama said. “We knew that if we waited, if we waited one more day, Benghazi, a city nearly the size of Charlotte, could suffer a massacre that would have reverberated across the region and stained the conscience of the world.”

Gadhafi, apparently unlike Saddam, needed to be stopped because he would kill his own people to maintain his own power, an act that this time posed a threat to America’s “interests and values,” Obama said.

“But when our interests and values are at stake, we have a responsibility to act,” said Obama. “That’s what happened in Libya over the course of these last six weeks.”

Obama, in his 2002 speech, said that instead of deposing Saddam through force, America should “fight” for democratic reforms in countries such as Saudi Arabia and Egypt, stronger international nuclear safeguards, and energy independence.

“Those are the battles that we need to fight,” Obama said in 2002. “Those are the battles that we willingly join – the battles against ignorance and intolerance, corruption and greed. Poverty and despair.”

By 2011, however, Obama had come to endorse the use of military power to enforce America’s “responsibility as a [global] leader” arguing that the United States was “different” and therefore had no other choice but to attack Libya.

“To brush aside America’s responsibility as a leader and, more profoundly, our responsibilities to our fellow human beings under such circumstances would have been a betrayal of who we are,” he said. “Some nations may be able to turn a blind eye to atrocities in other countries. The United States of America is different.”

The Return of the Debtor’s Prison

This week’s credit check: Judges have signed off on more than 5,000 warrants allowing borrowers who don’t pay to be jailed since the start of 2010. Portfolio Recovery Associates, a debt buyer, made $44 million last year on $281 million in revenue, a 16% net margin.

You wouldn’t be crazy to think that debtor’s prisons are a thing of the past. Debtors have historically been treated pretty poorly: under Roman law, a debtor’s body could be chopped up and the pieces given to his creditors (although they were more likely to be turned into slaves). So debtor’s prisons, in comparison, might seem less harsh. But they were squalid and debtors weren’t given any provisions. No sentences were set; you were there until you paid up. Borrowers owing as little as 60 cents could be jailed indefinitely. They were officially abolished in the United States in 1883.

But they’re now making a comeback in a modern form. As the debt-collection industry buys up bad debt and then seeks payment, it’s started relying on arrest warrants to get its way, throwing those who miss court appearances or don’t pay in jail. The Minneapolis StarTribune was one of the first to report on the resurgence: after analyzing court data it found “the use of arrest warrants against debtors has jumped 60 percent over the past four years, with 845 cases in 2009.” The practice is inconsistent, varying state-by-state, and the actual punishment varies. But there have been some cases that stand out:

In Illinois and southwest Indiana, some judges jail debtors for missing court-ordered debt payments. In extreme cases, people stay in jail until they raise a minimum payment. In January, a judge sentenced a Kenney, Ill., man “to indefinite incarceration” until he came up with $300 toward a lumber yard debt.

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It’s impossible to say how widespread this is across the country as no national statistics are kept. But the Wall Street Journal recently reported on the same phenomenon:

More than a third of all U.S. states allow borrowers who can’t or won’t pay to be jailed. Judges have signed off on more than 5,000 such warrants since the start of 2010 in nine counties with a total population of 13.6 million people, according to a tally by The Wall Street Journal of filings in those counties.

In Minnesota, arrest warrants have been issued for debts totaling as little as $85. It’s not free to put people in jail, either, and taxpayer dollars cover the cost. Not to mention the distraction from pursuing violent offenders. Law enforcement “can’t quickly access arrest orders for dangerous criminals because their computer system is clogged with debt cases,” reports the WSJ.

And there’s something else we’re being distracted from. In Joe Nocera’s weekend NYTimes column, he told the story of Charlie Engle, a marathoner who has been serving a 21-month sentence for mortgage fraud. Was he a lender who suckered borrowers into loans they couldn’t afford? A banker who sliced and diced mortgages into securities with AAA ratings? No. He’s a borrower who supposedly lied on two liar’s loans (although as Nocera reports, the evidence for that is pretty fuzzy). So while Angelo Mozilo walks free, making a nice profit for his company and himself, Engle goes to jail.

Banks and debt collectors are making a tidy profit, while the customers they prey upon are being thrown in the slammer. “We have now imprisoned one generation of debtors after another,” Samuel Johnson observed in 1758, “but we do not find that their numbers lessen.” His words ring true today.

Housing Market Blues


Mike Whitney

The Bleeding Continues

The collapse in housing prices is gaining pace proving that the Fed’s bond purchasing program (QE2) has been an utter failure. While liquidity sloshes around in the equities markets, the distress on Main Street is more excruciating than ever. The release of the Case-Shiller index of property values on Tuesday, confirmed analysts worst fears, that the decline in prices is accelerating on the downside further weakening household balance sheets, wiping out precious home equity, and thrusting working class families back into the red.

According to Bloomberg:

“Residential real estate prices dropped in January by the most in more than a year, raising the risk that U.S. home sales will keep slowing. The S&P/Case-Shiller index of property values in 20 cities fell 3.1 percent from January 2010, the biggest year-over-year decrease since December 2009….

Rising foreclosures are swelling the number of houses on the market, which may put additional pressure on prices in coming months. At the same time, a further decline in home values may keep potential buyers on the sidelines as they foresee better deals, hurting construction and consumer spending as owners’ equity evaporates.” (Bloomberg)

Who will buy a house in this market knowing that the same house might be cheaper tomorrow by tens of thousands of dollars? So, why has Fed chairman Ben Bernanke focused all his energy on the financial markets? Indeed, $600 billion in monetary stimulus has sent stocks into the stratosphere rising nearly 15 percent in just 3 months, but what about the underlying economy where wages are frozen, 14 million people are out of work, food stamp usage is at record highs, and the housing market is crashing? Bernanke is like the man who tries to fix his car by digging a hole in the back yard. It can’t be done, because the two things are entirely unrelated. QE2 has been a bust for everyone excluding the bank Mafia that torched the financial system with their pernicious flimflam.

So now prices will likely overshoot their historic trend due to growing pessimism and uncertainty about the overall health of the economy. Does Bernanke really believe that the financial markets can detach themselves from the real economy and float freely on a wave of overleveraged paper assets traded between charlatans?

Be serious. Housing needs a lifeline, pronto. Every downtick in prices means more lost equity, more foreclosures, more backlog, more red ink for the banks, and more years of scraping the bottom. Owning a home is no longer a vital part of the American dream; it’s a sinkhole that devours everything and leaves its owner drowning in debt.

More from Bloomberg: “Foreclosure filings may climb about 20 percent in 2011, reaching a peak for the housing crisis, according to RealtyTrac Inc….

The median price of existing homes, which make up more than 95 percent of the market, slid 5.2 percent from a year earlier, erasing all gains made after February 2002, according to the National Association of Realtors.”

So, we’re back to 2002 and counting. How much carnage can Bernanke and Obama endure before they lend a hand?

Prices are tumbling, inventory is mushrooming, and foreclosures are off-the-chart. Yes, the market can fix this problem by adjusting prices according to supply and demand, but that wasn’t the standard Bernanke used with the banks. Oh, no. Bernanke purchased $1.7 trillion in garbage mortgage backed securities (MBS) to keep his shifty buddies from taking the hit. (And that was AFTER the $700 billion TARP) It just goes to show that “free market” solutions are always jettisoned when they don’t meet the needs of the rich and powerful. The free market is just a stick that’s used to beat up on little guys.

According to Case-Schiller, housing prices are now off by 31.4% from their peak, a measly 2.2% above May 2009 the post-bubble bottom. So, when do we hit bottom; 35%, 40%, 50%?

Bank of America has already seen the light and started a pilot-program for making principal reductions on existing mortgages, in other words, lowering the face-value of the loan. This is a step in the right direction and could help eliminate negative equity leading to additional “walk aways” and foreclosures. According to Housingwire:

“The program will be funded from the $699.6 million the California Housing Finance Agency received from Treasury Department’s Hardest Hit Fund last year. A spokesperson for the CalHFA said there is no set amount of loans BofA is targeting, but the bank will be soliciting eligible homeowners soon.” (Housingwire)

The Obama administration should abandon its limp-wristed attempts at mortgage modification (HAMP) and establish Federal guidelines for “forced” cramdowns (mortgage reductions) as soon as possible. That will keep millions of people in their homes and quickly stabilize the market. There’s been enough devastation and bloodletting already. Housing needs government support and a policy that’s crafted in Washington not Wall Street.

The Inflation Knuckleball


Michael Pento

By its very definition, fiat money is something created out of thin air: the word “fiat” is Latin for “let it be done” (as in, by decree). But the convenience that such a currency system offers central bankers is paid at the expense of savers.

With nothing of real or lasting value on which to anchor, the value of fiat currencies can always blow away like ashes on a windy day.

For the past 40 years or so, every country on the planet has relied on fiat money

To a very large extent, this means that the national economies are far more exposed to the whims of their central bankers than they have been in the past. So, if central bankers go off their meds, the danger to the currency becomes profound. Unfortunately, at America’s Federal Reserve, it seems the inmates are now running the asylum.

We are being led to believe that falling prices are evil, and that only an increase in inflation can save our economy. From the moment the financial crisis took hold in 2008, Fed Chairman Ben Bernanke has looked to lower the dollar’s value and cause asset prices to rise – especially in real estate. But his pitch is wildly off the mark. The Fed can’t control the exact rate of inflation, nor can it direct where inflation will be distributed across the economy. In other words, inflation is like a knuckleball: once you let it loose, you’re never really sure where it’s going to go. And Bernanke’s pitches are so wild it would make Tim Wakefield jealous.

Thus, we are seeing rising prices everywhere except where Bernanke really wants them – real estate. Data released last week shows that the median price of existing homes declined 5.2% in February compared to the previous year, to $156,100. New home prices fared even worse; the median sales price dropped to $202,100 in February, from $221,900 a year earlier – a tumble of some 9%!

However, commodity prices provide the arena in which the the Fed’s lack of inflation control becomes most apparent. So far this year, gold is up over 4% and the CRB Index is up 8%.

Meanwhile, over the same period, the dollar has dropped over 4% against other fiat currencies, according to the Dollar Index. This has occurred despite global economic developments that would normally benefit a currency that has “reserve” status: Japan, the world’s third largest economy, has been taken off-line due to a catastrophic earthquake; the EU is facing another massive bailout bill as Portugal failed to pass austerity measures; and, a sandstorm of destabilizing revolutions is sweeping through the Middle East. Yet, instead of providing a safe haven for skittish capital, the dollar has recoiled.

It’s really no wonder that faith is waning. As the dangers of inflation become increasingly apparent, there is still no prospect for a change in policy any time soon. By all reasonable accounts, commodity prices will continue to surge as real interest rates continue to fall. Right now, the yield on the one year T-bill is .23%, while the YoY increase in inflation is 2.1%. And this is using the government’s twisted figures!

I estimate real interest rates are somewhere close to -8.75%. Therefore, investors are being thrust into the arms of precious metals and away from dollar-based assets.

There really isn’t much choice

However, since the real estate market was in a prolonged and lofty bubble, it will be the last asset class to respond to the Fed’s dollar debasement strategy. Although Bernanke is noted for his Great Depression scholarship, it should be obvious by now that he never spent much time studying asset bubbles. If he did, he would have learned that gold took decades to recover from its crash in 1981. The NASDAQ is still 45% below its all-time nominal high set over a decade ago. And, unlike housing prices, these markets were allowed to clear themselves after their respective crashes.

Prices dipped more than 70% before turning north in earnest. In contrast, home prices are being kept in a rump bubble by Fed stimulus. Amazingly, since 40% of the core CPI is owner’s equivalent rent, Bernanke will continue to miss the mark about the true level of the inflation he has created.

The aftershock of the real estate bubble has sent millions of homes into foreclosure, left 11% of homes vacant, and caused 23% of mortgage holders to be without any equity in the home. Unless the Fed starts to create credit to buy houses directly off the market, it will be very difficult to get real estate values to move higher.

It is clear that by trying to channel his inflation into just one asset class, Bernanke has placed the entire US economy in severe danger. He now faces a serious conundrum.

Does he raise interest rates significantly to fight inflation at the cost of a second housing market collapse, or does he sit idly by and watch the broader economy become as unaffordable as a resetting Option-ARM mortgage? Neither choice is pleasant, but one thing’s for sure: if the bond vigilantes start to raise interest rates for him, we’ll know his knuckleball missed the strike zone.

No Western Government Has Ever Claimed The Power To Do This, Not even Hitler.

Europe Whispers “Crisis” While the Market Continues Screaming


Jason Kaspar

Last year the Europe Union (and the euro) teetered on the verge of collapse when the Greek financial crisis strained the viability of the EU construct. This year, as other EU countries domino in similar fashion, no one seems to care – certainly not the markets. Portugal’s government collapsed last Friday, and Standard and Poor has downgraded Portugal twice in the last week from A- to BBB-. S&P then proceeded to cut Greece’s rating further from BB+ to BB-. Yet, defying all reason, the markets have gone up.

So, why is the market reacting positively to this news?

Well, in the perverse logic of a shortsighted market, debt spending is good. Going into the European crises last year, there was no backstop for a European country in trouble. The provisions for sovereign collapse were unclear and hotly debated. Would Greece be kicked out of the Eurozone? What would happen to the Euro? Would bondholders suffer losses? How would this impact banks?

The solution? Europe quickly embraced the troubled American model, socializing risk, instituting multiple backstops, and implementing enough cross guarantees to ensure that sorting through them would be more difficult than, say, trying to figure out how may countries the US is at war with.

The primary organism responsible for this socialist backstopping is the European Financial Stability Fund, or EFSF. The EFSF has the authority to issue $440 billion in additional bonds backed by European Area Member States, or EAMS, which means that Greece is lending to Portugal through the EFSF, and Portugal is lending to Greece. The credit rating agencies have (naturally) given this bailout vehicle their highest rating, AAA. Go figure. The system represents nothing more than a European version of a collateralized debt obligation (CDO) or collateralized loan obligation (CLO). You may remember, CDOs and CLOs helped ruin the financial system in 2008. To certain market participants, garbage intermingling with trash with a spice of waste produces a sweet European fragrance.

Seduced by this “sweet” aroma, when a government like Portugal fails and a bailout is imminent, the market perceives it as a non-event at worst and as a positive at best, because CDOs and CLOs allow leverage to be piled upon leverage. When the economy is doing well, the prospect of leverage actually enhances returns. The EFSF offers a Euro version of quantitative easing, providing a tailwind for the market when the market is going up.

The European effort does not actually fix the system, and in true Americano style, it is a form of kicking the can down the road (Americans may not be great at soccer, but we are elite can-kickers). For this reason, the European debt crisis continues unabated, passing from one country to the next. There will be a day of reckoning; the question is the catalyst, of which there are many possibilities. Spain, by itself, could crash the entire fiesta, straining the best laid bailout plans based on pure size. The country I am particularly watching is Ireland. There has been chatter in Ireland about default on some of its bonds, which has the potential to start a chain reaction across Europe. It changes the game theory scenario. Default seems inevitable for many of the EU countries, but it can be pushed off at the expense of citizens for years. If Ireland defaults, Greece and Portugal should very quickly come to the conclusion that they can default also, bringing down the pyramid of leverage and instigating the European version of America circa 2008. Because the euro structure is much worse than the dollar, such a crisis also likely would create a currency panic.

The day is coming, but until it does, overweight market participants plump with profits will enjoy skinny-dipping with the false protection of a full tide. Someday the tide will go out, and it will be a very ugly sight indeed.