Archive for July 9th, 2012
The oft outspoken Member of European Parliament, Nigel Farage (UKIP) joins Rick Santelli on CNBC for four and a half minutes of pure golden, truth. Among the gems, Nigel explains the European bailouts as “the same bundle of money going round and round in circles” further describing it as “a giant ponzi scheme”. Santelli, never one to be quiet when it comes to revealing the truth, explains how the US is just such a money-circulating ponzi scheme as “one part of the government issues debt as another part is buying”.
The problems that America is experiencing right now are not just confined to the field of economics. The truth is that there are signs of deep decay wherever we look, and without question the United States is rotting from the inside out in thousands of different ways. For a long time ourdebt-fueled prosperity has masked much of the social decay that has been festering underneath the surface, but now it is becoming increasingly apparent that the thin veneer of civilization that we all take for granted is beginning to disappear. For many Americans, it is easy to point a finger at a particular group or political party and blame them for all of our problems, but the reality of the matter is that our societal decay cuts across all income levels, all political affiliations and all regions of the country. We are being destroyed from within, and this decay can be seen on the streets of the most dilapidated sections of major U.S. cities and it can also be seen in the halls of power in Washington D.C. and on Wall Street. It is undeniable that something has fundamentally changed. The American people do not seem to possess the same level of character that they once had. So where do we go from here?
The following are 25 signs the collapse of America is speeding up as society rots from the inside out….
1. Homicides in Chicago are 38 percent ahead of where they were last year at this time. In fact, the Daily says that “homicide victims in the Windy City outnumber U.S. troops killed in Afghanistan this year”. Things are taking a turn for the worse in other major U.S. cities as well. Just check out the carnage that happened in New York City this past Friday night….
Across barely eight hours, at least seven New Yorkers were murdered and another 21 shot, stabbed or slashed across the city — with only three suspects arrested before the blood stopped flowing
2. Speaking of New York City, a teacher there recently posted the following on her Facebook page….
“Crupi and I survived a shootout today…Thank God we are ok…To all the wanna be gangstas of Staten Island (who say they are from Brooklyn but really aren’t), be grateful you have what you have and stop trying to live a lifestyle you will never understand.”
About a week later, her husband discovered her dead in a pool of her own blood in their apartment. She had been stabbed numerous times.
3. Reporter James Carlini recently discussed the growing problems that roaming gangs of youths are causing along the Magnificent Mile in Chicago….
There is an increase in problems at night with small gangs roaming around looking for the right prey.
Don’t bother looking for any cops, they are far and few between. Little perfume-size pepper spray canisters may be in vogue, politically correct and fit in a purse, but they are not practical. Forget about pepper spray, you’d need a gallon jug of it to stop five or six assailants.
Do you now need a .357 Magnum to walk down the Mag Mile? Maybe a compact .45 or a high-capacity 9MM “just to be on the safe side” is more what you should have. Even the police are telling each other that they better “carry large caliber” off-duty and not be caught unarmed.
4. Down in Florida, a lifeguard named Tomas Lopez was recently fired for attempting to saving a man that was drowning “outside his patrol zone“….
Lopez, 21, was hired by Jeff Ellis Management to monitor a portion of a public beach in Hallandale Beach, Fla. The company allegedly gave Lopez strict instructions to stay inside his patrol zone, ABC News reports.
But when Lopez spotted a man in distress outside his patrol zone Monday afternoon, he ignored those instructions and leapt into action.
By the time lifeguard Tomas Lopez got to the man, other bystanders had already pulled him to shore, the South Florida Sun Sentinel reports. Lopez stayed with the man until paramedics arrived.
That valiant act was Lopez’s last as a lifeguard, as his employer fired him for straying 1,500 feet outside his patrol zone.
5. Authorities say that thieves are stealing identities and filing fraudulent tax returns on a scale never seen before….
With nothing more than ledgers of stolen identity information — Social Security numbers and their corresponding names and birth dates — criminals have electronically filed thousands of false tax returns with made-up incomes and withholding information and have received hundreds of millions of dollars in wrongful refunds, law enforcement officials say.
The criminals, some of them former drug dealers, outwit the Internal Revenue Service by filing a return before the legitimate taxpayer files. Then the criminals receive the refund, sometimes by check but more often though a convenient but hard-to-trace prepaid debit card.
In all, the IRS says that there were approximately 940,000 fake tax returns filed for 2010.
6. U.S. Secret Service agents are supposed to be “the best of the best” and are charged with guarding our top public officials. But even they have exhibited a consistent pattern of moral decay for many years according to one recent report….
Secret Service agents and officers have been accused of leaking sensitive information, publishing porn, sexual assaults, illegal wiretaps, embezzlement and drunkenness on duty, according to a 229-page log released yesterday.
After a prostitution scandal in April, when agents consorted with hookers while preparing for President Obama’s arrival in Colombia, Service Director Mark Sullivan apologized. But he said it was an isolated case, not a “systemic issue.”
However, the log, which the Service Service released yesterday after news organizations requested it under the Freedom of Information Act, shows a pattern of misdeeds dating back to 2003.
7. These days thieves will steal just about anything that is not bolted down and that they can sell for money. For example, three thieves recently broke into a Chicago beauty supply store and took off with hair extensions that were worth a total of $230,000.
9. According to one shocking new report, one out of every 10 Wall Street employees is a “clinical psychopath”. That is a rate about 10 times higher than the general population.
10. Even many police are going crazy these days. Over in Seattle, police zapped a pregnant woman with a taser three times just because she refused to sign a ticket.
11. Down in California, one man recently sliced off the ear of another man with a knife over an unpaid debt.
12. These days we are seeing senseless crimes being committed even in small towns in the heartland of America. Just check out what happened in Helena, Montana about a week ago….
Helena Police are working to identify two young men after what they call a random act of violence over the weekend. Helena Police found a 40-year-old homeless man badly beaten in an alley behind the Gold Bar around 2 a.m. Sunday morning.
Helena Police Detective Sergeant Richard Drysdale states,” The video shows two white males surrounding the victim as he was entering the walkway yelling at him and then knocking him down to the ground where they beat and kicked him until he was unconscious.”
You can find a video report about this incident right here.
13. One town in Connecticut was forced to shut down a beautiful new public fountain because too many people were using it as a toilet.
14. According to one very shocking study, the percentage of U.S. households that contain a married couple with children has fallen from 44.3% in 1960 to 20.2% today.
15. A huge brawl between parents erupted during one recent preschool graduation ceremony down in the Los Angeles area.
16. We continue to see “mob robberies” at retail establishments all over the nation. During one recent mob robbery in Detroit, thugs beat the living daylights out of one very unfortunate stock clerk.
17. Speaking of Detroit, nobody is immune to the spreading violence in that city. For example, just check out what happened recently to a 22-year-old pregnant woman….
A 22-year-old pregnant woman survived after being bound, driven to Detroit, set on fire and shot early Saturday morning.
The woman, who was nine-months pregnant, had returned from a movie with her boyfriend and dropped him off at his house in Warren when she was approached from behind, Warren police Sgt. Dave Geffert said.
The woman’s hands, feet and eyes were bound with duct tape. She was then forced into her car and driven to an unknown place in Detroit where she was doused with lighter fluid, set on fire and shot once in the upper back, he said.
18. Many families returned to their homes following the recent wildfires in Colorado only to discover that their houses had been robbed and looted.
19. One 33-year-old art teacher in Arizona was not satisfied with only having sex with one of her students. In fact, police have charged her with having sex with four of her male students.
20. Down in Florida, one man has actually been charged with biting the lips off of a kitten.
21. Over in Waco, Texas a 22-year-old man recently strangled and ate the family dog while he was high on drugs.
22. Of course most of us have heard of the recent outbreak of “zombie attacks” around the nation where criminals have actually been biting their victims and chewing their flesh. The following is another example of this phenomenon from a recent case in central New York….
A synthetic drug known as “bath salts” is blamed for some bizarre behavior in central New York.
The Utica Observer-Dispatch reports that police officers were called to Stanley’s Bar Saturday night to check out a woman described as emotionally disturbed. When an officer approached her, she lunged at him and tried to bite his face. Police say she screamed that she wanted to “kill someone and eat them.”
The woman was taken to St. Luke’s Memorial Hospital for a mental health evaluation.
Another very disturbing “zombie incident” took place down in Georgia recently….
Karl Laventure, 21, was believed to be high on bath salts when he tried to attack the officers in Lilburn, Georgia.
And after they had managed to subdue him he began threatening to eat them.
Laventure appeared out of some woods and was seen running naked around a golf range near Atlanta, swinging a club around his head and screaming.
Police said that it took several officers to subdue the man who had ‘super-human strength’.
23. All over America, people seem to be losing their minds. Just check out what one man in New Jersey did recently when police arrived at his home….
Officers got a call that morning when a witness said Carter was threatening to harm himself with a knife. Two cops responded, kicked in the door and found Carter in the corner, the station reported.
Carter allegedly ignored officers’ orders to put down the knife, and instead began stabbing himself in the abdomen, neck and legs.
An attempt to pepper spray the bleeding man had no effect, the Associated Press reported.
That’s when Carter — disemboweled but responsive — reportedly threw bits of his skin and intestines at the officers.
24. One woman in the St. Louis area was recently caught cooking meth in her purse inside a Wal-Mart store.
25. Anyone that believes that slavery has been abolished in America does not know what they are talking about. Every single night sex slaves are being horribly abused all over the United States. The following is from a recent Daily Mail article….
The FBI has rescued 79 teens held against their will and forced into prostitution from hotels, truck stops and stores during a three-day swoop on sex-trafficking rings across the country.
The sex slaves were aged between 13 and 17, although one said she had been involved in prostitution since she was just 11, authorities said.
During the sting operations across 57 U.S. cities – including Atlanta, Sacramento and Toledo, Ohio – 104 alleged pimps were arrested.
It is estimated that “100,000 children are victims of prostitution and trafficking each year” in the United States.
Are you starting to get the picture?
Sadly, there are dozens and dozens more examples like these. If you want to see more examples of how the collapse of America is speeding up, check out these articles that I recently published….
The frightening thing is that this breakdown of our society is happening at the same time that our economy is completely falling to pieces.
This economic decline that we are experiencing is shredding the middle class and it is plunging millions of Americans into very desperate circumstances. The following is a brief excerpt from a recent Rolling Stone article….
Every night around nine, Janis Adkins falls asleep in the back of her Toyota Sienna van in a church parking lot at the edge of Santa Barbara, California. On the van’s roof is a black Yakima SpaceBooster, full of previous-life belongings like a snorkel and fins and camping gear. Adkins, who is 56 years old, parks the van at the lot’s remotest corner, aligning its side with a row of dense, shading avocado trees. The trees provide privacy, but they are also useful because she can pick their fallen fruit, and she doesn’t always have enough to eat. Despite a continuous, two-year job search, she remains without dependable work. She says she doesn’t need to eat much – if she gets a decent hot meal in the morning, she can get by for the rest of the day on a piece of fruit or bulk-purchased almonds – but food stamps supply only a fraction of her nutritional needs, so foraging opportunities are welcome.
Prior to the Great Recession, Adkins owned and ran a successful plant nursery in Moab, Utah. At its peak, it was grossing $300,000 a year. She had never before been unemployed – she’d worked for 40 years, through three major recessions.
You can read the rest of the article right here.
What would you do if you were in a similar situation?
Sadly, many more Americans will end up just like her. As I wrote about the other day, the U.S. economy is not going to be able to produce enough jobs for everyone anymore. In fact, the overall employment picture is going to keep getting worse for working Americans.
Things have gotten so bad that even many very highly educated scientists cannot find jobs in America right now. Almost everybody is hurting, and we haven’t even gotten to the next wave of the economic collapse yet.
The next time that there is a major spike in the unemployment rate, millions of Americans will lose all hope and will become very desperate.
And desperate people do desperate things.
The rot and decay that we are witnessing right now is just the beginning.
Things are going to get a lot worse.
So let us hope for the best, but let us also prepare for the worst.
Government promises to public employees have created “zero-risk” Wonderlands protected from the market forces of risk and consequence. These islands of privilege are snapping back to join the real economy.
Every government entity that reckoned it was moated from the market economy will be snapped back to “discover” risk and consequence. Let’s lay out the dynamic:
1. Every government can only spend what its economy generates in surplus.
2. Every government transfers risk and consequence from itself, its employees and its favored vested interests to the citizenry and taxpayers.
3. Every government collects and distributes the surplus of its private sector to its employees, favored constituencies and vested interests.
4. Since the government (State) promises guaranteed salaries, benefits and entitlements to its employees and favored constituencies, these individuals believe they are living in a risk-free Wonderland that is completely protected from the market economy.
5. Risk cannot be repealed or eliminated, it can only be masked or transferred to others.
6. The Federal government and the Federal Reserve have pursued a policy of inflating serial speculative credit-based bubbles.
7. These bubbles inflated assets, profits and taxes, creating the illusion that blow-off speculative tops were “the new normal.”
8. Speculative credit-based bubbles misallocate capital and incentivize malinvestment on a spectacular scale.
9. Once the bubble deflates, the capital is lost or trapped in illiquid malinvestments.
10. As a direct result of the dot-com bubble, Stockton’s tax revenues (general fund) leaped to $139 million in 2001. As a direct consequence of the housing bubble, it jumped to $186 million in 2007.
11. This “new normal” encouraged the belief that the stock market would double or triple every decade into the future, generating 8%+ annual returns for public union employee pension funds.
12. The city government granted employees open-ended guarantees of lifetime healthcare coverage.
13. This meant that there was no limit on the cost of each employee’s benefits.
14. As noted here many times, healthcare costs rise by 7%-10% every year, even as the economy which supports healthcare grows by 2% on average.
15. Healthcare alone will bankrupt the nation, and the bankruptcy of entities that promised open-ended healthcare is merely one manifestation of the coming bankruptcy of the entire sickcare/entitlement Status Quo.
16. Once the stock market reverts to the mean and is revalued to the “new normal” of global recession and low earnings growth, it will decline by 40% or more and yields will remain around 2%.
17. Pension funds earning 2% at best based on expectations of permanent 8% returns cannot sustainably pay the benefits promised.
18. If the city attempts to make up the shortfall annually, the services provided to the citizenry will be gutted. The risk and consequence of malinvestment and favoritism has been offloaded onto the citizens while those protected by the government moat live “risk-free” lives of guaranteed pensions and benefits.
19. The public-employee pension and healthcare benefits were separated from the market economy with this government guarantee: regardless of what happens in the real economy, you will be paid pensions and benefits that have zero exposure to the market economy and private-sector pensions/benefits.
20. In effect, the government has placed its employees and vested interests in a moated “risk-free” zone outside the market economy. The risk that is distributed to all participants in an open market (i.e. a democracy) is transferred to the citizens and taxpayers.
21. Any government that siphons off an increasing share of its taxpayers’ disposable income (to distribute to the privileged few) in return for declining services will eventually be overthrown by the citizenry and taxpayers who must bear the full consequences of the city’s mismanagement of their capital and income.
22. Every city, county and state in the U.S. which has secured a risk-free wonderland for its favored few will “snap back” into the real economy and face the discipline of the credit market and the “discovery” of price and value.
23. Risk cannot be eliminated by government mandate, it can only be transferred to others. No government entity can maintain a “risk-free” fortress outside the market forever. The moat around Wonderland will be drained or filled, regardless of what promises were made.
24. Government has no mechanism to transparently price risk, value and return on investment. The market will “discover” all these and re-set government services and salaries accordingly.
Charles Hugh Smith – Of Two Minds
Still, we continue to lie….
This morning Spain’s 10y yields went back up over 7%, the so-called “Maginot line” beyond which they allegedly cannot finance themselves.
Still, we continue to BS ourselves, both here and in Europe.
The simple fact of the matter is that nobody is willing to have an honest conversation — not on government and its size, not on our own personal finances, not on our standards of living and not on our own culpability for the mess that we find ourselves in.
There’s nothing complicated about any of the economic mess we find ourselves in. The arm-waving obfuscation by the mainstream media and politicians is intentional; they know damn well that both the cause and cure are simple, but political correctness prevents the truth from being told.
It is simply this – we spent 30 years lying to ourselves about “growth” being something that we’re entitled to finance with more and more borrowing rather than through actual economic surplus — that is, via advances in technology and human effort.
It really is as simple as this chart:
During the 2004-2007 period there were several quarters where one trillion dollars per quarter were borrowed in excess of new production. There was no three month period where less than $500 billion was borrowed. This is well over 10% of the economy!
When this ponzi collapsed the government stepped in and borrowed the same 10% of the economy and spent it to replace that which you were borrowing privately.
Nobody — not here and not in Europe — has stood up and said “we can’t do that any more, we built industry and businesses based on unsustainable practices, we are living beyond our means and we have to eat our peas.”
Until we do there is not only no solution but the damage that we must accept in order to restore sanity and balance will grow worse by the day. The more we believe that people can simply stop looking for work and go on “disability”, the more we play with ZIRP and eviscerate interest income (including for Social Security and Medicare “trust funds”, along with pensions both public and private), the more the government at all levels borrows money to prop up insolvent financial institutions and excuses serious frauds against the public, whether in mortgages or LIBOR, the closer we come to the point where the owners of capital simply throw up their hands and say “screw you!”
How far are we from this sort of event? A 2008-style (but much worse!) collapse in confidence, lending, borrowing and economic activity where governments are powerless to intervene as they have exhausted their own borrowing capacity.
It’s impossible to know for sure, but there are some reasonable assumptions we can work with. We know where the corners are. We know, for example, that ZIRP, the Fed’s “zero interest” policy, will cause the Social Security “trust fund” to run out of money more than a decade earlier than previously projected if it is maintained — meaning by the end of this decade!
Pension funds? Same deal, whether they’re admitting it or not.
And the market never waits for you to hit the wall, just as it has not in Spain. It always anticipates, and given Washington’s refusal to deal with this problem front-and-center, the presumption is that loss of confidence will happen sooner rather than later.
The fuse is much shorter than it appears.
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