Archive for November 1st, 2012

Lauren Lyster sits down with Bill Bonner of Agora Financial.

As we head into the last few days of the presidential race, we ask Bill Bonner, bestselling author and founder of Agora financial what he thinks the biggest issues on the electoral agenda should be. Considering the problems facing the country took decades to form, can they be easily resolved by the casting of a vote? And what about the debt and the deficit? Both presidential candidates express some concern about the debt, but are either really going to act on those concerns in meaningful ways?

Also, better-than-estimated US economic data, including initial jobless claims and consumer confidence, pushed stocks higher, according to the Financial Times. What exactly do the numbers mean? People look at indicators ranging from payroll numbers to the stock market, to get a sense of the health of the economy; today we talk to Bill Bonner, author of Empire of Debt, about other litmus tests that might give us a better sense of where the US is headed. What does he look at, and how important is an indicator like GDP in telling us how well our economy is doing?

And prices for gasoline, soda, hotel rooms, and batteries have risen sharply in areas affected by Superstorm Sandy. In some areas of New Jersey, residents waited on line for hours to buy gasoline. New Jersey Governor Chris Christie and New York Governor Andrew Cuomo have stepped up efforts to crack down on retailers looking to make increased profits on the storm. With inefficiencies created by long lines, Lauren and Demetri discuss if there is a case for price gouging, even during the aftermath of a storm like Hurricane Sandy, in today’s “Loose Change.” Demetri thinks that the very term “gouging” is pejorative, and that trying to regulate what price is exorbitant, instead of letting the market determine that, is asking for trouble.

 Britain calls for a cut in EU budget, warns on veto

British Prime Minister David Cameron.(AFP Photo / Leon Neal)

“We want a cut in the EU budget,” Chancellor of the Exchequer George Osborne told BBC Radio 4. “We will not accept a deal unless it is good for the British taxpayer. We will veto any deal that is not good for the British taxpayer.” 

Osborne also stressed that a eurosceptic mood is on the rise in the UK as taxpayers are rebelling against increasing spending in Brussels. “Britain has become more eurosceptic over my lifetime. I think people are outraged when they see money being wasted in Europe,” he said.

Meanwhile UK Prime Minister David Cameron has insisted he will veto any increase in the European Union’s budget as he prepares for budget talks at the EU summit in Brussels on 22-23 November.

“This government is taking the toughest line in these budget negotiations of any government since we joined the European Union,” Cameron told the Commons at his weekly question-and-answer session. “At best we would like it cut, at worst frozen and I am quite prepared to use the veto if we don’t get a deal that’s good for Britain.” 

Wednesday Conservatives teamed up with the opposition Labour Party to pressure the Government about the EU budget. The MPs voted 307 to 294 last night in favor of an amendment, though not binding for the government, which calls for a real cut in the bloc’s spending between 2014 and 2020.

The European Commission has already proposed savings 1.03 trillion euros for the years 2014 through 2020, an increase of almost 6 % compared to the 2007- 2013 budget.

The UK is one of 12 EU members which make a net contribution to the EU budget. It means that it pays in more than it gets back in EU funding. The country’s net contribution to the EU budget in 2011 was 10.6 billion euro, according to Treasury. But the European Commission says the UK’s net contribution was 7.25 billion euro.

It’s not the first time Tories have shown their eurosceptic attitude. Last year 81 Tory lawmakers called for a referendum on Britain’s membership of the 27-nation EU.

RT.com

 

David Cameron suffers stinging defeat over EU budget

David Cameron suffered a stinging Commons defeat over Europe as Conservative backbenchers told him he must deliver real reductions in the European Union budget.

The defeat came after more than 50 Conservative rebels were joined by Labour MPs in supporting a demand for real-terms reductions in spending by Brussels.

The Government was defeated by 307 votes to 294, a majority of 13. Commons sources estimated that 51 Tories voted against the Government, with two more acting as tellers.

The vote was Mr Cameron’s second major Commons defeat over Europe and led to warnings that division in the Conservative Party over Europe could hamstring him as it did Sir John Major during the 1990s.

The vote is not binding, but will put Mr Cameron under intense pressure to take a harder line in talks on the EU budget at a summit in Brussels later this month.

Mr Cameron had already promised to veto any significant rise in EU spending and Downing Street last night promised to “take note” of the vote in the coming budget negotiations.

Some Conservative MPs said the vote could strengthen Mr Cameron’s hand in the budget talks, but aides fear the result could create a significant political problem for Mr Cameron.

Government sources insist that it is effectively impossible for Mr Cameron to deliver a cut in EU spending because so many other members want an increase.

Yet any budget deal that falls short of the cuts demanded by the House of Commons could leave Mr Cameron facing a backlash from MPs and the public.

Peter Bone, a Conservative rebel, said many MPs had defied the Government because their constituents will not accept a rise in EU spending.

“Parliament spoke for the people,” Mr Bone said. “It was a very significant victory for the people.”

Ed Balls, the Labour Shadow Chancellor described the vote as “humiliating” for Mr Cameron.

Senior Tories responded by accusing Labour of taking an “opportunistic and hypocritical” position on the budget because of the last government’s record on EU spending.

EU leaders are trying to decide on a budget for 2014 to 2020. The European Commission and several EU countries are calling for an increase in spending.

Mr Cameron has said he wants EU spending to rise in line with inflation, a real-terms freeze. Conservative critics say that would still cost British taxpayers billions of pounds, arguing that at a time of domestic austerity, EU spending should also be cut.

Before the vote, the Prime Minister tried to placate his party by insisting that he too wanted a cut and promising a hard line at the summit.

“At best we would like it cut, at worst frozen, and I’m quite prepared to use the veto if we don’t get a deal which is good for Britain,” he said.

“But let’s be clear – it is in our interest to try to get a deal because a seven-year freeze would keep our bills down compared to annual budgets.”

Mark Reckless, one of the leaders of the Conservative rebellion, told MPs that Mr Cameron’s plan would increase the UK’s net contribution to the EU from £9.2 billion last year to £13.6 billion in 2020.

“We simply cannot, cannot afford that,” he said.

Mark Pritchard, another rebel leader, said money sent the EU should be spend in the UK instead.

He said: “Are we going to continue to ask families up and down this country to stop putting new shoes on their children’s feet while we fill the very large Mercedes fleet of Brussels?”

No 10 said that Mr Cameron was taking the toughest stance of any EU leader on the budget, but ministers admitted that even his starting position for the talks – inflationary rises in spending – would cost Britons more money.

Greg Clark, the City minister, told MPs: “It is true that the increase we are talking about would involve further contributions.”

Tony Baldry, a senior Tory backbencher who backed the Government, accused the rebels of “self-indulgence” that could take the party back to the internal conflict that undermined Sir John Major’s government.

He said: “If this party hopes to be in government after the next general election, it has just got to get a grip and start supporting the Prime Minister.”

Ed Miliband, the Labour leader, likened Mr Cameron to Sir John, his authority undermined by Tory dissent over Europe.

“He can’t convince European leaders, he can’t even convince his own backbenchers,” Mr Miliband said. “He is weak abroad, he is weak at home: It’s John Major all over again.”

Videos and more at the link:

The Telegraph

 

Tory Euro rebels warned they are damaging David Cameron’s hopes of re-election as Nick Clegg says there is ‘no hope’ of EU budget cut

• Government loses crunch vote by 307 votes to 294 as Commons demands a real terms cut in funding for Brussels
• Nick Clegg says there is ‘absolutely no chance’ of persuading all 26 states for a real-terms cut
  
• George Osborne says he understands the ‘frustration’ of backbenchers
• Rebels say they have spoken for the people but loyalists warn Tory hopes of re-election have been damaged by the revolt
  

The coalition risked descending into political infighting today, after David Cameron suffered his first significant Commons defeat at the hands of Labour and Tory rebels demanding a tougher stance on the EU’s budget.

Tory rebels claimed they had defied the Prime Minister to vote for the British people, while loyalists warned Conservatives must ‘get a grip’ and support Mr Cameron or face defeat at the 20-15 general election.

Chancellor George Osborne refused to say a real-terms reduction in Brussels spending was impossible but Deputy Prime Minister Nick Clegg warned those demanding a cut had ‘absolutely no hope’ of achieving their goal.

David Cameron and Ed Miliband clashed over the government’s stance on the EU budget at Prime Minister’s Questions in the Commons today

Announcement: Commons Speaker reads the result in the House of Commons last night. MPs voted for a cut by 307 votes to 294

Result: The result is announced to the House as MPs watch on

Mr Cameron will go to next month’s European Council summit calling for a real terms freeze in the EU’s seven-year budget.

But MPs instead backed a call for a cut by 307 votes to 294.

Mr Cameron has faced repeated comparisons to John Major, whose premiership was dominated by Tory splits over Europe and endless debates on the Maastricht Treaty which eroded his authority.

Tory MP Tony Baldry warned Mr Cameron’s hopes of winning the next election had been damaged by last night’s vote.

‘Colleagues have got to realise that we’ve got to get a grip and support the Prime Minister.

‘Electors do not vote for parties that they see as being divided. I do not believe that the Conservative Party should be putting itself in the position to lose the next general election,’ he told BBC Radio 4.

The PM yesterday indicated he would use Britain’s veto unless Brussels agreed to limit its budget increases to the level of inflation.

But this did not satisfy the Eurosceptics in his party, who insist on a real-terms reduction.

In the first major defeat of Mr Cameron’s premiership, a total of 53 Tory backbenchers voted with Labour, which was accused of cynically shifting its position on EU spending earlier this week to embarrass the Prime Minister.

Senior government figures had spent the day pleading with rebel Tories to accept that a real-terms budget freeze was the best possible outcome from a crunch EU summit next week.

Today Mr Osborne sought to placate the rebels, saying he understood the ‘frustration’ of MPs over ‘outrageous’ rises in EU spending.

He declined to say whether he believed a real-terms cut was possible and played down the significance of last night’s vote as a ‘debate about tactics’.

Deputy PM Nick Clegg said those calling for a cut in the EU budget had ‘absolutely no hope’ of achieving their goal

‘What we have got to do is come to a position that is agreed by the other countries and that the House of Commons accepts. That’s the circle we’ve got to square,’ Mr Osborne told BBC Radio 4.

‘What you saw last night was a debate about tactics, about the start of a negotiation, understandable frustration from MPs on all sides of the Conservative Party and the House of Commons that the European Union is spending too much.’

He also attacked Labour, claiming its tactics reminded him of the ‘unprincipled’ stances taken by Conservatives in the wake of the Labour landslide in 1997.

Foreign Secretary William Hague earlier said ministers would ‘hear and take notice’ of what Parliament had said.

But Deputy Prime Minister Nick Clegg aimed insisted the Coalition Government’s position remains the same.

‘We will not accept an increase, above inflation, to the EU Budget.  That is a real terms freeze. And we will protect the British rebate in full. That is the toughest position of any European country.’

In a speech to be delivered to the Chatham House international affairs think-tank, he also turned his fire on Labour, angrily accusing them of a ‘dishonest’ and ‘hypocritical’ change of policy for short-term political advantage.

‘In pushing a completely unrealistic position on the EU budget – one that is miles away from any other country’s position – Labour would have absolutely no hope of getting a budget deal agreed.’

Ministers insist there is no chance of persuading all other 26 EU member states to accept a real-terms cut in spending, since 17 of them get more out of Brussels spending than they put in.

However, they believe that with most governments being forced to tighten their belts at home in an age of austerity, there is scope for an agreement on a freeze.

At Prime Minister’s Questions yesterday, Mr Cameron told MPs: ‘This Government is taking the toughest line in these budget negotiations of any government since we joined the European Union.

‘At best we would like it cut, at worst frozen, and I’m quite prepared to use the veto if we don’t get a deal which is good for Britain. But let’s be clear – it is in our interest to try to get a deal because a seven-year freeze would keep our bills down compared to annual budgets.’

If Mr Cameron does wield Britain’s veto, no deal will be reached – and under the EU’s rules, the current year’s budget is rolled forward, plus inflation. Annual budgets can be agreed by a majority of member states, rather than the unanimity required for a longer seven-year agreement.

But last night’s vote will increase the pressure on the Prime Minister, who last year became the first to deploy the veto when he refused to sign up to a treaty on ‘fiscal union’, to repeat the exercise at a summit next month.

Financial Secretary to the Treasury Greg Clark said in yesterday’s debate: ‘We want to see the EU budget cut. Part of the negotiating mandate that the Prime Minister has agreed is that the very most that we would accept would be a real-terms freeze.

‘If there is no cut or no real freeze, there is no deal. The framework will be vetoed. The Prime Minister has a formidable task in persuading other countries of this, many of whom were looking forward to a seven-year payout.’

Rebel Douglas Carswell said: ‘This is not about Tory divisions or Labour hypocrisy, it’s the moment the House of Commons finally said, “Enough is enough”. Enough to the Whitehall elite and the Eurocrats. We will not put up with it any more.’

Peter Bone, another Eurosceptic MP, hailed what he called a ‘remarkable victory’. ‘Parliament spoke for the people,’ he said. ‘There was enormous pressure on colleagues to vote with the Government. It was a very significant victory for the people. It was because MPs have to face their constituents.’

There were bizarre scenes in the Commons as backbench Tories clashed with each other and with Labour members.

Veteran MP Edward Leigh compared his colleague Sir Tony Baldry to wartime prime minister Neville Chamberlain, who was accused of selling out to Hitler, after Sir Tony warned it would be an act of supreme ‘self-indulgence’ to defy the Prime Minister.

Remarkable victory: Peter Bone, left, said that the defeat was the day Parliament spoke for the people while Douglas Carswell added that it was the moment the House of Commons said ‘enough is enough’

Sir Tony denounced claims by the rebels that defeat strengthens Mr Cameron’s position at next month’s summit as ‘cobblers’.

He warned that failure to back Mr Cameron would cause the Tories to lose the next election. ‘If colleagues are not prepared to support the Prime Minister, every time they go into a division lobby different from that of the Prime Minister, they are weakening the Prime Minister’s negotiating hand in Europe,’ he said.

Abstained: Senior Right-wingers such as former defence secretary chose not to vote rather than side with Labour

‘We simply cannot carry on with this sort of self-indulgence. If this party hopes to be in government after the next general election, it has just got to get a grip and start supporting the Prime Minister.’

Labour’s Treasury spokesman Chris Leslie, meanwhile, was jeered by Tories who accused Labour, which gave away a huge chunk of Britain’s budget rebate and waved through inflationary increases while in power, of a cynical stunt.

Mr Leslie repeatedly refused to say whether Labour would use a budget veto, though his fellow Treasury frontbencher Rachel Reeves had earlier suggested the party might.

Mr Leslie said: ‘A real-terms reduction is possible but it requires persuasive diplomacy, careful alliance building and, above all, leadership.’

Senior Right-wingers such as former defence secretary Liam Fox abstained rather than vote on the same side as Labour. But in a hard-hitting speech yesterday Dr Fox warned Mr Cameron that he must threaten to leave the EU or he ‘cannot achieve’ his pledge to renegotiate the UK’s relationship with Brussels.

‘If you’re not willing to cross the Rubicon on that point you cannot achieve what we’re trying to achieve,’ he told the Institute of Economic Affairs. Dr Fox said the Tories should enter the next election on a pledge to go ‘back to the Common Market’, stressing economic not political links with Europe and then offer a referendum on the new deal or exit.

A source close to the Prime Minister said: ‘We were expecting to lose this vote. Everyone agrees we want to keep down EU spending. The only difference is how you do that.

‘The Prime Minister has made it very clear that a cut is the best case scenario and a freeze is the worst case scenario. He will keep fighting to get the best deal for taxpayers. David Cameron is the only Prime Minister in history to use the veto and our backbenchers understand that. Parliament is absolutely right to express its view. It’s a “take note” motion and we will take note.’

The Daily Mail

God asked Adam, “What’s wrong?” Adam replied, “I’m lonely.” So God said: “Adam, I will make you a partner. She will wash and cook and clean for you, she will listen to what you have to say and never interrupt you. She won’t nag you about your actions and she will even bear your children. She will stay loyal to you and never be influenced by other men.” So Adam asked, “Well, what’s his gonna cost me?”

“An arm and a leg,” said God. Then Adam asked, “Well what can I get for a rib?”  And the rest is history. It is always the history that matters; if you pay attention.

It has been almost three years since I said that Greece would go bankrupt. I first made that pronouncement on January 13, 2010 and advised exiting the credit. The yield on the Greek ten year was 4.38%. Lots of water underneath the bridge since then. Greece has made a second run at it, Portugal plunged into the rapids, Ireland grabbed its banks and headed over the falls and now Greece is about to take a third try at obliteration. I have stated and long held the view that Greece would keep on with it until the very last Euro that could be soaked from Europe was handed out and then the game would stop. The idiocy of those on the Continent hiding behind a united Eurozone that was locked and everlasting and inscribed in the Last Rite books in Heaven has played out far longer than common sense would dictate but it is politics here and fanciful dreams and the normal judgment utilized for bankruptcies has been cast aside again and again as the debts grew and as the uncounted liabilities became real liabilities and as the word “contingent” became meaningless while the nations of Europe turned a blind eye and ignored it all the best they could.

“Facts do not cease to exist because they are ignored.”

-Aldous Huxley

Given the length of time that has passed the markets are mostly immune now, deadened by some kind of economic Novocain where there is little feeling left and where the ECB’s “Save the World” rhetoric overshadows all issues and problems and so the prevailing attitude is “Yes, there is Greece; but it doesn’t matter.” I am afraid that this will not be the case in the coming weeks and that Greece will matter once again as the severity of the situation rises anew and like the Gorgon and their quite ugly heads will be revealed once again. You may recall the tale of the three sisters where Stheno and Euryale were immortal but their sister Medusa was not and she was slain by the mythical demigod Perseus. I fear that the immortals are about to be slain next and it could come in a number of ways.

“One of the advantages of being disorganized is that one is always having surprising discoveries.”
-Winnie the Pooh

The IMF has suggested that Europe take the pain and Europe is refusing and so the IMF may decide not to fund and leave the nations on the Continent to their own designs. Any extensions in terms will require another $40 billion give or take and some countries might actually refuse to participate as a matter of national politics. Greece, itself, may not be able to take the pressure of the austerity measures demanded as the coalition government topples and during the call for new elections defaults and throws the financial system of the world into havoc. It will be systemic, have no fear, if Greece defaults, it will not be an isolated incident because the size of their total debt now exceeds $1.5 trillion which is the number you get if you count what should be counted and not some far lesser number provided by the EU when they pick and choose what they count and with great care and with obvious deficiency.

“If the person you are talking to doesn’t appear to be listening; be patient. It may simply be that he has a small piece of fluff in his ear.”

-A.A. Milne, the author of Mr. Pooh & friends

If there are ten tanks lined up against you on the battlefield and you radio back to headquarters that the enemy only has six tanks that is your decision but then don’t be surprised when the other four tanks start firing shells into your position. “Watch out for all of the tanks shells,” would be my warning!

Zero Hedge

Stuff costs too much.  Seriously.  Every time I go to the grocery store these days, I am absolutely horrified by the prices.  I try not to buy anything that is not on sale, but the problem is that I am discovering that the new sale prices are the old regular prices.  So now paying what used to be “full price” is supposedly a “good deal”.  The other way that they are trying to hide rising prices is by shrinking package sizes.  As if we wouldn’t notice that a box of 21 garbage bags is now being sold for the exact same price that a box of 25 garbage bags used to be sold for.  It is one of my pet peeves.  I feel like I am in the middle of some bizarre movie entitled “The Incredible Shrinking Dollar”.  Sadly, I am far from alone.  There are millions upon millions of American families that are seeing their expenses continue to rise even as their paychecks remain the same.  But neither Barack Obama nor Mitt Romney seems very concerned about inflation.  In fact, the Federal Reserve, QE3 and Ben Bernanke were not even mentioned in any of the three presidential debates.  So I think that somebody should start the “Stuff Costs Too Much” Party.  Inflation is a tax which is destroying the value of each dollar that we hold a little bit more every single day, and the American people deserve to know the truth about what is going on.

In this day and age, it simply does not pay to put money into long-term savings.  When you finally pull your money out it will have far less purchasing power than it originally did.

Way back in 1950, you could buy a first-class stamp for just 3 cents and you could buy a gallon of gasoline for about 27 cents.

Wouldn’t it be great if you could still get a gallon of gasoline for 27 cents?

But we don’t have to go all the way back to 1950 to find low prices.  All we have to do is go back ten years.

A recent article by Benny Johnson detailed how the prices of many of the things that we buy on a regular basis absolutely soared between 2002 and 2012.  Just check out these price increases…

Eggs: 73%

Coffee: 90%

Peanut Butter: 40%

Milk: 26%

A Loaf Of White Bread: 39%

Spaghetti And Macaroni: 44%

Orange Juice: 46%

Red Delicious Apples: 43%

Beer: 25%

Wine: 60%

Electricity: 42%

Margarine: 143%

Tomatoes: 22%

Turkey: 56%

Ground Beef: 61%

Chocolate Chip Cookies: 39%

Gasoline: 158%

So what will the next ten years bring?  Unfortunately, we are already being told that it looks like inflation is going to start accelerating.  A recent CNBC articlestarted this way…

Consumers will have to dig deeper into their pockets next year to pay for costlier health care, more expensive grocery bills and higher taxes, an extra drag on the country’s already slow-moving economy.

That is not what millions of struggling American families need to hear right about now.

Their bills just keep going up but their paychecks are not keeping pace.

Have you noticed that almost everything that we spend money on just keeps rising year after year?

According to USA Today, in some areas of the country water bills have actually tripled over the past 12 years.

Has your paycheck tripled?

Electricity bills in this country have risen faster than the overall rate of inflationfor five years in a row.

Winter is a really bad time for power bills.  Millions of struggling families will set their thermostats very low this winter and yet will still be slammed with absolutely outrageous bills.

Of course just about every type of insurance is going up faster than the overall rate of inflation.

Have you gotten a price increase notice in the mail lately?

I have.

The price of health insurance in particular has soared in recent years.  Health insurance premiums increased faster than the overall rate of inflation in 2011and that is happening once again in 2012.

All of these price increases are pushing many American families to the breaking point.

But Federal Reserve Chairman Ben Bernanke insists that there is very little inflation right now, and he has government statistics to back his assertions up.

Of course the way that the government calculates inflation has changed more than 20 times since 1978, but Bernanke never mentions that.

According to John Williams of shadowstats.com, if inflation was measured exactly the same way that it was back in 1990, the official inflation rate would be about 5 percent right now.

The American Institute for Economic Research says that inflation is even high than that right now.  According to them, the real rate of inflation was about 8 percent last year.

Meanwhile, household incomes are actually going down all over America.

Even though we are supposedly in the midst of an “economic recovery”, median household income has declined for four years in a row.

Overall, median household income has declined by more than $4000 over the past four years.

Incomes are going down and prices just keep on rising.

So how are families adjusting?

Well, many of them are spending less.  One survey found that 62 percent of all middle class Americans have had to reduce household spending over the past year.

Others are going into increasing amounts of debt in an attempt to survive from month to month.

Inflation has become a way of life in America.  But what could make it a whole lot worse is if a nationwide crisis suddenly disrupted the normal operation of the economy.  If that happened, we would see price gouging happen literally overnight.  Just check out what one article that was posted on CNBC said happened in the aftermath of Hurricane Sandy…

Four dollars for a can of coke. Five hundred dollars a night for a hotel in downtown Brooklyn. A pair of D-batteries for $6.99.

These are just a few of the examples of price hikes I or friends of mine have personally come across in the run-up and aftermath of hurricane Sandy.

So you might want to use your extra dollars right now.  They are never going to be more valuable than they are today, and in the event of a major disaster they might lose value very, very rapidly.

Unfortunately, millions of American families don’t have any extra money at all.  Many of them have been slowly worn down by this economy and are now just desperately trying to survive.  The following is what one reader shared in a comment following one of my recent articles…

There is one thing you should know about poverty: it is crushing! It crushes the spirit first and foremost, then it crushes the idea of dreams because people in extreme poverty don’t see a way out when they barely have enough to eat let alone get ahead in life.
So, by offering a hand up to those in poverty, we relieve a bit of that pressure…just enough so that their basic needs are met. Once those needs are met, those in poverty can start to see “LIGHT”, something hard to see when being crushed by the pressures and hardships of poverty.

I know of what I speak; I was once living an upper middle-class life and enjoyed all the trappings of material and financial successes.

However, an accident caused that life as I knew it to end in a moment. I’m no longer able to work and for the past few years have barely been able to feed myself.

When I became homeless in 2010, I felt suicidal. My lowest moment was holding a sign asking for help very near the 6 bedroom home I once lived.

Don’t think that it can’t happen to you.  What would you do if you suddenly lost your job and could not find another one?  Would you be able to survive?

Just because you are living a middle class lifestyle today does not mean that you will be in the same position a year from now.  The truth is that everything in your life can change in a single day.  The following is from a comment that one of my readers named Kimberly left recently…

My husband lost his job of 20+ years to cut backs roughly 3 years ago, 8 months later his health declined of which I attribute to the depression he went through at not being able to find employment. I went back into the work force, or I should say tried… I’m a nursing assistant by trade but no nursing homes are hiring because the families are pulling their loved ones out because they cannot afford to keep them there, hospitals are not hiring because what jobs there are in my field go to nurses awaiting a nursing job and I’m sure my age (53) plays a role in it too. The closest hospital to us just announced it will be closing it’s doors on the 31 because despite it’s tries it cannot afford to remain open under Obamacare.

We have in the last couple years armed ourselves with a gun, started a garden and now do serious couponing to stock pile for emergencies which seem more and more each day are coming. We have dropped from a life lived on 65,000 – 75,000 a year to living on under 23,000 a year. We have made cut backs in every area of life and hope for the best.

We go to bed at night worried about tommorow, next week and next year .. you feel anxious all the time and panic attacks come more frequently with each passing day. I love the Lord with all my heart and I know He is in control, but am just human and one cannot stop the feelings that wash over them.

I have children and grandchildren and am scared to death what faces them in the coiming years. We all lived in within miles of each other until my children lost their jobs and could find nothing here in Mobile, Al. so they moved to Texas and have found at least some work… something is better than nothing you know. We are hundreds of miles apart now and rarely get to see them as gas is also so very high. I have a grand daughter I have never met because we cannot afford the trip and neither can they.

The U.S. economy has never even come close to recovering from the last economic downturn.  If you doubt this, just read this article.  Now the next economic crisis is rapidly approaching us.

If you think that the economic pain and suffering in this country are bad now, just wait.

We haven’t seen anything yet.

Things are going to get much, much worse.

The Economic Collapse

Do they not get it or do they think we all failed grade-school arithmetic?

Ben S. Bernanke argued for 15 years that the Federal Reserve should announce a numerical inflation target. When he finally got his way in January, the victory allowed the central bank to elevate its other mandate: full employment.

…

Bernanke’s shift to emphasizing employment goals is one of the hallmarks in a grueling two-term chairmanship that spanned the worst financial crisis and recession since the Great Depression and a slow labor-market recovery that pinned joblessness above 8 percent for 43 months. The presidential campaign has put the Fed in transition as Republican candidate Mitt Romney said he’d replace Bernanke, though former colleagues doubt he will stay on, no matter who wins.

And on both counts the “mandate” has been failed.

Intentionally so, I might add.

The Fed Mandate is for stable prices, not 2% inflation.  Need I remind everyone that a 2% inflation target, if met over a 45 year working life (age 20 – 65) results in a price increase of 144%?

Of course the actual performance of The Fed historically is closer to 3% inflation.  That’s a 278% inflation over the same 45 years.

Put another way if you earned $1 in purchasing power at age 20 and saved that dollar, you have about 35 cents left at age 65.

And this is Bernanke’s intent.

Innovation and job creation require capital formation.  Capital formation is, simply put, savings.

Lacker finishes with:

“I don’t think the expectation the public and the political system has for regulators’ and supervisors’ responsibilities is reasonable,” Lacker said in an interview. “We have been set up again to be scapegoats the next time something goes wrong,” and when something “blows up, somebody will want us to step in.”

What’s reasonable is that when you intentionally violate a black-letter legal requirement for 100 serial years, making excuses the entire time and attempting to pat yourself on the back for having done so, is that you and your cohorts swing from at least a political set of lampposts.

But that would require that Congress not have every interest congruent with maintaining your scam and actually be representative of the best interest of the people, which, of course, it does not.