FedUpUSA

Archive for the ‘Depression’ Category

2012 is shaping up to be a very tough year for the global economy.  All over the world there are signs that economic activity is significantly slowing down.  Many of these signs are detailed later on in this article.  But most people don’t understand what is happening because they don’t put all of the pieces together.  If you just look at one or two pieces of data, it may not seem that impressive.  But when you examine all of the pieces of evidence that we are on the verge of a devastating global recession all at once, it paints a very frightening picture.  Asia is slowing down, Europe is slowing down and there are lots of trouble signs for the U.S. economy.  It has gotten to a point where the global debt crisis is almost ready to boil over, and nobody is quite sure what is going to happen next.  The last global recession was absolutely nightmarish, and we should all hope that we don’t see another one like that any time soon.  Unfortunately, things do not look good at this point.

The following are 22 signs that we are on the verge of a devastating global recession….

#1 On Thursday it was announced that U.S. jobless claims had soared to a six-week high.

#2 Hostess Brands, the maker of Twinkies and Wonder Bread, has filed for bankruptcy protection.

#3 Sears recently announced that somewhere between 100 and 120 Sears and Kmart stores will be closing, and Sears stock has fallen nearly 60% in just the past year.

#4 Over the past 12 months, dozens of prominent retailers have closed stores all over America, and one consulting firm is projecting that there will be more than 5,000 more store closings in 2012.

#5 Richard Bove, an analyst at Rochdale Securities, is projecting that the global financial industry will lose approximately 150,000 jobs over the next 12 to 18 months.

#6 Investors are pulling money out of the stock market at a rapid pace right now.  In fact, as an article posted on CNBC recently noted, investors pulled more money out of mutual funds than they put into mutual funds for 9 weeks in a row.  Are there some people out there that are quietly repositioning their money for tough times ahead?….

Investors yanked money out of U.S. equity mutual funds for a ninth-consecutive week despite a bullish 2012 outlook from Wall Street and a December rally that’s carried over into the New Year.

#7 There are signs that the Chinese economy is seriously slowing down.  The following comes from a recent article in the Guardian….

Growth had slowed to an annual rate of 1.5% in the second and third quarters of 2011, below the “stall speed” that historically led to recession.

#8 The Bank of Japan says that the economic recovery in that country “has paused“.

#9 Manufacturing activity in the euro zone has fallen for five months in a row.

#10 Germany’s economy actually contracted during the 4th quarter of 2011.  At this point many economists believe that Germany is already experiencing a recession.

#11 According to a recent article by Bloomberg, it is being projected that the French economy is heading into a recession….

The French economy will shrink this quarter and next, suggesting the nation is in a recession as investment and consumer spending stagnate, national statistics office Insee said.

#12 There are a multitude of statistics that indicate that the UK economy is definitely slowing down.

#13 The credit ratings of Italy, Spain, Portugal, France and Austria all just got downgraded.

#14 It is being reported that the Spanish economy contracted during the 4th quarter of 2011.

#15 Bad loans in Spain recently hit a 17-year high and the unemployment rate is at a 15-year high.

#16 According to a recent article in the Telegraph, the Italian government is forecasting that there will be a recession for the Italian economy in 2012….

#17 Italy’s youth unemployment rate has hit the highest level ever.

#18 The unemployment rate in Greece for those under the age of 24 is now at 39 percent.

#19 Greece is already experiencing a full-blown economic depression.  About a third of the country is now living in poverty and extreme medicine shortages are being reported.  Things have gotten so bad that entire families are being ripped apart.  According to the Daily Mail, hundreds of Greek children are being abandoned because the economy has gotten so bad that their parents simply cannot afford to take care of them anymore.  The note that one mother left with her child was absolutely heartbreaking….

One mother, it said, ran away after handing over her two-year-old daughter Natasha.

Four-year-old Anna was found by a teacher clutching a note that read: ‘I will not be coming to pick up Anna today because I cannot afford to look after her. Please take good care of her. Sorry.’

#20 In Greece, large numbers of people are simply giving up on life.  Sadly, the number of suicides in Greece has increased by 40 percent in just the past year.

#21 In many European countries, the money supply continues to contract rapidly.  The following comes from a recent article in the Telegraph….

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.

#22 The major industrialized nations of the world must roll over trillions upon trillions of dollars in debt during 2012.  At a time when credit is becoming much tighter, this is going to be quite a challenge.  The following list compiled by Bloomberg shows the amount of debt that some large nations must roll over in 2012….

Japan: 3,000 billion U.S.: 2,783 billion Italy: 428 billion France: 367 billion Germany: 285 billion Canada: 221 billion Brazil: 169 billion U.K.: 165 billion China: 121 billion India: 57 billion Russia: 13 billion

Keep in mind that those numbers do not include any new borrowing.  Those are just old debts that must be refinanced.

As I mentioned at the top of this article, things do not look good.

The last thing that we need is another devastating global recession.

As I wrote about yesterday, the U.S. economy is in the midst of a nightmarish long-term decline.  The last major global recession helped to significantly accelerate that decline.

So what will happen if this next global recession is worse than the last one?

Sadly, the people that will get hurt the most by another recession will not be the wealthy.

The people that will get hurt the most will be the poor and the middle class.

So what should all of us be doing about this?

We should use the time during this “calm before the storm” to prepare for the hard times that are coming.

As always, let us hope for the best and let us prepare for the worst.

But things certainly do not look promising for the global economy in 2012.

The Economic Collapse

Can you hear that?  It almost sounds like a little bit of peace and quiet.  This year, the holiday season has been fairly uneventful, and for that we should be very grateful.  But it isn’t going to last long.  2012 is going to be a much more difficult year for the U.S. economy and the global financial system than 2011 has been.  So if things are going well for you right now, enjoy this little bubble of peace and tranquility while you can.  Because while things may look calm on the surface right now, the truth is that this is a very scary Christmas for financial professionals and world leaders.  Most of them know how fragile the global financial system is at the moment.  Most of them know that we are living in the greatest bubble of debt, leverage and financial risk that the world has ever seen.  As I wrote about the other day, world leaders would not be throwing huge bailouts around like crazy if everything was going to be just fine.  The truth is that we are rapidly approaching another financial crisis that may end up being even worse than the horrific crash of 2008.

Despite unprecedented efforts by the European Central Bank, the yield on 10 year Italian bonds is nearly up to 7 percent again.

Keep an eye on the yield on 10 year Italian bonds.  That is going to be one of the most important financial numbers in the world in the coming months.

But Italy is not the only problem.  The reality is that several European governments are teetering on the verge of default right now.  Meanwhile, confidence in the European financial system has been absolutely shattered and a devastating credit crunch has set in.  Nobody (other than the ECB) wants to loan money to the banks and the banks are massively cutting back on loans to businesses and consumers.  This is causing the money supply to fall.  The ECB is trying to hold things together with chicken wire and duct tape, but it isn’t going to work.

In major financial centers such as the City of London, this is a very scary Christmas and the outlook for the new year looks very frightening.  Because financial activity has dried up so dramatically, a number of firms are already shutting down.  The following comes from a recent Bloomberg article….

London’s stockbrokers are shrinking as Europe’s sovereign debt crisis and competition from international firms squeezes revenue and fees.

“This isn’t just a blip, this is much worse,” said Tim Linacre, who is stepping down as chief executive officer of Panmure (PMR) Gordon & Co., a 135-year-old brokerage. “It’s a desert for activity, which is why you are seeing some firms throw in the towel.”

In the past month, Altium Capital closed its securities unit. Evolution Group Plc (EVG), Merchant Securities Group Plc, Arbuthnot Securities Ltd. and Collins Stewart Hawkpoint Plc have all accepted takeover offers from larger competitors.

“It feels worse than any other time,” said Lorna Tilbian, an executive director at Numis Corp. who began her career in 1984. “All I hear about is people putting up a white flag.”

Many out there are wondering if we are about to face another crisis like the one we saw back in 2008.

Unfortunately, none of the underlying problems that caused that crisis were ever really fixed.

We did not learn from history so now we are in for another round of pain.

In fact, Chris Martenson believes that this next crisis will be even worse than 2008….

There are clear signs of a liquidity crunch in the asset markets right now, and the question I keep hearing is, Is this 2008 all over again?

No, it’s worse. Much worse.

In 2008 there was a lot more faith and optimism upon which to draw. But both have been squandered to significant degrees by feckless regulators and authorities who failed to properly address any of the root causes of the first crisis even as they slathered layer after layer of thin-air money over many of the symptoms.

Anyone who has paid attention knows that those “magic potions” proved to be anything but. Not only are the root causes still with us (too much debt, vast regional financial imbalances, and high energy prices), but they have actually grown worse the entire time.

Frightening stuff.

A couple of months ago, I wrote about the coming derivatives crisis that could potentially wipe out the entire global financial system.

When the next great financial crisis strikes, there is going to be a lot of focus on derivatives once again.

Top global financial authorities such as Ben Bernanke continue to insist that derivatives are perfectly safe.

But there are other voices in the financial world that are warning that we are heading for financial armageddon.  For example,just check out what Mark Faber is saying….

“I am convinced the whole derivatives market will cease to exit. Will become zero. And when it happens I don’t know: you can postpone the problems with monetary measures for a long time but you can’t solve them… Greece should have defaulted – it would have sent a message that not all derivatives are equal because it depends on the counterparty.”

That is very strong language.

Faber also believes that the stock market is going to get hit really, really hard during the coming crisis….

“I am ultra bearish. I think most people will be lucky if they still have 50% of their money in 5 years time. You have to have diversification – some real estate in the countryside, some gold and some equities because if you think it through, say Germany 1900 to today, we had WWI, we had hyperinflation, WWII, cash holders and bondholders they lost everything 3 times, but if you owned equities you’d be ok. In equities in general you will not lose it all, it may not be a good investment, unless you put it all in one company and it goes bankrupt.”

Some of the top financial officials in the entire world have also used some very scary language in recent weeks.

The head of the International Monetary Fund, Christian Lagarde, recently stated that we could soon see conditions “reminiscent of the 1930s depression” and that no country on earth “will be immune to the crisis”….

“There is no economy in the world, whether low-income countries, emerging markets, middle-income countries or super-advanced economies that will be immune to the crisis that we see not only unfolding but escalating”

But most people are so busy opening up the cheap plastic presents under their Christmas trees (that were mostly made overseas) that they aren’t even paying attention to these warnings.

Look, when the money supply falls significantly it is almost impossible to avoid a recession.  Just look at the historical numbers.

Unfortunately, money supply numbers all over Europe are falling dramatically right now as an article in the Telegraph recently 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.

Confidence in the banking system in Europe has never been this low in the post-World War II era.  Sadly, most people simply do not understand how bad things have gotten for major European banks.  One Australian news source recently put it this way….

“If anyone thinks things are getting better, they simply don’t understand how severe the problems are,” a London executive at a global bank said. “A major bank could fail within weeks.”

Others said many continental banks, including French, Italian and Spanish lenders, were close to running out of the acceptable forms of collateral, such as US Treasury bonds, that could be used to finance short-term loans.

Some have been forced to lend out their gold reserves to maintain access to US dollar funding.

The outlook is very ominous.

Financial professionals all over the globe are telling us what is coming if we are willing to listen.

The following comes from a report recently produced by Credit Suisse’s Fixed Income Research unit….

“We seem to have entered the last days of the euro as we currently know it. That doesn’t make a break-up very likely, but it does mean some extraordinary things will almost certainly need to happen – probably by mid-January – to prevent the progressive closure of all the euro zone sovereign bond markets, potentially accompanied by escalating runs on even the strongest banks.”

The first six months of 2012 are going to be a very key time.  National governments and big European banks are scheduled to roll over huge mountains of debt.  But if they can’t find any takers that could bring the global financial system to a moment of great crisis very quickly.

The following is how former hedge fund manager Bruce Krasting recently described the problem that Italy is facing….

At this point there is zero possibility that Italy can refinance any portion of its $300b of 2012 maturing debt. If there is anyone at the table who still thinks that Italy can pull off a miracle, they are wrong. I’m certain that the finance guys at the ECB and Italian CB understand this. I repeat, there is a zero chance for a market solution for Italy.

But even if we don’t see a formal default by a major European nation such a Italy, that doesn’t mean that major European banks are going to make it through the crippling recession that has now begun in Europe.

Charles Wyplosz, a professor of international economics at Geneva’s Graduate Institute, is absolutely convinced that we are going to see some major European banks collapse….

“Banks will collapse, including possibly a number of French banks that are very exposed to Greece, Portugal, Italy and Spain.”

Authorities in Europe are saying the “right things” publicly, but privately they are preparing for the worst.

As the Telegraph recently reported, the British government is now making plans based on the assumption that a collapse of the euro is only “just a matter of time”….

Yes, we are heading for a huge financial collapse and massive economic trouble.

So enjoy the good times while we still have them.

They are not going to last too much longer.

The Economic Collapse

This video says it all.  Personally, I live in an upper-middle class area, at one time, even considered ‘wealthy.’  I now see precisely what is shown in this video all around me.  On my block alone, there are 3 empty houses, the result of the owners’ job losses and failure to be able to continue to pay on their mortgages.  This was not a ‘subprime’ loan area.  Some of these people weren’t even underwater on their mortgage, they just couldn’t pay ANY mortgage any more.  Some people had been looking for work for more than 2 years and had been trying to get by on various minimum wage jobs.  Most had fallen off unemployment and are now not even counted as part of the statistics.

Anyone still believing we have a 9% unemployment rate needs their head examined.  Many of the jobs that have been lost in the past 5 years are never coming back.  Should we just dispose of these jobless people like we do their statistics?  What is a life worth?  Our government seems to think that bailing out big corporate interests and insolvent banks is a much more worthy endeavor than protecting our GDP and industry.  You see, every bit of debt created in order to provide money for the banks is taking away production (jobs) from the REAL economy.  The REAL economy is not about banks or selling debt to create money – the REAL economy is about people.  People creating something of value.

Our government is not interested in creating anything of value.  It wants to continue to create debt which in turn, is leveraged to create more credit/money for the banks.  This is the unsustainable evil of our monetary system.  Until this system is destroyed, what is shown in this video will spread and grow until it reaches enormous proportions.  Maybe then people will wake up and realize what our government is doing to us.  We are debt slaves.  Maybe we should get off the plantation?

2011 is nearly complete, so it is time to look briefly behind us and look forward to the new year. Somehow, through some minor miracle, the American and global economies avoided recession this year. Yes, I know, “recession” has become a relative term. It’s well nigh impossible to tell the difference between the “slow” GDP growth we’ve got now and another downturn. However, a recession implies an actual contraction in economic activity, and all that entails—job losses instead of paltry gains, yet another downturn in the housing market, another nosedive in auto sales, and so on.

The “good times” of 2011 are behind us and 2012 lies ahead. What will the new year bring? John Hussman recently asked have we avoided a recession?

In recent months, we’ve observed a fairly neutral flow of economic data — not strong by any means, but offering a reprieve from the clearly  negative momentum that we observed in late-summer.

The following chart  is presents a consensus of economic measures that we track as a  composite (long-term chart here),  focusing on the past decade. Note the bounce toward zero that we’ve  seen in recent months. New orders remain generally weak, but other  measures are dead-neutral. Note that we saw a similar pop for a few  months just as we were entering the last recession in 2007. Modest  upticks in these measures – even if concerted – don’t carry much  information.

And while this graph appears to show there is no cause for alarm, Hussman still sets the chances of a recession in 2012 at about 85% (in another graph not shown here). That prediction is based on his analysis of the economic indicators.

We use a variety of methods to gauge recession  risk. The most straightforward is to form fairly low-order indicator  sets like our Recession Warning Composite (see November 12, 2007, Expecting A Recession),  that have a long historical record of accurately distinguishing  recessions. These indicator sets are comprised of what might be called  “weak learners” — conditions that do not in themselves have infallible  records of identifying recessions, but that provide very strong signals  when observed in combination with other recession flags. They include  fairly straightforward conditions such as whether or not the S&P 500  is below its level of 6 months earlier, whether credit spreads are  wider than they were 6 months earlier, whether the Purchasing Manager’s  Index is in the low 50′s or below, and so forth.

As of last week, a simple average of 20 of these  binary recession indicators continued to show a preponderance of signals  still in place — a condition that has never been observed except  alongside a U.S. recession.

This is the calm before the storm according to Hussman, which is is bad enough if we consider only the United States. But then there is a possibility of a global contraction led by the troubles in Europe and the ever-more-obvious downturn in China. Hussman provides charts to document those catastrophes in the making. What would happen to the American economy in the context of a global recession? More specifically—

• What would happen to America’s already unhealthy import/export balance?
• What would happen if contagion in the global finance system spreads to this country?

And then there are oil prices, which now exceed $100/barrel. If there is a global recession, we might expect demand to fall off and prices to decline. However, those prices are undoubtedly helping to push us into another recession.

If we add all of these factors together, it appears that a new recession is all but inevitable. Thus it appears we will not escape “unscathed” in 2012 as we did in 2011. (I am not talking about the Mayan Prophecy  ) It appears that serious damage is going to be done next year, not only in Europe and China, but right here in the United States. This would harm many, many ordinary Americans, not only in the short-term but over the long haul. In a recent post Little Hope and Not Much Change, Financial Armageddon’s Michael Panzner cites a new study which foreshadows the long-term damage which might occur.

The John J. Heldrich Center for Workforce Development at Rutgers University has published an updated working paper, Categorizing the Unemployed by the Impact of the Recession, detailing the results of surveys conducted from August 2009 through  August 2011 of American workers who lost a job during the height of the  Great Recession…

Just 7% of the unemployed initially  contacted by the Heldrich Center in the summer of 2009 have made it back  to where they were before the recession. And just another 23% are  on the way back — they have experienced a minor downward change in their  quality of life that they believe will be temporary. Another third of  those participating in the initial August 2009 survey can be thought of  as downsized. Many here (11%) have taken a minor quality of life hit and  say their financial situation is poor, but believe they will work their  way out of it in time. Another 10% are in at least fair financial shape  but report a minor downward change in their lifestyle they believe will  be permanent.

The remaining 36% speak of cataclysmic  effects of the Great Recession on them and their families. They comprise  two groups, both of whom can be said to have been devastated. We  consider 21% to be devastated because they are in poor financial shape  and have suffered a major quality of life change, even if they believe  it to be temporary. Also included in this group are respondents who  report being in fair economic shape, but who have experienced a major  decline in their lifestyle they expect to be permanent. Finally, there  is a sizeable 15% who appear to have been wrecked by the recession. They  are at the bottom on all three measures — they are in poor financial  shape, have suffered a major change in lifestyle, and believe this new  state of affairs will be a permanent condition.

Even if a new recession is not as severe as the “Great” one, it would still hurt those who are “climbing back,” or who were “downsized” or “devastated” in the aftermath of the financial meltdown in 2008. A new recession would further push millions of Americans into poverty or out of the Middle Class, and these injurious changes could be effectively permanent. So we need to take the prediction of a new recession very seriously indeed.

I’m sorry to tell you about this impending Bad News, but that’s just the way it looks.

Decline of the Empire

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 madness demonstrated, 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 league collapse 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 in the 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.

As I wrote about yesterday, a new law (S. 1867) is being pushed through the U.S. Senate that is extremely frightening.

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.

The Economic Collapse