Posts Tagged ‘Oligarchy’
It’s over folks.
The Euro clowns have now said out loud that the Cyprus model is how banks will be resolved in the future as a “template.”
Now what is Deutsche Bank’s leverage ratio? The real one, not what they claim?
Oh, and the rest of the banks in Europe too.
How many are still running at 50:1 or even 100:1 leverage — 1-2% reserve ratios in fact despite their claims, when one looks at actual values of assets and not mark-to-fantasy and uncollateralized derivatives?
That would be virtually all of them.
Do you have your money in a European bank or own their bonds?
This is what is about to be done to you as demonstrated in Cyprus.
European officials are openly admitting that the two largest banks in Cyprus are “insolvent“, and it is now being reported that Cyprus Popular Bank only has “enough liquidity to cover the next few hours“. Of course all banks in Cyprus are officially closed until Tuesday at the earliest, but there have been long lines at ATMs all over Cyprus as people scramble to get whatever money they can out of the banks. Unfortunately, some ATMs appear to be “malfunctioning” and others appear to have already run out of cash. You can see some photos of huge lines at one ATM in Cyprus right here. Some businesses are now even refusing to take credit card payments. This is creating an atmosphere of panic on the streets of Cyprus. Meanwhile, the EU is holding a gun to the head of the Cyprus financial system. Either Cyprus meets EU demands by Monday, or liquidity for the banks will be totally cut off and Cyprus will be forced out of the euro. It is being reported that European officials believe that the “economy is going to tank in Cyprus no matter what“, and that it would be okay to let the financial system of Cyprus crash and burn if politicians in Cyprus are not willing to do what they have been ordered to do. Apparently European officials are very confident that the situation in Cyprus can be contained and that it will not spread to other European nations.
Unfortunately, European officials are losing sight of the bigger picture. If the largest banks in Cyprus are allowed to fail, it will be another “Lehman Brothers moment“. The faith that people have in banks all over Europe will be called into question, and everyone will be wondering what major European banks will be allowed to fail next.
Meanwhile, European officials have already completely shatteredconfidence in deposit insurance at this point. Everyone now knows that when there is a major bank failure that depositors will be expected to share in the pain. Expect to see “bank jogs” all over southern Europe over the coming weeks.
The banks in Cyprus had been scheduled to reopen on Tuesday, but very few people expect that to actually happen at this point. In fact,Bloomberg is reporting that EU officials are actually thinking about shutting down the two biggest banks in Cyprus and freezing their assets…
Finance ministers for the 17 euro countries are considering a plan to shutter the two biggest banks in Cyprus and freeze the assets of uninsured depositors, said the four officials, who asked not to be named because the talks are ongoing. The ministers are holding a teleconference tonight.
Cyprus Popular Bank Pcl (CPB) and the Bank of Cyprus Plc would be split to create a so-called bad bank, one of the officials said. Insured deposits — below the European Union ceiling of 100,000 euros ($129,000) — would go into a so-called good bank and not sustain any losses, while uninsured deposits would go into the bad bank and be frozen until assets could be sold, said the four officials.
Losses to unsecured creditors, including uninsured depositors, could reach 40 percent under the plan, which has support from the International Monetary Fund and the European Central Bank. The proposal, a version of which was rejected last week, is considered a better option than taxing insured deposits or allowing Cypriot banks to collapse in a disorderly fashion if they lose access to ECB aid, the officials said.
Such a scenario would be an utter disaster.
How would you feel if you woke up someday and 40 percent of your life savings was suddenly gone?
According to Greek newspaper Kathimerini, European officials are also openly discussing the possibility of a Cyprus exit from the eurozone if a suitable bailout agreement is not worked out…
The possibility of Cyprus exiting the eurozone was discussed during teleconference involving technocrats from the Euro Working Group on Wednesday, Kathimerini understands.
A reliable source told Kathimerini that the technical implications of a euro exit, as well as the adoption of capital controls were debated by the Euro Working Group officials during the teleconference.
As I mentioned above, European officials seemed resigned to the fact that there will be an economic collapse in Cyprus “no matter what”, and so letting Cyprus leave the euro would not make that much of a difference. Either way, the banks are going to have to be “reorganized” and capital controls will be imposed…
In detailed notes of the call seen by Reuters, the group’s chair Austria’s Thomas Wieser said: “The economy is going to tank in Cyprus no matter what. Restrictions on capital will probably be imposed.”
Never before have we seen European officials impose such a harsh ultimatum with such a short deadline. It is almost as if they want to boot Cyprus out of the euro. The following comes from a recent CNBCreport…
In stark twin warnings on Thursday, the European Central Bank said it would cut off liquidity to Cypriot banks and a senior EU official made clear to Reuters that the bloc was ready to see the bankrupt island banished from the euro in the belief it could then contain damage to the wider European economy.
And European officials are even publicly talking about the possibility that Cyprus will soon need to start using “their own currency”…
In Brussels, a senior European Union official told Reuters that an ECB withdrawal would mean Cyprus’s biggest banks being wound up, wiping out the large deposits it has sought to protect, and probably forcing the country to abandon the euro.
“If the financial sector collapses, then they simply have to face a very significant devaluation and faced with that situation, they would have no other way but to start having their own currency,” the EU official said.
This is absolutely shocking. Everyone always thought that Greece would be the first to leave the euro, but now it looks like it might be Cyprus.
However, there is still a chance that Cyprus may find a way to comply with EU demands. Politicians in Cyprus are frantically searching for a way to raise the needed cash without raiding private bank accounts. The following is what CNN is saying about the latest efforts…
Leaders of Cyprus’ political parties agreed Thursday to create an “investment solidarity fund,” which would issue bonds backed by state and church assets.
The plan was due to be discussed by the Cypriot government and parliament on Thursday evening, but few details were available and it was not clear how much the fund would be worth.
According to Reuters, other proposals have been under consideration as well…
The government said a “Plan B” was in the works.
Officials said it could include: an option to nationalize pension funds of semi-government corporations, which hold between 2 billion and 3 billion euros; issuing an emergency bond linked to future natural gas revenues; and possibly reviving the levy on bank deposits, though at a lower level than originally planned and maybe excluding savers with less than 100,000 euros.
At this point it is unclear whether any of those proposals will turn out to be acceptable to European officials.
In fact, the tone of European officials has noticeably changed from previous bailout efforts. They now seem much more willing to play hardball. For example, just check out what German Finance Minister Wolfgang Schaeuble is saying about the situation in Cyprus…
German finance minister Wolfgang Schaeuble told the ZDF public broadcaster on Tuesday night (19 March) he “took note with regret” of the Cypriot parliament’s rejection of the bailout deal, but insisted that the terms will stay the same.
Asked if the eurozone was willing to let Cyprus go bust, he answered: “Well, we are much more stable in the eurozone – we took measures to protect ourselves from the risks of contagion … but I don’t want to have any of this.”
He added: “It is a serious situation, but this cannot lead to a decision that makes absolutely no sense, to rescue a business model that has failed. Cyprus has a banking sector that is totally oversized and this made Cyprus insolvent. And nobody outside Cyprus is to blame for it.”
Schaeuble knows that the EU is holding all of the cards and that Cyprus is doomed without their help…
“The Cypriot state cannot fund itself on the markets. Its two largest banks are insolvent and are being kept afloat with emergency funding from the ECB, but only on the condition that there will be a long-term rescue programme. If this condition is no longer met, Cyprus will no longer be solvent and this is something Cypriot decision makers must know”
But the truth is that the EU can’t really afford to allow major banks to fail or for a single member to leave the eurozone. If either of those things happen, the confidence game that has been holding the European financial system together will begin to rapidly evaporate.
If the EU thinks that they can abandon Cyprus without the crisis spreading to the rest of southern Europe they are just being delusional.
At least there are a few politicians in Europe that understand what is happening. Nigel Farage, a very outspoken member of the European Parliament, is telling people to get their money out of banks in southern Europe as quickly as they can. He is warning that a great collapse of the European financial system is coming and that people need to get prepared for it…
So what do you think?
Do you believe that we are on the verge of a major financial collapse in Europe?
The Government Has It Bass-Ackwards: Failing To Prosecute Criminal Fraud by the Big Banks Is Killing – NOT Saving – The Economy
U.S. Attorney General Eric Holder said today:
I am concerned that the size of some of these institutions [banks] becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy
As we’ve repeatedly noted, this is wholly untrue.
If the big banks were important to the economy, would so many prominent economists, financial experts and bankers be calling for them to be broken up?
If the big banks generated prosperity for the economy, would they have to be virtually 100% subsidized to keep them afloat?
If the big banks were helpful for an economic recovery, would they be prolonging our economic instability?
In fact, failing to prosecute criminal fraud has been destabilizing the economy since at least 2007 … and will cause huge crashes in the future.
After all, the main driver of economic growth is a strong rule of law.
Nobel prize winning economist Joseph Stiglitz says that we have to prosecute fraud or else the economy won’t recover:
The legal system is supposed to be the codification of our norms and beliefs, things that we need to make our system work. If the legal system is seen as exploitative, then confidence in our whole system starts eroding. And that’s really the problem that’s going on.
I think we ought to go do what we did in the S&L [crisis] and actually put many of these guys in prison. Absolutely. These are not just white-collar crimes or little accidents. There were victims. That’s the point. There were victims all over the world.
Economists focus on the whole notion of incentives. People have an incentive sometimes to behave badly, because they can make more money if they can cheat. If our economic system is going to work then we have to make sure that what they gain when they cheat is offset by a system of penalties.
Nobel prize winning economist George Akerlof has demonstrated that failure to punish white collar criminals – and instead bailing them out- creates incentives for more economic crimes and further destruction of the economy in the future.
(Review of the data on accounting fraud confirms that fraud goes up as criminal prosecutions go down.)
The Director of the Securities and Exchange Commission’s enforcement division told Congress:
Recovery from the fallout of the financial crisis requires important efforts on various fronts, and vigorous enforcement is an essential component, as aggressive and even-handed enforcement will meet the public’s fair expectation that those whose violations of the law caused severe loss and hardship will be held accountable. And vigorous law enforcement efforts will help vindicate the principles that are fundamental to the fair and proper functioning of our markets: that no one should have an unjust advantage in our markets; that investors have a right to disclosure that complies with the federal securities laws; and that there is a level playing field for all investors.
Paul Zak (Professor of Economics and Department Chair, as well as the founding Director of the Center for Neuroeconomics Studies at Claremont Graduate University, Professor of Neurology at Loma Linda University Medical Center, and a senior researcher at UCLA) and Stephen Knack (a Lead Economist in the World Bank’s Research Department and Public Sector Governance Department) wrote a paper called Trust and Growth, showing that enforcing the rule of law – i.e. prosecuting white collar fraud – is necessary for a healthy economy.
One of the leading business schools in America – the Wharton School of Business – published an essay by a psychologist on the causes and solutions to the economic crisis. Wharton points out that restoring trust is the key to recovery, and that trust cannot be restored until wrongdoers are held accountable:
According to David M. Sachs, a training and supervision analyst at the Psychoanalytic Center of Philadelphia, the crisis today is not one of confidence, but one of trust. “Abusive financial practices were unchecked by personal moral controls that prohibit individual criminal behavior, as in the case of [Bernard] Madoff, and by complex financial manipulations, as in the case of AIG.” The public, expecting to be protected from such abuse, has suffered a trauma of loss similar to that after 9/11. “Normal expectations of what is safe and dependable were abruptly shattered,” Sachs noted. “As is typical of post-traumatic states, planning for the future could not be based on old assumptions about what is safe and what is dangerous. A radical reversal of how to be gratified occurred.”
People now feel more gratified saving money than spending it, Sachs suggested. They have trouble trusting promises from the government because they feel the government has let them down.
He framed his argument with a fictional patient named Betty Q. Public, a librarian with two teenage children and a husband, John, who had recently lost his job. “She felt betrayed because she and her husband had invested conservatively and were double-crossed by dishonest, greedy businessmen, and now she distrusted the government that had failed to protect them from corporate dishonesty. Not only that, but she had little trust in things turning around soon enough to enable her and her husband to accomplish their previous goals.
“By no means a sophisticated economist, she knew … that some people had become fantastically wealthy by misusing other people’s money — hers included,” Sachs said. “In short, John and Betty had done everything right and were being punished, while the dishonest people were going unpunished.”
Helping an individual recover from a traumatic experience provides a useful analogy for understanding how to help the economy recover from its own traumatic experience, Sachs pointed out. The public will need to “hold the perpetrators of the economic disaster responsible and take what actions they can to prevent them from harming the economy again.” In addition, the public will have to see proof that government and business leaders can behave responsibly before they will trust them again, he argued.
Note that Sachs urges “hold[ing] the perpetrators of the economic disaster responsible.” In other words, just “looking forward” and promising to do things differently isn’t enough.
Shiller said the danger of foreclosuregate — the scandal in which it has come to light that the biggest banks have routinely mishandled homeownership documents, putting the legality of foreclosures and related sales in doubt — is a replay of the 1930s, when Americans lost faith that institutions such as business and government were dealing fairly.
Indeed, it is beyond dispute that bank fraud was one of the main causes of the Great Depression.
Economist James K. Galbraith wrote in the introduction to his father, John Kenneth Galbraith’s, definitive study of the Great Depression, The Great Crash, 1929:
The main relevance of The Great Crash, 1929 to the great crisis of 2008 is surely here. In both cases, the government knew what it should do. Both times, it declined to do it. In the summer of 1929 a few stern words from on high, a rise in the discount rate, a tough investigation into the pyramid schemes of the day, and the house of cards on Wall Street would have tumbled before its fall destroyed the whole economy.
In 2004, the FBI warned publicly of “an epidemic of mortgage fraud.” But the government did nothing, and less than nothing, delivering instead low interest rates, deregulation and clear signals that laws would not be enforced. The signals were not subtle: on one occasion the director of the Office of Thrift Supervision came to a conference with copies of the Federal Register and a chainsaw. There followed every manner of scheme to fleece the unsuspecting ….
This was fraud, perpetrated in the first instance by the government on the population, and by the rich on the poor.
The government that permits this to happen is complicit in a vast crime.
Galbraith also says:
There will have to be full-scale investigation and cleaning up of the residue of that, before you can have, I think, a return of confidence in the financial sector. And that’s a process which needs to get underway.
Galbraith recently said that “at the root of the crisis we find the largest financial swindle in world history”, where “counterfeit” mortgages were “laundered” by the banks.
As he has repeatedly noted, the economy will not recover until the perpetrators of the frauds which caused our current economic crisis are held accountable, so that trust can be restored. See this, this and this.
No wonder Galbraith has said economists should move into the background, and “criminologists to the forefront.”
The bottom line is that the government has it exactly backwards. By failing to prosecute criminal fraud, the government is destabilizing the economy … and ensuring future crashes.
Directed and written by Bill Still, Jekyll Island – The Truth About The Federal Reserve (still in production) will prove to be an in-depth, eye-opening documentary about the organization that controls the amount of money in our financial system. We look forward to its release, popcorn ready…
The Gannett Company
Gannett Company, Inc. claims to be “A media and marketing solutions company with a diverse portfolio of broadcast, digital, mobile and publishing companies.” Gannett owns many media outlets including:
USA Today of Tysons Corner, Virginia (1,830,594, 2nd overall)
The Arizona Republic of Phoenix, Arizona (308,973, 14th)
Detroit Free Press of Detroit, Michigan (245,326, 20th)
The Indianapolis Star of Indianapolis, Indiana (182,933, 32nd)
The Courier-Journal of Louisville, Kentucky (159,275, 42nd)
The Cincinnati Enquirer of Cincinnati, Ohio (157,574, 43rd)
The Tennessean of Nashville, Tennessee (127,538, 61st)
Democrat and Chronicle of Rochester, New York (119,399, 65th)
Asbury Park Press of Neptune City, New Jersey (112,683, 68th)
The Des Moines Register of Des Moines, Iowa (109,095, 73rd)
The News Journal of Wilmington, Delaware (87,138, 89th)
The Journal News of White Plains, New York (79,525, 96th)
Pacific Daily News of Guam
WBIR-TV (NBC) in Knoxville, Tennessee
WXIA-TV (NBC) and WATL (MyNetworkTV) in Atlanta (Pacific and Southern Company, Inc.)
WUSA (CBS) in Washington, D.C.
KPNX (NBC) in Phoenix
WTSP (CBS) in Tampa-St. Petersburg (Pacific and Southern Company, Inc.)
KARE (NBC) in Minneapolis-Saint Paul
KUSA-TV (NBC) and KTVD (MyNetworkTV) in Denver
WKYC-TV (NBC) in Cleveland
KXTV (ABC) in Sacramento, California
KSDK (NBC) in St. Louis
WZZM-TV (ABC) in Grand Rapids, Michigan
WFMY-TV (CBS) in Greensboro, North Carolina
WJXX (ABC) and WTLV (NBC) in Jacksonville, Florida
WGRZ-TV (NBC) in Buffalo, New York
KTHV-TV (CBS) in Little Rock, Arkansas
WLTX (CBS) in Columbia, South Carolina (Pacific and Southern Company, Inc.)
WMAZ-TV (CBS) in Macon, Georgia (Pacific and Southern Company, Inc.)
WCSH-TV (NBC) in Portland, Maine (Pacific and Southern Company, Inc.)
WLBZ-TV (NBC) in Bangor, Maine
Classified Ventures (20%)
With such a vast audience, Gannett wields considerable influence in America. Unfortunately, Gannett frequently pushes statist propaganda, behaving like an ideal MSM Lapdog for those currently in power.
The Des Moines Register
A recent article published in The Des Moines Register (a Gannett company) illustrates this fact to a painful degree. After the tragedy at Sandy Hook Elementary School in Newtown Connecticut, Donald Kaul came out of retirement (again) to rail against gun ownership, the Second Amendment, and to call the NRA a “terrorist organization.” In his “…program for ending gun violence in America,” Kaul calls for the Second Amendment to be repealed, for the NRA to be declared a terrorist organization, and to “…tie Mitch McConnell and John Boehner, our esteemed Republican leaders, to the back of a Chevy pickup truck and drag them around a parking lot.”
Had he named Democratic congress members as his targets, he would already have been visited by the FBI, but since his suggestion fits the Progressive Playbook, nary an eyebrow was raised. One is forced to wonder if Mr. Kaul has any home security plans beyond dialing 911. Here is his home address, why not pay him a visit and ask?
The Journal News
Another Gannett media company (The Journal News of White Plains, New York) again, in the wake of the Sandy Hook tragedy, published a map of all pistol permit holders in Rockland and Westchester, NY. Soon afterward, a veritable avalanche of “negative correspondence” inundated The Journal News. This highly negative reaction so alarmed Journal News Rockland Editor Caryn A. McBride that The Journal News hired armed security guards from New City-based RGA Investigations, which are now manning the newspaper’s headquarters. Here is her home address (280 Bronxville Rd Apt 4B Bronxville, NY 10708-2819 Phone: 914-954-3412) I’m sure she would welcome a call or a visit to discuss her fears.
The hypocrisy in this is nearly tangible…and if questioned, would surely be dismissed as a “necessary precaution” for the safety of their staff. It is unclear if this map stunt of theirs has affected their readership (they’ll never tell) but their local competitor (The Rockland County Times) has reported an influx of new subscribers that stated they cancelled their subscriptions to The Journal News due to the gun story. Some folks out there are apparently awake, and unwilling to continue to support such a hypocritical organization. Handily, one such person published a map of Journal News staff, for your convenience.
The Detroit Free Press
The Detroit Free Press (another Gannett company) just published an article entitled Headlines we’d like to see in 2013. As annual year-end lists go, there isn’t much surprising there, but where this list bothers to get political, it takes a hard left. One of their dream headlines for 2013 reads, “Tea party is over: Voters recall dozens of lawmakers over ‘fiscal cliff’ shenanigans”. The interesting part of this is that The Detroit Free Press doesn’t seem to see the “shenanigans” perpetrated by any other group…they lay the blame for the fiscal cliff situation solely at the feet of those that were sent there to stop such nonsense. Sit. Stay. Good MSM Lapdog.
The Indianapolis Star
The Indianapolis Star recently published an article called The power of an economic NATO, which glorifies the concept of another NAFTA-like agreement, this time with Europe. In keeping with The Program, columnist David Ignatius opines, “What’s appealing about the trans-Atlantic initiative, in particular, is that it could be a big job creator for economies on both continents…” obviously having missed the effects of NAFTA on our economy. He goes on to state, “I like the idea of an “economic NATO” because it addresses fiscal problems through growth and expansion,” but the problem is that Europe isn’t growing or expanding. A more accurate assessment of Europe would use words like “teetering” and “faltering”. Would such a trade partner help us expand and grow our way out of our current miasma?
Ross Perot warned us of a “giant sucking sound” as our jobs flew out of the country post-NAFTA, and as we all know now, it came to pass. Considering the depressed economies in Greece, Italy, Spain, Portugal and Ireland, and the low wages their unemployed would be willing to work for, one must employ pure magical thinking to believe yet another such agreement would have different results. What was it that Albert Einstein said about insanity?
On December 29th, The Courier-Journal of Louisville, Kentucky came out with this lovely piece: NRA call for guns at schools obscene, in which Tom Diaz, a former gun owner and former NRA member who now works for the Violence Policy Center, is quoted as telling NPR, “The gun industry realized that it really loses every argument where you can have facts,’’ apparently “proving” that the NRA needs to lie to support the Second Amendment of our Constitution, by mere assertion. Blind assertion doesn’t cut it, Mr. Diaz, and the Courier-Journal should be ashamed for not calling you out on this.
The article goes on to list the President of the NRA, Wayne LaPierre’s suggestions at a recent news conference, snidely and childishly dismissing each, calling them “paranoid and delusional.” For proof of the folly of LaPierre’s suggestions, the article only cited one source – The New York Times, and that only in regards to an assertion that the NRA is being funded by video game makers via the gun manufacturers…again, with no real proof. The rest of Mr. LaPierre’s suggestions were merely ridiculed, as by a know-it-all teenager…but hey, it all fit The Program, and that’s all that matters to a Gannett Company, right?
The Cincinnati Enquirer
On December 23rd, The Cincinnati Enquirer published this piece: The culture of violence which, in accordance with The Plan, ridicules the NRA and Second Amendment supporters. The article states that Nancy Lanza, the Sandy Hook killer’s Mother, was killed by her stockpiled weapons in a bald-faced attempt to demonize the weapons themselves, as if her son Adam had nothing to do with her death. The more the mantra of Guns Are Bad is repeated, the more people may be amenable to giving up their right to own one, or so The Plan goes. The Cincinnati Enquirer ought to be ashamed to publish such intellectually dishonest assertions, but apparently they ceased being real journalists, and eagerly embraced their new lives as MSM Lapdogs…all in the name of the statist agenda.
One cannot long peruse a Gannett publication without running afoul of statist propaganda. Whether discussing our Second Amendment rights, the TEA Party, or our economy, the constant drum-beat of statism permeates every outlet in Gannet’s arsenal, and Gannett is not alone. The rhythm of statism being continually and perpetually pounded out into the Main Stream Media in America is evident to all but the most brain-washed observer. Are they actually colluding to keep every media outlet on the same page, or does it just appear that way? Who do these people (that control what is said in the MSM) work for…themselves, or some other, possibly more sinister puppet-master? What is the goal of desensitizing the American public to statism, and who will benefit once the American people give all control over to their government?
With multiple examples of failed statist regimes in our history (some of them recent) one may have been lead to believe that statism was on its last legs politically. With standard-bearers such as Gannett, this is sadly not the case, and we all need to be vigilant in our defense of our rights until such organizations are exposed as the statist puppets they are, and they assume their rightful place in the ash heap of history.
Randy – FedUpUSA
The beginning of the year has traditionally been a time of optimism when we all look forward to the exciting things that are going to happen over the next 12 months. Unfortunately, there are a whole bunch of things about 2013 that we already know are going to stink. Taxes are going to go up, good paying jobs will continue to leave the country, small businesses will continue to be destroyed, the number of Americans living in poverty will continue to soar, our infrastructure will continue to decay, global food supplies will likely continue to dwindle and the U.S. national debt will continue to explode. Our politicians continue to pursue the same policies that got us into this mess, and yet they continue to expect things to magically turn around. But that is not the way that things work in the real world. Bad decisions lead to bad outcomes. Instead of realizing that what we are doing is not working, our “leaders” continue to give us more of the same. As a result, there are going to be a lot of things about 2013 that will not be great. Sticking our heads in the sand and pretending that everything will be “okay” somehow is not going to help anyone. We’ve got to make people understand exactly what is happening and why it is happening if we ever hope to see real changes.
The following are 16 things about 2013 that are really going to stink…
#1 Taxes Are Going To Go Up
Even if a fiscal cliff deal is reached, some taxes will still go up next year. And if no deal is reached, there will be a whole bunch of different tax increases in 2013.
According to CBS News, these tax increases would be very painful for the middle class…
If lawmakers fail to work out any sort of deal, there will be severe long-term consequences for the economy: According to the Tax Policy Center, going off the “cliff” would affect 88 percent of U.S. taxpayers, with their taxes rising by an average of $3,500 a year; taxes would jump $2,400 on average for families with incomes of $50,000 to $75,000. Because consumers would get less of their paychecks to spend, businesses and jobs would suffer.
#2 The Middle Class Is About To Be Scorched By The Alternative Minimum Tax
Of more immediate concern for the middle class is the Alternative Minimum Tax. Many Americans have never heard of the AMT, but it is truly one of the worst things about our tax code.
If Congress does not act, and right now it does not look promising, millions of middle class households will see a massive increase in their tax bills for 2012.
According to one analysis, households that are forced to pay the AMT will end up paying an extra $3,700 in taxes…
Unless Congress acts by the end of the year, more than 26 million households will for the first time face the AMT, which threatens to tack $3,700, on average, onto taxpayers’ bills for the current tax year. Because those people have never paid the AMT, they have no idea they are in its crosshairs — put there by a broader stalemate over tax policy that has kept Congress from limiting the AMT’s reach.
Do you have an extra $3,700 sitting around to send to Uncle Sam?
If not, you had better contact your representatives in Congress and scream like crazy about passing a fix for the AMT. They have always gotten it done before, but this year there is so much animosity between the Republicans and the Democrats that nothing may end up getting done.
#3 The Economy Will Continue To Get Worse
Despite all of the talk in the mainstream media and from our politicians that our economy is getting better, the truth is that the U.S. economy continued to decline in 2012. If you doubt this, just read the 75 statisticsin this article.
And there are a whole host of signs that the economy is starting to slow down even more as we enter 2013. For example, consumer confidence in the United States has experienced its largest two-month drop in over a year, and retail sales during the holiday season turned out to be quite disappointing.
#4 Good Paying Jobs Will Continue To Be Shipped Out Of The United States
Thanks to decades of “free trade agreements”, workers in the United States must directly compete for jobs with hundreds of millions of workers on the other side of the globe that live in countries where it is legal to pay slave labor wages.
We continue to see millions of jobs being shipped out of the country and our politicians stand by and do nothing.
Most Americans have no idea how this emerging one world economic system works. The beautiful product that you buy at the big retail store may have been made by someone working in some of the most horrific conditions imaginable.
A 42-year-old woman named Julie Keith recently found this letter inside a box of Halloween decorations that had been made in China…
“If you occasionally buy this product, please kindly resend this letter to the World Human Right Organization. Thousands people here who are under the persecution of the Chinese Communist Party Government will thank and remember you forever.
People who work here have to work 15 hours a day without Saturday, Sunday break and any holidays. Otherwise, they will suffer torturement, beat and rude remark. Nearly no payment (10 yuan/1 month).
People who work here, suffer punishment 1-3 years averagely, but without Court Sentence (unlaw punishment). Many of them are Falun Gong practitioners, who are totally innocent people only because they have different believe to CCPG. They often suffer more punishment than others.”
But both political parties continue to tell us how wonderful it is that we are trading with communist China. They see no problem with the fact that good paying jobs that used to be performed in America are now being performed by slave laborers on the other side of the planet. And most Americans continue to support this system by filling their shopping carts with lots of stuff that has “made in China” stamped on it.
#5 Small Businesses Will Continue To Be Destroyed
At the same time, small businesses all over America are being strangled to death by taxes and regulations. Just consider the following numbers from a previous article…
We are told that the economy is supposed to be “recovering”, but the number of “startup jobs” at new businesses has fallen for five years in a row. According to an analysis of U.S. Department of Labor data performed by economist Tim Kane, there were almost 12 startup jobs per 1000 Americans back in the year 2006. By 2011, that figure had fallen to less than 8 startup jobs per 1000 Americans.
How is our economy ever going to thrive if we keep killing off our small businesses?
#6 Hunger And Poverty Will Continue To Explode To Unprecedented Levels
As the U.S. economy bleeds jobs and loses small businesses, the number of Americans living in poverty continues to explode.
Here are some numbers to show to people who still don’t understand how desperate the situation is…
-Families that have a head of household under the age of 30 have a poverty rate of 37 percent.
-According to U.S. Census data, 57 percent of all American children live in a home that is either considered to be “poor” or “low income”.
#7 The Number Of Americans On Food Stamps Will Continue To Increase
If the economy is recovering, then why does the number of Americans on food stamps continue to soar?
As I wrote about yesterday, about 17 million Americans were on food stamps back in the year 2000.
Today, more than 47 million Americans are on food stamps.
Does anyone want to explain to me how that is a sign that things are getting better?
Back in the 1970s, about one out of every 50 Americans was on food stamps. Today, about one out of every 6.5 Americans is on food stamps.
How much worse do things have to get before people realize that what we are doing is not working?
#8 Millions Of Americans Are About To Lose Their Unemployment Benefits
During this economic crisis, an unprecedented number of American families have been relying on unemployment benefits in order to stay afloat.
Well, if no agreement is reached in Washington D.C., millions of Americanswill shortly lose those benefits…
Three million Americans may become unwitting casualties of the political war in Washington over the fiscal cliff.
Since 2008, the federal government has funded extensions of the unemployment insurance offered by states, more than tripling the amount of aid available to the unemployed in some areas. But the program is expensive, with the Congressional Budget Office estimating it would cost $30 billion to extend it through 2013. President Barack Obama wants to extend the benefits for another year, but Congress has already pared back the program, and Republicans insist it represents the kind of largesse Washington can no longer afford.
#9 Our Infrastructure Will Continue To Rot And Decay
The United States once had the most beautiful infrastructure in the entire world. Our highways, bridges, airports, railroads, sewer systems and electrical grids were the envy of the entire planet.
Well, now we don’t even have enough money to repair what we already have, so our infrastructure will continue to rot and decay in 2013…
Highways and bridges will need $2.5 trillion in upgrades if they are to survive for another 50 years — a must-do to keep commerce thriving. And that figure doesn’t even take into account the airports, railroads, subways, sewage-treatment plants, waterworks, levees, electric grids, pipelines, and all of those other expensive systems that people ignore until they break down.
#10 Many Of Our Major Cities Will Continue To Be Transformed Into Festering Hellholes
A lot of our major cities are also rapidly degenerating. Detroit is one of my favorite examples, but the same kinds of things could be said about dozens of other major cities all over the country. The following is a brief excerpt from one of my recent articles…
If you can believe it, more than 50 percent of all children in Detroit are living in poverty, and close to 50 percent of all adults living in the city are functionally illiterate. The high school graduation rate in Detroit is down to about 25 percent, and the city has become a breeding ground for gangs and violence. The number of murders in Detroit is already higher than last year, and recently groups of young men toting AK-47s have been running around robbing gas stations. How much worse can things possibly get for Detroit?
#11 State And Local Governments Will Find Ways To Squeeze Even More Money Out Of Us
In case you haven’t noticed, state and local governments all over the country are bleeding cash and are desperate for money. In 2013 you can expect them to continue to find more ways to squeeze even more money out of all of us. Here is one example…
Over the course of 2013, the District government will add 134 traffic cameras to its network, more than doubling the size of a system that generated $85 million in revenues for the city in its last fiscal year.
Police spokeswoman Gwendolyn Crump told The Washington Examiner that the city will intensify its camera-based efforts to cite motorists for speeding and stoplight violations while also adding cameras to detect other moving violations.
#12 Drug Cartels Will Continue To Easily Cross Our Borders And Terrorize Our Citizens
The federal government continues to refuse to protect our borders, and that means that drug runners and gang members will continue to pour into the United States.
Down in the Southwest, many ranchers are being absolutely terrorized by these criminals. The following is from a recent NBC News article…
Just before nightfall, 73-year-old rancher Jim Chilton hikes quickly up and down the hills on his rugged cattle-grazing land south of Tucson, escorting two U.S. Border Patrol agents.
He wants to show them the disturbing discovery he made earlier in the day: a drug-smugglers’ camp on his private property. Stacked together under a stand of trees are blankets, jackets, food, water, binoculars and bales of marijuana from Mexico wrapped in burlap. The smugglers, themselves, are nowhere in sight and are believed to have fled the area, which is about 10 miles north of the Mexican border.
Chilton has had his house burglarized a couple of times and his family regularly encounters groups of armed drug smugglers coming across from Mexico…
Their cattle fences are frequently cut and paths heading north from Mexico cross their property. Beckham says a smuggler even fired shots at him while he walked his land with a U.S. Border Patrol agent. Several illegal border crossers have also approached his house at night–one even reaching his hand into their bathroom window.
“Several years ago, one of my children was taking a shower and had a gentleman reach into the shower while he was in there, and he came out screaming, absolutely refusing to take a shower for the next couple months.”
But even if you don’t live along the border, all of this still affects you. According to government figures, Mexican drug cartels are actively operating in more than 1,200 U.S. cities right now. They are probably hard at work in the community where you live.
So what is the Obama administration doing to fix the problem?
In fact, the Obama administration is actually encouraging people to come to the U.S. and become dependent on the system. If you can believe it, there is actually a website run by the Department of Homeland Security that teaches immigrants how to apply for welfare benefits once they get into the United States.
#13 Social Decay Will Continue To Accelerate
All over America we are seeing signs of social breakdown. Here is yetanother example…
A woman sleeping on a street bench outside a drug store was doused with an accelerant and set on fire early Thursday morning in Van Nuys.
Witnesses told police that a man poured liquid — possibly a beverage containing alcohol — on the sleeping woman at about 1 a.m. outside a Walgreens store near Van Nuys Boulevard and Sherman Way. He lit a match and ran from the location, witnesses told police.
Who would just run up and set a woman on fire?
Sadly, this is not an isolated incident. For many more examples like this, please see this article: “20 Shocking Examples Of How Sadistic And Cruel People Have Become“.
We need to admit that we have a major problem on our hands. Violent crime in the United States increased by 18 percent in 2011, and another huge increase is expected when the numbers for 2012 come out.
America is changing, and not for the better.
#14 Global Food Supplies Will Continue To Dwindle
Did you know that for six of the last eleven years the world has consumed more food than it has produced?
As a result, global food reserves have reached their lowest level in almost 40 years.
So what is going to happen if the world continues to eat more food than it makes?
Let us hope that there is not another major drought in 2013. If there is, we could be looking at a very serious food crunch.
#15 Wall Street Will Continue To Resemble A Giant Casino
Our financial system seems to have not learned any lessons from the financial crash of 2008.
Instead of admitting their mistakes, they just continue to engage in even more reckless behavior.
Today, there are four major U.S. banks that each have more than 40 trillion dollars of exposure to derivatives.
At some point that house of cards is going to collapse and we will be facing a derivatives crisis of unprecedented magnitude.
Will it be in 2013?
#16 The U.S. National Debt Will Cross The 17 Trillion Dollar Mark
In 2013, our national debt will blow past the 17 trillion dollar mark and start heading toward 18 trillion dollars.
How stupid can we possibly be?
During the first four years of the Obama administration, the U.S. national debt has grown by about as much as it did from the time that George Washington took office to the time that George W. Bush took office.
It really takes something to match more than 200 years of debt accumulation in less than four years.
But our politicians don’t seem to care about all of this debt. They will continue to steal more than 100 million dollars from our children and our grandchildren every single hour of every single day. That is beyond criminal, and yet the American people don’t seem to care.
What in the world has happened to this country?
Of course not everything about 2013 will be bad. Personally, I am looking forward to an exciting year. I have a new book that will be coming out, and my family is blessed and healthy. I would like to wish all of you a very blessed 2013. Things may be falling apart all around us, but that doesn’t mean that we can’t have a great year even in the midst of all the chaos.