How Close Are We to New Great Depression?

[Mark]

How Close Are We to New Great Depression?

The risk of a new depression — a sustained, severe recession — has struck fear into the heart of markets and driven monetary policy in developed economies since the current financial crisis began.

“We’re in a very unfortunate position to be here,” Richard Duncan, author of The New Depression, warned on CNBC’s “Squawk Box Europe” Monday.

“When we broke the link between money and gold, this removed all constraints on credit creation. This explosion of credit created the world we live in, but it now seems that credit cannot expand any further because the private sector is incapable of repaying the debt it has already, and if credit begins to contract, there’s a very real danger that we will collapse into a new Great Depression,” he argued.

“If this credit bubble pops, the depression could be so severe that I don’t think our civilization could survive it.”

The explosion in cheap credit has been widely blamed for the global financial crisis, but the debate about how to fix the problem continues.

In the past few years, central banks including the U.S. Federal Reserve [cnbc explains] , the European Central Bank [cnbc explains] and the Bank of England have pumped liquidity into their financial systems through a number of ways, including quantitative easing [cnbc explains] and the ECB’s long-term refinancing operation (LTRO).

“We could keep deferring the depression, but that could just encourage the bad guys. If you do this, you possibly do more harm than good,” Roger Nightingale, economist and strategist at RND Associates, told CNBC Monday.

“You can defer, but not prevent.”

Nightingale argued that previous credit booms, for example in Japan in the 1980s, have led to sustained recessions.

rest: http://www.cnbc.com/id/48193471

[Mark]

“When we broke the link between money and gold, this removed all constraints on credit creation.
central banks including the U.S. Federal Reserve

  cant believe they admitted it, must be really bad...

[Psalm 51:17]

“When we broke the link between money and gold, this removed all constraints on credit creation. This explosion of credit created the world we live in, but it now seems that credit cannot expand any further because the private sector is incapable of repaying the debt it has already, and if credit begins to contract, there’s a very real danger that we will collapse into a new Great Depression,” he argued.

And the public school systems have been brainwashing their students with just THAT - over how somehow debt is *good* for businesses and spin many reasons why(ie-one of them being how they can write off the interest payments off of their taxes, which would lead to more cash flows, which would lead to easier times to pay off expenses, hiring more employees, etc).

Again, this is public school(and throw in the private schools as well) brainwashing at its best - making them thing evil is good, and good is evil.

Ultimately, after the so-called bank bailout legislation passed 4 years ago, these businesses investing in debt came into a rude awakening.

Pro_22:7  The rich ruleth over the poor, and the borrower is servant to the lender.

[Mark]

20 Signs That All Point To The Exact Same Thing - Can You Guess What That Is?

The U.S. economy is in a massive amount of trouble.  There aren't enough jobs.  There isn't enough money to go around.  Business activity is slowing down again.  Household wealth has been falling.  Food prices have been rising.  Many state and local governments all over the country are flat broke and are drowning in debt.  The federal government has been rolling up unprecedented amounts of debt in an attempt to keep things going, but everyone knows that kind of borrowing is simply unsustainable.  So where do we go from here?  We consume far more than we produce and we use debt to make up the difference.  40 years ago the total amount of debt in America (government, business and consumer) was less than 2 trillion dollars.  Today it is nearly 55 trillion dollars.  How in the world did we let the total amount of debt in the United States grow more than 27 times larger over the past 40 years?  Our economic system is fundamentally broken, but most Americans don't realize it yet because times are still relatively good.

However, the next great economic crisis is going to wake a whole lot of Americans up.

And when they realize what has happened to our future, they are going to be really, really angry.

Enjoy the good times while they last.  The next recession is rapidly approaching, and it will not be pleasant.

The following are 20 signs that all point to the exact same thing....

#1 The unemployment rate in the U.S. has been above 8 percent for 40 months in a row, and 42 percent of all unemployed Americans have been out of work for at least half a year.  As I wrote about recently, there are never going to be enough jobs in America ever again.  As bad as things are right now, they are about to get even worse.  So what is our country going to look like once the unemployment rate starts shooting up rapidly once again?

#2 35 percent of all unemployed workers have had to dip into retirement savings in order to make ends meet over the past year.

#3 Since 2008, the U.S. economy has lost 1.3 million jobs while at the same time 3.6 million more Americans have been added to Social Security's disability insurance program.

#4 A recent survey conducted by the National Association for Business Economics found that only 23 percent of all U.S. companies plan to hire more workers over the next 6 months.  When the same question was asked a few months ago that number was at 39 percent.

#5 An important measure of U.S. manufacturing activity has fallen to its lowest level since June 2009.

#6 Hundreds of thousands of federal jobs at civilian agencies will likely be lost if Congress allows the automatic federal budget cuts to go into effect next year.  The following is from a recent article posted on federalnewsradio.com....

A report released Tuesday suggests that several hundred thousand federal jobs at civilian agencies would be on the chopping block within the next year if Congress lets the automatic budget cutting process known as sequestration go into effect.

The study, authored by George Mason University professor Stephen Fuller, adds a new dimension to a budget debate that's so far been centered on sequestration's effects on the military.
#7 The teen unemployment rate in Washington D.C. right now is 51.7 percent.

#8 Gallup's U.S. Economic Confidence Index is now the lowest that it has been since January.

#9 The median net worth of U.S. households in 2007 was $126,400.  By 2010, it had fallen to just $77,300.

#10 Pensions at S&P 500 companies are more under-funded than they have ever been before.

#11 According to the New York Times, state and local governments across America "shortchanged their pension plans by more than $50 billion" between 2007 and 2011.

#12 The city of Compton, California is evaluating whether or not it should declare bankruptcy.  If it did, it would become the fourth California city to declare bankruptcy this year.

#13 The percentage of U.S. households that are spending more than half their incomes on housing is at an all-time high.

#14 For the first time in modern history, Canadian households are wealthier than American households are.

#15 One recent poll found that 42 percent of all Americans believe that China is the leading economic power in the world while only 36 percent believe that the U.S. is still the leading economic power in the world.

#16 According to the federal government, the price of food rose much faster than the general rate of inflation did during 2011.  Just check out these rates of food inflation for 2011....

Beef: +10.2%
Pork: +8.5%
Fish: +7.1%
Eggs: +9.2%
Dairy: +6.8%
Oils and Fats: +9.3%
If that happened during a somewhat "normal year", what will food prices look like after we are done with the drought of 2012?

#17 The price of a bushel of corn has risen by 54 percent since mid-June.

#18 According to one survey, 42 percent of all American workers are living paycheck to paycheck.

#19 A different survey found that 28 percent of all Americans have absolutely no emergency savings at all right now.

#20 Federal Reserve Chairman Ben Bernanke made the following statement to Congress on Tuesday: "At this point we don't see a double dip recession. We see continued moderate growth."

Do you remember that old Seinfeld episode when George Costanza decided that he would "do the opposite" of everything that his instincts were telling him to do and everything started working out great for him?

Well, when it comes to Federal Reserve Chairman Ben Bernanke, the key is to "believe the opposite" of everything that he says.

And since Bernanke does not believe that a double dip recession is going to happen, that probably means that we are about to hit another recession.

If you doubt this theory about Bernanke, just go back and check out his track record.

Okay, so if our economy is in big trouble shouldn't our leaders be doing something about it?

Well, it is election season now so I wouldn't expect too much from Barack Obama.  He is too busy raising money in France and in China.

I wouldn't expect too much from Obama's economic advisers either.  In fact, Obama's much-ballyhooed "jobs council" has not even met in six months.

Not that the "jobs council" was ever going to do anything substantive anyway.

The truth is that it was just for show and most of the CEOs on the council have been sending jobs overseas anyway.

Well, what about the SEC?

Shouldn't they be doing something to fix the financial system?

No, they are too busy investigating the Amish.

It looks like we are on our own.

Soon, even more parts of the country will start looking like Detroit or Baltimore or Cleveland.

This country is rapidly falling apart, and the federal government is not going to save us.

That is why we need to focus on preparing to weather the coming storm on a family and community level.

There is hope in being prepared.  The coming economic crisis will wipe out many Americans because they will never even see it coming.  But that does not have to happen to you.

If you work really hard right now to prepare your family for the storm that is on the horizon, then you will have a much better chance of making it through to the other side.

http://theeconomiccollapseblog.com/archives/20-signs-that-all-point-to-the-exact-same-thing-can-you-guess-what-that-is

[Mark]

American Families ARE Getting Poorer

Did you know that median household income in the United States is lower today than it was when the last recession supposedly ended?  If we are in the middle of an "economic recovery", how can this possibly be happening?  Stunning new statistics compiled by Sentier Research show that the U.S. economy is not nearly as healthy as we have been led to believe.  According to the study that Sentier Research has just released, median household income in the United States was sitting at $55,470 back in January 2000.  In December 2007, when the recession began, it was sitting at $54,916.  In June 2009, when the recession supposedly ended, it was sitting at $53,508.  Today, it is sitting at $50,964.  This is a long-term trend that is definitely going in the wrong direction.  The fact that median household income in the U.S. is now 4.8 percent lower than it was when the last recession ended is incredibly disturbing, especially since all of the things that we buy on a regular basis just keep going up in price.  Food, gas, electricity, car insurance and health insurance all cost a whole lot more today than they did back in the year 2000, and yet median household income has dropped 8.1 percent since that time.  So what does all of this mean?  It means that American families ARE getting poorer.

Yes, the stock market has been soaring, corporate profits have set all-time records in recent years and the big Wall Street banks that were showered with bailout money are absolutely thriving.

But there has been no economic recovery on "Main Street".

According to the Sentier Research report mentioned above, incomes have been declining in all geographic regions of the country and in all sectors of the economy....

-Median household income for the self-employed has fallen 9.4 percent since June 2009.

-Median household income for private sector employees has fallen 4.5 percent since June 2009.

-Median household income for government workers has fallen 3.5 percent since June 2009.

-Median household income for Americans living in the West has fallen 8.5 percent since June 2009.

-Median household income for Americans living in the Northeast has fallen 4.9 percent since June 2009.

-Median household income for Americans living in the South has also fallen 4.9 percent since June 2009.

-Median household income for Americans living in the Midwest has fallen 1.1 percent since June 2009.

Remember, the recession supposedly ended in June 2009.

Since that time we have supposedly been in a "recovery".

So if it has seemed to you that American families have been getting poorer it has not just been your imagination.

In a previous article, I detailed 84 statistics that prove that the middle class in America is being systematically destroyed.  If you have not read it yet, I encourage you to go check it out.  At this point it is absolutely undeniable that the middle class in America is declining.  The following are just a couple of the numbers from my recent article....

1. According to the Pew Research Center, 61 percent of all Americans were "middle income" back in 1971.  Today, only 51 percent of all Americans are.

2. The Pew Research Center has also found that 85 percent of middle class Americans say that it is harder to maintain a middle class standard of living today compared with 10 years ago.

3. 62 percent of middle class Americans say that they have had to reduce household spending over the past year.

4. The average net worth of a middle class family in America was $129,582 in 2001.  By 2010 that figure had dropped to $93,150.

5. According to the Federal Reserve, the median net worth of all families in the United States declined "from $126,400 in 2007 to $77,300 in 2010".

You can find 79 more statistics just like this right here.

At the same time that our incomes are going down, the cost of living just continues to rise steadily.

Thanks Ben Bernanke.

American families are being increasingly stretched financially, and if major changes are not made this is going to get even worse in the years ahead.

Another thing that we aren't being told on the nightly news is that the percentage of working age Americans that have jobs is lower today than when the last recession ended.

So let's summarize....

-A smaller percentage of Americans have jobs today compared to June 2009.

-Median household income has declined by 4.8 percent since June 2009.

-American families are far less wealthy than they were just a few years ago.

Are we sure that we are in an economic recovery?

Just look at what is happening to our cities.

The rest of the world once looked at Detroit in awe.

Now it is a global joke.

You can see some incredible photographs of the devastation in Detroit right here.

This kind of thing is happening on the east coast as well.  I have written many times about how horrible life has become in places such as Camden, New Jersey.

Well, now the entire Camden police force is being disbanded, and the policing of the city is going to be turned over to the county.

We are a mess, and it is time to admit that.

Sadly, most Americans simply have no idea how close our economic system really is to total system failure.

Only 24.6 percent of the jobs in this country are "good jobs" at this point, the velocity of money in our economy has plunged to a post-World War II low, unemployment is rampant, more than half of all Americans are at least partially financially dependent on the government and our national debt is crossing the 16 trillion dollar mark.

We don't need someone to come in and "tweak" the economy.

We need radical reconstructive surgery.

But most Americans do not understand this.

Most Americans do not seem to grasp these things until economic hardship touches them personally.

After all, if you still have a good job and the mainstream media is telling you that everything is going to be okay it is really easy to pretend that we aren't heading for an economic disaster of unimaginable proportions.

A massive problem that we are facing right now is something known as "normalcy bias". This is how Wikipedia defines "normalcy bias"....

    The normalcy bias, or normality bias, refers to a mental state people enter when facing a disaster. It causes people to underestimate both the possibility of a disaster occurring and its possible effects. This often results in situations where people fail to adequately prepare for a disaster, and on a larger scale, the failure of governments to include the populace in its disaster preparations. The assumption that is made in the case of the normalcy bias is that since a disaster never has occurred then it never will occur. It also results in the inability of people to cope with a disaster once it occurs. People with a normalcy bias have difficulties reacting to something they have not experienced before. People also tend to interpret warnings in the most optimistic way possible, seizing on any ambiguities to infer a less serious situation.

Doesn't that sound exactly like the vast majority of Americans right now?

Most Americans just assume that since we have always recovered from every other economic downturn in the past that we will always be able to easily handle whatever the future throws at us.

If only that was true.

We are heading into a time that will be unlike anything any of us have ever experienced before, and many people that have blind faith in the system are going to be absolutely devastated when this coming crisis blindsides them.

Our economy has been collapsing, it is continuing to collapse, and the collapse is going to accelerate dramatically in the coming years.

You can have blind faith in the system, or you can get prepared for what is coming.

The choice is up to you.

http://theeconomiccollapseblog.com/archives/it-is-not-just-your-imagination-american-families-are-getting-poorer

[Psalm 51:17]

The normalcy bias, or normality bias, refers to a mental state people enter when facing a disaster. It causes people to underestimate both the possibility of a disaster occurring and its possible effects. This often results in situations where people fail to adequately prepare for a disaster, and on a larger scale, the failure of governments to include the populace in its disaster preparations. The assumption that is made in the case of the normalcy bias is that since a disaster never has occurred then it never will occur. It also results in the inability of people to cope with a disaster once it occurs. People with a normalcy bias have difficulties reacting to something they have not experienced before. People also tend to interpret warnings in the most optimistic way possible, seizing on any ambiguities to infer a less serious situation.

Doesn't that sound exactly like the vast majority of Americans right now?

Most Americans just assume that since we have always recovered from every other economic downturn in the past that we will always be able to easily handle whatever the future throws at us.

If Satan has his way COMPLETELY, the Rev 13 prophecies would have happened way back in 1984 or so(when it was reported that not one nickel goes to government expenditures, but to pay down the massive national debt). But as we all know, Jesus Christ is on the throne, and his heavy hand of protection is holding things back.

It's only a matter of time now...$16t debt, and $100t if you include SS/Medicare? And the debt is growing at a much faster pace now? And if Romney gets appointed, the guys he'll chose are the World Bank/Harvard/Columbia/Democrat guys.

2Th 2:7  For the mystery of iniquity doth already work: only he who now letteth will let, until he be taken out of the way.
2Th 2:8  And then shall that Wicked be revealed, whom the Lord shall consume with the spirit of his mouth, and shall destroy with the brightness of his coming:

[Kilika]

Most Americans just assume that since we have always recovered from every other economic downturn in the past that we will always be able to easily handle whatever the future throws at us.

Yeah, being caught up in the moment, they don't know that there is not a single nation that hasn't fallen in world history. They all fall. Including America sooner or later. These silly people think it can be saved! As it stands now, the US isn't far from that fall as a country.